Mutual Funds

Why  you need a expert or a financial planner to select the funds & timely review them because even a 3% difference in the Portfolio can make a 26 Lakh difference in your returns in a long run. And 3% difference in returns is seen across various Mutual Funds  schemes if we compare one with another. So selection of Mutual funds is very important. Verify yourself with an illustration

Investor A Investor B
Investment 10 Lakhs 10 Lakhs
Time Horizon 10 Years 10 Years
Annualised Returns 22% 25%
Amount after 10 Years 74 Lakh 1 Crore

Just to showcase you how selection of Mutual Funds is so important & reviewing it from time to time is so important. Lets see

Name of the Fund 10 Year Annualised Returns 10 Year Absolute Returns
SBI Magnum Multiplier Plus Fund 20% 565%
Tata Select Equity Fund 20% 570%
HDFC Top 200 Fund 31% 1439%
Reliance Growth Fund 35% 1970%

Why Invest in Mutual Funds

  • Convenience: Investors have to spend a lot of time in doing research to deciede on which stock to buy & normally 50% of the times they end up buying a wrong stock & end up loosing money by buying small caps on the recommendation of their stock broker. Mutual Funds provide solution to it by proving Research in the safe hands
  • Diversification: You cant hold a single stock for years. For example. If SBI is trading at Rs 2700 today, it cant be at Rs 27000 (10 times) after 10 years. But if you look at the Mutual Funds , a lot of Mutual funds are there which has made your money infact 20 times in the last decade from 1st Jan, 2001 to 31st Dec, 2010. It also offers diversification to your Portfolio by having atleast 50 odd shares in your Portfolio.
  • Liquidity: Just like securities or shares, mutual funds are also liquid investments that can be bought or sold freely so that investors have access to their money when needed.

Regards

Mayank Gupta

Wealthbazaar.in

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