Mutual Funds v/s SIP | AICTE approved in Bangalore

Posted by Dr. Samiya Mubeen On 01/02/2022 11:30:54

Mutual Fund

A mutual fund is a mechanism for pooling the resources by issuing units to the investors and investing funds in securities in accordance with objectives as disclosed in the offer document.

Investments in securities are spread across a wide cross-section of industries and sectors and thus the risk is reduced. Diversification reduces the risk because all stocks may not move in the same direction in the same proportion at the same time. Mutual fund issues units to the investors in accordance with the quantum of money invested by them. Investors of mutual funds are known as unitholders. AICTE approved in Bangalore

The profits or losses are shared by the investors in proportion to their investments. The mutual funds normally come out with a number of schemes with different investment objectives which are launched from time to time. A mutual fund is required to be registered with the Securities and Exchange Board of India (SEBI) which regulates securities markets before it can collect funds from the public.

Net Asset Value (NAV) 

The performance of a particular scheme of a mutual fund is denoted by Net Asset Value (NAV).

Mutual funds invest the money collected from the investors in securities markets. In simple words, Net Asset Value is the market value of the securities held by the scheme. Since the market value of securities changes every day, the NAV of a scheme also varies on a day-to-day basis. The NAV per unit is the market value of securities of a scheme divided by the total number of units of the scheme on any particular date. 

Systematic Investment Plan( SIP)

A systematic investment plan SIP is a way of investing in mutual funds. It is just a process through which you can contribute small but regular amounts to invest in a mutual fund and build a good corpus over a period of time.

It brings discipline to investing a fixed amount on a regular basis like weekly, monthly, or quarterly among investors. SIP helps an investor invest in installments while keeping his/ her monthly income and expenses planned and in sync

It is very important to start investing, even in smaller denominations.

SIP Vs Mutual Fund 




Mutual Funds

Investment way


One time





Less due to rupee cost averaging

High as the investment is done in a single transaction 


Less impact

More impact


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