Investing in mutual funds is like investing your money on auto pilot mode where instead of your taking any investment decisions, a mutual fund company hires experienced fund managers who are responsible to take most significant decisions regarding investing your money. Mutual fund companies create a pool of investment from investors and invest this pooled money in various securities..
Yes, mutual funds are regulated by Security and Exchange Board of India (SEBI). SEBI makes the policies for mutual funds and also regulates the mutual fund industry. SEBI constantly lays guidelines for the mutual funds to safeguard the investors’ interest.
A lot of investors have variety of financial goals at regular intervals and they do not know to achieve them so you will need a person who can guide you through the ups and downs in the market to reach your financial goals that you have planned throughout your life span. Financial advisors showcase the best techniques on how you can save your money, invest it in various financial assets through a range of platforms and ultimately grow your fortune over a period of time. If you have specific financial goals like tax planning, retirement plans, education planning for kids, buying house etc they can help you in understanding your goals from the investment point of view and provide you with a set of asset allocations so that you can reach your goals in desired time.
Yes, cash investments up to INR 50,000 per investor, per mutual fund, per financial year can be made in mutual funds. However, any repayment (redemption/dividend) is made only through bank channel.
SIP draws benefits from rupee cost averaging and hence it is the best strategy for investing in volatile market for efficient risk mitigation. For example, if you start your investments of Rs. 5000 per month via SIP, the money will be debited from your account every month and will be invested in the mutual funds that you have chosen for systematic investment plan (SIP). Hence SIP is known as the most disciplines way of investing money to achieve your financial goals.
What is NFO?
The term New Fund Offer (NFO) in mutual funds is similar to IPO (Initial Public Offering) in share market. It is an opportunity to subscribe to a particular scheme through limited period offer. Mutual fund companies offer investors to purchase mutual fund units within pre-defined offer period through an offer price. NFO investors usually generate good returns post listing.
Who should invest in mutual funds?
A person who is looking for tax saving, professional management of portfolio, stable growth, regular investment option, good liquidity, better returns, ease of investment, protection against inflation should invest in mutual funds.
Can NRI’s invest in mutual fund?
NRIs are allowed to invest in mutual funds in India on a repatriable or non-repatriable basis subject to regulations prescribed under the Foreign Exchange Management Act (FEMA). For general NRIs (not from USA and Canada) the process of investing in Indian mutual funds is as simple as it is for the Indian investors. They just need to comply by certain norms set by the country they are based in.
What are capital gain bonds?
CFS offer Capital Gains Bond under Section 54EC of the Income Tax Act, 1961. These bonds are being issued as ‘Long term specified assets’ within the meaning of Explanation (b) to sub-section (3) of Section 54-EC of the Income Tax Act, 1961. Those desirous of availing exemption from capital gains tax under Section 54 EC may invest in these bonds. Capital gains arising from transfer of Long-term capital assets can be invested in these bonds within a period of six months from the date of transfer of the asset for getting exemption from the capital gains tax. Such Bonds are issued by SIDB, NHB, NHAI and REC.
What is rupee cost averaging?
Rupee cost averaging helps us to against the volatility of the market. In the rupee cost averaging approach, you invest a fixed amount of money at regular intervals irrespective of whether the markets are going up or down. The rupee cost averaging ensures that one can buy more units when the markets are low and lesser units when they are high. This approach helps an investor to bring down the average cost per unit over the long-term.
What is power of compounding?
Mutual fund investment system is deliberately constructed to make best out of the power of compounding. When you keep your money invested for long term, you get maximum benefits from compounding.