Benefits of investing in mutual funds

1) Professional expertise

When you invest during a open-end fund , knowledgeable fund manager handles your investments. A team of researchers who track the market on a real-time basis supports every fund manager. supported their inputs, fund managers make necessary changes to your open-end fund portfolio to maximise returns. this feature can become an appropriate option for salaried people (and business owners) who don't have the time to trace markets or make timely investments.

2) Convenience

Investing in mutual funds are often a hassle-free and easy exercise. the whole process is paperless, and you'll complete it from the comfort of your home. And once you start your investment journey, you'll follow your holdings and make necessary adjustments, if needed, through your computer or smartphone.

3) Begin with small investments

Many people assume you'll only invest in mutual funds if you've got an outsized sum of cash . actually , you'll begin investing with just Rs. 500 per month. a scientific Investment Plan (SIP) can assist you invest small amounts regularly. And if your income rises over time, you'll also increase your SIP allocation. This way, you not only lower your investment costs but also enjoy the facility of compounding.

4) Diversification

Diversifying your portfolio is significant if you're looking to attenuate your exposure to risk and loss. An adequately diversified portfolio can weather the poor performance of one stock or sector, thus cushioning your total investments. Mutual funds are designed during a thanks to provide adequate diversification.

For instance, a open-end fund that tracks the S&P BSE 100 index could open your investment to as many as 100 securities during a single fund. this will be an easy and cost-effective way of diversifying your portfolio.

5) Tax benefits

Section 80C of the tax Act provides tax deductions on investments made in specific financial instruments. This includes mutual funds too.

Currently, you'll claim a tax break of up to Rs. 1.5 lakh per annum in Equity Linked Saving Scheme (ELSS) that provide one among the shortest lock-in period. These reasons make ELSS funds a well-liked tax-saving option among investors.