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How to begin investment journey with passive funds

A beginner's guide to investing in passive funds

Today, there are better investment options than ever before. However, the increasing number of options make it difficult to choose the right investment product that fits your bill. Investment vehicles include stocks, bonds, ETFs, FOFs, mutual funds, passive funds, real estate, and a whole lot of other investment options to choose from. All these investment options should be used to create a balanced portfolio that stays green despite the market movements.

If you want to invest in passive funds, this article will aid your journey. So stick with this and read through the end.

Let's start with knowing what a passive fund is.

What Is A Passive Fund?

As the name suggests, a passive fund is a passively managed mutual fund scheme that invests in a specific sector or market indices. As a result, passive funds are cheaper to invest in, making them a better choice than actively managed index funds.

So now, let's look at the benefits of passive funds.

Benefits Of Investing In Passive Funds

  • Affordable with less significant charges.
  • A robust long-term option that can withstand market movements.
  • Generates guaranteed wealth as you continue investing.
  • Follows the principle of time in the market rather than timing the market for consistent returns.

Having known about the benefits of passive funds, let's uncover how you can invest in one of them.

Also Read: How To Diversify Your Equity Portfolio Across Market Capitalisation With Passive Funds?

How To Invest In Passive Funds?

Research

The first step towards beginning your passive fund investing is researching and finding the correct fund. Currently, there are more than one hundred passive funds in the Indian market, and you should choose the one that suits your investment ambitions and financial setting. For example, if you are looking for a sectoral passive fund, you can research the funds based on that sector on websites like grow, Zerodha coin, MoneyControl, or any other platform of your choice.

Invest Offline

If you like the conventional way of investing, you can reach out to the fund house with your documents and sign up for a SIP or a one-time investment plan. However, to invest in the offline mode, you'll require a cancelled cheque, address proof, identity proof, and some photographs.

Invest Through Apps

Today, multiple apps exist in the Indian markets that make investing in passive funds easy. First, you have to install the app and look for the right passive fund worthy of your investment. Once you've finalized the app and look for the passive fund, your investment is just a few buttons' clicks away.

Investing through apps is a better idea, as you can track your investments quickly. Moreover, apps don't charge money to manage your investment relationship with the fund house, so it is cheaper to invest through apps.

Through Official Website

Every passive fund has an official website that allows options to invest in the fund. In addition, there are sections where you can sign up, complete the KYC procedure and start investing in your passive fund.

Investing through the official website can provide you with better knowledge of the underlying fund's terms and conditions. You can also understand the other options to choose from the fund's offerings.

There are other ways to invest in passive funds, but these are the best. Passive funds will offer you better returns if you stay invested for a more extended period, and the only risk is the extreme market movements.

Today, there are better investment options than ever before. However, the increasing number of options make it difficult to choose the right investment product that fits your bill. Investment vehicles include stocks, bonds, ETFs, FOFs, mutual funds, passive funds, real estate, and a whole lot of other investment options to choose from. All these investment options should be used to create a balanced portfolio that stays green despite the market movements.

If you want to invest in passive funds, this article will aid your journey. So stick with this and read through the end.

Let's start with knowing what a passive fund is.

What Is A Passive Fund?

As the name suggests, a passive fund is a passively managed mutual fund scheme that invests in a specific sector or market indices. As a result, passive funds are cheaper to invest in, making them a better choice than actively managed index funds.

So now, let's look at the benefits of passive funds.

Benefits Of Investing In Passive Funds

  • Affordable with less significant charges.
  • A robust long-term option that can withstand market movements.
  • Generates guaranteed wealth as you continue investing.
  • Follows the principle of time in the market rather than timing the market for consistent returns.

Having known about the benefits of passive funds, let's uncover how you can invest in one of them.

Also Read: How To Diversify Your Equity Portfolio Across Market Capitalisation With Passive Funds?

How To Invest In Passive Funds?

Research

The first step towards beginning your passive fund investing is researching and finding the correct fund. Currently, there are more than one hundred passive funds in the Indian market, and you should choose the one that suits your investment ambitions and financial setting. For example, if you are looking for a sectoral passive fund, you can research the funds based on that sector on websites like grow, Zerodha coin, MoneyControl, or any other platform of your choice.

Invest Offline

If you like the conventional way of investing, you can reach out to the fund house with your documents and sign up for a SIP or a one-time investment plan. However, to invest in the offline mode, you'll require a cancelled cheque, address proof, identity proof, and some photographs.

Invest Through Apps

Today, multiple apps exist in the Indian markets that make investing in passive funds easy. First, you have to install the app and look for the right passive fund worthy of your investment. Once you've finalized the app and look for the passive fund, your investment is just a few buttons' clicks away.

Investing through apps is a better idea, as you can track your investments quickly. Moreover, apps don't charge money to manage your investment relationship with the fund house, so it is cheaper to invest through apps.

Through Official Website

Every passive fund has an official website that allows options to invest in the fund. In addition, there are sections where you can sign up, complete the KYC procedure and start investing in your passive fund.

Investing through the official website can provide you with better knowledge of the underlying fund's terms and conditions. You can also understand the other options to choose from the fund's offerings.

There are other ways to invest in passive funds, but these are the best. Passive funds will offer you better returns if you stay invested for a more extended period, and the only risk is the extreme market movements.