Benefits Of Investing In Mutual Funds

Visit our website: http://franklintempeltonindia.com Benefits of Investing in Mutual Funds In most developed markets, investors invest their savings primarily in mutual funds. Because they’re great for all the benefits they offer! In India, while many corporates invest in mutual funds extensively, most individual investors are not quite sure if it’s the right thing for them as they are not fully aware of its benefits. Well you’re in for a surprise because mutual funds are one of the few investment options that will give you and any other investor uniform benefits. Let’s talk about the benefits at length, shall we? Mutual Funds offer a Wide Range of Products across asset classes (fixed income, equities, cash, gold,) that are: Suitable for different investment durations (from one day to a lifetime), or Suitable for different investment needs: such as Cash & fixed income funds for investors seeking steady growth in income at lower risk Hybrid funds – A mix of equity and fixed income for investors seeking growth at moderate levels of risk Equities for investors looking for growth over the long-term but willing to take a higher level of risk another benefit Professional Management: The big advantage is that your money is managed by qualified and experienced professionals whose job is to manage money. Their decisions are based on in-depth research and solid investment processes. And then there’s Economies of Scale, whereby the services of professional fund managers are possible thanks to the pooling of everyone’s investments. These economies of scale extend to all areas of money management, like costs related to investment research, customer service etc. that may otherwise be very expensive for individual investors. There’s also Portfolio Diversification, allowing investors to diversify across different asset classes and within an asset class. Like if you wanted to buy one share of every company listed in a popular index (BSE Sensex), which would be cumbersome and rather costly on your own, but is a lot more cost effective through a mutual fund. Much easier, isn’t it? Another problem if you’re on your own is Liquidity! You know it. There have probably been times when you found yourself stuck with a stock and you can’t find a buyer, or worse still, you can’t find the company you invested in! This would not happen through a mutual fund. Investors can redeem their investments at prevailing NAV per unit, either on any business day, specific intervals, or closure of the scheme, depending on the type of mutual fund scheme. Few Mutual Funds schemes may also offer certain tax benefits as compared to other investment options These are great, you think, but this is your hard earned money we’re talking about, and you want to see where it’s going in detail! Ta-da! You’ll be happy to know that Mutual Funds also offer a great degree of Transparency, making sure you’re kept informed! Exactly. Every mutual fund has a clear investment objective and a performance track record, which is disclosed periodically to investors, allowing them to compare different schemes easily. Mutual Fund schemes also disclose the NAV per unit on a regular basis. Finally there’s the scheme’s portfolio, published periodically, showing details of the amount of money invested in each security, quantity of securities, market value, scheme expenses, and the proportion as % to total portfolio value. And once you make an investment with a mutual fund, you’ll have the Investment Comfort of being able to make more purchases with minimal documentation, simplifying the investment activity to a great extent! The benefits continue! Investors have Regulatory Comfort, because the Securities & Exchange Board of India has mandated strict checks and reporting of the mutual funds’ activities, and investors benefit from such protection. You see, there are tons of benefits of investing in mutual funds! It really doesn’t matter if you are an individual or a corporate. Just go ahead and get started! We hope you enjoyed watching this video! Watch more, and we’ll help you learn about different investing concepts. You can also write to us with your feedback (editor@templeton.com)

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