Mutual fund firms are expected to spend more than Rs 3.5 billion on advertising in 2018 to educate investors and debunk myths associated with the product, according to a new report by Livemint.
There is, however, no doubt that the interest of investors has surely increased. As per the latest data, the mutual fund industry garnered about Rs 58.93 billion in November 2017 through SIPs against Rs 38.84 billion collected in November 2016. The increased interest in SIPs can be attributed to the strong performance of equity schemes and investor education initiated by Amfi and mutual fund houses, Bajaj Capital CEO Rahul Parikh said as quoted by PTI.
But there are still some myths related to investing in mutual funds.
All MFs qualify for tax deduction
Incorrect. Only the Equity Linked Savings Scheme (ELSS) is eligible for tax deduction under Section 80C of Income Tax Act.
Need large amount to invest in MFs
This is not true. You can begin by an amount as low as Rs 500 through Systematic Investment Plan (SIP). And then you can contribute more as your income rises.
You will never lose money
There is no doubt that this is the best way to invest in equities with low risks involved. But, SIPs can also give lower returns than total sum invested in a rising market
You should be an expert to invest in MFs
Mutual funds are actually the best medium for people who don't understand investments. A good fund manager or adviser can simply choose the right scheme best suited to your profile.
Demat account is a must
It is not necessary. You can invest in MFs through online distributors or buy funds directly from fund houses.