Jun 10
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Lot of investors think as to how to make investment in mutual funds. To invest in mutual funds in India is easy these days, but you need some knowledge to form your buying decisions. Primarily, the need for mutual funds in India has been due to the phenomenal rise in investments in the stock market. If you don’t know much about the movements of the stock prices and trading, your best bet would be to invest in mutual funds that re-invest your money in a wide variety of stocks providing you a reasonable return.
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You can start off by checking out the websites of various mutual funds companies in India. There are several foreign fund managers that have set up offices in recent years and many more of them are coming regularly to invest in Indian stocks. You can email the chosen mutual fund company and even transact business online. All you would require are an internet access, a broker or a financial adviser and money to invest in mutual funds.
There are many types of mutual funds in India and they start with open ended funds that offer liquidity and you can sell or purchase according to the net asset values or NAV. The maturity date is not also fixed. You can get fixed maturity periods in close ended schemes that can range from 2 to 15 years. You can also invest in foreign markets for capital growth and income and you should check whether there is market exposure to India in your portfolio.
Like all mutual funds, Indian mutual funds are also affected by world events and the risks from political upheavals. There can be economic changes as well affecting the value of mutual fund investments. You can also face the risk of change in currency prices if you invest in Indian mutual funds. By researching mutual finds from India, you can ask for their prospectus and decide on the best alternative with your financial broker.
It is best to purchase mutual funds through a broker as he or she would be best placed to provide you with relevant and updated information. Even though the mutual funds were primarily available with Unit Trust of India for long, there are now a wide variety of funds from different countries and they are backed by years of experience in trading stocks in global markets. There are private and public companies offering the best spread.
Invest during a lull
You need to do a lot of research initially to be able to spot the best fund manager in the business. It is best to invest in mutual funds during a lull in the stock market when investors have closed their positions after a bull run. The indices fall after heavy selling and the value plummets further before actually settling down. There are many banks in India that include Indian and foreign banks that have funds on offer.
Participation by foreign companies in mutual funds and asset management companies are limited and they are considered on a case to case basis. With an extensive marketing network the mutual fund managers offer upfront and hands on help and guidance in spotting the best portfolio for your investing needs. The SEBI or the Security Exchange Board of India looks after the functioning of mutual funds in India and is a regulatory body.
Mutual funds are allowed to apply for firm allotment in public issues and they are supposed to be functioning as trusts. The direct management of funds is done by a separate asset management company and the net worth of an asset management company or its affiliates has to be Rs50 million to manage other funds.
Many people prefer investing in mutual funds through the Systematic Investment Plan or SIP. It involves investing a fixed amount of money in a chosen fund on a monthly, quarterly or half-yearly basis. Two biggest benefits of investing in mutual funds through SIP is that it eliminates the need to time the market and it gets the investor in the habit or discipline of investing since payments have to be made at fixed times. Like the post suggests, it’s best to invest in mutual funds through a broker. Many stock broking companies offer this service. For example, GEPL offers broking services in mutual fund investment and has a team of experts who manage the MF portfolios of their clients.
[...] order to have an overview of Indian mutual funds you need know what mutual funds actually are all about. Mutual funds are a pool of money that is [...]