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What is the Mutual Fund?

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Hello friends, welcome to Metthu, so friends today, we will tell you what is the Mutual Fund, you must have heard about it somewhere. So friends, today you read this post till the end because today In this post I will tell you what is Mutual Fund, Types, Advantages and disadvantage of Mutual Fund, etc.

Often you will have seen that many people earn a lot of money from Mutual Fund and it is really an easy way to earn money. You do not need thousands or millions of rupees to earn money from the mutual fund, but you can start it with just 500Rs, if you are also interested to know about Mutual Fund, then let us know.

Many of you may consider the share market and Mutual Fund to be the same, but in fact, it is not. So, today all the questions in your mind related to the mutual fund will be cleared today, so let’s know about Mutual Fund.

What is the Mutual Fund
What is the Mutual Fund

What is Mutual Fund?

It is called a place where a large number of deposits of all the investors are kept and after that, it is put into the Fund. And then a fund manager invests money to manage financial instruments in various types after that it is tried that all investors should get the maximum benefit from their money.

Who is Mutual Fund Manager?

We also know the fund manager by another name, which we also call a professional fund manager and its job is to convert the money invested by people into profit, this is the work of a fund manager or a professional fund manager.

Example of Mutual Fund

We are giving you a small example of the Mutual Fund and by this example, you will understand what is it.

Suppose a new company came in a market and all the investors invested in that company and after investing that company collected 100 crores of rupees, then that company will invest those rupees in the share market.

If this scheme is an equity scheme, then this company will invest most of the 100 crores in the share market and if this scheme is a debt scheme, then this company will invest this money in government schemes.

If the company offered you a unit for 10 rupees in starting, then if you bought 1000 units at the rate of 10 rupees, then you invested ten thousand rupees accordingly.

The same rupees that the company had invested after one year, then the cost of those units has now gone up from Rs. 10 to Rs. 14, then according to this the company will give you Rs. 14000 at the rate of Rs. 14, then your profit in it.

How does Mutual Fund work?

As we have already told you that Mutual Funds are operated by a professional fund manager and they invest the investment amount in a place where, there is profit because they are professional fund managers then they know the thing very well where they have to invest the amount of investment so that the investors get profit. This is how a mutual fund works.

Advantages of Mutual Funds

Till now you have learned most of the things and now we will tell you what are its benefits, so let us know about its benefits without delay.

  • Diversity
  • Professionally Management
  • Variety of Return
  • Facility
  • Cheap and Affordable
  • benefits of tax
  • Liquidity

Disadvantages of Mutual Fund

Now you have learned about the advantages of it and now you will know what are its disadvantages, it is very important to know about the advantages and disadvantages before doing any work, so let us come to know about its advantages.

  • Hidden Fee
  • Lack of liquidity
  • High sales fees
  • Poor trade performance
  • High capital gains distribution
  • Fluctuating Returns

Types of Mutual Funds

Although there are many types of mutual funds, here we have given such types of mutual funds which you mostly get to see, so let’s know about its types without delay.

  1. Debt
  2. Hybrid
  3. Equity
  4. Solution-Oriented

Debt Mutual Fund

Debt Scheme which invests this amount in securities, investors can invest in it to the short term financial goals, if we compare this scheme to the share market then it is less risky than this, and at the same time, it gives better returns than bank fixed deposits.

Hybrid Mutual Fund

The Hybrid Scheme, which invests in both debt and equity schemes. And when investors choose the Hybrid category, then they should also pay attention to their risk at that time.

Equity Mutual Fund

If you want to invest in the long term then this will be a better option for you. Because it invests the deposited funds in the share market, but remember that such funds include both risk and risk.

Solution-Oriented Mutual Fund

In this type of scheme, you have to invest for at least five years because it is made for a specific and important goal like retirement, education, etc. But there is so much worry about risk in it.

How to invest money in Mutual Fund?

If you also want to invest in mutual funds, then on the Internet, you get many types of websites where you can invest your money. If you want to take the service of a mutual fund adviser, then you can also do this.

So, If you want to invest directly, you can go to any company’s website and invest or go to the office of that company and submit the documents.

But if you invest directly in this, then you get an advantage of this, that is you do not have to pay any kind of commission. So if you invest in long term, you also get a high return.

Where to invest

By the way, in the internet or market, you get many types of companies that offer you to invest in mutual funds. Such as Groww, MyCams, InvesTap, KTrack Mobile App, IPRUTouch App, etc. If you believe in us and you get some information from our knowledge, then you can invest your money using Groww.

Easy investing through SIP

You can also invest in mutual funds through SIP (Systematic Investment Plan). This means that it is an arranged investment plan in which an investor invests the specified amount per month. This is what we call SIP (Systematic Investment Plan).

Why Mutual Funds are Investor’s Choice

Recently the mutual fund has grown very fast and it is still emerging and people are also very interested in it because it is very easy to invest in it, so people like it more, and for a long time to invest in, its return is also very high if we compare it with the bank.

Asset management companies

There are also AMC companies in India, out of which the names of some companies have been given below. Come, let us know which are the AMC company in India.

  • HDFC
  • ICICI
  • SBI
  • Kotak Mahindra
  • L&T

These 5 things must be known before investing in mutual funds

Some things have to be taken care of before investing in this fund system, so now we will talk about the same things that you should take care of before investing in a mutual system.

  1. What is the purpose of your investment?
  2. Decide the risk capacity
  3. Check past performance of the fund
  4. Look at spending
  5. Check the record of the fund house and manager

Can you lose your money in mutual funds?

There is no guarantee of this thing that you will earn only profit in it, you can also lose your money in it. As we have already told you that the mutual fund is the fund that is run by the manager and those managers invest your money in different types of markets.

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