Mutual Funds, Indian Mutual Funds, Mutual Fund, Birla Mutual Fund, LIC Mutual Fund, |
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Invest at One Place, Reap from all Places...
 Mutual Fund is a money managing system that has been introduced to invest money collected from the public. The Assets Management Companies (AMCs) mange the different types of Mutual Fund Schemes. The AMCs are being supported by various financial Institutions or companies.
Mutual Fund Investment in India means pooling money in bonds, short-term money market, financial institutions, stocks and securities and dishing out returns as dividends. Mutual Funds are being managed by Fund Managers and regulated by the Securities Exchange Board of India.
Mutual Funds have different structures and different aims. They enable us to classify them into various major categories as follow.
Closed-End MutualFunds:
A closed-end Mutual Fund has a fixed number of shares issued to the public through an initial public offering.
Open-End MutualFunds:
Open end Mutual Funds are being operated by a mutual fund house which raises money from shareholders and invests in a group of assets.
Large Cap Mutual Funds:
Large Cap Funds are those mutual funds, which seek capital appreciation by investing primarily in stocks of large blue chip companies.
Mid-Cap Mutual Funds:
Mid cap funds are those mutual funds, which invest in small / medium sized companies. As there is no standard definition classifying companies.
Equity Mutual Funds:
Equity mutual funds are also known as stock mutual funds. Equity mutual funds invest pooled amounts of money in the stocks of public companies.
Balanced Mutual Funds:
Balanced fund is also known as hybrid fund. It is a type of mutual fund that buys a combination of common stock, preferred stock, bonds, and short-term bonds.
Growth Mutual Funds:
Growth funds are those mutual funds that aim to achieve capital appreciation by investing in growth stocks.
No Load Mutual Funds:
Mutual funds can be classified into two types - Load mutual funds and No-Load mutual funds.
Exchange Traded Mutual Funds:
Exchange Traded Funds (ETFs) represent a basket of securities that is traded on an exchange, similar to a stock. Hence, unlike conventional mutual funds.
Value Mutual Funds:
Value funds are those mutual funds that tend to focus on safety rather than growth, and often choose investments providing dividends as well as capital appreciation.
Money Market Mutual Funds:
A money market fund is a mutual fund that invests solely in money market instruments. Money market instruments are forms of debt that mature in less than one year and are very liquid.
International Mutual Funds:
International mutual funds are those funds that invest in non-domestic securities markets throughout the world.
Regional Mutual Funds:
Regional mutual fund is a mutual fund that confines itself to investments in securities from a specified geographical area, usually, the fund's local region.
Sector Mutual Funds:
Sector mutual funds are those mutual funds that restrict their investments to a particular segment or sector of the economy.
Index Mutual Funds:
An index fund is aa mutual fund or exchange-traded fund) that aims to replicate the movements of an index of a specific financial market.
Fund of Funds:
A fund of funds (FOF) is an investment fund that holds a portfolio of other investment funds rather than investing directly in shares, bonds or other securities.
BENEFITS OF MUTUAL FUND:
Mutual Funds Investment is cost effective and has easy process of investment.
Cost Effectiveness:
By investing in to Mutual Fund, investors can buy stocks or bonds at lower trading charges, as they get concession from Brokers. They also have the services of financial experts for very small fees.
Affordability:
Investment in Mutual Fund can be started with small amount of money. You do not require lakhs of Rupees to buy a portfolio of Blue Chip Companies. You can start with few thousand rupees only.
Diversification:
Diversification means diffusing money across various different categories of investment. Mutual Fund investment makes it possible for even small investors to diversify their portfolio. However, small investors cannot afford to have well diversified portfolio because it calls for large investment.
Professional Management:
Mutual Funds are managed and run by highly experts of stock market professionals. You get a professional Money Managers for small fees. You can leave investment decision on them and you just have to monitor the performance of the Mutual Fund at regular interval.
Transparency:
Mutual Funds offer daily NAVs of the scheme, which helps you monitor your investments at regular basis. You also have advantage of capital gain tax. Certain Tax-Saving Schemes and Pension Schemes give you the added advantage to save money.
Convenience:
Some of the Mutual Funds offer tailor made investment plans like Systematic Investment Plan and Systematic Withdrawal Plan. Investors do not have to take investment decision or they do not have to deal with brokerage for buying and selling the shares. Mutual Fund Investment offer some specialized scheme like Retirement Plans, Children Plan, and some industry specific schemes to suit personal preference.
Liquidity:
You can liquidate your investment at any time, say within 2 working days. There is no any penal interest in most cases. However some Schemes charge to get an exit.
Tax Benefits:
You do not have to pay any taxes on mutual Funds Dividend and the advantage of Capital gain.
RISK VERSUS REWARD
Unpredictability in the market can be the one of the biggest risk in the Mutual Fund Investment. The sudden upturn and downturn of market sentiments, Inflation, Interest Rate Change, and General Economic Scenario are some of the factors amongst the investors. However, the element of Unpredictability can also bring substantial long term return.
SELECTION PARAMETERS
Objectives:
Before investing in to Mutual Funds, you have to find out the scheme that matches with your objective! For example, a Scheme that invests heavily in mid-cap stocks is not suitable for a conservative equity investor. Conservative investor should choose schemes that invest in blue chips.
Risk Capability:
The investors who cannot tolerate the risks should go for debt schemes, which are safer. Aggressive investors can invest in Equity Investments. Highly aggressive investors can choose schemes with specific industry.
Managers and Track Record:
It will be imperative for you to see that your money should be managed by some financial experts. It is also essential that the Mutual Fund House you choose should have excellent track record of making money for investors. You will have to look at the schemes which performed in different market conditions.
Cost Factor:
As AMC fee is regulated, you need to have a look at the expense ratio of Mutual Fund before investing, because your money will be deducted from the investment. Higher Entry Charges or Exit Charges can reduce your investment returns. Higher expenses ratio can only be justified by outstanding return.
Some of the popular firms that deal in mutual funds in India are:
Reliance Mutual Funds, HDFC, ABN Amro, AIG, Bank of Baroda, Canara Bank, Birla Sun Life, DSP Merrill Lynch, DBS Chola Mandalam AMC, Escorts Mutual, Deutsche Bank, ING, HSBC, ICICI Prudential, LIC, JP Morgan, Kotak Mahindra, Lotus India, JM Financial, Morgan Stanley, State Bank of India (SBI), Sahara Mutual Funds, Sundaram BNP Paribas, Taurus Mutual Funds, Tata, UTI, and Standard Chartered
Let us try to figure out the factors that decide their fate in the market.
To get an idea of best performing Mutual Fund, one should know about its current Net Asset Value (NAV). NAV is considered the latest market value of the holding of a fund that brings the Funds liability down, which is indicated as per share amount. NAV is decided daily basis. This is determined after trade closes on certain financial exchanges. An increase in NAV signifies rise in the holdings of shareholders. The Mutual Fund Firm will then do the transactions along with the sales fees.
For More Information Contact:
JSAfinance.com
Rizvi Park, E28 Ground Floor,
S.V.Road, Near Milan Subway,
Khar (West) - Mumbai - 400 0052 India.
Phone : (022) 2661 5092
Cell : 98925 22650
eMail : jsajinkya [at] gmail.com
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Mutual Funds In India