In the pursuit of a better lifestyle, the demand for products that facilitate investments has expanded throughout time. Adding to that, the currency’s depreciation has forced investors to choose a wide range of investment options to assist them to expand their wealth. Mutual funds are a convenient approach to improve prospective returns and obtain access to financial markets. This is also one of the reasons why mutual funds are becoming increasingly important.
A mutual fund scheme is a form of the financial instrument made up of a pool of money collected from a number of different investors. Through AMCs, mutual fund companies trade securities such as company shares, bonds, debts, stocks, and other assets. These open-ended investments are managed by AMCs. Mutual fund firms invest in a variety of securities. This enables its investors to increase their money by investing.
A Mutual Fund scheme’s capital gain is determined by the performance of the securities it purchases. The state of the market is also a factor in determining the value of the securities purchased. The profits or gains from these investments are subsequently dispersed among the investors. The distribution is made after certain expenses are deducted and the scheme’s Net Asset Value is calculated.
Why choose HDFC?
HDFC Mutual Fund is a fund institution that delivers the finest investment for every customer base, with a variety of products that appeal to every investor and entity. HDFC Mutual Fund has it all, from tax savings to wealth growth to retirement planning. A number of their funds also have a CRISIL rating of 3 or higher, which is a good sign of good fund management.
By asset size, HDFC MF is India’s second-largest mutual fund house. For the quarter ending March 2020, the investment house manages Rs 3.70 lakh crore in assets under management (AUM). The fund house’s asset size declined by 3.30% from the previous quarter’s number in December 2019. The fund house has been in operation for approximately two decades.
Here are the top 10 Mutual Fund Schemes:-
- Equity Fund
- Taxsaver Fund
- Gold ETF
- Dynamic PE Ratio FoF
- Children’s Gift Fund
- Liquid Fund Premium Plan
- Mid-cap Opportunities Fund
- Corporate Bond Fund
- Short-term Debt Fund
- Retirement Savings Fund – Equity Plan
Benefits of investing in Mutual Funds:-
- Effortless procedure
Investing in a mutual fund is simple and easy. Investors must select the auto-debit method from their bank account. The bank will invest the money in the fund option according to the amount decided by the investors.
- Provides Discipline investment
Patience is the key to a successful investment. One can invest a fixed amount each month in a mutual fund. Investors can increase or decrease their mutual fund SIP investment because it is quite flexible. One can deal with market fluctuations and earn a higher return on investment over the long run by using a disciplined investment technique. For irregular investors with a rigorous investment procedure, mutual fund SIP is likely the finest investment alternative. They can quickly amass wealth and achieve their financial objectives.
- For Future financial goals
Mutual fund is an innovative investing tool that is ideal for people who have set financial goals for the future. Getting married, buying a new automobile, paying for their children’s higher education, and so on. By investing a small amount each month through a SIP, investors can quickly build a final buffer to achieve their short- and long-term goals.
- Provide benefits of compounding
Investing a small sum on a regular basis is preferable to making a huge one-time commitment. This is because an individual’s lump-sum savings may not yield more interest. The amount invested increases due to compounding benefits. This means that the investment’s interest earns interest as well. This enables investors to build wealth that is a combination of their contributions and compounding profits over time.
- Take advantage of rupee cost averaging.
Rupee cost averaging is a good investment strategy for reducing the need to time the market. Most investors buy stocks when they are cheap and sell them when they are very expensive. As a result, market timing is not only time-consuming but also risky. On the other hand, to benefit from rupee cost averaging, one must consistently invest a predetermined amount over a longer period of time. Because an individual’s investment remains constant, he or she can acquire more units when the price rises. As a result, the average cost per unit is reduced.
Below Mentioned are the Types of Mutual Funds offered by HDFC Mutual Fund
- Equity Growth Funds: The fund, which is mostly equities and shares, is ideal for both short- and long-term investments.
- Debt Income Funds: Such funds are designed to invest in debt products like bonds, debts, and money markets.
- Liquid Funds: Liquid funds are investment vehicles that invest in securities and have a 91-day maturity period. They pose the least amount of risk to investors.
- Children’s Gifts Funds: This fund was set up with the intention of attaining long-term goals, such as covering the costs of children’s college education. It’s a good long-term investment option.
- Fixed Maturity Plans: Investments are made in debt and sovereign bonds in this case. They are low-risk investments for investors.
- Exchange-Traded Funds: ETFs, or exchange-traded funds, are gold-backed funds that are traded on the stock market.
- Rajiv Gandhi Equity Savings Scheme: An equity investment program that provides the investor with tax advantages.
- Quarterly Interval Funds: Investors can invest in both open-ended and closed-ended funds with these funds.
- Fund of Fund Schemes: This fund invests in a variety of other mutual funds. When compared to traditional mutual funds, the returns offered by these schemes are generally higher.
- Annual Interval Fund: These mutual funds put their money into government bonds and money markets.
Mutual Funds can be invested in as soon as one begins earning and saving. In fact, even children can start Mutual Fund investment accounts using money they receive as gifts on special occasions such as birthdays or festivals. Similarly, there is no upper age limit for mutual fund investing.