I usually oppose the investments in mutual funds due to these reasons. Primarily, it being heavy fees and charges in the name of fund management, yet no guarantee of any sure shot returns. However, markets are large and millions and billions of market participants are still favoring mutual fund investments, without caring for high amount of mutual fund fee and administration charges.
Low Cost Mutual Funds
So if you invest in mutual funds, you must pay attention to fees and fund management charges. It’s as simple as that -“If you can manage to save even 0.5% from your fund management fees it results in saving thousands if you stay invested over a long period of time. Hence, in this article let me discuss some Low Cost Mutual Funds, which can be used as efficient investment vehicles and provide savings in terms of low cost mutual fund fees if you decide to invest in fund for long time.
There are many such articles available on internet with the details of Low Cost Mutual Funds. In this article, I’ll attempt to put up a summary of all the available Low Cost Mutual Funds. They are selected based upon the past performance of the mutual funds over last few years.
I am putting the Low Cost Mutual Funds in the following categories:
Low Cost Mutual Funds – Index Funds:
These mutual fund offerings called Index Funds are designed to track the results of a benchmark like the BSE index, etc. These funds are good for investors who cannot understand the complex jargon of mutual fund prospectus and don’t have time to do research. Index funds always attempt to be with the market performance of the underlying index, hence they make good investment. Since index products are relatively static they feature little turnover that can trigger capital gains and they charge the lowest fees in the mutual-fund world.
Low Cost Mutual Funds – Exchange Traded Funds ETF:
Though not exactly like a mutual fund, but they are similar. They more or less track the performance of the underlying index without much deviation, as trading on ETF goes on in real time on stock exchanges like any other shares.
Low Cost Mutual Funds – Growth Funds:
Growth Funds are those which try to achieve capital appreciation by investing in companies which utilize investor’s money into profitable projects. These companies do not pay regular dividends, but invest the income back into profit making projects, thereby generating growth.
Low Cost Mutual Funds – Value Funds:
Value Funds are those which usually pay a lot of dividends to the investors regularly.
Low Cost Mutual Funds – International Mutual Funds:
Apart from the Indian domestic funds, the International funds from US, China, Latin America, Europe and other foreign countries are also attractive. More so, investing in international funds helps you achieve diversification. Though International Mutual Fund tends to charge more because of the administration and money transfer across the globe along with the forex risk, there are still some good funds which charge relatively less.
Hence, making an investment in a mutual fund is based upon investor’s preference. Selecting a Low Cost Mutual Funds to suit your needs is also important. Better to cut down on costs if you can find such a Low Cost Mutual Funds.
Would be nice if u explain Mutual funds in more detail and how similar/diff they are to shares.
I believe SEBI recently changed some rules related to Mutual Fund Entry Load Fee –Check that out
@Sudhix : I shall write more about it.
@Bidhan : Yeah, I have to look into it and update the information in coming posts.