Mutual Funds are the only instrument in India whose returns beat the inflation rate. As more and more Indians get financially literate and understand the benefits of investing in mutual funds, the penetration of mutual funds in Indian households is increasing. Mutual funds are instruments that create long-term wealth. The long-term returns of a mutual fund scheme beat the returns generated by any other asset class by a long margin.
➤ Financial Planning: Financial planning is of paramount importance in today’s unstable world. Without financial planning, it is impossible to sustain a lifestyle and remain stable in old age. Investing in mutual funds is the first step towards creating a comprehensive financial plan.
➤ Retirement Planning: Since mutual funds are one of the few instruments whose returns beat inflation, it makes them a very viable and obvious choice for retirement planning. Investing in mutual funds helps you in diversifying your retirement plan as there are multiple schemes available in mutual funds.
➤ Develops A Saving Habit: Most Indians prefer to invest in mutual funds via a SIP (Systematic Investment Plan). A SIP is a way through which you can invest a fixed amount of money every month in the mutual fund scheme of your choice. A SIP helps in long-term wealth creation or goal planning and at the same time acts as a buffer in times of financial instability.
Equity Oriented Funds
In India, equity mutual funds are investment vehicles that primarily invest in stocks or equity-related securities of companies listed on stock exchanges. They aim to provide capital appreciation to investors over the long term. Equity mutual funds are managed by professional fund managers who make investment decisions based on their analysis of market trends, company performance, and economic conditions.
Debt Funds
Debt mutual funds are investment vehicles that primarily invest in fixed-income securities such as government bonds, corporate bonds, debentures, treasury bills, and other money market instruments. These funds aim to provide stable returns through regular interest income while preserving capital. Debt mutual funds are suitable for investors seeking income generation and capital preservation with lower volatility compared to equity investments.
Hybrid Funds
Hybrid mutual funds, also known as balanced funds, are investment vehicles that combine investments in both equity and debt securities within a single portfolio. These funds aim to provide investors with a balanced mix of capital appreciation from equity investments and income generation and stability from debt investments. Hybrid funds offer diversification across asset classes, thereby reducing overall portfolio risk.
Solution Oriented Funds
Solution-oriented mutual funds in India are a category of funds that are designed to address specific financial goals or objectives of investors over the long term. These funds typically have a lock-in period and are structured to help investors achieve specific objectives such as retirement planning, children’s education, or buying a house.
International Funds
Schemes
International funds, also known as foreign funds or overseas funds, are mutual funds or exchange-traded funds (ETFs) that invest primarily in securities listed in international markets outside of India. These funds provide Indian investors with exposure to global markets, allowing them to diversify their investment portfolios geographically and potentially benefit from opportunities in international markets. Here are the main types of international funds available in India
Index Schemes
This category invests in all the companies that make up the particular index, which gives an investor a more diverse portfolio than buying individual stocks. Index funds follow a benchmark of an index like Sensex, and Nifty 50, to invest in them as per the allocation similar to these benchmarks.
Lumpsum Investment
A lump sum investment is when an individual invests a large sum of money in a mutual funds scheme in one go. Generally, these types of investments are done by people who are veteran investors. A lump sum investment is the most preferred method of investment by individuals at the time of stock market corrections.
Systematic Investment Plan (SIP)
A SIP or Systematic Investment Plan is a system wherein you can invest a fixed amount at regular intervals in a mutual fund scheme of your choice. Generally in a SIP the investment amount, period of investment, and tenure of investment are predecided. SIP also offers the following benefits
Systematic Transfer Plan (STP)
A STP or Systematic Transfer Plan is a method through which fund gets transferred from one fund to another. Generally, in an STP the fund transfer takes place from a debt fund to an equity fund. STP enables quick deployment of funds into an equity scheme during market fluctuations.
Disclaimer: Clicking a login button will redirect you to an external portfolio platform.
