A mutual fund is a professionally managed investment vehicle that pools money from multiple investors to invest in a diversified portfolio of stocks, bonds, or other securities. When you invest in a mutual fund, you're buying units of the fund, and your returns depend on how well the underlying investments perform. It's managed by experienced fund managers who make investment decisions on behalf of all investors.

Through Wizr, you can invest in various types of mutual funds including:

• Equity Funds: Invest primarily in stocks for long-term growth potential
• Debt/Fixed Income Funds: Invest in bonds and fixed-income securities for steady returns
• Index Funds & ETFs: Track market indices with lower costs
• Arbitrage Funds: Use price differences across markets for returns
• Fund of Funds (FoFs): Invests into existing mutual funds
• Liquid, Cash & Overnight Funds: For short-term parking of money
• Duration-based Debt Funds: Ultra short-term, short-term, and long-term funds
• Hybrid Funds: Combine equity, debt and other asset classes like gold and silver

Mutual funds generate returns through three main ways depending on the underlying securities it invests in:

1. Capital Appreciation: When the value of underlying securities increases
2. Dividends: Income received from stocks in the portfolio
3. Interest: From bonds and fixed-income securities These returns are reflected in the Net Asset Value (NAV) of your fund units, which fluctuates based on market performance

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Key risks include:

• Market Risk: Value can go down due to market fluctuations
• Credit Risk: In debt funds, if issuers default on payments
• Interest Rate Risk: Affects debt funds when rates change
• Liquidity Risk: Difficulty in selling units quickly
• Concentration Risk: Over-exposure to specific sectors or stocks

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A Systematic Investment Plan (SIP) is one of the smartest ways to build wealth through mutual funds. Think of it as your financial autopilot—it automatically invests a fixed amount of your choice into mutual funds at regular intervals, typically monthly.

How SIP Works:

• You choose an amount (starting from just ₹500) and a date each month
• This amount is automatically debited from your bank account
• The money purchases mutual fund units at the current market price (NAV)
• Over time, you accumulate more and more units in your chosen fund

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The Magic of Rupee-Cost Averaging: SIP's biggest advantage is that it smoothens market volatility through rupee-cost averaging:

• When markets are high, your investments buys fewer units
• When markets are low, the same investments buys more units
• Over time, this averages out your purchase cost, reducing the impact of market ups and downs

Why SIP is Perfect for Building Wealth:

1. Disciplined Investing: Removes emotions and timing concerns from investing
2. Convenience: Once set up, it runs automatically—no need to track markets daily
3. Flexibility: You can increase, decrease, pause, or stop your SIP anytime
4. Affordable Start: Begin with small amounts and gradually increase as your income grows
5. Power of Compounding: Regular investing combined with time creates exponential wealth growth

An illustration: If you invest ₹5,000 monthly in an equity fund for 15 years at an average 12% annual return, you would invest ₹9 lakhs but potentially accumulate around ₹25 lakhs—that's the combined power of SIP discipline and compounding!

STP (Systematic Transfer Plan) is a smart feature that automatically moves a fixed amount from one mutual fund to another at regular intervals—think of it as an automated rebalancing tool for your portfolio.

How STP Works:

• You set up a transfer of a specific amount (say ₹5,000) from Fund A to Fund B
• This transfer happens automatically on your chosen date each month
• Fund A units are redeemed and the proceeds buy units of Fund B at current market prices
• The process continues until you stop it or exhaust the source fund

An illustration: Suppose you receive a ₹3 lakh bonus. Instead of investing it all in equity funds at once, you can potentially benefit from market volatility by:

1. Parking it in a liquid fund earning 4 to 5%* returns
2. Setting up an STP of ₹25,000 monthly to transfer into your chosen equity fund
3. Let’s say over 6 months, your money gradually moves to equity while earning returns on the remaining amount

Key Benefits:

• Reduces timing risk when investing lump sums
• Provides rupee-cost averaging benefits
• Keeps your idle money earning returns
• Completely automated—no manual intervention needed

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SWP (Systematic Withdrawal Plan) is like a reverse SIP—instead of putting money into mutual funds, it lets you withdraw a fixed amount from your funds at regular intervals, creating a steady income stream from your portfolio.

How SWP Works:

• You choose a specific amount to withdraw (say ₹10,000) from your mutual fund
• This amount is automatically redeemed from your fund units on your chosen date each month
• The money gets credited directly to your bank account
• The remaining investment continues to grow, potentially earning returns

An illustration: Suppose you have ₹50 lakhs in mutual funds at retirement:

1. Set up an SWP of ₹30,000 monthly for regular income
2. Your remaining investment continues earning returns (say 8-10% annually)
3. If managed well, your corpus can last longer while providing steady income
4. You get the flexibility to increase, decrease, or pause withdrawals as needed

Smart SWP Strategy: The key is withdrawing less than what your fund typically earns annually. If your fund averages 10% returns, withdrawing 6-7% annually can help preserve your capital while providing income.

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Key Benefits:

• Regular, predictable income flow
• Tax-efficient compared to fixed deposits for long-term investors
• Flexibility to adjust withdrawal amounts
• Capital appreciation potential on remaining investment
• No need to time the market for withdrawals

Compounding is truly an underrated concept. It simply means your returns earn returns over time:

For example:

• Year 1: Your ₹10,000 investment in mutual funds grows to ₹11,000 (10% return)
• Year 2: The ₹11,000 grows to ₹12,100 (10% on the new base)
• Over time, this creates exponential growth as returns are reinvested
• The longer you stay invested, the more powerful compounding becomes