{"id":12331,"date":"2017-10-27T14:49:43","date_gmt":"2017-10-27T09:19:43","guid":{"rendered":"https:\/\/blog.fundsindia.com\/blog\/?p=12331"},"modified":"2022-01-27T11:48:58","modified_gmt":"2022-01-27T06:18:58","slug":"what-are-the-benefits-of-investing-in-mutual-funds","status":"publish","type":"post","link":"https:\/\/www.fundsindia.com\/blog\/back-to-basics\/what-are-the-benefits-of-investing-in-mutual-funds\/12331","title":{"rendered":"What are the benefits of investing in mutual funds?"},"content":{"rendered":"

\"what<\/a>

\n

Crafted for those new to the world of mutual funds<\/a> and investing, FundsIndia’s Back to Basics series covers the basic facts about mutual funds you need to know. In this Back to Basics article, we discuss the benefits of investing in mutual funds.<\/p>\n

<\/div>\n

Investors are spoilt for choice when it comes to picking the best investment avenue – bank deposits, money market securities, shares, bonds, etc. Mutual Funds<\/a>, owing to their well regulated structure and higher yield potential, offer a great opportunity for investors to invest and build wealth.<\/p>\n

Before we answer the \u2018why\u2019 of mutual funds, let\u2019s go back to the fundamental question:<\/p>\n

What are mutual funds?<\/strong><\/h4>\n

A mutual fund is an investment product that pools money from many people and invests it in a wide variety of stocks, bonds, and other investments. They are managed by \u2018fund managers,\u2019 who are experts at managing money and investments. To know more, read\u00a0\u00a0What is a mutual fund and why should you invest in it?<\/a><\/p>\n

Whether the objective is higher returns, \u00a0convenience, or tax saving, mutual funds present the following benefits to investors:<\/p>\n

Open<\/span> a FREE Account Now! <\/span><\/a><\/div>\n
    \n
  1. \n

    Diversification<\/strong>
    \nInvestors enjoy the benefit of asset diversification, when they invest in mutual funds. Diversified portfolios invest in a variety of instruments, from low to high risk, such as bonds, stocks, international securities, etc. Underperformance of one fund can be balanced out by the performance of other funds in the portfolio. Having a diversified portfolio increases the chance of earning higher returns, while minimizing risks.<\/p>\n<\/li>\n<\/ol>\n

      \n
    1. \n

      Liquidity<\/strong>
      \nOne of the biggest advantages of mutual funds is the ability to invest and redeem with relative ease, compared to other instruments. Investors have the advantage of getting their money back almost instantly in case of mutual funds, based on the Net Asset Value (NAV) at that time. The only thing to watch out for is exit load, which may apply to some funds.\u00a0 However, we do not recommend redeeming your investments unless your fund underperforms or you\u2019ve reached your goals. Speak to your personal financial advisor when it comes to redemption of assets.<\/p>\n<\/li>\n

    2. \n

      Flexibility<\/strong>
      \nUnlike the traditional investing instruments, mutual funds come with less or even zero lock-in period, depending on the kind of fund you pick. This means you can redeem your investments in times of utmost need. While most of the funds do not have a lock-in period, tax-saving       ELSS<\/a> funds come with a lock-in period of 3 years, which is relatively lesser compared to bank deposits.<\/p>\n<\/li>\n<\/ol>\n

        \n
      1. \n

        Higher return potential<\/strong>
        \nMutual funds, in general, have the potential to generate higher returns compared to traditional investment instruments, as they invest in a variety of market-linked instruments. So, those having a low risk-appetite could invest in debt mutual funds, which tend to deliver FD-beating returns. \u00a0Equity mutual funds have delivered 11-15% over the last 10 years. Hence, for investors with moderate to high risk-appetite, investing in equities through mutual funds would help them earn superior returns, while minimizing risk, thanks to         rupee-cost averaging<\/a>. At FundsIndia, our expert advisors can help you pick and invest in the right funds based on your requirements and risk-tolerance levels.<\/p>\n<\/li>\n<\/ol>\n

          \n
        1. \n

          Professionally managed and secure<\/strong><\/p>\n

          Mutual funds are managed by professional fund managers, who are qualified experts in this field. They identify the best stocks in the market, and track their performance on a regular basis to ensure that they deliver high returns to the investors. They also help investors make an informed choice, when it comes to picking the right funds. What\u2019s more? Mutual funds in India are moderated by the industry body, SEBI, which ensures transparency and security. So, to answer the question \u201cis it safe to invest in mutual funds?\u201d – \u00a0yes, it is perfectly safe to invest in mutual funds because of it\u2019s well regulated, transparent structure.<\/p>\n

          Open<\/span> a FREE Account Now! <\/span><\/a><\/div>\n<\/li>\n<\/ol>\n

          Now that you know the benefits of mutual funds, it\u2019s time to get you started with India\u2019s friendliest investment platform! Sign up<\/a> with us to get started on your journey to prosperity!<\/p>\n","protected":false},"excerpt":{"rendered":"

          Investors are spoilt for choice when it comes to picking the best investment avenue – bank deposits, money market securities, shares, bonds, etc. Mutual Funds, owing to their well regulated structure and higher yield potential, offer a great opportunity for investors to invest and build wealth. Before we answer the \u2018why\u2019 of mutual funds, let\u2019s […]<\/p>\n","protected":false},"author":5,"featured_media":12228,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[508,6],"tags":[500,289,148,516],"yoast_head":"\nBack to Basics: What are the benefits of investing in mutual funds?<\/title>\n<meta name=\"description\" content=\"Whether the objective is higher returns, convenience, or tax saving, mutual funds present several benefits to investors. 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