Mutual funds

A mutual fund is an investment option where multiple investors combine their money into a shared pool. A professional fund manager then invests this collective sum across different asset classes, such as stocks, bonds, gold, and other securities, with the goal of generating returns. Any profits or losses from these investments are distributed among the investors based on their individual contribution to the fund.

Mutual Fund Advantages

Liquidity

Liquidity refers to how easily an investment can be bought or sold. Mutual Funds provide excellent liquidity, allowing you to buy or sell your holdings at any time, offering greater flexibility compared to many other investment options.

Expertly Managed

A significant advantage of these funds is that your investments are handled by experienced professionals with extensive expertise in managing portfolios and navigating the financial markets.

Returns

As with any investment, the success of these funds is evaluated based on the returns they generate. Historically, mutual funds have outperformed traditional investment options, offering the potential for higher returns over time.

Affordability

You can start investing in these funds with as little as $500, making it simple and accessible to begin building your portfolio without the need for a significant amount of money upfront.

Diversification

Mutual funds allow you to own a diversified portfolio of stocks, bonds, and other assets, even with a small investment. This diversification helps spread risk and offers greater stability to your investments.

Regulated

Mutual fund schemes operate under strict regulations that ensure transparency and accountability. These rules are in place to protect investors' interests and maintain fairness in the investment process.

Ways to Invest

Systematic Investment Plan (SIP)

SIP enables you to invest a set amount consistently over time. It’s widely regarded as a convenient and effective method for investing in mutual fund schemes. Additionally, SIP helps you average the cost of purchasing fund units, making it a smart investment strategy.

Lump Sum

A one-time investment is referred to as a lump sum. People typically make lump sum investments when they receive a significant amount of money, such as bonuses or proceeds from selling an asset.

Categories of Mutual Funds by Asset Class

Mutual funds are typically categorized according to the asset classes they invest in. Here are some common categories:

Equity Mutual Funds

Equity funds primarily invest in stocks, with the majority of their assets allocated to them. These funds are categorized according to the market capitalization of the stocks they hold.

Large-cap Funds

These funds dedicate a minimum of 80% of their assets to the largest 100 companies ranked by market capitalization.

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Mid-cap Funds

These funds allocate at least 65% of their assets to the companies ranked from 101st to 250th in terms of market capitalization.

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Small-cap Funds

These funds dedicate at least 65% of their assets to companies with a market capitalization ranking of 251 or higher.

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Multi-cap Funds

These funds allocate at least 25% of their assets to large-cap, mid-cap, and small-cap stocks, respectively.

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Debt Mutual Funds

Debt funds generate returns by investing in debt securities issued by corporations and governments. These funds are categorized according to the duration of the investment and the credit quality of the underlying debt instruments.

Market Funds

These funds achieve returns by providing short-term loans, typically with durations of up to one year, to businesses or government entities.

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Corporate Bond Funds

These funds generate returns primarily by lending at least 80% of their assets to companies with top-rated debt securities.

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Overnight Funds

These funds generate returns by offering loans to companies or governments with a maturity of just one business day.

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Liquid Funds

These funds earn returns by extending short-term loans to companies or governments with durations of up to 91 days.

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Hybrid Funds

Hybrid funds allocate investments across a combination of asset classes, such as equities, debt, and gold. They are further categorized based on the proportion of their investments in each asset class.

Agressive Hybrid

These funds have to invest at least 65% of their assets in equities while it can’t exceed 80%. The rest goes into debt.

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Multi-Asset Allocation

These hybrid funds allocate at least 10% of their total assets to each of at least three asset classes, such as equities, debt, gold, and others.

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Dynamic Asset Allocation Funds

Also referred to as Balanced Advantage Funds, these funds dynamically adjust their allocation between equities and debt, ranging anywhere from 0% to 100% in either asset class, based on their predefined investment strategies.

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Arbitrage Funds

These funds generate returns by capitalizing on price differences of securities across various markets.

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Getting Started with Your Investment Journey on World Fund

We simplify mutual fund investments with three easy steps, making the process convenient and fast:

Select your preferred fund

Complete your KYC and set up without the need for paperwork.

Simply make payment