1. There is a widespread perception that mutual funds themselves are an asset class.
2. Factually, they are vehicles to a definite asset class, be it equity, debt, bonds, gold, real estate, commodities, fixed income, etc., through which you can reach your financial destination.
3. The main advantage is that you can also have a mix of all in your portfolio, even with a limited corpus, which may not always be possible if you invest directly in each of these asset classes.
4. The other advantages of investing in mutual funds are:-
a) no entry load, no exit load (in long-term)
b) tax advantages
c) relative safety
d) diversification in multiple asset classes
e) transparent structure
f) best investment brains at least cost
g) liberty and flexibility in own choices
5. Mutual funds, therefore, should be treated like a portfolio of financial instruments and not just another financial product.
2. Factually, they are vehicles to a definite asset class, be it equity, debt, bonds, gold, real estate, commodities, fixed income, etc., through which you can reach your financial destination.
3. The main advantage is that you can also have a mix of all in your portfolio, even with a limited corpus, which may not always be possible if you invest directly in each of these asset classes.
4. The other advantages of investing in mutual funds are:-
a) no entry load, no exit load (in long-term)
b) tax advantages
c) relative safety
d) diversification in multiple asset classes
e) transparent structure
f) best investment brains at least cost
g) liberty and flexibility in own choices
5. Mutual funds, therefore, should be treated like a portfolio of financial instruments and not just another financial product.