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Is it wise to invest in different mutual fund companies or just one?
Is it wise to invest in different mutual fund companies or just one company for maximum returns? My reason is that in case Company A fails, I still have a backup with other companies.

                 What is your opinion on this, will it matter if I invest in different companies? What are the chances that a mutual fund company will actually fail/close?

Best Answer - Chosen by Voters
Mutual Fund companies tend to not fold, but I can understand your concern. But generally when people invest in funds they look at different types of funds - like large cap domestic, international, small cap domestic, emerging markets, etc. It certainly can't hurt you to go with different fund companies.

I suggest you take a look at index funds - Vanguard and Fidelity have some good ones. They invest in a variety of markets and beat mutual funds over time. They also have low expense ratios. So if you want to look at seperate fund companies take a look at some of Vanguard's index funds
ANSWER2

Mutual funds are diversified to an extent. It is always good to diversify even if it's between different fund managers. Also it's good to get different investments working for you why not have some CDs and bonds as well. It never hurts to have a small amount of income investing to go with your growth investing

ANSWER3

Its a better idea to invest in more than 1 mutual fund. Yes MF is about diversification but you also need to diversify across mutual funds and across types of funds as well.

You may want to look at different sectors based on their performance; you may want to look at short term/long term funds, etc.

Dont diversify too much or management and tracking will become too much to handle

ANSWER4

The big companies are fairly secure, so failure is probably not the issue.

One thing to consider is how much money youare investing. If you have it between two companies, both will charge a maintenance fee, and you won't qualify for "break-points", which is the level where you get reduced commissions. Also, within a fund family, you can generally exchange from one fund to another without commissions. Just a few thoughts.

CHARACTERISTICS OF MUTUAL FUNDS

1: Investors purchase mutual fund shares from the fund itself( or through a broker for the fund) instead of from other investors on a secondary market, such as the New York Stock Exchange.

2: The price of investor’s pay of mutual fund shares is the fund’s per share ANV plus any share holder fees that the fund imposes at the time of purchase.

3: Mutual fund shares are “redeemable”, meaning investors can sell their shares back to the fund

4: Mutual funds generally create and sell new shares to accommodate new investors. In other words, they sell their shares on a continuous basis, although some funds stop selling when , for example they become too large

5: The investment portfolios of mutual funds typically are managed by separate entities known as “investment advisers” that are registered with the SEC

Mutual Fund-Keys to remember

1: mutual funds are not guaranteed or insured by the FDIC or any other Govt: agency.-even if you buy through a bank and fund carries the banks name. You can lose money invest in mutual fund

2: Fast performance is not a reliable indicator of future performance so don’t be dazzled by last years high returns. But fast performance can help you assess a fund volatility overtime.

3: All mutual have costs that lower your investment returns. Shop around, and use the SEC’s Mutual Fund Cost Calculator at www.sec.gov/investor/tools.shtml to compare many of the costs of owning different funds before you buy.

How does SIP works?

You can enroll for an SIP directly without having to make a one-time investment. Suppose you enroll for a SIP of RS per month for one year in January 2008. Your first investment will be for Rs500 and units will be allotted. As it takes time for an SIP document to be processed with banks, your SIP installments may start latest by March. A few fund house also allow SIPs in their new fund offer (NFO) period. This way, if you like a particular NFO, you do not have to wait for a-month-and-a-half to start an SIP.

You can use a SIP in two ways:
1: By issuing the required number of post-dated cheques, or

2: By authorizing your banker to debit your account on a specific date of a month for the SIP period chosen by you, also known as auto debit facility. This is a more convenient way to invest in a SIP.

Assume you invest Rs1000 every month and your SIP date is the first of every month. On this date, every month, the appropriate number of unit will be credited to your MF account. As your monthly contribution remain the same, if the market and, therefore, your fund’s net asset value NAV) goes up , you will get fewer units; if your fund’s drops you will get more units.

Computing your returns:Ultimately, you need to know the returns you have through your investments. Its easy to calculate returns if it’s a one-time investment because you simply calculate the percentage between the two values.(cost price and selling price) and then annualize it if the time period is more than a year. But how do you do it in a SIP, where there are multiple values, one for each month? Using the XIRR function in Microsoft Excel, You can calculate returns with irregular payments. The IRR’ of X1RR stands for internal rate of return and denotes the interest rate accrude on a investment where there is a series of payment.(SIP installment) and an income (redemption) at the end.

What is SIP?

An SIP is a facility offered by all mutual funds for investing in equity funds. It requires you to invest a fixed sum of money periodically,say monthly,or quarterly,in an equity fund of your choice.The amount can be low as Rs 500 or Rs 1000. Your SIP should last for a minimum of six months.So even if you do not have a lumpsom to commit at the start, you can make a small beginning using an SIP,and then continue to invest periodically.The approach here is similar to investing regularly,every month,in recurring deposits of banks and post offices.However, a SIP gives you the long-term benefit of equity investing.

How to buy and sell SHARES?

You can purchase shares in some mutual fund by contacting the fund directly. Other mutual fund shares are sold mainly through brokers,banks,financilal planners,or insurance agents. All mutual funds will redeem(or buy-back) your shares on any business day and must send you the payment within 7 days.

The easiest way to determine the value of your shares is to call the fund's toll-free number or visit the website. The financial pages of major news papers sometimes print the NAVs for various mutual funds. When you buy shares , you pay the current NAV per share plus any fee the fund assesses  at the time of purchase,such as a purchase sales load or other type of purchase fee. When you sell your shares, the fund will pay you the NAV minus any fee the fund assesses at the time of redemption,such as a deferred(or back-end) sales load or redemption fee.A fund's NAV goes up or down daily as its holdings change in value 

WHAT IS MUTUAL FUND?

A MUTUAL FUND IS A COMPANY THAT POOLS MONEY FROM MANY INVESTORS AND INVESTS THE MONEY IN STOCKS,BONDS,SHORT-TERM MONEY-MARKET INSTRUMENTS, OTHER SECURITIES OR ASSETS, OR SOME COMBINATION OF THESE INVESTMENTS. THE COMBINED HOLDINGS THE MUTUAL FUND OWNS ARE KNOWN AS ITS PORTFOLIO. EACH SHARE REPRESENTS AN INVESTOR'S PROPORTIONATE OWNERSHIP OF THE FUND'S HOLDINGS AND THE INCOME THOSE HOLDINGS GENERATE.  

ABOUT MUTUAL FUND

OVER THE PAST DECADE,  INVESTORS INCREASINGLY HAVE TURNED TO MUTUAL FUNDS TO SAVE FOR RETIREMENT AND OTHER FINANCIAL GOALS. MUTUAL FUNDS CAN OFFER THE ADVANTAGES OF DIVERSIFICATION AND PROFESSIONAL MANAGEMENT. BUT,AS WITH OTHER INVESTMENT CHOICES, INVESTING IN MUTUAL FUND INVOLVES RISK. AND FEES AND TAXES WILL DIMINISH A FUND'S RETURNS. IT PAYS TO UNDERSTAND BOTH THE UPSIDES AND DOWNSIDES OF MUTUAL FUND INVESTING AND HOW TO CHOOSE PRODUCTS THAT MATCH YOUR GOALS AND TOLERANCE FOR RISK. 

MUTUAL FUND DEPOSIT IS A GOOD INVESTMENT SCHEME

Mutual Funds - The Logic behind Investing in Them
Mutual funds are investment companies that pool money from investors at large and offer to sell and buy back its shares on a continuous basis and use the capital thus raised to invest in securities of different companies.

Is it possible to diversify investment if invested in mutual funds?
Find more on the working of mutual fund
Know more about the legal aspects in relation to the mutual funds
At the beginning of this millennium, mutual funds out numbered all the listed securities in New York Stock Exchange. Mutual funds have an upper hand in terms of diversity and liquidity at lower cost in comparison to bonds and stocks. The popularity of mutual funds may be relatively new but not their origin which dates back to 18th century. Holland saw the origination of mutual funds in 1774 as investment trusts before spreading to Anglo-Saxon countries in its current form by 1868.

We will discuss now as to what are mutual funds before going on to seeing the advantages of mutual funds. Mutual funds are investment companies that pool money from investors at large and offer to sell and buy back its shares on a continuous basis and use the capital thus raised to invest in securities of different companies. The stocks these mutual funds have are very fluid and are used for buying or redeeming and/or selling shares at a net asset value. Mutual funds posses shares of several companies and receive dividends in lieu of them and the earnings are distributed among the share holders.
A Brief of How Mutual Funds Work
Mutual funds can be either or both of open ended and closed ended investment companies depending on their fund management pattern. An open-end fund offers to sell its shares (units) continuously to investors either in retail or in bulk without a limit on the number as opposed to a closed-end fund. Closed end funds have limited number of shares.

Mutual funds have diversified investments spread in calculated proportions amongst securities of various economic sectors. Mutual funds get their earnings in two ways. First is the most organic way, which is the dividend they get on the securities they hold. Second is by the redemption of their shares by investors will be at a discount to the current NAVs (net asset values).
Are Mutual Funds Risk Free and What are the Advantages?
One must not forget the fundamentals of investment that no investment is insulated from risk. Then it becomes interesting to answer why mutual funds are so popular. To begin with, we can say mutual funds are relatively risk free in the way they invest and manage the funds. The investment from the pool is well diversified across securities and shares from various sectors. The fundamental understanding behind this is not all corporations and sectors fail to perform at a time. And in the event of a security of a corporation or a whole sector doing badly then the possible losses from that would be balanced by the returns from other shares.

This logic has seen the mutual funds to be perceived as risk free investments in the market. Yes, this is not entirely untrue if one takes a look at performances of various mutual funds. This relative freedom from risk is in addition to a couple of advantages mutual funds carry with them. So, if you are a retail investor and planning an investment in securities, you will certainly want to consider the advantages of investing in mutual funds.
Lowest per unit investment in almost all the cases
Your investment will be diversified
Your investment will be managed by professional money managers

EARN 30000 MONTHLY WITHOUT ANY INVESTMENT

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MUTUAL FUND SCHEMES

Ethical Flavour in MFs
The concept of a socially responsible fund was hitherto unknown to Indian investors. Ethical funds, as they are popularly called, cater to the need of a population segment with personal ethical codes, which are not in line with normal investment practices. These funds consider environmental, social and animal cruelty issues before investing in a company
For Children - With love from MFs
Mutual Fund schemes focusing upon the clientele in select age group are not common as of now. However in recent times various mutual funds have lined up schemes targeting children. Presently we have Children’s schemes from UTI, Kothari Pioneer, HDFC, IDBI and Tata Mutual Funds.
How to evaluate a Pension Plan
There are many options available to an individual intending to plan for his retirement. Be it PPF, ULIP, NSC’s etc. Most retirement options fall into two categories,-those which promise a fixed assured return and those, like pension plans, which offer non-assured returns. At present, UTI Retirement Benefit Plan and Kothari Pioneer Pension plan fill the retirement mutual fund void.
ELSS - A good tax Planning instrument
Though promising easy liquidity and a positive stance towards interest rates, the RBI has nevertheless not ruled out the possibility of quick reversal in current policy thus signifying its intents to keep in tune with external changes in the international monetary system.
Squeezing liquidity out of liquid funds
Though promising easy liquidity and a positive stance towards interest rates, the RBI has nevertheless not ruled out the possibility of quick reversal in current policy thus signifying its intents to keep in tune with external changes in the international monetary system.
Advantage of mutual funds
Mutual Funds continue to be unique financial tools in India. Periodic gyrations are as true for stock markets as for mutual funds. Why not apply the same logic to Mutual Funds? Mutual Funds have not failed in any country where they work within a regulatory framework. Their futuBet your money on diversified funds
The average appreciation of the top-50 scrips was 9.7 per cent. Only 17 of these managed to better the diversified mutual funds average score. Not more than 10 could outperform the top fund, and about 25 were worse off than the worst-performing fundre is bright.