Mutual Fund: How to Start Low Risk and Better Returns, Mutual Fundsby rajtechnews February 28, 2019 at 10:48 am 0 comments
How to Invest in Mutual Fund: Raghav wants to invest in mutual funds. But they do not have too much money to invest. He goes to Himanshu and explains to invest with him. But both do not have much understanding of the mutual fund market. So both the fund managers go to the manager. Fund managers deduct their commission, invest their money in mutual funds according to their understanding. Actually there are many people like Raghav and Himanshu who have heard about mutual funds, but they do not have much sense of investment. In this way, we are giving you information about mutual funds here
What is Mutual Fund?
There are several different mutual fund houses in the country who invest in shares and debt funds by taking money from small investors. These companies employ fund managers to invest. Fund managers have good information about the market, which, by their own understanding, invest in such funds, which have the maximum profits. In order to invest in mutual funds these companies earn commissions from investors.
Benefits of investment
There are risks of investing in the stock market. If you do not have good information about the market, then you can put money in such a stock and you can put money into a stock where there is a deficit. The advantage of a mutual fund is that your investment here is managed by the fund manager, which has a good understanding of the market. In such a way, he invests your money thinking, where the return is expected to be better. At the same time, mutual funds invest in different shares rather than just one stock. If there is one risk in one, then it gets covered in the other. Your money is also invested in debt funds, so even if there is instability in the market, money is still safe.
How is the investment done?
Like those who invest in the stock market, they are called shareholders, in the same way those who invest in mutual funds are called unit holders. Mutual fund companies issue ‘new fund offers’ to fund the fund. The units are given to those investing in mutual funds. Here, a certain amount of per unit is fixed, not at discount or premium. You can invest all the money at a time or invest via SIP. SIP means that you invest a fixed amount in a mutual fund every month or in a set time.
Types of mutual funds
There are usually three types of
mutual funds : – Growth / Equity Mutual Fund –
DET / Income Scheme –
Balanced Fund / Hybrid Scheme
In Equity Mutual Fund, much of the amount is invested in equities. Because of this, there is more risk in this also. In this scheme, investors are given two options, either choose a dividend scheme or capital growth. This option can also be changed later. This is a good option for investing for a long time.
Debt funds are a good option for those who do not want to take too much risk and want a regular and stable income. In this scheme, most of the money is invested in bonds, companies’ debentures and government securities. Because these are all like debt, the market volatility has no bearing on it. With all these options, investors get a regular income. It has less income than equity but the risk is also lower.
Balanced Fund / Hybrid Scheme
As the name suggests, these funds are balanced. These funds are invested in both equity and debt. In order to increase the income of the investors as well as earn regular income. This document is already told, how much of your money will be invested in the scheme. This is usually the ratio of 40:60.