Equity Mutual Fund is suitable for all. Who are looking long term capital growths? Also, return and risk vary from scheme to scheme under equity mutual fund. They are manage by fund managers. Here eight reasons to invest in Equity Mutual Fund. See types of equity funds and best equity mutual funds.
Easy on Pocket
You can invest in equity mutual fund through SIP mode. And you can start investing Rs 500 month. SIP allows regular periodic investment through ECS (Electronic Clearing Service) process. Thus every month money get deduct from your bank at predetermine date.
What is Capital Appreciation on Investments?
Capital appreciation also known as capital growth. It is primary benefits in equity mutual fund to get capital growth. This is financial instrument which give you high inflation beating returns. It refers to increase in value of an investment over time.
If stock price increase it will reflect in invest money. You can accumulate good amount of wealth for time. It tells you how much profit you have to pay taxes on if you sold investment that day. But, it does not give you full picture of how well investment is performing. Because it doesn’t include all return types.
Instant Diversify of your Portfolio
Mutual funds provide instant diversification. Since you are buy units of mutual funds that spread across several stocks. You receive diversification benefit without investing huge corpus. Diversify lowers your risk in future.
Some stocks underperform at exchange you can make up for loss. With this you can reduce your market risk in your portfolio. Thus you cannot escape all risk even you have well diversify portfolio. Check Top 5 Diversified Mutual Funds
Goal oriented funds
You are looking for long term financial goals. Equity mutual fund is best vehicles to achieve goal. These funds are large-cap, mid-cap and small cap. And return varies from fund to fund. With high risk you have chances to get high returns to achieve your target amount.
Option of Tax Plan
ELSS or equity linked savings schemes stand to gain benefits under section 80c of income tax act. Also, you can avail tax benefits through ELSS funds. Invest lump sum for 3 years lock -in-period. Tax benefits for up to Rs 1.5 lakh of investment are allow under section 80 C.
This scheme only has lock-in as compare to other tax planning. Like FDs, PPF, NPS for 5 years. They also give high returns when compare to other tax saving funds. Also, returns are link with market not guarantee.
Your investments go away from 12 months period. Then returns become tax free. Also, if you redeem before year short term capital gain tax is apply at 15 per cent rate. You can reduce your capital to high level and your actual returns become negative. Thus it is advice to invest for long time. So that you not only earn high returns but also get tax free once redeem.
Manage by professional
You need not review your funds daily. Because, it is manage by professional fund manager. When you are unable to invest in equity due to lack of market knowledge. Equity mutual fund is best option. On behalf of you all scheme are manage by professional fund manager.
One of the main benefits a Mutual Fund provides is that you don’t have to pick stocks. Professional fund manager will pick stocks, track, and asset part, buy and sell stocks.
It is easy to get back corpus in your bank account while invest through mutual funds. You can redeem at any point of time. If you are in need of money you can stop your SIP. And redeem all units you want. So total process takes about week time. But if your SIP is already mature you can get your money back in three days.
You can check benefits of equity mutual fund. And see top equity mutual funds in India. Also, check present scenario of mutual funds in India. For more details see it is right time to invest in Mutual fund. See Benefits for young investor to invest in mutual fund