MUTUAL FUND
What is Mutual Fund?
Mutual fund is a trust that pools savings of a number of investors who share a common financial goal. This pool of money is invested in accordance with a stated objective. Joint ownership of the fund is thus “Mutual”, i.e. the fund belongs to all investors. The money thus collected is then invested in capital market instruments such as shares, debentures and other securities. A mutual fund is an investment tool that allows investors access to a well-diversified portfolio of equities, bonds and other securities.
Advantages of Investing in a Mutual Fund
Professionally managed Mutual fund's pool of money is invested by experts called fund managers who come with years of experience in fields such as equity and debt and invest the fund's money on behalf of the investor.
Diversification: As an individual investor, one might often find it difficult to invest in equity or debt markets directly, due to reasons such as lack of expertise and time. But through a mutual fund, the pool of money is invested across asset classes thereby diversifying the risk that arises from investing in one asset class alone.
Transparency: Mutual funds offer complete transparency and disclosure of information through statutory documents like Scheme Information Document and Key Information Memorandum, which are regularly updated. Fund managers also provide regular information about their investment strategy and the fund’s holdings.
Convenience: Mutual funds are an ideal investment option when looking for ease of transacting and tracking. As mutual funds are managed by expert fund managers, the investors need not be worried about how and where the money is getting invested. One can also buy or sell units of the fund on any business day, thereby adding liquidity to the investment.
Why us?
• Our Promoter comes with hands on experience in the Mutual Fund Industry where he has been an integral part of Research and Fund Management team.
• Triple Distilled process for selecting a mutual fund scheme.
• We come from the school of thought of, ”Skin in the game” so we invest our client money the way we invest our own.
Myths of Investing in Mutual Fund
One of the biggest hurdles in the journey of investing is getting over the widely believed myths that bear no foundation or truth. To start investing, one must, most importantly refrain from giving in to false notions and myths and believe in facts.
a) Mutual Funds need large investment
Fact: Mutual funds do not need large amounts to start with. An investor can start with even as low as Rs. 1,000 per month, through a tool called Systematic Investment Plan wherein the investor is allowed to invest a regular monthly installment in the fund, basis which units would be purchased in their folio. In fact, the earlier one starts investing, the better it would be for his funds as they would get to undergo compounding for a longer period of time.
b) One needs to invest in several mutual funds to avail the benefit of diversification
Fact: Mutual funds by itself invest across asset classes such as equity, debt and money market instruments, which provide investors with the benefit of diversification of risk. In mutual funds, investors can diversify their portfolio basis their risk appetite and alter it from time to time, whenever and wherever necessary.
c) Buying a top rated mutual funds guarantees better returns
Fact: Mutual fund performances are subject to market risks and may vary from time to time. Thus, it is not certain that a fund that may have performed well in the past will do so in the future as well. Investments in mutual funds need to be tracked and reviewed from time to time to ensure it is performing as per the need of the investor.
d) A demat account is needed to invest in mutual funds
Fact: A demat account is not needed to invest in mutual funds. By filling up the application form and ensuring that the investor is KYC compliant, they can choose the fund and submit a cheque to make the investment. However, to ease the process of investing and get better guidance, investor may engage a financial adviser throughout.
e) Mutual funds are unsuitable for beginner
Fact: Any investment, if done without appropriate knowledge can be dangerous. Mutual funds offer high transparency with respect to where and how the funds of the investors are invested. New investors could consider starting a Systematic Investment Plan in a mutual fund, through which they could invest small regular amounts every month and gradually increase it overtime. Financial advisers should be consulted for professional advice in investing, reviewing and tracking the performance of the mutual funds.