Mutual Fund - What is Mutual Fund (MF)? Types of MF ? Better option for Investment? - Detail Understanding #MutulFunds #BestInvestment #ShareMarket

 

MF =Mutual Fund

Mutual fund is one type of investment like Bank RD (Recurring Deposit), PPF (Public Provident Fund) etc. Here we are going to discuss about Mutual fund - Each & Every Concepts  - 

What is MF?

In simple word Mutual Fund is nothing but a one type of Investment option where we can invest one specific amount and wait for growing your money. 

Mutual Fund is one type of center where some professional persons like Fund Manager are manage your fund properly and generate a better returns for you.

Amount Condition: 

You can start MF with smallest amount like Minimum Rs.500 or more. 

Investment Periods: 

You can invest in MF either Monthly or Lump sum. 

Monthly = SIP (Systematic Investment Plan)

Lump Sum = One time like Yearly

Where Mutual Fund invest their Money ? 

MF invest their money in Stock Market, Some Govt. Bonds, Securities Bonds etc. for generating a better returns for our customers.

Types of Mutual Fund:

There are 3 types of of MF like - 

1) Equity Or Growth Funds -

 These funds invest their all money in Share Market. Objective of these funds are Capital Appreciation or Wealth Creation. 

• Large Cap MF  
• Multi Cap MF
• Mid Cap MF
• Small Cap MF
• Tax Saving MF (ELSS - Equity Linked Saving Scheme) 

2) Income or Bonds Funds -

These funds invest their money in Govt. Securities or Bonds, Commercial Papers & Debentures , Bank Certificate , Money Markets etc. This is for Safer Investments or Suitable for Income Generation.

• Liquid Fund
• Short Term
• Corporate Debt

3) Hybrid Funds - 

These funds invest their money in both Equity & Bonds as well. The objective of these funds are Growth Potential or Income Generation.

• Balanced Fund
• Pension Plan
• Child Plan
• Monthly Income Plan 

Offices/AMC of MF:

Basically MF is one of the Asset Management Company (AMC). Where they can manage your money and provide the best returns for you. 

Now a days banks also provide the MF facilities. There are lot of AMC options are available in the market who can provide their different funds services. They can provide their services Online or Offline.

e.g.  Mirae Asset , Aditya Birla , HDFC MF  etc. 

How to start your Investment in MF :

You can start your investment in MF either Online or Offline as well. 

Just simply visit your AMC Office or related Website & follow their instructions for further process. 

NAV: - Net Asset Value

When You invest in MF then their is one specific amount for that fund i.e. Buying Price - which is called NAV.  

Fund Manager: 

Each AMC having their one expert person who can handle their funds smartly and generate the better returns to our customers which is called Fund Manager. 

Reason for Investment: 

For Wealth Creation or Money appreciation. As per your financial goal you can choose your plan like for 5 yrs or 10 yrs or 20 yrs. For long term it provide benefits. 

MF Plan/Schemes for Investment:

There are 2 plans for each MF like

Direct Growth - Investor invest directly with the AMC without any distributor.

Regular Plan - Investor invest through distributor or bank.

Which is best? 

If you have good knowledge about AMC & best funds then go with Direct Growth Plan which is best for higher returns else go with Regular plan. 

MF provide Tax Saving Benefit?

If you are started normal MF - doesn't matter Lump Sum or SIP - Not benefit in Tax.

If you are invested in ELSS fund which is specially designed for Tax Benefit - Then you get Tax benefit under 80C. But its locking period is 3 years. You can not redeem your money before 3 years. Its locked till 3 years. 

Better option for Investment?

At the end MF will invest their money in the Stock Market or some Bonds. 

If you have good knowledge about Stock Market and enough time then Stock Market is also best option. 

For more info about Stock Market - https://www.uthubs.com/2021/01/stockshare-market-end-to-end.html

MF is best option for those persons who are not aware about Stock Market and not enough time for tracking. Specially for working persons MF is best options- Just invest and wait for grow your money. 

For more better understanding please watch below YouTube video: 

Hope you understand the Mutual Fund concept. Enjoy your wealth Creation. 

Thanks. 🙏👍