Mutual Funds (MFs) offer a single financial solution to investors such as best returns, flexibility and liquidity. It offers tax benefits also under the equity linked tax saving plans (ELSS).
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The mutual fund industry is well regulated both by SEBI and Association of Mutual Funds in India (AMFI). They have, over the years, introduced regulations to ensure greater transparency. Now it is safer and convenient for investors to invest through the mutual funds. The MFs in India is the best disciplined institutional investors in the Indian market, playing a vital role.

As an acknowledgment to the role of MFs, SEBI made it mandatory to the corporate houses to set apart 5% of Initial Public Offerings (IPO) for the Mutual Funds in addition to making it eligible for biding for the rest of the portion of IPOs. SEBI has also allowed MFs to trade in derivatives. Now they are on par with FIIs to invest in futures and options of stock market. The budget for 2006-07 offered grater freedom to the Mutual Funds.

The magnitude of mobilization of funds by various MFs during the current year alone reflects the confidence shown by investors through the MF route to enter the stock market. After all, they are one of the leading players after the FIIs in the Indian market which would ultimately bring the benefit of equity market to the small investors; in other words, to the grass route level. Nowadays, whenever there is a slowdown in the FII inflow, Mutual Funds took positions in the market to reap the benefit of next bull run. Mutual Funds net investment during 2005 amounted to more than Rs 13500 crores the largest ever. Many of the Funds have given returns ranging from 60 to 70% during 2005.

Equity Mutual Fund Investments standout in the realm of stock market operations in many ways.
Consider :
- Over a long horizon, MF investments have given returns which far exceeded not only the average return from BSE or Nifty but also the returns from debt based instruments.
- It offers the best liquidity as investments can be withdrawn at any time. MFs offer an attractive alternative to directly entering the equity market when many of us who do not have the desired expertise and are too busy with our other daily commitments.
- You need not to enter the stock market directly and this job will be undertaken by the professional fund managers of respective MFs after due research on each stock.
- MF is a good option for people who wish to stay invested in equity for a long duration.
- Dividends from equity mutual funds are tax free. It enjoys long-term capital tax exemption MF helps investors to ignore short term volatility in stock market and take a long view leading to better returns.
- You don’t need a DMAT A/C to invest in MFs as in stock market investments.

Plan for next year:

Normally we think of tax savings at the end of every year. It dislocates the budget of a common man during the month of February and March. The solution to this problem is Systematic investment Plan (SIP). ELSS offers you an opportunity to save a fixed amount every month starting from Rs. 500/-. It not only gives you the market linked return along with tax saving without the year end budget dislocation. Auto debit facility offered in SIPs is another advantage. If we opt for auto debit facility, we need not to run for the monthly remittance. The payment will go directly from your bank every month. See how does your SIP works in your advantage.
Now, it is the time to do final touches to your year end tax savings or plan your tax savings next year.

Contact us, we will be at your service.