Important things you should know about Mutual Fund
Mutual Fund Basics
Mutual fund is a financial product consisting of pool of funds wherein you invest with the help of fund managers who professionally manage these funds on your behalf and help you receive capital gains on your investments.
Best Mutual Funds to Invest in India
A number of financial companies in India such Taurus, SBI, UTI, HDFC, ICICI and Birla Sun Life to name a few offer different types of mutual funds. Equity funds, Debt funds, Equity Linked Savings Scheme, Liquid funds are some of the best mutual funds to invest in India.
How to Invest in Mutual Funds
You can invest in any mutual fund scheme either online or physically visiting the branch of a mutual fund company. But, before that you need to decide in which company’s mutual funds you would like to invest. While investing in mutual funds, your financial mediators can be an IFA (individual financial advisor), a brokerage house, a bank or a third party distributor. However, you need a few documents such as PAN card, photograph, address proof and a KYC compliant bank account to proceed with your mutual fund investment.
Top 10 Mutual Funds in India
Listed below are some of the best mutual funds where you can invest in:
Goldman Sachs PSU Bank BeES
Birla Sun Life Top 100 (G),
Franklin India Opportunities (G),
SBI Blue Chip Fund (G),
DWS Banking & PSU Debt - RP (G),
HDFC Short Term Opportunities (G),
L&T Short Term Opportunities (G).
SBI ETF Banking Fund - (G)
Taurus Banking & Financial Services Direct-G
ICIC Pru Focused Blue Chip Fund.
Best Performing Mutual Funds
There a number of mutual funds that have shown outstanding performance in India. They are - Gilt Long Term Fund, MIP Aggressive, Liquid Fund, Ultra Short Term Debt, Debt Long Term, Index Fund, Credit Opportunities Funds, Balanced Fund etc. The performance of mutual funds always plays an important role when it comes to your income growth and capital appreciation. Usually, the benchmark index is used to assess the performance of a mutual fund. A benchmark index tells you how your fund has performed so far.
Types of Mutual Funds
Mutual funds are divided into various types and each of these funds has its own set of objectives. Equity funds, Exchange Traded funds, Hybrid funds, Debt / Income funds, Fixed Maturity Plans, Sectoral Mutual Funds, Balanced Mutual Funds, Liquid funds, and Fund of Funds are some of the best mutual funds to invest in India.
Advantages of Mutual Funds
By investing in mutual funds, you can enjoy the following benefits:
There is no mandatory amount of investment involved in mutual fund investments. Even if you have a small amount of savings, you can invest that amount in mutual funds for a short or longer tenure.
Mutual funds enables you to invest in a wide range of investment funds and securities such as Equity, Debt, ELSS and Liquid Funds etc. Since, you can invest in a variety of securities, the possibility is very much there that you will face reduced investment risks.
You can invest directly by using the online platform offered by various mutual fund companies or through a chosen financial advisor.
Mutual funds are professionally managed by efficient fund managers. These fund managers keep a track of the growth and prospects of your funds and suggest required alterations in your investments.
When you invest in open-ended mutual fund, you can easily access your savings as and when you need. However, some mutual fund schemes have lock-in periods. In that case, you cannot get back your investment units, but you can sell your units at the existing market price.
Tax Saving Mutual Funds
By investing in Equity Linked Savings Scheme (ELSS), you can save income tax. Under section 80C of the Indian Income Tax, 1961, the Equity Linked Savings Schemes are eligible for tax exemption. These schemes are also known as or tax saving mutual fund. You can invest up to Rs. 1,00, 000 lakh in an ELSS so as to save tax.
Given that mutual funds enables you to invest in diversified funds by using small amounts and provide you with assured returns, you should invest in them and reap their benefits.
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