6 Benefits of Investing In Mutual Funds

[Shashank Bhaskar]

Mutual Funds are perfect for investors looking for professional management of their investments at a nominal cost. They offer plenty of schemes like Equities, Debts, etc., and each of them makes investments according to your objective. You can select suitable schemes based on your needs and by matching the goals with them.

A team of fund managers professionally manages Mutual Fund Investment. They make investment decisions and ensure the fund adheres to the investment objective. The following are the benefits you receive as an investor:

Diversification

Each scheme invests in many securities across different asset classes to build a diversified portfolio based on the investment objective. When you invest in Mutual Fund, your investment spreads across these securities, thereby giving you the benefit of diversification without investing a large sum.

Investment strategies

Mutual Funds offer multiple schemes which invest in different asset classes and use different investment strategies based on the objective. You can select from Equity Funds, including large-cap funds, mid-cap funds, small-cap funds, etc. or debt-oriented funds, including bonds and government securities, Gilt Funds, etc.

Investment and withdrawal

Mutual Funds offer flexibility in terms of investment and withdrawal. You can opt to invest in a lump sum amount or use the Systematic Investment Plan route, where you invest a fixed amount periodically using the Mutual Fund app.

Professional fund management

Mutual Funds provide you access to professional fund managers with deep knowledge and extensive experience in capital markets at a nominal cost. It saves countless hours of time and energy in conducting research and analysis of prospective investments. You can also invest in ELSS Funds to save tax on your investment.

Investment discipline

Building personal wealth requires the discipline of planning your investments and investing regularly. You can invest a fixed amount in Debt Mutual Funds using the online facility offered by your bank and issue standing instructions for the transfer. This way, you do not make efforts to invest since they are automated. It also helps you average down the investment cost if carried over the long term.

Affordability

Investing in Mutual Funds does not require a large capital outlay. While your initial investment in a scheme could be Rs. 5,000 additional investments made into the scheme can be as low as Rs. 500. Furthermore, the expense ratios of Mutual Funds are relatively low.

Conclusion

Multiple Mutual Fund benefits range from disciplined investing to low costs. They offer a variety of schemes, investment flexibility, and professional fund management that fulfil the needs of all investors. You should select the plan according to your investment goals and earn better returns over time.