Best Open-ended Mutual Fund
What is open-ended Mutual Fund?
An open-ended mutual fund is a diversified portfolio of pooled investor money that can issue an unlimited number of shares. The fund units are bought and sold at their NAV prices daily.
How to buy the open-ended mutual fund?
In order to invest in an open-ended mutual fund, an investor must need to follow these simple procedures:
- Sign in at Gulaq Account.
- Enter all your credentials regarding the amount of investment and period of investment.
- Gulaq make sure that your e-kyc should be done in less than 5 minutes.
- Now invest in the open-ended mutual fund from the list of the given funds.
What are the pros and cons of open-ended mutual funds?
The pros and cons of open-ended mutual fund:
- Liquidity: It offers greater market participation in the market and provides investor liquidity at the will of the investor, thus allowing the investor to make sound investment decisions on the prevailing market condition.
- Diversity: It provides diversification of the portfolio thus lessening the risks.
- Systematic Investment: An open funds allows every investor to make use of systematic plan both for the investment and withdrawal purpose. An investor can make use of SIPs, SWPs and STPs with an open-ended fund.
- Open ended funds do carry some risk with them. They are vulnerable to large inflows and outflows.
- The NAV of open-ended funds fluctuates daily, that’s due to stock market volatility. Sometimes too much liquidity offered by open ended fund is also a disadvantage.
- Open ended funds also have exit loads. They charged is levied if you exit the fund within a certain pre–defined time.
How an open-ended fund work?
An open-ended fund issues shares through a stock exchange. But a unit of the fund itself is not listed on an exchange. They are offered through a fund company which sell shares directly to the investor. They will be sold at the respective NAV prices on the given day. The outstanding shares in a fund go up when they are sold and goes down when the existing shares are repurchased. The fund size expands when the number of shares being sold is more than the number of shares being repurchased. On the other hand, the fund size reduces when the repurchases exceed selling.
How Open mutual fund are taxed?
If you are an investor who sell their open mutual fund before a year, then the returns on the investment are treated as short term capital gains. The short-term capital gains will be taxed at 15 percent. But if you are an investor, who sell their open mutual fund after one year, then the returns on the investment are treated as long term capital gains. In case if the gains are more than one lakh in one year, then it will be taxed at 10 percent according to the income tax slab applicable to you.
*Mutual fund investments are subject to market risks. Please read the scheme information and other related documents carefully before investing.