Question

How much would mutual funds be to invest since they are considered the least expensive?

Answer 1

Yes, this is true that mutual funds are the least expensive investment alternative. Mutual fund pools your money and invests into different companies of different sectors, mutual funds provides diversification.

Load and charges in mutual funds- these are as following:

1. Entry load- When units are purchased, then entry load is applicable.
2. Exit load- If units are redeemed before one year then exit load is applicable.
3. Transaction fee- Your broker charges transaction fee when you transaction in mutual funds exceeds a certain limit.

Benefits of mutual fund- One should invest into mutual funds becasue its benefits are as following:

1. Mutual fund diversifies the money into different asset class group so as to diversify the risk.
2. Mutual fund provides professional management services as the fund is managed by big and highly educated professionals.
3. Mutual funds provide tax saving, there are some tax saving scheme that are called Equity linked saving schemes (ELSS).

Conclusion- Inspite of so many benefits, mutual funds have very less chagres and expense as compare to other financial products. So we should invest into mutual funds to get the above benefits and to minimize the risk.