mutual fund money market basics best top mutual fund

Investing types of Mutual Funds
¨ Open ended
    In this method you can subscribe/buy mutual fund anytime during the year. Anytime you can buy and sell your units.
    There is no lock in for your money.
¨ Closed ended
    These types of funds are available only during certain period of time, not through out the year like open ended. And if you
    invest/subscribe for this type of mutual fund then your fund will get locked for that particular period.
    You can sell or redeem your units only after your lock in period completes.
¨ SIP (Systematic Investment Plan)
    If the mutual fund, have SIP investment method they you can prefer this. In this method you have to invest in equal
    monthly installment.
    For example - If you want to invest 12000 per year, then you can plan to invest 1000/month. In this type of investment you
    get two benefits, one is installment means instead of paying full amount you can pay in installment and second one is if
    your mutual fund is related to equity market then you may get advantage of purchasing NAV when markets go down.

Mutual Funds Returns
Following are the reasons, why today most of the people choose mutual fund as the best investment method.
¨ Your money is managed by professional funds manager
    Every mutual fund has a fund manager, who will be responsible for your money management, time to time he monitors the
    performance of your mutual fund and if requires he do changes in the portfolio of mutual fund, so its like invest and forget.
    But better to keep an eye on quarterly basis not even on monthly basis.
¨ Reduced risk
    Mutual funds invest money in various stocks instead of single stock, if you choose equity link mutual fund. Even if you
    choose any other mutual fund they will invest in various sectors, fields, Government securities funds etc. So your risk is
    reduced and you can get higher returns. If you see past records of any top mutual fund, then minimum at least 12% to
    15% returns they had declared, which is very good return as compared to any bank returns.
¨ Liquidity
    Investors can buy and sell their mutual fund units any time, especially in open ended mutual funds.
¨ Affordability (cheaper to buy)
    There is no compulsion for amount to invest in mutual fund; you can start investing from Rs.500. Investing in mutual fund
    becomes easy for every one due to smaller amount.
¨ Convenient (easy to buy)
    Now days most of the Mutual fund are offering online facilitiy. So you can view and monitor NAV’s, charges, mutual fund
    plans, redeem units etc. using online facility by sitting at home or at internet café.
¨ Flexibility and variety
    You have lots of varieties of Mutual fund and brand names. You can choose to invest in any sector you like, any field, any
    investment pattern you like so investing in mutual fund is very flexible.
¨ Tax benefits
    Very important is you get income tax benefits by investing in tax saving mutual fund and also 100% income tax exemption
    on all mutual fund dividends.

Best Mutual Fund analysis
After all it’s your hard earned money, so think twice and consider following points before selecting your mutual fund,
¨ Profile of mutual fund
    Understand where the mutual fund is going to invest your money. It’s very important to know the investment sectors and
    fields where mutual fund is going to put your money.
¨ Don’t put all money in single mutual fund
    Don’t ever try to put invest all your money in single mutual fund and also in mutual fund which are sector specific.
    Because if something gives wrong with that fund then all your money will be in trouble and also if something happen to
    that sector then also your money is in trouble.
    So invest/put your money in such mutual fund, who is investing in diversified sectors/fields/shares etc. You can also plan
    like one mutual fund of diversified equity plan, second mutual fund of balanced type and third one you can plan of debt
    type etc. In this manner your money will get diversified, risk is reduced and you may get excellent profit.
¨ Find the right fund
    - Look for past returns, dividend etc. the mutual fund has declared.
    - Look for brand name of mutual funds like Franklin Templeton, HDFC, Reliance etc. to see more click here so that
       your money will be on safer side.
    - See how big is the mutual fund like market capitalization, turnover etc. Good if the mutual fund has large market
       capitalization.
    - If you have chosen equity or stock market related mutual fund, then you may go for SIP (Systematic Investment Plan)
       method.
    - Customer services (Its one of the important point) - The mutual fund company should be easily contacted i.e. you should
       be able to easily contact the mutual fund company or its executive, how quickly they respond to your questions or your
       fund related problems etc.

Compare Mutual Funds
¨ Diversified equity mutual funds
    In this mutual fund type the money is invested in various selected shares of the stock market. It reduced the risk of
    investing in single stock.
¨ Index mutual funds
    This type of mutual fund gets invested in indices or index like sensex, nifty etc. This type of mutual fund has high risk and
     high returns.
¨ Mid cap funds
    All investment is done in various selected shares of medium scale industries. According to mutual fund mid cap stocks
    have faster growth rate.
¨ Sector funds
    In this mutual fund, money is invested in selected shares of specific sectors like auto, IT, pharmaceutical, FMGC etc.
    Investment in this type of mutual fund is avoided as your money is invested in only specific sector.
¨ Tax saving mutual funds
    Here your money may be invested in equity market, bonds etc. You get income tax benefit by investing in their type of
    mutual fund.

Top companies mutual fund schemes
You may select following top mutual fund companies which are having good market
capital and name.
¨ ABN Ambro
¨ Birla mutual fund
¨ Fidelity Mutual Fund
¨ Franklin Templeton Mutual Fund
¨ HDFC
¨ ICICI
¨ JP Morgan
¨ SBI
¨ Sundaram
¨ UTI
¨ Reliance

Following is the summarization to brief you about the risk involved and returns you may get by investing
in particular type of mutual funds.

Risk Involved and Returns Expected	Mutual Fund Investments	Type of Mutual funds	Benefits you get from Mutual fund
Low	Only in Debt	Bank/ Company FD, Debt based Funds	Liquidity, Better Post-Tax returns
Medium	Partly in Debt Partly in Equity	Mix of shares and Fixed Deposits, Balanced Funds, Some Diversified Equity Funds and some debt Funds	Liquidity, Better Post-Tax returns, Better Management, Diversification
High	Only in Equity	Capital Market, Equity Funds (Diversified as well as Sector)	Diversification, Expertise in stock picking, Liquidity, Tax free dividends