Why Mutual Funds ?

WHY MUTUAL FUNDS:

Mutual fund is a pool of funds (money) brought together from investors sharing their common goal, and invests into various asset classes.

Here are the benefits of investing in mutual funds:

Diversification

Diversification

Mutual funds invest in several Securities, such as Equity, Debt and Gold thereby facilitating the diversification to the investor.

Professional Management

Professional Management

Mutual Funds are managed by experienced professional Fund Managers along with their research teams who track real time Market situations and plan out to take decisions to get the maximum benefits from the invested fund.

SIP

Lower Entry Level

Mutual Funds can be started by making investments as little as Rs 500 with the help of SIP (Systematic Investment Plans).

Economies of scale

Economies of scale

It indirectly lets you invest into large ticket size instruments like Government Bonds which otherwise are unavailable to retail investors.

Liquidity

Liquidity

You can buy/sell Mutual Funds by simply approaching the Fund House, MF Distributor, or even by Transacting Online.

Investing Through Advisors

Investing Through Advisors

Advisors help you buy Mutual Funds after detailed research on Schemes and Market.

Tax Savings

Tax Benefits

Investing in ELSS (Equity Linked Saving Scheme) Mutual Funds investor can get the dual benefit of Savings on Taxes of upto Rs. 150,000 with lowest lock in period and higher returns on investment compared to Bank FD, PPF, NSC and Other Tax Saving Investment Options.

Mutual fund Classification

Mutual Funds can be classified on two parameters – Structure and Investment Objective.

Structure

Mutual funds schemes can be either Open-Ended, Close-Ended or Interval Schemes.

  1. Open-End Funds:

Purchase and sale of unit can be undertaken any Open-Ended time (in Business Hours) on any business day at prevailing NAV.

  1. Close-End Funds:

Units can be purchased only during the NFO and Close-ended redeemed only on a specified date. In the interim, units can be traded on the stock exchange.

  1. Interval Schemes:

Presently, Interval Schemes can be purchased and redeemed at fixed intervals at the fund houses. With effect from 01st Apr, 2011, the units shall be listed and available for trading on exchange(s). However, the same shall be purchased/redeemed at the fund houses during the specified transaction period.

Portfolio

Mutual funds can invest in various investments ranging from treasury bills to companies listed overseas. Based on the underlying portfolio, mutual fund schemes can be broadly classified as:

  1. Equity Based Schemes.
  2. Debt Based Schemes.
  3. Balance Schemes (Equity + Debt).

 

  1. Equity Based Schemes:

Equity oriented schemes can be further classified.

Equity Oriented Funds Chart
  1. Debt Based Schemes:

Debt oriented schemes can be further classified.

Debt Oriented Funds Chart
  1. Debt Based Schemes:

A balanced or hybrid provides a one-stop investment mix by investing in a mix of debt and equity instruments. In India, the Best Balanced Mutual Funds typically invest 50% to 70% of their portfolio in stocks and the remainder of their resources in bonds and other debt instruments.

Recent Posts
Kothari & Co. April 11, 2019
Ashutosh NRI Services April 11, 2019
Ashutosh Capital Advisors April 11, 2019