A Mutual Fund is a trust that pools the savings of a number of investors who share a common financial goal. The money thus collected is then invested in capital market instruments such as shares, debentures and other securities. The income earned through these investments and the capital appreciation realized is shared by its unit holders in proportion to the number of units owned by them.

Thus a Mutual Fund is the most suitable investment for the common man as it offers an opportunity to invest in a diversified, professionally managed basket of securities at a relatively low cost.

What is a Systematic Investment Plan?

SIP or Systematic investment plan refer to the practice of investing a constant amount regularly, generally every months.SIP ensures that the investors’ acquisitions costs are approximated to the average NAV, as when the market will go up more units will be bought and when the markets come down fewer units will be bought. However it does not offer protection from losses.

How does it work?

A SIP is a flexible and easy investment plan. Your money is auto-debited from your bank account and invested into a specific mutual fund scheme. You are allocated certain number of units based on the ongoing market rate (called NAV or net asset value) for the day.

Every time you invest money, additional units of the scheme are purchased at the market rate and added to your account. Hence, units are bought at different rates and investors benefit from Rupee-Cost Averaging and the Power of Compounding.

For more information and personalized advice, please contact Wealth Max. Our team of experts is ready to assist you with your financial planning needs. Reach out to us today to take the next step towards achieving your financial goals.

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