How to Buy Mutual Funds

The Complete Guide to Easily understand where to buy and where to buy mutual funds, buy online or buy offline, which all formalities have to be completed.

Mutual funds can buy both offline and online. Before investing in a mutual fund, you should thoroughly research and decide which asset management company you have to invest in. Examine different types of mutual funds, their investment objective and past proformas. However, the previous performance can not be guaranteed that in the future, any mutual fund scheme will perform as it has performed earlier.

Offline:

You can use the services of a financial intermediary i.e. financial intermediary to make an offline investment in a mutual fund. These are called mutual fund distributors. You can invest directly in the mutual fund by going to the office of the Asset Management Company or in the office of the Registrar and Transfer Agent. A bank, non-banking finance company or personal financial advisor can be a mutual fund distributor.

Online:

To invest online in a mutual fund, you can invest online by going to the site of a mutual fund asset management company. Here you have to create your account and create a user ID and password. You have to choose a fund of your choice and tell how much you have to invest. You can read the types of mutual funds for your information. You can also get help by calling in Asset Management Company. The names and web addresses of mutual fund asset management companies were given in our previous post.

If you have a demat account with a broker, you can also buy a mutual fund from the broker. In this way, the mutual fund purchased will come directly into your Demat Demat account.

Mutual Funds Whether you buy offline or online, you can also order a SIP purchase in your form. For this, you can also give your bank details and ask for an automatic purchase.

Formalities to apply for Mutual Fund

In order to purchase a mutual fund, you will have to fill out a KYC form and give the proof of identity, copy of the PAN, and address of the residence address with the passport size photograph. Put a habit of investment from today and see your future dreams come true. Small investments made in mutual funds can be a huge amount for one day.

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What is ELSS? Equity Linked Savings Scheme

Equity Linked Savings Scheme is a diversified equity fund that invests its maximum corpus in equity. ELSS is a very popular scheme under Article 80C of Income Tax which also includes income tax savings and increases in invested capital. There is a lock-in period of three years in this scheme. It is very important to understand this plan before investing.

ELSS is a mutual fund mutual fund that can invest in equities as well as tax. ELSS is a diversified equity mutual fund that invests in the majority of its corpus fund equity. Diversified means that this fund invests in shares of companies of different industries and sizes. So that the diversities in the fund remain. It is necessary to understand here that there will be more variety of winning in the investment, the less the risk. Since it is an equity fund, returns from ELSS ELSS Fund reflect returns from the equity market. Better fund managers can give you better returns than the market.

Tax savings with investment in ELSS Mutual Fund

Dividend and Growth Like all other Equity Mutual Fund Equity Mutual Fund schemes, ELSS also offers dividend and growth options. Investors get a lump sum at the end of 3 years in the Growth option. On the other hand, in the option of dividend, investors get regular dividend income, whenever the dividend is declared by the fund, even during the lock-in period.

Lock in period:- is a lock-in period of three years on the investment under this scheme ie when you invest in this scheme, you can not redeem your investment for three years. Since it is beneficial to invest only in long-term for a longer period of time, therefore, in three years, you are likely to get a good return. You can also invest in ELSS through SIP, which makes investing easier and reducing the risk of investment.

Tax exemptions can be claimed as a deduction up to 1 lakh rupees of their ELSS investment from their gross total income in a financial year under Section 80C of the Income Tax Act. Returns from ELSS scheme are completely tax-free Any other investment plans available for tax rebates such as bank deposits, NSC or PPF, ELSS is available with the lowest lock-in period.

ELSS is a great Mutual Fund investment scheme in the schemes available for investment, but like investing in the stock market share market, there is a risk in the same way as the stock is in the market. It is expected that ELSS in Hindi would have liked you and you have helped to know what ELSS is in Hindi.

Example:- Canara Robeco Equity Tax Saver Fund

Want to know how to buy one read here.

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Types of Equity Funds | Basics

We told you different types of mutual funds. Equity funds are the most popular among different mutual funds. Today, we will discuss in detail about equity funds. What kind of investors should invest in the type of equity fund? What will be the difference between large caps, mid-caps, small-caps and sector funds?

Equity funds are the most popular among different mutual funds. Today, we will discuss in detail about equity funds. This fund is so popular because these funds invest in the stock market and can give returns as well. Most equity funds invest in companies according to market capitalization and are classified accordingly. Equity funds are mainly divided into large caps, mid-caps and small-caps.

Large-cap funds:- mostly invest in large companies. Funds invest these companies according to the size of their market capitalization. These companies are considered safe for investment because they are well-established companies in their industry sector and in a way the top companies are likely to be in large caps. This is the reason why large-cap funds are considered suitable for equity investors who do not like to take more risk. These funds are likely to give simple returns while taking a relatively low risk.

Mid-cap funds:- invest in most mid-sized companies. Investing in these companies can also lead to some risks because they may not be able to grow according to their full potential. However, if these companies develop and become big companies, then they can be very beneficial for the investors. Invest in investors who can afford more risks.

Small-cap funds:- invest in small companies. Investment in these companies can be very risky because very little information about them will be available in the public domain. However, these companies can give extraordinary returns. These funds are suitable only for high-risk investors.

Diversified Equity Fund:- Based on the market view of the fund manager, the diversified equity funds invest in companies with different size market capitalization. Because the portfolio is spread over various market capitalization, they are less risky than mid-caps and small-cap funds, but slightly higher risk may be compared to those of large-cap funds. These funds are suitable for investors who can afford the general risk.

Equity Linked Savings Scheme(ELSS):- or Tax Planning Mutual Fund is suitable for investors to save taxes under Section 80C of the Income Tax Act. Investments in these funds are eligible for tax deduction up to Rs 1.5 lakhs. They come with a mandatory lock-in period of three years. This means that you can not redeem these funds for three years after making a test.

Sector funds:- mostly invest in shares of companies in a particular area. Since the investment is centred on one area, the sector fund is considered to be extremely risky. For example, the real estate sector fund will invest only in real estate companies. Changing the economy into various cycles also foresees the fate of the areas. Investors should invest only a small part of their investment in the Sector Fund.

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What is Mutual Fund | Basics

Basics of Mutual Fund, Opportunities of MF schemes and Learn types of MF investments. The amount deposited by a large number of investors is called a mutual fund, which is put into a fund. The fund manager uses his investment management skills to invest this money in various financial instruments. Mutual funds invest in many ways, which determines their risk and returns. When many investors invest in a fund together, the fund is divided into equal parts called unit.

For example, suppose some friends want to buy a piece of land together. The price of a piece of land of hundred square yards is one lakh rupees. Now if you divide this fund into units of ten rupees then 10,000 units will be formed. Investors can buy as many units as they wish, according to their investment capacity. If you have only one thousand rupees for investment then you can buy a hundred units. In the same proportion, you too became the owner of that investment (land).

Now suppose that the value of this one lakh investment has increased to one hundred and twenty thousand after one month. Now, according to this investment, the unit price will be calculated, then the unit of ten rupees has now become twelve rupees. The investor who bought a hundred units in one thousand rupees, according to the twelve rupees per unit, now his investment (100×12) has been Rs. 1200.

Based on the amount invested by you as an investor, how many units you own. Therefore, an investor can also be known as a unitholder.

With this, you can see that an investor who can not make big investments, has the facility of investing in small units. Apart from this, the biggest benefit of Mutual Fund MF is that an investor who does not have much information about the market leaves his investment in the hands of experts. These experts determine where, how and when to invest.

Mutual funds can be invested in many ways. To know more read here

Also, It is very important for you to understand what is NAV if you want to invest in a Mutual Fund

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NAV in Mutual Funds and Explanation

It is very important for you to understand what is NAV if you want to invest in a Mutual Fund.

By investing in Mutual Fund Mutual Fund, your investment is in the hands of experts and in this way you can reduce the risk of direct investment in the stock market. Today, we will learn here that what is the NAV in the MF, how it is counted and how important it is.

Net Asset Value, or NAV, means directly the value of the total property. Net asset value, or NAV, in any of the Mutual Fund funds, after deducting the liabilities from the total value of all the shares of the portfolio, including cash, the outstanding balance is obtained by dividing it by the total number of units remaining.

NAV fund is per unit’s total asset value (excluding expenditure) and at the end of each day’s business, it is calculated by the asset management company (AMC) of that fund. On any given day, if that MF is terminated, then the unit holder of that mutual fund will get the price for each unit instead. In a way, the NAV is the book value of any mutual fund unit.

Most of the unit’s base value in the Mutual Fund Mutual Fund is Rs 10 or 100 rupees. In each business day, the NAV curve of the unit increases according to the market value of the fund’s portfolio.

NAV refers to the growth of the unit of a mutual fund mutual fund. If you invest Rs 12 per unit in a fund at NAV and after one year, if the NAV of that unit goes up to 15 rupees per unit then that fund has 25% growth. It is not right to believe that the mutual fund with lower NAV will give good returns and more NAV fund will give fewer returns.

Types of Mutual Funds read here.

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What are the best ways to find best mutual funds for beginners

Usually, people find best mutual funds schemes by looking into star ratings through websites like moneycontrol or valueresearchonline. Or sometimes we look into rankings of the best fund schemes which has given best returns in the previous 3 to 4 years.

But such cases for highly rated fund scheme managers need to be more responsible for such huge investments from customers and this leads him to compromise on the stocks he selects in the future.

So it is not predictable that the schemes which have the good track record till date will perform better in the future.

To pick the best mutual fund schemes go through these points mentioned below,

  1. The fund which has the best track record on the basis of consistency, with which safe track record rather than risky.
  2. Check for the fund manager previous track records also check if the fund manager changed for a particular mutual fund scheme. If a fund manager handles 5 funds and he is managing 3 or 4 funds better out of 5, then we can consider him he is good at managing fund schemes.
  3. Best return without risk track records are important.
  4. Large caps with a big percentage of return is more important than mid-cap/small-cap fund with a small percentage of returns.

 

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