The following are the Mutual Funds Investment Options:

• Direct

Under straight investment ability, an NRI can liberally invest in equity or debt scheme via NRE or NRO account or by foreign exchange allowance from abroad which is in Indian Rupees.

• Systematic Investment Plan (SIP)

An SIP is the method of investing funds for fixed sum i.e. on regular basis in mutual fund scheme. It is same as regular investment schemes like regular deposits. An SIP permits one to buy units on a specified date every month, that implements a investment plan for themselves. A SIP can be initiated with only Rs. 500/month in ELSS scheme and Rs. 1000/month in equity schemes for diversification. Buying at a lower price and selling at a higher price, is a simple winning approach for stock markets. But the timing the movement in market is not an easy task for anyone. At times, markets can miss the rally and might stay away while markets are expected to do well. Thus, other than timing the market, investing every month can ensure that one is investing funds at the high and low and earn the best possible returns with an opportunity which can be difficult to predict.

 

• Systematic Transfer Plan (STP)

STP helps you to make a complete lump sum amount in the money market or in debt oriented scheme and can transfer fractional amounts to any equity oriented at regular basis. This way the funds invested continues to earn and it waits to be fully organized in equity scheme of your choice. You can opt from the frequencies such as quarterly, monthly or weekly if you want to shift your savings from one scheme to the other.

• Systematic Withdrawal Plan (SWP)

SWP works like the opposite of SIP. This allows you to automatically withdraw the existing savings by redeeming your funds in intervals instead of at one time. As in case of SIP, it helps to reduce risk of misdoing your exit from a scheme.

• Growth Option

Dividend is not given under growth plan and thus, investor realizes the appreciation of capital on the fund invested (by increasing NAV)

• Dividend Payout Option

Dividends are paid to investors in Dividend payout option. But, the Net Asset Value of mutual fund scheme falls to point of dividend payout.

• Dividend Reinvestment Plan

Dividend plans of schemes shall carry an added option for reinvestment of income allocation. This refers to the dividend reinvestment plan. In this plan, dividend declared are again invested on the part of investor, which increases the no. of units detained by the investors.

• Open-ended Fund

An open ended scheme or fund is one which is available for subscription and repurchase on the constant basis. These schemes don’t have preset maturity time. Investors can suitably buy and sell units at NAV, which are confirmed on daily basis. The major feature of open ended schemes is liquidity. 

• Close-ended Fund

A close ended scheme has predetermined maturity time i.e. 5-7 years. These types of funds are open for subscription for the specific period at the commencement of the scheme. Investors can put in their funds in the scheme at the time of IPO and then they can either buy or sell the stocks/units of the scheme on exchange where stocks/units are listed. In respect to offer a way out route to the traders, some of the close ended funds can offer an option of selling back the units to the mutual funds through periodic redemption at NAV related prices. According to SEBI regulations, at least one of two exit routes is offered to the traders i.e. through repurchase and getting listed on exchange. This scheme is also known as income or growth or balanced scheme which considers the investment objective.