There is a saying "little drops make a big Ocean". This is what exactly fitting our today's financial situation.Nowadays Earning capacity is increased rapidly. But Money saving attitude is on down the trend.There are many ways to save money. The Recurring deposit,chit,and mutual fund.
The mutual fund is the only product to meet the demand of inflation. The Recurring deposit,and chit returns are static irrespective of market fluctuation.
Always there is ups and downs in the share market. If the market is down we will get more units. If the market is up we will get the less number of units. Let's say Net asset value of mutual fund A is Rs.10.Suppose we are going to invest Rs.1000 per month.The entry load will be 2.25%.The entry load for Rs.1000 is Rs.22.5. The actual investment portion will be Rs.977.5.(Rs1000-22.5) . Number of unis for Rs.977.5 is 97.5.(Investment Portion/NAV=977.5/10).The following is the real time data which will give you real understanding of Mutual fund benefits.Each month unit will be allocated .
You will notice one month there will be more number of units and other month there will be less number of units.Finally the total number of units will be 699.057.
Nav on final month will be 22. So final value will be Rs.15,379.54.
| Month | Amount | Price | Number of units | Balance in units |
|---|---|---|---|---|
| DEC | Rs.1000 | 18.28 | 54.705 | 54.705 |
| JAN | Rs.1000 | 15.65 | 63.898 | 118.603 |
| FEB | Rs.1000 | 15.54 | 64.350 | 182.953 |
| MAR | Rs.1000 | 14.32 | 69.832 | 252.785 |
| APR | Rs.1000 | 15.41 | 64.893 | 317.678 |
| MAY | Rs.1000 | 16.10 | 62.112 | 379.790 |
| JUN | Rs.1000 | 16.51 | 60.569 | 400.359 |
| JUL | Rs.1000 | 18.18 | 55.006 | 495.365 |
| Aug | Rs.1000 | 16.32 | 61.275 | 556.640 |
| SEP | Rs.1000 | 19.49 | 51.308 | 607.948 |
| OCT | Rs.1000 | 20.97 | 47.687 | 655.635 |
| NOV | Rs.1000 | 23.03 | 43.422 | 699.057 |
Systematic
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