Indian Mutual Funds
Mutual funds have long been considered as the essential investment vehicle. The investors are usually allured by the systematic investment plan of Mutual funds. This route of systematic investment plan brings in the afford ability of the Mutual fund.
But is the afford ability the only cause of growing popularity of mutual funds? There is in fact a series of advantages associated with mutual funds. This article is an attempt to dig out every possible advantages of the mutual fund, convey it to the readers and help them to be more wary in taking investment decisions.
In order to list up the benefits of mutual funds, one must begin with the principles that helm the fund.
Registration under SEBI has been mandated for every mutual fund. SEBI has laid down staunch regulations for the safety of the investors. Every company dealing in Mutual funds has to abide by those regulations and hence will safeguard the investors against any possible frauds.
Mutual fund inevitably provides less tension to the investors, because of the professional management of the fund. Every scheme of mutual fund has a clear and well-defined objective. Behind every scheme there exists a dedicated group of fund managers, who work in association with investment research team. They engage themselves in studying the companies, their products and performances judiciously. After a thorough analysis, they decide on the investment plan that is most likely to suit the investor’s goal.
Diversification is one of the attractive features of mutual funds that motivate its investors. Mutual funds allow the investors to spread their investment across different financial products reducing the risk without harming the volume of return.
As mentioned in the beginning of the article, afford ability associated with mutual fund investment guides most of the investors. As a small investor, this feature is very crucial, since you can invest relatively small amounts, without big expenses for trading fees.
There are varied kinds of mutual funds available with different investment objectives. This facilitates an investor to choose a scheme that aptly fits his saving requirements.
The liquidity benefit also adds to the convenience of the investors. At any point of time, one can encash his investments, partly or wholly, at the prevailing NAV. However, there are certain schemes where lock in period is mentioned.
In regard to the investments made in mutual funds, a practice of transparency is always maintained. Investors are updated regularly about the nature of investment made, fund manager’s investment strategy behind the investments, the exact amount invested in each type of security, etc.
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