Mutual funds have gained popularity. With various options like systematic investment plans (SIP), dividend pay-out plans, equity traded funds (ETF), index funds, etc. mutual funds provide schemes to investors according to their needs.
Equity mutual funds move in tandem with the market. Hence when the market is beaten these mutual funds generate low returns and vice versa.
We all know that the higher the risk higher the returns. Hence, mutual funds with high risk often give high returns.
The question here is how can one choose a mutual fund that balances both the risk and reward. Equitymaster can give you an insight into how to choose winning mutual funds.
One of the biggest advantages of investing in mutual funds is that it allows you to withdraw some amount of your profits from an investment regularly.
These kinds of mutual funds were initially called Income Distribution cum Capital Withdrawal (IDCW) option. But like all market-related investment schemes this one too comes with risk. So should one consider IDCW as investing option?
Investing in mutual funds can be confusing because there are so many categories to choose from. But if you know your long term goals, the journey can be fruitful and decision making even easy.
The best mutual fund scheme you choose should be suitable for you in terms of investment horizon, risk appetite, and the fund’s investment objectives.
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