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Everything You Need to Know About Mutual Funds

Author: Shashank Pawar
by Shashank Pawar
Posted: May 20, 2019

Mutual funds are one of the most popular forms of investments available to investors. Understanding mutual funds, how they work, and whether they are a safe place to invest your money is important. Here is everything you need to know about what are mutual funds, their benefits, and the type of mutual funds to choose. Mutual Funds Basics are easy to understand. Funds from many investors are collected to form a pool, which is invested in different asset classes like debt funds, liquid assets, etc. Gains, as well as losses, are shared according to the investor’s contribution to the pool.

Mutual funds are regulated by SEBI in India, and there are different types of mutual funds based on your objective, the asset types, and the fund structures. It is necessary to comply with the KYC process to invest in mutual funds. KYC Process refers to Know Your Customer and it is a compulsory part of many financial and legal processes. It verifies your identity and makes the process of setting up your investments quicker.

The KYC process is simple and easy to follow. You will be asked to provide a photographic identity proof as well as an address proof.

Documents such as

  • PAN card,
  • Aadhaar card,
  • passport
  • other recommended

Identification is suitable. The agent or firm concerned with helping you invest will provide you with the list of any other documentation that might be needed to complete the process. Types of Mutual Fund Schemes Investors can choose between different types of mutual fund schemes. Choosing the right scheme depends on various factors that vary from person to person. Some factors are- short term versus long terms goals, the level of risk you are willing to tolerate, and the expense ratio. Expenses related to managing funds and its distribution is borne by the scheme itself and a higher expense ratio means lower returns. These are the various factors to be considered when choosing a mutual fund scheme.

Mutual fund schemes come under different categories. There are schemes based on the maturity period, such as open-ended schemes which do not have a fixed maturity period and close-ended schemes have a maturity period of several years, ranging from 5 to 7 years. Schemes are also based on the objectives like capital appreciation, getting a regular income from investments, or by doing both. There are a number of mutual fund schemes available which can make the process easier to fit your needs.

Benefits of Mutual Funds offer a number of advantages to investors. Mutual funds have several advantages such as liquidity, reduction of risk through diversification, and they are managed by experts, which means you can invest in them without personal knowledge of trading, investing, and mutual funds. There are other benefits of mutual funds like lower costs, a pain-free process, and the availability of schemes that suit your goals. You can earn returns on savings by investing in mutual funds. Find out more about the best schemes for you by getting in touch with us. Mutual funds are one of the most popular forms of investments available to investors. Understanding mutual funds, how they work, and whether they are a safe place to invest your money is important.

Here is everything you need to know about what are mutual funds, their benefits, and the type of mutual funds to choose. Understanding Mutual Funds Basics Mutual funds basics are easy to understand. Funds from many investors are collected to form a pool, which is invested in different asset classes like debt funds, liquid assets, etc. Gains, as well as losses, are shared according to the investor’s contribution to the pool. Mutual funds are regulated by SEBI in India, and there are different types of mutual funds based on your objective, the asset types, and the fund structures. It is necessary to comply with the KYC process to invest in mutual funds. KYC Process KYC refers to Know Your Customer and it is a compulsory part of many financial and legal processes. It verifies your identity and makes the process of setting up your investments quicker. The KYC process is simple and easy to follow.

You will be asked to provide a photographic identity proof as well as an address proof. Documents such as PAN card, Aadhaar card, passport or other recommended identification are suitable for the KYC process. The agent or firm concerned with helping you invest will provide you with the list of any other documentation that might be needed to complete the process. Types of Mutual Fund Schemes Investors can choose between different types of mutual fund schemes. Choosing the right scheme depends on various factors that vary from person to person. Some factors are- short term versus long terms goals, the level of risk you are willing to tolerate, and the expense ratio. Expenses related to managing funds and its distribution is borne by the scheme itself and a higher expense ratio means lower returns. These are the various factors to be considered when choosing a mutual fund scheme. Mutual fund schemes come under different categories. There are schemes based on the maturity period, such as open-ended schemes which do not have a fixed maturity period and close-ended schemes have a maturity period of several years, ranging from 5 to 7 years. Schemes are also based on the objectives like capital appreciation, getting a regular income from investments, or by doing both.

There are a number of mutual fund schemes available which can make the process easier to fit your needs. Benefits of Mutual Funds Mutual funds offer a number of advantages to investors. Mutual funds have several advantages such as liquidity, reduction of risk through diversification, and they are managed by experts, which means you can invest in them without personal knowledge of trading, investing, and mutual funds. There are other benefits of mutual funds like lower costs, a pain-free process, and the availability of schemes that suit your goals. You can earn returns on savings by investing in mutual funds. Find out more about the best schemes for you by getting in touch with us.

Here is everything you need to know about what are mutual funds, their benefits, and the type of mutual funds to choose. Understanding Mutual Funds Basics Visit Mutual Funds Sahi Hai website.

About the Author

Here's a little bit about myself. I've done a Masters in Economics and teach the subject to high school students. I am 32 years old and married to an investment advisor. A Dhoni fan who loves to play football! I am a sports enthusiast and a firm beli

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Author: Shashank Pawar

Shashank Pawar

India

Member since: Dec 24, 2018
Published articles: 38

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