Over time, the popularity of mutual funds has grown tremendously. For those who know how the mutual fund market functions, they are probably aware of the factors behind its popularity. Automatic diversification, professional management, customizability, and liquidity are some of the associated factors.
What is a mutual fund?
A mutual fund such as SBI MF gives you the privilege to invest in financial securities such as bonds, stocks, and other assets. You earn income both from stock dividends and bond interests which are held under your portfolio.
Reasons for gaining popularity:
As soon as you purchase a mutual fund, your mutual fund agency, couples your investment with the investment from another investor. As it holds many investments, mutual funds make it easier for you to diversify your investment portfolio rather than hovering around an individual investment.
However, it is essential for you to understand that not all of your investments will reap out the best results for you at one go. Diversification helps you to lower the impact of lagging mutual funds and reaping out the benefits of those that perform better in the market.
Diversification plays a pivotal role in balancing out all your volatile stock holdings. For an optimal diversification, it is essential for you to keep track of all your investments in different sectors.
You may or may not be skilled at managing your own investment portfolio. At times, it may also be difficult for you to understand market volatility as you lack sufficient time to dedicate for the same. Mutual funds give you a liberty to club your money with other investors. Also, all investment decisions shall be taken care of by your portfolio manager. He will critically analyse the market and invest in appropriate funds to yield you a good return on investment.
Connecting with fund managers of SBI MF ensures that you do not need to worry about researching market pitfalls.
What makes mutual funds favourable is that it allows you to buy and share them in accordance to your own will. You can either opt for mutual funds through banks or other financial planning or investment firms. Whenever the situation calls for immediate access to your invested money, mutual funds gives you complete independence to sell your fund shares or units.
There are myriads of mutual funds available for you to make a choice for your financial goal achievement. Right from high-risk funds to funds offering a steadier growth, the market has it all. Here are three prime types of investing in –
- Equity funds: These funds are for those investors who have a stable and well-defined income and are willing to spend for a long tenure.
- Balanced mutual funds: These funds are for those who are in the middle stage of their career. For those who are willing to optimize both their risk and return, should blindly opt for balanced mutual funds.
- Bond funds: For those who are near their retirement stage should prefer bond funds for investment. Bond funds assure you with a fixed income guarantee with a low-risk factor.
For hassle-free mutual funds investment, prefer to invest in SBI mutual fund with Clearfunds.