Mutual funds have many benefits

Some of them are...

Diversification

Most investors don't understand the stock market in depth. They benefit from mutual funds because of dedicated and expert fund managers who take required decisions for investors.

Professional Management

Most investors do not know about the capital market in depth. They can benefit from mutual funds because of dedicated and expert fund managers who take required decisions on behalf of the investors.

Transparency

All asset management companies provide scheme-related details like past performance, expense ratio, portfolio, NAV and so on on a regular basis.

Security

Securities and Exchange Board of India (SEBI), regulates mutual funds schemes closely. So, there is a sense of security as well.

Liquidity

Barring few schemes, most funds do not have a lock-in. So, you can redeem your investment anytime. Just be carefull of the exit load and the tax implications.

Compounding

You can earn interest on the interest, and your wealth grows in multiples.

Affordability

Mutual funds are an investment vehicle appropriate even for small investors with limited funds to invest.