What is a Mutual Fund?
A mutual fund is a professionally managed investment option made up of a pool of money collected from many investors for the purpose of investing in securities such as stocks, bonds, money market instruments and other assets.
What are the categories of Mutual Funds ?
There are multiple type of mutual fund schemes offered by many AMCs, the large categories are as below:
1. Equity: These are schemes that invest only in stocks.
2. Debt: These schemes invest in fixed income instruments such as debentures (bonds), Treasury Bills etc.
3. Hybrid: These schemes invest in a mix of stocks and bonds.
4. Tax Saver: These are equity mutual funds that provide tax benefits under Section 80C of the Income Tax Act and have a lock-in period of 3 years.
5. Gold: These are schemes that mainly invest in Gold ETFs and other related assets.
What is SIP or Lumpsum Investment?
There are two primary ways of investing in a mutual fund - Lumpsum (One Time Investment) and SIP (Systematic Investment Plan)
Lumpsum Investment: A lumpsum investment is a one-time investment made by an investor when he is looking to invest a certain amount of money at once.
SIP: A SIP (systematic investment plan) is a recurring investment made by an investor in the same scheme at regular intervals (monthly, weekly, etc.).
Which AMCs are available on Paytm Money?
Currently, you can invest in mutual funds from all leading AMCs on Paytm Money (listed below).
We are working towards bringing more AMCs onboard with Paytm Money.
List of AMCs on Paytm Money:
- Aditya Birla Sun Life Mutual
- Axis Mutual Fund
- Baroda Pioneer Mutual Fund
- Canara Robeco Mutual Fund
- DHFL Pramerica Mutual Fund
- DSP BlackRock Mutual Fund
- Edelweiss Mutual Fund
- HDFC Mutual Fund
- ICICI Prudential Mutual
- IDFC Mutual Fund
- Indiabulls Mutual Fund
- Invesco Mutual Fund
- Kotak Mahindra Mutual Fund
- L&T Mutual Fund
- LIC Mutual Fund
- Mirae Asset Mutual Fund
- Motilal Oswal Mutual Fund
- Principal Mutual Fund
- Reliance Mutual Fund
- SBI Mutual Fund
- Tata Mutual Fund
- UTI Mutual Fund
What are Mutual Fund Ratings?
A mutual fund rating is usually a measure of a fund's historical risk-adjusted performance over different time frames compared with the funds in the same category. Mutual Funds are independently rated by various rating agencies such as CRISIL, Morningstar and Value Research.
What does the Rating of a Mutual Fund signify?
Mutual fund ratings are designed to help investors quickly identify mutual funds to consider investing into. These ratings are based on their
- Historical performance
- Fund Manager
- Other such criteria
It serves to provide a snapshot of how the fund has performed relative to other funds in its category.
What are Direct Mutual Funds Plans? How are they different?
All Mutual Fund schemes have both Regular and Direct Plans. Paytm Money offers only Direct Plans to its investors. Direct Plans of Mutual Funds are free from any hidden commissions that are charged on your investments.
Simply put, this implies that investors get a better return (upto 1% p.a.) on their investments via Direct Mutual Funds on Paytm Money.
Regular Mutual Fund plans have a higher expense ratio, which means that a part of the amount invested by you is deducted and provided to distributors as commission.
What are Growth and Dividend options?
Growth Option: When investments are made under the - growth option, the payout is made only at the time of redemption of units. Growth schemes do not yield any short term income as all the money invested continues to be invested and compounds until redeemed.
Dividend Option: When investments are made under the dividend option, the payout to the investors is made from time to time, in addition to payout at the time of redemption. The interim payments made by the scheme are known as dividends. The scheme NAV (Net Asset Value) falls each time a dividend is paid out.