Mutual Fund

What Is A Mutual Fund?
Achieve A Common Investment Objective

A mutual fund is an investment vehicle that mobilises funds from different investors to achieve a common investment objective. Funds are raised by selling the fund's units, which represent contributions to the mutual fund corpus. The fund invests this money into various assets such as stocks, bonds, money market instruments, real estate, gold, etc.

Fund managers professionally manage mutual funds, and invest the pooled money according to the scheme's objectives to make financial gains. They distribute returns from the mutual funds proportionately among investors after deducting the applicable fees also called the expense ratio.

The most significant advantage of mutual funds is that they allow retail investors access to a diversified portfolio of financial securities (stocks, bonds, and more). This level of diversification would be challenging for most investors as they would need a substantial amount of capital. Other benefits include their professional money management and strict regulation by SEBI.

How To Invest In
Mutual Funds With
RxStox

The Fund Invests Money
Into Various Assets

RxStox makes investing easier and accessible for everyone.
It takes only minutes to sign up and explore the best-performing
mutual funds across different categories. To invest from anywhere,
download the RxStox app on your smartphone and follow these below
mentioned steps to invest in mutual funds through RxStox:

Sign Up

View Invest Section

Go to the Invest section and select the mutual fund category you want to explore.

Find The Results

You Can Type In The Name of the mutual fund scheme or sort the results.

View Details Of Fund

Click on the fund's name to view its details (NAV, expense ratio, AUM, etc.)

Make A Choice

Choose whether to invest via SIPs or lump sum and enter the investment amount.

Add Payment

Confirm your order and complete the payment.

What Are The Different Types Of Mutual Funds?
Each Designed To Suit Different Investment Goals.

There are many types of mutual fund schemes in India, each designed to suit different investment goals. Based on their structure, there are open-ended and close-ended funds. Depending on the fund manager's role, mutual funds can also be active or passive. The following is a broad classification of mutual funds based on the underlying asset class and investment objectives.

Equity Funds

These funds invest most of their assets in stocks and related instruments. Returns from equity funds largely depend on the current stock market climate. Equity funds are ideal for investors looking for high returns and have a higher risk tolerance.

Debt Funds

Debt funds invest primarily in fixed-income instruments like government securities, treasury bills, corporate bonds, debentures, certificates of deposits, etc. They aim to provide regular and stable returns while protecting your capital.

Hybrid Funds

Hybrid funds invest in stocks and debt to offer balanced returns and risks. Their asset allocation will differ based on their mix of equity and debt.

Solution-Oriented Funds

These mutual fund schemes aim to build wealth investors for achieving their long-term goals like children’s education or retirement plans. They carry a lock-in period of at least 5 years or the retirement age whichever is earlier.

Index Funds

Index mutual funds replicate the index which they are following, a mutual fund following Nifty 50 will invest in those 50 stocks, which comprise the Nifty 50. Index funds due to their historic performance are one of the most popular investment options amongst investors.

Other Funds

include ETFs (Exchange Traded Funds), ELSS mutual funds, and FoFs (funds of funds), etc.

Benefits of Investing in Mutual Funds
Here’s Why So Many Investors Choose To Invest In
Mutual Funds

Professional Money Management

Most investors neither have the time nor the expertise to pick individual stocks and bonds. Professional fund managers run mutual funds and make investment decisions pertaining to the mutual fund. They have the experience, resources, and time to monitor your investments continuously and rebalance your portfolio if needed.

Portfolio Diversification

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Highly Liquid Investment

Affordability

Strictly Regulated

Things To Check Before Investing In Mutual Funds
Before You Invest In Mutual Funds, Here Are Some
Of The Factors You Will Need To Check

Fund’s Past
Performance

Different categories of mutual fund schemes carry different risks depending on their asset allocation and investment objective. You will want to check if you are comfortable with the risk levels and investment objectives of a fund before investing.

Fund Manager’s
Track Record

The expense ratio is an annual charge imposed by AMCs to cover a mutual fund scheme's managerial and operating costs. It is essential to check the fund's expense ratio as a high fee will considerably reduce your returns.

Your Financial
Goals

You will want to invest in a mutual fund best suited for your investment goal, whether to fund your children's education or build a retirement corpus. Even if you do not have a clear goal, you can decide based on factors like investment time.

Risk Level

Expense Ratio

Frequently Asked Questions
The Fund Invests Money Into Various Assets

A. What is the meaning of the NAV of a mutual fund?

Net Asset Value or NAV is the price of a unit of a mutual fund scheme at which an investor can buy or redeem their mutual fund investments. The combined NAV of all the units of a particular mutual fund scheme represents the combined market value of all assets held by a fund on a particular day plus the accrued income minus its expenses and liabilities.

B. How is a mutual fund set up in India?

C. What is the AUM of a mutual fund scheme?

D. What is the difference between direct plans and regular plans?

E. Why would you want to invest in mutual funds via SIPs?