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What Is a Mutual fund?
A mutual fund is a financial tool made up of a pool of money collected from different investors to invest in securities like stocks, bonds, etc.
Mutual funds are divided into several kinds of categories, representing the kinds of securities they invest in, their investment objectives, and the type of returns they seek.
Mutual funds are handled by professional portfolio managers, who allocate the funds and manage them carefully to create wealth for the fund’s investors in order to satisfy the investment objectives.
The Securities Exchange Board of India regulates the mutual fund market in India to ensure responsible and transparent management of the investor’s wealth.
The price of a mutual fund share is referred to as the net asset value (NAV) per share as it represents investments in many different securities instead of just one holding. The NAV is computed by dividing the total value of the securities in the portfolio by the total amount of mutual fund units outstanding.
Benefits of Investing in BestMutual funds in India
There are many reasons to invest in Mutual funds Online with the top mutual fund advisor in India. Some of them are mentioned below:
- Professional Financial Experts
As the best mutual fund company in Delhi we would like to highlight the point that every Mutual fund scheme has a well-defined objective and behind every scheme, there is a dedicated team of financial experts working in tandem with specialized investment research team. These experts diligently and judiciously study companies, their products and performance, and after thorough analysis, they decide on the best investment option most aptly suited to achieve the scheme’s objective as well as investor’s financial goals.
- Diversifying Risk
Diversification of Risk plays a very big part in the success of any portfolio. The top mutual fund advisor in Delhi always suggest investment in a broad range of securities. This limits the investment risk by reducing the effect of a possible decline in the value of any one security. Mutual fund unit-holders can benefit from diversification techniques usually available only to investors wealthy enough to buy significant positions in a wide variety of securities.
- Low Cost
Today the online mutual fund investment has become very cheap and highly accessible by people of all income groups. Nowadays, Mutual funds generally provide an opportunity to invest with fewer funds as compared to other avenues in the capital market. You can invest in a mutual fund with as little as Rs. 5,000 and also have the option to invest in SIP mutual funds or commonly known as Systematic Investment Plan starting with just Rs.500 every month.
As one of the top mutual fund company in Delhi we have seen that people are often afraid to invest in SIP mutual funds as they assume that once they invest in SIP mutual funds their money will be locked in for years but this is not true.
You can encash your money from a mutual fund rather easily on immediate basis when compared with other forms of savings like the public provident fund or National Savings Scheme. You can withdraw or redeem money at the Net Asset Value related prices in the open-end schemes. However, please note that in closed-end schemes, lock in period is mentioned, investor cannot redeem his investment until that period.
- Variety of Investment
There is no shortage of variety when investing in mutual funds. There are funds that focus on blue-chip stocks, technology stocks, bonds or a mix of stocks and bonds and with due assistance from a financial expert, the investor can choose a scheme that aptly fits his requirements, and helps him achieve maximum profitability.
Types of Best Mutual funds in India
You are reading this means that you have been at least acquainted with the term ‘Mutual fund’. Being one of the top mutual fund advisor in Delhi, we believe that Mutual funds just like any other financial instrument has various types. We have tried to sum up a few best mutual funds in India to invest in as follows:
- Equity Funds
The most popular types of mutual funds to invest in are Equity funds. The major portion of such shares are dedicated to stocks. Equity funds aim to provide capital growth by investing in the shares of individual companies. Any dividends received by the fund can be reinvested by the fund manager to provide further growth or paid to investors. Both risk and returns are high but equity funds could be a good investment if you have a long-term perspective and can stay invested for at least five years.
- Debt or Income Funds
A fixed income mutual fund are concentrated towards investment in funds that pay a set rate of return, such as government bonds, corporate bonds, or other debt instruments. The aim of debt or income funds is to provide you with a steady income. These funds generally invest in securities such as bonds, corporate debentures, government securities (gilts) and money market instruments. Opportunities for capital appreciation are limited.
- Balanced Funds
The aim of balanced funds is to provide both growth and regular income as such schemes invest both in equities and fixed income securities in the proportion indicated in their offer documents. The investor may wish to balance his risk between various sectors such as asset size, income or growth. Therefore the fund is a balance between various attributes desired, however, NAVs of such funds are likely to be less volatile compared to pure equity funds
- Liquid Funds
Liquid funds are a safe place to park your money; it is an appealing alternative to bank deposits because they aim to provide liquidity, capital preservation and slightly higher interest rates than bank accounts. Returns on these funds fluctuate much less compared to other funds as the fund manager invests in ‘cash’ assets such as treasury bills, certificates of deposit and commercial paper.
- Index Funds
Another group of funds, which have been extremely popular amongst other types of best performing mutual funds in India are the Index funds are which are passively managed funds i.e. the fund manager attempts to mirror the performance of a benchmark index like the BSE Sensex or the S&P CNX Nifty, by being invested in the same stocks. NAVs of such schemes would rise or fall in accordance with the rise or fall in the index.