7 points you must know while investing in Mutual Funds

Regular Saving is a Good Habit. As,you know “finance is the backbone of everyone Life”.

Honestly, if you are thinking to invest in Mutual Fund, that’s a Good step.

In fact, step by step everyone can achieve their Goal. Everyone has goal to save money for their future needs.Here,i am illustrating 7 points you must know while Investing in Mutual Funds.

Before investment in mutual fund, read all legal aspect of fund houses. Because Mutual Fund investment depends on Market Risk.

So, Let’s talk on, 7 Points you must  know while Investing in Mutual Funds:-

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1.FUND CATEGORY

Before investing you should know or have knowledge about fund category. It plays a vital role in appreciation of your capital.

  • “Equity” based Mutual Fund. 
  • “Tax Saver” Mutual Fund. 
  • “Debt” based Mutual Fund. 
  • “Hybrid” Mutual Fund. 
  •  Others. 

To Know in details Click Here!

According to this, you can invest in different fund category. 

According to your Risk taking capacity invest in mutual fund.

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2.RISK GRADE                                             

  • Low
  • Moderately Low
  • Moderate
  • Moderately High
  • High

In this you have to choose according to your Income and Loss bearing capacity.

 

3.INVESTMENT OPTIONS

It is of two types:-

  • Direct

In this, you directly invested in the Asset Management Company (AMC).

There is no distributor between You and Investment Company. Therefore Direct Plan has lower expense ratio.

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  • Regular

In this, Investment is done through distributor, broker or banker.

Therefore, Regular Plan has slightly more expense ratio because AMC paid fee or commission to Intermediary such as distributor, broker or banker.

By reading this, your vision would be clear that which fund would give your capital better result.

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4.FUND OPTIONS
  • Dividend/Income

Further, Dividend Plan is classified into three category:-

  1. Dividend Payout– when you go for this dividend paid to your bank account.
  2. D.Reinvestment – In this your dividend again reinvested in the same fund.
  3. Dividend Sweep – In this your dividend invested in another units of mutual fund in the same fund house.
  •  Growth

In this you will not get dividend paid out by stocks. Some shares pay dividend regularly, but in this you are giving authority to fund house to reinvest the money in same fund scheme.

By doing this the Net Asset Value (NAV) of the mutual fund Increases. you will get benefited when you are selling you fund, means in this your capital gain is more.

This give clear idea about your choice or need, according to your choice or need you can invest in different category of mutual fund.

Related articles:-What is Mutual fund,Its Type & Category of It?

5.FUND TYPE

  • Open Ended

When you think to invest in mutual fund then you are investing in Open Ended mutual fund. In this you buy shares at Net Asset Value. It doesn’t issue fix shares to market.

It don’t have fixed time period. In this you can buy and sell according to your convenience. 6d023be237fd9e66884053fbcc63fa2eedc50991 300%20x%20250 01 7 points you must know while investing in Mutual Funds

  • Closed Ended

Closed-end funds issue a fixed number of shares that are traded on the stock exchanges. In this, when shares are sold after that shares are not issued.

Shares of closed-end funds are bought and sold through brokers.

6.MINIMUM SIP INVESTMENT                   

  • <=100
  • 101-500
  • >500

Amount of Investment to choose is depend upon your income & Expense level.

So, it is very necessary to calculate before starting investment so that you can continue your investment.

7.VALUE RESEARCH RATINGS

Rating you will find from 1 star to 5 star.

5 star rating mutual fund is the best for investment.

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