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Benefits of investing in Mutual Funds

As an investor you want nothing more than good returns on your investment. This requires a lot of analysis and low risk investments. Which is where mutual funds come into the picture. Here’s a look at some of the benefits mutual funds offer:

• More optionsMutual funds offer a range of schemes to suit everyone’s needs. All you have to do is discuss with your financial advisor on how to alter your portfolio over the years.

• Diversification Investing in mutual funds of different sectors reduces the risk of losses, since it is very rare that prices of all sectors will drop at the same time.

• Professional expertsOnce you invest in mutual funds, your money is handled by professional experts and a dedicated team which analyzes and studies the performance of the companies and guides you accordingly.

• Regulations All mutual funds have to be registered with SEBI and have to follow strict regulations in order to protect investors.

• Transparency The performance of a mutual fund is reviewed by various publications and rating agencies, making it easy for investors to compare fund to another

• Affordability Mutual funds have minimal investment requirements and buy and sell in large volumes, allowing investors to benefit from low trading cost.

• LiquidityMutual Funds are more liquid than most investments in shares, deposits and bonds. You can redeem all or part of your investment any time you wish and receive the current value of the shares.

• Tax benefitsMutual funds registered under SEBI are eligible for tax deduction U/S 80 C. Also, mutual funds held for 12 months or more have the benefits of indexation under LTCG.

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