Continued from advantages of Investing in Mutual Funds - Part 01.......
We are covering the possible advantages of investing in Mutual Funds.
We are covering the possible advantages of investing in Mutual Funds.
4. Managed by a Professional: Mutual funds appoint expert, financially aware professionals to
manage the Mutual fund. These professional use their fundamental and technical
analysis to take decisions on behalf of the client. The services which,
otherwise, a common man can’t afford are made available via mutual fund.
5. Well
Regulated hence transparent: Mutual funds are managed under the purview of SEBI. The Mutual
fund comprises of four different structures: Sponsor, trust, Asset Management
Company (AMC) and Custodian. The role of the sponsor is limited to providing
the required capital to the Mutual Fund. The trust is in charge of the actual
floating of the AMC. It has to ensure that the AMC workers in interest of the
investor. The AMC is responsible of appointing the fund managers and the
different schemes to invest the money in different securities market. They
charge an administrative fee on the same for the same. The custodian looks
after the actual buy –sell transactions of Mutual Fund. Thus, the ownership and
administration in mutual funds is in two different hands and there is no
conflict of interest.
6. Diversification and Variety:
Based on the objective of his investment, the investor can decide on the type
of fund he needs to invest into. He can choose from a variety of options
available and also reduce his company specific risk with the diversified
holding via a single mutual fund.
7. Convenient
Administration: Any individual would find it difficult to manage news
regarding his entire capital markets and its policy through his limited
knowledge and exposure. With help of Mutual fund, the investor is assured of
the fund manager tracking the news for him and taking the right decision at the
right time.
Thanks and Regards
Team
Email: saarthifp@gmail.com
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