Qrius
  • Economy
  • Culture & Society
  • Science & Technology
  • World
  • Content Services
  • Economy
  • Culture & Society
  • Science & Technology
  • World
  • Content Services
12 Jul, 17
12 Jul, 17

6 benefits of Mutual Fund Investments to mark Mutual Fund Day

Though mutual funds have not gained much popularity in India, they have diverse benefits over many other financial instruments.

By Qrius

Mutual funds have emerged as one of the most popular investment destinations in India. This asset class provides security to retail investors. Average Assets under Management has peaked at a high of Rs. 17.37 trillion as of January 2017.  In spite of the phenomenal growth mutual funds still lack the penetration in India that has been witnessed in other heavyweight economies such as US, China or even Western Europe. It is thus important to inculcate the healthy habit of mutual fund investment among the Indian population.

To promote the ritual of regular investing, the Mutual Fund Day is marked by the 7th of every month. Here are 6 benefits of sound mutual fund investments that can be highlighted:

a) Higher returns

Regular savings accounts give returns of between 4 to 6%. Fixed deposits rates stretch till 8%. On the other hand, mutual fund investments have been known to give anywhere between 12% to 15% over a long period of time. Mutual funds have consistently outperformed savings and fixed deposit returns in India.

b) Tax Savings

Read moreFree CAT Workshop by Arun Sharma and Meenakshi Upadhyay on 9th Mar.(Sun), 11 am

Mutual funds under Equity Linked Saving Schemes offer tax benefits of up to Rs 1.5 lac under Section 80C, thereby serving as a lucrative tax saving investment.

c) Compounding Effect

Investing via the Systematic Investment Plan route helps achieve the effect of compounding. An investment of just Rs 10,000 per month over a 30-year period, at a 15% rate of return, will grow to become a gigantic Rs 7 crores.

d) Saves time

For busy professionals, investing directly in equities is not always a great option since it requires a time investment to understand the fluctuating market. Mutual funds enable you to hand over your hard-earned money to professionals who study the market in detail.

e) Portfolio balancing

Read moreThe Role of Cinema and Novels in Our Daily Life

They give the flexibility of re-balancing the portfolio depending on risk appetite, age and income. It also allows for shifting between equity and debt mutual funds. This allows you to hold investments that fit your specific profile, and move between investment profiles easily. In comparison, investments in instruments such as gold and real estate are not as flexible.

f) Liquidity

They come with minimal or no lock-in periods, giving easy liquidity so that investments can be redeemed as and when needed.

The growth in mutual fund portfolios has been increasing aggressively due to industry initiatives like Mutual Fund Day – which actively encourages investors to make monthly investments in mutual funds. The initiative reminds people to invest their resources while educating them about the various targets to pursue. Through Mutual Fund Day Reliance Mutual Fund is attempting to spread awareness and build consideration towards investing in Mutual Funds to help investors realise their dreams.  Reliance Mutual Fund has also conceived a Facebook application called Fund for a Friend which helps you to recommend an appropriate mutual fund for a friend by evaluating his personality.


Read moreBillion Dollars, for a Non-Profit!

Featured Image Courtesy: Pixabay


Stay updated with all the insights.
Navigate news, 1 email day.
Subscribe to Qrius

what is qrius

Qrius reduces complexity. We explain the most important issues of our time, answering the question: "What does this mean for me?"

Featured articles

1

Abstract

The Everlasting Allure of ‘The Double Life of Veronique’
2

‘Women are not just for sex’ says Kangana Ranaut as she hits back at fmr Cabinet Minister
3

India’s Monthly Economic Review: FY24 Outlook Bright, Fundamentals Strong, Global Headwinds
4

Where are we in the fight against ‘homosecularism,’ the belief that sexuality and religion are at odds?
5

Supreme Court refuses woman?s plea to medically terminate her 26-week pregnancy
6

How ‘Birkenstock’ built on its brand and broke bank
7

Israel-Hamas Conflict: Tackling false claims and misleading content in violence-hit Gaza
8

Humans of Bombay founder Karishma Mehta pens note on controversy with People of India
9

How did a ‘bus shelter’ go missing in Bengaluru?
10

Che Guevara

Why is Che Guevara’s image still invoked in pop culture?
About UsContributorsBecome a ContributorContact
2018 QRIUS. All Rights Reserved