Importance of Mutual Fund Investment during Pandemic

The pandemic has given a reason to think about our financial planning in a more serious tone. People have become more aware of their savings now. Because of no consistent flow of money, the savings are now being used to meet the daily expenses . Therefore, the savings are needed to be invested wisely. This brings us to the importance of mutual fund investment.

According to research, the mutual fund industry saw an exponential rise in the investments during the pandemic. This shows that people are looking for ways of systematic investments.

Why Mutual Funds? – Importance of Mutual Funds

  • The market correction during the pandemic was seen as an investment opportunity by many. This is the reason the Mutual Fund industry saw an increase of 72 lakh investor accounts according to Association of Mutual Funds in India (AMFI). 
  • Another reason why people are switching to Mutual Funds is the low interest rate on bank deposits. Due to unattractive interest rates, many people moved to Mutual Funds. Also, this year was all about Work-From-Home. While people were not stepping out, their expenses saw a decline. This increased the saving part. So, people found Mutual Funds to be the best option to leverage their savings.
  • There are more than 2500 mutual fund schemes to choose from. There is something for everyone’s needs. According to your income, your goals and the level of risk you can take, a financial planner can suggest you the best of funds. 
  • The best part of investing in Mutual Funds is Customization. Your investment portfolio can be customized according to your needs. Also, any mid-changes that may be required due to unexpected circumstances, can easily be done. It’s that flexible.
  • People generally feel managing their finances to be a daunting task. This is because they have to manage multiple investments for their multiple needs – Education, Retirement, Tax Savings, Wealth creation, Paying off debt, and many more. But, the good news is that all these goals can be managed at one place – Mutual Funds.

A Financial Advisor can build a balanced portfolio that can meet all your needs. Also, a certified financial planner uses the best of his knowledge to bring you maximum returns while meeting your requirements and taking your income and risk factor into consideration. 

Many people are getting inclined towards Mutual Funds, due to the ease of investment and diversified schemes and the returns of course.

Sharing some real Portfolios

Following are some real portfolio examples of showing how people can gain by strategically planning their investments.

  • Portfolio 1 

Aggressive Investor – High Risk Taking Capacity – Investment Amount 5 Lakhs – Investment Tenure 5 years

 

– Large Cap 20 – 100000 Axis Bluechip Fund 15.95 – 209582

– Mid Cap 30 – 150000 ABSL Midcap Fund 10.81 – 250603

– Small Cap 50 – 250000 Franklin India Smaller Companies Fund 11.23 – 425647

 

  •  Portfolio 2

     

 Moderate Investor – Moderate Risk Taking Capacity – Investment Amount 500000 – Investment Tenure 5 years

 

– Large Cap 30 – 150000 Franklin India Bluechip Fund 11.40 – 257346

– Mid Cap 50 – 250000 HDFC Midcap Opportunities 15.01 – 503058

– Small Cap 20 – 100000 Axis Small Cap 18.23 – 231014

 

  • Portfolio 3 

 Conservative Investor – Low Risk Taking Capacity – Investment Amount 500000 – Investment Tenure 5 years

 

– Large Cap 50 – 250000 – ICICI Bluechip Fund 13.89 – 479036

– Mid Cap 20 – 100000 Franklin India Prima Fund 13.23 – 186126

– Small Cap 10 – 50000 Tata Small Cap Fund 20.46 – 126819

– Liquid Funds 20 – 100000 Franklin India Liquid Fund 6.25 – 135408

 

Likewise, one can design their own portfolio according to their needs and goals.

The Assets Under Management (AUM) of the mutual funds industry in India was recorded as Rs 31,42,764 crore as on March 31, 2021 which saw a growth of more than 5 folds over the last 10 years. The growth of the mutual funds industry and investor accounts is evident of the rising awareness among people for Mutual Funds. 

This is also because mutual funds give you the freedom to invest and withdraw your money anytime and from anywhere. Mutual Funds have proved to be the best investment during the pandemic period.

How Financial Friend can help ?

  • At Financial Friend, we critically examine your current investments, suggest the necessary corrections and re-design your portfolio as per your income, risk-taking and other factors. 
  • Customized portfolios are designed for wealth creation, tax saving, long term investments, short term investments and many more. 
  • Providing unbiased advisory is what we swear by. 
  • Consistent monitoring of the portfolios is carried on. 
  • Regular updates are provided.
  • There is complete flexibility for mid-term changes in the portfolio. 

Well begun is half done. So, take your first step to financial freedom. 

Click Here to start investment in Mutual Funds.