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Mutual Funds

A mutual fund is an investment security that enables investors to pool their money together into one professionally managed investment. Mutual funds can invest in stocks, bonds, cash or a combination of those assets. The underlying security types, called holdings, combine to form one mutual fund, also called a portfolio

In simpler terms, mutual funds are like baskets. Each basket holds certain types of stocks, bonds or a blend of stocks and bonds to combine for one mutual fund portfolio.o.

About Mutual Fund

A mutual fund is the trust that pools the savings of a number of investors who share a common financial goal.

Anybody with an investible surplus of as little as a few hundred rupees can invest in Mutual Funds.

The money thus collected is then invested by the fund manager in different types of securities. These could range from shares to debentures to money market instruments, depending upon the scheme’s stated objective.

It gives the market returns and not assured return

In the long term, market returns have the potential to perform better than other assured return products. Mutual Fund is the one of the most cost efficient financial products.

Professional Management

Diversification

Convenient Administration

Return potential

Low cost

Liquidity

Liquidity

Transparency

Flexibility

Choice of schemes

Well regulated

Tax benefits

Capital appreciation: As the value of securities in the fund increases, the fund’s unit price will also increase. There would be capital appreciation when you sell your available units at a price higher than the price at which you bought.

Coupon / Dividend Income: Fund will earn interest income from the bonds it holds or will have dividend income from the shares.

Income Distribution: The fund passes on the profits it has earned in the form of dividends.

Disclaimer:- As the value of securities in the fund increases, the fund’s unit price will also increase. You can make a profit by selling the units at a price higher than at which you bought. Although – Mutual Fund does not guarantee the same or does not guarantee returns.

Step 1 Identify your investment needs

What are my investment objectives and needs?

How much risk am I willing to take?

What are my cash flow requirements?

Step 2 Choose the right mutual fund.

The track record of performance over the last few years in relation to the appropriate Benchmark and similar funds in the same category.

How well the mutual fund is organized to provide efficient, prompt and personalized service.

Degree of transparency as reflected in frequency an d quality of their communications.

Step 3 Select the ideal mix of schemes

Investing in just one scheme may not meet all your investment needs.

You may consider investing in a combination of schemes to achieve your specific goals.

The amount invested in tax-saving funds/Equity Linked Saving Schemes (ELSS) is eligible for deduction under Section 80C upto a limit of Rs.1,50,000/- (in a financial year).

Dividend from Mutual Fund Schemes is Tax-Free in the hands of the Investor/receipient.

Indexation Benefit under Long term Capital Gain in Debt schemes.

It gives the market returns and not assured return

In the long term, market returns have the potential to perform better than other assured return products. Mutual Fund is the one of the most cost efficient financial products.

Risk is an inherent aspect of every form of investment. For Mutual Fund investments, risks would include variability, or period-by-period fluctuations in total return.

Market risk: At times the prices or yields of all the securities in a particular market rise or fall due to broad outside influences. This change in price is due to ‘market risk’.

Inflation risk: Sometimes referred to as ‘loss of purchasing power’. Whenever the rate of inflation exceeds the earnings on your investment, you run the risk that you’ll actually be able to buy less, not more.

Credit risk: In short, how stable is the company or entity to which you lend your money when you invest? How certain are you that it will be able to pay the interest you are promised, or repay your principal when the investment matures?

Interest rate risk: Interest rate movements in the Indian debt markets at times can be volatile leading to the possibility of large price movements up or down in debt and money market securities and thereby to possibly large movements in the NAV.

Other risks associated are:

Liquidity risk

Changes in the government policy

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Mutual fund investments are subject to market risks. Please read the scheme information and other related documents carefully before investing. Past performance is not indicative of future returns. Please consider your specific investment requirements before choosing a fund, or designing a portfolio that suits your needs. No warranties or representations, express or implied, on products offered through the platform. It accepts no liability for any damages or losses, however caused, in connection with the use of, or on the reliance of its product or related services. Terms and conditions of the website are applicable. BSE Mutual Fund Distributor Code: 12860 | Association of Mutual Funds in India: ARN - 111310 | EUIN - E156922

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