{"id":146971,"date":"2022-05-08T19:30:16","date_gmt":"2022-05-08T14:00:16","guid":{"rendered":"https:\/\/cbselibrary.com\/?p=146971"},"modified":"2022-05-11T10:53:26","modified_gmt":"2022-05-11T05:23:26","slug":"advantages-and-disadvantages-of-mutual-funds","status":"publish","type":"post","link":"https:\/\/cbselibrary.com\/advantages-and-disadvantages-of-mutual-funds\/","title":{"rendered":"Advantages and Disadvantages of Mutual Funds | Top Most Advantages and Disadvantages of Mutual Funds, Types and Benefits"},"content":{"rendered":"
Mutual Funds Advantages and Disadvantages:<\/strong> Mutual funds are those financial instruments that are beneficial for both the companies as well as the investors. With the help of these mutual funds the companies raise funds for the expansion and business purposes while the investors get the chance to use their surplus funds for earning some extra income. Mutual fund investments are time-bound investments which means they are made for a certain period after which the invested amount is returned to the investor along with the profit share earned by the mutual funds. The profit is termed as mutual fund returns.<\/p>\n Students can also find more\u00a0Advantages and Disadvantages<\/strong><\/a>\u00a0articles on events, persons, sports, technology, and many more.<\/p>\n Mutual funds are those financial instruments that provide the investor an opportunity to earn dividends in a very risk-free manner. Mutual funds are comparatively less risky in terms of the market than any other financial investment available in the market. Mutual funds approximately give the returns that are most nearly to the calculated assumptions.<\/p>\n Mutual funds are not a beneficial instrument for the investors but are also equally important for the companies. It is an important tool for the companies to raise the funds for their expansion purposes, for which they do not have to get loans from the financial institutions at a very high rate of interest. Mutual funds enable these companies to raise funds in their capacity against the profit share to the investors in return. The funding companies pick up the top-performing stocks and bonds for the offerings of mutual funds.<\/p>\n There are several categories of mutual funds operative in India, most of them are listed below-<\/p>\n Equity Funds or Equity Schemes: <\/b>Equity funds are the most profitable investment tool but on the other hand, these are also at high risk. These types of mutual funds facilitate the investor to trade in the stock market, which makes these funds highly risk-prone though they provide very high returns also.<\/p>\n Debt Funds or Debt Schemes: <\/b>Debt funds are other types of mutual funds recognized by Indian financial institutions. These are the type of investment instruments that are much more secure if compared to equity funds. These types of investments provide fixed returns but in a secure way. The popular debt schemes for investment purposes are various types of bonds such as government bonds, corporate bonds, etc. The debt funds are also known as hybrid funds.<\/p>\n Hybrid Funds or Hybrid Schemes: <\/b>These are known as hybrid funds because these funds act as a bridge between equity funds and debt funds, in other words, these types of funds are a perfect balance of risk and return. These types of funds are generally low in the risk capacity while they provide a regular return, monthly returns are most widely preferred in this type of investment.<\/p>\n It has always been a dilemma for investors to find out the perfect and most trustworthy ways of investment. Since there are various types of mutual funds the confusion arises even more. There are mainly two types of investments made in mutual funds: one-time investments and systematic investment plans or SIPs.<\/p>\n One-time investments are more prone to risk but they offer high returns also. In a one-time investment, it is very necessary to track the markets regularly and make the investments at the right time to yield the highest returns. While in systematic investment plans or SIPs investments are not made at one time, instead in this type investments are made at regular intervals so that all of the money is not at risk.<\/p>\n These types of investments are less risky but they do not produce the returns as high as the one-time investment does. It is suggested that beginners should opt for SIPs instead of one-time investments at the early stages.<\/p>\n <\/p>\nWhat are Mutual Funds? Advantages and Disadvantages of Mutual Funds<\/h2>\n
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Types of Mutual Funds<\/h3>\n
How to Invest in Mutual Funds?<\/h3>\n
<\/a>Advantages of Mutual Funds<\/h3>\n
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<\/a>Disadvantages of Mutual Funds<\/h3>\n
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<\/a>Comparison Table for Advantages and Disadvantages of Mutual Funds<\/h3>\n