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Concept & Benefits of Mutual Fund


Elite wealth Advisors Ltd. provides some basic concepts & benefits to the investors who want to invest their money through mutual fund. – PowerPoint PPT presentation

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Title: Concept & Benefits of Mutual Fund

What is Mutual Fund
A mutual fund is an investment vehicle that is
made up of a pool of funds collected from many
investors like you for the purpose of investing
in securities such as stocks, bonds, money market
instruments and similar assets.
Concept of Mutual Fund
Benefits of investing in mutual funds
Professional Management Qualified professionals
manage your money, but they are not alone. They
have a research team that continuously analyses
the performance and prospects of companies. They
also select suitable investments to achieve the
objectives of the scheme. It is a continuous
process that takes time and expertise which will
add value to your investment. Fund managers are
in a better position to manage your investments
and get higher returns.
Benefits of investing in mutual funds
Diversification The cliché, dont put all your
eggs in one basket really applies to the concept
of intelligent investing. Diversification lowers
your risk of loss by spreading your money across
various industries and geographic regions. It is
a rare occasion when all stocks decline at the
same time and in the same proportion. Sector
funds spread your investment across only one
industry so they are less diversified and
therefore generally more volatile.
Benefits of investing in mutual funds
Affordability As a small investor, you may find
that it is not possible to buy shares of larger
corporations. Mutual funds generally buy and sell
securities in large volumes which allow investors
to benefit from lower trading costs. The smallest
investor can get started on mutual funds because
of the minimal investment requirements. You can
invest with a minimum of Rs.500 in a Systematic
Investment Plan on a regular basis.
Benefits of investing in mutual funds
Transparency The performance of a mutual fund is
reviewed by various publications and rating
agencies, making it easy for investors to compare
fund to another. As a unit holder, you are
provided with regular updates, for example daily
NAVs, as well as information on the funds
holdings and the fund managers strategy.
Benefits of investing in mutual funds
Rupee-cost Averaging rupee-cost averaging, you
invest a specific rupee amount at regular
intervals regardless of the investments unit
price. As a result, your money buys more units
when the price is low and fewer units when the
price is high, which can mean a lower average
cost per unit over time. Rupee-cost averaging
allows you to discipline yourself by investing
every month or quarter rather than making
sporadic investments.
Benefits of investing in mutual funds
More Choice Mutual funds offer a variety of
schemes that will suit your needs over a
lifetime. When you enter a new stage in your
life, all you need to do is sit down with your
financial advisor who will help you to rearrange
your portfolio to suit your altered lifestyle
Types of mutual funds
What are the risks associated to mutual funds
The level of risk in a mutual fund depends on
what it invests in. Usually, the higher the
potential returns, the higher the risk will be.
For example, stocks are generally riskier than
bonds, so an equity fund tends to be riskier than
a fixed income fund.
What are close and open-ended schemes
A closed-end fund has a fixed number of shares
outstanding and operates for a fixed duration.
An open-end fund is one that is available for
subscription all through the year. The majority
of mutual funds are open-end funds. Investors
have the flexibility to buy or sell any part of
their investment at any time at a price linked to
the funds Net Asset Value.
What is ELSS
ELSS is a type of diversified equity mutual fund
which is qualified for tax exemption under
section 80C of the Income Tax Act, and offers the
twin-advantage of capital appreciation and tax
benefits. It comes with a lock-in period of three
Mutual Fund- Which one to buy?
How To Chose a fund for Investing?
Expense ratio Denotes the annual expenses of the
funds including the management fee and
administrative cost. Sharpe Ratio An indicator
of whether an investment's return is due to smart
investing decisions or a result of excess risk.
Higher sharpe Ratio is better. Alpha Ratio
Measures risk relative to the market or benchmark
index. For investors, the more positive an alpha
is the better it is. R-squared Measures the
percentage of an Investment's movement that are
attributable to movements in its benchmark index.
A mutual fund should have a balance in R-square
and ideally it should not be more than 90 and
less than 80.
Elite Wealth Advisors Ltd
DDA Shopping Complex, Mayur Vihar-1, Delhi-91
Contact Details
Phone 01142445800/9650901058 Email Website
For Invest in Mutual Fund visit us on
Thank You For Your Time Attention!