MUTUAL FUNDS
Mutual Funds are professionally managed investment schemes where money is invested in different instruments such as –
- EQUITY FUNDS. These are invested exclusively in the equities of domestic companies listed on stock exchanges. Equity is categorized as high-risk funds.
- MONEY MARKET FUNDS. These are mainly meant for investors looking for easy liquidity and returns in the short-term. Money Market is categorized as low-risk funds.
- DEBT FUNDS. It is considered as an alternative to Fixed Deposits. Debt funds invest in fixed-income securities. They are categorized as low-risk funds.
- BALANCED FUNDS. A combination of fixed income securities (debt) and equity funds. Hence offers a balanced portfolio to investors.
WHY MUTUAL FUNDS?
Mutual Funds are managed by professional people, who have years of experience in market analysis. They have the knowledge and expertise to take a call on buying and selling of funds. Fund managers can prevent your portfolio from becoming stagnant.
Mutual Funds ensure –
- Right Amount of Diversification
- Flexibility
- Professional Assistance
- Accessibility
- Liquidity
- Tax Benefits
Mutual Fund investment is one of the most preferred ways for money multiplication, especially for investors who do not have much exposure to stock markets. Mutual funds include investment in both stocks and bonds. Mutual Funds are managed by investment professionals.
Before you begin investing in mutual funds, it’s essential to know the purpose of investment – wealth creation, child education planning, lavish wedding planning, retirement planning, etc.
If you are planning to invest in mutual funds it is suggestive to take these important steps – having essential documents in hand, knowing your purpose of investment, and opting for the right mutual fund schemes.