Are You Investing in the Right Mutual Fund Scheme? – MoneyMindz

By | 18/06/2018
Mutual Funds Financial Advisory | MoneyMindz

MoneyMindz – India’s First Free Online/On-call Financial Advisory Portal | Mutual Funds

There are countless mutual fund schemes to invest in. But investing is not all about picking up a random fund and investing blindly. You have to choose the right fund.

What is a Mutual Fund?

It is an avenue that pools the money of many investors together and invests in financial instruments like stocks, securities, debentures and so on. The appreciation made on those investments would be distributed among investors on the basis of their units.  [Get Personalised Advice For Mutual Funds –Visit]

There are many kinds of Mutual Funds. Some of them are listed below.

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Types of Mutual Funds:

1. Debt Funds:

This is invested in debt like company debentures, government bonds, and fixed income assets and so on. They are known as safe investment instrument due to fixed returns. [Get Personalised Advice For Debt Funds –Visit]

2. Equity Funds:

This is invested in company stocks and shares. Since they provide high results, they’re known as high-risk funds. [Get Personalised Advice For Equity Funds –Visit]

3. Balanced or Hybrid Funds:

It is invested in different asset classes. A perfect balance is ensured when returns and risks are the same. This happens when debt proportion is lower than equity or vice versa. [Get Personalised Advice For Hybrid Funds –Visit]

4. Money Market Funds:

This is invested in liquid instruments. They are considered safe investment options due to instant moderate returns. [Get Personalised Advice For Money Market Funds –Visit] 

5. Index Funds:

This is invested in a specific sector of the market, like infrastructure. Investment returns are directly proportionate to the performance of the sector. Risk factor varies from sector to sector. 

6. Income Funds:

You’re left to invest your money in fixed income instruments like debentures and bonds. It is forgiving regular income and protection of wealth to investors.

7. Open Ended Funds and Closed Ended Funds

Open Ended Funds invest units which are be bought throughout the year. Close Ended Funds invest units which can only be bought during the initial period.

8. Growth Funds

It lets you invest your money mostly in equity stocks with the objective that it brings capital appreciation. This is for long-term investments and is considered risky.

These are some of the Mutual Funds. You would be thinking how you will buy a Mutual fund.

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How to Open a Mutual Fund and What Documents are Required?

1. Know your investment objective, risk appetite and time horizon first.

2. Select the best performing Mutual Funds.

3. Ensure you have an understanding of the fund house, its functions and performances.

4. Look out for loads and recurring expenditures.

5. Know the Fund Manager and how trustworthy and efficient he is.

6. You need to fill up a given form for opening a Mutual Fund.

7. Be disciplined in your investments.

8. Market positioning, tax savings and returns on investments have to be verified thoroughly.

9. Parents are the only persons who can open mutual funds for minors.

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