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  MONDIAL MMX › Products ›› Mutual Funds


Mutual Funds

Mutual Funds

Mutual Funds are a good investment avenue if you are seeking a diversified portfolio that offers liquidity and transparency. Mutual Funds are managed by qualified and experienced professionals, who have access to the right research, market information and methodology to make sound investment decisions. At a high level, Mutual Funds are categorized into Equity, Debt or combination of both.

Equity Funds

These types of funds invest investor's money in equity shares. These funds work on the basic concept of 'high Risk, high Return'. Among all categories of products this type of funds have potential to generate highest return but investors have to face highest risk. As money gets invested in equity market, the performance of these type of funds largely depend on equity markets but fund managers due to their expertise and research tend to outperform benchmark indices over a long investment horizon.

Among equity funds, fund managers adopt different investment strategies and accordingly schemes can be divided. There are different schemes like Diversified funds, Large Cap / Midcap / Small Cap funds, Sector specific Fund, Index Funds etc.

Equity mutual funds are most suited for investment horizon of three years and above as in short term equity markets remain highly volatile.

Debt / Income Funds

These are the debt category of funds. They invest in fixed income generating instruments and that is why they are broadly called income funds. They invest in large universe of debt instruments like money market instruments, Treasury bills, Corporate bonds, Government securities etc.

The main objective of Income funds is to generate steady return at lower level of risk. Based on underlying assets and duration these funds can be classified in different categories like gilt funds and income funds. As name suggests gilt funds invest only in government securities where as income funds invest in corporate bonds and debentures along with Govt. securities. As gilt funds invest only in G sec there is no default risk involved. Both Income funds and Gilt funds are mainly affected by changes in interest rates in the economy.

Balanced Funds

As the name suggest, balanced fund invests in a mix of debt and equity. most balanced funds available in the market keep a minimum of 65% in equity. This qualifies them as an equity oriented fund and the are eligible for tax benefits on long term capital gains.

These schemes aim to provide investors with the best of both the worlds. Equity part provides growth and the debt part provides stability in returns.

Balanced funds aim to derive growth from equity component and stability from debt component. they can dynamically shift from one asset class to another as the markets change course - which is difficult for the individual to do with a combination of an equity and an income fund.

Liquid Funds

Liquid funds are used primarily as an alternative to short-term fix deposits or Savings account in Bank. Liquid funds invest with minimal risk (like money market funds). Most funds have a lock-in period of a maximum of three days to protect against procedural (primarily banking) glitches, and offer redemption proceeds within 24 hours. The minimum investment size in a liquid fund varies from Rs. 5000 to Rs 1 lakh.

Liquid funds invest in short-term debt instruments with maturities of less than one year. Therefore, they invest in money market instruments, short-term corporate deposits and treasury. The maturity of instruments held is between three and six months. A liquid fund provides good liquidity, low interest rate risk and the prevailing yield in the market. Liquid funds have an exit load if the investor redeems before the lock-in period. But in most cases, the lock-in period is quite low - varying from 7 to 15 days. Liquid funds score over short term fix deposits. Returns from Bank deposits are taxable depending on the tax bracket of the investor, which considerably pulls down the actual return. Dividends from liquid funds are tax-free in the hands of investor, which is why they are more attractive than deposits.

Mondial MMX Financial through it's "7 Pearl Methodology" will help you in identifying the right ratio of Debt and Equity based on individual's risk profile. We will construct your Mutual Fund Portfolio depending upon the Purpose, Duration, Risk appetite and expected return. We will identify best available Fund in the identified Mutual Fund Category. We will continue to monitor the Fund Performance and recommend any realignment through our Portfolio review process. We offer Comprehensive reporting package of individual client's portfolio through our Website.