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.
How to start investing in mutual fund schemes?
Investing in mutual funds has become so easy and simple that you can think of investing in any number of funds without much additional documentation. First-time mutual fund investors need to complete their KYC, which is a one-time process. You can engage a distributor or investment advisor to help you complete the KYC verification or you could do e-KYC online. KYC is like a key to the world of mutual funds. Once you have completed your KYC, you can choose to invest in any fund without going through additional verification for each investment.
Once you are ready to invest after the KYC verification, you can choose to invest with the help of a mutual fund distributor, registered investment advisor, stock market broker, bank, or any other financial intermediary. But if you wish to invest on your own, you can visit the office closest to the fund’s house or visit their website to make an investment online or through any online platform.
The choice between investing directly or investing through a distributor is individual. If you are someone who likes to manage his investments on your own, you can definitely invest online through the fund’s website or through any online platform. But if you like to ask for advice or need help investing, you can invest through an intermediary such as a distributor, investment advisor, bank etc.
