Investment in Mutual Funds in India & Advantages of this Investment

Investment in Mutual Funds

Mutual fund invests the money of many investors in a bulk in different securities such as shares, debt securities, money market securities, gold instruments or a combination of these. These securities are professionally managed on behalf of the investors to give them higher return. Investors own units based on the amount of money invested by them.  The increase in value of the investments is also passed on to the investors in proportion to the number of units owned.

Mutual Funds are better option for inexperienced and new investors who does not have more knowledge about the equity, debt and other security markets.

Advantages of Investment in Mutual Funds

  • Mutual funds are managed by professional experts and they balance the portfolio according to current economic scenario.
  • Lower expense ratios to the investors’ under direct plans of mutual funds.
  • In the mutual funds Investments, You could structure your investments according to your requirements such as income and expected return.
  • Experts invest your money in the diversified securities; it reduces risk present in any one type of security. They invest your money in equity, debt securities, money market securities, gold instruments or a combination of these.
  • Mutual Fund investments are liquid in Nature as you could access your money according to your convenience.
  • The procedure to invest in mutual fund is simple.
  • They also give personal assistance to their customer in buying and selling fund units also provide fund information. They also give answer to your questions related to your account.
  • It reduces the transaction cost because many people pooling in their savings, mutual fund get the advantage of the power of bargaining and under provisions of Section 10 (23D) of the Act, any income received by the Mutual Fund is also exempted from tax.
  • Mutual Funds are regulated by Securities and Exchange Board of India (a regulatory authority) which enables transparency and protects the welfare of the investors.
  • Tax Benefit: Dividends received from equity schemes of Mutual Funds are tax-free.


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