Mutual Fund: A beginner’s guide towards modern investing…!!

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Mutual Fund: A beginner's guide towards modern investing

People love to explore various investment avenues these days. There are various traditional ways of investment avenues such as PPF, Fixed deposit, NPS, Gold and Real estate. But over the course of time, their charm among investors has diminished due to the poor returns. Investor these days are moving towards alternative mode of investment such as stocks, bonds, venture capital, Hedge Fund and Mutual Fund. 

Many young investors, who are just barely a year or two in their career are eager to invest in mutual fund. Mutual Fund is one of the simplest ways to invest in the capital markets. A mutual fund collects money from investors and invests on their behalf. 

Easy and simple way to invest in Mutual Fund  

An investor can either invest directly with the mutual fund or hire the services of mutual fund advisors. In case, if an investor is investing in the mutual fund directly, then it is called as Direct Mutual Fund. But if an investor is investing in the mutual fund with the help of a mutual fund advisor, then it’s called as Regular plan. If you want to invest in the mutual fund directly, then it’s better to visit the website of the fund or its branch office and submit the relevant documents. There are certain companies like Gulaq which are offering Free KYC and commission free direct mutual funds to the investors. In case of direct fund, an investor has the advantage of saving on the commission, but he must also do the research, analysis as well as monitoring of his investment.  

Before investing in any mutual fund, an investor must be aware about his financial goals and types of mutual fund best suited for his risk and return expectation. There are various categories of mutual fund such as debt mutual funds, equity mutual funds, hybrid mutual funds, solution oriented mutual funds. A debt mutual is one of the safest mutual funds in term of risk, an equity mutual fund has a chance of providing higher returns, whereas a hybrid mutual fund provides diversification of your portfolio to reduce the risk and maximize returns. It’s always advisable to look for the rating, past performance and fund manager experience before picking any mutual fund. Let’s look at the top performing mutual fund in 2019 according to the CRISIL:  

  • Mirae Asset Tax Saver Fund 
  • Canara Robeco equity Tax 
  • Axis Banking and PSU Debt Fund 
  • IDFC Banking and PSU Debt Fund 
  • Mirae Asset Hybrid Equity  

Selecting a right fund and investing in them is totally an art. So, it’s quite important to choose a scheme based on your risk profile. A large cap is ideal for conservative investors, whereas a multi-cap is suitable for the investor who wants to take a moderate risk and an aggressive investor can invest in small and mid-cap mutual funds. Depending upon his risk appetite and profile, an investor can choose either of these mutual funds to invest.    

A mutual fund is one of the best investment vehicles which provides professional management, higher returns, diversification at low cost.  

 

*Mutual fund investments are subject to market risks. Please read the scheme information and other related documents carefully before investing.

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