Mutual Funds

What is a Mutual Fund?

People contribute money to form a Fund. This is managed by a professional money manager who invests this money in Assets which shall generate Returns. After charging a fee, these returns are passed back to the people (contributors).
Generally, a particular fund holds the money of a number of investors with a common financial goal.

Where does a fund manager invest the money?

Based on the objectives of the fund, the manager invests in equities of different companies, and in some fixed income securities.
Equity securities represent ownership claims on a company’s net assets. And fixed income securities 1unlike in the case of equities, these have no ownership rights are instruments that allow governments, companies and other types of issuers to borrow money from investors. These take the shape of corporate bonds when the issuer is a company, and government securities when the issuer is the government. The investors hold the right to receive interest on the money lent to the issuer.

Who can invest?

Anyone with investible surplus 2any amount that you set aside for investing can invest in mutual funds. One can start with an amount of just ₹ 500 for tax saving category 3An investment up to ₹ 1,50,000 with a lock in of 36 months begets a deduction of the invested amount from one’s taxable income, under section 80 C – ELSS (Equity Linked Savings Schemes) , and ₹ 1,000 for any other category of mutual funds. There is no upper limit!

Why should I consider investing in Mutual Funds?

Mutual funds are a convenient way of investing (even small amounts) in a highly regulated and transparent way, while availing the services of top money managers by paying low management fees, so as to beget higher returns, and still maintaining the option to exit at any given time 4unless opted for lock-in .

When is a good time to invest?

Now is as good a time as any! No time is bereft of risk, and there is never a scarcity of growth opportunities. Choose your fund wisely, but what’s more important is that you keep it simple and get started!

How can I get started?

Please contact us about your mutual fund needs on –
mf@competentfinman.com or call us on +91 9876 702157