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Mutual Funds

In recent times, one of the most convenient ways to grow your money is investing in mutual funds. You may not know the nitty-gritty of stock market investing, still you are not kept away yourself with from the benefits of high return in the capital market. Irrespective of your level of financial literacy, investment in mutual funds is always easy and hassle-free. In comparison to conventional instruments of investments like bank FDs, RDs, Insurance Plans, Post Office Deposits and PPFs, mutual funds always give higher returns to the investor. If inflation is factoIn recent times, one of the most convenient ways to grow your money is red in to the conventional investments, the real return would be very low and sometimes it becomes negative. Only mutual funds can generate positive returns after adjusting for inflation. Except direct equity, the mutual fund is the only investment vehicle that can create enormous wealth for the investor. The following reasons elucidates the benefits of investing in mutual funds –

  • Diversification: In investing parlance, the adage “don’t put all your eggs in one basket” has omnipotent wealth creation power. Diversification is one of the most crucial ways to lower the risk of your portfolio. To reduce potential losses, it is advantageous to diversify your holdings rather than invest in a single business, sector, or investment vehicle.
  • A Fund for Every Type of Investor is Available:You have a variety of choices to invest in mutual funds, e.g., equity, debt, hybrid, fund of fund, gold, commodities, ETF, real estate and vertically, large cap, mid cap and small cap funds and mix of any of these.
  • Advantages of High Liquidity: The second most liquid investment vehicle after bank deposits is open-ended mutual funds, which are also significantly more liquid than other types of investments like life insurance, infrastructure bonds, post office schemes, etc. In open-ended funds, investors have the benefit of redeeming their units.
  • Options for Lumpsum & SIP Investments: Mutual Funds also offer the option to invest the amount in one go or place a specified number at regular intervals. The first choice is referred to as a “Lumpsum” investment, and the second is referred to as a “Systematic Investment Plan,” or SIP.
  • The Benefit of Transparency: Another benefit of Mutual Funds for investors is transparency. Investors are always updated on the current market value of their Mutual Fund units because Mutual Fund schemes make their Net Asset Values (NAVs) public at the end of each business day.
  • Tax Benefit: One of the biggest advantages of investing in mutual funds over many customary fixed-income investments is their tax advantages. Under Section 80C of the Income Tax Act of 1961, investing in an ELSS Fund entitles you to a reduction in your taxable income of up to Rs. 1.5 lakh.
  • Competency of Cost: Mutual Fund investing is very cost-effective.
  • Lower Transaction Cost: Another benefit of Mutual Funds is lower transaction costs as a result of economies of scale, and, since Mutual Funds buy and sell securities in large volumes, transaction costs per unit are much lower than those incurred by retail investors when they buy or sell shares through stock brokers.
  • Smaller Upfront Investment: The next important feature of Mutual Funds is that you can begin investing in them with small amounts of money.
  • Professional Management & Expertise: Stock and bond investing require a great deal of knowledge and experience. On the other hand, Mutual Funds are managed by professionals who have the necessary training, knowledge, and experience to choose the best stocks or other financial instruments to obtain the best risk-adjusted returns is a major benefit of Mutual Funds.

 We at Wealth Axis Securities provide customized services to the common investors based on the risk profile and investment time horizon, the best suited mutual fund schemes that generates highest return in the category.