Basics Of Mutual Fund Investment –
In this post, we are going to discuss the basics of Mutual Fund Investment. A mutual fund is a type of investment that consists of stocks, bonds, and short-term debt. Mutual funds are managed by professional fund managers. Mutual funds typically invest in a range of companies and industries. It is a company that collects money from people with common investment goals and invests them accordingly. Mutual funds normally come out with several schemes launched from time to time with different investment objectives. We will discuss what is mutual fund. We will also discuss mutual fund investment benefits and a list of mutual fund company.
What is Mutual Fund –
Mutual Fund is a type of investment that is managed by professional fund managers who pool money from many investors and invests the money in securities such as stocks, bonds, and short-term debt. The combined holdings of the mutual fund are known as its portfolio. Investors buy shares in mutual funds. Each share represents an investor’s part ownership in the fund and the income it generates.
The income/gains generated from this collective investment are distributed proportionately amongst the investors after deducting applicable expenses and levies, by calculating a scheme’s “Net Asset Value” or NAV. Mutual Funds are ideal for investors who don’t have large capital or who don’t have time to research the market. Investors can start mutual fund investment from 500 Rs per month also.
Types Of Mutual Funds –
- Equity Mutual Funds – These are mutual fund schemes that primarily invest in stocks. These funds are a great investment option for capital appreciation as they have the potential for long-term wealth creation. It provides higher risk and higher returns. This fund invests in stocks of various companies in particular proportions.
- Debt Mutual Funds – These are mutual fund schemes that invest primarily in fixed-income securities such as bonds, securities, and treasury bills. These instruments have a fixed maturity date and interest rate that the buyers could earn till the maturity of the security. It provides a lower risk and lower returns.
- Hybrid Mutual Funds – These are mutual fund schemes that invest in both stocks and bonds proportionally. Sometimes they also include Gold or even Real estate. The ratio could vary according to risk profiles. It provides medium risk and medium returns. It offers diversification.
Types of Mutual Fund Based On Structure –
- Open-Ended Fund – Open-ended funds are always open to investment and redemptions, hence, the name open-ended funds. It is an investment scheme where the shares can be issued and redeemed at any time. Open-ended mutual funds typically do not limit the number of shares they can offer and are bought and sold on demand.
- Closed-Ended Fund – A closed-ended mutual fund scheme is where your investment is locked in for a specified period. Closed-ended funds are suitable for investors who are looking at a long investment path. Closed-ended funds have a fixed number of shares like stocks.
Mutual Fund Investment Benefits –
- The biggest benefit of investing in mutual funds is diversification.
- The most important benefit of investing in mutual funds is that they are managed by qualified and professional experts.
- Mutual fund investments can be done in a lump sum or installments.
- Mutual funds may earn income from dividends on stock or interest on bonds.
- It provides flexibility to invest in smaller amounts.
- Mutual funds are easily redeemable.
- Mutual funds are well regulated.
- Mutual funds are less expensive.
- It provides tax benefits.
- Transparency is another benefit of mutual funds.
These are mutual fund investment benefits.
List of Mutual Fund Company –
- Axis Asset Management Company Ltd
- Aditya Birla Sun Life AMC Limited
- HDFC Asset Management Company Limited
- SBI Funds Management Private Limited
- ICICI Prudential Asset Management Company Limited
- Kotak Mahindra Asset Management Company Limited (KMAMCL)
- IDFC Asset Management Company Limited
- Mirae Asset Global Investments (India) Pvt. Ltd.
- Edelweiss Asset Management Limited
- Tata Asset Management Limited
- Baroda Asset Management India Limited
- BNP Paribas Asset Management India Private Limited
- BOI AXA Investment Managers Private Limited
- Canara Robeco Asset Management Company Limited
- DHFL Pramerica Asset Managers Private Limited
- DSP Investment Managers Private Limited
- Essel Finance AMC Limited
- Franklin Templeton Asset Management (India) Private Limited
- HSBC Asset Management (India) Private Ltd.
- IDBI Asset Management Ltd.
- IIFCL Asset Management Co. Ltd.
- IIFL Asset Management Ltd.
- IL&FS Infra Asset Management Limited
- Indiabulls Asset Management Company Ltd.
- Invesco Asset Management (India) Private Limited
- ITI Asset Management Limited
- JM Financial Asset Management Limited
- L&T Investment Management Limited
- LIC Mutual Fund Asset Management Limited
- Mahindra Asset Management Company Pvt. Ltd.
- Motilal Oswal Asset Management Company Limited
- PPFAS Asset Management Pvt. Ltd.
- Principal Asset Management Pvt. Ltd.
- Quant Money Managers Limited
- Quantum Asset Management Company Private Limited
- Reliance Nippon Life Asset Management Limited
- Sahara Asset Management Company Private Limited
- Shriram Asset Management Co. Ltd.
- SREI Mutual Fund Asset Management Pvt. Ltd.
- Sundaram Asset Management Company Limited
- Taurus Asset Management Company Limited
- Union Asset Management Company Private Limited
- UTI Asset Management Company Ltd.
- YES Asset Management (India) Ltd.
Also, check – Fundamental Analysis
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