Tax Planning - very important

A mutual fund is a trust that pools together the savings of a number of investors who share a common financial goal. The fund manager invests this pool of money in securities, ranging from shares, debentures to money market instruments or in a mixture of equity and debt, depending upon the objective of the scheme.

Professional expertise: Fund managers are professionals who track the market on an on going basis. With their mix of professional qualification and market knowledge, they are better placed than the average investor to understand the markets.

Diversification: Since a mutual fund scheme invests in number of stocks and/or debentures, the associated risks are greatly reduced.

Relatively less expensive: When compared to direct investments in the capital market, mutual funds cost less. This is due to savings in brokerage costs, demat costs, depository costs etc.

Liquidity : Investments in mutual funds are completely liquid and can be redeemed at Net Assets Value (NAV) related price on any working day.

Transparency : You will always have access to up-to-date information on the value of your investment in addition to the complete portfolio of investments, the proportion allocated to different assets and the fund manager’s investment strategy.

Flexibility : Through features such as regular investment plans, regular withdrawal plans and dividend investment plans, you can systematically invest or withdraw funds according to your needs and convenience.

SEBI regulated : All mutual funds are registered with SEBI and function within the provisions and regulations that protect the interests of investors. While most investment options provide most of these features, only Mutual Funds provide all of these options.

Snapshot of Mutual Fund Schemes

Don’ts for Mutual Funds

1. DO NOT SPECULATE - Always evaluate risk taking capacity.
2. DO NOT CHASE RETURNS - Because what goes up must come down.
3. DO NOT PUT ALL EGGS IN ONE BASKET - Diversification reduces the risk.
4. DO NOT STOP WORKING ON MUTUAL FUNDS - Evaluation of funds is a must.
5. DO NOT TIME THE MARKET - Every time is good for investments.

Don't forget ever ?

1. Mutual fund are subject to market risk and there is no assurance that fund objective will be achieved.
2. NAV fluctuates depending on forces affecting capital market.
3. Past performance do not indicate future performance.
4. Returns are not guranteed and assured.