As a universal rule, every investor eyes for best return, however, his appetite to take risk may differ from person to person. It may not be wrong to state that all investors want best return but with least risk This is where, Mutual Funds comes as a blessing. A Mutual Funds Company creates a pool or a reservoir of funds by collecting small savings of individual investors. These companies have Professional Fund Managers who take decision to invest these funds in various stocks and commodities. Since an average individual investor does not have the time, resource and expertise to study and research various investment option himself, Mutual Fund option with professional expertise in the area comes a great relief. Also an individual investor can invest his small savings in varied of investment portfolio which otherwise would have been impossible at his individual level. Along with the variety of investment option in which the funds are invested, mutual funds have an added advantage of liquidity. Investment through Mutual funds apart from giving benefit of Convenience, Diversified Investment Option, Professional handling the operations with Transparency, also has an advantage Tax Efficiency. It may not be apt to state that in India individual investors are not opting for Mutual funds. However, the ratio between the choice made by investors between mutual funds and other options of investment such as bank fixed deposit, equity shares, gold real estate etc is very low. Educating the investor – especially the rural investor and convincing them that Mutual Fund investment is a safe bet and also it will give them a decent return is the biggest challenge.
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