Mumbai For the average investor, investing directly in the stock market is more risky, as it is common for stock market fluctuations to occur. Because of these fluctuations the average investor makes the wrong decision. Second, it is not easy to make a profit by investing in the right place in the stock market. This is a very difficult task. This requires selecting good stocks after thorough research on every economic aspect and making a timely decision to sell the profit book and both are difficult for the average investor. Neither does he have the understanding or time to do the research nor does he have the ability to make the right sales decision at the right time. In this case, it is best for the average investor to invest in a mutual fund. However, investors should only choose mutual funds with a good track record that offer good returns to their investors.
Mutual fund houses, with the help of their team of fund managers and research analysts, do thorough research from every aspect and select good stocks and book profits on time and provide it to their investors. This is the reason why mutual funds are becoming more and more popular in India too and the monthly investment is Rs. 28,000 crore and the total management fund (AUM) of the equity fund is Rs. 13.15 trillion. Similarly, monthly investment through Systematic Investment Plan (SIP) increased to Rs. 12,328 crore has reached a new high. In this article, we have analyzed Largecap Funds, Midcap Funds and Smallcap Funds which have outperformed their benchmarks in the last 5 years starting from FY2021-22. In many of these fund schemes, investors get very good returns ranging from 25 to 58%. Which proves that equity mutual funds are capable of creating good returns and wealth in the long run.
Investment team keeps an eye on every moment: DP Singh
DP Singh, chief business officer, SBI Mutual Fund, says it takes a lot of hard work to outperform a benchmark. We track the companies in which our plans are invested, 24 hours a day. Business, corporate governance, industry trends, government policies, economic growth of companies have to be monitored everywhere. Our research and investment team is engaged in this work 24 hours a day. All this work is very difficult for the average investor. As important as it is to invest in the right place, it is just as important to make a timely decision to sell. This is difficult even for the average investor. While our research and investment team tracks every moment and makes decisions accordingly. This is the reason why we are able to give better returns to our over 2 crore investors. Another advantage of investing through mutual funds is that even though mutual funds often buy and sell shares, the investor is not liable for short-term or long-term capital gains tax. He will have to pay income tax on profits from the mutual fund as per his income slab.
Opportunity to invest in diversified companies with small capital: Anand Varadarajan
Anand Varadarajan, business head of Tata Mutual Fund, says retail investors have limited capital, in which they can only invest in a couple of companies. Even so, owning one is still beyond the reach of the average person. Like you went to a hotel and after seeing the menu there ordered two dishes, but you did not like the taste. Still, you eat that dish because you have less money in your pocket, but not in a mutual fund investment. Here you can invest in many companies with small capital, as mutual fund schemes invest in different companies with different businesses. One scheme allows you to invest in 50 to 100 companies. Your investment is varied. As a result, the risk is lower and the probability of return is higher. Our research and investment team monitors every business activity of the companies in which we invest, only then a good return can be obtained. That’s why we always try to give our investors a better return. Tata Largecap Fund and Tata Balance Advantage Fund seem to be favorable for investment in the current market conditions.