Mutual Fund – Investment Option

June 9, 2014 Posted by admin

Mutual funds are one of the best investment options for small investors. By investing in it, investors are able to diversify their investments and earn excellent returns. For those wanting to invest in top mutual funds, there are two ways of determining what constitutes a top fund. One way is to focus on fund houses that have very attractive investments. Some examples of popular fund houses with attractive investments are Birla Sun Life, HDFC, ICICI Prudential, Reliance and UTI Mutual Fund. Another way to determine top funds is by looking at fund houses that have the best rated funds in offering.

It is important to note that a fund house may be a top mutual fund with respect to gathering assets, but it may fall behind in terms of performance. It is also important to understand that investment decisions should be made on the basis of performance, rather than popularity. Other aspects to take into account when selecting mutual funds are the reputation of the fund house, the asset under management of the scheme, and the past performance of the scheme. Based on the investor’s risk profile and goal, the investment will be made in equity, debt and gold funds.

The demand for it is high because of the many benefits of investing in such investment vehicles. For starters, one benefit of it is professional expertise. Fund managers are extremely qualified and have lots of experience. They understand the economic and sector indicators and track the market closely. This places them in a good position to make investment decisions. Another benefit of it is asset allocation. Investors can allocate their money in various asset classes, based on their goals, horizon and risk appetite. It also have the benefit of risk diversification. Investors can diversify their risks across asset classes, industries and companies. This type of investments also have the advantage of liquidity. Such investments are highly liquid. This means fund units can be sold on any business day. The money gets credited to the investor’s account within one or two business days. Mutual funds are also affordable. They are perfect for investors who have a small amount to invest. This type of investment is also tax efficient. Dividend received from it is tax-free for investors. With all these benefits, it is easy to see why they are so popular.

Investment in it somewhat risky because it depend on market. So, please read the document carefully before investing in it.

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