Friends, today we will tell you What Is Mutual Fund In India And How It Works it. I will give you complete information about what is mutual fund in india and how it works . A lot of people don’t know that What Is Mutual Fund In India And How It Works. So this is what we are going to tell you about. All things will tell you in this blog. Being a common man or a new investor, you should know all these things. So let’s start……
What Is Mutual Fund In India And How It Works 2021
Friends, when your salary comes, you save some money out of it and keep some money for spending. You must have saved some money to buy a house or a car.One way of saving is to get money in your bank and let it stay in it.
This is a very useless way, the lying money keeps destroying its value.
Inflation keeps on increasing in our country, which keeps the price of everything going up. The money lying does not reduce its value, so people invest that money from place to place.
Investments Are Done At 5 Places In Our Country
- Saving account
- Gold and Jewellery
- Real state
- Stock market
There Are 3 Things To Any Investment.
- Return – Return means how much profit you are making from your investment. Our inflation rate is 4%.So you have to see that your profit should be more than that. If not more than that, then what is the benefit of investment.
- Risks – Risk means how much risk is there in that investment.Do you know if you get lost in that investment .So this is a risk.
- Time – For how much time are you investing? The basic rule is that if the time is more the risk is more then the return will also be more.
What Is Mutual Fund In India And How It Works
Many people think that What Is Mutual Fund In India And How It Works only invest money in the stock market. But friends, you can invest in gold from mutual funds. You can also invest in real state.
Mutual fund is the place where you can invest separately by investing money in one place. I understand you with the help of an example.
Suppose 4 people are A, B, C, D and they have some money.All four have to invest their money, but they do not have knowledge of the stock market and do not even have enough time to give time to all of them.
So these people give their money to a company to invest, that company has a fund manager who is fully aware of the investment. That manager invests all the money.So, the fund manager takes 2 or 2.5 percent of the profit that comes from his investment, you get the rest of the money.
this is the answer of your question that What Is Mutual Fund In India And How It Works.
How To Invest In Mutual Funds ?
Many people think that if I invested money in a mutual fund and they ran away with my money. So friends, let us tell you that your money mutual fund is completely safe. You can invest your money through SIP
Now how will you choose a mutual fund because there are many mutual funds.
- You should choose a fund that has a rating higher than 4 star.Every website that has a rating of more than 4 stars should choose it. Those who have 1 star or 2 star should not choose it.
- You should fix your own amount.Whatever the amount is 1000 or 10000.You can also go through a broker or you can also go direct. Some people are afraid that if mutual funds start coming down, then what will our money do.
- When you continue to invest your money in a 4-star fund, when it comes down, it will come down to 20%, but a 1-star or 2-star fund will come down by 50 or 60%.
- So when 20% of you have come down, then you should invest in the 50% which has come down, then you will get the fund there cheaply. When 20% goes up, you should invest in 4 star again, this will give you more profit.
There is a simple strategy of a mutual fund, when everyone is scared then become greedy and when everyone is greedy then be a little afraid.
So do not be afraid because when the mutual fund goes down you will still benefit and when it goes up, you still have the benefit.
Mutual Funds Investment
Investing in mutual funds is very easy. This funds invest your money in many companies. So it gives you very high returns. Investing in mutual funds is completely safe.
Best Mutual Funds Investment
We tell you which fund has given the highest returns so far and if there has been a loss, then how much has been lost. Which fund gave the highest return in large cap category.Last year, the Axis Bluechip Fund gave the highest returns.
Its return was -2.40%.Now you must be thinking that it has given negative returns, so why am I calling it the highest-paying fund? If I talk about a year, it has given the lowest negative returns in a whole year.
So, I am calling it a good performing fund. Which company gave the highest amount of mid-cap category.
Axis Midcap Direct plan has given the highest return in mid-cap.Its return was 5.70%.
If we talk about which fund gave the highest return in the small cap category. You know that small cap has the highest risk.
So the higher return in small cap Axis Small Cap fund performed best. Its return was -1.24%. This mutual fund has given the lowest negative returns for the whole year.
These were the funds which have performed well since last year.
Mutual Funds In India
many people wants to know What Is Mutual Fund In India And How It Works Very few people in India invest in mutual funds. Because they are afraid that their money will not be lost.
But investment in mutual funds is safer than all other investments.
Only 11% of people invest in mutual funds in India. Whereas 62% people all over the world invest. and some people only know What Is Mutual Fund In India And How It Works Very few people invest in mutual funds in India.
Types Of Mutual Funds
There are 3 types of mutual funds.
The risk in this fund is less.All the companies are big in it.If the companies go into loss then there is so much finance that your money can give returns. It also has some types.
- Large cap funds – These are the funds in which the risk is very less.These companies are very big companies.Your money is absolutely safe in this.
- Mid cap funds – These are companies in which there is a slight risk.The returns of these funds are also not high.
- Small cap funds – These are the funds in which risk is also high and returns are also high.
- Multi Cap Funds
- large cap
- mid cap
- small cap
- Large & Mid Cap Funds
- Dividend Yield Funds
- Value Funds
- Contra Funds
- Focused Funds
- Sectoral or Thematic
- ELSS Funds
2. Debt Schemes
It also has some type. These are the funds that give loans.These loans are given to the government, business and financial institutions.
- Overnight Funds
- Liquid Funds
- Ultra Short Duration Funds
- Low Duration Funds
- Money Market Funds
- Short Duration Fund
- Medium Duration Funds
- Medium to Long Duration Fund
- Long Duration Fund
- Dynamic Bond Funds
- Corporate Bond Funds
- Credit Risk Funds
- Banking and PSU Fund
- Gilt Fund
- Gilt Fund with 10 year constant duration
- Floater Fund
3. Hybrid Schemes
It is also some type of hybrid fund.
- Conservative Hybrid Funds
- Balanced Hybrid Funds
- Aggressive Hybrid Funds
- Dynamic Asset Allocation Funds or Balanced Advantage
- Multi-Asset Allocation Funds
- Arbitrage Funds
- Equity Savings
How many types of Mutual Funds are there, on all these, we will create a blog in which all these things will be displayed.
One important thing, friends, you should never invest your money in one place. Because if you invest all your money in one place, if that fund goes into loss, then all your money will go into loss.
Therefore, if you invest your money separately, if one fund goes into loss, then the remaining funds will remain.
Because not all funds will go into loss simultaneously.
Fears About Mutual Funds
Some of our expert people asked the people who tried to learn about it, and most of the people had the same question.
1. Will my money be safe?
Ans . Friends, you money is completely safe in mutual funds.Because SEBI, which is a government company, handles mutual funds.
2. Returns are not fixed in mutual funds.
Ans .Returns are not fixed in mutual funds.When we invest money in FD, then the bank invests that money somewhere and when its profit comes, the bankers give us the fixed return.
However, in mutual funds, this is not the case because the company managing the fund takes a very small portion of the profits and gives you full benefits, so returns in mutual funds are not fixed.
3. We will get returns or not. If not found.
Ans. You will definitely get returns in mutual funds.You know that India is a development country, due to which profits are high.
4. Mutual funds invest in stocks and the stock market is very risky.
Ans . Mutual funds do not invest only in the stock market.He invests your money a little everywhere, so he is a mutual fund.
I hope that in this blog, we have removed all your doubts and fears.And there are some topics that we have not done a full screen, we will make a separate blog for that which will give complete information about that topic.
I told you What Is Mutual Fund In India And How It Works. I tried my best to ask you this question What Is Mutual Fund In India And How It Works Can give a complete answer to. You must have understood What Is Mutual Fund In India And How It Works. If you did not understand What Is Mutual Fund In India And How It Works. So you can ask any question related to this, we will definitely answer.
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