Mutual Fund Investments
Mutual Fund Investments Services
Why do you need to invest in Mutual Funds?
- Diversification of portfolio
- Low Minimum Investment
- Professional Management
- Lower costs
- Systematic Investment Plans (SIPs)
- Invest in Lump-sum
- Reduces Tax liability
- Can invest in even small amounts
- Balanced funds
- Fixed income
What are the different types of Mutual Fund Investments?
There are many types of Mutual Fund Investments:
1. Money Market Funds
Money Market Funds generally invest in the short-term fixed income securities such as treasury bills, government bonds, bankers’ acceptances, commercial papers and certificates of deposit. They are relatively a safer investment option but give a lower potential return compared to other types of mutual funds.
2. Fixed Income Funds
Fixed Income funds, as the name suggests, buy investments that offer a fixed rate of return like government bonds, investment-grade corporate bonds etc. They aim to keep money coming into the fund regularly, mostly through the interest that the fund earns.
3. Equity Funds
Equity funds invest in stocks. These funds aim to grow faster than money market or fixed-income funds, so there is usually a higher risk that you could lose money. You can choose from various types of equity funds.
4. Balanced Funds
Balanced funds invest in a combination of equities and fixed-income securities. They try to balance the goal of achieving higher returns against the risk of losing money. Most of such funds follow a method to split the money among the types of investments.
5. Index Funds
Index funds target to track the performance of a particular index, for example, the S&P/TSX Composite Index. The value of the mutual fund will go up or down as the index goes up or down. Index funds usually have lower costs than actively managed mutual funds.
6. Specialty Funds
Speciality funds focus and support the specialized streams like real estate, commodities or socially responsible investing. For example, a socially responsible fund may invest in companies that support environmental stewardship, human rights etc. And may avoid companies involved in alcohol, tobacco, etc.
These funds invest the money in other funds. Just like the balanced funds, they try to make asset allocation and diversification easier for the investor.
The Mutual Fund Investments have proven to be more beneficial when it comes to short-term fund investments. Though the risk factor is involved, the rate of return is also higher with that respect.