Before learning the origin of mutual funds, let’s understand the basic hypothesis behind the working of it. When a bunch of investors with a common financial goal invest in a mutual fund, a pool of money is created. In order to yield returns to our investors’ portfolio, the money is later managed by professional fund managers, who invest in bonds, stocks & various other money market instruments.
The First Concept- Mutual funds are believed to be first traced back in the year 1774 by a dutch merchant Adriaan van Ketwich. Evidently, Ketwich was the owner of many brokerage offices. In the year 1772-73, his clients suffered a major loss, as an investment in the British East India Company didn’t turn out ideal.
Bearing the heavy loss in mind, Ketwich came up with the concept of diversification of investments. This eventually reduced the risk of loss to budding and existing investors. Back then the term fund was called “Eendragt Maakt Magt” which means “unity makes strength”. Later this concept evolved and bloomed in various forms around the world.
The Indian origin of mutual funds- Unit Trust of India (UTI), a platform created by the Reserve Bank of India and the Government of India, in the year 1963, was the onset of mutual funds in India. Their first mutual fund scheme was put to sea in 1964, which by the end of 1988 had 6,700 crores of assets under direction. In 1987 UTI saw the birth of public sector mutual funds. Sectors like Life Insurance Corporation of India (LIC), SBI Mutual Fund, Punjab National Bank Mutual Fund, Indian Bank Mutual Fund, Bank of Baroda Mutual Fund & many more surfaced. By the end of 1993, the mutual funds industry grew the value of the assets to 47,004 crores. In 2003, the second UTI mutual fund was created. Sponsored by the public sectors (LIC, BOB, PNB, and SBI) it got registered with SEBI guidelines under the Mutual Fund Regulations.
With the advancement of technology, mutual funds bloomed to yield more growth. There are numerous apps, blogs, books, write-ups & now podcasts, that help investors grow knowledge around mutual funds and bonds. One of such is Scripbox, a mutual fund app that helps you not only in your portfolio building but also assists with tax-saving and tracking your financial growth. It also comes with a free sip planner, which tremendously helps in wealth management, tax-saving, and smart investing. At Scripbox mutual funds are scientifically and algorithmically selected, hence helping you in goal-based investment.
From careful thinking by Ketwich in 1774 to podcasts on mutual funds in 2021, we have come a long way. Ancient remains the concept of risk diversification but the tools grew more advanced and easy as we walked through the timeline. “Mutual funds are safe!” They have been saying since 1774, and the advocates of this statement are counting vividly.
With countless Mutual Fund distributors competing for your business, you can be attracted to select a Mutual Fund Distributor based on the service alone.
It is often even a lot more vital when you’re investing in a long-term product like Mutual Funds and stocks.Download the best Mutual Fund App in India at – https://www.imperialfin.com/mutual-fund-investment-app/ The perfect investment company can even change depending on what kind of investments you’re looking for.
Here are some of the prominent tips that you should consider when selecting a mutual fund investment distributor in Nagpur, India.
Don’t Select a Company As Per Initial Service Quotes:Undoubtedly, Service is an extremely vital factor when selecting Mutual Fund Investment Company in India.
You need to know that after the service has been fully given, which means all your personal and family details have been assessed, you could attain a final and higher service quote from a mutual fund Distributor Consider Financially Stable Companies: When purchasing funds, you enter into a contract for a long period.
Some companies have found they can offer much better return rates to people with specific market conditions and still be profitable.
Debt mutual funds have been increasingly popular in the recent years.
Different types of debt mutual funds:
Over the years, debt funds have evolved into something very broad.
Liquid funds are generally used by investors to park excess amounts of money for a short period of time.
Though this may seem less than other debt funds, liquid funds actually have a lot of benefits such as liquidity, etc.
Such funds are suitable for those with a low to moderate risk appetite, and a short-term investment horizon.
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