Investing in stock market requires a great deal of courage provided you have immense patience, time and required financial expertise to do so. Stocks is also called as equity in financial world, so start investing in the share (stock – equity) market. Are you ready to make money in stock market (it’s full of risk management)? Start to investment in initial investment because you deployed in the stock market. Of course not. Wondering what the other avenue is? Yes, it is Mutual Funds. Do you know, Mutual fund is one such location where your investment gets allocated to a wide spectrum of equity chosen by a stock expert.
Several investors refer stock market as 'equities' and fear risk of losing out their money which in further makes them stay away from taking further steps ahead. But in mutual funds, things are different? Diversification plays a best role in balancing your investments risk with the returns you generate from the fund. Know the difference between Stocks (Equity) or Mutual Funds.
Read More Here - How to invest in Bonds in India? & Where to invest in Bonds in India?
1. Professional Management: Mutual Funds offer the expertise of a dedicated fund manager that aims to achieve the investment objective of the scheme. On the other half, before investing in (Equity) stock person need to possesses the desired (required) skills (knowledge) for identifying the right and best stocks to invest.
2. Low Ticket Size: Some shares have a high share value not affordable by small investors. However, in mutual funds, one can invest in variety of stocks with a minimum investment as low as ₹500.
3. Fees & Expenses: Mutual Funds charge fees and expenses capped under the stipulated regulations whereas for trading in equities one would require paying Demat charges along with trading charges.
4. Liquidity: Open-ended funds permit the investors exit at the current NAV subject to exit loads whereas investing in stock markets don't always give guarantee to investors.
5. Risk Management: An investor gets carried away with sentiments while picking up the stocks and sometimes, may go overboard with a specific stock.
6. Choice of Funds: Investors prefer investing in a scheme that matches their investment needs. For example: an aggressive investor may prefer investing in a diversified equity fund where a less aggressive ones may prefer investing in a balanced fund.
In short, stock market is like a casino where you have to count your own fortune to bring the luck for you. Do you know, mutual fund always work in getting out the best returns on three condition- your investment timing, your financials goal and your aptitude of risk taking.
Above three parameters help to balance your worth (goal) to extracting more money from the of Mutual Fund investments. Let's find out top 5 stocks Vs Mutual Funds keeping in view for investors taking lesser risk.
Top 5 Mutual Funds in India (Balanced Funds)
Name of Mutual Fund - Returns (%) as on 18th Oct'17
1. Principal Balanced Fund (Growth) - 1.4 (1-month), 7.1 (3-month) and 16.7 (3-year).
2. ICICI Prudential Balanced Fund -1.0 (1-month), 2.3 (3-month) and14.5 (3-year).
3. SBI Magnum Balanced Fund 1.0 (1-month), 3.7 (3-month) and 14.0 (3-year).
4. UTI Balanced Fund 0.4 (1-month), 2.8 (3-month) and 12.4 (3-year).
5. Baroda Pioneer Balanced Fund 0.2 (1-month), 5.3 (3-month) and 15.5 (3-year).
Top 5 Stocks In India
Name of the Security - Returns(%) as on 18th Oct'17
1. South Indian Bank Banking and Financial Services - 9.93 (1-month),13.03 (3-month) and 12.27 (3-year).
2. ING Vysya Banking and Financial Services - 8.36 (1-month), 3.31 (3-month) and 43.49 (3-year).
3. Kotak Mahindra Bank Ltd. Banking and Financial Services - 4.34 (1-month), 8.50 (3-month) and 29.25 (3-year).
4. Federal Bank Banking and Financial Services- 4.28 (1-month), 7.53 (3-month) and 22.22 (3-year).
5. Karnataka Bank Banking and Financial Services - 1.65 (1-month), 0.13 (3-month) and 22.38 (3-year).
Comparing overall mutual funds with the stocks, it is clearly been witnessed that both have performed well in their respective categories. If you notice in the mutual funds category, Principal Mutual Funds have performed good with respect to the returns generated within 1 month whereas Federal Bank has relatively given somewhat lower returns in the stock category within 1 month. So, if you assess the overall scenario, mutual funds are a self-reliant proposition for your investment because of diversification it gives to make your own portfolio strong.- year).