Advantages of Mutual fund:
1. Professional Management: Fund manager are qualified and expert people who continuously analyze the performance of company and suggest best scheme option to investor.
2. Diversification: It gives an opportunity to investor to invest in different types of scheme rather than in one particular scheme. Thus it lower risk of loss by spreading money across various industries.
3. Affordability: It is most affordable way of investment. One can invest with minimum of Rs. 500 in a any systematic investment plan on regular basis.
4. Liquidity: With Open ended scheme investor can redeem all or part of investment at any time at current market price of scheme.
5. Transparency: The performance of mutual fund is reviewed by various publications and rating agency which help investor to compare performance of various schemes.
Disadvantages of Mutual Fund:
1. Cost despite negative returns: Investor must pay sales charges,annual fees, and other expenses regardless of how mutual fund perform.Iinvestor also has to pay taxes on any capital gains they receive.
2. Market Risk: Investment performance depend on current market condition of that scheme. If particular sector is in its low then the price of that scheme drops heavily.
3. No Guarantee of return: Mutual fund does not give guarantee of return on any scheme.
1. Professional Management: Fund manager are qualified and expert people who continuously analyze the performance of company and suggest best scheme option to investor.
2. Diversification: It gives an opportunity to investor to invest in different types of scheme rather than in one particular scheme. Thus it lower risk of loss by spreading money across various industries.
3. Affordability: It is most affordable way of investment. One can invest with minimum of Rs. 500 in a any systematic investment plan on regular basis.
4. Liquidity: With Open ended scheme investor can redeem all or part of investment at any time at current market price of scheme.
5. Transparency: The performance of mutual fund is reviewed by various publications and rating agency which help investor to compare performance of various schemes.
Disadvantages of Mutual Fund:
1. Cost despite negative returns: Investor must pay sales charges,annual fees, and other expenses regardless of how mutual fund perform.Iinvestor also has to pay taxes on any capital gains they receive.
2. Market Risk: Investment performance depend on current market condition of that scheme. If particular sector is in its low then the price of that scheme drops heavily.
3. No Guarantee of return: Mutual fund does not give guarantee of return on any scheme.
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