Introduction:

There used be a time when people kept large sums of money in banks to increase its value, but today when where bank rates are going down and are mostly below the rate of inflation, it may not be the brightest of ideas. This is the age of investment. So look towards the stock market and start investing to gain profits.

Mutual funds in India will give you are great opportunity of doing so as it is cost efficient and also an easy way of investing. On the basis of their investment types mutual funds are classified into categories like close-end, open-end, large cap, mid cap, low cap, equity and balanced, growth, value, money market, no load funds etc.

Mutual funds in India:

The mutual funds in India are under the regulation of the Securities and Exchange Board of India. Following are some of the popular firms in India that deal in Mutual Funds. Some of them are reliance mutual funds, Kotak Mahindra, Lotus India, HSBC, State Bank of India etc.

Growth Funds:

Growth funds are the kind of mutual funds that are invested with an objective of increasing capital by way of investment in the growth stocks. The main frame are those companies which get great earning and growth in their revenue instead of only those companies that just pay dividends. Thus it is about the rapidly growing companies in the market.

The Reliance growth fund is an open ended equity growth scheme which has dividends, growth and bonus options under it. A minimum of Rs.5,000 can be invested under this scheme and the face value is Rs.10 per unit.

Advantages of investing in Mutual Funds:

Mutual funds in India are known for their process of easy investment and also for their cost effectiveness. The main advantage of investing by way of mutual fund is that the investor is able to buy the stocks at low rates or trading charges.

The second benefit that comes out of mutual funds is its diversification according to which the small investments are made at different places. This helps in balancing the losses with the profits so that there is a net gain and the investor does not have to suffer. Thus the risks that are involved with investing in the mutual funds are reduced to a large extent

For e.g. If you invest some money in reliance growth funds and it ensures you high profits within a short time span as it is a growth fund then its profit can subdue the effect of a loss that you suffer at any other place of investment of the mutual fund.

Other benefits that accrue out of mutual funds are variety, flexibility, liquidity; transparency etc. and they are generally not found in other investments in this manner.

Conclusion

There are certain risks associated with mutual funds in India. Like for e.g. when you invest in growth funds even the good ones like the reliance growth funds you may incur losses. The market may be volatile and the quick upwards and downwards movements due to inflation, interest rate change or the general economic scenario but if invested smartly there are going to be gains too.