Like any investment, mutual funds come with certain risks:Market Risk: The value of equity mutual funds can fluctuate with market conditions, posing a risk of capital loss.Credit Risk: In debt funds, there is a risk that bond issuers may default on payments, which could negatively impact the fund’s returns.Interest Rate Risk: Debt funds are affected by changes in interest rates; for example, when interest rates rise, bond prices usually fall, impacting the fund’s NAV.Liquidity Risk: Some funds invest in assets that are not easily sold, which may cause delays in redeeming your investment.Inflation Risk: If your mutual fund returns do not keep pace with inflation, your purchasing power may decrease over time.Understanding these risks can help you choose funds that align with your risk tolerance and financial goals.