some of the benefits are:-
- Professional money manager- experienced fund mangers manage your money, off course for high returns.
- Diversification- investors can reduce the risk by investing in a number of organisations across a broad spectrum of sectors.
- Liquidity- open ended MF are priced daily. There is no reason to search for a buyer at the time of redemption MFs are often willing to buy back from the investors. but for some time fixed assets a little patience can prove beneficial.
- Transparency- the portfolio is disclosed regularly with the fund managers investment strategy.
- Well regulated- MFs are registered with SEBI(https://www.sebi.gov.in/
) which imposes strict rules to ensure the protection of the investors.
- Low transaction cost- MFs are an accumulation of units from huge number of investors, thus a single person willing to invest but cannot purchase due to its high cost, brokerage, paper works etc can be comfortable with his capital, shifting all other worries to the MF house.
- Tax efficiency- on equity funds no tax is paid on dividends. No TDS is applicable on redemption of the units. STT is applicable. some tax free saving schemes (ELSS)are also available.
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