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Mahindra Finance_ What are mutual funds?


by Mahindra Finance


June 30, 2023


4 mins read

Why invest in mutual funds? A brief overview of what are Mutual Funds and Their Benefits

Why invest in mutual funds? Here’s a brief overview of what they are, different types of good mutual funds and benefits of investing in good mutual funds.

Mutual funds are one of the most popular forms of investments today. Millions of people across the globe depend on good mutual funds to grow and diversify their wealth. If you’re new to investing, but want to grow your portfolio, simply contact an asset manager at a leading Investment Solutions company such as Mahindra Finance who can invest in mutual funds on your behalf, thus increasing your chances of making more money. Know more about mutual funds, what they are, what are the different types of mutual funds, and why invest in mutual funds for the future.

What are mutual funds?

To understand why invest in mutual funds, you should know, what are mutual funds? A mutual fund is like a shared or common pool of wealth, in which many investors put in their money, which is then invested in assets that the investment deems as its primary objective. Mutual funds can be invested in securities, gold, real estate assets, stock markets, bond markets or other money market instruments present in the country. Fund managers manage these investments with an objective to grow this wealth, thereby benefiting all the people who pooled their money in the first place.

Some examples of the top mutual funds include HDFC mutual fund, SBI mutual fund, ICICI, Motilal Oswal, Axis, IDBI and Tata Mutual Funds among others.

If you’re wondering which are some good mutual funds to invest in, simply contact an asset manager at a leading Investment solutions company such as Mahindra Finance to begin with!

How do investors make money through mutual funds?

  • Mutual funds give investors an option to claim all earnings or reinvest their earnings in more investments! Typically you earn returns in the form of dividends on stocks or as interest on bonds, every year.
  • If a mutual fund happens to sell securities that have been very profitable, the mutual fund generates something called a capital gain. This capital gain is also distributed to investors as a reward.
  • If the fund’s price increases with time, but your fund manager decides not to sell them, you can sell them outside in the market for a profit and make money out of it.

These are some ways through which you can make money through mutual funds.

What are the benefits of mutual funds?

  • If you’re wondering why invest in mutual funds, know that they offer a lot of flexibility to investors, especially open ended ones, where if you feel like the market isn't being favourable, you can simply withdraw anytime you like.
  • Mutual funds allow you to diversify your investment portfolio and invest in several types of assets. Thus even if one fails, the others remain profitable.
  • Mutual funds are handled by experts who are deeply involved in the stock market and who understand the nuances of trading. Therefore, it's not something you need to worry about at all.
  • Anyone can invest in mutual funds, as it accepts even a small amount of money. If you’re a novice investor, mutual funds are a great place to start.
  • You can buy mutual funds from several leading financial services companies that exist today that handle several good mutual funds in the millions, without any issues. Thats a very convincing reason for, ‘why invest in mutual funds?’ isnt it?
  • Finally, mutual funds are safe and are endorsed by the most trustworthy financial institutions in the world. Your money is in safe hands!

As you can see, there are so many wonderful reasons why invest in good mutual funds. At Mahindra Finance, we offer a wide range of investment options that are fully supported by our end to end digital capabilities. You can invest in several good mutual funds right from the comfort of your home, and leave the rest to our expert asset managers. So, the next time you’re wondering why invest in mutual funds, just get mutual with Mahindra Finance Investment Solutions!

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