Greetings, First of all ! Welcome to today’s blog on our website meriSIP.com Today we will talk about Mutual Funds & their benefits.

Mutual Funds & Their Benefits :-

The collection of money from different – different people, to invest the collected money into Categories of their selection is known as a Mutual Fund.

The word Mutual Fund is a two letter word :- Mutual + Fund – Its meaning is quite similar to its disected words ( Those funds in which money is collected mutually and invested into the desired instruments to meet the goal of Investors ).

The whole mutual fund industry revolves around these simple lines and have their own responsibilities to complete. For Example – I said that the money is collected mutually, so there will be some poeple who will be looking after the transactions of money ( i.e. inflow/outflow ).

Next, the collected money has to be invested into desired instruments – so we require a Fund Manager ( Whose responsibility will be to search for the investing opportunities ).

Next, the goal of investors – For that we must have some mechanism through that we can decide that who will get how much depending upon their initial investments. So, the method of giving units was decided and it is quite easy as well. The whole Mutual Fund Industry revolves around these three wider themes.

At last, who will tell which Mutual Fund to buy ? That’s when the role of Experts comes , who decides the allocation of money into different instruments depending upon the risk profile of the Investor ( The ability to take Risk, The Willingness to take Risk & The Capability to take Risk look same but these are different things which an Advisor looks for ).

Thus, the whole industry ensures Investors interest ideally.