Mutual Funds

Mutual funds are best suited products for individual investors. They offer different products across various investment horizons and different risk levels. Unlike AMCs that sell only their brand’s mutual funds, IIFL gives access to a variety of Mutual Funds through 42 AMCs via its easy-to-use trading platform. This ensures that customers are able to cherry pick best performing funds across AMCs and manages them from a single account. With IIFL one can enjoy below benefits while investing in mutual funds:

  • We offer anytime anywhere transaction capabilities via online platforms, dedicated Relationship Mangers, and IIFL IFAs.
  • We offer financial planning and portfolio rebalancing advisory.
  • For its mutual fund products, IIFL is backed by a strong mutual fund research team which regularly interacts with AMCs/fund managers. This team continuously monitors performance, publishes periodic reports on Mutual Funds and advises on investments with aim to protect and build clients wealth.
  • IIFL offers hassle free and user friendly transaction platform (IIFL Market App, IIFL Mutual Fund App, online website).

Mutual Funds Basics

What are Mutual Funds?

In a mutual fund, money from various investors is pooled together and invested in a portfolio of instruments. A mutual fund may invest only in equities or debt instruments or a mixture of the two, also called balanced funds.

Mutual funds are best suited products for individual investors. They offer different products across various investment horizons and different risk levels.

Different types of MF can be segregated as per the risk profile of customer in following manner:

Low risk

Liquid Funds and Ultra Short-term Funds

Moderately low risk

Short to Medium term Debt Funds

Moderate risk

Long-term Debt Funds, Gilt Funds, MIP Fund

Moderately high risk

Balanced Funds, ELSS, Diversified Equity Funds, Index Funds and Gold ETFs

High risk

Sector Funds, Thematic Funds, Sectoral ETFs

Why invest in Mutual Funds?

Mutual funds are ideal for investors who do not like to put all their eggs in one basket. Along with diversification, mutual funds offer the advantages of professional management of funds and low costs.

Investment in mutual funds offers the following advantages:-

Diversification of portfolio:

Since mutual funds invest in a bouquet of instruments, they offer an effective means of diversification for the investor.

Professional management:

Mutual funds are an excellent means of investment for people who do not have the time or the expertise to study the markets in depth before making investment decisions. The funds are generally managed by well-qualified fund managers, and it is always prudent to check the fund manager’s background before investing in a fund.

Low cost:

A mutual fund unit is much less expensive than the individual stocks in which the fund has invested. Thus, with a given amount of money, an investor can buy more number of units of mutual funds than individual stocks.

Tax Benefits:

Investment in mutual funds offers several tax benefits. Investment gains beyond 1 year are tax-free. Furthermore, dividends received through mutual funds are exempt from tax, while investment in certain types of mutual funds is deductible from the taxable income to reduce the tax liability. Thus, mutual funds can be used as effective tools for tax planning.

How do I invest in Mutual Funds?

Mutual funds can be bought through a mutual fund distributor or agent. Mutual fund units are also traded on exchanges and can be bought and sold there from. IIFL offers both services, acting as a distributor agent for mutual funds, as well as offering broking services for trading in the markets.

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