Mutual Funds – What are They and Their Future
                     Mutual Funds – 
What are They 
and Their 
Future?
WHAT IS 
MUTUAL 
FUND?
• A mutual fund is a way to pool 
money in a variety of underlying 
securities to pool money from 
investors for investment. 
Source: 
www.moneycontrol.com
Types of 
Mutual Funds 
in India
• In India, mutual funds are 
categorised on basis on the type 
of underlying asset.
• Equity schemes
• Debt schemes
• Hybrid schemes
Source: 
www.moneycontrol.com
Risk factor
• High-risk Funds: These operate best 
for investors who want enormous 
yields with enormous risk appetite.
• Medium-risk Funds: This category 
includes most debt mutual funds. 
The risk factor is average since the 
bulk of the investment is in debt and 
the remainder is in equity.
• Low-Risk Funds: The yields provided 
are smaller compared to the other 
funds. However, the risk factor is 
very low.
Source: 
www.moneycontrol.com
Features of 
Mutual 
Funds
• Open-ended mutual funds allow 
the investors to redeem all or 
part of the investments to be 
liquidated at any moment. 
• With the right investment 
advice, it is possible to find the 
mutual fund suited to your 
investment objectives.
• It is an excellent investment 
avenue if an investor wants to 
diversify their portfolio.
Source: 
www.moneycontrol.com
Benefits of 
mutual 
funds
• No fixed amount of investment
• Good returns
• The investor does not have to 
actively manage the fund
• Several ways to invest
• Helps you to diversify your 
portfolio
• Tax-efficient 
Source: 
www.moneycontrol.com
Eligibility to 
invest in 
mutual funds
• An investor of a mutual fund can 
be Indian residents above the 
age of 18, Non-resident Indians 
(NRIs) and Persons of Indian 
Origin (PIOs) residing abroad.
• Companies (including public 
sector undertaking, corporate 
bodies, trusts and cooperative 
societies, religious and charitable 
trusts (through trustees), and 
private trusts, which can invest 
in mutual fund schemes.
Source: 
www.moneycontrol.com
How one can 
invest in 
mutual funds?
• Investors can invest directly or 
contact mutual fund agents for 
the necessary application forms 
that are needed.
• Investors need to put in their 
money into investments through 
distributors who are associated 
with the Association of Mutual 
Funds in India (AMFI). 
Source: 
www.moneycontrol.com
Risk-level 
Associated
• Low: where the principal is low-risk
• Moderately low:- Principal at a 
moderately low-risk
• Moderate: Where the principal is 
moderately risky
• Moderately high: In these cases, 
the principal is at a moderately 
high-risk
• High: where the principal is high-
risk
Source: 
www.moneycontrol.com
Fees, charges 
and expenses 
of mutual funds
• Transaction Charges: Investors 
must pay a nominal charge as 
transaction fees, which is a one-
time charge during investment.
• Indirect costs may be incurred 
by investors during the 
investment tenure.
• The asset management 
company and the fund manager 
also charge their fees.
Source: 
www.moneycontrol.com
Things to 
Consider as a 
First Time 
Investor
• Fix an investment goal
• Choose the right fund type
• Shortlist and choose one mutual 
fund
• Diversify your portfolio
• Go for SIPs instead of lump-sum 
investments
• Keep KYC documents updated
• Seek advice from a mutual fund 
expert
Source: www. cleartax.in