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Top advantages of Mutual Fund Investment in India

Mutual Funds are like the Bollywood celebrities of the financial world. Everyone is talking about them. If you have still not capitalized on this investment wave, here are ten reasons to sway your heart.<br>

Nidhimehra
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Top advantages of Mutual Fund Investment in India

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  1. Top advantages of Mutual Fund Investment inIndia Mutual Funds are like the Bollywood celebrities of the financial world. Everyone is talking about them. If you have still not capitalized on this investment wave, here are ten reasons to sway yourheart. ProfessionalManagement Mutual Fundsare professionally managed by a team of experts called Fund Managers. These professionals are equipped with the knowledge, research facilities and capabilities to make the best decision for the investors’ money. This team of experts will also guide you on aspects such as fund allocation, asset selection, and portfoliomonitoring. Diversification Most Mutual Fund advertisements end with the caution note that they are subject to market risks. But so are all other investment options. The advantage with Mutual Funds is that you can diversify the associated risk. Mutual Funds invest across multiple asset categories such as equity, debt as well as money market instruments. This process helps to spread the risk. Even if one asset category underperforms, the other one can make good theloss. Liquidity Liquidity refers to the ease with which you can convert an investment into cash without a dent in the value. This is an important deciding factor for many investors as it ensures that in case of a financial emergency, you can make money from that investment. Mutual Funds have better liquidity as compared to other investment options such as PPF, real estate, NPS,etc. Only in case of close-ended Mutual Funds, such as ELSS, you can withdraw after the completion of the three-year holdingperiod. Affordable The USP of Mutual Funds is that they are affordable for everyone. You can take the Systematic Investment Plan (SIP) route wherein you can invest as low as Rs. 500 every month. This does not put too much pressure on your monthly budgeting and still gives you an investmentavenue. On the other hand, if you are able to invest a large sum of money in one shot, you can also opt for lump-sum investmentmode. Something foreveryone

  2. There is a Mutual Fund scheme for every kind of investor. You can choose a fund as per your investment objective, risk appetite, desired return, investment tenure, etc. Additionally, you can opt for growth or dividend payout facility as per yourneeds. If you are planning for retirement or want to supplement your regular income, you can opt for SWP (Systematic Withdrawal Plan) for the same. Basically, whatever is your financial goal, there is a right mutual fund scheme available foryou. Accessibility Mutual Fund investments score high on the accessibility factor. You can invest online in a mutual fund scheme of your choice from the comfort of your home. There are many channels through which you can invest in mutual funds – AMC, brokerage firms, online platforms, R&T Agents like Karvy, etc. Moreover, you do not need to have a Demat account to invest in mutualfunds. Transparency Mutual Funds are strictly regulated and monitored by statutory bodies such as AMFI and SEBI. For instance, aspects like expense ratio and investment guidelines are laid down by SEBI and fund houses need to adhere to it. This ensures safe, healthy and transparent investmentpractices. You can also easily access information about the fund manager and AMC easily. This includes AUM, solvency details, verification of credentials,etc. Cheaperalternative Asset Management Companies pool in money from multiple investors and then invest in various asset classes collectively. This helps to bring down transaction costs. Additionally, the asset management fees are on the lower side as it gets equally distributed between all theinvestors. Flexibility Mutual Funds offer a great deal of flexibility to the investors. You can switch schemes or between funds to get better returns. You can also change the SIP amount basis on your cash flowsituation. Taxbenefits Mutual Funds are comparatively more tax-efficient than other investment options. ELSS Mutual Fund is eligible for deduction (up to Rs 1.5 Lakhs) as per Section 80C of the Income Tax Act. Also, long term capital gains do not attract income tax to the value of Rs. 1Lakh.

  3. Mutual Funds have something for everyone – irrespective of financial goals, risk profile or even investible amount. So, what is your excuse for not investing in MutualFunds?

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