Mutual Fund
Wealth creation through equity investment
Not everyone can become a successful business person or achieve huge success in their career. But most people can save and investing for the long term in mutual funds. Mutual funds is great choice for people to build wealth.
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Financial experts invest your money in different securities and monitor its performance regularly. The investor can redeem his investment at any time which is a great advantage.
Types of Mutual Fund
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Debt Mutual Funds
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Debt funds are less risky but offer less returns compared to equity funds. Debt funds invest in securities which generate fixed income like treasury bills, corporate bonds, commercial papers, government securities, and many other money market instruments. All these instruments have a pre-decided maturity date and interest rate that the buyer can earn on maturity – hence the name fixed-income securities. The returns are usually not affected by fluctuations in the market. Therefore, debt securities are considered to be low-risk investment options.
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Liquid Mutual Funds
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Liquid mutual funds are one of debt funds. A Liquid Mutual Fund is a debt fund which invests in fixed-income instruments like commercial paper, government securities, treasury bills, etc. with a maturity of up to 91 days. The net asset value or NAV of a liquid fund is calculated for 365 days. Further, investors can get their withdrawals processed within 24 hours. These funds carry the lowest interest-rate risk in the debt funds category.
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Equity Mutual Funds
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Equity Funds invest in the shares of different companies. Equity funds are known to generate better returns than term deposits or debt-based funds. There is an amount of risk associated with these funds since their performance depends on various market conditions.
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