Mutual Funds Advantages

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On an average, Indians save around 30% of their income which is an excellent saving ratio. It is considered one of the best across the world. However, when it comes to investment, most of the people fail miserably. They consider savings or fixed deposits as an investment. They invest without knowing the features of these investment products and also the risks associated with it. Most of them do not know about the other investment options available to them. Serious investors look for good investment opportunities that give them better returns and are both safe and secure. Looking at present financial distribution system and quality of advice available in the market, mutual funds are great investment options that can help a lot to investors…show more content…
As an investor, you can purchase a mutual fund unit that represents your share of holding in a particular scheme. These mutual fund units can be further purchased or redeemed as needed at the current Net Assets Value (NAV) of the fund. These values are not constant and keep fluctuating in accordance with the funds holding. Each investor who has purchased a mutual fund holding shares the gain and loss of the funds proportionately. Mutual Funds: Benefits Mutual funds are reliable and safe investment options for people who wish to save and grow their money. They offer several benefits to the investors, some of them are discussed here. • The biggest and the most significant advantage of investing in mutual funds is that people can get an access to a professionally-managed and diversified portfolio of equities, bonds and other securities which would be quite challenging to create on their own with a small amount of capital. • Mutual funds permit the investors to put in small amounts of money and still reap the benefits of investing a large pool of cash since many investors jointly hold a mutual fund. They jointly share in the gains and losses incurred by the mutual fund, proportionate to the amount they have invested in the mutual…show more content…
The Net Asset Value (NAV) is declared daily and the portfolio of the schemes is also made available every month. There are many agencies that rate the mutual fund schemes depending on risk and reward attached to them. Mutual Funds: Types There various types of mutual funds categorised based on factors such as risk, assets management, speciality, and structure and investment objective associated with them. Some of the most common types of mutual funds are briefly discussed here. Open-end Funds: In this type of mutual funds, units are open and available for subscription throughout the year and are not listed on the stock exchange. Basically, these funds allow investors to keep the investment as long as they want. There are no limits on how much can be invested in the open-end mutual funds. Closed-end Funds: A closed-end mutual fund is the one in which holdings can be purchased only during the initial offer period. These mutual funds are also listed on the stock exchange and have a fixed number of shares outstanding. They also operate for a fixed duration. The investors can redeem their units only during the specified

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