Investing in mutual funds is very convenient. With a lot less paper-work and market-monitoring, you can get exposure to a broad-based market and investment as per your requirement. Moreover, the facility of switching between funds and portfolio rebalancing helps to keep your returns in line with expectations.
b. Low initial investment
With as low as Rs 500, you can get access to a diversified mutual fund portfolio. Moreover, you get the flexibility to invest via a lump sum or a systematic investment plan (SIP). As compared to a lump sum, an SIP is a good way to lower the overall cost of investment and enjoy the power of compounding.
Section 80C provides tax deductions on certain financial instruments and mutual fund is one of them. Equity Linked Savings Scheme (ELSS) has become a popular tax-saving option for Indians in the last few years, owing to its higher returns and the shortest lock-in period of 3 years.
d. Professional fund management
In mutual fund investing, your money is managed by a professional fund manager who is backed by a team of researchers. He formulates the investment strategy to do the asset allocation. He gets real-time access to the financial environment and adjusts your mutual fund portfolio accordingly. They have the investment-related skills which retail investors may lack.