What is Mutual Fund and how to invest in a mutual fund

What is Mutual Fund and how to invest in a mutual fund 1

It is a consolidated fund. In which a lot of investors invest their investments, and in this way a fund is collected by collecting lots of money.
You can also understand it in this way that the amount deposited by many investors is collected as a fund and used to invest this fund elsewhere through the fund company of the fund company Mutual Fund. The fund manager invests the funds collected in this fund at different places and its endeavors are where the investment is being invested in it.

When the fund manager is benefited after the fund is invested, he divides the profit in all the investors investing in that fund. Thus the process of mutual fund runs.
The best advantage of a mutual fund is that it does not have any major losses to any one investor. Since there are many investors investing in the fund. This is because there is very little risk in it. When many investors meet together If you invest in a fund, the fund is divided into equal parts, which is called a unit. Net asset value (NAV) per value of mutual fund unit Unit known as. Mutual fund units can usually be bought or sold at the current NAV of the fund.
Asset management companies (AMC) manage these funds. Most asset management companies are part of large investment companies.

most popular mutual fund companies in India

We are giving below details of the most popular companies in India.

ICICI Prudential
HDFC
Aditya Birla Sun Life
reliance
SBI
Kotak Mahindra

Apart from this, there are many AMC companies that manage mutual funds.
Now try to understand the Mutual Fund through an example.
Suppose that you have to buy a land whose value is 100000 (one lakh rupees).

Now you only have 10000 rupees. Can you buy the land? So it’s not the answer. You are not able to buy the land because you did not have enough money.

But if you collect funds to buy that land and bring 10 such investors in it, which together collect 10000 rupees and collect one lakh rupees fund. So you can easily buy that land.

And if the value of that land was later increased to Rs 2 lakh then all the investors would benefit. Every investor had invested Rs 10000 to collect a fund of Rs. 1 lakh, but if the price of land increased, he would have to pay Rs 20000 Will meet.

Just like this, many companies bring their Mutual Fund Plans in the market and attract investors to invest in it. When many investors invest in that fund, then the company will fund its funds collected by that Mutual Fund Invest in different places by the manager in which the company feels that it will benefit. When the company has a profit, then it will be beneficial for people who invest in mutual funds. T gives and takes some retained as profit commission.

The fund manager is an expert who has the responsibility to invest the mutual fund on a place that is profitable. And by which means it can allow the investing people to make profits.

The best advantage of mutual funds is that in this, we start investing in very low prices, whereas in the stock market this does not happen. Share Sell and Buy is very risky in the Share Market. While in the Mutual Fund The risk is very low as it invests the money we put into it in an Expert Fund Manager. Which makes the risk very low.

Thus, both the Share Market and Mutual Funds are different. Due to less risk in the mutual fund, people consider it more appropriate to invest more in comparison to the stock market.

What are the basic benefits of investing in a mutual fund?

In India, mutual funds are becoming very popular over the last few years, do you know what is the reason behind it. So let me give you information about its benefits.
1 – Low Risk – The money we invest in mutual funds is invested by an Expert fund manager, which has more chances of profit. That is why people invest more.
2 – There are many mutual fund plans – in this, you get different types of mutual fund plans. Which gives the investor a lot of options that the Konasana plan will be more appropriate according to his needs. While not in the stock market it happens.
3 – Tax exemption – Whenever we invest in the stock market, we have to pay tax. But there are some schemes in the mutual fund that give you a tax rebate for a few months.

Apart from this, it has many benefits. Looking at all these benefits, most people now invest more in the mutual fund than the stock market.

How to invest in a mutual fund?

What is Mutual Fund and how to invest in a mutual fund 2

There are many AMC companies in the market that register for the Mutual Fund Collect by SEBI. Many of them are brought to the Mutual Fund Plans market. All plans have different rules and conditions in which this information is How much is the fund to collect, how much time to invest, where to invest the fund manager of the mutual fund, etc.

By reading these rules and conditions thoroughly, any investor chooses the Mutual Fund Plans as per their investment amount and tells the company that I want to invest in this plan. Then the company will give all the information to the investor After that, he collects the funds. Many such investors invest in the fund.

Mutual Fund Plans Types: –

Nowadays in Market many types of mutual funds. In which all plans have different rules and conditions. Whenever you invest in any mutual fund, first of all, know the plan of the plan that you are going to invest in, What are the terms and conditions? There are some mutual fund types such as –
Equity Mutual Fund
Debt Mutual Fund
Hybrid Mutual Fund
Solution-Oriented Mutual Fund

Note – We do not inspire you to invest in mutual funds. You invest in Mutual Fund with your own discretion. We are not responsible for any kind of profit or loss in the mutual fund. It has been written only for the purpose of evolution. You should think carefully – invest in a fund.

Leave a Reply