What is a Mutual Fund ? How to make first ever Mutual Fund Investment?
A mutual fund can be compared to any team sport, where the investors are participants, the fund manager is the coach and achieving investment objective is the target and that is how Together Everyone Achieves More.
What is a Mutual Fund?
A mutual fund is an investment vehicle which collects money from different investors and invests in stocks, bonds, debentures and money market instruments. Mutual funds are such investment vehicles for retail investors in which investments can be made with an amount as low as ₹500.
Mutual Funds have become preferred investment vehicle for retail investors, as they help achieve financial goals with the amounts.
Benefits of Investing in Mutual Funds:
- Comfortable Investment: Stock Market investments require independent research and analysis prior to investments, mutual funds however are comfortable investment options as they are managed by financial experts to whom research comes handy.
- Safety & Transparency: As mutual funds are managed by financially qualified and experienced fund managers, an investor can rest assured that his investment is in safe hands and is invested with due diligence .
- Diversification: The key to making is good investment is to diversify the investment meaning investing across various categories to decrease the risk, mutual funds by its definition, has in-built feature of diversification. A mutual fund investment is spread across equity, debt, money market instruments etc.
- Professional Fund Management: Mutual Funds as mentioned earlier are managed by professional financial experts who have years of experience and expertise in managing thousands and crores of assets. Hence, an investor gets the benefit of Professional and expert Management paying a basic fee.
- Liquidity: While making investments, it is essential to check the liquidity status of investments, mutual funds are highly liquid and can be converted to cash easily except for the Closed ended Fund which have lock in periods
How do First Time Investors invest in Mutual Funds?
- First of All, an investor needs to be KYC Guideline – Know Your Customer Guidelines compliant
- Filling up the prescribed form, alongwith a passport size photograph,
- Attaching a copy of Passport size Photograph
- A copy of Pan-Card
- A copy of Residential Proof – Aadhaar Card, Electricity Bill, Passport, etc
- E-KYC formats are also available to fill the form online and submit all the above required proofs digitally.