If you’re new to investing, consider setting yourself up with a monthly investment plan with one of the many mutual fund companies. This will enable you to participate in real-time financial markets by investing in a professionally managed portfolio of stocks and bonds.A piece of a mutual fund is a mix of securities and money market instruments.
Mutual fund investing has been steadily gaining traction in the past few decades and is beginning to be more accessible as asset management firms offer different funds with various investment objectives. Investors who share an objective all contribute towards the pooled money that is then invested in various asset classes and investments.
Mutual fund investors are allotted mutual fund units in proportion with the size of their investment and depending on the value of existing investments.Mutual fund performance is dependent on the performance of the underlying assets and sectors in which it invests.
The market regulator SEBI has classified mutual funds into several groups depending on certain specific traits like their asset allocation strategy, risk profile, and investment objective. For the long term, equity mutual funds invest mainly in stocks and other equity-related investments. They’re unique because they are not managed to achieve a predetermined rate of return.
There are a number of different types of equity mutual funds, including those that target small-cap, mid-cap, large-cap and more. These funds can be indispensable in finding all the components you need for your portfolio. ELSS is a 3 year graded equity mutual fund that people can invest in to save taxes. The other large-cap EETs can also be considered by people who are looking for stable returns but don’t want to take much risk.
A Large Cap Fund is an open-ended scheme that must invest a minimum of 80% of its assets in large-cap companies. These funds invest in stocks of the highest grade – companies that are ranked between 1st and 100th in terms of market capitalization.Bluechip funds, also known as “blue chip stocks,” invest in only the most reputable companies, which means they are financially sound. The objective of a bluechip fund manager is to invest in a way that earns some stable growth by avoiding high-risk investments.On the other hand, since they’re an equity scheme, any investments made in bluechip funds cannot be entirely conclusively guaranteed.Furthermore, these funds do not guarantee capital appreciation, so you should evaluate your risk tolerance before investing.