What is Mutual Fund?
Mutual Fund is a fund in which the money of many investors is first deposited in one place, then the money of that fund is invested in many places including the bond share market. Mutual funds are managed by AMC ie Asset Management Companies operator, usually all AMCs have many types of mutual fund schemes.
Mutual Fund means mutual fund, if it is said in simple language, then the shared amount of many people is called Mutual Fund . In Mutual Fund, the money of many people is put together in the stock market or investment schemes. In this way, collective investment of your shared tomorrows is done in joint funds, whatever the benefit is, it is also distributed according to the investment shares of all.
Why invest in mutual funds _
You can buy and sell any number of mutual funds on any day, whereas you cannot buy and sell bank FD, PPF or insurance on Sunday, which is a government holiday.
Mutual fund expense ratios usually range from 1.5-2.5% of your investment. Expense ratio is the fee you pay to the AMC to manage your fund. This fee is low because many people invest in a mutual fund. And this fee is distributed among all.
Mutual Funds give you the flexibility to own multiple stocks and brands in less investment, whichever Mutual Fund you invest in. Out of that fund, money is not invested in any one place, but it is invested in different places so that even if there is a recession in one area, profits can be made from other areas.
how to invest in mutual funds
Like other financial products, mutual fund investment can also be done in two ways.
Online
Investing in mutual funds online is a simple process, the investor can start by visiting the website of the selected mutual fund or through the app of any intermediary, in which the investor's eKYC assessment and necessary information such as PAN and Aadhaar card etc. are confirmed immediately. and investment can be started easily.
Offline
You can also invest in mutual funds through offline means. This is the traditional method of mutual fund investment. In this, investors can go to the office of their chosen fund or the branch of such a bank where investment in the said fund is available, by filling the application form. Along with this, necessary documents and other conditions also have to be fulfilled, investment can be started after meeting all the requirements.
How to choose mutual fund
Along with getting all the information about mutual funds, you should also know about how to choose mutual funds. First of all, you have to choose which type of fund you want to invest in. Broadly speaking, activity funds should be selected. Should be taken when you are ready to take the risk and its time limit is more than 5 years. If you can take medium risk then you can invest in hybrid funds and if you want to take less risk then you have to invest in debt funds.
After which type of fund you want to invest in, you can choose one of those funds. To choose this fund, you can choose the fund by comparing its performance over a time frame and there are some other factors that you can also consider.
Experience of Fund Marriage Since when the fund managing company is managing the fund and what is its track record.
Portfolio is that mutual fund investing in smaller companies with higher risk and making higher returns. You should also see in which sector that mutual fund is investing its money. Or see separately how much money was invested in equity and how much in debt.
Expense Ratio: With a higher expense ratio, you give away a larger portion of the profit you earn, thus reducing your profit.
Types of Investing in Mutual Funds _
If you want to invest in mutual funds, then you can invest in mutual funds in 3 ways, we will provide you detailed information about these three methods below.
- Equity
- date
- hybrid
Equity – In these, money is invested in the shares of the companies and their performance is based on the performance of the said companies, in which the possibility of both risk and return is high.
Debt – Money is invested in a group of fixed income assets such as government bonds, corporate bonds, municipal bonds, treasury bills, etc. They provide a source of regular income and the rate of return is known in advance.
Hybrid – These have a mix of equity and debt which can be increased or decreased as per the prescribed ratio. Fund managers balance debt and equity according to the market conditions. They give the advantage of investing in both the asset classes from a single option. They are more risky than debt funds but less than equity funds.
Eligibility for Mutual Funds _
- Anyone can invest in mutual funds.
- You can invest a minimum of ₹500 in mutual funds.
- Both Resident Indians and NRIs can invest in Mutual Funds.
- You can also invest in the name of your life partner or children.
- If your child is a minor or below the age of 10 years, then you will have to provide your details while investing in his/her name.
Conclusion
This was our information today about Mutual Fund Kya Hai, hope you have understood all this information and if you want to invest in the stock market for the first time, then you can read our post about investing in mutual funds. Can take advice If you have liked all our information today and proved useful for you, then share our post as much as possible.
