Mutual Funds

Mutual fund investments can be an affordable and convenient way to build wealth over time. Mutual funds pool money collected from multiple investors and put it into a diversified basket of securities – such as stocks or bonds. They are managed by a fund manager, a financial expert who makes the investments and monitors them on behalf of the investors. This professional management and the diversification across multiple securities help mitigate risk and make investing accessible even to those who are not well-versed in the financial market.

What are mutual funds?

Mutual funds are a pooled investment vehicle, where money collected from multiple investors is combined and invested in a diverse basket of securities. This could include stocks, bonds, commodities, or other investment avenues.

The mutual fund scheme is handled by a fund manager, a financial expert who is tasked with executing the scheme’s investment strategy. This includes designing the portfolio (the basket of securities that the scheme investments in), overseeing it, and making changes to it when necessary to potentially achieve the scheme’s investment goals.

How do mutual funds work?

A mutual fund scheme is run by an asset management company or AMC and managed by the fund manager. Investors’ money is pooled together and invested in a diversified portfolio of securities. The portfolio composition depends on the scheme type (equity, debt, hybrid, etc), the investment objective, and the fund manager’s discretion.

Investors buy units in the mutual fund, representing partial ownership of the portfolio’s securities. The value of these units fluctuates based on the performance of the underlying assets.

For example, the value of an equity mutual fund’s portfolio will depend on the value of the stocks that it invests in.

The per-unit value of a mutual fund scheme is known as the Net Asset Value, which is calculated by dividing the value of the scheme’s underlying securities, minus its liabilities, by the total number of outstanding units. The NAV is calculated at the end of each trading day based on the closing market prices of the fund’s holdings.

Advantages of mutual funds

Mutual funds make investing easy, convenient, and affordable. Here are some key advantages:

Diversification: Mutual funds invest in a wide variety of assets, reducing the risk associated with any single investment.

Professional management: Experienced fund managers make investment decisions, aiming to achieve the fund’s objectives.

Liquidity: Investors can easily buy or sell mutual fund units at the current NAV. Experienced fund managers make investment decisions, aiming to achieve the fund’s objectives.

Accessibility: Mutual funds provide access to a broad range of investments, even for those with limited capital.

Convenience: Investing in mutual funds is straightforward, with minimal administrative tasks for individual investors.

Ways to invest in mutual funds

There are two common routes for mutual fund investments: Systematic Investment Plan or SIP and lumpsum.

Lumpsum: This mode involves investing a sizeable amount in one go into the scheme of your choice. It is a one-time investment.

SIP: This involves investing a fixed amount in regular instalments – weekly, monthly, quarterly, etc. It encourages investing discipline. It is also affordable, as SIP options start from Rs 100 or Rs 500 in several schemes.

How to invest with Bajaj Finserv Asset Management Ltd

First, select a Bajaj Finserv AMC mutual fund scheme. You can choose from among debt, equity and hybrid mutual funds and exchange traded funds (ETFs). You can invest in these mutual funds online or offline through Bajaj Finserv AMC. Once you’ve chosen a fund, you can invest through the following steps:

1.Click on ‘Invest Now’ on the scheme page or the website home page. You will be redirected to the investor portal.

2.If you are an existing investor with Bajaj Finserv AMC, you can log in. New investors can sign up. To sign up, you will be asked to enter some basic information such as your name, date of birth, PAN details and bank account information. You may also be asked to complete your Know Your Customer (KYC) verification process if you are not KYC validated.

3.From the dropdown menu, select the scheme you wish to invest in and the mode of investment (lumpsum or SIP). Enter the investment amount and select the payment method.

You can also invest online as well as offline through financial advisors, distributors and on aggregator platforms.

Plan your investment

If you’re not sure of where to invest and what amount to start with, there are several convenient and easy-to-use tools that can simplify the planning process. For example, Bajaj Finserv AMC has a free online SIP Calculator, SIP Top-Up Calculator, Lumpsum Calculator If you’re not sure of where to invest and what amount to start with, there are several convenient and easy-to-use tools that can simplify the planning process. For example, Bajaj Finserv AMC has a free online SIP Calculator, SIP Top-Up Calculator, Lumpsum Calculator and Compounding Calculator. Depending on your mode of investment (lumpsum or SIP), you can choose the tool that is suitable.

All you need to do is enter your investment amount, duration, and expected rate of return. The calculator instantly shows you the potential total corpus. You can determine the expected rate of return based on the historical performance of the mutual fund scheme or category you are looking to invest in. Do note, however, that past performance may or may not be sustained in the future.

You can also use the calculators to determine what scheme to invest in, or what instalment or investment amount to choose, based on what you want your final investment amount to potentially be.