As an investor you will receive several benefits from investing in a Mutual Fund.
Professional Management:
Your money in a mutual fund is managed by professionals who have considerable expertise, experience and resources. They analyse the markets and economy comprehensively to spot good investment opportunities that may not be easy or feasible for an ordinary investor.
Diversification of Risk:
Mutual funds reduce the risk to which you would have been exposed by investing in a single stock/bond. A Mutual Fund usually invests in a broad cross section of industries/companies and asset classes. Relatively cost effective: When compared to direct investments in the capital markets, mutual funds cost less. This is due to benefits of scale that mutual funds have in brokerage, custodial and other fees. All these benefits get passed on to the investor.
Transparency:
Mutual Funds regularly disseminate information on the value of your investments alongwith portfolio disclosure of the investments made by the scheme and also the proportion invested in each asset type. Investment strategy and change in the securities is well defined and conveyed to the investors.
Liquidity:
You can redeem your holdings at NAV related price from the Mutual Fund in case of open-ended schemes. Units of close-ended schemes are listed on the stock exchange and therefore can be sold at the prevailing market price. They can also be redeemed from the Mutual Fund directly, at periodic intervals, when repurchase is announced.
Choice:
There is a variety of mutual fund schemes to choose from and you can find one that will suit your needs perfectly.
Flexibility:
Mutual funds offer various features like systematic investment plan, systematic withdrawal plan, switch facility, systematic switch facility etc.
Convenience:
Investing in a mutual fund reduces paperwork and keeps you away from problems involved while dealing with brokers and companies.
SEBI regulated:
All mutual funds are registered with SEBI and function within the guidelines laid down by SEBI so as to protect the interests of investors.
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