Mutual fund today is an important asset class for any kind of investor: a retail investor or if you are a corporate treasury manager and looking for solutions for regular cash flow managemnt or parking your idle money more tax efficiently. Mutual Funds are the easiest way to invest small amounts regularly or lump sum in today’s scenario. Whether you are looking to invest small amounts every month for your child’s higher education or you are investing to accumulate a handsome corpus by the time you retire or even planning for a medical emergency (contingency fund) in the family; mutual funds have an option for all of this. While an SIP (Systematic Investment Plan) of Rs 2000/= every month in an equity fund can give you a retirement corpus of as high as Rs 30 lacs (assuming a CAGR of 15% in 20 years)* at the same time Rs 100000/= in a liquid fund is available to you the very next working day and still earns you more than a savings bank interest.*
Equity Mutual Funds are an easy way to invest in equities even for a layman investor over longer time horizons. While an equity fund has the potential to deliver higher inflation adjusted returns a monthly income plan (MIP), has the potential to deliver superior returns compared to debt instruments like bank fixed deposits. You can also choose an ELSS (Equity Linked Savings Scheme) fund to invest as eligible investment u/s 80C. Therefore depending on what your Financial Goal is there is an appropriate fund for that, which makes an important part of the Financial Planning. Important point is you should choose the right Investment Advisor who would help you to choose the right investment product for you.
In India Securities and Exchange Board of India (SEBI) regulates mutual Funds and all the mutual funds in India have to be registered with SEBI. Mutual Funds have a three tier structure which protects investor’s interest in mutual funds. Association of Mutual Funds of India (AMFI) has prescribed guidelines; which are followed by various mutual funds and mutual fund distributors to protect the investor’s interest.
There are various kinds of Mutual Funds from various mutual fund houses available in the market today.