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Mutual funds - a beneficial investment option
Investing in Mutual Funds offers you many benefits. Here are some reasons why Mutual Funds are a preferred avenue of investment...
Mutual Funds are managed by qualified and experienced professionals. These experts have access to company research and analysis for making informed, well-timed decisions.
Investing in Mutual Funds diversify your portfolio and lower your risk.
Let's say, you have Rs. 20,000/- to invest; you will perhaps be able to buy a couple of blue chip stocks. However, investing the same amount in a mutual fund will allow you to diversify your risk over several stocks held by the fund.
Mutual Funds are easy to invest in and can be purchased with minimum documentation from investment advisors, banks and mutual fund companies. Open-ended schemes are highly liquid and one can withdraw from them at the net asset value (NAV) at any time.
- All mutual fund companies publish details about the investments made by the fund regularly, hence you can judge if your money is canalized in the preferred manner.
- Besides, the charges are transparent and clearly mentioned.
- The Net Asset Value of the fund is declared every working day, so you can track the value of your investments.
One can invest an amount as low as Rs. 500 per month via Systematic Investment Plans (SIPs), hence investments in mutual funds are affordable and convenient.
Equity Linked Savings Schemes (ELSS) offer tax rebates to investors under Section 80C of the Income Tax Act. Additionally, dividend income from Mutual Funds is tax-free in the hands of investors.
Most mutual fund houses belong to large industrial groups, banks and foreign institution investors. Mutual funds are governed by the Securities Exchange Board of India (SEBI) and guided by Association of Mutual Funds in India (AMFI).