Why Mutual Funds Sahi hai for Your Financial Future

Discover how mutual funds can help you grow your money, diversify your portfolio, and achieve your goals.

What are mutual funds and how do they work?

Mutual funds are a way of pooling your money with other investors and buying different types of assets, such as shares, bonds, and others. Mutual funds are run by experts who choose the assets and monitor their performance.

Mutual funds have many benefits, such as:

·       Investing in different assets: Mutual funds let you diversify your portfolio and reduce your risk.

·       Getting help from experts: Mutual funds are managed by professionals who make smart decisions for you.

·       Buying and selling easily: Mutual funds are easy to buy and sell, as they are traded every day. You can get your money back at any time, but you may have to pay some charges and taxes.

·       Starting with a small amount: Mutual funds have low minimum investment requirements, so you can start with a small amount. You can also invest regularly through systematic investment plans (SIPs).

·       Choosing from different options: Mutual funds have many options to suit your different needs, goals, and risk levels. You can choose from equity, debt, hybrid, sectoral, thematic, index, or fund of funds options.

·       Benefiting from economy of scale: Mutual funds help you save money and earn more by buying a large number of different assets. This helps to lower fees, taxes, and other costs, and find better deals.

How many people in India are investing in mutual funds?

Mutual funds are one of the most popular investment options in India, as they offer a wide range of schemes for different investors.

According to the Association of Mutual Funds in India (AMFI), the number of mutual fund folios in India has grown from ~10 crore in June 2021 to 19.10 crore in June 2024, with a CAGR of 24.1%.

The total mutual fund industry AUM in India has increased from Rs. 33.67 lakh crore in June 2021 to Rs. 61.16 Lakh Crore in June 2024, with a CAGR of 20.3%.

Within the mutual fund industry, SIPs are a preferred way of investing, as they offer convenience, discipline, and affordability. SIPs also help you benefit from rupee cost averaging, which means buying more units when the market is low and less units when the market is high.

According to the AMFI, the number of SIP accounts in India has grown from 5.06 crore in June 2021 to 8.99 crore in June 2024, with a CAGR of 21.1%.

Why are mutual funds sahi hai for your dreams?

Mutual funds are sahi hai, or right, for your dreams because they can help you achieve them in a planned and disciplined way. Whether you want to save for retirement, buy a house, fund education, or travel the world, mutual funds can help you get there faster and easier.

Here are some reasons why mutual funds are sahi hai for your dreams:

·       They give you more returns than traditional savings options, such as bank deposits, post office schemes, or gold, over the long term. Equity mutual funds, especially, can give you more returns by investing in the share market.

·       They help you beat inflation, which reduces the value of your money over time. Mutual funds can help you maintain and increase your buying power by giving you returns that are higher than the inflation rate.

·       They help you save tax, as some mutual funds give you tax benefits under Section 80C.

·       They help you create wealth through the power of compounding, which means earning interest on interest. By reinvesting your returns in the same or other mutual funds, you can grow your money over time.

·       They help you plan your money better, as you can match your mutual fund investments with your dreams. You can consult your financial advisor to find out how much you need to invest, for how long, and in which options.

How can a financial advisor help you start your mutual fund journey?

If you are new to mutual funds, you may need help from a qualified and experienced financial advisor who can help you with the following things:

·       Finding out your dreams, risk appetite, and investment period, and suggesting the suitable mutual fund options for you.

·       Explaining the features, benefits, and costs of the mutual fund options, and helping you understand the risks and rewards, and tax implications of investing in them.

·       Checking your mutual fund portfolio regularly, and advising any changes or rebalancing that may be needed.

·       Answering your questions and doubts, and giving you timely and accurate information and reports on your mutual fund investments.

Conclusion

Mutual funds are a smart choice for your financial future, as they can help you achieve your dreams and become financially independent. Mutual funds have many benefits, such as diversifying your portfolio, getting help from experts, buying and selling easily, starting with a small amount, and choosing from different options. Mutual funds are also sahi hai for your dreams, as they give you more returns, beat inflation, save tax, create wealth, and plan your money better. Moreover, mutual funds are becoming more popular among Indian people, as shown by the increasing number of SIP accounts, contribution, and AUM.

If any of these 8.99 Crore accounts don’t belong to you then this is the right time to get one.

You can reach out to your financial advisor who can help you start your mutual fund journey.By Ritesh Chaturvedi

Disclaimer:

This article is intended for informational purposes only, and the data has been compiled from online sources. Please consult with your financial advisor before making any investment decisions.