MUTUAL FUND

To start a mutual fund investment online, you need to open an account with fund houses and complete your KYC. The next step is to create a mutual fund portfolio which many investors find tough. First, shortlist a few mutual fund schemes with credible long-term performance record.

Active funds tend to have higher fees than passive funds as they are actively managed by a fund manager who uses his/her expertise to make the investment decisions. A passive fund on the other hand has a mandate to track a very specific index, and it rebalances itself when the index components change.

Stock mutual funds are appropriate for long-term periods at least for more than 10 years.

There is no limit to the amount of money you can contribute to a mutual fund that is not part of a tax-advantage retirement plan.

Investors need to be clear that investments in mutual funds are essentially medium to long term investments. Hence, short-term abnormal profits will not be sustainable in the long run. But in the medium to long run the mutual funds tend to outperform most other avenues of investments at the same time avoiding the risk of direct investment accompanied with professional fund management

It is always a good time to invest in equity mutual funds, provided you invest via a systematic investment plan (SIP) and have an investment horizon of at least 10 years. Assuming you are a moderate-risk taker and considering your age, you should invest 50% in equity, 40% in debt and 10% in cash.

Beginners can invest in MF using the MO Investor app or our website. The Suggest Me Tool may be used by an investor under our offerings section of our website. This tool will give suggestions to invest based on the risk appetite of a client.

Mutual funds based on risk appetite may be categorized into Equity, Hybrid and Debt schemes for Aggressive, Balanced and Conservative investors respectively. However, this is just a generalization, as for investors of all risk profiles, it is recommended to have an allocation of all 3 types of Mutual Funds in the right proportion.

In the long-term, Mutual Funds have the capacity to beat inflation as well as FD returns. Further, Mutual Funds are highly liquid and more tax efficient as compared to FD’s. Debt Mutual Funds that invest in high quality instruments, gives returns with a slight premium over a similar tenure FD rate.