If your salary is 50,000 or 5000 in the last what matters is your ‘SAVING’. If you are capable to save you are also capable to invest. Investment helps you to secure your future and to add huge gain in your income. Mutual funds are one of the best investments in which you can opt for a good gain. These are great vehicles for building wealth in the long run.
Let’s study what is Mutual fund? then we’ll here light you the benefits of investing in mutual funds.
A mutual fund is a professionally managed investment fund that pools money from many investors to purchase securities. These investors may be retail or institutional in nature. They have advantages and disadvantages compared to direct investing in individual securities.
Have a look at statistical data on such kind of investments.
At the end of 2018, mutual fund assets worldwide were $46.7 trillion, according to the Investment Company Institute. The countries with the largest mutual fund industries are:
- United States: $21.0 trillion
- Luxembourg: $4.7 trillion
- Ireland: $2.8 trillion
- Germany: $2.2 trillion
- France: $2.1 trillion
- Australia: $1.9 trillion
- Japan: $1.8 trillion
- China: $1.8 trillion
- United Kingdom: $1.7 trillion
- Brazil: $1.2 trillion
Now let us look at the benefits of mutual funds.
Less Risk
The risk involved in Mutual funds in much more less than the risk involved in stocks. Every stock has three types of risk i.e company risk, sector risk, and market risk. In mutual funds, these three risks are neglected which gives it more privilege to invest in it.
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Small capital
Here you not need to require a large amount of capital. You can invest in mutual funds with less capital also. Unlike investment like a stock where you need to build a good portfolio of large capital outlay. Just by 5000, you can invest in a mutual fund.
Investment expertise
Investing in mutual funds does not require much knowledge. With basic rules and norms, you can easily invest here and can get good returns from it too. These mutual funds are managed by some professional fund managers who have sufficient expertise and experience in picking the right move to get the best risk-adjusted returns.
Variety of products
Mutual funds offer investors a variety of products that suit their risk profiles and accomplish their investment objectives. Apart from equity funds, there are also balanced funds, monthly income plans, income funds, and liquid funds to suit different investment requirements.
If you still have any doubts regarding mutual fund, just let us know in the comment section below. You can also share anything regarding this.
