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Mutual Funds Sahi Hai?

Mr. C.S. Sudheer | Updated On Friday, June 29,2018, 01:26 PM

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Mutual Funds Sahi Hai?

 

 

If you switch on your TV, you will see the highly popular Ad, Mutual Funds Sahi Hai. This is a campaign launched by AMFI (Association of Mutual Funds in India), whose aim is to create awareness on mutual funds. AMFI started this highly popular Ad campaign in March 2017. You will see Mutual Funds Sahi Hai advertisements appearing in TV, print, radio, cinema, digital and even hoardings.

Mutual funds set aside a part of their management fees, to promote mutual funds through this highly popular Ad campaign. The aim of this campaign....Mutual funds are the right choice for you.....

Most banks have cut savings bank interest rates and some banks have even cut FD rates. SBI now offers only 6.75% interest on one year FD's compared to 6.9% earlier. With banks offering lesser interest on savings bank accounts and FD's, perhaps it's time to say, Mutual Funds Sahi Hai.

Want to know more on mutual funds? We at IndianMoney.com will make it easy for you. Just give us a missed call on 022 6181 6111 to explore our unique Free Advisory Service. IndianMoney.com is not a seller of any financial products. We only provide FREE financial advice / education to ensure that you are not mis-guided while buying any kind of financial products.

 

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Mutual Funds Sahi Hai

If you have seen the Mutual Funds Sahi Hai advertisements, the plain simplicity of these Ads captures you. It's all about daily routine in life. You see a man travelling in a crowded local train who tells another man he has got a bonus of INR 6,000 and asks where to invest it. Pat comes the reply....Invest in mutual funds. He says why are you mocking a poor man, but he gets this reply. You can invest just INR 500 in a mutual fund. I have done it....'Mutual Funds Sahi Hai'.

You will see similar advertisements under this highly popular campaign. These advertisements present mutual funds as part of a regular conversation and a daily routine. The tone of voice is direct, honest and plain speak. You will see different scenario's like  car, wedding, train, showroom, parlour, golf, halwai and concert. Each film focuses on a specific theme, dispelling a myth or creating greater awareness on mutual funds.

SEE ALSO: How to choose the best mutual fund?

 

What are mutual funds?

A mutual fund in India, collects and invests your and other investor’s money, in stocks, bonds or even a mix of stocks and bonds. The total investment made by the mutual fund, either in stocks, bonds or a mix of both, is divided into units. Depending on the amount you invest, you are given units of the mutual fund. The NAV (Net Asset Value), gives you the value of the mutual fund.

Your money is invested, depending on the type of mutual fund, you choose. If you choose equity, your money is invested in reputed stocks. If you choose debt, your money is invested in fixed income securities, like bonds and money market instruments. You can also choose hybrid funds. Your money is invested in a mix of both, equity and debt.

The mutual fund is managed by the fund manager. The fund manager decides which stocks, bonds or assets, the mutual fund must buy, depending on the type of mutual fund.

SEE ALSO : 3 Challenges of buying mutual funds with your mobile wallet.

 

Are mutual funds sahi hai for you?

You are afraid of investing your hard earned money in mutual funds. Your biggest fear is you may be taken for a ride.

Many mutual funds agents and distributors give themselves attractive titles. But, they very rarely tell you the true cost of an investment in mutual funds. The mutual fund agent will not tell you about the hidden costs in your investment like sales commission. This amounts to mis-selling.

Yes....Mutual funds sahi hai, but for you to really get the benefits of investing in mutual funds, the mutual fund industry has to do more. It has to welcome the changes made by the mutual fund regulator SEBI, (Securities and Exchange Board of India) and also the  investment advisory guidelines and the fiduciary responsibilities. Only then.... 'Mutual Funds Sahi Hai'.

SEE ALSO: Mutual funds to invest your money

 

SEBI has made rules to classify mutual fund schemes

SEBI will soon bring in new rules whose aim is to help you (investors) identify the right mutual fund schemes from within the product heap. SEBI wants to classify mutual fund schemes into three broad categories: Equity, Debt and Hybrid. These will be further sorted out into subcategories depending on the investment mandate.

Currently, mutual fund schemes do not have an official classification. Mutual fund products will have to be brought under these categories and asset managers will have to merge schemes which are similar. Let's say a mutual fund house operates two separate schemes which invest in mid-caps. The mutual fund house will have to merge these schemes or scrap one of them.

Today, you and other investors are rushing to invest in mutual fund schemes. If there are too many mutual fund schemes which are similar, it's very difficult for you or any investor to make the right choice. Merging of similar mutual fund schemes reduces confusion. SEBI has been asking mutual fund houses to consolidate schemes, but mutual fund houses have not responded. Now, SEBI will frame new rules and force mutual fund houses into consolidation.

SEBI wants to address mis-selling in mutual funds and had introduced product labelling. Now, you and other investors can easily understand the kind of product/mutual fund scheme you are investing. Mutual funds will have to stick to their product label. Once the circular comes out, mutual funds have 6 months to comply with the requirements.

Yes... Mutual Funds Sahi Hai. It's time for you to invest your money in mutual funds and make the right choice. Be Wise, Get Rich.

 

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Article Author

Mr. C.S. Sudheer

Mr C.S.Sudheer is a management graduate. He started his career with ICICI Prudential Life Insurance and later on worked with Howden India. After his brief stint in Howden India, he moved on and incorporated Suvision Holdings Pvt Ltd which is the sole promoter of IndianMoney.com. He aims to build a nation that is financially literate with investment savvy citizens.

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