Why did investors move towards mutual funds during the Corona era?

The coronavirus has caused outrage all over the world and due to this, the global economy has been badly affected. India is also not untouched by this. But even in the Corona era, the stock market has increased and the trend of investors has increased towards mutual funds.

Highlights

• Coronavirus outbreak has affected the global economy badly
• But the good thing is that the market has gained momentum in the Corona era
• Investors trend once again towards mutual funds
• Many funds have given more than 10 percent returns in May.

The coronavirus has caused havoc all over the world and the global economy has been badly affected due to this. India is also not untouched by this. During this financial year, the GDP rate in the country is expected to be negative. In order to give relief to the economy, the Reserve Bank has cut policy rates, due to which banks are also continuously reducing the interest rates of fixed deposits. With this, it is no longer an attractive option for investors.

But the good thing is that the market has gained momentum in the Corona era. In such a situation, there is a good chance of making big profits on small investments in equity mutual funds. This is the reason why the trend of investors has once again turned towards mutual funds. This can be gauged from the fact that only in April, about 7 lakh new investors opened their accounts. In the mutual fund scheme, an investment of 46 thousand crore rupees was made last month. In May, many funds gave more than 10 percent returns and investors turned silver during the Corona period.

Invest every week with SIP

With a Systematic Investment Plan (SIP), you can invest a fixed amount every month in your preferred mutual fund scheme. You can also invest every week through SIP. It continues to invest regularly, along with discipline in investment. There is no difference from market boom or recession and your money goes regularly in mutual funds. If you decide to invest a fixed amount every month in a mutual fund, then you will not need to take time separately for this.

Generally, the choice of two to three mutual funds is better. By limiting your portfolio to two-three, you can handle them well. In this, the help of a market-savvy expert can be taken. It can help in selecting mutual funds that offer better records and good returns for investors.

These can be better options

Axis is a long-term equity fund. Its 5-year return is 8.46 percent annually. Similarly, the 7-year return is 17.21 percent annually. The value of one lakh investment in this fund in 7 years is Rs 3.04 lakh. Similarly, the value of a monthly SIP of Rs 10 thousand is Rs 12.26 lakh in 7 years.

Similarly, the 5-year return of the BoI AXA Tax Advantage Fund is 7.90% per annum. Its 7-year return is 13.49 percent annually. In 7 years of investment of Rs 1 lakh, the value is Rs 2.43 lakh. The value of a monthly SIP of Rs 10 thousand is Rs 11.40 lakh in 7 years.