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Quantum Long-Term Equity Value Fund

Quantum Long-Term Equity Value Fund

Incorporated in the midst of the Global Financial Crisis, Quantum Mutual Fund has been in existence for approximately two decades now. The AMC offers a variety of mutual fund schemes, including equity funds, debt funds, and hybrid funds. Quantum Mutual Fund is known for its focus on active management and its commitment to providing investors with high-quality investment products.  In this blog, we will explore its flagship product – Quantum Long Term Equity Value Fund. Quantum Long-Term Equity Value Fund Investment Objective The primary investment objective of the scheme is to achieve long-term capital appreciation by investing primarily in shares of companies that will typically be included in the S&P BSE 200 Index and are in a position to benefit from the anticipated growth and development of the Indian economy and its markets.  Investment Process  The scheme follows a bottom-up approach for stock selection with disciplined research and investment process.  The scheme follows the thought process of investing in high-conviction stocks with long-term time horizons and hence has a lower portfolio turnover ratio.    Portfolio Composition The portfolio is biased towards large-cap stocks, with 86.49% of the funds allocated to large-cap stocks and the remaining 13.51% to mid-cap stocks. Significant sectoral exposure is to Financials, which accounts for more than one-third of the portfolio. The top five sectors hold more than 82% of the portfolio.  Data as of 31st July 2023Source: Value Research  Top 5 Holdings for Quantum Long-Term Equity Value Fund Name Weightage % HDFC Bank Limited 9.62 ICICI Bank Limited 6.80 Infosys Limited 4.78 State Bank of India Limited 4.73 Eicher Motors Limited 4.34 Note: Data as of 31st July 2023. Source: Value Research  Performance for Quantum Long-Term Equity Value Fund Particulars 1 Year 3 Year 5 Year 7 Year 10 Years Quantum Long Term Equity Value Fund 16.78 23.68 11.13 10.96 14.60 S&P BSE 100 TRI 13.08 22.20 12.76 13.94 15.21 Equity: Value Oriented 22.04 28.41 14.25 14.68 19.06 Note: Returns in % as of 10th August 2023. Source: Value Research  Since its inception, the fund has generated a CAGR (Compounded Annual Growth Rate) of 13.56%. Talk to an expert Fund Manager The scheme is co-managed by Mr. George Thomas & Mr. Christy Mathai.  Mr. George Thomas has more than six years of experience and has been managing this fund with effect from 01st April 2022.  Mr. Christy Mathai has approximately seven years of experience and has been managing this fund with effect from 23rd November 2022.  Who Should Invest in Quantum Long-Term Equity Value Fund?  The fund is suitable for investors who are seeking   Long-term capital appreciation.  An investment opportunity that invests primarily in equity and equity-related securities of companies in the S&P BSE 200 index.  Why Invest in this Fund? The fund uses the bottom-up approach for stock selection to minimize risk.  It follows disciplined research and investment process.  It has a low portfolio turnover.  It holds cash when stocks are overvalued and does not expose itself to derivatives.  It has one of the lowest expense ratios in the industry.  Time Horizon One should look at investing for at least five years or even more.  Investment through Systematic Investment Plan (SIP) may help in tackling the volatility of the broader equity market.  Conclusion: The Quantum Long-Term Equity Value Fund is an open-ended fund that allows investors to invest in undervalued equities. Although it has underperformed its benchmark over the long term, the fund has shown outperformance in the recent past. Thus, it will be important to monitor how the fund performs in the upcoming future. DisclaimerThis is not recommendation advice. All information in this blog is for educational purposes only.
Boost Your Financial Liquidity: Dive into the Top 6 Liquid Mutual Funds

Boost Your Financial Liquidity: Dive into the Top 6 Liquid Mutual Funds

As per SEBI regulations, a liquid fund is one that invests in debt and money market instruments with a maturity of up to 91 days only, such as Certificate of Deposits, Treasury Bills (T-bills), Commercial Paper (CP), etc. The aim of these funds is to provide capital preservation/safety along with reasonable returns. Advantages: High Liquidity: The main aim of such funds is to provide liquidity for their investors. So, investors can redeem their units at any time. Low Exit Loads: These funds have exit loads of less than 7 days. So, you can redeem your funds after 7 days without any penalties. Indexation Benefit: Long-term taxation will be calculated based on inflation. Only returns over inflation will be taxable. Better Returns: Investors can enjoy better returns than their regular savings bank account by investing in these funds. Top 5 liquid mutual funds S.No.Fund Name3-Yr Annualized Performance1Quant Liquid Plan Growth Option Direct Plan5.01 %2IDBI Liquid Fund Direct-Growth4.27 %3Mahindra Manulife Liquid Fund Direct Plan-Growth4.23 %4Edelweiss Liquid Fund Direct-Growth4.23 %5Franklin India Liquid Super Institutional Plan Fund Direct-Growth4.22 %Note: Data as of July 25, 2022Source: Morningstar 1. Quant Liquid Plan Fund analysis: The fund is the top-performing fund in its category. The fund has a low-risk profile. The fund has outperformed the category and the benchmark. The fund has invested in high-quality bonds i.e., AAA-rated. The fund can be used to park your emergency funds. ProsConsHigh liquidity. Invested in AAA quality bonds.High expense ratio.Note: CRISIL Liquid Fund BI Index Start Investing 2. IDBI Liquid Fund Fund analysis: The investment objective of the Scheme will be to provide investors with a high level of liquidity along with regular income for their investment. The Scheme will endeavor to achieve this objective through an allocation of the investment corpus in a low-risk portfolio of money market and debt instruments with a maturity of up to 91 days. The fund has outperformed the category over the period. The fund has invested 100% in AAA-rated bonds. The fund is a good alternative to fixed deposits (F.D.) ProsConsLow Expense Ratio.Attractive risk-to-reward ratio.Fund has underperformed the benchmark over 5-Yr trailing returns.Note: CRISIL Liquid Fund BI Index Start Investing 3. Mahindra Manulife Liquid Fund Fund analysis: The Scheme seeks to deliver reasonable market-related returns with lower risk and higher liquidity through a portfolio of money market and debt instruments. The fund has outperformed the category average over different trailing periods. The fund holds high-quality debt and money market instruments. ProsConsFund has outperformed the category average over different trailing periods. Low expense ratio.Fund has underperformed the benchmark over 5-Yr trailing returns.Note: CRISIL Liquid Fund BI Index Start Investing 4. Edelweiss Liquid Fund Fund analysis: The fund’s objective is to provide reasonable returns, commensurate with low risk while providing a high level of liquidity, through a portfolio of money market and debt securities. The fund has invested 100% in debt and money market instruments that have the highest rating i.e., AAA-rated bonds. The fund has delivered consistently better returns than the category average. ProsConsHigh liquidity. Invested in AAA quality bonds.Fund has underperformed the benchmark over 3-Yr & 5-Yr trailing returns.Note: CRISIL Liquid Fund BI Index Start Investing 5. Franklin India Liquid Fund Fund analysis: The fund’s objective is to provide current income along with high liquidity. The fund has relatively high volatility. The fund is a good alternative to bank accounts along with high liquidity. The fund has invested in AAA-rated bonds and money market securities. ProsConsInvested in AAA quality bonds. High liquidity.Relatively high volatility.Note: CRISIL Liquid Fund BI Index Start Investing Features of Liquid Mutual Funds Liquid mutual funds are a type of mutual fund that primarily invests in short-term, highly liquid money market instruments such as government securities, certificates of deposit, commercial paper, and treasury bills. They are designed to provide investors with a safe and convenient avenue to park surplus funds for the short term. Here are some key features:  Liquidity: Liquid funds offer high liquidity, allowing investors to redeem their units quickly with minimal impact on the net asset value (NAV).  Low Risk: These funds invest in low-risk securities, making them relatively safer compared to other mutual fund categories. However, they may not offer high returns.  Low Investment Minimums: Many liquid funds have low investment minimums, making them accessible for both individual and institutional investors.  Steady Returns: While liquid funds aim to generate steady returns, the focus is on capital preservation and liquidity rather than aggressive growth.  Taxability: The gains from liquid mutual funds are subject to taxation based on the investor's holding period. If the investment is held for up to three years, the gains are treated as short-term capital gains and taxed at the investor's applicable income tax rate. If held for more than three years, they are considered long-term capital gains and taxed at a flat rate with indexation benefits. Who are these Funds suited for? Corporates: Businesses often use liquid funds to manage short-term cash surpluses efficiently, earning a return on excess funds.  Individuals: Liquid funds are suitable for individuals who want a safe alternative to traditional savings accounts and are willing to compromise slightly higher returns for greater liquidity.  Emergency Funds: They can serve as a part of an individual's emergency fund, providing quick access to funds without the risk associated with other investments.  Major Advantages Safety and Liquidity: Liquid funds offer a balance between safety and liquidity, making them an excellent choice for short-term goals and funds you may need at short notice.  Better Returns Than Savings Accounts: While liquid funds might not offer the same interest as savings accounts, they generally provide better returns due to their investments in higher-yielding money market instruments.  No Exit Load: Most liquid funds have no exit load, allowing investors to redeem their units without incurring any additional charges.  Tax Efficiency: The tax treatment for gains from liquid funds can be more favorable than other fixed-income investments, especially for investors in higher tax brackets.  Professional Management: Liquid funds are managed by professional fund managers who have expertise in managing short-term investments, enhancing the chances of achieving consistent returns.  Conclusion: Liquid funds are a good alternative to bank accounts. Investors can also park their emergency funds in these mutual funds because of their high liquidity. This results in better returns than a regular savings bank account as the exit load is maximum for 7 days only. Talk To An Expert FAQs Which mutual fund scheme is highly liquid? Liquid mutual funds are highly liquid as they primarily invest in short-term money market instruments. They offer quick and easy redemptions with minimal impact on the fund's net asset value (NAV). Which is the safest liquid fund? Liquid funds, by nature, aim for safety and stability. Funds from reputable asset management companies like HDFC Liquid Fund, ICICI Prudential Liquid Fund, and SBI Liquid Fund are generally considered safe due to their investments in high-quality, short-term instruments. However, no investment is entirely risk-free, so research and diversification are still important. What liquid fund is best? Determining the best liquid fund depends on your specific financial goals, risk tolerance, and investment horizon. Some reputable options included ICICI Prudential Liquid Fund, Aditya Birla Sun Life Liquid Fund, and Nippon India Liquid Fund. However, it's crucial to research the latest performance, expense ratios, and other factors, and consider consulting a financial advisor before making a decision. Disclaimer:This is not recommendation advice, use it for educational purposes only. Mutual Fund investments are subject to market risks, read all scheme-related documents carefully. The NAVs of the schemes may go up or down depending upon the factors and forces affecting the securities market including the fluctuations in the interest rates. The past performance of the mutual funds is not necessarily indicative of the future performance of the schemes
Best 5 divided paying mutual funds. You never knew!

Best 5 divided paying mutual funds. You never knew!

Best dividend-paying mutual funds are one of the types of mutual funds in India that invest in equity and equity-related instruments that can yield a high dividend to its shareholders. These companies have strong fundamentals as they are profit-making companies. Only profit-making companies can distribute dividends to their shareholders. Having said that the primary intention of these companies is to provide regular income and capital appreciation to their investors. As per SEBI (Securities and Exchange Board of India) norms, a dividend yield fund invests at least 65% of its portfolio in dividend-yielding instruments. Features of Dividend-Paying Mutual Funds  Dividend-paying mutual funds offer several features that make them distinct from other types of funds:  1. Income Generation: These funds focus on stocks or securities of companies known for consistent dividend payments, aiming to provide a steady income stream to investors.  2. Diversification: Dividend-paying mutual funds typically invest in a diversified portfolio of dividend-yielding stocks, reducing the risk associated with relying on the performance of a single company. 3. Reinvestment Options: Investors can opt for dividend reinvestment plans (DRIPs), where the dividends received are automatically reinvested to purchase additional fund shares, potentially compounding returns over time.  Start Investing in Mutual Funds Taxability  Dividend income from mutual funds can have tax implications:  1. Taxation of Dividends: Dividend income received from mutual funds is generally taxable as per the investor's income tax slab. However, dividends from equity-oriented funds might be tax-free up to a certain limit due to the Dividend Distribution Tax (DDT) paid by the fund.  2. Dividend Distribution Tax (DDT): Prior to Budget 2020, mutual funds were subject to DDT before distributing dividends. Now, investors are liable to pay tax on the dividend income received as per their tax slab.  Who are these funds suited for?  Dividend-paying mutual funds can be suitable for:  Income-Oriented Investors: Individuals seeking regular income from their investments, such as retirees or those looking for a supplementary income source.  Conservative Investors: Those who prefer a lower-risk investment option with potentially stable returns, as dividend stocks tend to be established companies.  Major Advantages of Dividend-Paying Mutual Funds Steady Income: Dividend-paying funds can offer a reliable income stream, making them appealing to investors who rely on investment income.  Potential for Growth: Some dividend-paying companies might also experience capital appreciation, providing growth potential alongside regular income.  Diversification: By investing in a range of dividend stocks, these funds offer diversification benefits, spreading risk across various industries and sectors.  Compounding Effect: Dividend reinvestment can harness the power of compounding, where dividends are reinvested to potentially generate higher returns over time.  Advantages of the best dividend-paying mutual funds These funds have the potential to regular income through dividends. These funds invest majorly in strong companies having strong fundamentals. These funds provide equity exposure with lower risk. 5 High Dividend Mutual Funds S.No.Fund Name3-Yr Annualized Performance1Templeton India Equity Income Fund Direct Payout of Inc Dist cum Cap Wdrl22.43 %2IDBI Dividend Yield Fund Direct Payout of Income Distribution cum Cap Wdrl18.83 %3Sundaram Dividend Yield Fund – Direct Plan Half Yearly Payout of Income Dis cum Cap Wdrl18.59 %4Aditya Birla Sun Life Dividend Yield Fund Direct Plan Payout Inc Dist cum Cap Wdrl17.44 %5ICICI Prudential Dividend Yield Equity Fund Direct Payout Inc Dist cum Cap Wdrl17.30 %Note: Data as of July 26, 2022Source: Morningstar 1. Franklin Mutual Fund The scheme seeks to provide a combination of regular income and long-term capital appreciation by investing primarily in stocks that have a current or potentially attractive dividend yield, by using a value strategy. The fund has outperformed the category average over different tailing period returns. The fund has invested majorly in large-cap companies (81.41%) followed by mid-cap (17.77%) and small-cap companies (0.82%). ProsConsAttractive risk-to-reward ratio. The fund outperformed the category average when the market was falling & rising.High volatility than the category average. Invest Now 2. IDBI Mutual Fund Fund analysis: The fund’s aim is to provide capital appreciation and/or dividend distribution by investing predominantly in dividend-yielding equity and equity-related instruments. The fund has a beta of 0.78 indicating that the fund performance is less relative to the market. The fund follows a blended style of investing which means that the fund has invested in both value and growth stocks. The fund has outperformed the category average marginally. ProsConsLess volatile than the category average. Fund has outperformed the category average when the market was falling.Fund has underperformed the category average when the market was rising. Invest Now 3. Sundaram Mutual Fund Fund analysis: The fund has given consistent performance over the long-term period. The fund has a well-diversified portfolio, spread across sectors except for real estate. The fund has invested across market capitalization companies i.e., large-cap (84.79%), mid-cap (13.42%), and small-cap (1.79%) companies. The fund has also invested some portion in the debt category also. ProsConsFund has outperformed the category average when the market was falling. Well-diversified portfolio.High expense ratio. Invest Now 4. Aditya Birla Mutual Fund Fund analysis: The fund has a beta of 0.91 indicating that the fund’s performance is closely related to the performance of the market. The fund has invested across market capitalization, but the major investments are in large-cap (60.07%) followed by mid-cap (26.37%) and small-cap (13.55%) companies. The fund has a high risk (measured by standard deviation) than the category average. ProsConsWell-diversified portfolio. Fund has outperformed the category average when the market was rising.High expense ratio. Invest Now 5. ICICI Prudential Mutual Fund Fund analysis: The fund’s objective is to provide medium to long-term capital gains and/or dividend distribution by predominantly investing in a well-diversified portfolio of equity and equity-related instruments of dividend-yielding companies. The fund has given reasonably good performance over the period. The fund follows a blended style of investing, which means that the fund has invested in both value and growth stocks, and has invested across market capitalization companies. The fund has a higher risk (measured by standard deviation) than the category average. ProsConsLow expense ratio. Fund has outperformed the category average when the market was rising.The fund underperformed the category average when the market was falling. Invest Now Conclusion: Investors looking for regular income and capital appreciation from the stock market should consider such funds as part of their portfolios. FAQs Which mutual fund gives monthly dividends?  Ans. Sundaram Dividend mutual funds – Direct Plan-Growth - NAV: INR 91.29 Expense Ratio: 2% AUM: INR 321.27 Cr  Aditya Birla Sun Life Dividend Yield Fund – Direct Plan-Growth - NAV: INR 280.57 Expense Ratio: 1.85% AUM: INR 810.28 Cr  Which 5 mutual fund is best? Ans. Tata Digital India Fund Direct-Growth   ICICI Prudential Technology Direct Plan-Growth  Quant Small Cap Fund Direct Plan-Growth  SBI Technology Opportunities Fund Direct-Growth  Aditya Birla Sun Life Digital India Fund Direct-Growth  Which dividend yield fund is best?  Ans. Templeton India Equity Income Fund, ICICI Prudential Dividend Yield Equity Fund, IDBI Dividend Yield Fund.  What are the 5 highest dividend-paying stocks? Ans. V.F. Corporation (VFC), Devon Energy (DVN), Dow Inc. (DOW), International Business Machines (IBM), and Verizon Communications (VZ).  Which mutual fund gives the highest dividend?  Ans. It's important to note that mutual fund returns can vary over time. Funds that focus on high dividends might sacrifice growth potential. Some funds known for higher dividends include Vanguard Dividend Appreciation Index Fund, Fidelity Equity Income Fund, and T. Rowe Price Dividend Growth Fund. Research and professional advice are recommended before investing.   Which top 5 companies give dividends?  The top dividend-paying companies included Apple Inc., Microsoft Corporation, Johnson & Johnson, JPMorgan Chase & Co., and Procter & Gamble.    What are the highest-yielding monthly dividend funds?   Some of the highest-yielding monthly dividend funds included Global X SuperDividend ETF, AGFiQ U.S. Market Neutral Anti-Beta Fund, and PIMCO Monthly Income Fund. However, yield and performance can change, so ensure you research and verify the status before making any investment decisions.  Disclaimer:This is not recommendation advice, use it for educational purposes only. Mutual Fund investments are subject to market risks, read all scheme-related documents carefully. The NAVs of the schemes may go up or down depending upon the factors and forces affecting the securities market including fluctuations in the interest rates. The past performance of the mutual funds is not necessarily indicative of the future performance of the schemes
Mastering CAGR in Mutual Funds: Your Path to Financial Growth

Mastering CAGR in Mutual Funds: Your Path to Financial Growth

In the previous article, we discussed NFO in mutual funds. In this article, we will discuss CAGR in mutual funds CAGR or Compound Annual Growth Rate refers to the mean annual growth of any investment over a period usually longer than a year. It is an accurate way to calculate and determine the return for investment portfolios, and individual assets that may rise or fall in value with time.  Investment consultants who boast about their market knowledge and funds advertising their returns use the phrase CAGR. What is CAGR?  The compound annual growth rate, or CAGR, measures your investments' yearly compounding rate. Let's spend some time considering the word compounding. Imagine you put Rs 1,000 into stock and received a 10% return. In the first year, the stock price will have increased by Rs. 100. Now that we are in the second year, the price has risen by 10% once again.  Will the cost increase by Rs 1,200 after two years? The answer is no. After a year, your initial investment of Rs. 1,000 has increased to Rs. 1,100. At this point, a 10% growth of Rs. 1,100 increases the investment's worth to Rs. 1,210 after two years. The fundamental idea behind CAGR, or compound annual growth rate, is compounding. https://youtube.com/shorts/HMvmvNppjtk?feature=share How does the compound annual growth rate work?  Several restrictions are associated with calculating the mean or arithmetic average of results. Because it offers a rate of return that is smoothed, CAGR aids in overcoming them. It may be used to compare the success of various assets over time and provides a reasonable prediction of the yields from an investment when compounded yearly.  Most of the time, when we evaluate the success of our assets, we are just interested in the total return. However, we frequently fail to consider the temporal worth of money. CAGR differs in this manner. In actuality, CAGR prefers taking the time value of money. CAGR calculator and mutual funds  Mutual fund investors can benefit significantly from the CAGR calculator. This can help you find out how good-performing your fund is for helping you take the required investment decisions. Uses of a CAGR in Mutual fund  Compare returns between different funds and benchmarks  The CAGR calculator may also be used to contrast the returns you receive from one fund with those of other funds of a similar type. This might help you understand the mutual fund's performance compared to its competitors. For further clarity, you may also evaluate against the benchmark indexes.  How should investors interpret the compound annual growth rate over a period of time?  As we previously mentioned, CAGR displays the average annual rate of return on your assets. CAGR accurately gauges an investment's growth (or decline) over time. A typical rule of thumb is that stocks generally favor firms with CAGR growth over 4-5-year intervals.  Profits are expected to be reinvested after each year of the time horizon for calculating CAGR. The CAGR is illustrative and inaccurate. This is so that people understand that when you state something like "CAGR has risen 15% over five years," it does not always indicate that it did so continuously over the five years. It may have fluctuated between positive, flat, and even negative growth during this time. Tax Saver Mutual Funds Read More Advantages of CAGR  It enables investors to evaluate the returns in various situations. For instance, you may model different CAGR scenarios to see how much your original investment would increase over time. It helps with financial planning.  It is simple to use and comprehend. Only the beginning value, the end transaction, and the preferred investment time must be entered. You may simplify the calculation using Internet calculators, excel spreadsheets, or scientific calculators.  Absolute returns over a longer time horizon may be deceptive. In these situations, the CAGR can assist you in comparing with other comparable instruments to see whether you outperform the market. For instance, if you previously bought units of an equity fund and their value has since grown, you can efficiently utilize the CAGR to evaluate the average yearly gains you have achieved.  When comparing CAGR to the cost of funds, it is essential to remember that CAGR is a return on the capital metric. For instance, to make a spread, you would need to look at an investment with a CAGR return of above 12% of your cost of funds was 9%.  Small Cap Mutual Funds Read More CAGR and mutual fund returns While investing in mutual funds, you need to know if it’s worthy of an investment. You need to measure the performance of a mutual fund over a period of time. Mutual fund fact sheets usually give you growth rates across various time horizons of a fund, which makes it difficult to understand the performance of a fund based on multiple rates. If you knew how it grew gradually over a specific period of time, it would get easier. CAGR does that, and it gives the investor the single annual growth of a fund. CAGR is one of the effective ways to calculate fund performance.   Limitations of CAGR CAGR doesn’t take into account the volatility of investment since it gives you a smoothed rate of return over a period of time. CAGR calculations will be accurate only if you don’t withdraw your initial investment and reinvest the returns you gained out of an investment. In case you withdraw or add funds to the investment, the calculation may not be accurate. CAGR can also be used to compare funds that have similar investment periods. CAGR is usually used to calculate returns for extended periods, and it may not help in calculating the rate of returns over small investment tenure.     Points to remember about CAGR The compound Annual Growth Rate assumes compounded growth, which basically means any returns you gain on the investment are reinvested. If you had invested Rs. 200 and earned a return of Rs. 30 after one year of investment, your gain of Rs. 30 gets reinvested. If you plan to use CAGR for two different investments, you need to make sure to keep the same time period for both investments because CAGR offers a rate of return over a specific time period. You may not be able to know the risks involved in the investment and the volatility of an investment with the help of CAGR.   FAQs What is a good CAGR for mutual funds?   An ideal compound annual growth rate can be between 8% and 12% for a long-term investment.   What does a 10% CAGR mean?   CAGR is the average rate at which a fund moves from one value to another within a specific period. Imagine you put Rs 1,000 into stock and received a 10% return. In the first year, the stock price will have increased by Rs. 100. Now that we are in the second year, the price has risen by 10% once again.    Will the cost increase by Rs 1,200 after two years? The answer is no. After a year, your initial investment of Rs. 1,000 has increased to Rs. 1,100.   At this point, a 10% growth of Rs. 1,100 increases the investment’s worth to Rs. 1,210 after two years. The fundamental idea behind CAGR, or compound annual growth rate, is compounding.      Is a CAGR of 5% good?   For large-cap companies, the compound annual growth rate of 5 – 12% is considered good.   What does 5-year CAGR mean?   CAGR, or Compound Annual Growth Rate, refers to the mean annual growth of any investment over a period usually longer than a year. It is an accurate way to calculate and determine the return for investment portfolios and individual assets that may rise or fall in value with time.  CAGR is a beneficial formula for estimating an investment's growth rate. It can help enhance the returns on the assets or evaluate historical profits as well. How much CAGR is considered good?  A good CAGR for mutual funds depends on the investor's financial goals and risk tolerance. Generally, a CAGR of 12-15% is considered good for equity mutual funds, while a CAGR of 8-10% is considered good for debt mutual funds. It is important to note that these figures are not guaranteed and can vary depending on market conditions and the specific mutual fund in question. Investors should consider their investment objectives, time horizon, and risk appetite when evaluating the potential returns of mutual funds.  How is CAGR calculated in mutual funds?  CAGR, or Compound Annual Growth Rate, is a measure of the annualized rate of return of an investment over a specific period of time. In mutual funds, CAGR is calculated using the formula: [(Ending value/Beginning value)^(1/number of years)] - 1. The beginning value is the value of the investment at the start of the period being measured, while the ending value is the value of the investment at the end of the period. The number of years is the length of the investment period. By using this formula, investors can assess the average annual growth rate of their mutual fund investment.  How can I use CAGR to compare mutual funds?  CAGR can be a useful tool for comparing the returns of different mutual funds over the same investment period. By calculating the CAGR for each fund, investors can get a sense of the average annual growth rate and compare the performance of different funds. However, it is important to compare funds with similar investment objectives and risk profiles. For example, comparing the CAGR of an equity mutual fund with a bond mutual fund may not provide meaningful insights due to the different risk-return characteristics of these asset classes. Additionally, CAGR should not be the only factor considered when selecting a mutual fund, as past performance does not guarantee future results. Investors should also consider other factors such as fund expenses, investment strategy, and the expertise of the fund manager.  What are the limitations of using CAGR to evaluate mutual funds?  While CAGR is a useful metric for evaluating the performance of mutual funds, it does have certain limitations. One limitation is that CAGR assumes a steady rate of growth over the investment period and ignores volatility. In reality, mutual fund returns can fluctuate significantly from year to year. Additionally, CAGR does not account for when an investor adds or withdraws funds from the portfolio over the period being measured. This can impact the overall return and may not be accurately reflected by the CAGR. Lastly, CAGR may not be representative of the fund's performance if the investment period is short. It is important for investors to consider other factors such as risk-adjusted returns, expense ratios, and fund manager track record when evaluating mutual funds.  TALK TO AN EXPERT
Top 10 ELSS mutual funds in India.

Top 10 ELSS mutual funds in India.

As per SEBI regulations, an ELSS fund has to invest a minimum of 80% of its assets in equity and equity-related instruments. It is a savings scheme that comes with tax benefits. An individual can claim a tax rebate of an amount up to Rs. 1.50 lakh and save up to Rs. 46,800/- in a financial year. Advantages: Tax Deduction: Any investor investing in an ELSS fund can claim the tax benefit of an amount up to Rs. 1.5 Lakh under Section 80C of the Income Tax Act and save up to Rs. 46,800/- a year. Shortest Lock-in Period: Only the ELSS fund is the scheme that comes with the shortest lock-in period when compared to other tax savings options available. Higher Returns: ELSS is the only scheme among other options available that have delivered higher returns. The habit of Savings: An individual can develop the habit of savings by investing in these funds through SIP (Systematic Investment Plan) with as low as Rs. 500. Top 10 ELSS mutual funds S.No.Fund Name3-Yr Annualized Performance1Quant Tax Plan Direct Option Growth Plan36.22 %2Bank of India Tax Advantage Fund Direct Plan-Growth25.13 %3IDFC Tax Advantage (ELSS) Fund Direct Plan-Growth22.18 %4Canara Robeco Equity Taxsaver Fund Direct Plan Growth Option21.59 %5Mirae Asset Taxsaver Fund Direct Plan-Growth20.94 %6UTI Long-Term Equity Fund Growth Option Direct19.99 %7Mahindra Manulife ELSS kar Bachat Yojana Direct Plan-Growth19.91 %8DSP Tax Saver Fund Direct Plan-Growth19.61 %9PGIM India ELSS Tax Saver Fund Direct Plan-Growth19.32 %10UTI Long Term Equity Fund Growth Option Direct18.87 %Note: Data as of July 24, 2022Source: Morningstar 1. Quant Tax Plan Direct Option Growth Plan Fund analysis: The fund’s objective is to generate Capital Appreciation by investing predominantly in a well-diversified portfolio of Equity Shares with growth potential. The risk grade is high and the return grade is high. The fund has a beta of 0.99 which means that the fund movement is very much relative to the market movement. The fund has a high risk (measured by standard deviation) than the category average. ProsConsWell-diversified portfolio.Tax benefit.Highly volatile. 2. Bank of India Tax Advantage Fund Direct Plan-Growth Fund analysis: The fund has outperformed the category average over the long-term period. The risk grade is below average and whereas the return grade is high. The fund has invested majorly in large-cap growth companies with 83.14% of its assets. The fund has low risk (measured by standard deviation) than the category average. ProsConsMajor holding is in Bluechip companies. Tax benefit.Fund has underperformed the category average in 1-Yr trailing returns. 3. IDFC Tax Advantage (ELSS) Fund Direct Plan-Growth Fund analysis: The fund is a consistent performer and has been rated 4 stars by Morningstar. The risk grade is high, and the return grade is high. The fund has a beta of 1.16 indicating an aggressive approach toward the stock selection. Along with investing in large-cap companies, the fund has exposure to mid-cap (19.32%) & small-cap (13.60%) companies. The fund has a high risk (measured by standard deviation) than the category average. ProsConsFund has outperformed the category average when the market was rising. Tax benefit.Fund has underperformed the category average when the market was falling. 4. Canara Robeco Equity Taxsaver Fund Direct Plan Growth Option Fund analysis: The fund has given consistent performance over the period. The risk grade is below average, and the return grade is high. The fund flows growth style of investing and the majority of holding is in large-cap companies. The fund holds a well-diversified portfolio. The fund has invested across market capitalization and sectors. The fund has low risk (measured by standard deviation) than the category average. ProsConsFund has outperformed the category average when the market was falling. Tax benefit.Fund has underperformed the category average when the market was rising. 5. Mirae Asset Tax Saver Fund Direct Plan-Growth Fund analysis: The fund is one of the top-performing funds in its category. It has outperformed the category average over the long-term period. The fund is rated 5-star by Morningstar. The risk grade is average, and the return grade is high. The fund follows a blended style of investing which indicates that the fund is holding both value and growth stock in the portfolio. The fund has good assets under the management of Rs. 11,494.59 crore, which shows the reliability of investors. The fund has a high risk (measured by standard deviation) than the category average. ProsConsFund has outperformed the category average when the market was falling. Tax benefit.Assets Under Management are high. 6. Union Long-Term Equity Fund Direct Plan Growth Option Fund analysis: The fund has outperformed the category average over the long term. The risk grade is average, and the return grade is high. The fund has a low beta of 0.95 indicating that the movement of the fund is less relative to the market movement. The fund has invested 85.27% in large-cap companies and the rest is in mid-cap (13.13%) & small-cap (1.60%) companies. The fund has invested across sectors. The fund has low risk (measured by standard deviation) than the category average. ProsConsWell-diversified.Tax benefit.The fund has a high expense ratio. 7. Mahindra Manulife ELSS Kar Bachat Yojana Direct Plan-Growth Fund analysis: The fund has given stable returns over the different trailing time periods. The risk grade is average, and the return grade is average The fund has a well-diversified portfolio of 49 holdings spread across sectors. The fund has majorly growth stocks in its portfolio. The fund has low risk (measured by standard deviation) than the category average. ProsConsFund has outperformed the category average when the market was rising. Tax benefit.Low Assets Under Management. 8. DSP Tax Saver Fund Direct Plan-Growth Fund Analysis: The fund’s objective is to generate medium to long-term capital appreciation from a diversified portfolio that is substantially constituted of equity and equity-related securities of corporates and to enable investors to avail of a deduction from total income, as permitted under the Income Tax Act, 1961 from time to time. The risk grade is above average, and the return grade is above average. The fund has a beta of 1.01 indicating fund movement is very much related to the market movement. The fund is rated 4-star by Morningstar. The fund has a relatively high risk (measured by standard deviation) than the category average. ProsConsFund has outperformed the category average when the market was falling. Tax benefit.The return grade is above average. 9. PGIM India ELSS Tax Saver Fund Direct Plan-Growth Fund analysis: The fund has outperformed the benchmark and the category marginally over the long-term period. The fund is rated 5-star by Morningstar. The risk grade is average, and the return grade is above average. The fund follows a blended style of investing, which means it has both value and growth stocks in its portfolio. The fund has low risk (measured by standard deviation) than the category average. ProsConsConsistent performer.Tax benefit.The fund has a high expense ratio. 10. UTI Long-Term Equity Fund Growth Option Direct Fund analysis: The fund has a well-diversified portfolio of 59 stocks, investing in growth stocks across market capitalization except for the energy sector, with major holdings in large-cap (69.73%) companies and the rest in mid-cap (24.14%) & small-cap (6.12%) companies. The risk grade is average, and the return grade is above average. The fund is rated 4-star by Morningstar and the fund has given satisfactory returns over the long term. The fund has low risk (measured by standard deviation) than the category average. ProsConsFund has outperformed the category average when the market was rising. Tax benefit.The fund has a high expense ratio. What are the features of ELSS Funds?  Here are some of the features of ELSS Funds to help you become an educated investor:  1. Lock-in period  ELSS Mutual funds have a lock-in period of 3 years. You can keep your money in the fund for longer than the given period but the 3-year period is mandatory. You cannot take the money out before this period ends.    2. Equity-based investment  One of the features of ELSS is that it is an equity-based investment. About 80% of investment is equity while 20% is invested in debt and hybrid funds. The portfolio is well-diversified and helps you as an investor beat the odds in the long run with sufficient exposure and risk management.  3. Portfolio Manager  ELSS mutual funds are managed by fund managers who have years of experience and adequate financial knowledge to make sound financial decisions. Your money is protected and managed by the best professionals.  4. Different ways to invest  When it comes to ELSS investments, you can either place a lump sum order or a SIP order. Some lumpsum amounts as little as Rs. 500 while some SIP investments start at Rs. 500 to Rs. 1000. You can invest more and build a bigger corpus by the end of the 3-year period to meet your financial goals.   5. Tax benefits   You can have up on taxes with ELSS mutual funds. This investment is covered under Section 80c of the Indian Income Tax Act, 1961. You can claim a tax refund of Rs. 1.5 Lakhs in a financial year. Thus a tool to save money and build a sizeable corpus for your financial goals.   What are the advantages of investing in ELSS Funds?  Some advantages of ELSS Funds:  1. Disciplined Investor  ELSS mutual funds have a lock-in period of 3 years which means that you will automatically become a disciplined and long-term investor. This helps you create a list of goals and manage your funds accordingly. If you invest via SIP, then making regular investments to this ELSS mutual fund plan is a great way to start.   2. Benefits of savings   ELSS Funds gives the opportunity to create wealth and save on taxes. The ELSS funds generate a minimum of 10%* investment (This is subject to change with market risks) and is considered tax deductible.   3. Tax Benefit  As per Section 80C of the Indian Income Tax Act, 1961, you can claim a tax rebate of INR 1.5 Lakh of your ELSS Fund investment. The gains from ELSS funds up to INR 1 lakh is not taxable by law, while above the set limit of INR 1 Lakh is taxable at 10%.  4. Lower lock-in period  ELSS Mutual Funds have a lock-in period. It is shorter than that of other investment tools like the National Pension Scheme (NPS), the Provident Pension Fund (PPF Scheme), and tax-saving Fixed Deposits. Your money is locked in for 3 years only.   5. Tax Savings   ELSS can save taxes and claim up to Rs. 1.5 lakhs under Section 80c of the Indian Income Tax Act.   Whom the funds are suited for?   ELSS are tax-saving funds that every investor should have in their portfolio. This fund adds value to your overall investment plan, helps you stay invested without any breaks, and saves you money in taxes. Whether you are a risk-loving or risk-averse investor, this type of investment is stable, managed by professionals, and has the dual benefit of creating wealth as well as saving your money in taxes.   Conclusion ELSS is the only equity-linked mutual fund scheme that provides Tax Benefits to its investors under Section 80 C of the Income Tax Act for an amount up to Rs. 1.5 Lac. And has the shortest lock-in period. There are two ways to invest in this scheme i.e., SIP (Systematic Investment Plan) or Lumpsum. The preferable mode of investing is Lumpsum as funds will be locked for 3 years. FAQs Is ELSS taxable after 3 years? ELSS has a lock-in period of three years. The gains generated up to Rs 1 lakh are tax-free, and any gains above this limit attract a long-term capital gains tax at 10% What ELSS means? ELSS stands for Equity Linked Savings Schemes. These are Mutual fund investment schemes that help you save tax and create wealth. It has a lock-in period of 3 years. Is ELSS better than PPF? Both ELSS and PPF are tax-saving investments. These investments allow you to create wealth while saving your current income tax. The former has a lock-in period of 3 years while the latter has 15 years. Are ELSS and SIP the same? No, SIP is a medium of investment while ELSS is an investment tool. You can start a SIP for an ELSS mutual fund. What are ELSS mutual funds?   ELSS mutual funds are equity-linked savings schemes that invest primarily in equity and equity-related instruments. They offer tax benefits under Section 80C of the Income Tax Act, making them an attractive investment option for those looking to save taxes while generating wealth in the long run. ELSS funds invest 80% of their corpus in equity-oriented instruments, which have the potential to generate inflation-beating returns.    What is the minimum and maximum investment amount for ELSS mutual funds?   The minimum investment amount for ELSS mutual funds varies from fund to fund and can range from Rs. 500 to Rs. 5,000. There is no maximum limit on the investment amount, but tax benefits are available only up to Rs. 1.5 lakh per financial year. This means that you can invest more than Rs. 1.5 lakh in ELSS funds, but you will not get any additional tax benefits on the excess amount.  What is the lock-in period for ELSS mutual funds?   ELSS mutual funds have a lock-in period of three years, which is the shortest among all tax-saving investment options under Section 80C of the Income Tax Act. This means that you cannot redeem your ELSS investment three years from the date of investment. However, after the completion of the lock-in period, you can redeem your investment or continue to hold it for the long term.   How to invest in ELSS mutual funds online?   You can invest in ELSS mutual funds online through various platforms such as the fund house website, online brokers, and mutual fund aggregators. You need to complete the KYC process and have a bank account to invest in mutual funds online. KYC stands for "Know Your Customer," which is a process of verifying the identity and address of an investor. You can complete the KYC process online or offline by submitting the required documents.   Disclaimer:This is not recommendation advice, use it for educational purposes only. Mutual Fund investments are subject to market risks, read all scheme-related documents carefully. The NAVs of the schemes may go up or down depending upon the factors and forces affecting the securities market including the fluctuations in the interest rates. The past performance of the mutual funds is not necessarily indicative of the future performance of the schemes.
Investment Options for 10 Lakhs in India in 1 Year

Investment Options for 10 Lakhs in India in 1 Year

Investing 10 lakhs for one year can be a challenging task that requires careful consideration of various factors, such as risk appetite, investment goals, and expected returns. It's crucial to make informed investment decisions that align with your financial objectives and tolerance for risk. In this comprehensive article, we will delve deep into the world of investment options available in India and explore the best ways to invest 10 lakhs for a one-year period. By understanding the pros and cons of each option, you can make well-informed decisions that optimize your investment potential while mitigating risks. https://www.youtube.com/watch?v=l8Hyb77tkM8 INR 10 Lakhs Investment Plan | 1-Year Guide 1. Fixed Deposits (FDs) Fixed deposits are a reliable and widely popular investment option due to their safety and stability. With FDs, you can deposit a lump sum amount for a fixed tenure and earn a predetermined interest rate. The interest rates offered by banks typically range from 4% to 6%, providing a predictable return on your investment. FDs are an ideal choice for conservative investors who prioritize capital preservation and a guaranteed return on their investment. Furthermore, they offer the convenience of easy liquidity, allowing you to access your funds when needed. How to Invest INR 500 for Child Education every month? Read More 2. Recurring Deposits (RDs) Similar to fixed deposits, recurring deposits allow you to invest a fixed amount every month for a predetermined period. RDs offer similar interest rates as FDs, making them suitable for individuals who want to build a habit of regular savings. This investment option is particularly appealing to those with a steady income who prefer a disciplined approach to investment. By contributing a fixed amount regularly, you can accumulate a sizeable corpus over time while enjoying the benefits of compounded returns. 3. Public Provident Fund (PPF) The Public Provident Fund (PPF) is a long-term investment option that not only offers attractive interest rates but also provides tax benefits under Section 80C of the Income Tax Act. Currently offering an interest rate of 7.1%, the PPF comes with a lock-in period of 15 years. It is an excellent choice for investors seeking a safe and secure investment avenue that can also help in building a retirement corpus. The PPF provides the advantages of compounding and tax-free returns, making it an appealing option for long-term wealth creation. https://www.youtube.com/watch?v=tdwqQH0xkFw 4. Equity-Linked Savings Scheme (ELSS) The Equity-Linked Savings Scheme (ELSS) is a tax-saving mutual fund that primarily invests in equities. ELSS offers investors the dual benefit of potential capital appreciation and tax deductions under Section 80C. However, it is important to note that ELSS comes with a lock-in period of three years, making it suitable for individuals with a higher risk appetite and a long-term investment horizon. ELSS investments expose you to the volatility of equity markets, but historically, they have delivered attractive returns over the long run. Careful selection of ELSS funds and a systematic investment approach can help you navigate market fluctuations effectively. 5. Mutual Funds Mutual funds have gained significant popularity in recent years due to their ability to provide diversification and professional management. Mutual fund investments help you gain exposure to a portfolio of stocks, other securities, and bonds, which decrease the risk associated with investing in individual assets. Mutual funds offer various categories, such as large-cap, mid-cap, small-cap, debt, and hybrid funds, catering to different risk profiles and investment objectives. Mutual fund investments allow you to benefit from the expertise of professional fund managers and leverage their in-depth market research. 6. Gold Gold has long been considered a traditional safe-haven investment option, providing a hedge against inflation and economic uncertainties. Investors can choose to invest in gold exchange-traded funds (ETFs), physical gold,  or sovereign gold bonds. The returns on gold are influenced by international gold prices, making it subject to price fluctuations. Gold serves as a diversification tool in an investment portfolio and is suitable for those seeking stability and protection against market volatility. Additionally, gold investments offer the flexibility to convert your holdings into cash easily when required. 7. Real Estate Real estate investments offer the potential for long-term returns and act as tangible assets. Investing in residential or commercial properties can provide rental income and capital appreciation over time. However, real estate investments require significant capital and can be illiquid. It is essential to carefully evaluate factors such as location, market conditions, and legal compliance before venturing into real estate. Real estate can be a viable option for investors seeking a long-term investment avenue and are willing to take on the responsibilities associated with property ownership. Talk To An Expert
Exploring ELSS Mutual Funds. Advantages of ELSS Funds

Exploring ELSS Mutual Funds. Advantages of ELSS Funds

Equity Linked Savings Schemes, also known as ELSS, are mutual fund investment plans that enable income tax reduction. They are also referred to be tax-saving funds for this reason. According to section 80c of the Income Tax Act, taxpayers may invest up to INR 1.5 lakh in certain stocks and deduct that amount from their taxable income. ELSS is one of the securities that has been legalized; other securities include PPF, postal savings such as NSC, tax-saving FDs, NPS, etc.  Features of ELSS mutual funds  Equity makes up a huge part of the portfolio of ELSS funds.  They all have mandatory lock-in periods, although theirs is the shortest at only three years.  You profit from tax savings in addition to capital growth from equity investment.  If you want a consistent income, you can choose dividend payouts, or you can choose growth for capital growth.  Entry or exit loads are not present in ELSS Mutual Funds.  Long-term returns from good ELSS Funds are in the 10 – 12% range, among the greatest of all financial vehicles in the tax-saving category. ELSS does, however, carry some risk.  Advantages of best ELSS mutual funds  Only 10% of the gains are taxed on earnings.  There is no upper investment limit.  The three-year lock-in period is the shortest of all Section 80C options.  Investors are not required to have extensive market understanding. The return on your investment is maximized by expert fund managers who have exceptional experience managing mutual funds.  The potential returns are significantly larger when comparing ELSS mutual funds to other tax-saving options like PPF or NPS Top 10 ELSS Mutual Funds Read More Who should invest in ELSS mutual funds?  A Hindu Undivided Family (HUF) or any individual may invest in ELSS. It is only appropriate for individuals who are knowledgeable enough, have the capacity for risk, and are committed to their investments over the long term. Young investors who are just starting their professional careers can make long-term investments. Young investors are the best candidates for ELSS since they have the time to fully harness the power of compounding and earn significant profits while saving up to Rs 46,800 in annual taxes. Options for investing in the best ELSS Mutual Funds  1. Growth Option  The holder won't get any benefits in the form of dividends under the growth option. Gains are received by the investor during redemption, which increases the profits by increasing the entire NAV. The one word of caution is that there is a market risk associated with the returns. It's possible that markets don't always favor investors.  2. Dividend reinvestments option  This is a choice whereby the investor reinvests dividends to raise the NAV. This is a wise move, especially if the market is performing well and is expected to do so in the future.  3. Dividend option  An investor who chooses this option receives timely advantages in the form of fully tax-free dividends. Only when there are excessive profits over and above are dividends issued.  Source: Pexels How to evaluate the best ELSS mutual funds  1. Fund returns  To check that the fund has remained stable over the years, compare its performance to that of its peer competitors. An investor can invest in the suggested funds based on these criteria.  2. Expense ratio  The expense ratio shows how much of your investment is used to manage the fund. Higher take-home returns were the result of a decreased expense ratio. It goes without saying that you should select the fund with the lower expense ratio.  3. Fund History  Select investment companies with a track record of steady performance over a lengthy period, such as five to ten years. Based on its benchmark and the caliber of the equities in its portfolio, a fund's performance is represented. A fund will provide significant returns if it outperforms its benchmark or if the stocks perform better.  4. Financial Parameters  To analyze a fund’s performance, consider a number of criteria, including Standard Deviation, Sharpe ratio, Sortino ratio, Alpha, and Beta. A fund that has a higher beta and standard deviation is riskier than one that has a lower beta and deviation. Because they give better returns for each additional risk you take, choose funds with a higher Sharpe ratio.  Building trust in the fund is mostly dependent on the fund manager. The fund manager is crucial because choosing the right stocks and building a solid portfolio are what enable the fund to generate high returns. Their competency skills and experience help to build confidence in this regard. Why do you invest in ELSS Funds? Read More Best ELSS Funds to Invest in 2023 Fund Name and their 3-Year Compound Annual Growth Rate (3Y CAGR) Fund Name 3-Y CAGR Quant Tax Plan 33.6% Bank of India Tax Advantage Fund Eco 24.4% Bank of India Tax Advantage Fund 23.8% Union Long-Term Equity Fund 20.6% Canara Robeco Equity Tax Saver fund 20.2% UTI Long-Term Equity Fund 19.3% Mirae Asset Tax Saver Fund 19.2% DSP Tax Saver Fund 18.5% UTI Long Term Equity Fund 17.8% Kotak Tax Saver Scheme 17.1% Principal Personal Tax Saver Fund 16.8% Baroda ELSS 96 Plan A 16.3% SBI Magnum Long Term Equity Scheme 16.3% ICICI Prudential Long Term Equity Fund Tax Saving 15.5% Invesco India Tax Plan 15.1% Tata India Tax Savings Fund 15% Baroda BNP Paribas ELSS Fund 13.8% SBI Magnum Long-Term Equity Scheme 12.9% Nippon India Tax Saver ELSS Fund 12.7%  FAQs Are ELSS funds better than mutual funds?   ELSS funds are a type of mutual fund that invests primarily in equity, providing the potential for higher returns and tax benefits.  What are the advantages of ELSS over the tax-saver FD?  The advantages of ELSS (Equity Linked Savings Scheme) over tax saver Fixed Deposits (FDs) include the potential for higher returns due to equity investments, tax benefits under Section 80C with a limit of 1.5 lakh INR, and the opportunity for wealth creation through long-term equity market exposure.  What are the advantages of ELSS funds?   The advantages of ELSS (Equity Linked Savings Scheme) funds include the potential for higher returns due to equity investments, tax benefits under Section 80C of the Income Tax Act, and a lock-in period of three years, which encourages long-term investment.  TALK TO AN EXPERT
ICICI Prudential India Opportunities Fund: Unlocking Investment Potential

ICICI Prudential India Opportunities Fund: Unlocking Investment Potential

ICICI Prudential Mutual Fund is the second-largest asset management company in India. With over Rs 5 Lakh crore, the AMC is among the most trusted names in the mutual fund space. ICICI offers products across asset classes. https://www.youtube.com/watch?v=tdwqQH0xkFw ICICI Prudential India Opportunities Fund Investment Objective The scheme's primary objective is to generate long-term capital appreciation by investing in opportunities presented by special situations such as corporate restructuring, Government policy and/or regulatory changes, companies going through temporary unique challenges, and other similar instances.  Investment Process   Concentrated portfolio: The scheme would take concentrated exposure to high-conviction stocks.  Market cap and sector Agnostic: The scheme has the flexibility to invest across market caps. Also, the scheme may take aggressive sectoral positions.  Bottom-up Approach: The investing style is a bottom-up stock picking style because the core of its investment strategy is identifying companies in special situations requiring rigorous 360-degree stock research.  Portfolio Composition  The fund had invested more than 66.49% of the funds in large-cap companies, 28.94% in mid-cap companies, and the remaining 4.57% in small-cap companies. Also, the fund is diversified across various sectors such as Pharma & Biotechnology, Automobiles, Banks, Telecom-Services, Finance, etc. The top five sectors hold approximately half of the portfolio. Note: Data as of 30th June. 2023. Source: ICICI Pru AMC, Value Research  Top 5 Holdings Name Sector Weightage % Oil and Natural Gas Corporation Ltd. Oil 9.03 Sun Pharmaceutical Industries Ltd. Pharma and Biotech 7.76 Bharti Airtel Ltd. Telecom Services 6.76 NTPC Ltd. Energy 6.40 Infosys Ltd. Information Technology 5.40 Note: Data as of 30th June 2023. Source: ICICI Pru AMC Performance Since Inception  If you had invested 10,000 at the fund's inception, it would now be valued at Rs 22,240. Note: Fund performance as of 30th June 2023 since launch; Inception Date:15th January 2019.  Source: icicipruamc.com  The fund has performed consistently and has generated an annualized return of 19.64% since inception. The fund has outperformed both benchmarks consistently.  Invest in Fund Fund Manager  Mr. Sankaran Naren and Mr. Roshan Chutkey ably manage the fund. Mr. Sankaran Naren has over 31 years of experience, and Mr. Roshan Chutkey has over 14 years of experience.  Who Should Invest?  The scheme is suitable for investors with an appetite for volatility and who would like to benefit from taking concentrated stock bets. Investors looking to benefit from investment opportunities presented by special situations such as corporate restructuring, Government policy and/or regulatory changes, companies going through temporary unique challenges, or other similar instances face time to time may consider investing in the scheme.  Why Invest in ICICI Prudential India Opportunities Fund?  Special situations are unique situations that companies may face from time to time.   These situations present an investment opportunity to a fund manager who can foresee and interpret the implications of that opportunity.  ICICI Prudential India Opportunities Fund has performed consistently following this investment strategy.    Ideal Time Horizon  One should look at investing for a minimum of five years or more.  Investment through Systematic Investment Plan (SIP) may help tackle broader equity market volatility.  Conclusion  The scheme provides access to well-researched companies currently undergoing special situations and provides a higher return potential. This allows investors to generate high returns over the long term by taking aggressive risks. Also, the fund has consistently outperformed its benchmark. Hence, investors seeking to invest for a long-term time horizon to generate high returns with higher risk through exposure to the banking and financial sector can consider this fund.  DisclaimerThis is not recommendation advice. All information in this blog is for educational purposes only.
HDFC Mid-Cap Opportunities Fund

HDFC Mid-Cap Opportunities Fund

Incorporated on December 10, 1999, HDFC Asset Management Company Ltd. is among India's most popular fund houses. HDFC Mutual Fund launched its first scheme in July 2000, and ever since it has been ambitious about offering a stable performance of funds across all the variants of schemes it offers. The HDFC Mutual Fund is managed by HDFC Asset Management Company (HDFC AMC) Limited.  Let us talk about the consumer product – HDFC Mid-Cap Opportunities Fund  https://www.youtube.com/watch?v=h0xun9aaj9s HDFC Mid-Cap Opportunities Fund  Investment Objective The primary objective is to provide long-term capital appreciation/income by investing predominantly in mid-cap companies.   Investment Process  To follow a stock-specific approach  Construct the portfolio on a bottom-up basis  Focus on good quality companies at acceptable valuations  Long-term orientation (resulting in low portfolio turnover)   Stick to the circle of competence  Portfolio Composition  The fund had invested 92.54% of its assets in equity & equity-related stocks, and significant sectoral exposure is to Finance, which accounts for roughly 11.89% of the portfolio. Note: Data as of June 30, 2023 Source: HDFC MF https://www.youtube.com/watch?v=UHYimOpW9Pw Top 5 Holdings  Name Weightage % Indian Hotels Company Ltd. 4.39 Cholamandalam Investment & Finance Co. Ltd. 3.66 Max Healthcare Institute Ltd. 3.65 Tata Communications Ltd. 3.58 Apollo Tyres Ltd.  3.30 Note: Data as of June 30, 2023. Source: HDFC MF  Performance    This Fund S&P BSE 150 MidCap TRI Equity: Mid Cap 1 Year 34.64% 24.82% 23.13% 3 Years 36.45% 33.34% 31.71% 5 Years 18.04% 16.83% 17.05% 10 Years 22.38% 20.17% 21.05% Note: Data as of June 30, 2023. Source: Value Research  Invest In Fund Fund Manager  Mr. Chirag Setalvad (Since June 28, 2014) has over 25 years of experience, of which 18 years in Fund Management and Equity Research and three years in Investment Banking. Before HDFC, he worked at New Vernon Advisory Services and started his career at ING Barings in India.   Who Should Invest in HDFC Mid-Cap Opportunities Fund?  Investors looking to generate higher returns by taking exposure to mid-cap equities can consider this fund. However, investors need to understand the aggressive risk exposure of this fund.  Why Invest in this Fund?  Opportunity to invest in a portfolio of predominantly mid-sized companies.  Aims to provide diversification to an investor’s overall equity mutual fund portfolio.  Experienced fund management and research teams with a track record of managing equity assets across market cycles.  Emphasis on risk management – portfolio diversification across stocks and sectors; focus on good quality businesses.  One of the largest funds in the mid-cap category with a track record of more than 15 years.  Time Horizon  One should look at investing for at least three years or even more.  Investment through Systematic Investment Plan (SIP) may help in tackling the volatility of the broader equity market.  Conclusion  The HDFC Mid-Cap Opportunities Fund has a proven track record of over 15 years, with an Asset Under Management of ₹42,731.64 Cr as on  June 30, 2023. The fund has consistently outperformed both the benchmarks and the category average also. Therefore, investors looking to generate wealth over the long term can consider this fund with an understanding of high risk.   DisclaimerThis is not recommendation advice. All information in this blog is for educational purposes only.
UTI Nifty50 Equal Weight Index Fund

UTI Nifty50 Equal Weight Index Fund

UTI is one of the pioneers of the Indian Mutual Fund Industry. With an AUM of more than Rs 2.4 Lakh crore, the AMC is among the most trusted names in the mutual fund space. The UTI Mutual Fund offers products across asset classes. https://www.youtube.com/watch?v=tdwqQH0xkFw UTI Nifty50 Equal Weight Index Fund  Investment Objective The investment objective of the scheme is to provide returns that, before expenses, correspond to the total return of the securities as represented by the underlying index, which is Nifty50 Equal Weight TRI, subject to tracking error.  Investment Process   UTI Nifty50 Equal Weight Index Fund follows a passive style of investing; that is, it invests in all the companies forming part of the Nifty50 Equal Weight Index (the underlying index) in the same proportion of the underlying index to earn a return as much as the underlying index, before expenses.     Portfolio Composition  The scheme had invested 98.52% of its assets in equities, and the remaining were cash and cash equivalents as of June 30, 2023. The scheme had significant exposure to financial services, followed by Automobile and Auto Components and Information Technology.  Note: Data as of June 30, 2023. Source: UTIMF, Value Research  https://www.youtube.com/watch?v=mVTKhy6XJME Top 5 Holdings Name Sector Weightage % Sun Pharmaceuticals Industries Ltd. Healthcare 2.03% Infosys Ltd. Information Technology 2.02%  Bajaj Auto Ltd. Auto and Auto Components 2.02% Tata Motors Ltd. Auto and Auto Components 2.02% JSW Steel Ltd. Metals and Mining 2.02% Note: Data as of June 30, 2023. Source: UTIMF Performance Since Inception  If you had invested 10,000 at the fund's inception, it would now be valued at Rs. 10,242, whereas the benchmark (Nifty50 Equal Weight TRI) would have fetched Rs. 10,501. Since the fund was launched just a month ago, monitoring how the fund tracks the underlying index in the long term will be essential.  Note: Performance of the fund as on June 30, 2023, since launch; Inception Date – June 07, 2023. Source: utimf.com Invest in Fund Fund Manager Sharwan Goyal is Fund Manager and Head - Passive, Arbitrage, and Quant strategies at UTI AMC. He is a CFA Charter holder from CFA Institute, USA, and holds a post-graduate degree in Management (MMS) from Welingkar Institute of Management, Mumbai. He has over 16 years of experience in Risk Management, Equity Research, Portfolio Analysis, and Fund Management at UTI AMC.  Who Should Invest?  This product is suitable for investors who are seeking:  Capital Growth in tune with Index returns.  Passive investment in equity instruments comprised in Nifty50 Equal Weight TRI.  Why Invest?  The index offers exposure to the Top 50 large companies on the NSE with equal weight (~ 2% to each stock) with quarterly rebalancing.  The index aims to benefit from the growth opportunities across stocks/ sectors rather than just relying on the performance of a few heavy-weight stocks/sectors.  The index represents smart and intelligent investing through "Auto Quarterly Rebalancing" and thus enables "Auto Profit Booking."  Ideal Time Horizon  Ideal for investment with a time horizon of, preferably, five years or above   Investment through Systematic Investment Plan (SIP) may help in tackling the volatility of the broader equity market.  Conclusion  Investing by replicating Nifty50 Equal Weight TRI is a better approach to investing in large-cap companies. Historical data shows that the Nifty50 Equal Weight TRI has generated better returns than the Nifty 50 with lesser volatility. Therefore, this scheme suits investors looking for a simple yet smart way of investing in the Top 50 companies. However, monitoring how efficiently the fund tracks the underlying index over the long term will be crucial. DisclaimerThis is not recommendation advice. All information in this blog is for educational purposes only. 
Is it time to pause investing in small caps?

Is it time to pause investing in small caps?

Small-cap funds are flooded with funds. Investors are heavily pumping money into small-cap equities in the hope of high returns. Investors have put in more than Rs. 33,040 crores in small-cap funds from April-2022 till June-23. Net inflows in mutual funds It can be inferred from the data released by AMFI that the investors are taking aggressive bets by flocking into high-risk funds such as small-cap, mid-cap, and thematic funds. The reason behind such a huge increase in small-cap investments is the returns given by small companies in the recent past. Nifty 250 TRI Rolling Returns The average returns delivered by small-cap funds in the last 1 year is 30.92% compared to the average return of 20.96% of the large-cap funds. Clearly, the returns delivered by small caps are way higher than the large caps. But, what about the risk? Aren’t the small cap equities too risky compared to the large caps? Let us see what the data says.  Volatility in price As can be inferred from the above graphs, the returns delivered by small caps are well above the large caps and contrary to the general perception, the volatility in the prices is not significantly higher than the large caps. After looking at this, now the question arises whether investors should continue to invest in the small-cap funds, or should they hit a pause on investing in the small-caps and book some profits. Let us try to find out.  Valuations: The first parameter the investors look at is the valuation. Are the small-cap companies overvalued? Let us look at the P/E ratio.  Nifty small cap 250 PE Although P/E alone cannot be used to conclude whether the companies are overvalued or not, it can be used to get a quick idea about the relative valuations of the companies. And as can be seen in the above chart, the current state of P/E does not suggest that small-cap companies are extremely overvalued.  Small Cap Premium: In a paper titled “The Relationship Between Return and Market Value of Common Stocks,” Rolf W. Banz concluded that the common stocks of smaller firms outperformed the common stocks of larger firms on a risk-adjusted basis. Many have argued that the inference drawn in the said paper does not hold good in today’s world. However, this has always been the case for developing economies like India where smaller companies have outperformed the large caps by a significant margin.  India’s Growth Story: India is a developing nation, and we are growing at the fastest rate. Small-cap companies are expected to benefit disproportionately higher than large-cap companies from such high growth. The primary reason behind this is the smaller base of the small companies which translates into higher growth in relative numbers. And secondly, it becomes difficult for large companies to grow faster due to their large size.   Volatility: As seen earlier, the volatility of small-cap companies reduces significantly over a longer period. Hence, small-cap companies are not as volatile in the long run as we generally perceive.  Conclusion  Small-cap equities offer tremendous growth potential over the long term, especially in a growing economy like India. However, it is possible that investors might not see extremely high returns in the short term. But stopping investments based on this rationale implies nothing but trying to time the market and doing so may prove to be harmful if the markets do not correct. Hence it is advisable to continue to invest for the long term keeping in mind the said factors
Is an SIP 100% Safe: Facts & Insights

Is an SIP 100% Safe: Facts & Insights

Investing in the financial markets can be a daunting task, especially for those seeking stability and security in their investment choices. One popular investment option that often garners attention is the Systematic Investment Plan (SIP). SIPs allow investors to invest a fixed amount of money at regular intervals in various avenues such as mutual funds, trading accounts, or retirement accounts.  While SIPs offer numerous advantages, it is crucial to delve into their safety aspect to gain a comprehensive understanding. In this article, we will explore the safety of SIPs, analyzing the potential risks and benefits they entail. This will enable you to make well-informed investment decisions with a thorough understanding of the factors at play. https://www.youtube.com/watch?v=wEA3dKj7q5U Understanding SIPs and Dollar-Cost Averaging SIPs are a form of passive investment strategy that utilizes the concept of dollar-cost averaging (DCA). DCA is a technique where investors make periodic equal transfers of funds, ensuring they accumulate assets over time. By investing a fixed amount regularly, regardless of market conditions, investors benefit from averaging the purchase cost of units, thereby reducing the impact of market volatility. This approach is particularly advantageous for long-term investments as it allows investors to ride out short-term market fluctuations and make consistent investments without being influenced by market timing. Invest in Mutual Funds Market Risks and Returns While SIPs provide a disciplined approach to investing, it is important to recognize that they are not immune to market risks. Mutual funds, which are commonly associated with SIPs, are subject to market conditions, and their value can fluctuate. Therefore, the returns on SIP investments are not guaranteed. The value of mutual funds can go up or down depending on the market conditions, and investors may lose money if they redeem their units at a lower price than the purchase price. It is crucial for investors to be aware of the inherent risks associated with the market and approach SIPs with a long-term investment horizon to potentially mitigate the impact of short-term market fluctuations. Calculate SIP Returns Long-Term Perspective and Compounding Benefits SIPs are best suited for individuals with a long-term investment horizon. The power of compounding works in favor of those who stay invested for an extended period. Compounding refers to the ability of an investment to generate earnings on both the principal amount and accumulated returns. By staying invested for at least 5-7 years, investors can harness the full potential of compounding, allowing their investments to grow significantly over time. This long-term perspective helps investors overcome short-term market volatility and allows them to reap the benefits of gradual wealth accumulation through the compounding effect. https://www.youtube.com/watch?v=BIRf2Dm1wB8 Wealth Accumulation and Reconsidering Investment Plans As investors accumulate wealth through their SIPs, it becomes essential to periodically assess their investment plans. Reaching certain milestones or nearing retirement may prompt a reevaluation of investment strategies. While SIPs offer a passive approach, some investors might consider transitioning to actively managed investments at a certain point. Active management involves a more hands-on approach by investment professionals who aim to generate higher returns by actively adjusting investment allocations based on market conditions and opportunities. This transition can provide investors with the potential to further grow their wealth and achieve their financial goals. Conclusion SIPs serve as an excellent investment option for those seeking a disciplined approach to wealth accumulation. However, it is crucial to understand that SIPs are not entirely risk-free. The potential market risks and fluctuating returns make it essential for investors to adopt a long-term perspective and remain invested for extended periods to reap the benefits of compounding.  Monitoring the wealth accumulated through SIPs and periodically reevaluating investment plans can help investors make informed decisions to maximize their returns. By combining a comprehensive understanding of SIPs with diligent research and risk management, investors can navigate the financial markets more confidently and potentially achieve their financial goals. Remember, investing always carries inherent risks, and consulting with a financial advisor or professional is advised before making any investment decisions. Talk To An Expert
Smart Investments for Kids of 10-15 Years: A Parent’s Guide

Smart Investments for Kids of 10-15 Years: A Parent’s Guide

Time slips through our fingers like grains of sand. In the blink of an eye, days turn into years. Parents cherish the childhood of their children. But as said, we don’t realize how time passes. Kids grow up, and as they grow up, the expenses also increase especially the education-related costs. And if you have a kid between the ages of 10-15 years, you will have to prepare for your child's college. The post-graduation is in the line. In this article, we will guide you on preparing for these expenses.  If you have a kid between the age group of 10-15 years, his/her college will be due in the next 3-5 years. Apart from that, there may be expenses such as application fees, expenditures on electronic gadgets like laptops or tablets, etc. There will be living expenses that you will have to incur. And after 6-8 years, you might have to incur the expenditure for post-graduation.   https://www.youtube.com/watch?v=tdwqQH0xkFw Education inflation comes under the top category, i.e., one of the highest among all the categories. Adding to the burden, if your child plans to go abroad, rupee depreciation increases your cost.  The only way to prepare for this expenditure and save your child's future is to start investing. As the Chinese proverb says, "The best time to plant a tree was 20 years ago; the second-best time is now." Similarly, it would help if you had started the investing journey much before. But if you have not, then do not waste your time. Start investing right now. Something is better than nothing. But how to do that? Let us see.  First, you need to identify the expenses you will incur along with their expected timing. As mentioned earlier, these can be graduation expenses, living expenses, etc. Using the college cost calculator, you can approximately estimate how much it will cost in the future to pursue the desired course for your child.   To estimate the other expenses, you can take the help of our SIP calculator by using which you can estimate how much you will be required to pay in the future and the required amount to invest monthly to reach your goal in the future by considering the inflation.   After identifying the expenses and their timing, you should bifurcate them as per the estimated timing of those expenses, like expenditure to be incurred within a year, in 1-3 years, after three years, etc. This bifurcation will help you determine how much risk you can take while investing. It is considered that an investor can take a higher risk while investing for the long term, and the risk appetite reduces as the time horizon decreases. There is a simple reason behind this. A long-term time horizon allows you to recover in case anything goes wrong.  The only thing that remains is to start investing as per your risk appetite. But how to select funds? As said earlier, you need to determine your risk appetite, and accordingly, you can invest. You cannot take the risk aggressively for expenditure to be incurred within a year. So, debt funds such as liquid or money market funds should be considered. For expenditure to be incurred after one year but within three years, you can take a little more risk.   Hence, you can consider investing a small portion of your investments into equities. This can be better done by investing in hybrid funds such as conservative funds or balanced advantage funds. An aggressive investor can consider investing in multi-asset funds as they provide allocation to various asset classes such as equities, debt, gold, etc. And lastly, for expenditures to be incurred after three years, such as post-graduation expenses, you should consider investing in equity mutual funds. Equity mutual funds provide excellent growth potential with reduced volatility over the long term. Small cap, mid cap, flexi cap, or focused funds can be good options for investing for the long term.  This is how you can start investing in your child's education. However, you need to keep in mind a few points.   First, you need to monitor your portfolio regularly and rebalance it. As you come closer to your goal, you will have to reallocate your money from high-risk funds to low-risk funds.   Second, if your child wishes to go abroad for graduation or post-graduation, it will be better to invest in USD as your exchange rate risk mitigates automatically. The procedure to estimate the expenditure and amount of investment remains the same.   And lastly, if you are too late to start investing, you might be required to look for an education loan.   However, you should start investing even if you are late so that you can create at least some corpus for your child's education rather than nothing.           Hopefully, this article has given you some insights and helps you plan better for your child’s education. Start investing!  Talk To An Expert
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