Investors together invest money in predefine scheme like equity fund or debt fund & Investors get units against his investment. The fund managers will invest that fund as per mandate of that scheme. The price of that unit is call NAV which is declared every day before 9:00 pm. NAV is calculated on the closing price of the underline asset of that scheme after deducting all expenses. When an investor wants that money back, he will give redemption instruction to mutual fund and mutual fund repurchase units at that day’s NAV.
It is relatively easier to buy and exit a mutual fund scheme, You can sell your units at any point.
The company always invest in more than one asset class & diversifies the risk of loss.
It doesn’t require the investors to do the research & asset allocation, the company takes care of it all.
You have the option to pick zero-load mutual funds with fewer expense ratios.
You can start with one mutual fund & slowly diversify. It is easier to handpick the funds.
Invest up to Rs 1.5 lakh in tax-saving MFs, covered under Section 80C of the Income Tax Act, 1961.
You can plan your mutual fund investment as per your budget and convenience.
There is a general notion that mutual funds are not as safe as bank products, but its a myth.