5 Tips on Mutual Funds

Mutual funds are a vehicle to mobilize money from investors, to invest in different markets and securities, in line with the investment objectives agreed upon, between the mutual fund and the investors.
Mutual fund investments are considered safe due to professional management, diversification, variety, liquidity, affordability, convenience, and ease of record keeping—as well as strict RBI regulation and full disclosure.

Popular Types of Mutual Funds in the Market are:

Diversified Funds

It is a category of funds that invest in a diverse mix of stocks/securities across sectors

Equity Linked Savings Schemes (ELSS)

Lock period of 3 years, tax benefits applicable.

Index Funds

To replicate the movements of an index of a specific financial market, or a set of rules of ownership that are held constant, regardless of market conditions.

Small, Mid & Large Cap Funds

Funds invested in different sized companies. Steady growth, capital appreciation is the key.

Sector Funds

Invested in sector-wise, less broad-based compared to diversification.

Balanced Funds

Invest & provide exposure in both equity and debt with the allocation based on the market views.

Here are 5 tips to help you invest in MFs smartly

Why are you Investing?  How much risk you can afford and stand? How much you need to invest initially and subsequently on a periodic basis (SIP) to meet your goals assuming a target rate of return that is consistent with your level of risk tolerance and a specific investment horizon?

Investment Scope & Evaluation

Decide on the set of assets that you will allocate your money to; consider all of the investing styles within each of the asset classes. Do a comparative analysis for the select MF list methodically. You can use some statistical evaluations, like risk-to-return, mean-variance, coefficient of variation based on the market cap and investing style.

Plan your budget

Investing whole-sum/part or incremental. Decide with the help of your financial advisor.

Buying Mutual Funds

An investor can subscribe to the New Fund Offer (NFO) through ASBA facility. You have the options of buying from issuer, broker or online. The Fund may introduce other newer methods of application which will be notified as and when introduced.

Rebalancing and Portfolio Maintenance

Monitor Mutual funds are a vehicle to mobilize money from investors, to invest in different markets and securities, in line with the investment objectives agreed upon, between the mutual fund and the investors.

Mutual fund investments are considered safe due to professional management, diversification, variety, liquidity, affordability, convenience, and ease of recordkeeping—as well as strict RBI regulation and full disclosure.

Popular Types of Mutual Funds in the Market are

Diversified Funds

It is a category of funds that invest in a diverse mix of stocks/securities across sectors.

Equity Linked Savings Schemes (ELSS)

Lock period of 3 years, tax benefits applicable.

Index Funds

To replicate the movements of an index of a specific financial market, or a set of rules of ownership that are held constant, regardless of market conditions.

Small, Mid & Large Cap Funds

Funds invested in different sized companies. Steady growth, capital appreciation is the key.

Sector Funds

Invested in sector-wise, less broad-based compared to diversification.

Balanced Funds

Invest & provide exposure in both equity and debt with the allocation based on the the market views.

Here are 5 tips to help you invest in MFs smartly

Why are you Investing? How much risk you can afford and stand? How much you need to invest initially and subsequently on a periodic basis (SIP) to meet your goals assuming a target rate of return that is consistent with your level of risk tolerance and a specific investment horizon?

Investment Scope & Evaluation

Decide on the set of assets that you will allocate your money to; consider all of the investing styles within each of the asset classes. Do a comparative analysis for the select MF list methodically. You can use some statistical evaluations, like risk-to-return, mean-variance, coefficient of variation based on the market cap and investing style.

Plan your budget

Investing whole-sum/part or incremental. Decide with the help of your financial advisor.

Buying Mutual Funds

An investor can subscribe to the New Fund Offer (NFO) through ASBA facility. You have the options of buying from issuer, broker or online. The Fund may introduce other newer methods of application which will be notified as and when introduced.

Rebalancing and Portfolio Maintenance

Monitor performance using NAV, ensure they aren’t off course and rebalance unfailingly. using NAV, ensure they aren’t off course and rebalance unfailingly.

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