Mutual Funds in India, usually charge an entry load of 2.25% for investment in equity funds. With effect from January 4, 2008, this entry load will be waived off for those investors who do not use the services of the distributors and instead invest directly by submitting their application at the AMC’s office/Investor Service Centres or Online through the internet.
MFs are any day a much better investment product than either Bank FD or Insurance. Be it in terms of convenience, flexibility, tax-efficiency, diversification, professional management, transparency, low-cost, etc.
There are more than 350 equity MFs in the market today and many more are being launched regularly. Therefore, it is not easy for a lay investor to choose the appropriate funds. As has been seen in the past, there is big difference in the returns from the top-performers and the laggards. Therefore, a wrong choice can seriously harm one’s wealth creation efforts.
For Example, Reliance Diversified Power Sector gave a return of 137% in one year, while the category retrun of Sensex for this sector was 64%. However, if you have invested in Franklin Infotech, you would have got a -20% return against the sensex average return of 8% for this sector.
Hence, one should opt for direct investment only if one is a very knowledgeable investor. If not, it would be prudent to go for a fixed fee-based financial advice and then invest yourself based on the advisor’s recommendations.
If you are a novice investor and looking forward for financial advice to choose the appropriate Mutual Funds, I will be pleased to assist you. Drop me a mail to rammesha@gmail.com.
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Posted in Economy, Financial Advice, India, Investments, Mutual Funds, Sensex
