File Name: what is mutual fund and its types in india .zip
Learn More. They are generally a safer investment, but with a lower potential return then other types of mutual funds. These funds buy investments that pay a fixed rate of return like government bonds, investment-grade corporate bonds and high-yield corporate bonds. They aim to have money coming into the fund on a regular basis, mostly through interest that the fund earns. High-yield corporate bond funds are generally riskier than funds that hold government and investment-grade bonds. These funds invest in stocks.
Savings and investments have evolved over the years, from hidden shelves in cupboards and piggy banks to savings accounts, fixed deposits FDs and recurring deposit RDs to equities and funds. Equities have always been a lucrative investment option, but the risk involved has always been a deterrent to many. Besides, there is a lot of research and knowledge required to successfully invest directly in equities and make profits. On the other hand, some people want the security offered by bank deposits and are okay with getting lower returns than equities. Hence, there is a large variety of mutual funds types available that address these specific concerns of investors. You may buy and sell units at any point while investing in open-ended mutual funds.
All Rights Reserved. A large number of investment avenues are available for investors in India. Risk and return are the major issues which an investor faces to maximize his returns while choosing investing avenues depending on his objectives, preferences and needs. The advent of mutual funds has helped in garnering the investible funds of this category of investors in a significant way. Mutual fund is one of the most viable investment options for the small investor as it offers an opportunity to invest in a diversified, professionally managed basket of securities at a relatively low cost.
Once a very small player in the financial market, mutual funds now play a large and decisive role in the valuation of tradable assets such as stocks and bonds. As an investor, you own units, which basically represent the portion of the fund that you hold, based on the amount invested by you.
Updated on Mar 08, - PM. Products IT. About us Help Center. Log In Sign Up. Then it is of utmost importance to understand the various mutual fund types and the benefits they offer. Mutual fund types can be classified based on the following characteristics. As a tax-paying citizen, the Sectionc of the Indian Tax Act allows you some breather — a deduction of up to , from your total annual income.
Today, there are a variety of schemes offered by mutual funds in India, which approved by SEBI manages the funds by making investments in various types of.Reply
A mutual fund, as defined in the regulations is 'a fund established in the form of a trust to raise monies through the sale of units to the public or a section of the public under one or more schemes for investing in securities, including money market instruments'.Reply