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I For Investment Financial Consultancy has brought you an opportunity to learn more about Mutual Funds. We will keep this blog updated periodically. Enjoy learning for the betterment of your Investment World.
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Definition of mutual funds:-
I For Investment Financial Consultancy has brought you an opportunity to learn more about Mutual Funds. We will keep this blog updated periodically. Enjoy learning for the betterment of your Investment World.
You may visit our Facebook page I For Investment Financial Consultancy if you would like to follow us on Facebook.
Definition of mutual funds:-
•Mutual Funds is a name given to a
pool of contribution made by various investors. This investment has to be
managed by professional and experienced Fund Managers.
Types of Mutual Funds |
Types of Mutual Funds:-
Equity Mutual funds:-
•Equity
Mutual Funds invest your money in Stock Market and the investment risk has to
be borne by the investor. Rate of Returns depends upon the movement in Stock
Market. If one has to invest in Equity Mutual Funds then he has to apply a
formula 100-Age=% of Equity Investment.
•For
example, a person is 25 years old then 100-25=75%, it indicates that his
investment should not be more than 75% in Equity Mutual Funds or Stock market.
•Recommended
for:- Young bread winners for the family
Debt Mutual funds:-
•Debt Mutual Funds invest your
money in Fixed Income Investment such as Corporate Bonds, Government Bonds,
Corporate Securities. These types of investment are more secure compare to the
investment in Equity Funds. However there returns given by these funds may be
less than the equity funds.
Balanced or hybrid Mutual funds:-
•Balanced or Hybrid Mutual Funds
have been designed for the investors who want a safety as well as some returns
on their investment. In these types of mutual funds the investment will be done
in Equity, Debt, Bonds and some fixed income instruments.
Money market Mutual funds:-
•Here your money will be invested
for a short duration even for 7 days. The investment has high liquidity with no
risk. These investments are alternative to the money kept in saving bank
account.These
funds are called Liquid Funds too.
Exchange Traded Funds (ETF):-
•Exchange Traded Funds need a
D-Mat Account to begin with the investment, however there are Funds of Funds
which do not need D-Mat Account for the investment.
•For Example:- A Gold Fund
•One should have 10 to 15% of
Portfolio invested into Gold Funds SIPs.
Types of mutual funds as per the
investment duration:-
•Open Ended Mutual Funds:- These
Funds allow the investor to exit as per his or her requirements of Money. Some
Funds charge Exit Load if investor exits before a year.
•Close Ended Mutual Funds:- Close
Ended Mutual funds have a lock-in period which doesn’t allow the investor to
exit as per his requirements. Close Ended Funds are popularly known as Equity
Linked Saving Scheme (ELSS) which allows investors to get Tax Benefits U/S 80 C
of Income Tax.
•One should choose the funds
carefully as per the future requirements.
Various Equity Funds:-
ØLarge Cap or Blue chip Funds:-
These Funds invest your money in the stocks which have the capital value more
than 20,000 Crores.
ØMid Cap Funds:- These Funds
invest your money in the stocks which have the capital value between 5,000 and
20,000 Crores.
ØSmall Cap Funds:- These Funds
invest your money in the stocks which have the capital value less than 5,000
Crores.
ØMulti-Cap funds:- These Funds
invest your money in Large Cap, Mid Cap and Small Cap Companies.
Options to invest in Mutual funds:-
•Onetime Investment:- Minimum
investment has to be of Rs. 5,000
•SIP:-
Systematic Investment Plan- Minimum investment has to be of Rs.
1,000 per month, Some funds allow the investment of Rs,
500 per month is called Micro SIPs. SIPs can be done daily, monthly and
Quarterly too.
•STP:- Systematic Transfer Plan:-
Here investor has to choose two funds where money will be transferred from one
to another as per the instructions given by the investor
•Investment in Liquid Funds:-
Rather than keeping money idle in Saving Bank Account, this option of
investment is more popular among the investors, These funds give you the money
as per your requirements. Some Funds provide Debit cards and some funds use IMPS
to give you money whenever you need.
Technical Terminologies of Mutual funds:-
qNFO:-
New Fund Offer
qSTP:-
Systematic Transfer Plan
qSWP:-Systematic
Withdrawal Plan
qExit
Load:- Charges against Premature Exit
qEntry
Load:- Charges at the time of Beginning
qAMC:-
Asset Management Companies
qNAV:-
Net Asset Value
qFund
Value:- Value of your investment including the profit or loss
qAUM:-
Asset Under Management
qKYC:-
Known Your Client
Choices for investor:-
•Direct
Mutual Funds:- Here investor invests directly with the fund without any
intermediary
•Regular
Mutual Funds:- Here Investor invests with a guidance of any advisor or a broker
•Growth
/ Dividend or Bonus:- Investor has to decide at the time of beginning
•DMAT
Mode or Physical Mode:- Investor can invest with or without DMAT account,
however to invest in Exchange Traded Funds (ETF) one needs to have a D-Mat
Account.
Most popular applications for
mutual funds:-
FundzBazar:-
FundzBazar Mobile App:-Click here to download FundBazar Mobile App.
Help From IFI•Click here to get our help for Mutual Funds
We are open for your queries, suggestions and feedback. You may contact us by the ooptions mentioned below
Cell No.9373907560
Email:- iforinvestment@rediffmail.com
Very informative.
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DeleteVery helpful!!
ReplyDeleteThank you.
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