Benefits Of Mutual Fund

The mutual investment fund is an investment instrument established and administered by specific asset management companies. These are financial products particularly suitable for savers and families who intend to increase the value of their capital over time by entrusting their management to professionals in the sector.

A piggy bank divided into shares

The company specializing in management collects the money of individual investors and constitutes a single autonomous asset, distinct from that of the asset management company itself or of any person involved in the operation of the fund.

The collective assets can thus be invested in different financial assets (shares, bonds, government bonds), following specific investment policies sanctioned by the fund regulations.

The assets of the mutual fund are divided among the individual investors in participation shares, which confer equal rights: the gains and potential losses are divided in proportion to the number of shares held.

The importance of diversification

Online Mutual Fund Investment allows the investor to limit the risks compared to an investment on the financial market in a single security. Joining a mutual fund allows you to diversify your investments, even if you do not have huge capital.

Diversification does not, however, guarantee certain returns on a specific date: profitability depends on the performance of the financial markets and the securities that make up the portfolio.

The professionalism of the manager

The professionals of the asset management company typically manage the fund’s assets “actively”: this means that they manage the securities portfolio by increasing (or decreasing) the exposure to sectors or individual securities, based on both strategic (long-term) and tactical (more short term) goals.

The mutual fund scheme managers provide their customers with the professionalism and skills necessary to operate efficiently on the markets and are committed to invest the savings entrusted to them in the best possible way to maximize value in the medium to long term.

Why invest in a mutual fund?

Joining a mutual fund allows the saver to invest his savings without being a finance expert: the law requires the manager to guarantee him maximum information in all phases of the investment.

To increase the value of the assets created with the shares of the various participants, the manager is required to select securities, market sectors and geographic areas according to diversification criteria. In this way, the risk of any losses for the individual investor is limited.

Access to the financial market through mutual funds is also facilitated by very flexible subscription methods and by the fact that the availability of large capital is not required.

There are several ways to invest in mutual funds. One way is to make a lump sum investment. Alongside this, another very popular method is the Systematic Investment Plan which allows you to make periodic payments. The mutual fund is an ideal investment tool if you aim to consolidate and increase your savings over the medium term. So, we suggest you to make investment in mutual funds India as early as possible as time plays a great role in growing your savings.