While Indians have historically been investing in physical assets like gold, real estate, etc., the millennials are reflecting an increasing preference towards investing in financial assets. Mutual funds are steadily emerging as a preferred investment option, as also being reflected by steady monthly SIP inflows (Source – Association of Mutual Funds in India, AMFI).
Systematic Investment Plan (SIP) allows you to invest a fixed amount into mutual fund schemes on a pre-determined periodic frequency. You can instruct the bank to auto-debit the from your account specified dates and invest in the pre-specified mutual fund scheme. This investment cycle happens automatically on a recurring basis irrespective of the market condition. This helps an individual to consistently move towards creating an investment corpus and take a step closer to achieve his/ her financial goals.
Monthly SIP inflows in mutual fund have managed to remain steady even during the recent volatile market condition. However, experts recommend that if such volatility and correction persist longer in the equity markets, it will have a significant impact on the investors. 2019 has been the year where investment in debt funds and Gold have generated better returns for the investors than the equities.
Just as it is important to start investing early, it is paramount to review your portfolio periodically. Regular assessment allows you to review the performance of the various funds and accomplish your financial goals. Here are four crucial parameters against which you may compare your mutual fund portfolio
<p dir="ltr"><span id="docs-internal-guid-073bb9ec-7fff-2b00-5718-87135ee2dd3a">Equity funds are those funds, which invest predominantly in equity and equity-related securities. Such investment exposures can include investments in equity shares of companies, or related derivatives with underlying equity shares.
When we discuss mutual funds, we come across the standard warning when, “mutual fund investments are subject to market risks.” However, such risks can be classified into two categories – systematic risks and unsystematic risks. Systematic risks arise because of macroeconomic changes in the domestic and global economy. Such changes can include economic growth, fiscal deficit, current account deficit, forex movements, etc.
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