by Admin Date 31/03/2020
Mutual funds companies are those companies which collects money from investors for buying securities. These companies invest this money for buying shares. In return, Mutual funds also charge their investors. Those persons who don't know anything thing about share market, those have a better option in form of mutual funds to invest their money and they also can earn profit. Mutual Funds provides a better security to your money. Those who wants to invest in Mutual funds can choose the mutual funds scheme according to their financial goal and convenience.
There are many ways by which you can invest in mutual funds which are as follows:
There are different types of mutual funds which are as follows:
Debt Mutual Fund scheme invests in only debt securities. Investors can invest their money in this scheme to meet their short term financial goals. If you want to invest for less than five years then you can take advantage of this scheme. This mutual funds schemes are much better than other shares schemes and also are less risky. These schemes also offers better returns rather than fixed deposits of banks.
Solution Oriented Mutual Funds Schemes are made according to specific goal or a certain solution. These Schemes may have such as the education of a child or after the retirement of employees from their jobs. There is a certain conditions to invest in these types of schemes that you must have to invest at least for five years to take the advantage of solution oriented mutual funds schemes.
Equity Mutual Funds schemes are made for directly investing investor'smoney into shares. These mutual
funds schemes can be risky for short term investment but in case of long term these schemes help you to earn a great profit and you can also take best returns. This type of mutual funds schemes depends only on the how stock perform in stock market and your returns from investing is also based on it. Those investor's financial goals whose are going to be completed after ten years, they can invest in these types of mutual funds schemes. This is the best scheme for these types of investors.
There are also different kinds of equity mutual funds schemes which are as follows:
Equity Linked Savings Schemes or ELSS is a tax savings vehicle as well as an equity instruments. There
types of funds have different types of portfolios where fund managers can invest in all types of stocks from all sectors they can choose. This type of tax saving schemes has lowest lock period of only just three years.
Sector funds or Single Sector funds focus on their investments in single sectors like financial sectors services, health care and technologies. These are the sectors in which investors will represent in different types of equity funds.
This type of equity fund is very diverse which classified in form of sector funds which can scout for stocks globally. You have funds for focussed on specific sectors like as mining, commodity, agriculture and energy stocks.
If you have bankless funds that can be allocated as equity at atleast 65% of their portfolios so they are capable for investing in these types of funds. For beginners, this hybrid equity funds are very good because they can get both equity and debt by investing their funds in these schemes.Even if an investor is already an equity fund holder and if he wants to grow in this area then he can choose balance fund.
All these types of funds have their own rights. However, if investors needs to look at market cap for investing their money. A fund focuses on small and mid cap stocks must not to be core holding in its portfolios. Those latter funds that are not biased towards big or mid cap stocks where opportunities can be seen in their portfolios.
This type of Mutual Fund Schemes invest most of its money only for buying shares or stocks of small
companies that's why this kind of mutual fund schemes are called small caps equity funds. The managers of such schemes invest only their funds or the entire money only for small companies Because of this reason, investments that are made in such schemes are much more risky than mid-cap and large-cap funds, but the returns from small-cap equity funds are also many times higher than largecap or mid-cap schemes.
In this type of equity funds, most of the companies are medium-sized targeted and invested only for medium-sized companies. But Investing in these type of medium sized companies you have to take some risk because these medium sized companies may not be perform to its full potential and you had to lose your money but you can also benefit from investing in such types of funds. If the company invested later develops and becomes a big company. Then you can make a lot of profit and this will be very beneficial for your company.
These types of equity funds are mostly invested only in big or multi national companies. These companies are well developed in their area and their chances of sinking are new or companies with less market capitalization are less. Because of large-cap companies are supposed to be safe for investment. Only big companies are likely to be in large caps. Only because of this reason large cap funds are considered to be suitable for equity investors who does not want to take more risk and also these type of funds returns with less risk.