Mutual Funds: Why Diversification of MF Portfolio is Important for Your Investment Goals?

According to Amit Gupta, MD, SAG Infotech for Mutual Funds, in order to achieve their investment objectives, professional fund managers must ensure that they are managed properly. “Investors with varying levels of experience can choose from a variety of mutual funds to suit their investment needs and risk appetite,” he added.

Tax Benefits of Mutual Funds

tax benefits of mutual fundThey are important for investors in higher tax brackets than traditional fixed-income investments. “You can invest in ELSS Mutual Funds to avail Section 80C tax benefits. Mutual funds, such as life insurance schemes and infrastructure bonds, are among the most liquid investments after bank deposits,” said Amit Gupta.

diversify your portfolio

According to Dr. Ravi Singh, Vice President and Head of Research, Share India, the best way to reduce portfolio risk and increase profitability is through diversification which can only be achieved through mutual fund investments. It provides an individual investor exposure to multiple stocks at a low cost and convenience managed by portfolio managers.

Gupta said it is important to diversify your mutual fund portfolio to get risk-adjusted returns. Despite the low market, SIP investment gives higher returns.

How to get the most out of your investment?

All investments should be viewed in the context of your overall return objective in the light of your risk appetite. Vivek Iyer, Partner, Grant Thornton India, said that taking on higher risk would mean that equity exposure would be a good way to achieve your portfolio objective. Taking less risk would mean investing in gilts would be a good asset allocation.

He said in an ongoing tight rate cycle globally, allocation of short-term assets and defensive stocks through a balanced portfolio would be a more balanced route for investors with low to medium risk.