Reasons To Invest In Mutual Funds & Types of Mutual Funds

Reasons To Invest In Mutual Funds & Types of Mutual Funds

2020/01/19

Mutual funds are investment vehicles, which pool together all the money from investors and invest in different asset classes such as equity, fixed income etc. Now days everybody wants to invest in capital market in order to attain higher returns. Mutual funds invest in capital markets on behalf of investors. Since the time mutual funds have come in, hey have caught the fancy of investors in a big way.

Following are the reasons for investing in mutual funds:

No time or market knowledge:

Equity markets are volatile and investment in it requires lot of time and effort on the part of investors. Also one needs to study the companies in detail before investing. Most of the retail investors either do not have the time or the expertise for this. Mutual funds are managed by fund manager who are experts in their field, so be rest assured that your investments are taken care of by the professionals.

Diversification:

Diversification ensures reduction of risk. A mutual fund invests all their funds across various securities, thereby reducing the risk in the portfolio. Any layman will not have the required expertise to invest across various companies, thus diversification ensures spreading your investment across various companies.

Fund manager:

Mutual funds are managed by fund managers who are experts in their fields. They will take the right decision keeping in mind the theme of the fund. Fund managers provide their services to the fund for a charge called as fund management charge.

Various types of mutual funds available:

Various types of mutual funds are available such as sector funds, diversified equity funds, ELSS, fixed income funds, balanced funds, liquid funds, ETf’s etc. Thus mutual funds give lot of choice to investors who can invest in funds on the basis of their risk taking ability.

Plethora of funds & schemes:

There are loads of mutual funds offering loads of schemes and thus offering wide variety to investors. Investors can choose from the vast plethora of funds and schemes available. Thus investment in mutual fund gives lot of choice to investors, something which they would not have got by investing on their own.

Reasons To Invest In Mutual Funds & Types of Mutual Funds insurance personal-finance

MORE ABOUT Reasons To Invest In Mutual Funds & Types of Mutual Funds

Historia amp