Mutual Fund

Like every other financial term, Mutual Funds too will appear as a complex word to a layman who has no understanding of it at all. In short, although there is no legal definition of the term "mutual fund", it actually deals with a variety of investment vehicles that are offered by different companies. Some of the mutual funds are open-ended in nature which means that one can buy and sell it at their convenience or depending on the market.

Often considered to be a good investment opportunity, the team of experts at Nostra Wealth will make you go through all the rules and regulations in case of opting for these funds so that you are clear about the entire process and can ask questions as per your query.

Why invest in Mutual Funds?

• Diversification that too at low cost: Mutual funds are the best means if you are looking for diversification in a simple way. Moreover with these funds you are able to diversify your money in different securities and that too at a low cost. Start with very nominal amount and get the advantage of long-term equity investment.
• Professional/Convenient Administration: Mutual fund investing are known for reducing paperwork and does away with inadequate deliveries, delayed payments and unnecessary follow ups with brokers and companies.
• Increase revenue opportunities: Investment in a mutual fund means you are a part owner in a pooled diversification. No single investor could cover this much diversification.
• Liquidity: As it is an open-ended scheme, you will get your money at net asset value related prices from mutual fund itself.
• Transparency: It's not sticking money in a portfolio not really knowing what is happening. Get regular updates on the value of investments in addition to disclosure on the specific investments made by your scheme, the proportion invested in each class of assets and the fund manager's investment strategy and outlook.
• Choice of Schemes: The wide range of schemes covers almost all the aspects of an individual's requirement.
• Safe and secure: All Mutual Funds are registered with SEBI and they function within the provisions of strict regulations designed to protect the interests of investors.

Five basic things about mutual fund that every investor must know:

• Investment Objective: Is the objective offered by the fund matching your needs? If you already have different investments, in which way is this fund beneficial to you? Does it provide the diversification you're looking for?
• Risk: What kind of risk does the particular fund subject your investments to? Is it worth it?
• Time Horizons: Does it serve the purpose as well as the time frame for which you made the investment?
• Expected Return: Does the fund have the potential to provide the returns you need to meet your goals? Although this can never be said with utmost confidence, yet does it match your goals and requirements?
• Past performance: Do go through the past performances of the fund you are investing in. Remember one thing, the lower the risk factor, lower will be the rate of return. You need to be practical and realistic in your approach.