Mutual Fund Investment

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The Mutual Fund Investment is a popular mode of investment due to its advantages for it is managed professionally.

There are different types of mutual funds offering various advantages to investors.

Mutual Fund Investment - At a Glance

The Mutual Fund Investment is a kind of financial instrument offered to the public by the finance corporations. They are resourcefully managed collective investments which gather money from different investors and use it as investment in various stocks, short-term money market financial instruments, bonds and other securities to earn interest and distribute it as dividends.

Mutual Fund Investment - Types

Investments can be undertaken in the following types of mutual funds -
  • Open-end fund
  • Equity funds
  • Exchange-traded funds
  • Funds of funds
  • Bond funds
  • Money market funds
  • Hedge funds

Mutual Fund Investment - Benefits

  • The risk pertaining to the Mutual Funds is quite low as the total investment is distributed in several industries and different stocks.
  • The Mutual funds are available in units so it is highly affordable due to the very large principal sum.
  • The fees pertaining to the custodial, brokerage and others are very low.
  • 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.
  • The Mutual Funds sector is regulated by the SEBI to safeguard the rights of the investor
  • The Fund Managers pertaining to the Mutual Funds gather data from the leading economists and financial analysts, so they are better equipped to analyze the scopes of lucrative return from the investments
  • 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 present rate of net value asset
  • The Mutual Funds are professionally managed. The experienced Fund Managers pertaining to the Mutual Funds examine all options based on research and experience

Mutual Fund Investment – Opportunities

  • Opportunities of future expansion are very high.
  • Corporate governance of Mutual Funds is being given emphasis.
  • The Mutual funds in India has the scope of penetrating into the rural and semi urban areas.
  • The Securities Exchange Board of India has allowed the introduction of commodity mutual funds
  • A number of foreign based assets Management Company are venturing into Indian markets.

Last Updated on 06/26/2011

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