Of late, Indian Mutual Funds have attracted every investor's
attention. It is the best option for retail investor because
it diversifies the portfolio by investing in various securities
and minimizes the risk. It maximizes the opportunities and
it is affordable by all as the minimum investment in MF
is just Rs. 500. It provides liquidity as well as tax benefits
to the investors. The investor gets regular information
on the value of his investment, and that way the transparency
is maintained. Moreover, MFs are subject to many government
regulations that protect from fraud and they are professionally
managed.
MFs in India have stepped on the accelerator and it is
boom time for them. In the last five years, the performance
of most of the MFs in India was better than the indices.
Two out of every three diversified equity funds have beaten
the BSE 500 index in the last five years.
MF companies in India are influencing the retail investors
to invest their surplus funds with or without complete understanding
of MF. The article titled, "Mutual Fund Investment
Preferred or Induced?" by Raju ISSN, looks at whether
MF is preferred by retail investors or they are influenced
by the trend of investing prevailing (induced) in the market.
Further, the article explores the factors influencing the
retail investor to invest in MF schemes. It also seeks to
understand the role of Sebi in safeguarding the interest
of retail investor in MF.
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