Rising rates of inflation, competing financial priorities, limited savings, the volatility of markets are just some of the things we have to keep in mind when making investment decisions. The reality is that while we have several financial life goals, our savings are limited and hence as investors we want to maximize our returns and ensure the real value of our savings increases in the long run. However, given the plethora of investment options at our disposal, it can be overwhelming to try and decide where we should park our life savings. For first-time investors, this process can be even more difficult, as your choice to invest in one will depend on a range of factors including, your income, financial goals, need for liquidity, investment horizon, risk appetite amongst other factors.
One investment option that has seen unprecedented growth in the Indian market is mutual funds. In fact, due to customer preference and a push by mutual fund houses to educate people about the benefits of investing in mutual funds, the mutual fund industry in the country has grown from Rs. 5.87 trillion in 2012 to over Rs. 15.63 trillion in 2016. For seasoned or first-time investors trying to decipher and understand your ideal portfolio can be difficult, however, with the 5nance mutual fund investment, a robo-advisory platform you can leave your financial decisions in safe hands.
Mutual funds are a tool of financial investment whereby investors with a common financial goal pool in their capital. Then a fund manager responsible for managing this pool of money will invest it into a variety of options ranging from company stocks, bonds and shares. Mutual funds can be classified into different categories based on certain characteristics such as asset class, structure, investment objectives, and risk. One of the most commonly used categories to classify mutual funds on the basis of their asset class. These include equity, debt, money market and hybrid funds and each has a different risk to return ratio.
Investing in mutual funds has a myriad of benefits for investors including offering a range of diversified risk investment options, access to markets with low costs of transactions and liquidity. Staying invested in mutual funds in the long term helps you survive the shocks of the market while also being able to get higher rates of returns on your investment. Volatile markets can be hard to navigate and deal with and switching your investments constantly in order to try and beat the market can be incredibly tricky and difficult. This is why investors and market experts alike encourage investing in instruments such as mutual funds which focus on long term wealth creation and help you survive whatever shocks the market may throw your way.
One of the most important benefits of investing in mutual funds is that you get professional fund management, which enables you to get market-linked returns without having to deal with the everyday hassle of deciding what you should invest your savings in. With 5nance investment planning and professional mutual fund management, all you have to do is provide details about your finances and your ideal portfolio will be generated to ensure your investments are secure and provide you with the highest possible returns. In fact, with the 5nance mutual fund investment tool investing in mutual funds is extremely liquid, just like buying and selling stocks online. For first-time or seasoned investors, you can make an account online in seconds and choose from the list of recommendations and start investing almost instantly with 5nance investment planning.
Over the past few years, mutual funds have popped up as a customer favourite. In fact, the total assets under management (AUM) to GDP ratio which is essentially used to assess the rate of mutual funds penetration in India was merely 10%, much lower than the global average of 55%, and the 100% staked by several developed countries. However, as more and more customers have begun to understand the benefits of mutual funds including the diversified risk options, liquidity, returns offered by them, there has been an inflow of investment into the industry with the mutual funds asset base estimated to have increased to over Rs. 23 lakh crore in 2017-18. As investors looking for a financial tool which will offer them high market linked returns as well as liquidity, mutual funds continue to stand out and be a customer favourite.