Mutual and other Funds

101. Explain the disadvantges of Mutual Fund when compared to other investment avenues.

Ans: On many investments, there is a sovereign gurantee with assured returns , besides tax benefits for some of the instruments . However , SEBI regulation do not permit Mutual Fund to guarantee any type of assured returns to their investors under any category of schemes . This disparity puts Mutual Funds at a disadvantageous position . Incidentally return on the small savings instruments, the real rate of returns is almost nil or at times even negative , whereas in Mutual Funds, if the risk is moderate, returns are much better.