Category Archives: Mutual 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. 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 Dividend Yield Fund  Investment Objective The scheme aims to provide capital appreciation and/or dividend distribution by predominantly investing in a well-diversified portfolio of equity and equity-related instruments of dividend-yielding companies.   Investment Strategy   The fund aims to invest a minimum of 65% of the scheme's assets in dividend-yielding companies at the time of investment or companies that choose to do a buyback in addition to payment of dividends or in lieu of dividends.   While trailing dividend yield will be an important factor in selecting a stock, the fund manager will also consider business fundamentals, industry outlook, absolute and relative valuations, growth outlook, and corporate governance.  The fund aims to be sector and market-cap agnostic.  Portfolio Composition  The portfolio holds significant exposure in equity & equity-related instruments at 97.83%, and significant sectoral exposure is to IT-Software, which accounts for roughly 13.01% of the portfolio. Over 68% of the equity was held in large cap, whereas approximately 21% and 11% were held in mid-cap and small-cap stocks as of May 31, 2023. Note: Data as of May 31, 2023. Source: HDFC MF Top 5 Holdings for HDFC Dividend Yield Fund Name Weightage % ITC Ltd. 4.66 ICICI Bank Ltd. 4.10 Infosys Ltd. 4.07 Hindustan Unilever Ltd. 3.95 Tata Consultancy Services Ltd.  3.80 Note: Data as of May 31, 2023. Source: HDFC MF  Performance   This Fund Nifty 500 TRI Nifty 50 TRI   CAGR CAGR CAGR 1 Year 17.16% 12.74% 12.94% Since Inception 21.53% 15.55% 14.26% Note: Data of Regular Plan as on May 31, 2023. Source: HDFC MF  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 Dividend Yield Fund?  This scheme is suitable for investors who  Are looking for a diversified portfolio of dividend-yielding stocks with an objective to provide capital appreciation over the long term   Aim for investment in equities with a fair amount of stability and relatively lower risk (than other equity funds) over medium to long term   Aim to take advantage of tax arbitrage via the mutual fund route compared to direct investing in dividend-yielding stocks  Why invest in this Fund?  HDFC Dividend Yield Fund is one of the largest funds in the dividend yield category.  The fund is less volatile, as depicted by the lower standard deviation compared to its benchmark.  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 an open-ended fund. One can invest any time in this fund.  Conclusion  The HDFC Dividend Yield Fund has outperformed the benchmarks and its peers since its inception. However, it is crucial to see how the fund performs over the long term since it was launched just a couple of years ago. Therefore, the fund is suitable for investors looking for long-term wealth creation with an understanding of high risk. However, investors need to remain invested for a long-term time horizon to witness wealth creation.   DisclaimerThis is not recommendation advice. All information in this blog is for educational purposes only. 

UTI is one of the pioneers of the Indian Mutual Fund Industry. With an AUM of approximately 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. UTI Nifty Next 50 Index Fund  Investment objective The scheme's investment objective is to provide returns that, before expenses, closely correspond to the total returns of the securities as represented by the underlying index, subject to tracking error.  Investment process  UTI Nifty Next 50 Index Fund follows a passive style of investing; that is, it invests in all the companies forming part of the Nifty Next 50 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 99.86% of its assets in equities, and the remaining were cash and cash equivalents as of May 31, 2023. The scheme had significant exposure to financial services, followed by FMCG and Capital Goods.  Note: Data as of May 31, 2023. Source: UTIMF  Top 5 Holdings for UTI Nifty Next 50 Index Fund Name Sector Weightage % LTIMindtree Limited. Technology 3.92% Cholamandalam Investment & Finance Company Ltd Financial Services 3.55%  Bharat Electronics Ltd. Capital Goods 3.44% Godrej Consumer Products Ltd Consumer Staples 3.43% Pidilite Industries Ltd. Chemicals 3.4% Note: Data as of May 31, 2023. Source: UTIMF  Performance since Inception  If you had invested 10,000 at the fund's inception, it would now be valued at Rs. 14,966, whereas the benchmark (Nifty Infrastructure TRI) would have fetched Rs. 15,885. Note: Performance of the fund since launch; Inception Date – June 08, 2008. 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.  Ayush Jain is a Manager and designated as Investment Associate at UTI AMC Ltd. He is a Chartered Accountant holding a charter from the Institute of Chartered Accountants of India. He began his career with UTI AMC Ltd in April 2018 and has over four years of experience in Equity Research, Equity Portfolio Analysis & Portfolio Management Services.  Who should invest in UTI Nifty Next 50 Index Fund?  This product is suitable for investors who are seeking:  Capital Growth in tune with Index returns.  Passive investment in equity instruments comprised in Nifty Next 50 Index  Why Invest in UTI Nifty Next 50 Index Fund?  Passive fund for Long Term Wealth Creation - Simple to understand the product for new investors.  A well-diversified portfolio of 50 companies with better sector diversification than the Nifty 50.  Ideal Time to Stay Invested   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 in Nifty Next 50 companies provides various advantages, such as investment in large-cap, well-diversified, stable companies with growth potential, lesser downside potential compared to mid-cap and small-cap companies, etc. UTI Nifty Next 50 Index Fund is one of the largest index funds having Nifty Next 50 as an underlying index. Investors willing to invest passively for long-term growth and want to save on expense ratio 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. Let us discuss the consumer product – DSP Nifty Next 50 Index Fund.  DSP Nifty Next 50 Index Fund  Investment Objective The primary investment objective is to invest in companies that are constituents of the NIFTY Next 50 Index (underlying index) in the same proportion as in the index and seeks to generate returns that are commensurate (before fees and expenses) with the performance of the underlying index, "subject to tracking error".  Investment Process   The fund replicates the Nifty Next50 TR Index, i.e., invests in the same stocks and proportion as in the Nifty Next50 TRI.    The portfolio is rebalanced semi-annually to adjust for any stock additions or subtractions to the index.  Portfolio Composition  The fund had invested 99.82% in equity, and the remaining was held in the form of debt/cash and cash equivalents as of 30th June 2023.  Note: Data as on 30th June 2023.Source: DSP MF Top 5 Holdings for DSP Nifty Next 50 Index Fund  Name Weightage % LTIMindtree Limited 3.86 Cholamandalam Investment and Finance Company Limited 3.65 Bharat Electronics Limited 3.65 Godrej Consumer Products Limited 3.31 Pidilite Industries Limited 3.21 Note: Data as on 30th June 2023. Source: DSP MF Performance  If you had invested 10,000 at the fund's inception, it would now be valued at Rs 16,881.  Note: Data as of 30th June 2023.Source: DSP MF Since its inception, the fund has generated a CAGR (Compounded Annual Growth Rate) of 12.77%.  Invest in Funds Fund Manager  Anil Ghelani has been managing this fund since July 2019 as a Co-Fund Manager. Anil has been working with DSP Group since 2003 and is Head of Passive Investments & Products. Previously, he was the Business Head & Chief Investment Officer at DSP Pension Fund Managers. Before that, he led the Risk and Quantitative Analysis team at DSP Mutual Fund, responsible for monitoring portfolio risk and buy-side credit research on companies across various sectors.  Diipesh Shah has been managing this fund since November 2020 as a Co-Fund Manager. Diipesh has a total work experience of Over 20 years. He has been working with DSP since September 2019 as a Dealer for ETF and Passive Investments. Now he is also the Fund Manager of various schemes of DSP Mutual Fund. Diipesh has worked with JM Financial Institutional Broking Limited, Centrum Broking Limited, IDFC Securities Limited, and Kotak Securities Limited as Institutional Equity Sales Trading.  Who Should Invest in DSP Nifty 50 Index Fund?  Consider this fund if you:   Are an experienced investor & know what you're doing.  Are looking to tactically allocate 10-15% of your overall portfolio to very high-risk opportunities?  Value low-cost, passive investing.  Have the patience & mental resilience to remain invested for a decade or more.  Accept that equity investing means exposure to risk.  Why Invest in this Fund?  Aim to build wealth by investing conveniently in companies that could become the next top 50 Indian companies.  Relatively low-cost, with a comparatively lower expense ratio than active large-cap funds.  Offers the potential to 'earn big' returns by utilizing this high-risk, high-return strategy.  Can help you beat the impact of rising prices over the long term.  Since the fund only replicates an index & does not have an 'active' fund manager, it carries no human decision-making bias.    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 Nifty Next 50 Index Fund provides a good option for passive investing in large-cap equities. It is better to consider index funds for large-cap investing since there is a very low probability of alpha generation in the large-cap space. Investors seeking capital appreciation through large-cap exposure can consider this fund with a time horizon of ten years or more. 

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. Let us discuss the consumer product – DSP Nifty Midcap 150 Quality 50 Index Fund.  DSP Nifty Midcap 150 Quality 50 Index Fund  Investment Objective The scheme's investment objective is to generate returns commensurate with the performance of the Nifty Midcap 150 Quality 50 Index, subject to tracking error.  Investment Process   The scheme is managed passively with investments in stocks in the same proportion as in Nifty Midcap 150 Quality 50 Index.  The investment strategy revolves around minimizing the tracking error through periodic rebalancing of the portfolio, taking into account the change in weights of stocks in the indices as well as the incremental collections/redemptions in the scheme.  A small portion of the net assets will be held as cash & cash equivalent.  Portfolio Composition  The fund had invested 99.69% in equity, and the remaining was held in the form of debt/cash and cash equivalents as on 30th June 2023.  Note: Data as on 30th June 2023. Source: DSP MF Top 5 Holdings  Name Weightage % Tata Elxsi Limited 4.20 Tube Investments of India Limited 3.63 ICICI Securities Limited 3.09 Persistent Systems Limited 3.03 APL Apollo Tubes Limited 2.91 Note: Data as on 30th June 2023. Source: DSP MF  Performance  If you had invested 10,000 at the fund's inception, it would now be valued at Rs 10,850.  Note: Data as of 30th June 2023.Source: DSP MF Since its inception, the fund has generated a CAGR (Compounded Annual Growth Rate) of 8.5%.  Invest In Fund Fund Manager  Anil Ghelani has been managing this fund since July 2019 as a Co-Fund Manager. Anil has been working with DSP Group since 2003 and is Head of Passive Investments & Products. Previously, he was the Business Head & Chief Investment Officer at DSP Pension Fund Managers. Before that, he led the Risk and Quantitative Analysis team at DSP Mutual Fund, responsible for monitoring portfolio risk and buy-side credit research on companies across various sectors.  Diipesh Shah has been managing this fund since November 2020 as a Co-Fund Manager. Diipesh has a total work experience of Over 20 years. He has been working with DSP since September 2019 as a Dealer for ETF and Passive Investments. Now he is also the Fund Manager of various schemes of DSP Mutual Fund. Diipesh has worked with JM Financial Institutional Broking Limited, Centrum Broking Limited, IDFC Securities Limited, and Kotak Securities Limited as Institutional Equity Sales Trading.  Who Should Invest in DSP Nifty 50 Index Fund?  Consider this fund if you   Are you an experienced investor or have access to expert advice?  Already have a strong core portfolio and are looking to invest in the mid-cap space.  Want to diversify existing active midcap funds in the portfolio at a lower cost?  Have the patience & mental resilience to remain invested for a decade or more.  Recognize market falls as good opportunities to invest even more.  Accept that equity investing means risk exposure.  Why Invest in this Fund?  Aim to build wealth by investing conveniently in objectively qualified quality mid-cap companies.  Affordable investing as compared to buying individual stocks of the Nifty Midcap 150 Quality 50 Index.  It can help you beat the impact of rising prices over the long term.  Since the fund only replicates an index & does not have an 'active' fund manager, it carries no human decision-making bias.  Have the potential to beat the broader Midcap 150 index & active midcap funds over the long term.  Ideal 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 Nifty Midcap 150 Quality 50 Index Fund provides a good option for passive investing in mid-cap equities. Since the fund was launched less than a year ago, it will be required to monitor how efficiently it tracks the underlying index. Investors seeking capital appreciation through mid-cap exposure by following a passive style of investing can consider this fund with a time horizon of ten years or more. 

As the middle class in India continues to thrive and make significant strides toward financial stability and prosperity, the need for reliable investment plans becomes paramount. Making wise investment choices is key to securing one's financial future and achieving long-term goals. Let's dig deeper into the details of the best investment plans tailored specifically for the middle class in India. By understanding these investment avenues, individuals can make informed decisions that pave the way for financial growth and security. https://www.youtube.com/watch?v=C2K84ePN4IU 1. Systematic Investment Plans (SIPs) Systematic Investment Plans (SIPs) have gained immense popularity among middle-class investors in India. SIPs allow individuals to invest a fixed amount regularly in mutual funds, thus harnessing the power of compounding. This investment avenue provides convenience, flexibility, and the opportunity of investing in diverse asset classes such as equity, debt, or hybrid funds. By investing in SIPs, the middle class can benefit from the potential for higher returns over the long term. Moreover, SIPs also enable investors to initiate with small amounts, making it an ideal investment option for those with limited disposable income. 2, Public Provident Fund (PPF) The Public Provident Fund (PPF) is a government-backed savings scheme that has been a popular choice among the middle class for decades. PPF offers a long-term investment horizon of 15 years, ensuring that individuals can accumulate a substantial corpus over time. This scheme provides a fixed interest rate, which is often higher than that of traditional fixed deposits. Opening a PPF account is easy, as it can be done at designated banks and post offices across India. Additionally, contributions made to a PPF account are eligible for tax deductions under Section 80C of the Income Tax Act. Furthermore, the accumulated amount in a PPF account can be withdrawn tax-free at maturity, making it an attractive investment option for the middle class. 5 Investment Plan every Parent should have Read More 3. National Pension Scheme (NPS) The National Pension Scheme (NPS) is a government-regulated investment plan specifically designed to cater to retirement needs. NPS offers the middle class an opportunity to build a substantial retirement corpus through regular contributions during their working years. The scheme provides a choice of investment options and fund managers, allowing individuals to customize their investment strategy according to their risk appetite. NPS also provides tax benefits under Section 80C, wherein contributions made towards NPS are eligible for deductions. Additionally, partial withdrawals are allowed under specific circumstances, providing individuals with flexibility in managing their financial needs. It's important to note that while NPS ensures security, it may not offer returns as competitive as other investment options. 4. Equity-Linked Savings Scheme (ELSS) Equity-Linked Savings Schemes (ELSS) are mutual fund schemes that combine tax benefits with the potential for higher returns. ELSS funds primarily invest in equities, which offer the opportunity for capital appreciation over the long term. Investments made in ELSS are eligible for tax deductions under Section 80C of the Income Tax Act. ELSS funds have a mandatory lock-in period of three years, encouraging investors to stay invested for the long term. This aligns with the objective of wealth creation, as staying invested for a longer duration allows investors to benefit from the potential growth of the equity market. 5. Fixed Deposits (FD) Fixed Deposits (FDs) have been a traditional investment avenue for risk-averse individuals, including the middle class. FDs provide a secure and predictable return on investment, making them an attractive choice for conservative investors. With flexible tenures and varying interest rates, individuals have the freedom to choose an investment period that suits their needs. Although the returns from FDs may be lower compared to other investment options, they are considered a safe haven for capital preservation. FDs provide a sense of stability and security, which is appealing to middle-class people seeking to protect their hard-earned money. One must remember this is a safe investment option, but FDs hardly give inflation-beating returns. Affordable Investment Opportunities Read More 6. Direct Equity Investment Direct equity investment is an option for individuals from the middle class having a keen interest in the stock market and a willingness to take calculated risks. Investing in individual stocks needs knowledge, thorough research, and a long-term perspective. While direct equity investment can be rewarding, it is important to exercise caution and consider consulting a financial advisor to make informed investment decisions in the equity market. Diversifying investments across sectors and market capitalizations can help mitigate risk. With the potential for higher returns, direct equity investment can be a valuable addition to a well-diversified investment portfolio. Conclusion Investing wisely holds great importance for the middle class to achieve their financial goals and secure their future. Systematic Investment Plans (SIPs), Public Provident Funds (PPF), National Pension Schemes (NPS), Equity-Linked Savings Schemes (ELSS), Fixed Deposits (FDs), and direct equity investment are among the best investment plans in India for the middle class.  By understanding the unique features, risk-reward profiles, and tax implications of these investment options, individuals can make well-informed decisions aligned with their financial aspirations. Remember, investing is a journey that requires discipline, patience, and periodic reviews to ensure that your investments align with your evolving goals and changing market dynamics. Start early, continue to be committed, and reap the rewards of a well-planned investment strategy tailored to your needs. Consult an Expert Advisor

In the previous article, we discussed AUM in mutual funds. In this article, we will discuss NFO in mutual funds. When it comes to mutual funds, there are a lot of acronyms and jargon that can be confusing for new investors. One such term you may have heard of is NFO or a New Fund Offer.   NFO is a term used in the mutual fund industry to describe the initial public offering of a new mutual fund. In other words, an NFO is when a mutual fund company first offers shares of a new mutual fund to the public.  The NFO period is typically a limited-time offer, during which investors can purchase shares of the new mutual fund at a discount on the fund's actual value. After the NFO period expires, the claims of the new mutual fund will trade on the open market at their then-current market value. Understanding NFO (New Fund Offering)  NFO in a mutual fund can be very beneficial for new investors. So, how do you know whether an NFO is worth your time?   You'll want to consider when an NFO is happening in your market.   Let's say you're in the market for a new mutual fund. If you see that an NFO is happening, you'll want to pay attention to the dates when that NFO begins, how long it lasts, and which funds that one offers.  If you're interested in purchasing a new mutual fund, you'll need to watch the dates when that new fund begins its NFO. You'll also want to pay attention to the NFO terms, particularly the discounts you'd receive for purchasing the shares of a new fund during the period offered.  Finally, you'll want to pay attention to the new fund's performance history. If you're already familiar with the historical performance of a particular fund, you may want to purchase shares of that fund instead. Types of NFO in Mutual Funds 1. Open-ended mutual funds  The vast majority of funds available through NFO are open-ended mutual funds. There are no constraints on the investment time or the number of units in an open-ended mutual fund scheme.  Once the mutual fund is active, fund units can be purchased or sold based on the current NAV.   2. Closed-ended mutual funds  Closed-ended mutual funds do not enable investment or withdrawal from the fund after the NFO completes, usually 3 to 4 years. These funds' units trade on the open market. However, their liquidity is less when compared to open-ended funds. source: pixabay Benefits of NFO in Mutual Funds A new fund offer (NFO) is an offer of units in a mutual fund scheme made by the fund house to the public. It is a way through which a mutual fund scheme launches.   When a mutual fund house launches a new scheme, it first offers the units of the scheme to its existing unit holders.   If there are any unsold units after this, the mutual fund house can offer these to the public. A new fund offer is also a public issue of units or an initial public offer (IPO).  The benefits of investing in a new fund offer are many. Some of these benefits are:  The opportunity to invest in a new scheme that may not be available through regular channels such as banks and brokerages.  The chance to get higher returns than what is available in the secondary market. The chance to invest in a scheme is still in the initial stage of development.  The chance to invest in a scheme that may not have been listed on a recognized stock exchange.  The chance to invest in a scheme with a good track record of performance in the recent past.  The chance to invest in a scheme backed by a knowledgeable and experienced management team.  The chance to invest in a scheme may be an excellent long-term investment.  The chance to invest in a scheme backed by experienced investors.  The chance to invest in a scheme with a good track record of performing well.  The chance to invest in a reliable scheme backed by a reliable source.  How do you invest in an NFO?  An NFO or a New Fund Offer is an investment option made available by mutual fund companies to their investors. It is a way through which the mutual fund company can raise money from the public by issuing units or securities in a new fund.  Such a fund is called a new fund, and it can be of any type. It may be a balanced fund, a stock fund, or a debt fund. Mutual fund companies offer NFOs to investors in two ways. One is using a prospectus, and the other way is using a letter.  The difference between an NFO and an IPO (Initial Public Offering) is that in an NFO, the mutual fund company does not offer all the units or securities of the new fund to the public. It provides only a part of the total.  The rest is there with the mutual fund company for its use. In the case of an IPO, all the units are offered to the public. Therefore, it is called the total offer. Difference NFO vs IPO In the case of an IPO, the units or securities are offered in the form of a certificate. This certificate needs to be issued to the investor as a stock certificate. Then, the mutual fund company gives a prospectus and offers the certificate holders a chance to buy additional units or securities from the mutual fund company.  Things to keep in mind before investing in an NFO Here are 3 things to keep in mind before investing in an NFO: The reputation of an AMC: The track record of the AMC influences the assets under management and the performance of a new NFO.  Minimum Investment - There is always a stipulated number of units that must be bought in the NFO.  Nature of instrument - An NFO documentation provides information about the risk associated with the fund, suitability, expected ROI, etc. FAQs What is NFO in mutual funds? NFO is a term used in the mutual fund industry to describe the initial public offering of a new mutual fund. In other words, an NFO is when a mutual fund company first offers shares of a new mutual fund to the public.  Is it good to invest in NFO mutual funds? NFO mutual funds can be risky investments. Unlike other mutual funds, they do not have a performance history that can be checked to determine their success or past performance. Which is better NFO or IPO? NFO and IPO are two different investments. In an IPO, the units or securities are offered in the form of a certificate. This certificate needs to be issued to the investor as a stock certificate. Then, the mutual fund company gives a prospectus and offers the certificate holders a chance to buy additional units or securities from the mutual fund company. Is NFO taxable? Yes, NFOs are taxed like other mutual funds. What are the benefits of investing in NFOs?  Here are some benefits of investing in NFOs: The opportunity to invest in a new scheme that may not be available through regular channels such as banks and brokerages. A chance to get higher returns than what is available in the secondary market.A scheme is still in the initial stage of development. A new scheme that may not have been listed on a recognized stock exchange. Invest in a scheme backed by a knowledgeable and experienced management team.  Is NFO a good investment?  Ans. An investor should not invest in a fund only because its net asset value (NAV) is low during NFO. The price at which the cash raised during an NFO will be invested is more crucial. Let's say there are two schemes: Scheme A and Scheme B. Units in Scheme A are brand new and come with a face value of Rs.   Is it better to invest in an NFO or mutual fund?  Ans. Existing mutual funds have a competitive advantage in terms of information and performance, but NFO opens a new market.  What is the benefit of NFO?  Ans. A mutual fund house can raise money through an NFO to buy securities or debt instruments. Consumers can commonly purchase units from AMCs for INR 10 per unit NAV for a subscription period of ten (10) to fifteen (15) days.  Consult an expert advisor to get the right plan for you TALK TO AN EXPERT

As parents, we have a profound responsibility to ensure a bright and secure future for our children. While providing love, care, and education are crucial aspects, financial planning plays a pivotal role in setting the stage for their success. Investing wisely is key to securing their future aspirations and safeguarding against unforeseen circumstances. Let's explore five essential investment plans that every parent should consider, ranging from mutual funds and US ETFs to US stocks and insurance. So, we will dive in and discover the strategies that can pave the way for your child's financial well-being. Education Fund: The Power of Mutual Funds One of the most crucial investments you can make as a parent is in your children's education. Start by setting up an education fund that specifically caters to their academic pursuits. Consider tax-efficient options like a 529 plan, which allows you to invest in a variety of mutual funds, ensuring growth potential while enjoying tax benefits. Platforms like EduFund (www.edufund.in) offer valuable guidance and tools to help you plan and manage your child's education fund effectively. investment plans US ETFs: Diversification Made Easy 1. Exchange Traded Funds Exchange-Traded Funds (ETFs) have gained significant popularity in recent years due to their flexibility and global exposure. Just like mutual funds, ETFs represent a basket of securities, including stocks, bonds, commodities, or a combination thereof. However, unlike mutual funds, ETFs are traded on stock exchanges throughout the trading day at market prices. ETFs offer several benefits, including transparency, liquidity, and cost-effectiveness. Parents can buy and sell ETFs at any time during market hours, allowing for more flexibility in managing their investments. Additionally, ETFs disclose their holdings daily, ensuring transparency in the investment portfolio. With generally lower expense ratios compared to mutual funds, ETFs offer a cost-effective investment option for parents. 2. USA Stocks For parents who are comfortable with taking on more active roles in their investment journey, investing in individual stocks can be an exciting avenue. Owning shares of well-established companies can offer substantial returns over time. While investing in individual stocks requires careful research and monitoring, it can provide the potential for higher growth compared to mutual funds or ETFs. EduFund's resources can assist you in understanding stock investing basics and identifying companies with strong fundamentals. To mitigate risk, parents can consider diversifying their stock portfolios across different sectors and industries. This diversification helps reduce the impact of a single stock's performance on the overall portfolio. In addition, parents should adopt a long-term investment mindset and focus on the fundamentals of the companies they invest in rather than short-term market fluctuations. Investment Tips for Dad's in India Read More Insurance - Protecting Your Family's Future Insurance is a pivotal component of any comprehensive financial plan, especially for parents. Life insurance provides financial protection to your family in the event of your untimely demise. It ensures that your children's education, living expenses, and future aspirations are secure, even in your absence. Term life insurance offers coverage for a specified period, providing a higher coverage amount at an affordable premium. Additionally, health insurance safeguards against unexpected medical expenses, offering peace of mind during uncertain times. By securing adequate insurance coverage, parents can safeguard their family's financial well-being and ensure a secure future. Investment Tips for Mom's in India Read More Mutual Funds - Diversify and Grow Your Wealth Mutual funds are an excellent choice for parents seeking diversification in their investment portfolios. These funds pool money from several investors to invest in a variety of asset classes, including stocks, bonds, and money market instruments. Managed by professional fund managers, mutual funds allow parents to benefit from their expertise and experience in making investment decisions. By spreading investments across different sectors and markets, mutual funds help reduce the risk associated with investing in individual stocks. Parents can choose from many types of mutual funds on the basis of their risk appetite and financial goals. For those seeking stability, bond funds can offer a regular income with lower volatility. On the other hand, equity funds offer an opportunity for capital appreciation through investments in stocks. Balanced funds offer a blend of both equity and bond investments, providing a balanced risk-return profile. By investing in mutual funds, parents can access professional investment management and enjoy the benefits of diversification. You can lay a strong foundation for your family's future by incorporating these investment plans into your financial strategy. Remember that investment decisions should align with your risk tolerance, financial goals, and time horizon. It's always suggested as advice to seek guidance from financial advisors who can provide personalized advice based on your specific circumstances. Conclusion  Investing wisely is an integral part of parental responsibility. By incorporating these five investment plans into your financial strategy, you can take proactive steps toward securing your child's future while also protecting your own financial well-being. Remember to conduct thorough research, seek professional advice, and regularly review your investment portfolio to adapt to changing circumstances. By combining long-term vision with disciplined investment practices, you can build a strong financial foundation for your children, allowing them to chase their dreams with confidence. Start planning today and pave the way for a prosperous future for your family. Consult an Expert Advisor

As the name suggests, open-ended mutual funds are always open to investment along with redemptions. In the world of mutual funds, open-ended funds are a common type of investment. One of the key highlights of these funds is that they don’t have any form of lock-in period or maturities. Hence, it is always open.  An open-ended mutual fund is an investment scheme where the shares can be issued and redeemed at any time. Based on data from (the Association of Mutual Funds in India) AMFI, a total of 14 open-ended mutual funds were launched in March 2021 with a total mobilization of INR 4539 crores.   In an open-ended mutual fund, you have to calculate the (Net Asset Value) NAV daily on the value of underlying securities at the end of the day. Here are some essential things to know about open-ended mutual funds. Difference between an open-ended mutual fund and a close-ended mutual fund  To be precise, there are various types of differences between open-ended mutual funds and close-ended mutual funds. Here are the primary differences between the two mutual funds:  1. Liquidity   In open-ended mutual funds, investors enjoy higher liquidity. Simply put, you can purchase or sell units at any time except the units of ELSS funds. The units are locked in for three years from the date of investment. This is one of the primary advantages of open-ended mutual funds compared to close-ended mutual funds.   On the contrary, close-ended mutual funds have no liquidity during the lock-in time. You can redeem your units only after the mandatory lock-in period is over.   Ways in which you can invest  In open-ended mutual funds, you can invest via lump sum and through SIPs. Moreover, you can make any number of purchases in the fund.   On the contrary, in close-ended mutual funds, you can only invest during the (New Fund Offer) NFO. In other words, you cannot invest in SIPs.   1. Investment amount   In an open-ended mutual fund, you can start investing with as minimum as INR 500 or INR 1000.   On the contrary, in a close-ended mutual fund, the minimum amount for investment is INR 5000.   2. Track record of the funds   You can invest in open-ended mutual funds by carefully checking the track record of the schemes in which you want to invest.   Since you can purchase close-ended funds only during the NFO period, no track record is available. Investing in a close-ended fund requires attention and minute assessment.  3. Average rupee cost  Through SIPs in open-ended mutual funds, you can take the benefit of rupee cost averages of the unit price. In the case of a lump sum amount, you can also invest based on the market fluctuations. You can also add more units if the market is stable.   On the other hand, in close-ended mutual funds, there is no average rupee cost. This is because close-ended mutual funds don’t accept any investments when the NFO period gets over.  30 source: pixabay Advantages of open-ended mutual fund  1. Liquidity   As an investor, you can redeem the units of open-ended mutual funds. There is no lock-in period that makes you enjoy the liquidity of open-ended mutual funds.   2. SIP availability   In open-ended mutual funds, you can purchase units on any working day. You can even set up a systematic investment plan to deposit a fixed amount.   3. Performance of the funds   You can easily assess the performance of the funds and their past records in an open-ended mutual fund.   Disadvantages of open-ended mutual fund  1. High volatility   The NAV of open-ended mutual funds fluctuates based on the performance of its underlying securities.   2. Relatively high risk  Open-ended mutual funds have a relatively high risk attached to them since the NAV of the funds fluctuates on a daily basis due to market volatility.   Is SIP an open-ended mutual fund?  Open-ended mutual funds allow you to track the performance of the fund, which assists in making informed decisions. In other words, SIP is an integral component of open-ended mutual funds and allows you to enjoy greater flexibility.     How do I know if the mutual fund is open-ended?  There are various ways to know if the mutual fund is open-ended or not. For instance, an open-ended mutual fund contains SIPs. Moreover, you will enjoy greater flexibility and market regulations in an open-ended mutual fund.   Is the Index fund open-ended?  In case you didn’t know, index funds are open-ended. It attempts to replicate an index like the S&P 500. Hence, it doesn’t allow the manager to actively select securities to purchase.  Investing in mutual funds is a great way to enhance your investment portfolio. By knowing about open-ended mutual funds, you will be able to gain greater flexibility. Open-ended funds are suitable for investors who can invest in a liquid investment instrument and undertake market risks. FAQs What is the difference between open-ended and closed-ended mutual funds?  Ans. Contrary to closed-ended funds, which may only be redeemed when the fund's investment tenure has been completed, open-ended funds allow for the purchase or sale of assets at any time.  What is a closed-ended mutual fund?  Ans. Close-ended funds are defined by the Securities and Exchange Board of India (SEBI) as mutual funds with a predetermined maturity period. At the moment the program is launched, these mutual funds are accessible for subscription for a set amount of time.  Is SIP an open-ended mutual fund?  Ans. Systematic Investment Plans (SIPs) allow you to invest in open-ended schemes. SIPs cannot be used to invest in closed-ended schemes; during the NFO period, only lump sum investments are permitted.  Consult an expert advisor to get the right plan for you    TALK TO AN EXPERT

In the previous article, we discussed the top 10 large-cap mutual funds in India. In this article, we will discuss the top 10 midcap mutual funds in India. A mid-cap fund is a fund that invests majorly in mid-cap companies as per market capitalization. As per SEBI regulations, a mid-cap fund is required to invest a minimum of 65% of its assets in mid-cap companies through equity. Advantages: High Growth Opportunity: Companies in these funds have a high growth opportunity because of their size and operations. The companies have the potential to become large-cap companies in the future. Diversification: These funds provide a good diversification in your portfolio by spreading the risk across market capitalization companies Top 10 mid-cap mutual funds S.No.Fund Name3-Yr Annualized Performance1PGIM India Mid-cap Opportunities Fund Direct Plan-Growth34.66 %2Quant Mid Cap Fund-Growth Option Direct Plan32.87 %3SBI Magnum Mid Cap Fund Direct-Growth25.55 %4Motilal Oswal Midcap 30 Direct Growth24.46 %5Edelweiss Mid Cap Fund Direct Plan-Growth Option24.39 %6Kotak Emerging Equity Scheme Direct-Growth23.33 %7UTI Mid Cap Fund-Growth Option Direct23.06 %8Mahindra Manulife Mid Cap Unnati Yojana Direct Growth22.66 %9Baroda BNP Paribas Mid Cap Fund Direct Plan Growth Option22.06 %10Axis Mid Cap Fund Direct Plan-Growth22.05 %Note: Data as of July 16, 2022Source: Morningstar 1. PGIM India Mid-cap Opportunities Fund Direct Plan-Growth - Midcap mutual fund Fund analysis: The fund has outperformed the category and the benchmark with good margins. The fund is investing predominantly in mid-cap companies. The fund is rated 5-star by Morningstar. The risk grade is above average, and the returns grade is high. The fund follows a growth style of investing. The risk is spread across companies with the top 10 holdings consisting of 35.25%. 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 and falling, better than the category average.The minimum monthly SIP amount is Rs 1000/- thus marginal investors may not be able to take exposure 2. Quant Mid Cap Fund-Growth Option Direct Plan - Midcap mutual fund Fund analysis: The fund’s objective is to seek to generate capital appreciation & provide long-term growth opportunities by investing in a portfolio of Mid Cap companies. The risk grade is below average, and the returns grade is high. The fund has a beta of 0.85 indicating that the movement of the fund is less relative to the market movement. The fund has a concentrated portfolio of 34 stocks, investing in both value & growth stocks. The fund has low risk (measured by standard deviation) than the category average. ProsConsA consistent top performer in its category. The fund captured the market well when it was rising and falling, better than the category average.Concentrated portfolio of 34 stocks. 3. SBI Magnum Mid Cap Fund Direct-Growth - Midcap mutual fund Fund analysis: The fund’s objective is to provide investors with opportunities for long-term growth in capital along with the liquidity of an open-ended scheme by investing predominantly in a well-diversified basket of equity stocks of Midcap companies. The risk grade is above average and the returns grade is high. The fund has invested across market capitalization and sectors of growth stocks. The fund holds a good risk-to-reward ratio. The fund has a high risk (measured in standard deviation) than the category average. ProsConsFund has outperformed the category average over the different horizons. Consistent performer.The fund has a high expense ratio. 4. Motilal Oswal Midcap 30 Direct-Growth - Midcap mutual fund Fund analysis: The fund’s objective is to achieve long-term capital appreciation by investing in a maximum of 30 quality mid-cap companies having long-term competitive advantages and potential for growth. The risk grade is high 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 concentrated portfolio of growth stocks consisting of 27 companies spread over different sectors. The fund has a high risk (measured in standard deviation) than the category average. ProsConsThe fund captured the market well when it was rising. The fund captured the market well when it was falling.Concentrated portfolio. Source: pixabay 5. Edelweiss Mid Cap Fund Direct Plan-Growth Option - Midcap mutual fund Fund analysis: The fund has outperformed the category and the benchmark with good margins. The risk grade is average and the returns grade is above average. The fund has delivered consistent returns over different horizons and has a well-diversified portfolio of 61 growth stocks, investing across market capitalization. The fund has a high risk (measured in standard deviation) than the category average. ProsConsFund captured the market well when it was rising. Consistent performer.Returns are above average. 6. Kotak Emerging Equity Scheme Direct-Growth - Midcap mutual fund Fund analysis: The fund’s objective is to generate long-term capital appreciation by investing predominantly in mid-companies. The scheme may also invest in debt and money market instruments, as per the asset allocation table. 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 except for the communication services sector. The fund has a high risk (measured in standard deviation) than the category average. ProsConsWell-diversified portfolio.Good risk-to-reward ratio.Minimum monthly SIP amount Rs 1000/- 7. UTI Mid Cap Fund-Growth Option Direct - Midcap mutual fund Fund analysis: The fund is rated 4-star by Morningstar. The risk grade is 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 25.87% only and the fund holds a total of 72 stocks in the portfolio. 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.The fund has a high expense ratio. Source: pixabay 8. Mahindra Manulife Mid Cap Unnati Yojana Direct-Growth - Midcap mutual fund Fund analysis: The fund has delivered marginally good returns over the long-term period. The risk grade is low and the returns grade is above average. The fund has a blended style of investing which means the fund is having both value & growth stocks in its portfolio. The fund has a well-diversified portfolio across market capitalization and sectors. The top 10 holdings of the fund consist of 28.33% only. The fund has low risk (measured in standard deviation) than the category average. ProsConsWell-diversified portfolio.Relatively low risk.6-Month returns are less than the category average. 9. Baroda BNP Paribas Mid Cap Fund Direct Plan Growth Option - Midcap mutual fund Fund analysis: The fund will emphasize companies that appear to offer opportunities for long-term growth and will be inclined toward companies that are driven by a dynamic style of management and entrepreneurial flair. The risk grade is below average and the returns grade is above average. The fund is rated 4-star by Morningstar. The fund has a blended style of investing which means the fund is having both value & growth stocks in its portfolio. The fund has low risk (measured in standard deviation) than the category average. ProsConsThe fund captured the market well when it was falling. Broad exposure to the market.1-Yr returns are less than the category average. 10. Axis Mid Cap Fund Direct Plan-Growth - Midcap mutual fund 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 low and the returns grade is above average. The fund has a beta of 0.76 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. Features of Midcap Mutual Funds  Before we delve further, let’s check out what features midcap mutual funds have and how would you identify the best ones.   1. Risk-return Ratio Not too much. Not too less. Unlike small-cap mutual funds, with the best mid-cap mutual funds, you get a moderate risk-return ratio. Despite the low risk, these MF schemes often outperform large-cap equity funds and generate greater returns in the long run.   2. Asset Allocation When it comes to investing equity or equity-based securities of mid-cap companies, the SEBI mandates at least 65% of the total assets to be invested. The rest of the assets can be allocated to debt securities.   Major Advantages of Midcap Mutual Funds in India 1. Transparency SEBI (Securities and Exchange Board of India) mandates all mid-cap mutual funds and displays their expense ratios, NAVs, and month-end portfolios. This data is also regulated closely by the apex body.   Who are the Top Midcap Mutual Funds Suited For?  Midcap mutual funds come with a probable capacity for market-beating returns. For this, investors who are willing to sit through long-term plans and face volatility would best fit. Some factors that must be considered before opting for these schemes are -  One must understand their financial goals before making a commitment.   Everyone has a certain capacity to bear the risk levels of mutual fund schemes. One must evaluate the risk levels carefully before investing.  Investors can opt for schemes that have a low expense ratio (the portfolio management fee one has to pay to the AMCs) and a decent track record.   If one redeems their funds before a specific period, the AMCs levy a penalty called Exit Load. Investors must check the Exit Load, which is denoted in percentage and mentioned in the scheme-related documents.    Tax on Midcap mutual funds  Here is the taxability of top midcap mutual funds.   1. TDS A midcap funds’ dividend that exceeds INR 5,000/ fiscal year is applicable for 10% TDS.  2. Long-term Capital Gains Tax (LTCG Tax) If a sold unit’s holding period is over 1 year and the gains exceed INR 1 L, the LTCG tax will be 10%. Any amount below INR 1 L/ FY is exempted from LTCG tax.   3. Short-term Capital Gains Tax (STCG Tax) If one sells the fund units within one year of the purchase, they’ll have to pay a 15% STCG tax on the capital gains. Conclusion: For any investor who is looking for capital appreciation with comparatively lower risk than the small-cap mutual funds. Companies in this fund are fast-growing companies with the potential to become large-cap in the future. TALK TO AN EXPERT FAQ Can I liquidate my midcap mutual funds easily?  Yes, these funds are highly liquid and one can sell their units whenever they want. What kind of taxes would I have to pay on midcap mutual funds?  You’ll have to pay 10% TDS if any dividend from the funds exceeds INR 5,000/ FY. 10% LTCG tax if your gains exceed INR 1 L and the holding period of the sold units is over 1 Year. 15% STCG tax on your capital gains if you sell your fund units within 1 year of purchase. Which is the best midcap mutual fund in India right now?  As of now, PGIM India Mid-cap Opportunities Fund Direct Plan-Growth is the top midcap mutual fund in India.   What is mid-cap mutual funds?  Ans. A form of equity mutual fund known as a "mid-cap fund" invests in the stock of mid-sized businesses. According to the rules, mid-cap companies are defined as those ranked 101 through 250 on the basis of market capitalization.  Are Midcap funds safe?  Ans. Mid-cap funds can be quite volatile in the short term; therefore, experts advise investors to avoid them if their investment horizon is short. They should make up less than 20% of their overall investment portfolio, they advise. A 20% allocation to mid-cap funds may be considered, depending on risk tolerance.  Which type of SIP gives the highest return?  Ans. Multi-cap schemes provide better ROIs than both types of SIPs, but they are more volatile than large-cap or mid-cap schemes. For investors who desire high returns but don't mind taking some risk with their investments, these SIPs are the perfect option.  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.

Foreign Direct Investments is one of the revolutionary concepts transforming the world landscape. United Nations, Canada, and Australia are the primary countries leveraging FDI for ages.  Recently, there was a growing interest among European countries. However, they reduced the monopoly to influence the decisions owing to national security concerns. Many countries previously lacked a proper FDI regime and prospectus.  COVID-19 proved as a breakthrough for FDI. With the world crippled with inflation blues and the Indian currency breathing last, Foreign Direct Investment emerged as a driving force. Investors became active internationally and began investing in some of the most potential sectors. However, these countries face hardships in securing clearance to invest.  India is increasingly encouraging foreign countries to contribute to development.  According to the Economic Times report in July 2022, “India approved 80 FDI proposals. One of these countries is China.” India received 382 proposals after imposing restrictions on investment from countries where it shares a border.  The government’s cautious stands reveal the reason behind slow approvals. India is currently focusing on approving proposals demanding minimal dominance. FDI in India is attracting worldwide attention in the e-commerce and manufacturing industries. What do Foreign Direct Investments imply?   Foreign Direct Investment is a business agreement between two countries. In this, one of the countries reveals interest in investing in the other country’s economy for development and advancement, and it proves beneficial for the country that welcomes investors worldwide.  The Foreign Exchange Management Act of 1999 (FEMA) was the inspiration behind the move. RBI issues regulations in detail in this regard.  Countries invest in expanding their business operations. In precise, an investment into a foreign land or company is FDI. If a country gains 10% of the voting power, it gains the interest of the country.  According to the Indica News Bureau, “Silicon Valley Bank, California concluded India as the 5th in FDI inflows.”  SVB praised India’s “Make in India” approach, and it held India in the top spot in ease of doing business criteria.  Moreover, it also states, “India is the 6th largest economy all over the world with a CAGR (Compound Annual Growth Rate) of 5.4%.”  The figures show that India is generating interest across the globe for diverse investment opportunities and potential for growth.  Popular foreign direct investment types in India FDI differs from direct investments in foreign countries in front of direct control. It is not just about transferring monetary funds but building lasting interest too. Here are 3 popular types of Foreign Direct Investments in India:   Horizontal Investment   In this, a country establishes its business in a foreign country without changing the core business policies. For example, McDonald’s operates in Asian countries to expand stores in a region.  Vertical Investment   In vertical investment, a country invests in another country from a resources point of view and in something complementary to the business.  For example, “a U.S. manufacturer may invest in India for a particular raw material required for manufacturing.”   Conglomerate investment   Here, a country invests in a foreign business that does not share any link with its core business operations.  It eventually is a sort of joint venture.   For example, “If a Chinese firm invests in the Indian Culture industry. In this, it hardly shares much knowledge regarding people’s preferences and economic interests.”  India repeatedly emerges as a preferred investment destination for countries in 2022. It has risen by 23% post-COVID, according to a press release updated by the Indian government.  Which sector attracted the maximum FDI in India in 2022?   The manufacturing sector in India fetched the maximum FDI in 2022. It increased by 76% in FY22 to $21.34 billion. The numbers stand in clear contrast with $12.09 billion in a year. Economic Times concludes the fact. What are some prohibited FDI sectors in India?   While India welcomes foreign countries to invest in a diverse industrial portfolio of the economy, at the same time, it prohibits investing in specific industries:  Agriculture and Plantation Activities  Atomic Energy Generation   Chit fund investments  TDR trading  Housing and real estate  Lotteries  Gambling activities Are foreign direct investments beneficial for a country’s economic growth?   A coin has two sides. Likewise, Foreign direct investment brings benefits and drawbacks in the same way.  Advantages of Foreign Direct Investments in India  Here are some primary benefits of Foreign Direct Investments:  It proves beneficial for the economy in terms of reduced tariffs, excise duty, and tax breaks.   It creates a conducive atmosphere for both investors and countries invested in  It creates new job opportunities for people. It increases income and buying capacity.  The development of human capital resources increases competence and knowledge among the workforce.  The benefit of resource transfer. Disadvantages of Foreign Direct Investments in India Hinders the growth pattern of a country’s economy  Political changes directly impact the growth prospects in the country it is investing in.  Too much intrusion in a country’s operations impacts foreign exchange policies   Increased expense than investing in domestic goods  Colonialism Threat for the Country Seeking FDI   Conclusion:   FDI may prove beneficial for the hosting countries. India made specific sectors 100% open to foreign investments, which can also help contribute significantly to the “MAKE IN INDIA” venture.  Specifically, the Indian economy holds great potential for foreign direct investment.  The country attracting foreign investors must channel a strict policy to limit intrusion and colonialism threats.  FAQs What is the meaning of foreign direct investment?  Ans. Foreign direct investment (FDI) is a type of cross-border investment in which a stake in and significant degree of control over an enterprise located in another country is established over time by an investor who resides in one economy.  What is foreign investment for example?  Ans. When foreign businesses engage in domestic ones, they are attempting to actively participate in both their ongoing daily operations and important strategic expansion. A foreign investment would be made, for instance, if an American company invested in an Indian business.  What is a real example of foreign direct investment?  Ans. An illustration would be McDonald's putting money into an Asian nation to expand the number of restaurants there. In this instance, a business enters a foreign economy to improve a component of its supply chain without significantly changing how it conducts business.  What are the disadvantages of Foreign Direct Investments in India? Hinders the growth pattern of a country’s economy  Political changes directly impact the growth prospects in the country it is investing in.   Too much intrusion in a country’s operations impacts foreign exchange policies   Increased expense than investing in domestic goods  Colonialism Threat for the Country Seeking FDI What are the advantages of Foreign Direct Investments in India? Here are some primary benefits of Foreign Direct Investments:  It proves beneficial for the economy in terms of reduced tariffs, excise duty, and tax breaks.   It creates a conducive atmosphere for both investors and countries invested in  It creates new job opportunities for people. It increases income and buying capacity.  The development of human capital resources increases competence and knowledge among the workforce.  The benefit of resource transfer.

A Systematic Investment Plan (SIP) in Mutual Funds allows investors to invest a specified sum of money periodically, once a month, or every other quarter. Like a recurring deposit, the monthly amount can be as low as INR 500. It's practical since you can direct your bank to deduct the money monthly.  SIP has gone mainstream amongst Indian mutual fund investors because it allows them to invest in a disciplined way without dealing with economic uncertainty. Mutual Funds Systematic Investment Plans are by far the most popular way to get started in the realm of long-term investing. Starting SIP in Mutual Fund helps you stay invested for a long.   SIPs are similar to recurrent deposits in which you invest a small/fixed sum each month. In India, Mutual Fund SIP accounts totaled 5.55 crores, with a total sum generated through SIP of 12,276 crores in June 2022.  The following are the monthly amounts of SIP Contributions received from FY 2016-17 onwards: The following are the details of new SIPs registered and canceled during FY 22-23 How long should a SIP last?  Staying invested as long as possible is key to good returns. If you participate in a SIP for four years, your chance of loss is minimal. It's also important to keep in mind that short time periods have more chances of loss and outside profit. In overextended historical periods, the good and terrible times balance out.  The asset allocation of SIP investment  Asset allocation is a critical component of SIP investment. The stock market performance determines the returns earned by equity-associated mutual funds. Therefore, if the market is not providing an attractive yield, your fund will deliver modest returns. For good returns, try to dynamically distribute your assets - ideally combine long-term, mid-term, and short-term investments. You can diversify your SIP investments based on your risk tolerance and investment objectives, and not restrict your investments to just one kind of investment.   When to withdraw?  This has been the most frequently posed question among investors. The appropriate response is entirely dependent on the success of your fund. Monitor the mutual fund performance in which you have invested. If the fund has a poor performance for even less than a year, it could be subject to market swings, but if the commission has been poor for much more than eighteen months, explore different investments.  Nevertheless, this is not the only criterion to consider when evaluating a fund's performance; you need also to consider the mix of firms in which the fund has invested and their potential profitability. Another effective method is to compare the performance of your mutual fund to that of identical mutual fund schemes.  Benefits of Investing through SIP  Simple Investment: You may begin investing as little as Rs 500 per month through SIP and see it increase. A SIP is not only easy to track, but it also allows you to save more money.  Average Rupee Cost: The Rupee Cost Averaging component of SIP is unique because you buy more units when the market is low and more negligible when the demand is high. Hence you can buy more during every market downturn, lowering your investment cost and increasing your returns.  Higher returns: SIP delivers twice the returns of regular investments or recurring deposits. This might assist you in avoiding excessive prices.  Compound growth: SIPs work on the theory of getting a compound rate of return on your investments a moderate amount spent over time yields higher returns than a sizeable one-time commitment.  Flexibility: SIP allows you to avoid long-term obligations such as building a portfolio such as Public Provident Funds or Unit Linked Insurance Plans.  Why SIP is the best investment? Read More The best SIP funds  Investing with a SIP allows you to spread your investments over time and benefits from rupee cost averaging. If you opt to invest in mutual funds through a SIP, you do not have to pace the markets. As per ICICI Direct below list is suitable for investments. Top 10 equity mutual funds  As per data from Clear tax (https://cleartax.in/s/best-equity-mutual-funds) table below displays the top-performing equities mutual funds over the previous three and five years. Who should make SIP investments?  Everyone, from students to salaried workers, can start a SIP and invest in their chosen Mutual Funds with as little as Rs. 100 by using this strategy. This is ideal for those with a consistent income stream. Individuals can invest a portion of their regular income in mutual funds by initiating a SIP.  Each mutual fund is designed to attain a certain goal. Select the fund that best meets your objectives and risk tolerance brings you closer to your financial goals. As a note to the investors, before initiating a SIP into a fund, examine the needs and align them with the fund's objectives. Do a thorough analysis of the funds to make the most of your investments! FAQs Is SIP better than a mutual fund?  Ans. SIP may offer a more effective means of achieving budgetary and investment objectives. An investor who uses mutual funds has the choice of reinvested returns or earnings. Investors can benefit from the power of compounding if they reinvest in the same plan rather than withdrawing their money.  Is SIP a good investment?  Ans. One of the greatest methods for disciplined investing is the systematic investment plan (SIP), which should be followed regularly throughout time. By beginning a SIP with two or more funds, an investor can diversify their portfolio.  Can I withdraw SIP anytime?  Ans. The amount and procedure for early withdrawal from a Systematic Investment Plan (SIP) depend on the type of mutual fund, the length of the investment, and the fund house's policies. Most funds have a minimum lock-in period and violating it may incur fees.  Consult an expert advisor to get the right plan for you TALK TO AN EXPERT

Planning your finances as a parent is the most crucial yet underrated aspect of raising children. Amidst all your parental responsibilities, becoming a parent is emotionally and financially life-changing. One fine day, you suddenly are responsible not only for yourself but also for another person. Embarking on this new adventure requires certain preparations. So, let’s figure out how to plan your finance as a young parent!  Planning Finance as Parents Financial hacks to learn on your new parenthood journey  Here are some hacks that will allow you to spend quality time with your newborn while managing your finances effectively.  #1 Get a health insurance plan for your newborn  The most important step after your child is born is to update your health insurance plan or get a new one to cover your newest member. Many health plans allow young parents to add their child within 30-60 days after the delivery to the family health plan. The insurance covers medical expenses, and hospitalization of the newborn baby and reduces the financial stress of medical bills!    #2 Create a Budget  With an infant entering your life, you will have new expenses. Diapers, baby clothes, baby food, and other childcare costs might add up quickly. Besides, you would also have post-natal and prenatal medical expenses. Some expenses, such as new toys and diapers, might be recurring, while others, like a car seat and a stroller, are a one-time investment.  One quick note: It’s best to understand the “upfront costs” that might be a temporary hit to the wallet. Differentiate it from the recurring costs because they will influence your overall budget. You may also use online budgeting apps to alleviate further stress and anxiety.  Ways to invest in 2023 Read More #3 Create an emergency fund  Sudden unemployment or hospitalization can be financially-stressful when your family is growing. That is why having an emergency fund covering between 6 and 12 months of living costs is valuable. The emergency fund offers a comfortable cushion for new parents. Such a fund is crucial when your family relies on a single source of income.   #4 Save for your kid’s education  Surveys suggest that the average tuition & fees for private institutions were more than $30,000 during 2017-2018. According to research, only 13% of parents place college savings as the top child-related financial priority. Even if your kid’s education does not sound like your immediate priority, the sooner you prepare for it, the better it is. You can start saving your money as per your salary to keep some amount for your child’s education.  source: pixabay #5 Financial plan for your retirement   With so many things to do for your infant, you might at times forget to prioritize your own life goals. But you must not undermine your priority. Just as your child is important, your future life is nowhere less significant. You must consider setting up automatic withdrawal of retirement contributions.  Prioritizing your retirement will prepare you for the future.   #6 Invest in a term life insurance plan  Like other insurance forms, life insurance also can financially protect you & your family against any worst situation. You might not realize it, but term life insurance policies are extremely affordable. For healthy adults, these policies can cost less than monthly video or music streaming services.  The best part of investing in such an insurance policy is that it provides the financial protection that your family requires in case of any unexpected tragedy. Due to the amount of coverage that varies by different aspects, life insurance calculators help determine the appropriate coverage for your family.  #7 Make a will & mention beneficiaries on your accounts  In the event of your unfortunate demise, financial arrangements for your child are crucial. A will, thus, offers a plan for the division of your assets. In addition, it also designates a legal guardian for your child. Most individuals mention their surviving spouse or children as their account’s beneficiaries. You may select a separate guardian who can manage your accounts & assets until your kid reaches legal age.   An authenticated will helps avoid long legal battles about who owns your accounts & assets. It also helps define how your kid will be cared for. You may change the will & beneficiaries at any point in time.   One quick note: When you file out the essential forms, always take legal consultation from an attorney.  Ensuring these steps can safeguard your and your child’s future. Comprehensive financial planning as a parent can help you manage different expenses and maintain a healthy lifestyle for your family. FAQs Why is financial planning important for parents? Financial planning for parents is a must. It helps them manage their child's big and small finances - the biggest finance is education. From nursery to college, Indian parents bear the cost of education, and it's important to plan for its expenses. By categorizing and budgeting, parents can know how much they need, by when they need it so that they can start preparing for it. For instance, the cost of engineering in India is nearly 4-5 lakhs today; in the next 5 years, this cost will double. So to save up for a child's degree, you can choose mutual funds or US ETFs. How do I financially prepare for my child? Here are 7 ways to financially prepare for your child: Get a health insurance plan for your newborn Create a Budget Create an emergency fund Save for your kid’s education Financial plan for your retirement Invest in a term life insurance plan Make a will & mention beneficiaries on your accounts How do I plan finances for my family? The best way to plan your finances as a family is to create multiple budgets. You can have an annual budget, a 5-year financial plan, and a 10-year financial plan. This will help you assess when you need to meet certain goals and how you can achieve the. You can consult a financial advisor to figure out the best possible route. What are the five importance of financial planning? Financial planning for parents helps in achieving the 5 most common goals: buying a home, children's higher education, children's marriage, retirement planning, estate planning, etc., and long-term financial security. Consult an expert advisor to get the right plan for you TALK TO AN EXPERT

In the previous article, we discussed the top 10 mid-cap mutual funds in India. In this article, we will discuss the top 10 large-cap mutual funds in India. A large-cap fund is a fund that invests majorly in large-cap companies as per market capitalization. As per SEBI regulations, a large-cap fund is required to invest a minimum of 80% of its assets in large-cap companies through equity. Benefits of Large-Cap Mutual Funds Relatively Low Risk: These funds invest in India’s top large-cap companies, which are very stable. Hence, it helps to lower the risk when compared to other categories of equity-oriented funds. High Liquidity: These funds hold the highest liquidity due to their size and reliability in the market. Stable Returns: Since these funds invest in large-cap companies, they have stability in the business. So, these funds provide stable returns to their shareholders. Top 10 large mutual funds S.No.Fund Name3-Yr Annualized Performance1IDBI India Top 100 Equity Fund Direct-Growth16.79 %2IDBI India Top 100 Equity Fund Direct Growth16.48 %3ICICI Prudential Bluechip Fund Direct Plan-Growth15.72 %4Kotak Bluechip Fund Direct-Growth15.21 %5Mahindra Manulife Large-Cap Pragati Yojana Direct-Growth15.07 %6Baroda BNP Paribas Large-Cap Fund Direct Plan - Growth Option14.65 %7SBI Bluechip Fund Direct-Growth14.44 %8Mirae Asset Large-Cap Fund Direct Plan-Growth14.13 %9Mirae Asset Large-Cap Fund Direct Plan Growth13.99 %10Invesco India Large-Cap Fund Direct Plan-Growth13.99 %Source: Morningstar Let’s look at these funds closely. 1. Canara Robeco Bluechip Equity Fund Direct Plan-Growth - Large cap mutual funds Fund analysis: The fund’s objective is to provide capital appreciation by predominantly investing in companies having a large market capitalization. The risk grade is low whereas the return grade is high. The fund has 98.06% holdings in large-cap companies by market capitalization. The fund has a beta of 0.86 which means that the fund movement is very less relative to the market movement. The fund has a lower risk (measured by standard deviation) than the category average. ProsConsThe fund is less risky when compared to other equity funds. Major holding is in Bluechip companies.Not meant for investors with an aggressive risk appetite. 2. IDBI India Top 100 Equity Fund Direct-Growth - Large cap mutual funds Fund analysis: The fund’s objective is to provide investors with opportunities for long-term capital appreciation by investing predominantly in Equity and equity-related Instruments of Large-cap companies. The risk grade is below average whereas the return grade is high. The fund has a well-diversified portfolio of 60 holdings. The top 10 holdings consist of 47.44%. It has invested in large-cap growth companies with 9.53% of exposure to mid-cap companies. The fund has a lower risk (measured by standard deviation) than the category average. ProsConsThe fund has captured the market well when the market was falling and when the market was rising. The fund is less risky when compared to other equity funds.The fund has low 5-Yr annualized returns. 3. Kotak Bluechip Fund Direct-Growth - Large cap mutual funds Fund analysis: The fund is a consistent performer and has been rated 4 stars by Morningstar. The risk grade is average, and the return grade is high. The fund has a beta of 0.95 indicating a balanced approach by the fund manager to aggressive and conservative stocks. Along with investing in large-cap companies, the fund has exposure to mid-cap (11.48%) & small-cap (0.61%) companies. The fund has low risk (measured by standard deviation) than the category average. ProsConsThe fund is less risky when compared to other equity funds. The fund captured the market well when the market was falling and when the market was rising.Not applicable 4. UTI Master Share Growth Option Direct - Large cap mutual funds Fund analysis: The fund’s objective is to generate long-term capital appreciation by investing predominantly in securities of large-cap companies. The risk grade is below average, and the return grade is high. The fund flows blend 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. 9,237.7 crore, which shows the reliability of investors. The fund has a lower risk (measured by standard deviation) than the category average. ProsConsThe fund is giving constant returns over the long term. The fund has good assets under management.Fund follows the benchmark closely. 5. Mahindra Manulife Large Cap Pragati Yojana Direct-Growth - Large cap mutual funds 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 below average, and the return grade is high. The fund flows blend 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. 9,237.7 crore, which shows the reliability of investors. The fund has a lower risk (measured by standard deviation) than the category average. ProsConsThe fund is less risky when compared to other equity funds. Major holding is in Bluechip companies.Low assets under management. 6. Baroda BNP Paribas Large Cap Fund Direct Plan-Growth Option - Large cap mutual funds Fund analysis: The fund’s objective is to generate long-term capital growth from a diversified and actively managed portfolio of equity and equity-related securities by predominantly investing in large market capitalization companies. The risk grade is low, and the return grade is high. The fund has a low beta of 0.86 indicating that the movement of the fund is very less relative to the market movement. The fund has invested 98.54% in large-cap companies and the rest is in mid-cap & small-cap companies. The fund has invested across sectors. ProsConsThe fund is less risky when compared to its category. The fund has a well-diversified portfolio.Fund has underperformed the benchmark. 7. ICICI Prudential Bluechip Fund Direct Plan-Growth - Large cap mutual funds Fund analysis: The fund’s objective is to generate long-term capital appreciation and income distribution to investors from a portfolio that is predominantly invested in equity and equity-related securities of large-cap companies. The risk grade is average, and the return grade is high. The fund has a well-diversified portfolio of 74 holdings spread across sectors except for real estate. The portfolio has both value and growth stocks in its portfolio. The fund has a lower risk (measured by standard deviation) than the category average. ProsConsThe fund invests in both value & growth stocks. Fund has outperformed the benchmark & the category with a good margin.Fund was not able to capture the market well when it was rising. 8. SBI Bluechip Fund Direct-Growth - Large cap mutual funds Fund analysis: The fund’s objective is to provide investors with opportunities for long-term growth in capital through active management of investments in a diversified basket of large-cap equity stocks (as specified by SEBI/AMFI from time to time). The risk grade is above average, and the return grade is high. The fund has a beta of 1.00 indicating fund movement is very much dependent on the market movement. The fund is rated 3-star by Morningstar. The fund has a relatively high risk (measured by standard deviation) than the category average ProsConsThe fund has a well-diversified portfolio. The fund invests in both value & growth stocks.Fund was not able to capture the market well when it was falling. 9. Mirae Asset Large Cap Fund Direct Plan-Growth - Large cap mutual funds Fund analysis: The fund has outperformed the benchmark and the category marginally over the long-term period. The fund is rated 4-star by Morningstar. The risk grade is average, and the return grade is high. The fund follows a blended style of investing, which means it has both value and growth stocks in its portfolio. The fund has a lower risk (measured by standard deviation) than the category average. ProsConsThe fund is equally volatile with its category average. The fund is a consistent compounder.Very high assets under management. 10. Invesco India Large Cap Fund Direct Plan-Growth - Large cap mutual funds Fund analysis: The fund has a balanced portfolio of 40 stocks, investing in value and growth stocks across market capitalization with major holdings in large-cap (93.50%) companies and the rest in mid-cap & small-cap companies. The risk grade is average, and the return grade is high. The fund is rated 3-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. ProsConsThe fund was not able to capture the market well when it was rising.Fund was not able to capture the market well when it was rising. Advantages of Investing in Large-Cap Funds 1. Stable investment option Large-cap funds invest in top companies that are financially sound and have an excellent track record of performing well in the markets. They have solid business plans, and their revenue is consistent. The chances of the funds of these companies getting affected by small market fluctuations are low. These companies also give their investors dividends which help them create wealth.    2. Investors can make informed decisions Large-cap funds invest in blue-chip companies. These companies are well-established and have been active in the market for a long time. So, investors can check their past performance and make wise investment decisions.    3. Liquidity Large-cap funds offer high liquidity, which makes it easier for investors to withdraw the investment amount during adverse market conditions without having to incur a major loss.    Disadvantages of Investing in Large-Cap Funds 1. Management fees Large-cap funds invest in top companies in every sector, and the fund management fees are usually high compared to other funds. The exit load of certain plans is 1%, which investors have to pay if they withdraw the investment within the minimum holding period.    2. Returns    Large-cap funds may not give returns as high as mid-cap or small-cap funds. This is because the top companies already hold a huge chunk of shares, and their gains may be in small increments.    Who should invest in large-cap mutual funds? Large-cap mutual funds are most suitable for investors who don’t want to take much risk and are happy with stable returns. Large-cap funds are ideal if investors want to invest for more than 5 years and are expecting average returns. Newcomers can opt for large-cap funds because it has the potential to manage fluctuations in the market and also offers better returns than bank deposits on most occasions.     Things to consider before investing in the best large-cap funds Understand the risk and returns of the ratio of the large-cap funds    Average returns compared to small-cap and mid-cap funds    High expense ratio- Management fees are on the higher side    This fund is suitable for long-term investors    Income gained from the mutual fund is taxable    How to choose the best large-cap mutual funds? Consider your financial goal and assess if investing in large-cap mutual funds can help you reach your goal. If you are planning to invest in the long-term, which is between 5 to 15 years, and you are risk averse, you could consider investing in large-cap funds. Investors who have short-term goals and expect higher returns may not be interested in investing in large-cap funds. Select a fund with a lower expense ratio, as large-cap funds usually charge higher management fees than others.     FAQs What are large-cap funds? Large-cap funds invest in the best companies in every sector that are well-established and have a great track record. Large-cap funds invest a large portion of the corpus in blue-chip companies. Which large-cap fund is the best? Canara Robeco Bluechip Equity Fund Direct Plan-Growth IDBI India Top 100 Equity Fund Direct-Growth Kotak Bluechip Fund Direct-Growth UTI Master Share – Growth Option Direct Mahindra Manulife Large-Cap Pragati Yojana Direct-Growth Baroda BNP Paribas Large-Cap Fund Direct Plan – Growth Option ICICI Prudential Bluechip Fund Direct Plan-Growth SBI Bluechip Fund Direct-Growth Mirae Asset Large-Cap Fund Direct Plan-Growth Invesco India Large-Cap Fund Direct Plan-Growth Is large-cap a good investment? Large-cap funds invest most of the funds in well-established companies with a great track record, making investing in these funds less risky. These funds also give stable returns over the long term. Investors looking to invest in the long-term with minimal risk prefer large-cap funds over other funds. What are the benefits of large-cap funds? Stable investment option Investors can make informed decisions because of the excellent track record of the funds Liquidity Low risk compared to mid-cap and small-cap funds Which is the best-performing large-cap mutual fund in the last 10 years?  Ans. Data shows that the Nippon India Large Cap Fund, Kotak Emerging Equity Fund, and Nippon India Small Cap Fund have provided the highest returns in the respective large--, mid-, and small-cap categories during the last 10 years.  Is large-cap fund good for the long term?  Ans. With the top large-cap funds, you can rest easy knowing that your money is going into businesses with a proven track record of success over the medium to long term. These funds tend to carry less risk than small-cap and mid-cap funds, making them an excellent choice for risk-averse investors.  Which type of MF gives the highest return?  Ans. Growing SBI Small Cap Fund. As of August 16th, 2021, the SBI small-cap fund has an AUM of INR 9,620.21 crore, an expense ratio of 0.84%, and a Net Asset Value (NAV) of INR 102.68. The fund has a very high level of risk; hence the minimum SIP is INR 500.  Conclusion: For any investor who is looking to take equity exposure with low risk, then large-cap mutual funds are the right investment option. One could expect stable returns from these funds. Consult an expert advisor to get the right plan for you 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