A mutual fund can be defined as vehicle to pool money from investor, with a promise that the money would be invested in a particular way and will be handled professional by managers who have necessary expertise to manage such funds. However they charge management fee for such services which is different for different schemes .
Following are some of the benefits of investing in mutual funds:
1. It is ideal for those who don’t have enough knowledge, time to manage their investments and since mutual funds are managed by professionals who expert in the equity markets one can invest his or her funds.
2. Since there are large numbers of schemes investor can choose any of them depending on his or her risk return profile so if one is aggressive one can go for equity related mutual fund and if one is defensive he can go for debt related mutual fund.
3. Mutual funds are highly liquid hence one can take the money as and when it is needed and hence one doesn’t have to worry about the liquidity of the investments.
4. Investors who don’t have large amounts of money and cannot directly invest in the equity markets can take the benefit from the mutual funds because one can begin investment in mutual with very low amount of funds.
5. One can invest in mutual funds either through service centers or through internet and hence it is very convenient to the investors.