What is Mutual Fund Sahi Hai? – All You Need to Know

Like all investments, mutual funds come with both positive and negative aspects. Investors should carefully assess their investment needs against the available options in a mutual fund investment before making a decision. The Association of Mutual Funds in India (AMFI) is a self-regulatory body for mutual fund houses in India. This organisation came up with a campaign called ‘Mutual Funds Sahi Hai’.

With this campaign, AMFI aims to promote mutual funds across India, especially as a future financial planning tool that can look after different life events of investors. The campaign also projects ethical and professional standards, followed by the mutual fund industry. The idea of MutualFundsSahiHai campaign is to create awareness among investors while promoting mutual fund products through various channels. The campaign primarily focuses on television advertisements. 

Mutual fund sahi hai campaign explained

The “Mutual Funds Sahi Hai” campaign is an initiative by the Association of Mutual Funds in India (AMFI) to create awareness about the benefits of investing in mutual funds. The campaign aims to educate investors about mutual fund investments and encourage them to make informed investment decisions. It emphasizes the safety, convenience, and affordability of investing in mutual funds, making them a suitable investment option for everyone.

How did the mutual fund sahi hai campaign start?

Historically, Indian investors have preferred investing in physical assets more than financial savings. However, in the past few decades, this trend is seen to be changing with more preference towards financial savings. This is primarily done with the objective to beat inflation. With equity mutual funds, for example, investors can gain far higher returns when compared to traditional saving forms. 

The Association of Mutual Funds in India (AMFI) launched ‘Mutual Funds Sahi Hai’ as an investor awareness campaign, which turned out to be a success. AMFI is known to have launched several campaigns over the years to build customer confidence and pass on education to investors while guiding them on the concept of mutual funds. It focuses on strengthening the mutual fund industry in India to imbibe higher professional standards along with a constant focus on ethics. It also aims to promote and protect investor interest for long-term benefits.

How mutual fund investors benefit from ‘Mutual Fund Sahi Hai’ campaign

Mutual fund investments come with certain risks due to market uncertainties and frequent volatilities. Also, a fund’s performance depends on how well the fund manager is equipped for decision making and devising the right investment strategies to protect investor’s interests while ensuring safety of capital. Every investor expects that their investment grows over time and they fetch returns as expected. Thus, it is important that every mutual fund house communication is as per SEBI guidelines and AMCs follow the rules designed by AMFI to help and guide the investing population.

In an effort to grow the category on the one end and educate the investor on the advantages of investing in mutual funds, AMFI is moving in the right direction to help all the mutual fund brands. While the ‘Mutual Funds Sahi Hai’ campaign is working towards achieving their end objectives, we also need to understand how these campaigns have helped the mutual fund brands and what kind of communication the various mutual funds brands are devising to engage with the audience for their brands.

Benefits of investing in mutual funds

Some of the noteworthy benefits of investing in mutual funds are:

1. Managed by fund managers

The primary benefit of investing in mutual funds is that these are managed by fund managers who strategize investments to maximise returns for investors. Fund managers are hired by AMCs based on their experience and success in managing funds to generate above par returns.

2. No need for market knowledge

Another benefit of these investments is that anyone can invest in them, irrespective of whether one has market knowledge or not. This is because investors can easily rely on fund managers to look after the investment decision making in a mutual fund.

3. Possibility of inflation beating returns

Mutual funds, especially equity funds, have the potential to generate inflation-beating returns. For these, investors have to stay invested for a longer duration and be prepared to take on some level of risks.

4. Caters to all risk profiles

Risk-averse investors have the option of investing in debt funds, since these are often low-to-moderate risk. Investors who want higher returns and are willing to take on higher risks can consider equity funds, especially for long-term investment. 

5. Option to park surplus funds

Investors who want to park their surplus funds can consider investing in liquid funds, like debt funds, and earn higher returns as compared to savings bank account returns.

How to choose the Sahi Mutual Fund?

Choosing the right mutual fund requires careful consideration of various factors. Here are some steps to help you choose the right mutual fund:

1. Define your investment goals and risk tolerance: Before investing, you need to define your investment objectives and risk tolerance. It will help you determine the type of mutual fund that aligns with your investment goals.
2. Consider the fund category: There are various mutual fund categories such as equity, debt, hybrid, and others. You should select a fund category that matches your investment objectives.
3. Analyze the fund performance: Analyze the fund’s past performance to evaluate its track record. You can look at the fund’s historical returns and compare them with the benchmark and peer group performance.
4. Check the fund manager’s experience: A fund manager’s experience and performance play a crucial role in determining the fund’s success. You can research the fund manager’s track record, qualifications, and experience before making an investment decision.
5. Look at the fund’s expense ratio: The expense ratio reflects the cost of managing the mutual fund. You should look for a fund with a low expense ratio as it directly impacts your returns.
6. Evaluate the fund’s portfolio: A fund’s portfolio holdings can provide insight into the investment strategy and risks involved. You should check the fund’s portfolio to ensure it aligns with your investment goals.

By following these steps, you can choose the Sahi mutual fund that matches your investment objectives, risk tolerance, and investment horizon. It’s also recommended to consult with a financial advisor before making any investment decision.

Conclusion

Among all the investment options, mutual funds are one of the most preferred these days, considering the wide variety of fund options to choose from. Every investor can find a fund that suits his/her specific requirements. These can allow an investor to design a suitable investment portfolio that matches personal investment profile and overall objectives.

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