Smartest investment and life plans in UAE
Invest smart today for a better tomorrow
Smartest investment and life plans in UAE
Mutual funds in UAE have become the most popular investment tool within the past few decades. Open-end mutual funds are highly liquid in nature and are quite easy to purchase. Moreover, these investments are managed by expert fund managers who are responsible for making all the investment related decisions. Mutual funds in UAE are pooled capital that is formed by the mutual contribution of multiple investors sharing a common objective of earning profit. Mutual funds in AUE are quite diverse and include equity funds, arbitrage, debt funds, liquid funds, etc.
However, if you are looking for investment tools that provide steady returns are easy to liquidate, you should consider liquid funds. These funds are investment tools that come under the category of mutual funds that invest in debt funds. Liquid funds are short term in nature and offer significant scope to earn good profit.
Within the past few decades, a slow drift has been observed in the market towards liquid funds due to high levels of liquidity that allows investors to cash out their investment in less than twenty-four hours. Furthermore, fund houses and companies do not charge any sort of entry or exit fees which is one of the reasons behind the growing popularity of liquid funds in UAE. Financial advisors consider liquid fund investments to carry the lowest degree of risks and volatility when compared to other forms of investments that function by investing in market-based instruments.
As discussed earlier mutual funds in UAE are financial tools that are composed of a pool of funds collected by multiple investors sharing a common goal. The money collected is later used to invest in different market-based securities like bonds, stocks, etc. One of the major reasons that make mutual funds in UAE highly reliable is expert assistance offered by fund managers. Expert fund managers allocate assets of the funds in order to maximize capital gains and minimize risks due to market instability.
Mutual funds in UAE provide all classes of investor easy accessibility to professionally managed investment opportunities. The performance of mutual funds in UAE is analyzed by tracking changes that occur in the total cap of the fund in the market. Investors earn returns on their investments in the form of dividends which can be received in the form of a paycheque or reinvested again to get more shares.
Mutual funds are categorized into different categories based on the kinds of market-based instruments they have targeted and the kind of profits they seek. Here’s a quick rundown-
Mutual funds in UAE have been one of the most popular investment vehicles for all classes of investors. The major advantages of mutual funds in UAE are as follows-
Diversity in terms of financial investments refers to investing in different investment vehicles that have an inverse relationship with each other so as to mitigate risks of losing capital. A diverse investment portfolio consists of securities with varying maturity periods and different capitalizations. Mutual funds add significant diversification to an investor’s portfolio.
Mutual funds allow investors to buy and sell different funds with considerable ease that makes them liquid investments. Mutual funds in UAE are one of the most feasible and user-friendly investment vehicles that allow investors to participate in foreign equities and exquisite commodities.
Mutual funds in UAE come with assistance from expert fund managers who are responsible or picking up ideal stocks for the funds and managing them efficiently. One of the major reasons that make mutual funds suitable for all classes of investors is expert assistance.
Mutual funds in UAE work under strict industry regulated guidelines that make them transparent investment tools.
Unlike the traditional forms of investment mutual funds in UAE require a low initial investment which is one of the contributing factors behind the popularity of mutual funds in UAE. Moreover, SIP approach helps investors to inculcate healthy financial habits along with offering good returns on investments.
Liquid funds are mutual funds that typically invest in instruments with a maturity period of up to a maximum of ninety-one days. Liquid funds have no lock-in period and therefore assets invested are not held for relatively long periods.
Liquid funds or liquid alternatives are investments that offer considerable scope for diversifying one’s financial portfolio and are quite easy to liquidate. Liquid funds can be bought and sold on a daily basis which is not possible in case of conventional equity or debt funds which are typically sold quarterly or monthly. Liquid funds counter the several drawbacks that come with conventional investments by providing investors access to alternate tools that can be easily liquidated as per their requirement. The primary objective of liquid funds is to offer a high degree of liquidity along with ensuring the safety of investor’s capital.
Liquid fund investments are highly suitable for investors who are looking forward to parking their idle cash into some sort of short term investment that is secure. Instead of allocating your extra cash into a savings bank account investors can go for liquid funds. Alternatively, liquid funds can be used as a medium to invest in conventional equity or debt funds. Investors can initially invest in a liquid fund and later transfer the funds to an equity fund over a fixed period.
Liquid funds have several advantages when compared to other types of traditional investment tools. Here’s a quick rundown-
Majority of investments in the market come with a minimum lock-in period for which investors cannot make use of their funds. In the case of liquid funds, there is no lock-in period which makes them a good investment choice for investors who wish to stay away from minimum lock-in periods.
Liquid funds, as the name suggests, are liquid investments that can be converted to cash very easily. Typically time take by fund houses to approve liquidation requests and convert the fund into cash is approximately 24 hours which is unmatched by any other form of investment available in the market.
Most of the investments come with some entry and exit fees which is not the case with liquid funds. These alternate investment tools have no exit load that enhances the liquidity of the asset and makes it even more user-friendly.
Mutual funds and liquid funds both have their own set of pros and cons, as an investor one should focus on their current financial portfolio and long term goals for which they are planning to make investments. Undoubtedly, mutual funds are a highly reliable investment vehicle for almost all types of investors but if your investment objective is centered on parking your extra cash for a short period to earn considerable returns then you should go for liquid funds.