Mutual fund means collective investment
Mutual funds are named prominently among the popular mediums of investment. The question for new investors is what is a mutual fund? Simply put, mutual funds mean collective investment. In the literal sense, it can be called mutual fund. Funds that earn profit by investing in shares and securities from funds collected from various investors are called mutual funds. In order to make the maximum profit from the investment, the fund manager will use the funds. Manage Every profit and loss earned in the above manner is distributed equally among all investors. All companies of mutual fund fund in India are registered under sebi (Securities and Exchange Board of India).
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Benefits of investing in mutual funds:
Investments in mutual funds are managed by fund managers in a professional manner. They, by their experience, invest in the right places to ensure maximum returns. Point wise know the benefits of investing in mutual funds.
It is not necessary to invest a large amount in Mutual Fund. You can start investing in the fund with only 500 rupees and later this investment can be increased.
The fund manager is managed efficiently by the fund manager. After collecting all the information, they invest in the profitable stocks and other securities. So a new investor can also invest easily.
Through mutual funds, we can invest in mediums of diverse nature. For example, if you invest in equity stocks directly, you can invest in only a few companies. On the other hand, money invested in mutual funds is invested in hundreds of stocks. So it is not wrong to say that mutual funds provide us with variety of investments.
Investing in mutual fund funds is very easy. Investors can invest both online or offline.In mutual funds, a balance is created between equity and debt, which reduces the risk arising from fluctuations in the stock market.
Mutual funds can be invested through lump sum and SIP investment. A large amount can be invested in a mutual fund at one time from a lump sum, while a fixed amount can be invested in a mutual fund of your choice every month for a long period of time through SIP.
Tax rebates are also available for investments up to Rs 1.5 lakh in a year through equity linked savings ELSS such as equity mutual funds.
The biggest reason for the popularity of mutual funds is the ease of investing and withdrawing in it. You can invest in it anytime and withdraw your money at any time. But if you deposit your money in fixed deposits, ahead of time You have to pay extra charge when withdrawing money.
Mutual funds help you diversify your investments. When you invest in only one option, you can incur huge losses as the market rolls down. However, you can avoid this problem by investing in different asset classes.
Mutual funds do not guarantee returns to investors as they are linked to market performance, but in the long run they give good returns due to the impact of fund compounding. For long term investments, it is a good and profitable investment from FD and other traditional investment options. |
Mutual fund companies manage all administrative activities including paperwork. Investments are made aware of the progress of the investment portfolio through a combination of Net Asset Value (NAV) and account statements.
