Imagine you are an investor and would like to invest your hard earned money. You are confused with various options around you. You do not know, where to invest, where to channelize your hard earned money.
Big problem isn’t it? However not to worry we, at Moneymindz will offer you one stop solution to your financial worry. Mutual fund is the best bet among various financial products that are available in India.
What are Mutual Funds?
A unique investment tool consisting of the funds collected from various investors and used in investing in stocks, shares, bond, money markets tools and other related assets is known as the Mutual Fund. A good mutual fund is structured in order to have a good investment in India.
Guidelines To Choose Best Mutual Funds In India
Various mutual fund companies are set up in India and the guidelines to select best mutual fund companies in India are:
Good Performance: You must select the right mutual fund company, by looking at its performance over last 5 years. SENSEX and NIFTY will be the yard stick of measuring performance.
- If the mutual funds are giving huge returns compared to target set, then it has performed well
- If the mutual funds are on par with the SENSEX/NIFTY, then it is neutral performance
- If the performance is below the SENSEX/NIFTY, then it has performed very badly
Read Scheme Document: One must be very alert and read the complete scheme related document, before making investment in Mutual Fund.
AUM(Assets Under Management)
The total market value of the assets, used by the financial establishment, on behalf of investors is known as the AUM. Assets under Management do rise and fall depending upon market scenarios.
Ranking By CRISIL (Credit Rating Information Service Of India Limited)
CRISIL, an agency established in India in 1987, headquartered in Mumbai, is very good in financial advisory/analytical services to various banking and credit companies in India. Ranking by CRISIL is vital and ranking starts from 1 to 5. Ranks 1, 2 and 3 are the best ranks for investment.
Long Term Growth: One must invest in mutual funds having long term growth. Otherwise returns will be very bad.
Benefits of Mutual Funds:
The major benefits of the mutual funds are given below as follows:
Professional Expertise: A good mutual fund service, in India will be assisted by a professional expert. You need to study all dynamics of the market, and study research patterns in India.
Diversification: You need to have great variety in dealing with the mutual funds in India. One can go ahead and invest in various kinds of mutual funds. Debt market in India is not good and do not have good returns. One could invest in Gold, Real estate and securities in India to have finest diversification.
Risk Reduction: Mutual fund is the ideal one in removing overhaul risks. Mutual fund has some investment goals, and do play a vital role in mitigating risks.
Convenient Option: A good mutual fund is an easy process and a very convenient option in India. Investors can invest in mutual funds based on their investments.
Low Cost: A mutual fund is very cheap and do not require huge amount to be invested. One can begin a systematic investment plan with INR 300 and still reap rich benefits.
Awesome Tax Benefits: A good mutual fund will have long term tax benefits in India. After investing in low risk products like cash/liquid funds, you will receive good returns.
More Vital Info On Mutual Funds In India
Interesting information is available relating to the mutual fund like:
Mutual funds are ideal for any person with minimum knowledge of financial markets.
Net Asset Value (NAV) is the market value of securities held by scheme under mutual fund.
Price an investor pays for investment and becomes a major part of profit/loss calculation is known as Purchase Price.
Price or NAV (Net Asset Value) in which issuing firm will purchase security/units before the maturity date is known as Redemption Price.
A fee charged by mutual fund, if investor likes to withdraw the investment within specific period is known as Exit Load.
Scheme related document and statement of additional information is vital to investors and gives insight into companies past performance and policies in particular.
The NAV (Net Asset Value) is declared in evening on or before 9 PM IST.
One can download application form from the website, or approach the bank.
Present Value of Investment (POV) is the current value of a sum of money going to be invested in future with a specific rate of return.
You will receive account statements immediately through email/courier, the moment you register with any mutual fund firm.
BENEFITS OF SYSTEMATIC INVESTMENT PLAN (SIP)
The advantages of the Systematic Investment Plan are as follows:
Lowers risk factor and hence investor can do a comeback.
Can be launched with small amount of money.
Helps in achieving long term financial goals.
Encourages regular investment among people in India.
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