Ever wondered what’s a guaranteed path to get rich? What looks like a straight path is a simple two-step process - saving and investing. Saving is the easier of the two steps, but when it comes to investing, one, people have apprehensions, and two, there is risk involved. Mutual Funds are an excellent way to tackle this risk and grow wealth over time.
This blog aims to inform you about the various types of mutual funds categorized on the following grounds:
When one invests via a mutual fund distributor, one invests in regular funds. Regular funds tend to have a higher expense ratio to compensate for the commission paid by the AMC to the distributor. On the other hand, direct plans have a lower expense ratio as there is no intermediary; you engage directly with the fund house. If you invest via your financial advisor, a regular plan suits you; otherwise, a direct plan is much better to reduce expenses.
Most AMC has a disclosure that the fund may fail to achieve its goals, and hence one should perform proper due diligence before investing.
IDCW stands for Income Distribution cum Withdrawal. These are plans where the AMC periodically distributes profit to its unitholders via the declaration of annual dividends. These are suitable for people looking for a regular income stream from their investments.