Use our Portfolio Manager
 to generate:

    - Insurance Chart
    - Cash Flow Chart
    - Premium Calendar

  Insurance Counsellor
  Calculators
   Log in

   Need for Insurance
  Insurance & Tax
  Retirement Planning
  Insurance as Investment

Home / Mutual Funds

Mutual Funds

Why invest in a Mutual Fund?

Investing in a mutual fund is just an efficient way of pooling resources by various individuals with similar goals. This collectively increases buying power and allows for the employment of a professional manager to invest and monitor the group's resources. 

A mutual fund is thus a manager of a portfolio of stocks, bonds, money market instruments, or a combination of securities. There are three main benefits in putting your money in a fund rather than playing the markets by yourself.

• One of the biggest benefits you derive is diversification. Since each mutual fund holds a number of securities, you are essentially spreading your money, and therefore your risk, over a number of investments. The advantage is rather obvious, as you do not stand the danger of your investment being wiped out at one stroke.
  
  
• Also fund managers handle investments in a professional and transparent manner. They thus have the latest data on the companies and industry trend as well as well researched data on potential investments.
  
  
• Above all it is far easier for you as a small investor to buy into a mutual fund than into the markets. Nearly all mutual funds have low investment minimums, making them accessible to nearly everyone.

But also bear in mind that your risks have not disappeared just because you invest in mutual fund. All funds are subject to risks and those that look primarily to stock markets run higher risks. Of course the potential for higher returns is also higher here than in funds that look to debt markets or government securities in a bid to lower their risk profile and earn steady income.

Click here to learn how to choose the right Mutual Fund.

| Back | Top | Home |