Investing in SBI Mutual Funds: Pros and Cons

Mutual funds are investment pools where multiple investors put their money in the same fund and the asset management company who is responsible for handling the mutual fund uses the same fund to invest in securities such as stocks, bonds, money market instruments, and more. SBI mutual funds are also the same and this mutual fund was founded in the year 1987.
 
The SBI mutual fund was registered with SEBI in the year 1993 when the agreement between SBI and AMUNDI Asset Management was signed. This implies that SBI mutual funds are joint ventures where SBI possesses the majority of the stake (67% to be exact).
 
Currently, SBI provides multiple mutual fund schemes which specialize in hybrid, equity, and debt among others. According to the data published by SBI, it has Rs. 6,47,602 crore (updated on May 31, 2022) worth of assets under management.
 
Investing in a particular mutual fund scheme comes with its own benefits and drawbacks. In this article, we will discuss all the advantages and disadvantages associated with SBI mutual funds.
Advantages of investing in SBI mutual funds
Here are the benefits of investing in SBI mutual funds:
Get the expertise of professionals
SBI is one of the finest banks in India and its mutual funds are also handled by top professionals that have incredible experience and expertise. These fund managers have the ability to pinpoint the best stocks available in the stock market and can use them efficiently to gain handsome returns.
Lower risk factor
As a financial organization, SBI has enough reputation in the market which is why if you are investing in SBI mutual funds then your funds will remain more secure and the diversification process adopted by the fund managers of SBI mutual funds gives extra security to your fund while being invested in the stock market.
Liquidity
Another advantage of investing in SBI mutual funds is that you will be able to easily withdraw money from the fund (in case of emergencies) due to its liquidity. Although it is easy to invest in mutual funds due to the liquidity factor a lot of investors don’t get the opportunity to withdraw money from the investment fund due to the low liquidity factor but with SBI mutual fund you won’t face this kind of problem.
Drawbacks of investing in SBI mutual funds
Expense or cost of the fund
Investing in SBI mutual funds comes with some drawbacks which include the cost of managing the funds which the investor has to bear. Some of the SBI mutual funds have a bit higher expense ratio which means as an investor you will have to pay more money to the fund house during the redemption or withdrawal process.
Inconsistent returns
There are multiple mutual funds available under the umbrella of SBI and not every one of them has the ability to offer the same return every single year. A lot of mutual funds handled by SBI offer inconsistent returns which is why it is important for the investor to check thoroughly before investing in the same.
Final words
In case you are thinking about investing in SBI mutual funds then first you need to check out the different mutual fund schemes available under this banner. Next, you need to thoroughly consider their portfolio, along with the return rate, historical performance, background of the fund manager, CAGR, etc. Furthermore, you should also consider the risk factor associated with the investment and make sure that the return on your investment is aligned with your financial goals.