From where do you get the vegetables for dinner? Do you grow them in your backyard, or purchase it from the nearest mandi/supermarket depending on what you need? Growing your own veggies is a great way of eating healthy food, but effort is spent on seed selection, manuring, watering, pest control, etc. The latter option allows you to choose from a wide variety without the hard work.Similarly, you can create wealth by investing directly in shares of good companies or invest in them through <a href="https://www.mutualfundssahihai.com/en">Mutual Funds</a>. Wealth can be created when we buy company stocks which use our money to grow their business, creating value for us.Direct investment in shares carries a relatively higher risk element. You need to pick stocks by researching the company and sector. It’s a humongous task to choose few companies from thousands of them listed on the stock exchange. Once done, you need to keep a track of every stock's performance.In Mutual Funds, the stock picking is done by expert <a href="https://www.mutualfundssahihai.com/en/are-fund-managers-necessary">fund managers</a>. You need to keep track of the<a href="https://www.mutualfundssahihai.com/en/schemeperformance"> performance of the fund</a> and not individual stocks within the fund. They also allow investment flexibility unlike stocks, with growth/dividend options, top-ups, <a href="https://www.mutualfundssahihai.com/en/what-systematic-withdrawal-plan-swp">systematic withdrawals/transfer</a>, etc. besides helping to ride over volatility by investing smaller amounts regularly through <a href="https://www.mutualfundssahihai.com/en/what-systematic-investment-plan-sip">SIPs</a>.

Mutual Funds vs Shares: What’s the difference?

Remember the first time you boarded a flight? Did you have butterflies in your stomach or a queasy feeling? Finally, when the flight was air-borne, didn’t you feel reassured? Flying at 30,000 ft, seat belt fastened and a warm cabin crew along with an able pilot to take care of you.<a href="https://www.mutualfundssahihai.com/en">Investing in Mutual Funds</a> online is no different from that first flight. While you may be initially worried about where your money is going and if it has reached the intended recipient, online mode of investment is as safe as any other mode. Online payment platforms are secured with necessary encryption protocols so that your personal and financial data can’t be tapped during data transmission.The online process is far more convenient because you can access all your transactions, buy or sell at any time and see how your portfolio is doing. When you invest online, your money is credited directly into the Mutual Fund’s account and it allots your units which you can see by logging into your account. So apart from safety and convenience, online mode offers you transparency too similar to offline mode.. Your money is safe in the system!

Is it safe to invest in Mutual Funds Online?

A mutual fund pools money from investors who share a common investment objective. This pooled money is then invested in a diversified portfolio of assets such as bonds, stocks and other securities, by a company called an Asset Management Company (AMC). The AMC's goal is to generate profits for the investors while managing risk and rewards. But what is the history of Mutual funds? &nbsp;History of Mutual Funds in India&nbsp;Since its inception, the mutual fund industry in India has seen many developments to widen the investment avenues for investors. Here is a brief history of mutual funds in India:&nbsp; &gt; 1st Phase (1964 – 1987)&nbsp;The history of mutual funds in India began with the creation of the Unit Trust of India (UTI) in 1963. &nbsp;&nbsp; &nbsp; &nbsp; &nbsp;It was set up by the Government of India and the Reserve Bank of India to promote saving, investing, and participation in the income and profits from securities. UTI dominated this phase and launched its first scheme in 1964 which offered safe and guaranteed returns and attracted small investors to the markets.&gt; 2nd Phase (1987 – 1993)&nbsp;Public sector banks and various financial institutions entered the mutual fund space during this phase. SBI Mutual Fund was launched in 1987 and was the first non-UTI mutual fund in India. This period saw the introduction of new schemes by UTI and other mutual funds and more options for investors.&nbsp;&gt; 3rd Phase (1993 – 2003)&nbsp;A major milestone was reached in 1993 when the government allowed private players to enter the mutual fund industry. This led to the creation of several private-sector Asset Management Companies (AMCs). The phase saw intense competition among mutual fund companies and rapid growth of the industry. SIPs were introduced in 1993 which changed the investment strategy and made it more systematic and affordable for retail investors.&nbsp;&gt; 4th Phase (February 2003 – April 2014)&nbsp;In February 2003, after the Unit Trust of India Act 1963 was repealed, UTI was split into two entities: SUUTI (Specified Undertaking of the Unit Trust of India) and UTI Mutual Fund, operating under the regulations of SEBI. After the global financial crisis in 2009, securities markets all over the world declined. Several investors who entered the market at its peak suffered losses, leading to a loss of faith in mutual fund products. The elimination of the Entry Load by SEBI and the effects of the financial crisis further impacted the Indian mutual fund industry. This resulted in slow growth in assets under management (AUM) from 2010 to 2013 as the industry struggled to recover. &nbsp;&gt; 5th Phase (Current – Since May 2014) &nbsp;Recognizing the limited reach of <a href="https://www.mutualfundssahihai.com/en">mutual funds</a> and the need to align stakeholder interests, SEBI introduced several measures to revitalize the Indian Mutual Fund sector. &nbsp; These measures succeeded in reversing the negative trend, and showed improvement after the new government took office. Since May 2014, the industry has seen steady inflows, along with an increase in assets under management (AUM) and the number of investor accounts.&nbsp;Mutual fund distributors have also played a key role in popularizing <a href="https://www.mutualfundssahihai.com/en/what-systematic-investment-plan-sip">Systematic Investment Plans (SIP)</a> over the years. In April 2016, the number of SIP accounts surpassed one crore. As of August 2024, India has approximately 9.61 crore accounts.&nbsp; Disclaimer&nbsp;Mutual Fund investments are subject to market risks, read all scheme related documents carefully.&nbsp;

Detailed History of Mutual Funds in India

In Mutual Funds, one often hears, ‘more the risk, more the return’. Is there truth in this?If ‘risk’ is measured as either, probability of loss of capital or as swings and fluctuations in investment value, then asset classes like equity are undoubtedly the riskiest, and money in a savings bank account or in a government bond is of course least risky.In the <a href="https://www.mutualfundssahihai.com/en">Mutual Funds </a>universe, a <a href="https://www.mutualfundssahihai.com/en/What-are-liquid-funds">liquid fund</a> is least risky and an <a href="https://www.mutualfundssahihai.com/en/what-are-equity-funds">equity fund</a> is most risky.So, the only reason to invest in equity would be an expectation of higher reward. However, higher returns come to those who invest in equity after careful study and adopting a patient, long term time horizon. In fact, risk in equity can be mitigated by adopting diversification as well having a longer term time horizon.Every category of <a href="https://www.mutualfundssahihai.com/en/what-are-various-types-mutual-funds">mutual fund schemes</a> have different types of risks – credit risk, interest rate risk, liquidity risk, market/price risk, business risk, event risk, regulatory risk, etc. The knowledge of financial experts like your mutual fund distributor / investment advisor and the <a href="https://www.mutualfundssahihai.com/en/are-fund-managers-necessary">fund manager</a>, along with diversification, can help mitigate them.

What is the co-relation between risk and return?

<a href="https://www.mutualfundssahihai.com/en/what-are-various-types-mutual-funds">Mutual Fund schemes</a> usually don’t have a maturity date unless you have invested in a close-ended <a>ELSS</a>&nbsp;or other close-ended schemes like FMPs. Even in case of a <a href="https://www.mutualfundssahihai.com/en/what-systematic-investment-plan-sip">SIP</a>, there is a term for which investments need to be made regularly. If the investor passes away while the SIP term is on or before the maturity of a close-ended scheme, there are defined procedures to be followed by the nominee, survivors in case of joint holding or legal heirs to claim the proceeds. This process is called transmission. For someone to request for a transmission, the person must be aware of your Mutual Fund investments in the first place, else it can just remain unclaimed forever.Hence, it is advisable to always add a nominee to your <a href="https://www.mutualfundssahihai.com/en">Mutual Fund investments</a> just like any other investments and keep the nominee informed about it. If you have a joint account holding, the survivors mentioned in your account can claim for transmission. But if you have neither got nominees nor surviving joint holders mentioned in your folio, your legal heirs can still request for transmission by submitting all the necessary documents and proofs including a death certificate. The person requesting for transmission needs to be KYC registered.

Mutual Funds Basics