Why Should New Investors Start with Mutual Funds Investing?

mutual funds investing
Feb 2, 2024 Reading time : 4 min

Embarking on a thrilling, yet potentially complex journey of investment, can be simplified for new investors through the strategic use of mutual funds. 

This type of funding is a golden opportunity, providing a diversified and accessible entry point in the financing sector.

By using a mutual funds application, you gain insight into the world of capitalizing money effectively. 

These applications make it simpler for new investors to explore and participate in the dynamic world of finance. 

Opting for mutual funds, with the added convenience of a dedicated application, sets the foundation for long-term financial success. 

It also allows navigating and contributing to your banking portfolio confidently. 

In this article, we will explore the advantages of investing in mutual funds for beginners. 

Key Advantages for Beginners Opting for Mutual Fund Investments 

Why Invest in Mutual Funds?

Let’s look into the advantages that new investors get by starting their journey with mutual funds. 

Diversification Simplified

Mutual funds act as financial superheroes for beginners who want to grow their profits. It provides instant diversification without the need for a large capital. 

By pooling money from lenders, it spreads transactions across various assets. It reduces risk and protects bankers when any stock performs poorly. 

Moreover, businesses that are ready to expand beyond their country can look into international mutual funds. 

These can be part of your investment portfolio, providing a balanced and more trusted brand perspective for shareholders. 

Mutual funds are considered liquid assets and shares can be sold at any time.

Professional Management

Mutual funds offer the benefit of professional management as skilled managers keep an eye on the market. They make smart decisions on behalf of the investors. 

This professional management is good for beginners who may lack the time or knowledge to navigate the market. 

A mutual fund has an annual operating fee which is a percentage of the managed funds, usually from 1-3%, known as expense ratio. 

However, investors enjoy the opportunity to research and opt for managers with a system that aligns with their financial goals.

The graph below shows the global market size growth of mutual funds by investment strategy since 2021. It is forecasted to expand further consistently till 2032.

 Global Mutual Fund Assets Market Size from 2021-2032.

Tax Efficiency

Mutual funds also bring tax benefits because of their structures that help minimize the tax impact on your earnings. 

When fund managers make changes within the fund, you won’t face immediate tax consequences. 

This tax efficiency can save you money in the long run, through a savvy investment plan for those mindful of their tax implications. 

It is recommended to understand the tax variables according to your investment plans. 

Typically, taxation depends on the type of funds, capital gains, dividend, and holding period.

Higher Profits

Every beginner wants to earn profits by investing in financial instruments. Mutual funds offer excellent chances for generating good returns over time. 

By utilizing it, finances can be spread across a diverse spectrum of sectors and industries. 

For example, investing in bond funds on undervalued projects can be sold for profit. 

They have higher risk, but if the market trends are in your favor, they yield higher returns.

Bankers can also look into other portfolios such as government, corporate, or other bond instruments. 

Moreover, they pool funding from various bankers, providing access to professional fund management. 

This diversification reduces risk and maximizes potential returns.

In most cases, total returns are calculated for one, five, and 10-year periods as well as since the day the fund opened, or the inception date.

Mutual Funds Application

In the current digital era, platforms for mutual funds applications have transformed the landscape of investments. 

These easy-to-use applications give beginners the tools to effortlessly oversee their portfolios. 

When keeping tabs on fund performance or carrying out transactions, these applications offer a user-friendly interface, significantly enhancing the accessibility of convenient investing. 

It is also recommended to be wary of online security offered by these apps and only download those that are verified and have positive reviews. 

These apps are also convenient when withdrawing money by simply creating an online account with all relevant information and submitting a withdrawal request. 


Mutual funds serve as a strong financial cornerstone for beginners. They offer a balanced blend of diversification, professional management, accessibility, and flexibility. 

The digital era has further simplified this journey with funding application platforms, providing a user-friendly gateway to financial growth. 

As beginners tread into the world of investments, embracing mutual funds lays a solid foundation for building wealth and achieving long-term financial goals. 

Start your investment journey with Dhan, explore the world of mutual funds, and witness the power of strategic and diversified investing.