Mutual funds in India have recently gained a lot of traction as an efficient investing avenue. If you are inspired by your dreams of early retirement and are ambitious to grow your savings at a faster pace, then there is hardly any better option than investing in mutual funds. Mutual funds have proved to offer great returns over the long term and you won't be disappointed if you choose this as your preferred investment option. Mutual funds are run by professionals who ensure that your money is being used efficiently and productively. Choosing the proper form of fund for your investment requirements from your financial product distributor will be determined by your investment aim.
This article provides a short description of all the online mutual fund investments in India.
1. Equity Funds
Equity Funds are a type of Mutual Fund plan that invests money primarily in company shares/stocks. These funds are also referred to as Growth Funds. These Equity funds are classified as either active funds or passive funds. An Active Equity Fund manager searches the marketplace, does company research, analyses performance, and searches for the finest stocks to invest money in. A Passive Mutual Fund's portfolio is built to match a prominent market index, such as the Sensex or the Nifty Fifty. Equity Funds are generally considered to be high-risk high-return mutual fund schemes.
2. Debt Funds
Debt Funds are a type of Mutual Fund plan that invests money in fixed income products that provide capital growth, including government and corporate bonds, corporate debt instruments, as well as money market instruments. Fixed Income Funds and Bond Funds are other names for Debt Funds. A few key benefits of investing in these Debt Funds include a cheap cost structure, reasonably constant returns, strong liquidity, and decent safety. Debt Funds are generally ideal for investors looking for a constant low to medium-income source without taking too much risk.
3. Hybrid Funds
Hybrid Funds are a type of Mutual Fund plan which compromises between Equity Funds and Debt Funds. They invest in a mix of asset classes & have both equity and debt components. These funds are also referred to as Balanced Funds. They invest in multiple asset categories like international equities, gold and others to maintain a well-diversified investment portfolio. Hybrid Funds are useful for investors with an investment horizon of 3 to 5 years.
4. Money Market Funds
Money Market Funds are a type of Mutual Fund plan that invests money in high-quality and liquid asset classes including repurchase agreements, treasury bills, commercial papers as well as deposit certificates. These funds mainly aim to get the unitholder’s earning interest by minimising the fund’s Net Asset Value i.e. NAV. Money Market Funds are generally used to generate short-term cash. Thus, if you are looking to generate some quick income, you can do so by maintaining a money market portfolio.
Conclusion
There are many things to consider when looking at mutual funds, especially when it comes to picking the one that best suits your investment needs. Mutual funds in India have the potential to change a lot about the way the average Indian invests in the future. This is something that really can have a huge impact on how people manage their finances, as well as retirement plans and pensions. With this said, it is still important that people educate themselves in order to get the best results – including growth and safety. Those who take the time to educate themselves end up seeing high returns without taking risks they can't afford to take – which means they will have a solid plan for their future, which is what all investment is striving to achieve.