Now-A-Day’s investment is increasing day by day. All people are investing or saving their incomes for their bright future. Many people are investing in the property and some are doing fixed deposits and also some are doing in the share market. Nowadays the best investment is in a mutual fund. So, we will learn what is mutual fund How to invest in a mutual fund? So let us now know what is a mutual fund?
Table of Contents
What Is A Mutual Fund?
In this issue you will know what is a mutual fund really? Mutual fund is one type of special investment. Mutual fund is one type of Asset Management Company which is known as AMC. This asset management company can invest in different companies and it will give back 4-30% of return rate. How AMC works? So, AMC will take money from peoples and make one fund then they will invest all funds at different places like stock market.
AMC will take suggestions of an expert and then do investment. AMC will take 1-2.5% of fund which will come from the peoples who have invested and it will give return your money with interest of 4-30% to people’s who have invested. HDFC, ICIC, ADITYA BIRA, RELIANCE, TATA, KOTAK MAHINDRA, etc. companies have opened their asset management companies. All asset management company will make mutual fund with different names. Like ICIC have opened 1200 plus company in mutual funds.
How much return will give mutual fund was decided according to company you have invested. Like you got 4% to 30% return on your investment. This all depends on asset management company. It will depend on where asset management company was investing. If asset management company can invest in stock market, then it is too much risky or if they can invest in government bond then it is not too much risky. If asset management company can invest in stock market, then return rate is also more.
Where there is more risk at there the return rate is also more. In mutual fund you can also do SIP. The meaning of SIP is systematic Investment plans. In Sip you don’t have to pay all money together. In Sip mutual fund monthly, the amount will be deducted from your bank which you have decided to pay in mutual fund.
You can open your mutual fund account at any bank or on any demat online website. If you open new mutual fund and you are buying any mutual fund then first learn about that company that it is best for long term or short term. Before invest in any mutual fund first check the company details it is best for investment or not then only invest in that company. It is for your profit only. In this issue you have learned, what exactly is a mutual fund? So let us now tell you, What are the advantages and disadvantages of mutual funds?
Mutual Fund Advantages And Disadvantages:
- Mutual fund is one type of professional management facility. In mutual fund when you invest at that time 1-2% of tax will be cut. More than one person can able to invest in mutual fund. So, you can divide the tax.
- You can invest with less money also. A person who has to invest in share market than he/she have to use big amount. Mutual fund is the best option then share market. In mutual fund you can make 500 or 1000 Sip and earn money easily.
- You have to invest in any mutual fund. And you can do it easily.
- Good returns and power of compound is found in mutual fund like if you have done 5000 Sip with 12% return rate then after 15 years the amount you get is 25.2 lakh.
- You can invest in any kind of program. Like if you don’t have to take risk then you have to put money in low-risk mutual fund. After that moderate risk or high-risk mutual fund in both the risk is more.
- Diversified investment: in this we can invest in different sector so that return rate is increasing.
- In mutual fund we can invest easily. You can open account from your home easily through AMC website, broker/agent or through mobile apps. But you have to do kyc one time.
- Online apps of mutual fund are groww, Paytm money, my cams, kubera, up stock, etc. from that apps you can open your mutual fund account easily.
- In mutual fund time will be saved. Like if you have invested in stock market then you have to give time to stock market. Mutual fund saves our time.
- mutual fund is one type of safe fund.
- In mutual fund you can remove your money any time. You have to do request to that mutual fund so within 2-4 days you will get your amount.
- In mutual fund return is risky because it is joined with the stock market. Risk is more in mutual fund then PPF, FD (Fix deposit), in post office saving, etc. the risk is not there.
- Mutual fund is one type of long-term investment.
- In mutual fund there is No-Lock-in -Period so you have to invest in safe or best mutual fund.
- Cost of expenditure
What Is Mutual Fund NFO?
By now you have learned, what is a mutual fund and what are its advantages and disadvantages? So let us now know about NFO. NFO means New Fund Offers. Nfo will publish new offers. All people thinks that nfo and ipo both are same. But nfo and ipo both are different. Nfo can release new mutual funds. Which will open new mutual fund for some time. And Ipo can release new share of that company. Which we can apply in ipo for some time.
Then share market will release their company share. When any Asset Management Company (AMO)can launch new fund this for few days only. For fund portfolio share buying is one type of reason. Or from one side for new fund all the money will be collected. nfo is an open-ended fund and close ended fund. for open ended fund subscription is taken.
After opening then anyone can be able to invest. It will depend on the net asset value (NAV)and in close end fund you can able to invest at only offer period. Nfos have no track record when selecting from existing, schemes, you have the advantages of knowing the historical performance, rating, ranking, risk scores, portfolio of assets etc. However, none of this is available when it comes to mutual fund nfos. In other words, nfos are a shot in the dark.
Additionally, on nfos comes with inexperience because per the 2018 SEBI circular an AMC can launch only one fund per category this means if a mutual fund launches a nfos it means they were not present in that category before.
ETMONEY’S advice is that if a fund is being launched in a category where a number of funds already exist, then it is prudent to pick a fund with an existing track record. By now you know, what is a mutual fund? So let us make you understand the difference between mutual fund and stock market.
Mutual Fund v/s Stock Market
What is difference between mutual fund and stock market. In mutual fund you have to invest money. If you invest in mutual fund your money is safe. And you get 4.30% return rate from mutual fund. They will invest your money in stock. You don’t know that which stock price will increase in stock market. That why they will invest in stock market with expert opinion.
We can say stock market as share market, stock market as equity market. In stock market you can buy or sell any stock. This means that you are doing partnership with that company. So, then you also got profit and when this company is in loss then you are also on loss.
The starting of stock market was before 400 years in 1600 in east India company like British east India company like Dutch east India company will be in Netherlands now-a-days. In sixteen those people will be doing exploration with ships.
And they have to travel for so many kilometers. At that time many people don’t have money. At that time the owners of ships have started one offer that the person the ship will take any treasure from sea then you will get some share. From this treasure this is too much risky at that time some ships will not return back from the sea.
These ships are buried in the sea. Robbery, etc. will happens many types difficulty was happened then one person has thought that if we do invest in 5-6 ships then any one ships will come back from 5-6 ships. Like this now-a-days these things are also happening with us in share market these is more risk than mutual fund. What is a mutual fund? And what are the functions of mutual funds? We hope that you have now found a suitable answer to such complex questions.
Best Mutual Funds For 2021 India
|ICICI Prudential Blue-chip Fund (G)||17.9%|
|Axis Blue-chip Fund (G)||22.6%|
|Kotak Blue-chip fund (G)||21.4%|
|Mirae Asset Large Cap Fund (G)||20.1%|
|ICICI Prudential Blue-chip Fund Institutional I (G)||0.2%|
|Invesco India large cap Fund (G)||19.6%|
|DSP Top 100 Equity Fund (G)||17.2%|
|Aditya Birla Sun Life Frontline Equity Fund Trigger Facility (G)||18.3%|
|LIC MF Large Cap Fund (G)||20.2%|
|BNP Paribas Large Cap Fund (G)||21.2%|
|Edelweiss Large Cap Fund C (G)||19%|
|Canara Robeco Blue-chip Equity Fund (G)||23%|
|L&T India Large Cap Fund (G)||18.8%|
|SBI Blue-chip Fund (G)||20.2%|
|IDFC Nifty Fund (G)||19.5%|
|UTI Master share Unit (G)||20.2%|
|HSBC Large Cap Equity Fund (G)||18%|
|PGIM India Large Cap Fund (G)||17.9%|
|Edelweiss Large Cap Fund B (G)||19%|
|Nippon India Large Cap Fund (G)||16.7%|