Advantages of Mutual Funds: Benefits of Investing in 2024 (2024)

FAQs

Which mutual fund is best to invest in 2024? ›

The Fidelity Cash Fund is one of the four funds selected by Fidelity's Investment Director Tom Stevenson as his picks of 2024. The Fidelity Global Technology Fund was the most popular actively managed equity fund over the quarter, ranking third for SIPP purchases and fifth for ISAs.

Mutual funds offer diversification or access to a wider variety of investments than an individual investor could afford to buy. There are economies of scale in investing with a group. Monthly contributions help the investor's assets grow. Funds are more liquid because they tend to be less volatile.

Long-term investments in mutual funds generate even better returns along with the benefit of compounding. Short-term mutual fund investments have low risks compared to long-term investments. Short-term investments are more suitable for short-term goals like travelling and wedding ceremonies.

Stocks and bonds deliver positive returns and cash underperforms both as the Fed pivots to rate cuts. Stocks and bonds may both be poised for success in 2024. Easing inflation and a pivoting Fed should reduce headwinds that have faced both asset classes in recent years.

One selling point is that they allow you to hold a variety of assets in a single fund. They also have the potential for higher-than-average returns. However, some mutual funds have steep fees and initial buy-ins. Your financial situation and investment style will determine if they're right for you.

Is it advisable to invest in mutual funds now? ›

There is no better time to start investing. It is very difficult to time the markets and although the markets are due for a correction, it would not be wise to wait further. Also, when it comes to SIPs, there is not much merit in timing the markets. We would suggest you invest in different mutual fund categories.

There are several specific reasons investors turn to mutual funds instead of managing their own portfolio directly. The primary reasons why an individual may choose to buy mutual funds instead of individual stocks are diversification, convenience, and lower costs.

The massive inflow in hybrid funds pushed the category's AUM to Rs 7.2 trillion in March 2024, a significant increase of 51 per cent from FY23. Overall, the mutual fund industry saw its AUM reach a record high of Rs 53.40 trillion in March 2024, reflecting a positive trend.

Vanguard's active fixed income team believes emerging markets (EM) bonds could outperform much of the rest of the fixed income market in 2024 because of the likelihood of declining global interest rates, the current yield premium over U.S. investment-grade bonds, and a longer duration profile than U.S. high yield.

Credit spreads remain very tight, and the yield you can earn when adjusted for duration favors high-quality intermediate bonds. So, investors are not really being paid to take on credit or interest rate risk.” Others have said that 2024 might be the time to invest toward the longer end of the risk-return spectrum.