A mutual fund, as you probably know, is an investment vehicle that pools money of several investors to invest in different types of securities such as equities and bonds, money-market instruments, real estate, and international securities. Although the definition of mutual funds sounds simple, many investors are intimidated by its complexity, return prospects, documentation, and managing their investments.
These concerns are valid for investors new to mutual funds. They may be feeling anxious about the whole concept of mutual funds and how mutual fund work. Before we take you to the site that answers all your questions, let’s explain some of the key features and benefits of mutual fund investing. To learn everything you need to know about mutual funds, including the basics and technical details, as well as simple answers to all kinds of questions.
Mutual funds, which are an investment type that provides higher returns than traditional savings and investment products, also have a high degree of risk. Mutual funds invest in securities traded on exchanges. This means that the market value of these securities can fluctuate daily due to changes in the wider market. The risk can be mitigated by investing in a variety of securities from different asset classes. One security may make a profit on one day while another security might lose on the same day. Mutual fund schemes invest hundreds of securities. This reduces volatility in the scheme’s return, as opposed to investing in one stock or bond.
After the stock markets close, the NAV of a mutual funds is calculated at the end. NAV is computed by adding all securities in the portfolio to the closing market price and subtracting expenses. You can find detailed mutual fund information here.
By investing SIP (Systematic Investment Plan), for as little as Rs.500 per monthly, you can enjoy the advantages of mutual funds. Investors have a wide range of options to choose from, unlike stocks. You have the option of a growth plan or a payout plan. If you want regular income from mutual fund investments, you can select a dividend payout option within the dividend plan.
