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Mutual Fund

Mutual fund is a trust that pools money from a group of investors (sharing common financial goals) and invest the money thus collected into asset classes that match the stated investment objectives of the scheme. Since the stated investment objectives of a mutual fund scheme generally forms the basis for an investors decision to contribute money to the pool, a mutual fund can not deviate from its stated objectives at any point of time. Every Mutual Fund is managed by a fund manager, who using his investment management skills and necessary research works ensures much better return than what an investor can manage on his own. The capital appreciation and other incomes earned from these investments are passed on to the investors (also known as unit holders) in proportion of the number of units they own.

In simple words Mutual Funds are a method by which small sums of money of individual investors is pooled to manage by professional fund managers in the asset class chosen. Based on the scheme chosen, you can take an exposure to equity markets, fixed income instruments (bonds or government securities) and money market funds.

As an independent investor of shares, you would need to have the know-how of various aspects such as which are the shares to invest in, at what price, how long to hold them, when to sell etc. You would also need a considerable investment especially if the shares are of higher value. Likewise as an investor of fixed income funds, you would need to do a research of the various instruments available, the interest rates offered, the duration to maturity, their credit rating etc. Further you will need to factor in penalties for redeeming before the prescribed lock in period.

Mutual funds are a safer way to invest. Benefit of the expertise and experience of the professional fund managers, diversification, transparency, flexibility and economies of scale as a result of the pooling of large resources are the advantages of this way of investing.

The real challenge of investing in mutual funds is the selection of appropriate and better performing schemes and knowing when to continue to invest or redeem.

We are empanelled with 13 mutual fund houses and follow systematic and open methodologies of analyzing, evaluating and recommending funds that address each of your needs – objectives, time horizon, tax implications, liquidity etc.