There are lots of choices when it comes to where to invest. Some may decide to play safe and invest in FDs while some are willing to take risk and invest in stocks. Recently one of the ad campaign that has caught everyone’s attention is the one that says `Mutual Fund Sahi Hai’. So is mutual fund really the right investment for you? Read on to know about various features of mutual funds and decide yourself.
For big and small investors
It does not matter whether you have a lump sum amount in your hand or whether you want to invest small amounts at regular intervals. You can invest in mutual funds either way. If you are a small investor you can choose the SIP route to invest a fixed amount at a regular interval for your preferred time period. Else you can park your savings in lump sum form whenever you like.
Liquidity
Mutual fund allows you to sell part or your entire fund whenever you want. The funds get credited back to the investor’s bank account as soon as they redeem it. There is no exit load for funds held at least for one year.
Time period
You can invest in mutual fund for small, medium or long term depending on your financial goals. The scheme can be chosen to suit year needs. However, it is recommended that you do not redeem your funds till your goal is achieved. The longer you stay invested, the better returns you will get.
Direct plan
Investors have the option to select direct plan where they can invest directly without intermediary or brokers. The returns in such plans are higher than regular plans as the expense ratio comes down because you are directly dealing with the AMC. This plan is good for investors who have proper knowledge of the market and can manage the funds on their own.
Different schemes
There are so many varieties of schemes to choose from. You can select from equity, debt or balanced funds depending on the returns expected. The schemes also allow you to choose from small, mid or large cap funds. You can have multiple funds of different varieties for your portfolio and you can hold them for different time frames.
Regular information
Mutual fund investors get regular information about the performance of portfolio through account statements. You also get details of various assets in which the AMC has allocated the fund. This makes it easy for you and your financial advisor to decide if you should stick to a particular fund or redeem it. Similarly, you can also allocate more funds in the scheme which is performing well.
Managed by professionals
Mutual funds are managed by professional fund managers who have sound knowledge of various aspects of the market. It is their job to make sure that the funds which they are managing perform better than the benchmark. They analyse the performance of various companies, identify the winning stocks and decide when to buy and sell them. The funds come under the governance of SEBI and hence they are duly regulated.
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