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- Equity mutual funds
- Debt mutual funds
- Hybrid mutual funds
- Solution-oriented mutual funds
- Other mutual funds
- Within these categories, an AMC can float schemes based on parameters like market capitalization (large-cap, mid-cap, small-cap), investment time frame (for debt schemes), the proportion of equity and debt, and investment strategy.
B. Diversification Since the investment is made in more than a single asset class, the risks are spread and the portfolio is diversified.
C. Expertise The investors don’t need to conduct any research on their own. Instead, professional fund managers, who operate mutual funds, use their expertise to determine which fund to buy and when to withdraw.
D. Goal-Oriented No matter what your income and expenditure habits are, there is always a mutual fund which will suit both your specific financial goals and your risk appetite.
E. Hassle-Free The entire process of investing in a mutual fund is quick, responsive and hassle-free.
F. Tax-Efficient A number of mutual funds offer tax deductions under section 80(C) of the Income Tax Act.
2. KYC Requirement To invest in mutual funds through SIP one has to comply with the ‘KYC’ requirements which is a one-time process. The essentials for KYC are PANCard, address proof, photograph & cheque. One final step in KYC is in-person verification (IPV).
3. Choose The SIP: Now we come to the business end of the process, where you need to choose the correct SIP which fulfills your needs. Depending upon your risk taking capacity, funds can be allocated.