Comparte Capital Investment

Many people in India consider gold also a good choice to invest

They assume it as stock trading and cannot understand it

The mutual fund industry has been conducted several studies and researches to understand the investor perception towards mutual funds. It helps to know how a customer approaches mutual funds as an investment instrument and which schemes they prefer. You will also get an idea about the mutual funds plans they opt to invest in and key reasons for their selections of mutual funds. As a financial intermediary, a mutual fund allows a group of investors with a predetermined investment objective to pool their money to fulfill their financial goals.

Mutual funds have been performing amazingly

In recent times, the popularity of mutual funds has been increased. Earlier, most people invest their money in real estate, but this industry is not performing well. Many people in India consider gold also a good choice to invest in. It also has been showing negative growth in recent years. So, many investors take time to study mutual funds and start investing in them. This instrument can offer higher returns if you compare it with many other investments. An attractive feature of mutual funds is that you can start investing in this instrument even with Rs.500.

Mutual fund industry – A buzz word in the financial system of India

Mutual funds have gained great popularity in India over the last few years. Earlier, UTI was the sole player in this field, but many companies started to enter this market and broke the monopoly of UTI. Many mutual fund companies started to study the behavior and perception of investors. They prefer to know the main objective of investors to invest in a scheme, the type of scheme they prefer to invest in, the role of brokers and financial advisors, and issues related to services provided by the mutual fund managers and the challenges faced by this industry.

Lack of awareness

Many people in India do not know much about mutual funds as a great investment choice. They assume it as stock trading and cannot understand it as a product category. It is interesting to know that even some highly educated people do not know about different categories of mutual funds. Most people in the past generations opted for insurance products and fixed deposits and completely overlooked mutual funds. The scenario has been changing, and the AMFI (Association of Mutual Funds in India) is making advertisements on behalf of the mutual fund industry to give awareness about this investment choice. Awareness about the products and the benefits of investing in them can change the attitudes and preferences of consumers when it comes to investing.

Challenges of the mutual fund industry in India

Increasing the confidence level of investors is important to acquire success in the mutual fund industry. Align the interests of investors is important to make them interested in this investment choice. Awareness of mutual funds is quite negligible among many investors. Some people believe that funds belong to UTI and LIC are governed by the government. Another challenge is the lack of proper allocation of the investor segments of funds. Align the interests of investors can be a difficult task because of this.

Performance is certainly another issue faced by the mutual fund industry. Most investors prefer to participate in the bond market instead of the mutual fund industry because they are worried about the principal amount they have invested.  Besides, many potential investors believe that mutual funds are expensive. The main expectations of investors from mutual funds are:

  • Regular returns
  • Long-term growth opportunities
  • Tax benefits

Reasons why people stay away from mutual funds

As said above, people stay away from mutual funds due to the lack of awareness about this financial instrument. They believe that investing in a mutual fund is risky, and the chances of losing their money are high. Since many asset management companies start advertising their products, more people start investing in them.

Understand the intricacies of this financial instrument can be difficult for many potential investors. They also believe that these funds are mainly equity-oriented, and the returns from them can fluctuate like the share market due to market volatility. Many investors feel a sense of fear if their previous funds performed poorly and lead to loss. Such investors prefer to stay away from mutual funds. Some of the main reasons why people avoid investing in mutual funds are:

  • Lack of awareness about different mutual fund products
  • Several procedures are associated with this financial instrument and require thorough understanding.
  • The ambiguity related to it when it comes to achieving returns
  • Influence of market volatility
  • Bad performance of their previous funds

Mutual funds are an active demanding financial instrument among investors. It is a suitable choice for those who wish to earn higher returns than traditional investment methods like fixed deposits, bonds, and post office savings. The experts of the investment management firm help you to choose the best mutual fund schemes. Each investor is entitled to get a proportionate share from the mutual funds, be it gains or losses. Since this industry belongs to volatile markets, some amount of market risks has been linked with it. Even if there is growth in this industry, mutual funds remain a small player in the Indian financial market. This industry offers many opportunities, but it is under-penetrated.

That’s why Comparte Investment team asks do you have “Nivesh Ki Aadat”.

With this one can say “Mutual Fund Sahi hai”,  so let me do Nivesh / Enquire