The biggest benefit of mutual fund

With the fund industry brainstorming hard to woo fence-sitting investors into mutual funds, suggestions have been flying to and fro on what mutual fund features should be highlighted in mutual fund advertisements. The power of equities, the benefits of compounding, the wealth-creation potential of SIPs and explaining market risks seem to be some popular choices. But mutual funds offer one big benefit that makes a big difference to investors and leaves all other asset classes in the dust. That feature is anytime liquidity. Open-end mutual funds are the only investment product where the vendor offers to buy back your entire investment at a transparent price at the time of your choosing. As investors in open-end funds, we often take anytime liquidity for granted. But we realise its true value only when we try to liquidate our other assets and come up against a wall. Really illiquid The months after demonetisation have shown us how the property market can malfunction during sudden shocks to the financial system. However, buying or selling apartments or plots of land was never easy even before this event. Illiquidity is also the primary problem most of us encounter when we try to cash in on the jewellery stashed

This article was originally published on August 27, 2018.