Life is an uncertain game and to hedge this uncertainty, People invest in various investment vehicles. Mutual Funds is one of them which has gained popularity in the past few years because of its strong distribution network & performance. If you think that Mutual funds concept is new to the market then you are wrong and late! The mutual fund was born from a financial crisis that staggered Europe in the early 1770s.

However, Mutual funds captured public's attention in the 1980s & 1990s when the mutual fund industry recorded high peaks & investors saw an incredible return. In India & other south East Asian countries, it got widely popular in the 2010s. Mutual fund industry folio count rises 9% in FY20 on robust performance, an economics times report says. According to data from Association of Mutual Funds in India, the number of folios with 45 fund houses rose to 8.97 crore at the end of March 2020 from 8.25 crore in March 2019, registering a growth of 9 per cent.

Mutual funds is an investment vehicle mixed with various securities available in the market offering a basket to the investors to encash decent returns at lower risks for which the investor is charged with a expense ratio for the portfolio & risk management services.

Let us understand with a practical case, Mr. Raj is a Medical Professional and his net earnings is ₹50,000 per month. He plans to invest 5% of his net earnings in Mutual funds for 5 years for his personal corpus. He has limited knowledge about the Investment Industry, He found Finocontrol from Google which can help him gain financial markets insights from scratch and decided to take its yearly subscription. After that, he understood the concepts, usage information & need of mutual funds & decided to start investing in Mutual funds.

Finocontrol recommended Mr. Raj some stable & strong performing reliable Mutual funds companies from where he can start his investing journey. Now, Mr. Raj had complete knowledge about it & was confident on his decisions. Now, he won’t be fooled by any of the agents and can detect scams easily (if any).

Mr. Raj went to XYZ Mutual Funds Company and mentioned his financial goals. Now a days, Mobile technology has dominated the industry and has made easier for investors to select mutual funds through website & apps. There are a wide range of online brokers as well providing seamless investing & research services. Finally, Mr. Raj downloaded the company’s app and invested his money online through its official application.

Mr. Raj gets catered with multiple options in the Mutual funds investing with rate of returns, historical performance, sector allocation, stock allocation and market trends. In Mutual funds, after Mr. Raj informed his basic personal & financial details, there are experienced portfolio/fund managers/experts who will allocate & manage Mr. Raj’s money & help him achieve goal. Therefore, Mutual funds have been considered as the best safest investing alternative as it fruits more returns than debt funds and carries less risk than direct equity investment.

Alas! Mr. Raj is happy & tension free now as he has parked his money in safe & reliable hands. After investing in Mutual funds, he doesn’t have to analyse markets regularly or think about possible risks. Other than that, research, financial valuations, technicalities everything gets automatically managed by the fund managers and this is one the major competencies of mutual funds. Mr. Raj has to just sit back, relax! & track its fund’s performance until maturity.

Therefore, Mutual Funds Investment is a balanced investment decision for securing a decent return which can range in between 8% to 15% depending upon the characteristics of securities and macroeconomic drivers. Finocontrol researchers and experts find mutual fund investments performing best when locked for a minimum of 5 years in Direct Mutual fund Hybrid schemes.

More such interesting, insightful and productive content regarding Mutual Funds coming up! Stay tuned! Happy Investing!//texts:Expenses ratio is the amount charged on the daily basis by the MF companies for managing an investor's portfolio. It is deducted before calculating the NAV(Net asset value) of your investment in form of Fund management fees, Advertisement & distribution Expenses, Legal & audit fees.

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