Registration of Mutual Funds with SEBI is mandatory. With investor interest at the helm, SEBI has laid down strict regulations to safeguard investors against possible frauds, and every company issuing or dealing in Mutual Funds must abide by them.
Professional Financial Experts:
Every Mutual Fund scheme has a well-defined objective. And behind every scheme, there is a dedicated team of financial experts working in tandem with specialized investment research team. These experts diligently and judiciously study companies, their products and performance, and after thorough analysis, they decide on the best investment option most aptly suited to achieve the scheme's objective as well as investor's financial goals.
Mutual Funds diversify the risks of investment by investing in varied stocks across different industries or sectors. Market volatility seldom affects all sectors at once, and hence, the investor is saved from incurring heavy losses.
Rate of Return:
The return potential of medium to long term Mutual Funds multiplies manifold, resulting in greater profitability for investors in the long-term.
Compared to direct investment in the share market, making investments through Mutual Funds is a less expensive affair that helps minimize an investor's overall cost of investment. Through Mutual Funds, the economy of scale tips in the investor's favor as he will enjoy special benefits in terms of brokerage, custodial fees, etc.
Benefit of Liquidity:
Investors can encash his investments in Mutual Funds, partially or wholly, at prevailing net asset value, at any point of time. For Closed ended schemes, investors can encash their investments at prevailing Nav, subject to exit load at specific intervals, if provided in the scheme. In certain schemes, where lock in period is mentioned, investor cannot redeem his investment until that period.
Mutual Funds are the most transparent form of investment. Investors will receive detailed information and timely updates about the nature of investments made, fund manager's investment strategy behind the investments, the exact amount invested in each type of security, etc.
Mutual Funds facilitate easy and disciplined investment as well as ensure easy withdrawal of funds as per investor's convenience.
Choice of Investment:
There are different types of Mutual Funds across varied sectors, and with due assistance from a financial expert, the investor can choose a scheme that aptly fits his requirements, and helps him achieve maximum profitability.