Algates Financial Private Limited

Mutual Funds

small amount, big dreams

Mutual Funds in India

Mutual funds are vehicles that pool money from investors into big chunks. These could be retail as well as institutional investors. Pooled money is then invested in variety of financial instruments like stocks, bonds, money markets instruments etcetera based on a common pre-determined objective to earn returns.

Mutual funds are managed by professional fund managers.

How do Mutual Funds Work?

Mutual funds are pooled investments. Many investors come together to invest with a common objective.

Mutual funds are set up by Promotors or Sponsors. The sponsor sets up an Asset Management Company (AMC) to manage the funds.

Investors purchase mutual funds in the form of units. Price of each unit is called NAV. This NAV for each fund is declared by AMC daily.

Money is invested in various financial instruments depending on the objectives of the fund to earn returns. These objectives are set at the outset of the fund. The scheme prospectus gives out these details for investors to read.

AMC charges a small fee for managing the assets under the fund.

Investors can redeem their investments by selling mutual fund units back to the AMC. AMC purchases the units back at prevailing NAV. 

Profit (or loss) made by an investor depends on the management of the funds, securities in which the fund is invested, NAVs at the time of purchase and sale of mutual fund units etcetera.

Benefits of Investing in mutual funds

Start with A Small Amount: In India, you can start investments in mutual funds with as low as Rs. 500. This makes mutual funds as option for investment for those with little investible income.

Professional Fund Management: Mutual funds are managed by AMCs who appoint fund manager who specialise in portfolio management. They also usually bring with them rich experience in fund management. The money invested by you is managed by these experts.

Diversification: Mutual funds give you access to a diversified portfolio even with a very small amount of investment. If you invest in individual stocks and bonds on your own, you need to invest a huge amount of money to achieve same degree of diversification.

Transaction Cost: If you buy and sell stocks on your own, you have to pay brokerage on every transaction you make in the market. Now imagine the total transaction cost involved if you want to achieve the same level of professional management of funds and diversification.

However, with mutual funds, you have to just pay a small amount which is built in the NAV to achieve this.

What do we offer?

Algates Financial as an Authorised Person of Cholamandalam Securities Limited brings to you an online platform to begin your investment journey.

Online buying and selling of mutual funds.

Online portfolio tracker to keep a track of your investments.

Choose your mutual fund according to your goals and risk appetite.

Invest a small amount every month with Systematic Investment Plan (SIP).