Mutual Funds are a more attractive investment alternative than traditional bank deposits. Starting to invest in Mutual Funds is simple, has low costs and offers several alternatives for each level of risk.
What are Mutual Funds ?
A mutual fund is an investment alternative that consists of grouping the monetary contributions of different people, natural and / or legal, to invest them in different financial instruments. In case of Mutual Funds conditions will be more favourable to those that would occur if each participant did it alone. In a nutshell, it is a collective investment.
How do Mutual Funds work?
Do you want to know How mutual funds work, then below is the answer. These are voluntary contributions, from individuals or legal entities, to a fund, which is administered by a Fund Management Company.
Investors give money to the Administrator and the mandate is to invest in different types of assets. The condition is that the investment has to converse with the mandate of the scheme launched by the asset management company.
How to invest in them?
Anyone can approach the office of a SIP Consultancy in Delhi. According to the new regulation of Mutual Funds, these may be: Banks, Individual Financial Advisors (IFAs) or Brokerage Companies.
The entities must have a contract with the Fund Management Company, through which their channels are used to place the Mutual Fund investments.
Is there a minimum amount to invest?
The amounts to access a Mutual Fund are not figures of several zeros. One can access with small amounts as Rs 1000/- and be added progressively.
The minimum amount may vary according to the characteristics of the particular investment in which a person wants to invest.
What are the costs of doing it?
Basically, the Fund Management Companies charge expenses that are based on the structure prescribed by the regulator. The expenses percentage charged depends on the nature of each fund.