Explore India’s Top Mutual Funds

Frequently asked questions

Q1. What is a mutual fund?

A mutual fund is an investment vehicle that pools money from multiple investors to invest in a diversified portfolio of stocks, bonds, or other assets.

Q10. What is an Expense Ratio and why does it matter?

The expense ratio is the annual fee charged by the fund house to manage your investments. A lower ratio means more of your money stays invested, improving returns over time.

Q2. Are mutual funds safe to invest in?

While mutual funds carry some risk depending on the fund type, they are regulated by SEBI in India and managed by professional fund managers to balance risk and returns.

Q11. What are exit loads in mutual funds?

An exit load is a fee charged when you redeem your mutual fund units within a specific period (usually 1 year). It’s meant to discourage early withdrawals.

Q3. What are the types of mutual funds available?

• Equity Mutual Funds

• Debt Mutual Funds

• Hybrid Funds

• Tax-saving ELSS Funds

• Index Funds

Q11. What are exit loads in mutual funds?

An exit load is a fee charged when you redeem your mutual fund units within a specific period (usually 1 year). It’s meant to discourage early withdrawals.

Q4. How do I start investing in mutual funds?

You can start investing through a verified platform or financial advisor. A PAN card, KYC, and bank account are required to begin.

Q12. How is SIP different from lump sum investment?

• SIP (Systematic Investment Plan) spreads investment over time, helping average out market volatility.

• Lump sum involves investing a large amount at once, which may be riskier but can yield better results in bullish markets.

Q5. What is the minimum amount to invest?

You can begin with as low as ₹100 via SIP (Systematic Investment Plan), depending on the fund.

Q13. What is NAV and how often does it change?

NAV (Net Asset Value) is the per-unit price of a mutual fund. It is calculated daily after the market closes and reflects the fund’s current value.

Q6. How are returns calculated in mutual funds?

Returns are based on NAV (Net Asset Value) appreciation. Gains are either distributed (in dividend plans) or reinvested (in growth plans).

Q14. How do mutual funds manage market risk?

By diversifying investments across sectors, market caps, and asset types, mutual funds reduce the impact of individual asset volatility.

Q7. Are mutual fund returns taxable?

Yes. Returns from mutual funds are subject to capital gains tax depending on the holding period and type of fund.

Q15. What is portfolio rebalancing in mutual funds?

Rebalancing involves adjusting the fund’s holdings to maintain the desired asset allocation in response to market movements or investor goals.

Q17. What is a Fund of Funds (FoF)?

FoFs invest in other mutual funds instead of stocks or bonds directly. They offer diversification but may carry higher expenses due to layered fees.

Q8. Can I withdraw my money anytime?

Yes, unless it’s a lock-in period fund like ELSS (3 years), you can redeem your investments partially or fully at any time.

Q9. What is the difference between Direct and Regular Mutual Funds?

• Direct plans are bought directly from the AMC with no commission, resulting in higher returns.

• Regular plans are purchased through intermediaries or distributors, which include commissions, leading to slightly lower returns.

Q18. How do I choose the right mutual fund?

Evaluate based on your financial goals, risk tolerance, fund type, past performance, expense ratio, and the credibility of the AMC (Asset Management Company).