Mutual Funds complete informantion

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What is a mutual fund?


An Mutual Fund is a trust that generates savings from investors who share a common financial goal. The funds deposited by investors are invested by the fund managers, which are invested by AMC, capital market instruments such as shares, bonds and other securities. The investment generates the return that is given to the holders of units in proportion to the units held. 


Why should we invest in mutual funds? 

Mutual funds offer benefits like:

Portfolio Diversification

Depending on the investment objective of the scheme, a mutual fund invests in several types of securities. It expands the risks involved in different asset classes, even if the amount invested is small. 


It allows small investments

Mutual funds allow investors to invest as little as $ 500 and sometimes even less. This makes it possible for small investors to invest in the capital market. 


Flexibility

Mutual funds allow unit holders to switch between plan and schemes according to their needs. However, keep in mind that changing plans may involve costs. 


Transparency

Mutual funds regularly share information about the investment value of the unit holders and the portfolio of the scheme through personal communication and / or their website. 


What are the types of Mutual Funds?

1. Investment funds: investment funds invest primarily in shares of several companies. You win or lose by raising or lowering the price of the shares. Capital funds are a good option if you want to invest for a long time. Equity investment funds have a higher risk and, at the same time, also obtain higher long-term gains.

2. Mutual debt fund: These are low-risk mutual funds that consist mainly of government securities that include bonds and treasury bills. Investing in mutual debt funds is much less risky than a capital fund and is good for investors who want to invest for a short time.

3. Balanced and hybrid funds: these types of mutual funds have a combination of debt and capital. These are medium-risk mutual funds. In hybrid mutual funds, the debt and equity ratio is determined by the fund manager and depends on the expected return of the fund.

Is it right to invest in mutual funds?


Yes, if you want to invest for a long time and not if you expect to earn a lot of money in a very short time. Along with this, it also matters in which fund you are investing money. If you invest money in a fund that is well managed, a mutual fund can provide you with very good benefits.

What is Mutual Funds SIP?

SIP (Systematic Investment Plan) Through SIP, you can invest the amount you choose each month in automatic mutual funds. When doing SIP, you must select the amount of investment you have chosen and the investment date each month only once. Whenever the date of your investment arrives, the money will be automatically invested from your bank account through SIP.

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