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About Funds Explorer
So many mutual funds and fund managers to choose from! Need help to find your needle in the haystack? InvestOnline's Mutual Funds Explorer tool can sift through data and showcase the Top Asset Management Companies (AMC) and their top performing Mutual Fund Schemes based on returns, Net asset Values (NAV) including those that qualify for direct tax savings - namely Equity Linked Saving Schemes in the section dedicated to ELSS.
A Mutual Fund is a financial instrument that is formed by drawing money from several investors and investing it in company shares, stocks and bonds. A mutual fund is collectively shared by thousands of investors who bear the gains, rewards and losses in equal proportion, depending on the share of investment made.
Mutual funds are regulated by the Securities and Exchange Board of India (SEBI) that is responsible for approving the Asset Management Company (AMC), managing the fund. Investing in mutual funds is a simple process as it can be done online in an easy way.
Investing in mutual funds is an easy way to increase your wealth.
Mutual funds at a glance
- Regulated by SEBI
- Offers good returns than other saving schemes
- Investment can be made in small amounts
- Professionally managed by fund managers
- Money is collected from various investors
- Offers access to large portfolios
Types of Mutual Fund
Investment in this type of mutual fund involves high risk as they offer higher returns. Equity funds invest money in equity stock or shares of various companies.
Debt funds are less risky in comparison to equities and offer fixed returns. These funds invest in government bonds, company debentures and fixed income assets.
Money market funds:
Investment in this type of fund is considered safe as it offers quick and moderate returns. Under this fund type, investment is made in liquid assets such as CPs, T-bills, etc.
Balanced or Hybrid funds:
To balance the risks and maintain a good return rate, these funds invest in both equity and fixed income funds. The ratio of investment is decided by the fund manager to equally create a balance between risk and returns.
These funds invest only in one specific sector which means that the returns are directly proportional to the performance of the sector in which the investment is made. The risk factor associated with sector funds varies from sector to sector.
As the name suggests, index funds invest in index. This type of mutual fund imitates the portfolio of an index. For example, purchasing shares from Nifty Index fund.
Tax saving funds:
Investment made under this type of mutual fund is eligible for tax benefits as per section 80C of the Income Tax Act, 1988. Tax saving funds usually invest in equities and involve high risks. Returns are usually high if the fund performs well.
Fund of funds:
These funds capitalize on other mutual funds and give returns depending on the overall performance of all the fund types.
Types of Mutual Funds Based on Structure
These funds are known as open-ended funds because units can be purchased or redeemed at any point in time. Since these funds offer the option of liquidity, they are much preferred by the investors. Also, the purchase and redemptions under these funds are done at the persisting net asset value (NAV).
Units under this type of mutual fund can be purchased only during the initial offer, hence, they are called close-ended funds. The units are then locked and can be redeemed on a predetermined maturity date. These schemes are listed on the stock exchange for trading purposes to provide liquidity.
Types of Mutual Funds Based on Investment
As the name suggests, growth funds invest in growth stocks i.e. emerging companies or younger companies with a proven track record of growth. The investment portfolio of a growth fund comprises of small, medium and large corporations. With growth as its primary objective, these funds offer little or no dividend payouts and the earnings are reinvested into expansion, acquisitions or research and development (R&D).
These funds capitalize in a fixed range of income securities and are known as income funds. These funds ensure regular income for the investors and are ideal for investors who are looking to get a regular supply of dividends. The fund manager of income funds invests in company fixed deposits, debentures, etc. Though income funds make for a stable investment option, they come with moderate risk as price fluctuations or instability largely affects the prices of the bonds and shares.
Aggressive growth funds:
As the name suggests, aggressive growth funds are mutual funds that aim to achieve the highest capital gains. These funds are suitable for investors who are looking to take high risk and gain more capital. These funds seek high capital gain among growth stocks of the companies that are expected to grow at a faster rate in relation to the overall stock market.
A balanced fund is a mix of growth and income fund that provides investors with fixed income as well as a growth opportunity. These funds aim to accomplish various investment objectives of the investors.
Money market mutual funds:
The primary goal of this type of mutual fund is to preserve the capital and prevent loss, which is why investors should be extremely cautious before investing in this fund type. The risk factor involved in this type of fund is very low and they yield a high-interest rate compared to bank deposit rates.
Why invest in mutual funds online in India?
Investing in mutual funds is one of the most lucrative options considering the plethora of benefits it offers. Here are a few reasons why you should invest in mutual funds.
Mutual fund companies employ professional fund managers who manage the money pooled in by the investors. Using their expertise and doing through research, professional managers reduce the risk of investment and help investors boost maximum returns. Professional managers help investors decide which company share, stock or debt papers they should invest in or whether they should hold on to the capital or not.
Lock-in period is a pre-determined time that restricts an individual from withdrawing money from the fund. Lock-in period differs for each mutual fund time-ranging from one month to none at all. For example ELSS mutual funds have a lock-in period of 3 years.
To spread the risks, mutual funds invest in diversified of assets and securities. This means that if one fund underperforms, the other can make up for the loss. Due to this, the risk gets reduced to a great extent, thus allowing an investor to gain maximum profit.
Open-ended mutual funds are liquidable and allow an investor to withdraw his money any time he wishes to. All he needs to do is simply place a request to his fund house and the earned money is credit in the account in the time of 2-3 days.
Fund switch facility:
To avail better schemes and get better returns, investors are offered the option to switch funds. This allows investors to shift their investment partially or wholly.
Government regulated investment:
Mutual funds are managed by SEBI, thus giving investors the assurance that their investment is made under the purview of a government regulated body.
Offer good returns:
Mutual funds are specifically designed to offer maximum returns to the investors. By opting for short and long-term funds, investors can look to obtain good benefits.
Investment made in equity-linked saving schemes (ELSS) is eligible for tax deduction under 80C of the Income Tax Act, 1961. ELSS funds are likely to offer good returns compared to bank FDs and other savings schemes.
Plethora of choices:
Based on his risk appetite and investment capacity and objective, an individual can opt for different mutual funds including debt funds, equity funds, hybrid fund and others.
Easy to monitor:
Each month, investors are provided with a detailed statement of their funds to make it easy for them to keep a track of their funds performance.
How to invest in Mutual funds?
Depending on an individual's financial capability and condition, he can make an investment as low as Rs. 500. With so many mutual funds available in the market, people are often confused about how they can start investing in it.
So here we tell you how you can do it.
Purchase it through agents:
Today in the market, there are a lot of mutual fund agents who are professionally trained to help you make the right investment decision. Based on your income and risk appetite, the agents offer you various mutual funds you can opt to invest in. Agents help you buy funds and also provide other services such as cancellation of funds, redemption, application and others. However, agents charge a commission for their service.
You can directly visit a fund house and ask them to give you a brief about different fund schemes. Doing this helps you save brokerage fees and also helps you clear all your queries from a trustworthy source.
With the digital wave, investing in mutual funds online has become one of the preferred options today. Purchasing mutual funds online is easy and also lets you compare various funds which help you make an informed investment decision.
How to Buy Mutual Funds Online?
To buy mutual fund online, all you need to do is:
- Visit Investonline.in
- Click on Mutual Fund
- Select start investment
- Look through various fund houses, fund categories and risk
- Then compare various fund schemes and select the right fund as per your budget and requirement
With Investonline.in, you can purchase mutual funds from the comfort of your home. We make it easy for you to evaluate and compare other fund options to ensure you put your hard earned money in a fund that offers you profitable returns.
How to choose the best Mutual Fund?
With plenty of mutual funds available online, it is necessary for an investor to deep dive a bit to make all his investment dreams come true. Before picking up a particular mutual fund scheme, an investor should look at all the fund types, compare them, check its performance and then make the investment.
So here are a few key points that an investor should keep in mind before investing money in a mutual fund scheme.
Have a diversified fund portfolio:
Having a diversified fund portfolio reduces your risk of investment. Diversifying the risk between funds that invest in stocks, money market, securities, etc. is important as a sudden change in the market would not affect your investments drastically. Diversifying fund allows you to get good results and also reduces the loss if any.
Keep inflation in mind:
Inflation is unpredictable and can highly affect the rate of returns of your funds. Hence, while capitalizing your money in mutual funds, it is imperative for you to consider the effects on inflation.
The rise and fall of shares is unpredictable. So always keep patience and wait for the right time to withdraw the money. A fund that is underperforming today can do really well tomorrow. So be patient and wait for your money to recover.
Consider your age:
Investing in mutual funds at a very young age gives you good returns over a period of time.
Consider your risk taking/bearing capacity:
Don't get lured away by looking at the returns offered by various mutual funds. Consider your risk-taking capacity and invest wisely as you might get into a loss in the future. If you are nearing retirement, then assess the investment and loss-bearing capacity, before investing in any fund type.
FAQs on Mutual Funds
What is ELSS in mutual funds?
ELSS is a diversified equity-linked mutual fund scheme that offers you the benefit of capital appreciation and a tax deduction.
Are SIP mutual funds tax-free?
No, not all SIP mutual funds are tax-free.
What is SIP?
SIP is a systematic investment plan that allows an individual to invest a small amount in mutual funds regularly.
What is direct mutual fund?
The direct mutual fund offers no commission to the broker or distributor from the investment made by the investor.
How much money can I invest in a mutual fund?
Through SIP's, you can invest a sum of money as low as Rs. 500 in mutual funds.