Peer 2 peer (P2P) is an online marketplace and a method of debt financing regulated by RBI, it works on crowd-funding concept. Investors looking for unsecured loans meet people willing to lend money at mutually agreed interest rates. Mutual funds are a trust that pools the savings of a number of Investors who share a common financial goal. Investors buy units of a particular scheme that has a defined objective and strategy. The money thus collected is then invested by the fund manager in different type of securities ranging from shares to debentures to money market instruments.
Let us see the differences between p2p and mutual funds:
P2P
INVESTMETS
|
MUTUAL
FUNDS
|
Regulated by
RBI
|
Regulated by
SEBI.
|
Diversity
options is limited to few investors or borrowers
|
Funds are more
diversified and have various investing options.
|
P2P investments
are not subjected to market risks.
|
Mutual funds
are subjected to market risks read the offer document carefully
|
Return on P2P
is decided at the time of Investment only.
|
They have
fluctuating returns subjected to the market volatility
|
P2P investments
are less liquid.
|
Mutual funds
are very liquid.
|
You cannot exit
before the duration of investment is completed
|
There is free
entry and exit in Mutual Funds.
|
Conclusion:
In order to reach our financial goals our task as an investor is to use a diversified array of investment, P2P lending is getting more and more popular, but mutual funds offer a much stronger regulation and better returns if you can tolerate large volatility.
Thank you
Regards
Author- Shivang Gupta
Kautilya
IBS Mumbai
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