A mutual fund is a professionally managed company that collects money from many investors and invests it in securities such as stocks, bonds and short-term debt, equity or bond funds and money market funds.
Mutual funds are a good investment for investors looking to diversify their portfolio. Instead of betting everything on one company or sector, a mutual fund invests in different stocks to try to minimize portfolio risk.
The term is typically used in the US, Canada and India, while similar structures around the world include the SICAV in Europe and the open-ended investment firm in the UK.
Can I change the mandate of my investment after I start investing?
Investing in mutual funds through SIP offers a lot of flexibility. Investors can check the amount they want to invest, the mandate for which they want to invest, the frequency with which they want to invest (weekly, monthly, quarterly, etc.).
But once you start an SIP, are you bound by the initial choices you make until the end of your SIP mandate?
The answer is no. For example, if you start a monthly SIP investment of INR 5,000 in a fund over a period of 7 years, you have the flexibility to increase or decrease its mandate at will, reduce or increase your SIP installment depending on your financial well-being. SIPs are one of the best long-term investment options you can take part in. These flexible features make them hassle-free and highly liquid compared to other investment options.
In fact, to reduce the hassle of periodically renewing and extending SIPs, you can also choose to opt for perpetual SIPs and continue uninterrupted until you reach your financial goals. In times of need, you have the flexibility to pause your SIP. If you wish to interrupt or pause your SIP before completing your term, please submit an application form at least 30 days before the next SIP expiration date to be sure.