Mutual Funds
Want to begin investing in mutual funds but don’t know where to start? Read our beginner’s guide to understand mutual fund investments.
Mutual Fund Investments - How do they work?
Each investor is allotted units proportionally on the basis of their contribution to the fund. The number of units purchased by the investor is determined by the amount of money that the investor is willing to invest. It is for the same reason that the investor is also known as a Unit Holder. The net return on the investment is calculated after deducting tax and research and administrative expenses. The value of each unit is expressed as Net Asset Value or NAV.
Mutual Funds -- Characteristics
Mutual Funds are ideal for those who are not financially savvy or adept at managing their investments. A Mutual Fund is managed by experts who determine where and how the money will be invested. As such, MFs help investors build their financial wealth slowly and steadily.
- Diverse options: Mutual Funds offer investors a wide range of options, spanning the entire risk-return profile. Investors may choose a Mutual Fund that meets their specific objectives.
- Long-term wealth: Mutual Funds help investors create long-term wealth by investing small amounts regularly (through systematic investment plans or SIPs). Over the long-term, SIP investments in Mutual Funds deliver good returns while lowering the risk.
- Easy to invest: Investors can choose to invest in Mutual Funds online or offline. They can invest in a lump sum or small amounts at a time. They can instruct their banks and automate their Mutual Fund investments.
- Easy to track: You can easily track your mutual portfolio online.