Mutual Funds

Investing in mutual funds is a great way to harness the power of compounding. It offers a disciplined approach to investing, which is essential for success.

Mutual Funds in India

It is essential for a developed or developing economy to have an active and strong financial market with broader participation. In order to materialize this objective, the Government of India and the Reserve Bank of India with the initiative of Unit Trust of India have established the first ever mutual fund in India in 1963. The vision behind the move was to encourage saving and investment culture among common people in India. In April 1992 SEBI took over the control of securities market and related instruments to protect the interests of investors. Since then, the investments in mutual funds have gained greater importance in a significant manner. As of now the mutual fund industry AUM surpasses Rs.50 lakh crores with 4.21 crore investors.

Mutual Fund Distributor

Mutual Fund Distributors are appointed under strict norms by the AMFI to engage in the business of mutual fund distribution. Each registered MF distributor is having a unique identification number called ARN. A Mutual Fund Distributor is providing the much-needed last mile connectivity with investors enabling them to invest in appropriate schemes and in helping investors stay on course through bouts of market volatility and thus experience the benefit of investing in mutual funds. MF distributors have played a key role in popularising the Systematic Investment Plans (SIP) over the years. In July 2024, the monthly inflows through SIP accounts have crossed Rs.23,332 crore through 9.34 crore SIP accounts. At present the mutual fund industry in India is comprising of 2.56 lakh distribution partners.

Benefits of Investing in Mutual Funds

1. Convenience to handle Pension Funds
2. Simplified process
3. Potential for higher returns
4. Rupee cost averaging
5. Compounding
6. Flexibility
7. Professional management
8. Diversification
9. Tax benefits
10. Long-term wealth creation

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