Best App for
Don't worry about which device to use. Because we're in every one of them
Mutual fund is referred to a mechanism focusing on pooling money through issuance of units to investors, and investing funds in securities according to objectives disclosed in offer document. Investments made in securities are spread across a wide spectrum of industries. Therefore, risk gets diversified since movement of stocks cannot be in same direction at similar proportion at same time. Mutual fund companies allot units to its investors according to proportion of money invested by them. These investors in MFs are called as unitholders.
Profits or losses get distributed by investors proportionately according to the investments made. MF companies tend to come out with several schemes that are launched from time to time having diverse investment objectives. MFs should be registered with Securities and Exchange Board of India (SEBI) before collecting funds from public.
Mutual fund schemes are managed by professional portfolio managers. Their main job is to invest funds and then manage it carefully. Focus is on creating wealth for fund’s investors in such a way that investment objectives get satisfied. SEBI is the regulatory body of MF market in India, and it ensures ethical and transparent management of investors’ wealth.
Price of MF is called as net asset value (NAV) per share. This exhibits investments in several different securities rather than just one holding. NAV can be calculated by dividing total value of securities in a particular portfolio by total MF units outstanding.
Since VSRK Capital has been categorised as a renowned MF distributor company in Delhi, we hereby highlight that every scheme of mutual fund has well-structured and defined investment objective. Behind every scheme, a responsible and dedicated team of financial experts continue to work in tandem with a reliable investment research team. These financial experts thoroughly study the companies, products and past performance, and other measures required to complete their research process. After being 100% satisfied and thorough analysis, these experts tend to invest in the best investment option which is suited to achieve that particular scheme’s objective.
Diversifying the risk plays a critical role in success of any portfolio. A well-rated distributor of mutual funds in Delhi prefers to invest in broad range of securities. Diversification can help in limiting the investment risk as it reduces effect of a probable fall in value of any one security. Unitholders of mutual funds can avail the benefit of diversification techniques, which are usually available only to those investors who are rich enough to purchase significantly high positions in variety of securities.
Nowadays, making investment in online MFs has become extremely cheap. This sort of investment has become highly accessible by individuals of all income groups. Mutual fund investments give an opportunity to be a unitholder with fewer funds in comparison to other investment options in capital market.
An investor can start investment with as little as INR5,000. Individuals can also start their investment journey in a disciplined manner through SIP (Systematic Investment Plan) with just INR500 per month.
As one of the rapidly growing and expanding MF distributors in Delhi, VSRK Capital has seen that individuals are afraid to make investment through SIP in mutual funds. This fear stems from the rumour that a particular investment in mutual funds can lock their money for years. However, this is not a fact. An investor can liquidate holdings and get his/her money credited in the linked account easily and on an immediate basis. This process of redemption is rather easy in comparison to other investment avenues such as public provident fund (PPF) or National Savings Scheme (NSC).
There is no dearth of investment options in mutual funds. There are funds available in the industry focusing on blue-chip stocks, technology stocks, or any other specific industry. There are funds that contain bonds or mix of stocks and bonds which offer sound returns. With the help of financial expert, an investor can select a scheme which is suitable according to his/her risk appetite, and helps achieve profitability.
A particular scheme of mutual fund is classified as growth, income or a balanced scheme on the basis of its investment objective. These schemes can be any of the two, open-ended or closed-ended schemes. Classification of such schemes has been done as follows:
Main aim of growth schemes is to offer capital appreciation in the medium to long run. As the name dictates, these schemes make major investments in equities. Since the investments are done in equities, they have higher risks. Such schemes offer several options such as dividend option, growth option, etc. According to their goals and risk tolerance, investors can choose a suitable option. Investors are required to indicate their option in an application form. Some MFs allow investors to change selected options later. These schemes are suitable for investors who have a long-term outlook and who seek capital appreciation over a period of time.
As the name explains, the main aim of these schemes is to offer regular and steady income to investors. Therefore, these schemes invest money in fixed-income securities including bonds, corporate debentures, government securities, money-market instruments, etc. In comparison to equity schemes, they are less risky. However, scope of capital appreciation is limited in such schemes.
NAVs of these schemes change due to changes in interest rates. When interest rates fall, their NAVs tend to go up in the short run and vice-versa. Long-term investors can ignore these minor fluctuations.
Balanced schemes aim to provide both growth and regular income to their unit-holders. Therefore, these schemes invest both in equities and fixed income securities. Investments are made according to proportion written in offer documents. Such schemes are apt for investors who look for moderate growth. Balanced hybrid schemes should invest ~40-60% in equity or debt. Aggressive hybrid schemes need to invest ~65-80% of corpus in equity, while ~20-35% can be invested in debt. Such funds can be affected due to fluctuations in share prices. NAVs are less volatile against pure equity funds.
Such schemes are also known as income schemes as focus is on offering easy liquidity, capital preservation and moderate income. Such schemes make investment in short-term instruments including T-bills, CDs, commercial paper (CP) and inter-bank call money, etc. Returns don’t fluctuate much in comparison to other schemes. These funds are suitable for corporate and individual investors if they want to keep surplus funds for shorter time horizon.
Such funds make investments exclusively in government securities (G-Secs). These securities carry zero default risk. NAVs tend to fluctuate because of changes in interest rates and other factors like in income/debt-oriented schemes.
These funds tend to replicate portfolio of a particular index like BSE Sensex, NSE Nifty, etc. Index funds invest in securities in similar proportion as comprised in an index. NAVs will fluctuate according to the fluctuation in index. However, NAVs don’t fluctuate by same percentage because of factors called as “tracking error”. Relevant disclosures are made in offer document of MF scheme.
A mutual fund is an investment scheme where a group of people pool in their money to be managed by a professional fund manager. The fund manager invests this money in different securities like stocks, bonds, and other assets, depending on the objective of the fund. Mutual fund investors get the benefit of professional money management, as most fund managers are experienced and have a good track record.
Mutual funds offer a variety of schemes with different investment objectives, so investors can choose a scheme that suits their needs. However, mutual fund investments come with some risks, as the value of the fund units can go up or down depending on the performance of the securities in the fund portfolio. Also, investors should be aware of the fees and charges associated with mutual fund schemes before investing.
Each person who has invested their money into the fund gain ownership over a part of the fund, known as a unit. We can also say that the entire fund is subdivided into multiple parts known as units. So, when a person wants to invest in a fund he has to buy these units.
Investing in shares exposes the risk of the particular company, hence it’s more risky. Whereas in mutual funds, the risk is mitigated with the help of a bouquet of diverse stocks. A common dilemma which all the prospective investors have, is to choose which one is the better. The fact remains that both these avenues are distinctive from each other. One must choose which suits risk appetite and financial goals.
A mutual fund (MF) is referred to a collective investment vehicle which collects & pools money from several investors and invests that money in equities, bonds, government securities, money market instruments, etc. Mutual funds can be of different types including open-ended funds, closed-ended funds, equity funds, hybrid funds, etc. For more information, please contact us!
Don't worry about which device to use. Because we're in every one of them
You don't need to worry about your privacy when you use our app. VSRK app has a built-in security system that will keep your information safe and secure.
This will allow the process to be quick and reliable. You can monitor your portfolio at any time or place by following a few simple steps.