A study on Investment Systems in Equity Mutual Funds as an Instrument for Wealth Creation

Abstract

The primary purpose of investing in various financial instruments is to efficiently allocate savings into opportunities provided by the Indian financial system, with the aim of achieving attractive returns. Investing serves multiple goals, including preparing for future life milestones and protecting against the erosive effects of inflation over time. Wealth creation relies on making wise investment choices made today to ensure the successful attainment of tomorrow's life objectives. Among the various investment options available, equity mutual funds have been a key instrument that has been accessible in India since 1963. Despite their availability, they have not seen widespread participation from individual investors. Given that investing in equity mutual funds involves exposure to market risks, it is essential to address and mitigate these risks through a deep understanding of mutual fund investments. Furthermore, as interest rates on traditional savings instruments like fixed deposits, recurring deposits, and post office savings have gradually declined over the years, investing in equity mutual funds has transformed from being merely an option to becoming a necessity, often due to misconceptions and misunderstandings about how mutual funds work.