What We Distribute
Mutual Funds, And The Four Ways People Use Them
A mutual fund pools money from many investors and a professional fund manager invests it — in shares, in bonds, or in a mix. You own units, priced daily at the fund's NAV. That is the whole idea. Everything below is a different way of putting money into one.
What A Mutual Fund Actually Is
Your money and other investors' money are pooled into a single fund. A professional fund manager, working for a company called an Asset Management Company (AMC), invests that pool according to the scheme's stated objective — in shares, in bonds, or in a mix of both. In return, you are given units of the scheme, and the value of what you hold moves with the value of what the fund owns.
SEBI's Categories
Six Kinds Of Scheme
SEBI groups every mutual fund scheme in India into one of these six categories, based on what it is allowed to invest in.
Equity
Invests mainly in company shares. The highest growth potential of the six, and the most it can fall in a bad year — suited to money you will not need for several years.
Debt
Invests in government securities, corporate bonds and money-market instruments. Generally steadier than equity, aimed at income and capital preservation rather than growth.
Hybrid
Holds a mix of equity and debt in a fixed or flexible proportion, aiming to balance growth against stability rather than choosing one or the other.
Index
Holds the same securities, in the same proportion, as a market index such as the Nifty 50 or the Sensex. Nobody is picking stocks — the fund simply tracks the index, usually at a lower cost.
Solution-Oriented
Built around a specific goal — retirement, a child's education — and carries a mandatory lock-in that ties the money to that purpose.
Other
Everything that does not fit the five categories above — chiefly a fund of funds, which invests in units of other mutual funds rather than directly in securities.
NAV, And How Quickly You Can Get Your Money Back
NAV — Net Asset Value — is the price of one unit of a scheme, published once at the end of each business day. It is worked out by taking everything the fund owns, subtracting what it owes, and dividing by the number of units in issue. Whenever you invest or redeem, it happens at that day's NAV — never at a price you or we set.
Look up today's NAV for any scheme →
Liquidity is how quickly units convert back to cash. Most open-ended schemes are highly liquid: you place a redemption request and the money is usually in your bank account within a few working days, with no need to find a buyer the way you would for property. The exceptions are schemes with a stated lock-in — ELSS, and solution-oriented schemes — where the money is genuinely unavailable until the lock-in ends, by design.
Who Regulates All Of This
Mutual fund schemes themselves are regulated by SEBI— the Securities and Exchange Board of India — which sets the rules for how a scheme is structured, priced, and disclosed to investors, including the six categories above. AMFI — the Association of Mutual Funds in India — is the industry body that registers distributors. An ARN, like ours, comes from AMFI, not SEBI; it is why we describe ourselves as an AMFI-registered distributor rather than an adviser.
What It Costs
Expense ratio. Every scheme charges an annual fee, a percentage of your investment, deducted before the NAV is published — so it is already reflected in the price you see, never billed to you separately. SEBI caps how much a scheme is permitted to charge. It is where our commission comes from, and we will tell you what it is before you invest.
Direct vs. regular plans. The same scheme is sold in two versions. A "direct" plan, bought straight from the AMC with no distributor involved, carries a lower expense ratio. A "regular" plan — the one bought through a distributor like us — carries a slightly higher expense ratio, because it includes the distributor's commission. Both versions hold the same underlying investments; the difference is entirely in who is paid, and how much.
Exit load. A separate charge some schemes apply if you redeem within a set period, usually a year, meant to discourage very short-term withdrawals. It is stated in the scheme document, and we will point it out before you invest.
SIP — A Fixed Amount, Every Month
The default answer for most people, most of the time.
A Systematic Investment Plan takes a fixed amount from your bank account on a fixed date each month and buys units at whatever the price is that day. When the market is down your money buys more units; when it is up, fewer. Over years, that averages out your purchase price without you having to guess when to buy.
It also removes the decision that trips most people up — is now a good time? — by answering it the same way every month.
Practical Details
- Start from ₹500 a month with most schemes
- Pick any date; the mandate runs automatically from your bank account
- Increase, pause, or stop it at any time. A SIP is not a commitment you are locked into — a common misunderstanding, and worth saying plainly
- A step-up SIP raises the amount automatically each year, which suits a salary that rises
Who it suits: anyone with a monthly income and a goal more than three years away.
Lump Sum — Investing An Amount You Already Have
A bonus, a maturing fixed deposit, the sale of land, a retirement payout, or simply savings that have been sitting in a bank account for years earning less than inflation.
Investing a large amount in one go carries a timing risk a SIP does not: if the market falls the month after you invest, the whole amount falls with it. Where that risk matters, an STP — a Systematic Transfer Plan — parks the money in a liquid fund and moves it into equity in instalments over several months.
Who it suits: anyone with a sum sitting idle, and a horizon long enough that a bad first year will not force them to sell.
Lump Sum Calculator
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This is an illustration, not a projection and not a promise. It assumes a constant rate of return, which no market delivers. Actual returns will differ. Mutual Fund investments are subject to market risks — read all scheme related documents carefully.
Investing Backwards From What You Actually Want
"I want to invest" is difficult to act on. "I need ₹20 lakh in eleven years for my daughter's degree" is a problem with a shape — an amount, a date, and therefore a monthly figure and a sensible category of scheme.
Goals that are far away can carry equity, because there is time to recover from a bad stretch. Goals that are close should not, because there is not. Most mistakes we see are this one: money needed in two years invested as though it were needed in twenty.
The Goals People Actually Bring Us
| Goal | Typical horizon | What tends to suit it |
|---|---|---|
| Emergency fund | available immediately | liquid funds |
| A car, a wedding | 1–3 years | debt or conservative hybrid |
| A home down payment | 3–7 years | hybrid, or equity with a plan to de-risk near the date |
| Child's education | 8–18 years | equity, moved to debt as the date approaches |
| Retirement | 15–30 years | equity, with the same de-risking near the end |
This table describes how the categories behave, not a recommendation for you. What suits you depends on your situation, and that is a conversation.
ELSS — The 80C Option With The Shortest Lock-In
An Equity Linked Savings Scheme is an equity mutual fund that qualifies for deduction under Section 80C, up to the limit for the financial year. It carries a three-year lock-in — the shortest of the 80C options. PPF is fifteen years; a tax-saving FD is five.
Two things worth knowing before you treat it as a tax product. It is an equity fund, so its value moves with the market and three years is not a long horizon for equity. And the lock-in applies to each instalment separately — in an ELSS SIP, each month's units unlock three years after that month, not three years after you started.
Note. 80C only applies under the old tax regime. Anyone on the new regime gets no deduction, which changes whether ELSS makes sense for them at all. We will ask which regime you are on before suggesting it.
SWP — Taking Money Out, Steadily
A Systematic Withdrawal Plan is the mirror of a SIP: a fixed amount paid out of your investment to your bank account each month, while the remainder stays invested.
It is what a retirement corpus is usually turned into — an income, rather than a lump sum somebody has to ration.
What You Should Know Before You Invest
We would rather you read this than skip it.
- Returns are not guaranteed, by anyone. Mutual funds are market-linked. A fund that returned 14% over ten years did not return 14% in each of those years — some of them it fell. Anyone quoting you a guaranteed return on a mutual fund is telling you something that is not true.
- Every fund has an ongoing cost. The expense ratio is charged as a percentage of your investment each year, deducted before the NAV is published. It is where our commission comes from. We will tell you what it is.
- There may be an exit load. Many equity funds charge a percentage if you redeem within a year. It is disclosed in the scheme document and we will point it out.
- Tax applies when you redeem, not while you stay invested, and the treatment differs between equity and debt funds and changes with the holding period. For anything beyond the general position, talk to a chartered accountant — we distribute funds, we are not tax advisers.
- KYC is mandatory before any investment. PAN, Aadhaar, a bank account and a photograph. If you are already KYC-compliant from an earlier investment, it usually carries over.
Mutual Fund Houses Available Through FirstV Capital
Frequently Asked Questions
Is my money safe in a mutual fund?
Mutual funds are market-linked, not risk-free — the value of your units can fall as well as rise, and nobody can guarantee a return. What SEBI's regulation does provide is structure: your money is held by a custodian separate from the fund house, the scheme's holdings are disclosed regularly, and pricing follows fixed rules. That protects against fraud and mismanagement; it does not protect against the market moving against you.
How much do I need to start?
Most schemes accept a SIP from ₹500 a month. A lump-sum investment usually has a higher minimum, which varies by scheme.
Can I withdraw my money whenever I want?
For most open-ended schemes, yes — redemption requests are usually processed within a few working days. Two exceptions worth knowing: many equity schemes charge an exit load if you redeem within about a year, and schemes with a mandatory lock-in, like ELSS or a solution-oriented scheme, cannot be redeemed before that lock-in ends.
What is NAV?
NAV — Net Asset Value — is the price of one unit of a scheme. It is calculated at the end of each business day by dividing the scheme's total assets, minus its liabilities, by the number of units outstanding, and it is what you pay to buy a unit or receive when you redeem one.
Do I pay tax on mutual fund returns?
Yes, when you redeem — the rate and treatment depend on whether the scheme is equity or debt, and on how long you held it. Tax rules change from year to year, so for anything beyond the general position, we would point you to a chartered accountant rather than guess.
Not Sure Which Of These Applies To You?
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