Key features of mutual fund you must know

Investments are generally made for a brighter and safer future. With utmost popularity amongst the masses, mutual funds have undeniably augmented in its scope. There are many investment options in the market amongst which mutual fund investment has stood out with its promising campaigns.

There are various advantages of mutual funds. Like the exclusive Equity Linked Savings Scheme which is an equity fund variant which confers tax perks of about INR 1.5 Lakhs. This scheme is mandated under Section 80C of the Indian IT Act. Click here for mutual fund advantages.

In this piece, we will discuss a step ahead on the advantages of mutual funds. A categorical feature of the merits offered by this investment opportunity. Being an investor you must act vigilantly and keep a track of the market alterations.

Essential traits of mutual fund investments

Is investment in mutual funds right for profile buildup? What are the real world advantages of mutual funds? Will it give me good returns? If you are dubious about investing in mutual funds, have a look at some features of mutual funds.

1.    Mediated by a trained and qualified expert

The advantages of mutual funds are many, one among the most highlighted perks is the back-end support of a qualified investor. A highly qualified and well experienced mutual fund manager will suggest prospective measures and allocate money wisely.

To find the needle in the haystack you need a professional backing to manage the financial investment challenges. As rightly mentioned, “Mutual funds are subjected to market risk”, you need someone to shield your hard earned money and keep your profile highly lucrative.

2.    It is both an open-ended and close-ended investment

The Indian Constitution proposes two types of mutual funds investment:

  • Open-ended: you can invest your money in any sector and withdraw it anytime. The granted liberty and time duration of such investments are highly flexible.
  • Close-ended: as an investor you will be given a fixed time slot for depositing money in the reserved funds.

3.    The inclusion of lump sum and SIP investment

Mutual funds allow you to make a series of investments on a routine basis. This system is similar to the open-ended system where you can invest routinely. On the other hand, mutual funds also bring you a provision of a fixed amount of money at a designated interval. This is known as a Systematic Investment Plan (SIP). In this system you can invest weekly, monthly or quarterly.

4.    Good return on investment

If you intend to go with a mutual funds investment option, you have a greater probability of good return on investments. Mutual funds allows investment in various capital market tools like:

  • Capital bonds
  • Equities
  • Treasury bills
  • Debentures

The integrated schemes in the market will help you to exchange bonds and equities and gain profits. Moreover, redemption opportunities can lead to selling consensus by the management. Therefore, returns are good yet variable in nature.

5.    Debt funds are comparatively secured

There is an attached perk related to mutual funds investment. Mutual funds have a tendency to invest on the debt instruments that often prove to be propitious for the investor. It is because the debt instruments possess a credit rating (external) that justifies its level of security. Moreover, these debt instruments possess a fixed interest rate and are unaffected by the capital market alterations. Promissory notes, leases and bonds are some common types of debt instruments.


From a huge assortment of mutual funds offered by the establishments, you can choose the ideal one which perfectly fits in your manifesto. Due to this profusion of investment opportunities, as an investor you can be more flexible and generate higher risk tolerances.

Irrespective of some market deviations, mutual funds investment is indeed one the best options to go ahead with. It helps to diversify your assets and possess a good profile in the global market.