. Liquidity andFlexibility: When an investor invests in open-ended mutual funds, they caneasily redeem their investment anytime by selling their units and get theintrinsic value. This provides the ability to get in and out of mutual fundswith relative ease.
Investors can easily transfer their holdings from onescheme to other, get updated market information and so on. Funds also offeradditional benefits like regular investment and regular withdrawal options.2. ProfessionalManagement: When you buy a mutual fund, you are also choosing a professionalmoney manager who has the education, skills, and resources to research diverseinvestment opportunities. This manager will use the money that you invest tobuy and sell stocks that he or she has carefully researched. Therefore, ratherthan having to thoroughly research every investment before you decide to buy orsell, you have a mutual fund’s money manager to handle it for you. They willalso monitor performance and make adjustments to the changing economic marketcycles.
3. Tax SavingBenefits: Mutual funds can be tax-efficient investment avenues that can helpreduce your tax burden and at the same time increase your wealth. ELSS –(Equity Linked Savings Schemes) – An Ideal Tax-saving Instrument offers an easyoption to obtain tax benefits and an opportunity to harness the potentialupside of investing in the equity market. Dividends declared under the ELSSscheme during the investment period are tax-free.
The profits from the sale ofELSS units are treated as long-term capital gains and are not subject to tax.This results in providing increased saving habit among investors.4. Affordability:Most mutual funds set a relatively low dollar amount for initial investment andsubsequent purchases. A mutual fund account can be opened, through yourFinancial Advisor, with a relatively small amount of money to make it easier toget started. Also, you can arrange to make low pre-authorized monthly paymentsto your account so you can keep investing.