Why is everyone talking about Mutual Funds
and what is the big deal anyway?”

It is ‘the financial product’ you need to know about, especially if your want to create wealth.

“When you want to build your wealth, you need mutual funds.”

What are mutual funds?

When a group of people look to earn their wealth, combine their resources to create a huge investable amount. That is Mutual Funds in simple terms.

Where are mutual funds invested in?

In almost all financial instruments:

Stocks

Bonds

Money Market Instruments

Securities

Gold

Other assets

In a mutual fund, all investors share in its profits, losses, incomes, and expenses.

What are the types of mutual funds?

There are a variety of mutual funds to choose from, here are some of the most common

Equity Funds
Funds are invested only in stocks and equity instruments.		 Debt Funds
Funds are invested only in fixed income instruments.		 Money Market Funds
Funds are invested in short-term money market instruments.
Hybrid Funds
Funds are divided investments between equity and debt to create a balance.		 Fixed Income Funds
Funds which track Index performance.		 Funds of Funds
Funds are invested in other funds.
And Many More Funds

Did you know some mutual funds can help you save on tax?

Terms to remember

  • AMC (Asset Management Company): The company that manages your fund.
  • NAV (Net Asset Value): The price per share or unit of a mutual fund.
  • Asset Allocation: The asset mix of equity, fixed interest rate instruments and cash or cash equivalents.
  • AUM (Asset Under Management): The total sum of investors which the AMC is controlling.
  • NFO (New Fund Offering): An offering made to public to raise capital for a particular scheme.

“With mutual funds, you choose to be a savvy investor.”

Why should you invest in Mutual Funds?

  • Low Initial Investment: You don’t need to invest large amounts to begin investing in mutual funds. You can start as low as Rs 500 a month.
  • Diversify your investments: You can easily diversify their investments into various financial instruments to reduce the risk of their investment.
  • Pros to help you: Mutual Funds are managed by experienced fund managers who have the skills and knowledge to manage your investments.
  • Easy Withdrawal: Even though it is recommended not to withdraw early, you can easily withdraw your investments at anytime.

Follow the 80/20 rule, which states when you are in your 20s invest 80% in equities and 20% in debt instruments. As you grow older, invest in more in debts and less in equities. So, 70% in equities in your 30s.

“Build your confidence and begin investing in mutual funds wisely.”

Why you invest in mutual funds, you should

  • Fix an investment goal: Like an investment have a financial goal and budget accordingly to build your wealth.
  • Choose a fund suited to you: Be conscious and choose a fund that matches your profile.
  • Start with SIPs: Since you maybe new to investments, start with Systematic Investment Plans (SIPs), than going for lump sum investments.
  • Open a Demat account: You can easily activate your net banking, through which you can open a Demat account. You shall require one to invest in Mutual Funds. Update your KYC documents: Be KYC-compliant. All you need is a PAN card and valid address proof.