According to investopedia, “A mutual fund is a type of financial vehicle made up of a pool of money collected from many investors to invest in securities like stocks, bonds, money market instruments, and other assets.”
As far as the tenure is concerned, there is no minimum tenure to invest in Mutual Funds. Hence, you can stay invested in a mutual fund for a day or for a perpetual period of time. However, some funds have an exit load for money withdrawals in short term periods.
Mutual funds collect money from a pool of investors and use that money to buy securities, i.e. stocks and bonds. The price of a mutual fund is called the Net Asset Value (NAV) of the unit of mutual fund. There are various types of mutual funds like equity funds, balanced funds, exchange-traded funds, fixed-income funds, index funds, money market funds, income funds, global funds and specialty funds.
Investing in mutual funds through the mode of SIP gives many options to an investor. For e.g. - flexibility is offered, tenure can be changed, frequency of investment can be decided and the amount that is to be invested over a period of time can also be modified.
However, there is an exception in the case of ELSS mutual funds where a lock-in period is applicable. Another aspect that must be considered is that if you invest in ELSS funds via SIP, each installment is considered as a separate transaction and thus, each installment gets locked in for three years. On the other hand open-ended mutual funds can be exited at any time.
For e.g.- Once you start a monthly SIP investment of Rs. 10,000 in a fund for a period of 5 years, you have the flexibility to increase and decrease the monthly amount, depending on your investment appetite. Thus, there is no mandate for a minimum or maximum tenure for a mutual fund investment.
As a matter of fact, many investors even choose to invest in perpetual SIPs till their financial goal is achieved, without being bothered about the tenure.
Mutual funds offer a wide variety for investment schemes. Risk averse investors can also preferably invest in the debt category where the returns are better than what they may earn with fixed deposits, however, at similar risk levels.Investing in mutual funds for a longer period of time comes along with many benefits like diversification, economies of scale, professional management of the fund and transparency over a variety of offerings. Thus, one must stay invested in top performing mutual funds for a long period of time.
With mastertrust’s simple and transparent platform, you can invest at your convenience and track your portfolio seamlessly. Say goodbye to paperwork, buy, sell and switch anytime conveniently with SIPs, SWPs and STPs.
As an investor, it is easy to get confused about where to put your hard-earned money for the best returns at least risk. Thus, mastertrust’s expert recommendation acts as your trusted partners and helps you with the right set of tools, guidance and knowledge.
Our dedicated research and advisory team will suggest the best mutual funds, top performing mutual funds and bring to you the best investment ideas across various mutual funds schemes and help you to take informed decisions. What’s more, we offer you a collection of investing tools to help you to filter and find great ideas on your own.
With a variety of top funds to invest in ranging from large and multicap, mid and small cap, balanced funds, debt funds, ELSS funds and liquid funds, mastertrust has been enabling a diverse set of investors to make the most of the exciting investing opportunities in the Indian market.