Mutual Funds
Small amount, Big Dreams
Mutual Funds in India
Mutual funds are vehicles that pool money from investors into big chunks. These could be retail as well as institutional investors. Pooled money is then invested in a variety of financial instruments like stocks, bonds, money markets instruments etc based on a common predetermined objective to earn returns.
Mutual funds are managed by professional fund managers.
How do Mutual Funds work?
Mutual funds are pooled investments. Many investors come together to invest with a common objective.
If you purchase any mutual fund, you get it in the form of units. Price of each unit is called NAV. This NAV for each fund is declared by the AMC daily. The AMC also charges a small fee for managing the assets under the fund.
The money you invest in mutual funds is invested in various stocks, bonds or other instruments by the fund manager. The fund manager does the allocation based on objectives of the fund.
You can find the objectives of any mutual funds scheme on its prospectus. All the details are available for investors to read.
Profit (or loss) you make depends on the performance of the fund. This is the difference between the NAV at the time of sale and NAV at the time of purchase.
Regular coupon payments from the bond are credited to your bank account. Final payment comes on the date of maturity. This final payment usually also includes the payment of the nominal value of the bond along with the coupon payment.
Why should you invest in Mutual Funds?
Investment
Start with A Small Amount: In India, you can start investments in mutual funds with as low as Rs. 500. This makes mutual funds an option for investment for those with little investable income.
Professional Fund Management
Mutual funds are managed by AMCs who appoint fund managers who specialise in portfolio management. They also usually bring with them rich experience in fund management. The money invested by you is managed by these experts.
Diversification
Mutual funds give you access to a diversified portfolio even with a very small amount of investment. If you invest in individual stocks and bonds on your own, you need to invest a huge amount of money to achieve the same degree of diversification.
Transaction Cost
If you buy and sell stocks on your own, you have to pay brokerage on every transaction you make in the market. Now imagine the total transaction cost involved if you want to achieve the same level of professional management of funds and diversification.
NAV Charge
However, with mutual funds, you have to just pay a small amount which is built in the NAV to achieve this.
Better than Bank
Bonds offer higher coupon rates than what is offered in simple bank deposits. This makes bonds a more lucrative investment option for you in fixed income investment avenues.
What do we offer?
Online Purchase
Algates Financial gives you the platform to do the online purchase of mutual funds.
Portfolio Management
We offer an Online portfolio tracker to keep a track of your systematic investments.
Choice of investment
Choose your mutual funds according to your goals and risk appetite.
Research
Invest a small amount every month with a Systematic Investment Plan (SIP).
Investor Education
We at Algates Financial believe in sharing knowledge. If you are a beginner in investment, we bring to you our online and offline workshops to help you understand the basics of investments.
Connect with our Growth Experts now for a valuable consultation.