What are the benefits of investing through the mutual fund route?
For investors who have limited resources available in terms of capital and the ability to carry out detailed research and market monitoring, mutual funds offer the following major advantages :- Portfolio Diversification This enables an investor to hold a diversified investment portfolio, even with a small amount of investment that would otherwise require big capital. Professional Management a team of professional fund managers manages them with in-depth research inputs from investment analysts. Reduction / Diversification of Risk However small his investment, an investor in a mutual fund directly acquires a diversified portfolio, which reduces his risk of loss as compared to investing directly in a few instruments. Reduced Transaction Costs An investor can reap the benefits of the ‘Economies of Scale’ as funds pay lesser costs on brokerage, custodian charges etc, because of larger volumes. Convenience and flexibility Investors can easily transfer their holdings from one scheme to anoth
