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Guide to Mutual Funds

Facilities and services that the investors GetS

One of the most popular instruments today for investors that can give maximum benefits with minimum efforts from the investor's side is Mutual Funds.

Let’s understand some major mutual fund services and facilities that the investors get-


Investing Regularly with an SIP(Systematic Investment Plan)

One of the smartest and most popular ways to enjoy the power of compounding is through an SIP in mutual funds. You can start off with a small amount(500,1000) on a disciplined regular basis and still achieve your financial goals. The stress of timing the market also vanishes.


Easy Switch by Systematic Transfer Plan (STP)

A Systematic Transfer Plan (STP) helps spread out your investments over time, managing risk and return balance. It involves transferring funds from one fund to another. Investors often use it when they've put a lump sum in a liquid or debt fund and want to move it systematically to a balanced or equity fund. 


Fund managers also use STP internally to adjust the portfolio between debt and equities during market ups and downs.


Risk Diversification

With options of having different instruments like equity, debt, bonds and more mixed-up options(Large cap, small cap), investors can have options to invest as per their financial goals, preferences and needs. Investors get the benefit of having a diversified portfolio that is managed by a market expert manager.


Transparency 

Mutual fund schemes share their Net Asset Values (NAVs) daily, letting investors know the value of their units. Monthly, they release Fund Factsheets, revealing the portfolio holdings and weights of securities for each scheme. 


This gives investors insight into where fund managers have invested each month.

You also get the exact details of who your fund manager is and what kind of experience he possesses.


Tax Benefits

Under Section 80C of the Income Tax Act, you can get tax benefits if you invest in ELSS (Equity Linked Saving Schemes). 

This means you can save up to Rs.1.5 lakh on taxes, which is around Rs.46,800 per year. Just keep in mind that ELSS comes with a minimum lock-in period of three years.



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Units 29/33