How money flows through Mutual Funds!!

By November 18, 2017 Economy No Comments
Blog MF

Looking at the fast-growing digital era and fewer investment avenues available which provides you inflation-beating returns, the investors had started moving towards Mutual Funds through Systematic Investment Plan (SIP) which indirectly helps to take benefit of higher returns in the stock market with diversified risk and return ratio. The growth can be seen clearly in the mutual fund industry.

The transformation in the behavior pattern of investors as compared to the previous bull run can be clearly noted where 3 million more demat accounts were opened in 2007 with a growth rate of 25% according to CDSL and now the growth of 16 million SIP from 9 million SIP in just 1.5 years from March 2016 to Sept 2017 (Source – CAMS).

At KIFS, We have been interacting with the end number of people day in and day out and answering this question “How money flows through Mutual Funds “and explaining them about how actually mutual works.

In India, Investors pool their money with minimum amounts of investment range from as low as Rs. 500, with no upper limit and invest in a portfolio of other financial assets. This helps one to own stocks or bonds which usually would not be conceivable for an individual investor to afford it alone.

The mutual fund has fund managers or money managers who analyze the various data available in different industries and based on the expertise they pick all the investment. As an individual with not much experience, one places his/her faith in the expertise of the mutual fund world.

Though while choosing a fund to invest it’s really important to match the scheme’s risk with your profile, Check for the cost, meet diversification targets, have a close look on the fine print, know your fund manager well, check past performance and last but not the least remain patient.

No Doubt, Many investors look for easy liquidity, so that if a need arises or there is an emergency they can encash easily. In the case of open-ended funds, redemption request can be submitted on any. Once such a request is place, you can get your money back in a time frame of 1 to 5 working days. With mutual funds, your potential for risk is less.

There is an element of uncertainty when investors hands over his money. In the case of Mutual Funds, your money is handed over to a professional fund manager, whose entire job is to keep track of markets and look out for the best opportunities for you, that fits in line with the objective of the scheme.

In addition, the NAV is published on AMFI and on each of the fund company websites on a daily basis, ensuring that you’re always in the loop about your investments. The fund house also publishes a monthly fact sheet which basically lists out all the important facts you need to know about the scheme you’ve invested in.

The ease of investment with less capital and systematic investment plan has not only helped investors to accept the benefits of the mutual fund but also to adapt it.

Johnson Kandi

About Johnson Kandi

Mr.Johnson Kandi is known for his financial industry experience of over 9 yrs & a proven track record in developing strategic plans for the organization with his passion to learn, evolve and adapt. His domain knowledge and expertise showcases through a range of skills, such as conceptualizing and conducting Training Programs for the organization, Setting up business channels, Market Research and carrying out branding activities thereby contributing direct impact in short-term and long-term goals of the company.

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