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What are the 4 types of mutual funds?
What mutual fund exactly is what happens Think of it like you wanted to invest some amount in a fund.
would deposit your money in your bank financial company or the asset management which is providing you with the option of funds investment.
Now like you, many other depositors would be providing funds. What mutual fund is a concept of pooling the funds together?
The asset management company collect all the funds to make a huge amount of fund and would be provided in the hands of the fund manager.
A fund manager is a person who is having an experience of professional experience in this market, who is having a piece of sound knowledge,
He would then make an investment strategy by monitoring the market by understanding the economic trends, he would analyze various securities.
That is the financial assets and makes an informed decision of investment he may decide on investing in an equity fund debt fund or hybrid fund as and when that is required and when that is required by the person who is making the deposit.
This is exactly what a mutual fund is, it is a pool of funds to invest so that returns could be availed in a better way in better returns you could get provides investment diversification
How are several benefits are related to mutual funds which we would see like the mutual funds are available for different time horizons?
How are mutual funds classified? It’s not necessarily that you have to buy. You have to get stuck to the mutual fund for this period like for five years for 10 years,
Not necessarily. It is available therefore different time horizons. There are short term funds to long term funds, as per your requirement,
You can invest in any of the mutual funds; you can decide whether you want to invest for one year, two years,
Or four even six months or two to three months you can make the decision. It provides you very much flexibility. Then you can decide on the amount as a friend.
You don’t need a large amount of money to invest in mutual funds like you wanted to buy and when you wanted to buy your property,
What do you think about having a lot of money to buy that property or to avail the loan amount and then build a property that is your investment option?
But here it’s not necessarily that you have to invest a large amount of money, you can start with a minimal initial investment that would be converted in the form of sip what is,
This is, systematic investment plans like you can systematically pay small amounts of money monthly, so you won’t feel the burden,
You won’t feel the high risk involved in your money, and thus you will be comfortable with the investment, you are making you can just try it out if you are a beginner if you are
Just starting to invest in a mutual fund, you can go with is PS which’s a better option now it’s, it also provides you with the options of various financial assets you can choose the equity fund the depth fund
What are the mutual fund and types of a mutual funds?
The hybrid. the fund, depending upon your choice of risk and return which I will be covering in detail.
Then it also provides you 100% tax exemption, Like whatever profits whatever gains you would behaving on the mutual funds, it is tax-free you want to be.
You want to be being charged on any extra tax amount for your gains for your profits, like if you’re investing directly in the share market if you’re investing directly in any bonds,
You would have to pay the tax amount for gaining something but in a mutual fund. You are tax exempted.
Now the transparency is that when you invest in a mutual fund, you get a detailed report of the investment of your investment,
As well as monthly statements to keep track of the performance of your fund you could analyze whether you’re whether your fund is doing well in the market or not.
And depending upon your choices you can decide when to extract that fund, out of, out of them out of the bank,
Out of the bank or out of the financial company in which you are invested. So there is the transparency you are having a track of your record you are having the,
You are having a track of the performance of your asset in which you invested, and then this is. Many people think that it is very risky and it’s not good to go with it.
The risk is involved. But, see, the rules and regulations are regulated by Sebby that is the Securities Exchange Board of India.
Mutual Funds investment is trustworthy some of the related terms to mutual funds, which may be a little bit confusing if you are not aware of what a mutual fund is
What are the various options provided what are the related terms of it to make it a little bit obvious a little bit clear.
What are the 3 types of mutual funds?
That another the time when you are following any statement when you’re following any mutual fund account statement you would be aware of these terms.
What do you mean by nav? That is the net asset value; it would be total as a value minus the expense of several units of asset. Now, this number of units would be whatever fund you would be providing that would be invested in any security.
How many units of security you can avail of with that amount of funds. That is, the number of units of asset that you are availing,
Then the total asset value in which security you have invested, what is the value of it, you can keep track of the nav to check out whether the value is growing, or it’s diminishing,
Then the expenses that would be charged by the company or the bank in between which is providing you with this option.
It’s a very low expense ratio about one to one to 2% so it doesn’t it hardly matters then there is sip as I told it is a systematic investment plant in which you can invest a smaller amount of money in monthly investments for your ease for your convenience.
Then, open-end funds, what does that mean open-end funds are the funds that could be withdrawn at any point of time,
Like you have invested but you want that freedom to take out your money whenever you feel like,
You can go for open-end funds which would provide you with that freedom, then there is close and funds, close and funds could not be withdrawn at any point of time,
It would be withdrawn only after the maturity period is over closing funds for a particular period and you have to wait for that period to get the returns to get to avail that amount.
What are large-cap funds? You may have the option of investing in large-cap mid-cap or small-cap large-cap means those companies which are having a larger capitalization and market.
Types of mutual funds in India
These are the large companies, and it’s having a value of about dollar 10 billion and more than that. Then there is met.
Then there are mid-cap funds which are the funds. Funds invested in medium-sized companies, the companies that have a market capitalization of dollar for $2 7 billion.
Then there are small-cap funds, these are the funds that are invested in the small-capitalization of companies that small capitalization companies with dollar $300,000,002 2 billion.
See, this is a basic classification like you wanted to go with equity fund debt funds are having fun but now you can categorize that risk and
The return involved so equity fund is generally the shares, like in the stock market you see you sell the shares you buy the shares.
The risk involved is very high. And yeah, because the risk is high, you can expect higher returns from the equity fund.
Likewise, the depth fund is related to the government it’s a more safe fund to invest in But does the risk involved is low, but the return would also be below.
And then there is a hybrid fund this fund makes your way into an investment, partially in both equity as well as debt fund.
It’s like moderating the risk and return ratio. Now the return and the risk involved also depends on the time horizon, and the amount which you have invested,
You should keep in mind if you are expecting some amount of return if you are expecting higher returns. You can’t just
Invest your money and take it out after one month and you can expect, and you are expecting a return of 11 to 15%.
That can’t happen the returns also depend on the time horizon, you have to invest for a particular period to analyze the market ups and downs,
That you can get an idea of a longer period and then you can. And then you can withdraw your money and get some benefit out of it.
How do mutual funds work step by step?
That is what happens and then also depends on the number, the amount of money which you have invested. I hope this is making you a bit clearer about what I’m trying to say.
It’s as if you want to invest in a mutual fund the risk is involved but it depends on you, how much risk you want to avail yourself,
How much return you were, how much return you are looking for, and what would be the period in which you are expecting that return what could be
The amount depends on your capacity, your savings capacity what you can deposit what you can invest in, and depending on all these factors you can decide your funds.
Hey, guys, I would also like to suggest some of the funds which you should go with. If you want to invest in mutual funds,
Like the access blue-chip fund, then it will advise large-cap funds, you can go with ici mid-cap fund India bulls Financial Alliance and staff These are the big brands that give you very good returns and the risk is also moderate.
Returns are ranging from 10% to 20%, depending on the type of fund. So these companies you can trust and go to if you want to invest in mutual funds.
If you want to invest in mutual funds, then you should go with these companies.
If you have any queries related to mutual funds, then you can ask me by commenting below. I’ll try my best to solve your queries.