About Mutual Funds

What is Mutual Fund?

A mutual fund is a financial vehicle that allows multiple investors to pool their money together, all with a shared investment objective. A professional fund manager oversees the pooled assets, making decisions on which securities, typically stocks or bonds, to invest in. Mutual funds are regarded as one of the most favourable investment options because they are cost-effective, easy to invest in, and eliminate the need for investors to choose individual stocks or bonds themselves.

How it Works?

A mutual fund is a pool of stocks, bonds, and other securities owned by multiple investors and managed by a professional investment firm. For individual investors, building a diversified portfolio can be challenging. Mutual funds make it easier by allowing investors to simultaneously invest in both equity and debt securities.
When an investor contributes a certain amount to a mutual fund, they become a unit holder of corresponding units. The fund then invests the unit holders’ money in various stocks, bonds, or other securities that generate interest or dividends. Any income earned, such as interest or dividends, is distributed to the unit holders. Additionally, if the fund sells stocks at a higher price, unit holders may receive capital gains.

Advantages of Mutual Fund

Professional Management

The primary advantage of funds is the professional management of your money. Investors purchase funds because they do not have the time or the expertise to manage their own portfolio. A mutual fund is a relatively inexpensive way for a small investor to get a full-time manager to make and monitor the investments.

Diversification

By owning "shares"(known as "units") in a mutual fund instead of owning individual stocks or bonds, your risk is spread out. The idea behind diversification is to invest in a number of assets so that a loss in any particular investment is minimized by gains in others.

Simplicity

Buying a mutual fund is easy! The minimum investment is also very small. As little as Rs 500 can be invested on a monthly basis. Just contact us to know more.

Economies of Scale

Because a mutual fund buys and sells large amounts of securities at a time, its transaction costs are lower than you as an individual would pay.

Liquidity

Just like an individual stock, a mutual fund allows you to sell the units at any time.

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