Answering 5 of the most commonly asked questions on mutual funds

1. How do I build wealth through mutual funds?

Say you invest Rs 15,000 each month for 15 years and the fund grows 15% annually, you’d accumulate Rs 92 lakh! That’s how mutual funds can help you build wealth in the long run.

2. How do I choose the best mutual fund?

Depends on you. Look for the fund that matches a) your future goals, b) investment horizon, and c) risk-taking capacity. Once done, look at their long-term record.

3. Which is a better form of investing in mutual funds – SIP or lump sum?

An SIP helps you invest during market highs and lows. With a lump sum investment, you are forced to time the market to get an optimal return. So, we suggest you opt for an SIP.

4. Should I stop my SIP when the markets are high?

You should continue your SIP regardless of market conditions. Over time, you will invest through highs and lows of the market. As a result, your investments average out.

5. How are equity funds taxed?

For equity fund investments that are over a year old, capital gains exceeding Rs 1 lakh will incur a 10% tax. If you sell before a year, the gains are taxed at 15%.

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