Category Archives: Mutual 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. 

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

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

What is a mutual fund?  A mutual fund is an investment program that is expertly managed by Asset Management Companies (AMC), which act as middlemen for ordinary investors. The AMC collects funds from numerous individuals and invests them in bonds, money market instruments, equity shares, and other securities. According to the amount invested in the fund, a certain number of units are allocated to each investor in turn. In proportion to his investment in the fund, the investor shares the fund's gains, losses, income, and expenses.   The money of the investor will be managed by the fund manager in accordance with the scheme's stated investment goals. Capital growth is his objective. The fund manager's mission is to meet the investment objectives of the mutual fund scheme by the wise selection of financial instruments, which can result in capital growth or dependable income.   For instance, an equity mutual fund will invest in equities so that investors can benefit from long-term capital growth. The debt fund will invest in government assets to earn a larger return based on changes in interest rates as well as fixed-income securities to provide investors with a steady income. To provide a higher return on investment and safeguard the portfolio during a downturn in the stock market, the balanced fund will invest in a combination of equity and bonds/fixed income. What is a mutual fund calculator?  You may determine the returns from mutual fund investments using the mutual fund calculator, which is a simulation. If you make an investment in a lump sum or even via a SIP, you can figure out its maturity value.   Even before you invest the money, a mutual fund calculator is a simple-to-use tool that enables you to obtain a sense of the maturity value of the mutual fund investment. Given that you already know how much money you will receive upon maturity, it enables you to plan your spending and meet your financial objectives. To calculate the maturity amount for an estimated rate of return, input the SIP amount, duration, and frequency. How to calculate mutual fund returns? For instance, you made a one-time investment of 1 lakh rupees in a mutual fund program for 10 years. The rate of return on the investment, according to your calculation, will be 8% annually. The following formula can be used to determine the investment's future value:  Future Value = Present Value (1 + r/100)^n  Present Value (PV) = Rs 1,00,000  r = Estimated rate of return of 8% = 8/100 = 0.08  n = Duration of the investment which is 10 years.  At maturity or after 10 years, you must determine the Future Value (FV) of the mutual fund investment.  FV = 1,00,000 (1+8/100)^10  FV = Rs 2,15,892.5.  Hence, at an estimated return of 8%, the future value of the mutual fund investment after 10 years is Rs 2,15,892.5.  Source: Pexels The mutual fund calculator can also be used to determine the maturity value of SIP investment.  Use the formula:  FV = P [(1+i)^n-1]*(1+i)/i  FV = Future value or the amount you get at maturity.  P = Amount you invest through SIP  i = Compounded rate of return  n= Investment duration in months  r = Expected rate of return  For instance, you might use a SIP to invest Rs 1,000 each month in a mutual fund scheme. The investment has a 10-year term and an expected annual return rate of 8%.   You have I = r/100/12 = 8/100/12 = 0.006667. (You must multiply the rate of return by 12 to get the monthly amount.) Additionally, you have n = 120 months or 10 years.  FV = 1,000 [(1+0.006667)^120 – 1] * (1+ 0.006667)/0.006667  FV = Rs 1,84,170.  So, at an estimated rate of return of 8%, the future value of a SIP investment of Rs 1,000 each month for 10 years is Rs 1,84,170.  How to compare two mutual funds? Read More Nature of investment (SIP/Lumpsum)  Money can be invested in mutual funds in two different ways. You have the option of making a lump-sum investment or a SIP.  1. Lump-sum investment You are allowed to invest a substantial amount of your available funds in the mutual fund plan of your choice. The profit from the sale of an asset or an inheritance can also be invested. The risk is increased when investing a lump sum, though. It is therefore always advised to use the SIP method.  2. Systematic investment plan (SIP)   In a Systematic Investment Plan, you tell the bank to take a set amount each month out of your savings account and invest it in a mutual fund plan. You won't have to worry about waiting until the ideal moment to enter the market because you can buy units continuously with this method. Additionally, you can profit from rupee cost averaging and take advantage of compounding. FAQs What is the formula for ROI calculation?   The formula for ROI (Return on Investment) calculation is:  ROI = (Net Profit / Cost of Investment) x 100.  How to make 5 crore in 5 years?  Making 5 crores in 5 years is a challenging financial goal that typically requires significant investment, entrepreneurship, or successful business ventures. It may involve high-risk investments, real estate development, or starting a profitable business. Success is not guaranteed, and careful planning and risk assessment are crucial. Consult with financial experts for personalized advice.  How do you calculate 100% ROI?  To calculate a 100% ROI, you need to double your initial investment. The formula for ROI is:  ROI = (Net Profit / Cost of Investment) x 100  If the ROI is 100%, it means that the net profit is equal to the cost of investment. In other words, you have earned back the entire amount of your initial investment, resulting in a 100% return on your investment.  TALK TO AN EXPERT

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. It offers products across asset classes. Let us talk about the flagship product – ICICI Prudential Midcap Fund.  https://www.youtube.com/watch?v=iK748JVOU08 ICICI Prudential Midcap Fund   Investment Objective The scheme's primary objective is to seek to generate capital appreciation by actively investing in diversified mid-cap stocks.  Investment Process   Diversification: The scheme aims at maintaining a well-diversified portfolio with the flexibility to invest across sectors.  Opportunistic Investment: The scheme shall follow a bottom-up approach in identifying midcap companies with proven products or services and above-average earnings growth. Midcap companies can deliver capital appreciation due to faster earnings growth.  Portfolio Composition  As per its investment objective, the equity exposure is majorly in mid-cap stocks at around 81%, and large and small cap had exposure of roughly 15% and 4%, respectively. The fund is well diversified across various sectors such as Auto Components, Cement & Cement Products, Industrial Products, Ferrous Metals, Realty, etc. The top 5 sectors hold nearly 44% of the portfolio. Note: Data as of 30th June 2023.Source: ICICI Pru AMC Top 5 Holdings for ICICI Prudential Midcap Fund   Name Sector Weightage % Hindustan Petroleum Corporation Ltd. Petroleum Products 4.52 Balkrishna Industries Ltd. Auto Components 4.00 Jindal Steel & Power Ltd. Ferrous Metals 3.26 Lupin Ltd. Pharma and Biotech 3.01 Minda Industries Ltd. Auto Components 3.00 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 181,040.  Note: Fund performance since launch; InceptionDate – 28th October 2004. Source: icicipruamc.com Since its inception, the fund has given consistent returns by generating a CAGR (Compounded Annual Growth Rate) of 16.65%.  Invest In Fund Fund Manager  The fund is ably managed by Mr. Lalit Kumar, who has 14 years of experience and manages seven funds.  Who Should Invest?  The scheme is suitable for investors who wish to invest in companies in the midcap space that are likely to transform into tomorrow's market leaders over a long period of time.  Why Invest?  The scheme offers diversification to investors looking to invest across various sectors.   The scheme provides access to well-researched mid-cap companies with a higher return potential and could grow to become tomorrow's market leaders in their respective segments.   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 mid-cap companies with a higher return potential and could grow to become tomorrow's market leaders in their respective segments. However, the fund has underperformed its benchmark. Hence, investors need to remain invested long-term to witness alpha generation. 

Previously we discussed the Top 10 large-cap mutual funds and mid-cap mutual funds in this article, we will discuss the top 10 small cap mutual funds in India. A small-cap mutual fund is a fund that invests majorly in small-cap companies as per market capitalization. As per SEBI regulations, a small-cap fund is required to invest a minimum of 65% of its assets in small-cap companies through equity. https://www.youtube.com/watch?v=DE-WJ24C1R8 Advantages: Attractive Valuation: Small-cap funds invest in small-cap companies majorly, so there are various companies that are available at cheaper and attractive valuations. Very High Growth Potential: Companies in these funds have very high growth potential because of their size and flexibility to change. The companies have the potential to become mid & large-cap companies in the future. Top 10 small-cap mutual funds S.No.Fund Name3-Yr Annualized Performance1Quant Small Cap Fund Direct Plan-Growth40.21 %2Bank of India Small Cap Fund Direct-Growth34.65 %3Canara Robeco Small Cap Fund Direct-Growth34.26 %4Kotak Small Cap Fund Direct-Growth31.30 %5Edelweiss Small Cap Fund Direct-Growth29.93 %6Nippon India Small Cap Fund Direct Plan Growth Plan29.19 %7Union Small Cap Fund Direct-Growth29.14 %8Tata Small Cap Fund Direct-Growth28.25 %9ICICI Prudential Small Cap Fund Direct Plan-Growth27.38 %10Axis Small Cap Fund Direct-Growth27.28 %Note: Data as of July 16, 2022Source: Morningstar https://www.youtube.com/watch?v=TIFEdoSEzC8 1. Quant Small Cap Fund Direct Plan-Growth - Small cap mutual funds Fund analysis: The fund has delivered an exceptionally good performance. The fund is investing predominantly in small-cap companies. The fund is rated 5-star by Morningstar. The risk grade is high, and the returns grade is high. The fund follows a blended style of investing. The risk is spread across companies with the top 10 holdings consisting of 38.96%. The fund has a high risk (measured by standard deviation) than the category average. ProsConsA top performer in its category. The fund captured the market well when it was rising.Volatility is very high. 2. Bank of India Small Cap Fund Direct-Growth - Small cap mutual funds Fund analysis: The fund is rated 5-star by Morningstar. The risk grade is below average, and the returns grade is high. The fund has a beta of 0.84 indicating that the movement of the fund is less relative to the market movement. The fund follows a growth style of investing. The fund has a low risk (measured by standard deviation) than the category average. ProsConsRisk Grade is below average. Well-diversified portfolio.The fund has a high expense ratio. 3. Canara Robeco Small Cap Fund Direct-Growth - Small cap mutual funds Fund analysis: The fund has outperformed the benchmark over different horizons. The risk grade is average and the returns grade is high. The fund has a well-diversified portfolio invested across market capitalization. The top 10 holdings consist of a total of 22.88%. The fund is rated 5-star by Morningstar. The fund holds a good risk-to-reward ratio. The fund has low risk (measured in standard deviation) than the category average. ProsConsThe fund captured the market well when it was rising. Fund captured the market well when it was falling.Less exposure to small-cap stocks. 4. Kotak Small Cap Fund Direct-Growth - Small cap mutual funds Fund analysis: The fund has outperformed the category average in terms of trailing returns over different horizons. The risk grade is above average and the returns grade is above average. The fund has a beta of 0.95 indicating that the movement of the fund is quite closely relative to the movement of the market. The fund has a well-diversified portfolio of growth stocks consisting of 72 companies spread over different sectors and market-cap companies. The fund has a high risk (measured in standard deviation) than the category average. ProsConsThe fund has a favorable expense ratio. Fund captured the market well when it was falling.Too much diversification may hamper the returns. 5. Edelweiss Small Cap Fund Direct-Growth - Small cap mutual funds Fund analysis: The fund has outperformed the category and the benchmark with good margins. The risk grade is below average and the returns grade is above average. The fund has delivered consistent returns over different horizons and has a well-diversified portfolio of 75 growth stocks, investing across market capitalization. The fund has low risk (measured in standard deviation) than the category average. ProsConsThe fund captured the market well when it was falling. Relatively less downside risk.Returns are above average. 6. Nippon India Small Cap Fund Direct Plan Growth Plan - Small cap mutual funds Fund analysis: The primary objective of the scheme is to generate long-term capital appreciation by investing predominantly in small-cap companies and the secondary objective is to generate consistent returns by investing in debt and money market securities. The risk grade is above average and the returns grade is above average. The fund has a well-diversified portfolio across market capitalization and sectors. The fund has a high risk (measured in standard deviation) than the category average. ProsConsConsistent compounder. The fund captured the market well when it rose.The fund has a high expense ratio. Source: pixabay 7. Union Small Cap Fund Direct-Growth - Small cap mutual funds Fund analysis: The fund is rated 3-star by Morningstar. The risk grade is below average and the returns grade is above average. The fund has a well-diversified portfolio across market capitalization and sectors. The top 10 holdings of the fund consist of 29.08% only and the fund holds a total of 54 stocks in the portfolio. The fund has low risk (measured in standard deviation) than the category average. ProsConsFund captured the market well when it was rising. The fund captured the market well when it was falling.The fund has a high expense ratio. 8. Tata Small Cap Fund Direct-Growth - Small cap mutual funds Fund analysis: The fund has outperformed the category average marginally. The risk grade is low and the returns grade is above average. The fund has a beta of 0.86 indicating that the fund’s movement is less relative to the market movement. The fund has low risk (measured in standard deviation) than the category average. ProsConsWell-diversified portfolio.Relatively low risk.Fund was not able to capture the market well when it was rising. 9. ICICI Prudential Small Cap Fund Direct Plan-Growth - Small cap mutual funds Fund analysis: The fund’s objective is to seek to generate capital appreciation by predominantly investing in small-cap stocks. The risk grade is above average and the returns grade is average. The fund is rated 3-star by Morningstar. The fund has a balanced approach towards investing by investing in aggressive stocks along with maintaining less downside. The fund has a high risk (measured in standard deviation) than the category average. ProsConsThe fund has high exposure to small-cap companies. Stable returns.Exit Load of 1% before 1-Yr. 10. Axis Small Cap Fund Direct Plan-Growth - Small cap mutual funds Fund analysis: The fund is giving consistent returns over the long term with an attractive risk-to-reward ratio. The fund is 5-star rated by Morningstar. The risk grade is below average and the returns grade is above average. The fund has a beta of 0.80 indicating that the movement of the portfolio has very less relation to the market movement. The fund has outperformed the category and the benchmark. The fund has low risk (measured in standard deviation) than the category average. ProsConsAttractive risk-to-reward ratio.Consistent performer.Fund was not able to capture the market well when it was rising. 3 ETFs in Small Cap Category Read More Features of Small Cap Mutual Funds Here are the features of small-cap mutual funds:   Invest in small-cap companies: Small-cap mutual funds invest primarily in small-cap companies. This is the most important feature of this type of mutual fund. These companies are new players with high potential, high risk, and high returns. The growth horizon of these funds is higher than those of mid-cap or large-cap mutual funds.  High Risk: A big feature of small-cap mutual funds are risky funds when compared to large and mid-cap funds. This is because these companies are new and   High Returns: Small-cap mutual funds can yield high returns. This is because small-cap funds invest in small-cap stocks that have the potential to beat the market and inflation. These funds experience high returns during a bull market and have the potential for extreme lows during a market fall.  Investment Horizon: The time period of investing in small-cap mutual funds is long-term. The minimum holding period is 7 years so that you can divide your risks and manage the market volatility that comes with small-cap mutual funds.   Volatile: Small-cap mutual funds are volatile in nature. They have the potential to provide high returns at high risk. They can be more sensitive to market upheavals than mid-cap or large-cap mutual funds.   Benefits of investing in top small-cap mutual funds  High growth: The biggest benefit of investing in small-cap mutual funds is the high growth. Small-cap companies are new players and are in the early stages of growth. They have a higher growth potential than others and can be beneficial for new investors.   Low pricing: Small-cap mutual funds have stocks that are priced well and have the potential of giving high returns. These stocks are new to the market and not actively followed, hence they are priced well and investors have the benefit of taking them on early.   Add diversity: Investing in small-cap mutual funds adds diversification to one’s portfolio. They are volatile, have high potential growth, and help with boosting one’s overall growth.   High returns: The greatest benefit of investing in small-cap mutual funds is the potential of maximizing high returns. Long-term investing: Small-cap mutual funds are seen as long-term funds. Investors are advised to take invested for 7 years minimum to balance out the risks taken during market falls.   SIP and lumpsum option: Another benefit is the flexibility of investing. You can invest in a lumpsum manner or as a SIP investor every month. This means whether you are a small or big investor, risk-averse or not, you can reap the benefits of investing in small-cap mutual funds.  Tax benefits: By investing in small-cap mutual funds for more than one year, your capital gains are under Long Term Capital Gain. Thus, LTCG of up to Rs. 1 lakh is not taxed and any gains above this amount are taxed at 10% without indexation!    Taxability of Small cap mutual funds   The taxability of small-cap mutual funds depends on the exposure and time horizon. An equity mutual fund has an equity exposure of greater than 65%. For equity mutual funds, if the gains have been realized within 12 months of holding, then the applicable tax rate is flat at 15% on the gains (irrespective of your income tax bracket).    When the holding period exceeds 12 months, the capital gains of Rs. 1,00,000 are exempt from taxes. Any amount upwards of Rs. 1,00,000 is taxable at 10%, along with the provision of indexation benefits.   For debt mutual funds (funds with greater than 65% exposure to debt instruments) – the holding period is considered short-term if it is less than 36 months; anything more than that is long-term.   For the short term, the tax rate is in accordance with your income tax slab. On the other hand, for debt funds held for more than 36 months, the gains are taxable at a flat rate of 20% post-indexation (plus, some cess and surcharge are added).   A possible third case is hybrid funds (funds with a mix of debt and equity) it is simple, their tax treatment is supposed to be on the basis of the fund’s exposure to debt and equity.   If the hybrid fund is equity-focused: LTCG is charged at 10% on capital gains exceeding Rs. 1 lakh (without indexation), and STCG is charged at 10%. If the hybrid fund is debt focused: LTCG is charged at 20% with indexation benefits, and STCG is charged per income tax slab.   Conclusion: For any investor who wants to create wealth over a long-term horizon by taking high risks, investing in fast-growing new-age companies. Investors investing in these funds should be cautious of high volatility during the investment journey FAQs Which mutual fund is best in the small-cap? Here are some of the best mutual funds in small cap category: Quant Small Cap Fund Direct Plan-Growth - Small cap mutual funds Bank of India Small Cap Fund Direct-Growth - Small cap mutual funds Canara Robeco Small Cap Fund Direct-Growth - Small cap mutual funds Kotak Small Cap Fund Direct-Growth - Small cap mutual funds Edelweiss Small Cap Fund Direct-Growth - Small cap mutual funds What are small-cap mutual funds? A small-cap mutual fund is a fund that invests majorly in small-cap companies as per market capitalization. As per SEBI regulations, a small-cap fund is required to invest a minimum of 65% of its assets in small-cap companies through equity. Is small-cap mutual fund safe? Small-cap mutual funds are risky investments. They have the potential of yielding high gains and high losses due to their sensitivity to market changes. Is a small cap good for SIP? Yes, you can invest in small-cap mutual funds via SIP. It is the best way to balance risk and stay invested for the long term. Which small-cap fund gives the highest returns? Quant Small Cap Fund Direct Plan-Growth - Small cap mutual funds What are the advantages of investing in small cap funds? Here are two main advantages of investing in small cap funds: Attractive Valuation: Small-cap funds invest in small-cap companies majorly, so there are various companies that are available at cheaper and attractive valuations. Very High Growth Potential: Companies in these funds have very high growth potential because of their size and flexibility to change. The companies have the potential to become mid & large-cap companies in the future. What are the taxability of small-cap mutual funds? The taxability of small-cap mutual funds depends on the exposure and time horizon. An equity mutual fund has an equity exposure of greater than 65%. For equity mutual funds, if the gains have been realized within 12 months of holding, then the applicable tax rate is flat at 15% on the gains (irrespective of your income tax bracket). TALK TO AN EXPERT 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.

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 Flexi Cap Fund  HDFC Flexi Cap Fund  Investment Objective The primary objective is to generate capital appreciation/income from a portfolio, predominantly invested in equity & equity-related instruments.   Investment Process  The fund follows the following approach to investing.  Focus on fundamentally strong companies with growth drivers in the medium to long term.  Focus on competitive position, corporate governance, and industry outlook.  Emphasis on valuation to assess risk-reward and provide a reasonable margin of safety.  A holistic approach to valuations without relying solely on traditional parameters like P/E or P/B.  Portfolio Composition  The fund had invested 90.85% of its assets in equity & equity-related stocks, 3.21% in real estate, and 5.94% in cash and cash equivalents. The significant sectoral exposure is to Banks, which account for roughly one-fourth of the portfolio. Note: Data as of June 30, 2023. Source: HDFC MF Top 5 Holdings  Name Weightage % ICICI Bank Ltd. 9.13 HDFC Bank Ltd. 5.62 State Bank of India Ltd. 5.28 Bharti Airtel Ltd. 4.71 Hindustan Aeronautics Ltd.  4.63 Note: Data as of June 30, 2023. Source: HDFC MF  Performance    This Fund S&P BSE 500 TRI Equity: Flexi Cap 1 Year 27.01% 18.66% 19.43% 3 Years 32.43% 24.46% 23.48% 5 Years 16.91% 13.71% 13.63% 10 Years 17.92% 15.33% 16.50% Note: Data as of June 30, 2023. Source: Value Research  Fund Manager  Ms. Roshi Jain (Since July 29, 2022) has over 17 years of experience in research and fund management. Before joining HDFC Asset Management Co Ltd in December 2021, she worked with Franklin Templeton India AMC Ltd. as a Vice President & Portfolio Manager. Ms Jain earned her Post Graduate Diploma in Management from the Indian Institute of Management, Ahmedabad, in 2002. She earned her Chartered Accountancy from the Institute of Chartered Accountants of India in 1998 with an All-India Rank 2. She is also a Chartered Financial Analyst (CFA) charter holder.   Who Should Invest in HDFC Flexi Cap Fund?  The fund is suitable for investors willing to invest across market cap. However, investors need to understand the aggressive risk exposure of this fund.  Why Invest in this Fund?  The fund provides an opportunity to invest in companies of various market caps.  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 flexi-cap category.  Ideal 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 Flexi Cap Fund has a proven track record of over 25 years, with an Asset Under Management of ₹36,345.36 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. 

In the previous article, we discussed CAGR in mutual funds. In this article, we will discuss what are index funds. If you are looking to benefit from the upward market movement, index funds are a great way to achieve that. Index funds are passive funds that follow specific market indices like the Bombay Stock Exchange or the National Stock Exchange of India. For instance, if an index fund is benchmarked against the BSE, its portfolio composition will mirror the holdings of the BSE. This implies that it invests in companies similar to BSE. This enables the index fund to move up and down as BSE does.   You must note that these funds are managed passively, and the fund manager simply replicates the movement and changing composition of the benchmark. No new research or analysis is brought in to evaluate whether investing in a certain company will help the fund in the long term.   Index funds are formulated and popularised on the basic premise that in the long run, stock markets will rise, and hence the index fund that closely mimics the original benchmark will also rise and bring growth to the investor portfolio. There are index funds that are benchmarked against different stock market indices and against different sectors. These give you the option to choose the segment of your interest. What makes index funds different?  According to Warren Buffet, index funds are a great place to park your money if you are looking at safe yet growth-oriented stock market options. This advice is based on a couple of facts that make index funds attractive to investors who do not want to shift their funds around very aggressively:  Index funds are passively managed  Index funds have a low expense ratio  Index funds match the profits and losses of the markets at large. And usually tend to perform equivalent or slightly lower than the benchmark  Index funds are invested on the premise that the market will always outperform any single stock  Investments in index funds will over a period of time keep your investments safe and growing at a steady pace as the economy and the market grows. Hence, these are recommended for investors close to retirement as good long-term investment options. What is the Russell 2000 Index? Read More How to invest in an index fund in India?  Investing in an index fund is similar to investing in any other mutual fund. It is important for you to understand what you are investing in, and not just put your money into some random investments.   As index funds are usually long-term investments and passively managed, it is important for you to be sure that the fund you select mirrors the stated index well.   Research: Research and analyze the index fund’s performance over the past few years against the benchmark index.   Check up on future opportunities: Look at how the market/industry you are planning to invest in is expected to grow in the future. You must understand the opportunity for the segment that your index fund will be investing in.   Map your investment goals: Check whether the overall portfolio composition of the fund matches your own investment expectations: high growth, safety, assured returns, and so on. Pick the one that is closest to your investment and returns expectations.   Check on fund expenses: Fund expenses must be studied and understood carefully especially if you are looking to shift large funds. High fund expenses could increase your trading costs unnecessarily over time. Simplified Guide to Index Funds Read More Risks and costs associated with index funds  Index funds move as the market moves, so it hardly ever outperforms the market.  It has little flexibility in cases of market crashes, the fund manager is not typically permitted to trade as a reaction to falling markets.   If the index fund does not truly mirror the benchmark index, it could affect your returns in the long run. This makes prior research very important.   It is worth noting that index funds with the lowest expense ratios track the benchmark index more accurately than others in the market. Word of caution Balance your portfolio with a combination of index funds and actively managed funds. This will help even out any major downsides that come with falling markets and bring more stability to your returns.   Be prepared to remain invested for up to a minimum of 7 years in the index fund if you wish to see some decent returns.  A few examples of popular index funds in India are:   IDBI Nifty Junior Index Fund Growth   ICICI Prudential Nifty 50 Index Plan Direct-Growth   UTI Nifty Next 50 Index Fund Direct-Growth  Index funds are a great tool to build your child’s education corpus fund. With the Indian economy growing, these funds will give you the growth that comes with the expanding markets. Start today, but make sure you do your due diligence before you part with your money.   FAQs What is an index fund and how does it work?  An index fund is a type of investment fund that aims to replicate the performance of a specific market index, such as the S&P 500. It works by holding a diversified portfolio of assets, mirroring the index's composition.  Is Nifty 50 an index fund?   No, Nifty 50 is not an index fund. Nifty 50 is a stock market index in India, comprising the 50 largest and most actively traded stocks on the National Stock Exchange (NSE). An index fund would be an investment fund that aims to replicate the performance of the Nifty 50 index.  What is an index fund in simple terms?   An index fund is like a basket of investments designed to follow the performance of a particular market index, such as the S&P 500. Instead of trying to beat the market, it aims to match its returns by holding a mix of assets like those in the chosen index.  Are index funds a good way to invest?   Ans. Yes, index funds are generally considered a good way to invest due to low costs, diversification, and potential for long-term growth.   Are index funds tax-free?   Ans. Index funds are not inherently tax-free. Investors may still incur taxes on capital gains and dividends when selling or receiving distributions from the fund, depending on their country's tax laws and individual circumstances.    What is a SIP in an index fund?   Ans. A SIP in an index fund involves regularly investing a fixed amount at predetermined intervals, promoting disciplined and gradual investment over time.    TALK TO AN EXPERT

In the previous article, we discussed NFO in mutual funds. In this article, we will discuss exit load in mutual funds Investors should always be aware of the costs and charges related to their investments when it comes to money management because these prices and charges immediately reduce their returns. For investors, some costs, such as fund management costs, may be inevitable because they increase the value of the mutual fund scheme. However, if investors carefully prepare for their investment withdrawal, they may be able to avoid one such fee, such as the exit load. What is an Exit load?  When investors redeem or withdraw their fund units, Asset management companies (AMCs) charge them a fee known as an exit load. If an investor withdraws money from the fund within the lock-in period, it is also known as the exit penalty or commission to fund houses.  Not all mutual funds impose an exit fee. Hence, in addition to the plan's expense ratio, take the exit load into account while making your decision. It's important to remember that the exit load is not included in the expense ratio. With open-ended funds, investors can withdraw their money whenever they wish. Investors may fail to commit to a fund for the time period they have promised to invest for. As a result, an exit load discourages investors from withdrawing money from a fund too soon. The number of withdrawals from mutual fund schemes may decline because of this cost. What is Open Ended Mutual Funds? Read More What is the Exit load in mutual funds?  The exit load often represents a portion of the investors' mutual fund holdings' Net Asset Value (NAV). The remaining amount is credited to the investor's account after the AMC deducts the exit load from the overall NAV. Imagine you invested in a mutual fund with a lock-in period of 1 year and an exit load of 2%. And you decide to withdraw the amount after 6 months when the fund’s NAV is at Rs.35 at the time of redemption. You’d only receive Rs.34.30 as you’d have to pay the exit load penalty of 2% for withdrawing the amount before the investment period is over. The exit load will not be applied to the investor's redemption if they stay invested for the full duration of the mutual fund. Exit Load on Different Mutual Fund Schemes  Exit load is not applied uniformly across all mutual fund schemes. Some mutual fund schemes may charge an exit load for up to a two-year investment period, whereas other schemes may only charge for a seven-day investment period.  In addition, many schemes might decide not to impose any exit load at all.   The following are the general exit load guidelines for several mutual fund categories:  If the holding period is less than the lock-in period, exit loads are typically imposed on redemptions by debt funds.  If the holding duration is between one and two years, equity funds may normally impose an exit load on redemptions.  On overnight schemes, there is no exit load.  In liquid schemes, if the investment duration is less than seven days, a graded exit load may apply. As a result, as the holding period extends, the exit fee gradually decreases.  Where does the exit load go?  The AMC receives the exit load payment, which it then invests in the portfolio. AMCs must reinvest it into the plan portfolio, as per SEBI's directive. Thus, mutual fund companies give you the net redemption proceeds after keeping a portion of the redemption value as the exit load. It is then reinvested in the portfolio to continue providing benefits to the current investors. XIRR in Mutual Funds Read More How can you avoid exit loads?  You can avoid the exit load if you redeem the fund after the specific time frame for which the load is applied.  To receive higher returns from your mutual fund investments, make sure to check the scheme's exit load before investing in it and aim only to redeem when the exit load is no longer applicable.  https://www.youtube.com/watch?v=T53Wlc0YS9U How to calculate exit load in mutual funds  Most of the time, the fund manager decides on the exit load. Let's say a person contributed Rs. 10,000 to a mutual fund scheme in January 2020. The scheme's NAV is Rs. 100, and there is a 1% exit fee for early withdrawal. The investor again chooses to invest Rs. 6,000 at a NAV of Rs. 100 in the same fund in March 2020. If they redeem the fund in November 2020, when the NAV is Rs. 110, how would you determine the exit fee? In the event that the redemption occurs in February 2021 and the NAV is Rs. 115, how can you determine the exit fee? Number of Units bought in January 2020 Rs. 10,000/100 = 100 (Total NAV/Number of Units bought) Number of units bought in March 2020 Rs. 6000/100 = 60 The investment of 10,000 in January 2020 and 6,000 in March 2020 will both have exit loads for redemptions in November 2020, based on the November NAV of Rs. 110. Exit Load 1% of [(100 x 110) + (60 x 110)] = Rs 176 The amount credited to the investor17600 – 176 = 17424 (Total NAV – Exit fee) For the second investment in March 2020 1% of (60 X 115) = Rs. 69  The first investment made in January 2020 exceeds the one-year period in the event of redemption in February 2021. Therefore, there is no exit load required to redeem it. However, the second investment made in March 2020 will be subject to an exit fee of 1%, as shown in the above table.  Conclusion   The assumption that the exit load time is always one year is incorrect. To learn about the exit load, which will always assist in making wise decisions, you should read the scheme information documents. Mutual fund exit loads are designed to prevent early redemptions in order to protect investors' interests in the scheme. Before investing, you should always be aware of the mutual fund exit load or mutual fund costs of a scheme. FAQs What is the exit load in mutual funds?   Exit load is a fee or amount charged by mutual fund houses when investors exit a scheme partially or fully during a specific period from the date of investment, as specified in the Scheme Information Document. The exit load is usually a percentage of the redemption amount at applicable NAVs. The purpose of exit load is to discourage investors from withdrawing their investments too soon, which can impact the fund's performance and returns.   Can exit load be avoided by investors?   Yes, exit load can be avoided by investors if they are smart about tracking when they bought the mutual fund units and when they plan to sell them. If investors hold their investments for the exit load period specified in the scheme's offer document, they can avoid paying the exit load. Additionally, investors can also consider investing in schemes that do not have an exit load or a lower exit load. However, it is important to note that exit load is just one of the many factors to consider while investing in mutual funds, and investors should always do their due diligence before making any investment decisions.  Do all mutual fund schemes levy exit load?   No, not all mutual fund schemes levy exit load. Some schemes do not charge any exit fee. For example, liquid funds and overnight funds do not have an exit load as they are designed for short-term investments. However, equity funds and debt funds may have an exit load, depending on the scheme's investment objective and holding period.   How is exit load calculated?   The exit load structure of a scheme specifies two parameters – mutual fund fees charged as a percentage of the redemption amount at applicable NAVs and the exit load period (period from the date of purchase). For example, if the exit load is 1% and the redemption amount is Rs. 10,000, the investor will have to pay Rs. 100 as exit load. The exit load period can vary from scheme to scheme and can range from a few days to a few years.   What is the difference between an entry load and an exit load?   An entry load is a fee charged by some mutual funds when investors purchase units in the fund. It is deducted from the investment amount and reduces the number of units allocated to the investor. On the other hand, an exit load is a fee charged when investors sell or redeem their units. It is deducted from the redemption proceeds and reduces the amount received by the investor.   How can investors avoid paying exit loads?   Investors can avoid paying exit loads by holding their mutual fund units for the duration of the exit load period. For example, if a scheme has an exit load for the first year, investors can choose to redeem their units after the first year to avoid the exit load. They can also choose to invest in schemes that do not charge an exit load or opt for schemes with a shorter exit load period. It is important for investors to carefully read the scheme information document (SID) before investing to understand the exit load provisions and make informed decisions. Are all mutual fund schemes subject to exit loads?   No, not all mutual fund schemes charge an exit load. The presence and amount of exit load vary from scheme to scheme. Some schemes may charge an exit load for a certain period of time, such as within the first year of investment, while others may not charge any exit load at all. The exit load guidelines are determined by the mutual fund company and are mentioned in the scheme information document (SID).  

UTI is one of the pioneers of the Indian Mutual Fund Industry. With over 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. Let us talk about the flagship product – UTI Equity Savings Fund.  https://www.youtube.com/watch?v=44SZNc03zBM UTI Equity Savings Fund  Investment Objective The investment objective of the Scheme is to provide capital appreciation and income distribution to the investors using arbitrage opportunities, investment in equity/equity-related instruments, and debt/money market instruments.   Investment Process   For Equity Investments: Sector selection combines top-down and bottom-up approaches going through short-term challenges and trading below long-term averages. Stock selection mainly involves Stocks trading at a deep discount to their intrinsic value and with signs of value unlocking. The focus lies mainly on stocks below their long-term averages or when it is cheap relative to market aggregates. Arbitrage opportunities arising out of mispricing in cash & future market. Opportunities that can provide regular accruals.  For Debt Investments: Debt portfolio is based on accrual strategy, focus on good credit quality, focus on low duration, tactical allocation on G-sec based on in-house view. Portfolio Composition  As a hybrid fund, the funds are allocated to equity, long-term debts, government securities, and non-current assets. The equity fund allocated 96.2% to large-cap funds, 3.8% to mid-cap. Note: Data as of 30th June 2023.Source: UTIMF Top 5 Active Stock Positions  Name Sector  % HDFC Bank Ltd. Banking 3.1% Infosys Ltd IT 2.9% ICICI Bank Ltd Banking 2.4% Larsen & Toubro Ltd Construction 2.1% ITC Ltd FMCG 1.9% Note: Data as of 30th June. 2023. Source: UTIMF  Performance Since Inception Note: Fund performance since launch; Inception Date – 30th Aug. 2018. Source: UTIMF Invest In Fund Fund Manager  Mr. V. Srivatsa is an Executive Vice President & Fund Manager –Equity at UTI AMC Ltd. He is a B. Com graduate, C.A., CWA, and has a PGDM from IIM, Indore. He has been with UTI AMC since 2002. Before joining UTI, he worked with Ford, Rhodes Parks & Co., Chartered Accountants for two years, and as Officer-Audit in Madras Cements Ltd. He started in the securities research department at UTI AMC, covering varied sectors such as Information Technology, Capital goods, and metals. He was promoted as fund manager offshore in December 2005 after a three-year stint in the DOSR. He was given additional responsibilities for the equity portion of hybrid funds in October 2009. He reports to the Head – Of equities for both the domestic & hybrid equity schemes.  Mr. Sunil Patil is Executive Vice President & Fund Manager – Debt. He joined UTI AMC in October 1989. He has 28 years of experience in Primary Market Investment / dealing and Fund Management.  Who Should Invest?  Investors looking for overall portfolio diversification.  Investors who want growth with limited downside risk to their portfolio  Investors looking for tax-efficient returns  Retirees looking for moderate and stable returns with low volatility  First-time investors to the Mutual Fund  Why Invest?  Diversified portfolio construct that limits the volatility   Aims to create long-term wealth creation by investing in companies that generate economic value   Portfolio management within well-defined investment philosophy & investment process Around 27 years of Performance track record  Tax efficiency due to equity taxation   Competitive expense structure   Ideal Time Horizon  Ideal for investors with a time horizon of three years and above.   Investment through Systematic Investment Plan (SIP) may help in tackling the volatility of the broader equity market.  Conclusion  The equity portion of the fund's portfolio is managed actively with both top-down and bottom-up stock-picking approaches. In contrast, the debt portion is managed with a focus on good credit quality and low duration. The fund has underperformed the benchmark since its inception. Hence, investors should remain invested long-term to witness alpha generation. 

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 Prudential Mutual Fund offers products across asset classes. ICICI Prudential Banking and Financial Fund  Investment Objective The scheme's primary objective is to generate long-term capital appreciation to unit holders from a portfolio that is invested predominantly in equity and equity-related securities of companies engaged in banking and financial services.  Investment Process   Portfolio construction: The scheme will invest a minimum of 80% of its total assets in stocks of companies engaged in the banking and financial services sector, including banking, broking, asset management, wealth management, insurance, non-banking financial companies (NBFC), and other companies that may be engaged in providing financial services.  Benchmark agnostic: While the Scheme’s performance is benchmarked against Nifty Financial Services TRI, it may opportunistically invest in companies outside the same.   Investment Approach: The scheme invests across market capitalizations and uses a combination of growth and blend investment style.  Portfolio Composition  As per its investment objective, the equity exposure is significant to stocks of companies engaged in the banking and financial services sector. The funds are invested primarily in large-cap companies with approximately 81% exposure to large-cap stocks, approximately 15% to mid-cap stocks, and the remaining 4% to small-cap stocks. Note: Data as of 31st May. 2023. Source: ICICI Pru AMC, Value Research  Top 5 Holdings for ICICI Prudential Banking and Financial Fund Name Sector Weightage % HDFC Bank Ltd. Bank 17.41 ICICI Bank Ltd. Bank 17.16 State Bank of India Ltd. Bank 9.34 Axis Bank Ltd. Bank 8.09 HDFC Ltd. Finance 5.3 Note: Data as of 31st May 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 95,580. Note: Fund performance since launch; Inception Date – 22nd August 2008.  Source: icicipruamc.com The fund has performed consistently and has generated an annualized return of 16.4% since inception. It has outperformed its benchmark except for the five-year period.  Invest in the fund Fund Manager  The fund is ably managed by Roshan Chutkey, who has over 12 years of experience and manages five funds.  Who Should Invest in ICICI Prudential Banking and Financial Fund?  This scheme is suitable for investors who aim to invest predominantly in companies engaged in banking and financial service and achieve goals like tactical solutions and wealth creation.  Why Invest in ICICI Prudential Banking and Financial Fund?  The banking and financial services sector proxies India's growing economy since every aspect of the economy is influenced by it.   It allows investors to invest in companies engaged in the banking and financial services sector across all market caps.   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 engaged in the banking and financial sectors that provide a higher return potential. This allows investors to have exposure to one of the most critical sectors that play a crucial role in the development of any economy. Also, the fund has consistently outperformed its benchmark except over five years. 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.

One of the largest AMCs in India, DSP has been helping investors make sound investment decisions responsibly and unemotionally for over 25 years. DSP is backed by the DSP Group, an almost 160-year-old Indian financial giant.  The family behind DSP has been very influential in the growth and professionalization of capital markets and the money management business in India over the last one-and-a-half centuries. DSP Global Innovation Fund of Fund This is an International Fund of Funds, FoFs (Overseas/ Domestic) fund with MSCI ACWI Net Total Return as its benchmark. It was launched in February 2022 and had an AUM of more than Rs. 501 crores as on May 31, 2023. The risk level for this fund is categorized as Very High Risk.  Investment objective  The primary investment objective of the scheme is to seek capital appreciation by investing in global mutual fund schemes and ETFs that primarily invest in companies with innovation themes having the potential for higher revenue and earnings growth. The scheme may also occasionally invest a certain portion of its corpus in money market securities and/or money market/liquid schemes of DSP Mutual Fund to meet liquidity requirements.  Investment process  DSP Global Innovation Fund Fund invests globally in the innovation theme via companies that are either market-leading dominators, game-changing disruptors, or connecting enablers through a mix of different investing styles, market-caps & fund managers.  It does this by investing in international funds across the active & passive space, which in turn invests in companies across multiple innovation themes and sectors such as Biotech, Aerospace & Defence, Fintech, E-Commerce, Mobility, Internet & interactive media, Semiconductors, and more.  Portfolio Composition  The fund had invested approximately 97% of the assets in equity, and the remaining were held in cash and cash equivalents.   Note: Data as of May 31, 2023. Source: DSP MF Performance:  If you had invested Rs.10,000 at the fund's inception, it would now be valued at Rs 10,355. Note: Data as of May 31, 2023. Source: DSP MF The fund has given a return of 15.04% in one year and has generated a CAGR (Compounded Annual Growth Rate) of 2.74% since inception. Since the fund was launched just a year ago, investors should remain invested long-term to witness wealth creation. Invest in the Fund Fund Manager Jay Kothari  Jay Kothari, Vice President & Product Strategist -Jay has been with DSP Mutual Funds since May 2005 and has been with the Investment function since January 2011. Jay joined the firm as a Sales team (Banking) member in May 2005. Before joining DSPAM, Jay worked for Standard Chartered Bank for a year in the Priority Banking division. Jay completed his Bachelor of Management Studies (Finance & International Finance) from Mumbai University and an MBA in Finance from Mumbai University.  Kedar Karnik  Kedar joined DSP Mutual Funds from Axis Asset Management and has over 17 years of investment experience. He has done his Masters in Management Studies from Jamnalal Bajaj Institute of Management Studies. He has over a decade of investment experience. He has previously worked with HSBC Asset Management and CRISIL Ltd.  Who Should Invest in the DSP Global Innovation Fund of Fund?  Consider this fund if you:  Are you an experienced Indian investor with a well-set core portfolio, looking to diversify no more than 10-15% of your portfolio internationally?  Love the theme of innovation & its investment potential and recognize that the future is powered by those focused on re-imagining the world.  Value international diversification & want to hedge your bets.  Have the patience and mental resilience to remain invested for a decade or more.  Do not always chase the highest possible returns.  Why Invest in this Fund?  To participate in cutting-edge next-gen themes like Artificial Intelligence, Machine Learning, Robotics, Cloud Infrastructure, Social Media, OTT, Digital Transformation & more.  To own companies that have demonstrated higher growth & also have higher earning growth expectations.   To get access to international companies that may be difficult for Indian investors to invest in directly- especially since major innovations have happened outside India.  Time Horizon:  One should look at investing for at least ten years or even more.  Investment through Systematic Investment Plan (SIP) may help in tackling the volatility of the broader equity market.  Conclusion The DSP Global Innovation Fund of Fund gives investors exposure to international companies engaged in the technology sector. Thus, it is the best option for investors seeking long-term capital growth and investment in units of overseas funds that invest primarily in equity and equity-related securities of technology companies with high risks. Investors need to stay invested long-term to reduce volatility and witness the benefits of compounding. DisclaimerThis is not recommendation advice. All information in this blog is for educational purposes only. 

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. HDFC Trustee Company Limited is the trustee of the mutual fund. The HDFC Mutual Fund is sponsored by the Housing Development Finance Corporation Limited (HDFC Ltd.) and Standard Life Investments Limited. HDFC Capital Builder Value Fund  Investment objective The scheme aims to achieve capital appreciation/income in the long term by primarily investing in undervalued stocks.   Investment process   Undervalued stocks are generally those that are trading at prices below their intrinsic value as measured by potential earnings or asset values and/or future cash flow growth.  The scheme endeavors to maintain a minimum of 60 % of the portfolio in companies that are trading at multiples lower than the Median P/E (Price/Earnings) or Median P/B (Price/Book Value) of the NIFTY 500 Index or below the five-year historical average of own trailing P/E or P/B.  Portfolio composition  The portfolio holds significant exposure in equity & equity-related instruments at 99.19%, and significant sectoral exposure is to Banks, which account for roughly 29.37% of the portfolio. The top 5 sectors hold more than half of the portfolio. Note: Data as of May 31, 2023. Source: HDFC MF Top 5 Holdings for HDFC Capital Builder Value Fund Name Weightage % ICICI Bank Ltd. 9.70 HDFC Bank Ltd. 9.07 Infosys Ltd. 6.82 Axis Bank Ltd. 5.11 Bharti Airtel Ltd.  4.66 Note: Data as of May 31, 2023. Source: HDFC MF   Performance   This Fund Nifty 500 TRI Nifty 50 TRI   CAGR CAGR CAGR 1 Year 14.46% 12.74% 12.94% 3 Years 28.03% 27.61% 26.02% 5 Years 9.58% 12.35% 12.89% 10 Years 14.92% 14.19% 13.33% Since Inception 13.97% NA 10.90% Note: Data for Regular Plan as on May 31, 2023. Source: HDFC MF  Invest in Funds Fund Manager  Mr. Gopal Agarwal (Since December 10, 2021) has over 19 years of experience in Fund Management and 2.5 years in Equity Research. Before HDFC AMC, he worked at DSP Investment Managers Private Limited, TATA Asset Management Company Limited, and Mirae Asset Global Investments (India) Pvt. Ltd.   Who Should Invest in HDFC Capital Builder Fund?  This scheme is suitable for investors who  Intend to invest in undervalued companies.  Would like to invest in a diversified portfolio with a long-term horizon.  Want twin benefit of earnings growth as well as re-rating of valuation multiples.  Are looking for a sound and disciplined approach to investing in volatile times.  Why Invest in this Fund?  The fund follows a diversified multi-cap strategy with a value bias.  There is an emphasis on investing in undervalued stocks with a reasonable margin of safety.  Investors with long-term horizons can benefit not only from earnings growth but also from the re-rating of multiples.  The fund is an actively managed diversified equity portfolio that invests across sectors without a market cap bias.  Time Horizon  One should look at investing for at least 3-4 years or even more.  The fund is open-ended. One can invest any time in this fund.  Conclusion  The HDFC Capital Builder Fund has outperformed both benchmarks consistently except for a five-year period. With an Asset Under Management of ₹5,534.27 Cr as on May 31, 2023, it is one of the largest funds in the value category. Therefore, the fund is suitable for investors looking for long-term wealth creation with an understanding of high risk. However, investors must remain invested for a long-time horizon to witness wealth creation.   DisclaimerThis is not recommendation advice. All information in this blog is for educational purposes only.