Since many years Mutual fund are delivering excellent results .It has frequently beat return of bank fixed deposit and investment in Gold also .This is the reason that Mutual fund is being considered as wealth creators .See following record of equity based some mutual funds .
If you had invested Rs.5000 per month in Reliance Growth fund for 20 years then you would have more than Rs.2 crore !If you had chosen HDFC Equity Fund then you would have got more than 1.50 crore .
Seeing above data facts you might have surprised .You may be thinking that how is this possible ? Here is simple answer for the queries . Above example is of growth equity based mutual fund and in this kind of fund investors get double benefit 1.They get price benefit of the stocks in which the fund is invested 2.They get compounded return on the investment . The limitation of this mutual funds is that carries risk of equity market and that's why it is advisable for the people who want remain invested for long term and want to bear risk of equity market .
Mutual funds also offer option to invest in debt market for the people who don't want to bear risk of equity market and expect moderate return . Many investors think that there is no requirement of any knowledge to invest in mutual funds . They think that give cheque to mutual fund advisor and rest will be handled by mutual funds ! This is gross misunderstanding . Investors will not get return at all or may loss also if they have zero or little knowledge about mutual fund. They may also become victim of mis-selling! This is the reason that investors are advised to choose right adviser or to learn basics of mutual funds .
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Mutual Fund investments are subject to market risk. Please read the offer document carefully before investin