How To Invest Mutual Funds 2022

The funds will invest the accumulated money only to the extent of the returns that it earns during the first year. The remainder of the invested money can be withdrawn after the second year. Such a solution offers a reasonably long lock-in period for investments and is a viable choice for investors with a lot of money. Those who can afford to invest big can invest some of their money in a liquid mutual fund and leave the rest invested in a fund whose returns are relatively less volatile. Such funds will invest the accumulated amount to the extent of returns that it earns during the first year and continue to invest the balance money only if it earns higher returns.

 To invest in a liquid mutual fund, the investor needs to make certain choices about the mutual fund that he wants to invest in. Typically, these funds are in the mid-cap and large-cap categories. The funds will invest a small amount of money in the company’s shares during a specified period and will retain the remainder of the investment money

After that, the money is locked in for the next 18 months. If a fund performs well during the first year and is able to increase its assets under management (AUM) by a certain percentage, it will be inclined to invest the remaining balance money that is not required for the initial investment or for the growth of the portfolio.

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