Mutual Funds

Benefits of Investing in Mutual Funds

Since its advent, mutual funds have been a widely held investment vehicle used by investors. Their simplicity in use along with other traits are listed below.

Professional Management

Going for mutual funds means you are also choosing a professional money manager. Rather than having to thoroughly dig down and research into every investment, you have a money manager who can do the heavy lifting for you. These professional fund managers are employed by AMC who undergo careful research before choosing an investment for the mutual fund or monitor performance of the assets.

Diversification

The cliché, "don't put all your eggs in one basket" really applies to the concept of intelligent investing.  Investment diversification is easily achieved by investing through a mutual fund, irrespective of size of investment. Assets of a mutual fund are spread across a range of companies and industry which minimizes the risk of loss due to poor performance of a particular company or industry.

Affordability

Mutual fund as an investment vehicle is also available for small investors who do not have significant amounts of money to invest.

Liquidity

Most of the funds at present are formed under an open-end structure which offers fund investors to timely redeem their investments.

Transparency

The performance of a mutual fund is carefully reviewed by various publications and rating agencies, making it easy for investors to compare fund to another. As a unitholder, you are provided with regular updates, for example daily NAVs, as well as information on the fund's holdings and the fund manager's strategy.