In English
Mutual Fund is a financial instrument, in which many investors have collected money and it is invested in a different financial instruments such as a professional fund manager, share, bonds, debt securities and other assets. It provides a simple and effective way to investors, so that they can put their money into diversified financial instruments. --- How does mutual fund work? 1. Pooling of money: money from gathering is collected. 2. Management of fund manager: A professional fund manager invest this money in separate assets (share, bonds, etc.). 3. Allocation of units: Investments are given units in proportion to their investment. 4. Return: Based on the performance of mutual fund, investors have profit (dividend, capital gain). --- The type of mutual fund is divided into different types of master funds based on their investment strategy and asset class: 1. Equity Mutual Fund) Investment These funds invest in stock market. The possibility of high returns, but the risk is more. 2. Date of Dutch Mutual Fund) These funds invest in government bonds, corporate bonds, and other debt instruments. Stable and safe returns. 3. Hybrid Mutual Fund (Hybrid Mutual Fund) These funds invest in both equity and debt. Balance of risk and returns. 4. Index fund) These funds track any particular index (such as Nifty 50). Low cost and passive investment 5. Liquid fund) These funds are short-term investment options and invest in terms of less than 91 days. Low risk and quick liquidity 6. Tax Saving Fund (ELSS - Equity Linked Saving Scheme) Investing in these funds, you can find discounts in tax (under section 80c). 3 years of lock-in period --- How to invest in mutual funds? 1. Use the online platform: through the platform like Groww, Zerodha, Paytm Money. 2. Through the AMC): Invest in directly from the Asset Management Companions (AMC) website of Mutual Fund. 3. Through banks: The banks also provide the services of mutual funds. 4. Help Advisor: Select the right fund with the help of a financial advisor. --- The benefits of mutual funds 1. Diversity: Divisionification: Your money is invested in various Asset class, which reduces the risk. 2. Professional Management: Fund Manager manage your investment. 3. Beginning from small investment: You can start investing even from 500 500 or 1000 1000. 4. Tax saving: Exemption in tax can be obtained by investing in ELSS. 5. Liquidity: You can ever invest or redeem in open-ended funds. 6. Transparency: All information about mutual funds are shared regularly. --- Risk associated with mutual fund 1. Market risk: Market risk: Returns can return in the market. 2. Credit risk: Danger of credit borrower when investing in debt funds. 3. Liquidity Risk: Sometimes the market can be difficult to remove money due to the market. --- The mutual fund and the SIP regard is a simple and disciplined way to invest in the SIP system (in Stillatic Investment Plan). In this, you regularly (monthly, quarterly) invest a fixed amount. There is a chance to make big funds from small investment. It helps to avoid the volulation of the market. --- Mutual Fund Taxation Rule 1. Equity Fund: 15% short-term capital gain tax on redemption in a short period of time. 10% tax on holding over one year and the profit tax of 1 1 lakh till-free). 2. Debt fund: Tax according to income tax slab at a short period of three years. 20% tax (independence with profit) on more than three years. --- Why invest in mutual funds? 1. If you keep less information about the stock market. 2. Want to manage your money professional in the professional manner. 3. Want to make money from long-term regular investment. 4. Want to get the benefits of investment with tax savings. --- Conclusion Mutual Fund is a great option for investors, whether they are new investors or experienced. It is a great medium to start with the small amount and insert your money. However, it is important to evaluate the ability to take its financial goals and risks before investing.
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Mutual fund