MF Investment: How to Make More Money Investing in Mutual Funds


Mutual funds have grown in popularity over the years. Investing in mutual funds seems to be the best option for those looking to grow their wealth quickly. Investing in mutual funds involves a number of risks, but diversification ensures that the risk is minimized to some degree.

It’s important to know why mutual funds are worth investing in before you get started to find out how they will help you build wealth.

Managing risk through diversification:

A mutual fund invests in a variety of stocks or bonds from different sectors or issuers, thereby diversifying risk. A diversified portfolio minimizes the risks associated with individual stocks and bonds.

Management by professionals:

It is the responsibility of professional fund managers to ensure that mutual funds are managed in accordance with their investment objectives. Research teams assist fund managers in stock picking and portfolio management.

Also Read: No-Fee EMI Scheme: Should You Go For It? Here’s what you need to know

Offer a wide range of solutions:

A wide variety of mutual funds are available to meet the investment needs and risk appetite of investors of varying levels of experience. The purpose of investing in equity funds is to meet long-term goals like retirement, children’s higher education, marriage, etc., while investing in debt funds is to meet short-term needs such as regular income or shorter investment periods. An investor with a variable risk appetite can choose a hybrid mutual fund that combines both stocks and debt.

Fiscal advantages:

The tax efficiency of mutual funds makes them an attractive investment option. Short-term capital gains (held less than 12 months) in equity funds are taxed at 15% and long-term capital gains (held for more than 12 months) at 10% (over Rs 1 lakh capital gains). Capital gains on non-equity funds are taxed at your income tax rate, while long-term capital gains on non-equity funds are taxed at 20% after indexing. Traditionally, interest income from fixed income investments is taxed at the investor’s income tax rate. Compared to traditional fixed income investments, mutual funds offer significant tax advantages to investors in higher tax brackets.

Tax Refund:

In order to take advantage of Section 80C tax benefits, you can invest in ELSS mutual funds.


There is no doubt that open-ended mutual funds are among the most liquid investments after bank deposits, and are far more liquid than investments such as life insurance plans, infrastructure bonds and postal systems. There’s usually no problem redeeming liquid, overnight, low-duration, ultra-short funds on the next business day.

How to get the most out of your investment?

All investors want high returns from their investments, but mutual funds don’t always deliver them due to market conditions. Despite this, there are a few strategies that can be used to maximize mutual fund returns.

Diversify your portfolio

To achieve risk-adjusted returns, you need a diversified mutual fund portfolio. Depending on the volatility of the stock market, all mutual fund categories and subcategories perform differently. By investing in a variety of instruments, you can reduce your risk. Additionally, investing in large, small, and mid-cap stocks will further broaden your portfolio. This can increase your return on investment over time.

Choose a SIP

Systematic Investment Plans (SIPs) are a great way to invest in mutual funds. Investments in SIPs are relatively low risk and tend to generate better returns even when markets are low. Plus, it can protect your investments from the effects of any potential market crashes. In SIPs, timing is not as crucial to achieving higher returns as in traditional investments. Additionally, SIPs generate higher returns because the interest is compounded. Investing in an SIP is also convenient because you can make small monthly payments and it won’t burden your financial planning.

Goal-Based Investments

The best way to invest in mutual funds is to set a specific goal. A financial goal can be to finance a child’s education, to buy a house or a car, or even to finance retirement. A reclassification can be made once the target objective has been achieved.

Assess your risk appetite

In the case of mutual fund investments, it is generally a good idea to consider your age when assessing your ability to take risks. You should invest most of your money in stock funds when you’re young. As you age, you should gradually reduce your investment in equity funds and invest more in debt securities. You can seek advice from a qualified financial planner.

It is extremely beneficial to regularly review the performance of your fund. As a result, you can make informed decisions about asset allocation and diversification of your investments. As a result, you will also be able to continuously assess your risk appetite and its impact on your financial goals. In addition, regular review of your fund’s performance ensures that your investment is active and in line with market conditions. You can use this knowledge to achieve higher returns over time.

An investment in a mutual fund could be the perfect solution for those who are in a hurry to reach a particular financial milestone. It is widely believed that investing early in life will help achieve financial goals and build wealth.

(By Abhinav Angirish, Founder,


About Author

Comments are closed.