Mutual Fund


Mutual Fund

Mutual funds are one of the best avenues for your money to flourish.Mutual fund is a pool of money contributed by individuals to invest in a predetermined security like Stocks, bonds, money markets, etc. The mutual fund is managed by a fund manager who is responsible for investing the money into various securities.

Every investor has a different investment objective. While some look for stability and opt for safer securities such as bonds or government securities. Others, who have a higher risk appetite and yearn for higher returns may want to choose risk-bearing securities such as equities. Hence, mutual funds come with different schemes, each with a different investment objective. There are hundreds of mutual fund schemes to choose from. Hence, they have been categorized as mentioned below.

By structure:

  • Closed-Ended- Close ended funds are can be subscribed only during the offer. Once listed on exchange, this can be bought and sold in secondary market at Net Asset value which depends on demand –supply situation, expectations of unit holder and other market factors. Repurchase schemes are also available on a periodic basis.
  • Open-Ended Funds- Open ended funds are open throughout the year for subscription with no fixed maturity.
  • Interval funds- IntervalFunds are a combination of the above 2 types. These can be traded on stock exchange or may be open for sale or redemption during pre-determined intervals at NAV.

By nature:

  • Equity Funds- invests primarily into stocks. Based on the stocks they can be further sub classified into Diversified Equity, Mid Cap, Sectoral Funds and ELSS
  • Debt Funds- invests in government or corporate bonds, money markets, Commercial papers, etc. These provide steady income and are low on risk.
  • Balance or Hybrid Funds- This includes investment in stocks and debt instruments.

Benefits of Mutual Fund Investment

  • Increased Diversification: A mutual fund scheme normally holds many securities; diversification reduces risk.
  • Advantage of Scale: The transaction costs of a single individual is low because mutual funds buy and sell in big volumes.
  • Choice: A wide variety of schemes allow investors to pick up those which suit their risk / return profile
  • Regulations: All the mutual funds are registered with SEBI. They function within the provisions of strict regulation created to protect the interests of the investors.
  • Transparency and interactivity: Mutual funds clearly present their investment strategy to their investors and regularly provide them with information on the value of their investments.

Depending on your investment objectives and future needs, We at Confi will help in simplifying the process of investing in Mutual Funds. The team of qualified AMFI certified trained personnel will assist you to determine appropriate schemes based on your objectives and Risk Profile.