What is Mutual Fund
All of you generally heard about mutual fund sahi hai in various ads or you have heard about SIP (Systematic Investment Plan).
A mutual fund is a pool of money managed by a professional fund manager. It is a trust that collects money from a number of investors who share a common investment objective and invest in equities and other instruments. You have wondered that there is gradually shifting from traditional saving options (like FDs, insurance) to mutual funds.
Here is some reasons why mutual funds are becoming so popular:
1. Professional management:
One of the biggest advantages of mutual funds is your money is being managed by experts who have in-depth knowledge of financial markets and have years of experience in managing money.
2. Better Return:
Equity mutual funds over the long term have beaten most investment options in return. Equity funds invest your money in companies that are driving India forward, and you directly benefit from growth of these companies.
3. Well-regulated:
All mutual fund houses function under the purview of SEBI (Securities and Exchange Board of India).
SEBI is a government agency that supervises mutual fund industry and works to safeguard the interest of investors.
4. Diversification:
Mutual funds allow you to have a diversified portfolio in a much and cost-effective way. When you invest in a mutual fund scheme, the scheme based on its mandate puts your money across industries or sectors and different asset classes.
5. Customizability:
There is a mutual fund scheme available for every possible investment objective. Whatever might be your investment goal, time frame for investment, or your risk appetite, you are sure to find a scheme that will suit your need.