Mutual Funds
WHY INVEST IN MUTUAL FUNDS?
As investment goals vary from person to person – post-retirement expenses, money for children’s education or marriage, house purchase, etc. – the investment products required to achieve these goals too vary. Mutual funds provide certain distinct advantages over investing in individual securities. Mutual funds offer multiple choices for investment across equity shares, corporate bonds, government securities, Commodities and Real Estates, providing an excellent avenue for retail investors to participate and benefit from the uptrends in capital markets. The main advantages are that you can invest in a variety of securities for a relatively low cost and leave the investment decisions to a professional manager.
- A Diversified Portfolio: Mutual funds invest in two main asset classes -- debt and equity. Some funds are pure debt, and some invest in just equity; others are balanced or hybrid.The primary benefit of investing in a mutual fund is that you get exposure to a variety of shares or fixed income instruments.
- There’s a Fund for Everyone: This could be one of the significant benefits of mutual funds. There are over 2,000+ currently active schemes -- a lot to choose from. You can find funds that match your risk appetite, investment horizons, and personal financial goals.
- Benefit from High Liquidity: If you invest in open-ended mutual funds (which most funds are), you can buy and sell your units at any time. Your total redeemable or buyable value is based on the fund’s net asset value (NAV) for that day.
- You can Invest in Small Amounts: Anybody can start their SIP according to their financial connivance or Goal Base. You can begin a SIP with as little as ₹1000 a month. The advantage here is that you don’t have to wait for a while until you accumulate enough cash to make investments.
- Well-Regulated: Mutual Funds are regulated by the capital markets regulator, Securities and Exchange Board of India (SEBI) under SEBI (Mutual Funds) Regulations, 1996. SEBI has laid down stringent rules and regulations keeping investor protection, transparency with appropriate risk mitigation framework and fair valuation principles.
