Direct Mutual Funds @ 0% Commissions

Mutual Funds are investment tools wherein a number of entities/people (investors) with a common financial goal invest capital. The pool of money is maintained by a fund manager who then invests the sum into company stocks, shares and bonds. This investment is done in alignment with the risk profile/appetite of the investors. 

Looking to embrace an investment strategy with higher returns? We will be inviting you soon to download and experience our all new Bajaj Markets App for your holistic investment needs. 

Types of Mutual Funds

Mutual funds investments are one of the best options for people who do not have the expertise to invest in the market. Top-rated mutual funds are run by professional managers who pick different instruments to invest in. Since mutual funds pool capital from different investors, it reduces the overall risk of investment. Mutual funds are also liquid which means they can be sold at any time. Looking for the best Direct mutual funds to invest? Read on, you are at the right place!

Equity Funds

Equity mutual funds invest at least 65% of their funds into equity shares. These funds are named after the stocks that they invest in i.e. large cap, small cap, mid cap, sector-based stocks. Equity mutual funds are risky because their movement and growth are dependent on stock market performance. In case the market falls, it may lead to a loss of capital. Equity mutual funds may issue a dividend in case an income plan is selected. In case of a growth plan, the dividend is reinvested in the company leading to growth.

Debt Funds

Debt mutual funds invest in a range of fixed income instruments based on their maturities. These instruments are:

• Money market instruments
• Government securities
• Rated bonds
• Corporate bonds and debenture
• Commercial paper Treasury bills
• Fixed-income securities

Generally, these best mutual funds have fixed or assured returns. These funds are an excellent option for people looking for capital protection and an assured return. Since these funds are liquid, they provide additional convenience since they can be liquidated at any point in time.

Hybrid Funds

These funds invest in a mix of debt and equity. Depending on the investment strategy adopted by the fund, the mix between debt and equity will change i.e aggressive hybrid funds invest majorly in equity whereas conservative hybrid funds invest the majority of their funds in debt instruments.

Factors Affecting Mutual Funds

In India, mutual funds are regulated by the Securities and Exchange Board of India (SEBI). The two major parameters that determine the decision to go for mutual fund investments are your financial goals and risk appetite.

First of all, you need to identify your financial and investment goals. Some Mutual Fund schemes are suitable for short term requirements or goals, whereas some might be better for long term goals. It is imperative that they are aligned with your goals. Often, your goal might also have something to do with investing with a specific purpose, or in a specific sector. There are sector-focused mutual funds for that.

The other parameter to consider is the risk appetite. Your risk profile governs the extent of risk you are happy to be exposed to. Some people may be okay with high exposure to risk if that means the possibility of high returns. Such investors will likely opt for equity mutual funds. The more conservative investor may be keen on getting an assured return, and would thus opt for debt mutual funds.

You can seek help from financial planners or investment advisers or Mutual Fund distributors to assess your risk appetite and align your portfolio with your overarching financial goals.

Benefits of Investing in Mutual Funds with Bajaj Markets

Mutual fund investment solves one of the most nagging problems facing the investors: which instruments are the best to invest in? They either don’t have the knack, time, interest or the knowledge to conduct the research to get an answer. Mutual funds essentially help outsource the work of management of these investments. The fund managers execute all the administrative work as well as choose the investment funds to align with the investors’ goals.

Here are the Benefits of Investing in Mutual Funds with Bajaj Markets

• Professional Fund Management

Mutual funds are managed by professional fund managers and as an investor, you benefit from their research and expertise. While this may not completely eliminate risk, it certainly lowers it.

• Diversification

Mutual Funds invest in a basket of securities. Diversification helps in minimizing the risk from a specific security’s under-performance.

• Caters to financial/investment goals

If the time horizon of the investment is in sync with the fund selected, you protect yourself from very short term fluctuations. For example, if you have invested in an Equity Fund, you may be affected by short term fluctuations, but over a longer-term, you would be more likely to get the long term returns associated with equities.

• Liquidity

Liquidity is ease of access or conversion of an asset into cash. Mutual funds can be easily withdrawn in most cases, except the Equity Linked Savings Scheme (ELSS) which comes with a lock-in period of 3 years.

• Withdrawals

Most of the mutual fund schemes are open-end schemes, which means they can be encashed easily. Once the redemption is complete, funds are transferred to the designated bank account of the investor, within 3 business days after the redemption was lodged. However, there may be an exit load period in certain schemes, and some fund managers may indicate a minimum amount for redemption.

• Tax benefits

ELSS, as mentioned above, are the mutual fund schemes that allow an investor a deduction from the total income of up to Rs. 1.5 lacs under Sec 80C of Income Tax Act 1961.