Advantages of Mutual Funds

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The Advantages of Mutual Funds encourage investors to invest in the same. The Mutual funds are very popular among investors as it is professionally managed and it offers a wide variety of advantages.

Advantages of Mutual Funds

The Mutual Funds are one of the best financial instruments offered to the public by the finance corporations. The Mutual Funds are collective investments, and use that money as investment in various stocks, bonds, and other securities to earn interest and disburse dividends.Advantages of Mutual Funds are the primary reason for the popularity of the mutual funds.

The Mutual Funds offers easy access to invest in the complex financial market. Major advantages of Mutual Funds are professional management, diversification and liquidity.

Advantages of Mutual Funds-Overview

  • Flexibility: The investments pertaining to the Mutual Fund offers the public a lot of flexibility by means of dividend reinvestment, systematic investment plans and systematic withdrawal plans.

  • Affordability: The Mutual funds are available in units. Hence they are highly affordable and due to the very large principal sum, even the small investors are benefited by the investment scheme.

  • Liquidity: In case of Open Ended Mutual Fund schemes, the investors have the option of redeeming or withdrawing money at any point of time at the current rate of net value asset.

  • Diversification: The risk pertaining to the Mutual Funds is quite low as the total investment is distributed in several industries and different stocks.

  • Professional Management: The Mutual Funds are professionally managed. The experienced Fund Managers pertaining to the Mutual Funds examine all options based on research and experience.

  • Potential of return: The Fund Managers of the Mutual Funds gather data from leading economists and financial analysts. So they are in a better position to analyze the scopes of lucrative return from the investments.

  • Low Costs: The fees pertaining to the custodial, brokerage, and others is very low.

  • Regulated for investor protection: The Mutual Funds sector is regulated by the Securities Exchange Board of India (SEBI) to safeguard the rights of the investor.

Last Updated on 06/26/2011

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