What is a mutual fund? How to open an account and invest?
What is a Mutual Fund?
A mutual fund is formed when a financial organization collects money from numerous individual investors or companies, consolidates it together, and allocates it to a trusted professional fund manager. The fund manager can invest the money in any number and any type of securities with the aim of generating the most return on investment while being mindful not to take too much risk in regards to where he invests. The fund manager builds up a portfolio which may be comprised of stocks, shares in companies, bonds, and other securities. As the investments begin to bear fruit, the profits are divided between the investors and paid monthly into their respective accounts. It is not necessary that each investor should invest the same amount of money. The original lump sum used to form the mutual fund will be divided up into units. Those who invest more money are said to own more units and therefore will receive respectively bigger shares of the monthly profits compared to those owning a lesser number of units.
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There are a huge number of financial institutions that offer the ability for the common man to invest in mutual funds. You may be confused as to which company will help you attain your goals in the simplest and cheapest way. Who will provide you with the best service? In order to work out which is the best online mutual funds service provider in India for you specifically, you have to ask some deeper questions from numerous companies and see what they offer in terms of service and how much they intend to charge you in fees. GOODWILL INDIA are completely transparent about their fees, and they offer some of the absolute lowest brokerage charges in India 2020. They also offer you the chance to open a trading account completely free of charge. This is something you will definitely need to have in place before you can begin investing in mutual funds.
Benefits of Mutual Funds
How great the benefits of any mutual fund will depend on several factors. Not least the diligence and skill of the fund manager tasked with looking after the investors’ money, but also on current market conditions. It is not unknown for a seemingly well performing mutual fund to crash down due to sudden unexpected changes in market conditions, such as we are seeing in early 2020 with the COVID-19 issue. This will most likely be a temporary setback, as history has shown us that markets sort themselves out once the disturbance has passed. A skilled fund manager will diversify the areas in which he invests the money across several sectors, industries, and securities. This acts as a hedge to protect against huge losses in the case of one sector or area suffering a crash. This is one benefit of mutual funds compared to investing in a single company or sector. The other main benefit is that investing in mutual funds requires little to no time or effort on the part of the investor. His role is limited to that of a provider of capital funds, and the management of the mutual fund is conducted by the fund manager on behalf of the investors. Monthly profits can be said to be a form of passive income, as they arrive month after month without the investor having to do anything.
How to open a Mutual Fund account
As with everything these days, online is the modern way to go. GOODWILL INDIA are one mutual fund service provider that can, in most cases, open an account for you entirely online. The process is very simple, and consists of filling out an online form with your details, followed by the uploading of scanned documents such as your PAN card, and proof of address. GOODWILL INDIA believe in offering their customers choices, so in addition to the online system, they can also open your account in person if you choose to visit any of their branches or sub-brokers which number more than 200, and are distributed across India.
Never be afraid to ask questions, however silly they may seem. GOODWILL INDIA are on hand to put your mind at ease. Everybody has questions when they are thinking of getting into something new for the first time. The chances of finding answers to your specific questions online are slim, so directing them to one of GOODWILL’s friendly and professional customer service representatives is a great way to get the exact answers you are looking for. Why waste time? Give them a call on +91 80122 78000 today, and find all all you want to know about mutual funds, foreign currency exchange, commodity trading and much more.