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When you plan to start investing via mutual funds, you would encounter direct mutual funds and regular plans offered by the fund houses. Which one would you choose and why? What do these plans entail, and how are they different? The following article gives a brief overview of these questions and also provides information on how to invest in direct mutual funds. What is a direct mutual fund or direct plan? A direct plan, as the name suggests means to invest directly into the mutual fund without any intermediaries – distributors, agents, brokers, etc. The direct and regular plans only differ in terms of the expense ratio, which is the management fees paid from your portfolio. The plans have a portfolio and are also managed by the same fund manager. Direct plans can be analogous to buying a pair of shoes from the brand’s factory outlet whereas regular plans would be buying it at the retail store. In the former case, you are purchasing directly from the manufacturer and hence would have a lower purchasing price. Similarly, in regular plans, the higher expense ratio is attributed to the distribution or commission charges by the intermediary. Why should invest in direct mutual funds? Direct plans have a higher NAV as a result of a lower expense ratio than their regular plan counterparts. These returns or differences get compounded over the years and could lead to a significant difference in the value of the investment at the end of the time period.  As shown in the figure, the initial investment in both plans is Rs 50,000. However, the plan with a lower expense ratio amounts to a larger corpus of Rs 12 lakhs after 30 years, whereas the plan with a higher expense ratio amounts to a corpus that is Rs 1.5 lakhs lesser than the former plan. However, direct plans are targeted at those investors who have a fine acumen on the nuances of the market and hence can make an informed decision on the choice of the fund – these investors can be called do-it-yourself investors. In the case of market downturns and sudden volatility, it is always advisable to have an experienced player such as a mutual fund distributor to guide you through your investments – for a fee. How to invest in a direct mutual fund or direct plan? Once you have decided which fund to invest in, the investment into the Direct Plan of the mutual funds can be made using any of the following routes: 1. Asset management company or AMC One can invest through this offline/traditional route by visiting the fund house for the first time to complete the KYC formalities if you are not KYC (Know your customer) compliant. An account will be thus opened which will hereafter contain your investments. The fund house will provide an online option for the next investments and hence you would not be required to visit the fund house in an offline mode again. To find the nearest office of your preferred fund, you can visit the AMFI website, where you can obtain the location and contact numbers of these centers.  2. Registered investment advisors They are individuals who provide financial advice that is tailored to your investment objectives, risk appetite, the affordability of schemes, etc. These professional advisors smoothen the process of investing by helping you fill in the application form and submit the same to AMC. They charge a management fee in exchange for the services provided. However, it is always advisable to screen the track record of these individuals before approaching them with your hard-earned money. 3. Mutual fund agents & distributors These organizations are intermediaries in the value chain of investments, analogous to the Kirana stores (where AMCs are your FMCG companies that produce the product, and these Kirana stores provide you with the convenience to buy them at your doorstep). The distributors are typically banks, small financial advisory companies, stockbrokers, and individuals – and they are registered with the Association of Mutual Funds in India (AMFI). Similar to the RIAs, the distributors bring in the application to the investors and submit them back to the respective fund houses. These agencies charge a flat fee for their services.  4. Registrar and transfer agents (RTA) These institutions maintain detailed records of the investments and the investor’s transactions on behalf of the AMCs or the fund houses. Transactions include buying and selling units, updating the personal information of the clients, redeeming funds, switching funds, etc. These backend tasks are tracked and recorded by the RTAs and are typically outsourced by the fund houses. They provide services and required information to the investors on behalf of the AMCs. One can invest in direct mutual funds through these agencies. 5. CAMS CAMS is a leading RTA that provides the investor with a web portal and mobile application through which he/she can independently transact without the help of any agency or service center. It is a mutual fund agency with trusted shareholders – Acsys, NSE, and HDFC Bank Group. 6. Karvy One of the largest Registrar and Transfer agents. It provides a single window to transact and assist its customers in the investment process. The agency has over 70 billion accounts and offers multiple other services. One can also visit the locations of these agencies to complete the registration process. Click on the links to find the nearest Karvy office and CAMS office. 5. Mutual fund utilities (MFU) This is a shared and innovative platform by the Mutual Fund industry, which is used by all the Indian AMCs. The platform enables easier and more convenient tracking of investments for the investor. It gives the option to create a common account through which transactions can be made to multiple schemes in various funds (Which are the participants of MFU). With your PAN and other KYC details, the platform will map all the details of the Accounts linked to your PAN, hence consolidating all your investments in one place and making it your single point of reference. A Common Account Number (CAN) is a unique id created for an investor (similar to your bank account number). To obtain this, the investor must complete the KYC process. One can invest in Direct mutual funds through this platform. Conclusion While selecting any of the routes for your investments ensure that you weigh the pros and cons of each of the options. Direct plans are preferred and considered economical for their low expense ratios, which have a noticeable effect in the long term and amount to a high magnitude as high as denominated in lakhs. Consult an expert advisor to get the right plan TALK TO AN EXPERT FAQs What is a direct mutual fund? A direct plan, as the name suggests means to invest directly into the mutual fund without any intermediaries – distributors, agents, brokers, etc. The direct and regular plans only differ in terms of the expense ratio, which is the management fees paid from your portfolio. Why Should One Invest In Direct Mutual Funds? Direct plans have a higher NAV as a result of a lower expense ratio than their regular plan counterparts. These returns or differences get compounded over the years and could lead to a significant difference in the value of the investment at the end of the time period. What is the difference between direct mutual funds and regular mutual funds? Direct Plan allows the investor to invest directly with the AMC without any broker or distributor involvement. In a regular mutual fund plan, the investor invests via an intermediary such as a distributor, broker, or banker who is paid a distribution fee by the AMC. Is it safe to buy direct mutual funds? Yes, it is the safest way to invest in the stock market. Direct mutual funds are managed by SEBI-registered AMCs that allow investors to enter the market in a relatively safe manner. What are the disadvantages of direct mutual funds? The biggest disadvantage of direct mutual funds is the lack of financial help while selecting mutual funds. There are many AMCs in India and thousands of mutual funds offered by these establishments. Any new investor is likely to suffer choice fatigue.

What is the meaning of arbitrage funds? Are these funds a wise investment option for investors? How do arbitrage funds work? Let's find the answers to all these questions in this article. We work our fingers to the bone to save and invest for our future selves or for our future generations. As investors, the biggest nemesis to our portfolio is the unstable market or an extremely volatile, ever-changing market. What if we told you, that there are funds that thrive in such conditions? An arbitrage fund is a kind of mutual fund, where the fund manager hunts for price differences in the spot market (cash market) and future market (derivates market) to perform the arbitrage. This fund ensures profit in volatile markets with minimal risk. These funds are highly suitable for conservative or risk-averse investors. Too much to handle? Read on to navigate through this financial labyrinth. To demystify this financial product, we need to start by understanding the term Arbitrage. What is Arbitrage? Arbitrage in a simple sense is a transaction or a trade where a commodity or security is purchased and sold in the same time frame in order to profit from the price difference. For example, a fruit retailer would purchase Apples from Kashmir for Rs.100/kg and sell them in Mumbai for Rs. 200/kg. Here, the retailer has made an arbitrage by purchasing and selling the commodity in different markets. Similarly, a stock of ABC company is trading at $100 on the stock exchange. A but is trading at $102 on stock exchange B. As a rational investor (provided that it is legally allowed in the country), I would buy from stock exchange A and sell it at B, hence pocketing a profit of $2.  The opportunity of arbitrage also presents itself in the price difference of securities in the spot and futures markets. Spot market refers to the public financial market where securities or commodities are traded to receive an immediate delivery. For example, if the price of stock ABC is INR 2350, one can purchase this stock and secure ownership of the company immediately. Is it advisable to copy the mutual fund portfolio? Read More Whereas, in the futures market the trades are locked for delivery at a specific date in the future, and the price is determined by the market view of the stock. Hence, if you are buying a share in the future market that has a maturity at the end of 1 month, then the share is delivered to you at the end of maturity (whereas in the spot market, it comes into your possession immediately). Pricing of the stock in the future market can be illustrated from this example: The price of stock ABC is INR 2350 in the cash/spot market. However, if the market feels that the company has a great potential for growth or there is an expectation that the stock would see a potential increase in the next two months, then future contract delivering these shares at the end of two months would be highly valued of a price say, INR 2700. Arbitrage funds are equity funds that employ an active strategy - buying and selling during downturns to deliver good returns. They hence turn volatility, your nemesis, into your friend-in-need. How do these funds do that? Volatility causes chaos and uncertainty in the markets and in the minds of investors. This leads to a large price differential in the future and spot market, hence opening up an opportunity for arbitrage. These funds also allocate ~10% or higher of the asset value into debt instruments that are considered stable. In a stable market condition where the opportunity of arbitrage is lesser, this allocation is altered, and the fund invests more in the highly stable debt securities becoming a bond fund or a debt fund would have a large impact on its profitability. This makes it a product that is highly suitable for risk-averse investors and investors who want to benefit from the volatility.  In a typical mutual fund, the securities are purchased with the view that the prices would increase over a period of time. However, in an Arbitrage fund, when the market is bullish or optimistic for the future, (which implies a potential growth in prices), the fund buys the stock in the cash market and sells it in the future market, hence pocketing the profit, Cha-Ching! Similarly, when the market is pessimistic or is taking a downturn, the fund buys the future contracts which would be priced lower, and then sell these shares in the spot market, where it would get a higher price – Cha-Ching again! Conclusion  These funds are suitable for a medium time horizon of 1- 3 years, where you are saving to get that Gaming laptop that you always wanted to buy that beautiful lehenga for your wedding or to fund any expense in the foreseeable time horizon. Reason: Because the volatility over a longer period of time would appear smoother, making other options superior investment alternatives. Arbitrage funds also have a higher expense ratio (management fees paid to the fund) than typical mutual funds. Reason: The profit made from the arbitrages is marginal and hence requires a large number of transactions to be executed to have a sizable gain. Hence, the fund charges you a higher fee than the regular mutual funds. The exposure to risk is very minimal as the purchase and sale trades occur almost simultaneously. As there would be a dearth of arbitrage opportunities as the prices in cash and futures markets converge, one would have to invest in other instruments to augment their overall returns. These funds are treated as equity-related instruments. Hence the funds are taxed at capital gains tax depending on the holding period.  a) If the holding period is >1 year – Returns earned are subject to long-term capital gains tax – 15%. b) If the holding period is <1 year – Returns earned from the fund are liable to a short-term capital gains tax -10%. A little more Financial Gyan To choose one of the many arbitrage funds available in the market, assess them on the following factors - Performance Consistency over the last 3 years 1-year returns How much has it outperformed the benchmark? Expense Ratio Asset Size  FAQs What is Arbitrage? Arbitrage in a simple sense is a transaction or a trade where a commodity or security is purchased and sold in the same time frame in order to profit from the price difference. For example, a fruit retailer would purchase Apples from Kashmir for Rs.100/kg and sell them in Mumbai for Rs. 200/kg. What is an arbitrage fund? Arbitrage funds are equity funds that employ an active strategy - buying and selling during downturns to deliver good returns. They hence turn volatility, your nemesis, into your friend-in-need. Is it good to invest in arbitrage funds? Arbitrage funds are good funds for investors who wish to gain good returns in a volatile market without the added risk. These are relatively less risky with a good margin of returns. Can you lose money in arbitrage funds? Yes, it is possible to incur a loss while investing in arbitrage funds. TALK TO AN EXPERT

Mutual funds have been the buzzword in the investment arena and a large number of budding investors are exploring this vehicle. Despite the awareness around this vehicle, the level of understanding of the nuances that exist in this investment route is very minimal. If you have been boggled by the jargon in the industry and would like to understand “What are mutual funds?” and the various benefits of investing in them, you have clicked on the right link – as this article provides you with a starter kit to navigate the financial jargon labyrinth. What is a Mutual Fund? Mutual funds are investment vehicles that pool money from a large set of investors and invest this net corpus into various asset classes such as government securities, corporate bonds, stocks of companies, and other money market instruments to earn the promised returns to its investors. A fund manager is the one who plays the role of the driver to this investment train and channels the pool of investments to align with the investment mandate and objective. Multiple schemes are launched by Asset Management Companies (AMCs) or fund houses to match the investment objectives of various investors. The profits (or losses) earned are apportioned according to the amount invested. For example, as shown in the figure below, 4 investors invest 1 to 4 coins in a mutual fund. After a year, the fund generates profits through these investments (capital gains or dividend earnings from the equity instruments or interest income through debt instruments). These are apportioned accordingly as 1 to 4 stars (representing units of profits) to the respective investors. As an investor, when you invest in mutual funds, you receive units of the fund in return representing your investment – similar to buying stocks of a company (however, one does not get voting rights into any company). These units are easily redeemable in the market. The price of each unit is known as Net Asset Value (NAV) and is obtained after the profits earned from the fund are adjusted for expenses and liabilities of the fund. Net Asset Value NAV = Fund Assets - Fund Liabilities or Expenses / Number of Units For example, XYZ Asset Management Company has launched a new fund and collects Rs 1 lakh from 10 investors. The fund house determines the NAV of the fund to be Rs 10. Hence each of the 10 investors receives Rs 10,000/10 (Units = Investment Amount/NAV) = 1000 units. Over a period of 1 year, the fund invests in multiple securities and earns profits which translates to an increase in NAV to Rs 15. Now, the investment value of each of the investors would have increased to Rs 15 * 1000 = Rs 15000 (New NAV * units held by the investor). Why should you invest in a mutual fund? Diversification, management of your money by financial experts, flexibility, and higher returns than typical bank deposits are some of the reasons which make mutual funds an ideal investment option. 1. Money managed by experts The fund managers who manage the pool of money are financial experts who are well-versed with the market and its patterns and have an excellent track record of managing funds. An enormous amount of research is done by the research analysts on each of the stocks or assets or sectors. This aids in handpicking the best stocks in the market. 2. No lock-in period Mutual funds do not have a lock-in period where an investor cannot withdraw the funds. Some of the instruments in the market do allow a withdrawal but charge a fat penalty for the same. Most of the mutual funds are categorized under the umbrella of open-ended schemes and have different levels of exit loads (small fees charged by the AMC for exiting the fund). ELSS, which is a tax-deductible instrument comes with a lock-in period of 3 years. 3. Flexibility Mutual funds provide the flexibility of entering and exiting the fund which is a highly desired option for most of the investors and is not available in most of the options in the market. This is owing to the high liquidity in the secondary markets (buying and selling over exchanges) for the mutual funds. Investors have also started considering mutual funds as a vehicle to save for their emergency fund.  4. Liquidity With the absence of a lock-in period, an investor can redeem his/her investments in case of a financial emergency. There is also a high level of convenience of completing the process within a few button clicks when compared to the long procedures of other investment counterparts. Post the request, the fund house credits the money into your account within 3-7 business days. 5. Diversification As a retail investor, one cannot mimic the market as our ticket sizes for investments would be very low compared to the level of diversification required to beat the market. Mutual funds invest across various asset classes or various sectors in the case of securities thus providing you with the benefit of diversification. Hence, an investor need not lose his sleep, over market volatility and fluctuations as the fund takes care of such market shocks.  6. Lower cost Due to the economies of scale of managing a large pool of money, the funds charge a very small % of the fees (also known as the expense ratio) from the investors for managing their investments. The fees range from 0.5% - 1.5% and do not exceed 2.5% which is the maximum fee that a fund can charge as per the mandates of SEBI. 7. Fund switch options Mutual funds also provide an option to the investor to switch to another fund under the fund house. It gives a smooth option to enter and exit the fund and to transfer the investments into another fund with another sector/objective of his/her choice based on the risk appetite and other factors. Systematic Transfer Plans are also available in the category which facilitates a smooth transfer of Debt to Equity hence enabling a reallocation of the portfolio of the investor. 8. Tax saving Equity Linked Savings Scheme (ELSS) can be used for tax deductions up to Rs 1.5 lakhs under Section 80C of the Income Tax Act of 1961. The instrument comes with the lowest lock-in period of 3 years when compared to other tax-saving instruments. It offers the benefits of wealth accumulation and tax savings. 9. Rupee cost averaging Investing into mutual funds through SIPs averages the cost of purchase of the units of the fund. In a bull market, where the prices are high, one purchases a lower number of units, whereas, in a bear market, one accumulates the units. Hence over a period of time, the cost of the units gets averaged providing the best price for the investor and eliminating the need to time the market. 10. Regulation SEBI strictly monitors the functioning of the mutual funds and has sacrosanct guidelines to the AMCs, ensuring the safety of the investments of a large number of retail investors. How to invest in mutual funds? There are multiple routes through which one can make investments in Mutual Funds 1. Fund houses Online website: Most fund houses provide the facility for opening an account through the fund house’s official website. The KYC or e-KYC process needs to be completed by filling in the details – PAN and Aadhar number. Post the verification of information, the fund house intimates you, and you can start investing. This hassle-free and the quick route is preferred by most investors. Apps: Fund houses also allow investors to invest, sell and buy through mobile devices. A detailed account of your portfolio can also be viewed on these apps. Offline: By visiting the nearest branch office of the fund house, where an application form is provided to initiate your account. Ensure to carry the following - Passport Size Photograph Identity Proof Canceled check Address Proof 2. Broker Also known as a mutual fund distributor, they will aid you through the end-to-end process of your investment. Information regarding the documents required and other guidelines will be provided to you along with guidance on the funds to invest in. A fee is charged by this intermediary for his/her services and is deducted as a % of your investments. 3. EduFund EduFund is a simple-to-use app that helps you invest in over 4000 mutual funds in India from all the leading fund houses in the country. The process to begin takes very little time and is quite intuitive. You just have to download the app from the app store and fill in some information to get started. FAQs What is a Mutual Fund? Mutual funds are investment vehicles that pool money from a large set of investors and invest this net corpus into various asset classes such as government securities, corporate bonds, stocks of companies, and other money market instruments to earn the promised returns to its investors. Why should you invest in a mutual fund? Diversification, management of your money by financial experts, flexibility, and higher returns than typical bank deposits are some of the reasons which make mutual funds an ideal investment option. How to invest in mutual funds? To invest in mutual funds, you can approach a broker, invest directly with the AMC and through financial investment app. Conclusion It is nearly impossible to time the market. However, with mutual funds, you need not hunt for the right time to invest because the right time would be now! Consult an expert advisor to get the right plan TALK TO AN EXPERT

Investing is no longer associated with wealth. To protect one's future it has become essential. In this blog, let's compare Life Insurance Corporation of India (LIC) vs. Public Provident Funds (PPF) vs. Equity Linked Savings (ELSS) funds to see which is a better option for you. What are LIC plans? The insurance and investment firm Life Insurance Corporation of India is owned by the government. It provides individualized policies to meet each person's insurance needs. One of the first life insurance companies and a pioneer in the insurance industry is LIC. Life insurance shields a family from unforeseen events like death. It helps to secure the financial future of a family. In the event that the family's primary provider dies suddenly, life insurance's primary objective is to provide "death benefits" to the dependents. Features of LIC plans Policy Holder: The life insurance policy's premiums are paid by the insured. They also agree to the terms of the company's life insurance policy. Premium: It's the sum that the policyholder pays to the insurance provider to have their life covered. Maturity: It is the period of time following the conclusion of the policy term and the termination of the life insurance contract. What is PPF? A portion of one's annual income is set aside in the Public Provident Fund, also known as PPF, which is a popularly abbreviated savings vehicle. If the money was received on maturity, PPF investors may receive tax-free interest income on their capital. PPF is a government-backed saving method for risk-averse people. Features of PPF  Tenure: A Public Provident Fund account has a 15-year term. The lock-in period is, therefore, 15 years as well. Eligibility: PPF investments are open to all Indian nationals. Additionally, a PPF account can be opened in a minor's name, and the parent or legal guardian can manage it. Risk: The PPF program is supported by the Indian government. As a result, it is one of the most secure investment strategies available to private investors. What are ELSS funds? The only type of mutual fund that qualifies for tax deductions under the terms of Section 80C of the Income Tax Act of 1961 is an ELSS fund, also known as an equity-linked savings plan. You can save up to INR 46,800 in taxes each year and get a tax credit of up to INR 1.5 lakhs by investing in ELSS mutual funds. The majority of the portfolio of ELSS mutual funds is allocated to equities and equity-linked instruments, such as listed shares, making up 65% of the portfolio. They could also be somewhat exposed to fixed-income securities. The shortest lock-in period among all Section 80C investments is three years for these funds. Lowest Lock-in: In the tax-saving category, ELSS investments have a 3-year lock-in period, making them a relatively more liquid option. SIP Option: The Systematic Investment Plan allows you to start investing in ELSS with as little as INR 500 each month (SIP). When it's convenient, you can start and stop the SIP. High Returns: One of the best returns in the group of tax-saving products has been provided by ELSS. PPF vs ELSS Following is the difference between PPF vs ELSS:  CharacteristicsPPFELSSSafetyVery High (Govt Guaranteed)Low-Moderate (Invests in Equity)ReturnsModerate – Fixed by Govt every quarter.High – Equity compounds over the long term.Lock-in15 years3 yearsLiquidityLow High Tax on ReturnsExempt10% of capital gains over the long term. Gains up to 1 lakh are exempted.Tax on MaturityExemptAs indicated above, taxes only apply to gains. PPF vs LIC  Following is the difference between PPF vs LIC:  Basis of DifferencePPFLIC PolicyPurposeSavings and investmentInsurance and risk protectionReturns7.1% p.a., compounded annuallyDepending on the policy, usually 4%-6%Tenure15 yearsFlexible tenure, as chosen by the subscriberPremature closureNot allowedAllowed with penaltiesRegulatory authorityCentral GovernmentInsurance Regulatory and Development AuthorityDeposit amountThe minimum is INR 500 and the maximum is INR 1.5 lakhsFixed Premiums LiquidityPPF enables loans from the third year and permits partial withdrawals from the seventh year.A 3-year lock-in term applies to insurance plans before they may be redeemed.TaxationPPP belongs to the EEE group. As a result, the corpus of the investment, interest, and redemption is entirely tax-free.If the premium is less than 10% of the amount assured, it is tax-free. Additionally tax-free is the death benefit. LIC vs PPF vs ELSS: Which is better? People frequently mix up investments with insurance. Investments are for a secure future, whereas insurance options like LIC are for risk protection. Having sound financial standing is important for any investor. A person needs an emergency fund for unforeseen costs, insurance to protect against unfortunate events, and investments to ensure a secure financial future. While both PPF and ELSS programs save taxes, it's still important to choose one based on your investment time horizon, risk tolerance, and expected returns. PPF is best for those who can afford a 15-year lock-in period and are utterly risk-averse. While ELSS is a good option for investors who are willing to take a moderate risk in exchange for higher returns. The best way to keep ELSS risk to a minimum is to keep your investments for the long run. Each person has a unique style of thinking and attitude while creating investment strategies. Some people desire higher earnings, while others seek financial security. Examining your financial condition is essential before making any form of investment, including those in PPF, LIC, or ELSS plans. Consult an expert advisor to get the right plan TALK TO AN EXPERT

With the dual advantage of tax-saving & potential for better returns than traditional tax-saving investment products, tax-saving mutual funds are a must-have for every investor. In this blog, we will discuss the best mutual funds to save taxes  What are tax-saving mutual funds? Mutual funds with a tax-saving component are identical to other mutual funds in every way. Because investments made in tax-saving mutual funds are eligible for tax benefits under section 80C of the Indian Income Tax Act, this form of mutual fund has a unique characteristic. Most tax-saving mutual funds participate in the growth-oriented stock market and are ELSS programs. The benefits of tax-saving mutual funds that save taxes provide investors with a variety of advantages. The following are a few of the crucial ones: Tax advantages of up to Rs. 1.5 lakh may be available for investments made in these kinds of funds. Under these plans, long-term capital gains are not taxed. Investments in these plans can be made as a way to set aside money for future expenses like car or home down payments. Through these programs, investors can make monthly investments through SIPs, eliminating the need for lump-sum investments. In order to reduce the danger of significant losses, the assets in the portfolios are not all invested in one location. If you decide against withdrawing your investment, it will keep growing and turn into a respectable sum of savings for an emergency. You may not be able to withdraw the original amount, but even during the lock-in period, you can withdraw the dividends that were received. These mutual funds have a lock-in term of just three years, as opposed to the six to fifteen years offered by other investing alternatives. Investments may be made at any time of the year because these schemes are open-ended in nature. Professional fund managers with extensive market understanding professionally oversee the funds. As a result, individuals who are unfamiliar with the market can also participate in these funds. Best mutual funds to save taxes 2022 The following are the best mutual funds to save taxes in 2022: Funds1-Year Returns (%)3-Year Returns5-Year ReturnsIDFC Tax Advantage (ELSS) Fund-Growth23.111.722.3Tata India Tax Savings Fund Growth14.612.3L&T Tax Advantage Fund Growth16.21320.3Aditya Birla Sun Life Tax Relief 96 Fund Growth19.312.123.5Aditya Birla Sun Life Tax Plan-Growth18.911.622.6DSP BlackRock Tax Saver Fund Growth911.421Axis Long-Term Equity Fund Growth18.19.324Kotak Tax Saver Fund Growth-4.7910.2517.66Invesco India Tax Plan Fund Growth0.611.119.0HDFC TaxSaver Fund-11.18.515.0 Who should invest in the best ELSS mutual funds? Any person or HUF that wants to reduce their annual tax liability by up to Rs 46,800 should think about investing in ELSS. The only people who should invest in ELSS are those who are ready to take some risk and can commit to holding their investment for at least the three-year lock-in period. To benefit from the greatest returns given by mutual funds, investors are urged to hold their investments for at least five years. It is appropriate to provide five years. You'll give your assets the necessary time to experience market cycles and generate great profits over the long term. Young investors who are just beginning their careers in finance can invest for the long term. Young investors are the greatest candidates for ELSS since they have the time to maximize the power of compounding, enjoy excellent returns, and save up to Rs 46,800 in annual taxes. FAQ Do tax-saving mutual funds outperform other tax-saving options like PPF and others in terms of returns? As of March 1, 2022, the category returns for ELSS are, respectively, 18.96%, 18.76%, and 14.38% for the 1-year, 3-year, and 5-year time periods. While Sukanya Samriddhi Yojana's current yield is 7.6%, the current return on PPFs, a popular fixed-income tax-saving device, is 7.1%. Financial analysts estimate that a ULIP plan produces an average return of 10–12% over a ten-year investment term. What are the hazards connected to different tax-saving tools? Since they are linked to investments in equity-related products, ELSS & ULIP investments are often high-risk. However, there are still some risks associated with fixed-income instruments. The government frequently assesses the interest rate on these programs (usually every quarter), and it is impossible to ignore the effects of interest-rate variations on them. Does ELSS have a minimum investment requirement? Undoubtedly, ELSS has a minimum investment requirement. Although the mutual fund provider determines the minimum investment amount, it is often approximately Rs. 5,000. Consult an expert advisor to get the right plan TALK TO AN EXPERT

According to Capgemini, "the number of Indians with over 1 million US dollars investments will increase by 80-% in 2025."  Around 50% of Indian students study in North America. It contributed $ 7.6 billion to the US economy in August 2021. The country recorded the highest number of Indian student applications. Given the popularity of the USA education deciding the best US investments for a child's higher education is crucial. Rupee depreciation and rising education costs form the base. Investing in US stocks helps earn profits even with a fixed stock price. Before investing, undertake the existing or predictable application costs, examination fees, cost of living, and tuition fees. Edufund helps individual circumstances by addressing the total money you need to invest in the top US stocks (zero commission fee). It concludes by determining the expected sum in the dedicated year. Knowing so, you can re-arrange the investments and invest in the Best US stocks and other products calculatingly. For example, suppose you invest ₹4000/month ($48.79) in a particular US stock and income slashes. In that case, Edufund helps stabilize the momentum by providing options at a lower investment amount (if the investment type does not have a minimum investment limit). You can always know the revised investment plan after investing ₹2000/month ($24.40)—the platform grants immense freedom to regulate investment securely. US Investment opportunities for your Child's education According to Business Standard reports, "9.2% depreciation in Indian Rupee against the US dollar may translate into a hefty sum for Indians planning US education for the child."  And as Statista puts it, "The average cost of higher education in the USA for the year 2022-2023 stands at $23,250."  To build up a good investment pot, guardians can buy individual shares or ETFs in the US market from India. S&P 500 index fund It lists the top and poorest 500 US stocks to invest in. To invest in these funds from India, follow the below guidelines: Select a fund that best suits your investment goal Open a share-trading account with Edufund Deposit a comfortable sum (no fee) You can buy the ETF or S&P 500 index  It is ideal for long-term savings with lower management fees. It yields high returns on maturity. ETF (Exchange Traded Funds) ETF funds are those in which one trades on exchanges by tracking a specific index. You must own a trading account to invest in this. The most popular ETFs in the US are- the NASDAQ-100 and the Rusell 1000 Index It helps Indians invest in companies that do not exist in India. It is ideal for those investors and guardians who lack the minimum money to meet the mutual fund investment requirement. It is a great way to create a cluster of the best securities leading to a diversified portfolio. This is it if you find a safe escape to the best US investments for a child's higher education. Corporate Bonds Corporate bonds are bonds through which you can invest in a US company. It is not capped or regulated by government regulations. It is ideal for individuals to share good knowledge about supporting and regulating investments.  These are risky bonds with high yields. If you eye a fixed income security to cover up for your child's education savings, check this. Bonds that large-cap companies issue are generally low-yield driven and vice versa. You will have to balance your investment in a way that maximizes investments along with balancing the loss. Mutual Funds  Mutual funds grant immense flexibility to you to diversify your investments in shares, bonds, and other assets.   It optimizes the risk possibility by balancing the trading opportunities. It is ideal for a long-term goal and eliminates any hassle of regular monitoring and management. Mutual Funds call for a minimum mandatory investment amount.  With Edufund, you can set up automatic mutual fund investments as per income and shifting circumstances. Choose the right industry before investing. Biotech and technology company shares pay the highest dividends and returns.  Money Market funds These mutual funds invest in short-term liquid assets and pay investors dividends. It is a type of short-term, high-quality corporate debt. Regulated under the Investment Company Act of 1940 and registered under the Securities and Exchange Commission, it is the safest investment option. Individuals looking to diversify investments by relying on safer options can consider money market funds. It is ideal for individuals looking forward to saving more than relying on returns. You can purchase these from a direct mutual fund provider.  Conclusion Earmark your timeline, and risk tolerance and partner with us for expert guidance. EduFund helps you provide the best US investments for a child's higher education as per risk appetite. TALK TO AN EXPERT

“Sukanya Samriddhi Scheme vs LIC Kanyadan Policy – which one is better” is an important query that needs to be answered so that an investor can invest in the scheme which is more suited and helpful for their girl child.  By assuring the safety of the capital and providing a fixed income, both schemes have managed to gain popularity amongst the masses. What is Sukanya Samriddhi Scheme? The Sukanya Samriddhi Scheme is a small savings scheme that comes under the “Beti Bachao Beti Padhao” scheme. It was launched by the central government to build a secured financial corpus and ensure a bright future for the daughters of India. What is LIC Kanyadan Policy? LIC Kanyadan Policy is a small savings scheme offered by LIC to protect the financial future of a girl child. It is a customized version of the LIC Jeevan Lakshya Policy, where a father can deposit money for the marriage and education of his daughter at a low premium. The policy offers both protection and savings benefits. Sukanya Samriddhi Scheme vs LIC Kanyadan Policy 1. Type of Scheme The Sukanya Samriddhi Scheme comes under the Beti Bachao Beti Padhao Scheme and is purely a small savings scheme launched for the education and marriage of a girl child. The LIC Kanyadan Policy is a modified policy based on the LIC Jeevan Lakshya Policy to financially secure the future of a girl child for later years.  2. Launched By The Sukanya Samriddhi Scheme was launched by the Government of India, whereas LIC Kanyadan Policy was launched by LIC. Both policies are exclusively meant for a girl child.  3. Account Holder The girl child is the account holder of the Sukanya Samriddhi Scheme until her marriage, whereas in the LIC Kanyadan Policy, it is the father who is the account holder and not the daughter as he operates the account in her name.  4. Age Criteria The age criteria of Sukanya Samriddhi Scheme vs LIC Kanyadan Policy are different as the first can be purchased after the birth and before the girl child is 10 years old, and the latter can be purchased when the girl child is at least 1 year old, and the age of her father is between 18 years and 50 years.  5. National Eligibility The Sukanya Samriddhi Scheme is open only to the citizens of India, whereas outsiders have the option of choosing the LIC Kanyadan Policy for their daughters.  6. Premium Limit In the Sukanya Samriddhi Scheme vs LIC Kanyadan Policy, the premium limit for the first scheme is INR 1.5 lakhs for a financial year, whereas there is no limit for the latter scheme.  7. Sum Assured Limit The sum assured in the Sukanya Samriddhi Scheme is limited as it is dependent upon the premium paid, whereas the minimum and maximum limits are INR 1 lakh and no limit, respectively, in LIC Kanyadan Policy. 8. Payment Terms In Sukanya Samriddhi Scheme, the amount should not be more than INR 1.5 lakhs and has to be paid every fiscal year. The payment term of the LIC Kanyadan Policy is 3 years under the policy term.  9. Account Maturity Tenure In the Sukanya Samriddhi Scheme, the girl child can handle the account until she is the age of 21 Years or married after 18 years, whereas in LIC Kanyadan Policy, the account maturity tenure is between 13 years – 25 years.  10. Loan Facility There is not any option for a loan facility in the Sukanya Samriddhi Scheme, whereas in LIC Kanyadan Policy, the policyholder can opt for a loan if the account is active and the premium has been paid for three consecutive years.  11. Compensation Offered (in case of the account holder’s death) No compensation is offered in case the account holder of the Sukanya Samriddhi Scheme dies. In LIC Kanyadan Policy, if the death of the account holder is natural then the girl child is eligible for immediate payment of INR 5 lakhs, and in case of accidental death, immediate payment of INR 10 lakhs. If the death is suicidal within 12 months of the policy purchase then 80% of the premium amount is paid by the LIC corporation, along with the surrender value and the tax amount.  Conclusion By now, you must have got a clear idea about which one amongst the Sukanya Samriddhi Scheme vs LIC Kanyadan Policy will suit the personal needs of your child. Remember, both schemes provide financial assistance to low- and high-income group parents who want to fulfill their dream of educating or simply marrying their girl child. So, consider their differences well and choose the one you find most beneficial.  Consult an expert advisor to get the right plan TALK TO AN EXPERT

Becoming financially independent is one of the ultimate goals behind pursuing any profession of your choice. Of course, everybody needs to work to earn money. But will earning money alone ensure your financial independence? We’ll discuss the possible ways to become financially independent in this blog. What financial independence means? Everyone defines financial independence in their own terms and goals. For most people, it usually means having financial freedom and not having to worry about finances and money-related issues. Financial independence comes when you intelligently invest and can afford a certain lifestyle of your choice. It also means you retire without worry or have the freedom to pursue your passion without second thoughts. 1. Set life goals A mere desire to achieve financial independence won’t help you reach your goal. If you wish to be financially independent as soon as possible, you should set realistic and ambitious goals. Setting life goals, big or small, would help you create a blueprint for achieving those goals. Be focused and specific about your goal and make timelines accordingly. This will not only help you meet your goal’s deadlines on time but also increase your chances of achieving your goal. 2. Make a monthly budget Making a monthly household budget is one of the best ways to control your spending and track your bills. Sticking to your budget is a great way to ensure that bills are paid and savings are on track. It also acts as a regular routine that reinforces your goals. 3. Start investing now In the midst of rising debt, financial emergencies, medical expenses, and excessive spending, achieving financial independence can be quite challenging. However, it is attainable with discipline and careful planning. Bad stock markets and low returns can make people question their wisdom in investing and whether they should keep investing their hard-earned money. But there is no better way to grow your money than investing. Investing is basically making your money work for more money rather than you working for the money. The magic of compound interest, dividends, growth in the share market, increments in shares you have invested in, etc., will grow your money exponentially. But you need a lot of time and patience to achieve this meaningful financial independence. Investing in the right tools at the right time with expert advice can help you reach your goal. Remember that not everyone is a professional investor from the beginning, so it would be a mistake to attempt the kind of stock-pinning and risky investments made famous by billionaires like Warren Buffett. Instead, start simply by opening an online brokerage account that will help you learn how to invest, create a manageable portfolio, and make weekly or monthly contributions to it automatically.  Track your investments on a regular basis and keep learning more about investments and better opportunities to invest in. More importantly, consult financial experts while investing your savings. 4. Avoid loans and debts and pay off your credit cards in full One of the vital hacks for becoming financially independent is to avoid loans, credits, debts, etc. You need to be smart when it comes to money and financial freedom. It might seem easy to pay back loans, but in reality, there are many challenges. When loans are being taken, they should be intelligently calculated and only be taken when necessary. Credit cards and other high-interest consumer loans may be hurdles to wealth-building. Make sure to settle the entire balance every month. Paying off mortgages, student loans, and other loans with comparable terms often have significantly lower interest rates, so doing so is not urgent. Even yet, timely repayment of these loans with lower interest rates is crucial. On-time payment of these loans would not only help you get financially independent early but also help you build a good credit score which is very beneficial. 5. Watch your credit score The credit score is a very important number for you as it determines the basis on which interest rate will be offered to you when you decide to take loans for any personal reasons like renovating your house or buying a new car, or taking any loans for any purpose. Credit score also plays an important role in determining the premium rate you will have to pay for any kind of insurance you take. Since someone with careless financial habits is thought to be irresponsible in other areas of life, credit scores are given a lot of importance. This is why it's crucial to obtain credit information on a regular basis to ensure that no incorrect defaults are harming your reputation. Stay educated on financial issues. 6. Create automatic savings Automatic saving basically means setting money aside the day you get paid so that it never reaches you. You can also call it paying yourselves to be ready for retirement. To be financially independent, it’s very important to enroll in an employer’s retirement plans and make full use of any matching contribution benefits, which are essentially free money. Having an emergency fund that may be accessed for unforeseen needs is a good idea as well. 7. Do not stop having fun And last, ensure your life does not seem too boring because you do not let yourself have a little fun and relax. Join parties, travel from time to time, and do not forget that you need to strike a reasonable balance between achieving financial independence and your everyday life as a young and happy person. Consult an expert advisor to get the right plan for you TALK TO AN EXPERT

Mutual funds are one of the hottest options for investing because they can assist you in achieving your financial goals. One significant downside of putting your money in a fixed deposit for investment purposes is that the interest is added to your taxable income and taxed at your income tax slab rate, which is especially unfavorable if you are in a high-income tax bracket. Here mutual funds do better financially as they can help you save some taxes.  You can benefit from specialized money management and tax-efficient returns by investing in mutual funds. Profits from investments in mutual funds are taxed in a manner similar to that of other asset classes.  By becoming knowledgeable about the taxes of mutual funds, you can set up your investments to lower your overall tax liability. You may also benefit from tax deductions in certain situations. Keep up with the rules governing tax on mutual funds when investing in them. Determiners of Tax on Mutual Funds There are two categories of mutual funds: equity- and debt-oriented. Both of them are subject to different taxation.  Dividend: A dividend is a portion of the cumulative profit that mutual fund providers distribute to scheme investors.  Capital gains: They are the profits made when investors sell their capital assets for more money than they originally paid for them Taxation of dividends offered by Mutual Funds  The Union Budget 2020 made changes that affect how dividends offered by any mutual fund plan are taxed. In other words, dividends that investors receive are added to their taxable income and taxed at the rates applicable to each income tax slab. Dividends were previously exempt from tax in the hands of investors since businesses paid dividend distribution tax (DDT) before distributing their profits to investors as dividends.  Investors were not subject to tax on dividends (received from domestic enterprises) up to Rs 10 lakh per year. Any dividends that exceeded Rs 10 lakh per fiscal year were subject to a 10% dividend distribution tax. Taxation of capital gains offered by Mutual Funds  The holding duration and kind of mutual fund affect the tax rate on capital gains for mutual funds. The holding period is the length of time an investor held units of a mutual fund. Mutual funds offer both short and long-term capital gains, which are taxed differently Things to remember regarding tax for mutual funds  Mutual does not need you to pay taxes yearly. When choosing a mutual fund scheme, the appropriate taxes must be paid only when the units are redeemed or the scheme is sold. It does not factor in annually. Your dividend income from mutual fund plans is included in your overall income for the questioned fiscal year. Therefore, if your income is subject to income tax, you must pay tax on this dividend income.  Even though you cannot avoid paying tax on capital gains, you can structure your investment in a way that minimizes your tax liability.  Even though tax-saving mutual funds have some restrictions, you should take four things into account when choosing one. They are investment method, asset allocation, tax-exemption thresholds, and lock-in duration.  Your investments in mutual funds may be eligible for an income tax refund. Tax benefits are available in the case of ELSS, or Equity Linked Savings Schemes, under Section 80C of the Income Tax Act. You can deduct up to Rs. 1.5 lakh from your taxes, which translates to an annual tax savings of about Rs. 46,800. Keep in mind that ELSS has a three-year minimum lock-in term.  There are no wealth taxes imposed on mutual funds or other financial assets.  It’s important to read and study the tax guidelines for mutual funds before investing your money. Connect with a financial expert to make the right choices and make the most of your returns to achieve your financial dreams. TALK TO AN EXPERT

Did you know that there are certain RBI guidelines for education loans that every borrower should be aware of? Let’s find out!    The RBI is in charge of determining the lending standards for Indian banks. It has agreed to give banks' financing to the education sector priority. Similar to any other loan, the bank considers the borrower's creditworthiness before approving an education loan. It's possible for a student to lack a credit history. Therefore, banks consider the CIBIL score of the parents who are the student borrower's co-signers. Here are the RBI guidelines for education loans The RBI demands that banks give deserving applicants education loans. A comparative phrase, "praiseworthy," is used to describe a student who has passed the admission test for professional and technical programs.   It also takes into account pupils who have been accepted to reputable universities on the basis of their employment history, demonstrating the students' potential for employment through campus recruitment.   The interest component of the loan may be claimed as a subsidy when filing for income taxes, according to Section 80E of the Income-tax Act. In addition to this law, the CSIS program offers the economically poorer portion full interest subsidies during the moratorium time.  Based on the sum provided, loans must be separated into protected and unprotected loans. No collateral is needed for loans under 4 lakhs, however, a security deposit in the form of collateral is required for loans over 4 lakhs.   Banks also provide a suspension period right after the program is over, during which the debtor can start looking for employment to begin paying as soon as the term is over.  Depending on whether you're seeking a student loan for India or abroad, the RBI will determine the interest rate. In India, students who are accepted into highly regarded educational institutions must pay a considerably lower interest rate. In general, interest rates primarily consist of fixed and floating rates.   Foreign loans are available with fixed interest rates, but loans from Indian banks for study at Indian colleges have a floating rate of interest.  In accordance with RBI regulations, you must begin making monthly payments as soon as the grace period is ended. Experts recommend that a person's EMI not go over 50% of their wage.  After the time limit, the payback should be finished in a range of 8 to 15 years. The payback period could be extended based on how soon the subsequent course will be finished in rare instances where a student gets another loan for a program enrolled in soon after the initial course completion.  Parents should take into account several factors prior to actually taking out a loan, such as   The potential increase in interest rates  EMI rates  Repayment options available  The RBI guidelines for education loans strive to ease the pressure by managing interest rates and repayment options to make education loans affordable for all.  FAQ What is the rule of RBI for education loans?  Program length plus one year, or six months following the job offer, which comes first. The loan will be repaid in 5-7 years from the start of the repayment period. If a student is unable to finish the course in the allotted time, an increase in the time limit for completion of the course may be allowed for a maximum of two years.  Are there any criteria for an education loan?  The applicant requesting the loan should be an Indian citizen. He or she should have received written confirmation of admission to reputable universities in India or abroad. When applying for a loan, the participant's age must fall between the ages of 18 and 35.  What is the rule for education loan repayment?  For Student and Scholar Loan Schemes, the EMI payback period begins 12 months after the course is finished or 6 months after obtaining employment, whichever comes first. Repayment of the EMI for Global Ed-Vantage Loans begins six months after the course ends. What happens if an education loan is not paid?  The lender would start sending reminders to you and your insurer if there is one if you don't repay your education loan in India. Failure to accept the cautions will result in loan default, which will negatively impact your credit score. For a very long period, you wouldn't be eligible for any loans in the future.  Consult an expert advisor to get the right plan TALK TO AN EXPERT

The asset management branch of State Street Corporation, State Street Global Advisors, was created in 1978 in Boston, Massachusetts.  The company's first three products  The domestic index fund An international index fund (based on the MSCI EAFE index) Short-term investment fund  By 1989, the division's assets were $53 billion (USD). State Street Global Advisors was established in 1990 as a distinct company from State Street Bank to expand internationally.   With the S&P 500 SPDR product release, traded on the American Stock Exchange in 1993, SSGA established the investment vehicle known as the exchange-traded fund (ETF).  State Street Global Advisors (SSGA) is State Street Corporation's investment management subsidiary and the 4th largest asset manager, with roughly $4.14 trillion in assets under administration as of December 31, 2021.   After BlackRock and Vanguard, SSGA is the world's third-largest ETF manager. States, corporations, foundations, non-profit foundations, business financial officers and CFOs, investment firms, financial advisors, and other intermediaries worldwide use the company to create and manage investment plans.  The company has won several accolades for its services. Some of the prominent awards are  Asia Asset Management's 2022: Best of the Best Awards- At Asia Asset Management's 2022 Best of the Best Awards, State Street was named Best Global Custodian in Asia-Pacific (25 years) and Best Middle and Back Office Provider.  HFM Asia Services Awards 2021: State Street was named Best Hedge Fund Custodian for the second year in a row at the HFM Asia Services Awards 2021.  The Asset Triple A Sustainable Investing Awards for Institutional Investor, ETF and Asset Servicing Providers 2021- For the seventh year in a row, State Street was named Best in Securities Lending at The Asset Triple A Asset Servicing Providers Awards.  Aite Group 2020 Impact Innovation Awards The organization earned operational efficiency after being recognized as a financial institution that has used technology to raise the bar.  Asia money FX Survey 2020 In South Korea, Taiwan, and Thailand, State Street has been named Market Leader. The company provides several ETFs and mutual funds to be chosen from. The company has a set of thematic ETFs which focus on cutting-edge innovation.   The SPDR S&P Kensho New Economy ETFs have the backing of S&P Kensho's forward-thinking and dynamic approach, which employs artificial intelligence to analyze regulatory filings to find and classify innovative enterprises based on factors other than revenue and balance sheet data.  Some such ETFs are associated with Future security, clean power, smart mobility, space exploration, intelligent infrastructure, etc.   Fixed-income ETFs come at a high degree of diversification with a 60% lower expense ratio than competitors. Investment worth $621 billion has been made by the firm in fixed-income assets with over 100 strategies.  SPDR Blackstone Senior Loan ETF and SPDR Portfolio TIPS ETF are some of the fixed-income ETFs. There are more than 250 low-cost passively managed ETFs offered by the company all over the globe.  Investors can use SPDR Portfolio ETFs to build large, diversified portfolios by choosing from equities and fixed-income exposures. SPDR Portfolio S&P 400™ Mid Cap ETF, SPDR Portfolio S&P 500® Growth ETF, etc., are some core ETFs.  Gold-backed exchange-traded funds (ETFs) combine the gold market's flexibility, openness, and accessibility with the cost-effective liquidity of an ETF wrapper through the company's offerings. The company offers two distinct products 1. SPDR Gold Shares 2. SPDR Gold Mini Shares The company also provides a variety of ESG investing options along with sectoral investing options and Smart Beta ETFs.  Along with ETFs, the firm also offers a variety of mutual funds to choose from - grouped into four categories SSGA Funds, State Street Institutional Funds, State Street Institutional Investment Trust, and State Street Variable Insurance Series Funds. These funds track indices like FTSE Russell, MSCI, Multiple/Blend, S&P Dow Jones, etc.  Multiple ESG investment strategies 1. Screening Negative screening excludes specific firms, sectors, or nations based on environmental, social, and governance (ESG) issues and an investor's values-based goals. Among the advantages are reduced reputational risk and the ability for investors to avoid providing capital to organizations or sectors that contradict their views.  2. Best in class This strategy focuses on investing in sectors and firms that outperform the industry peers in terms of ESG performance.  3. ESG integration To limit risk and uncover possibilities for long-term outperformance, active portfolio managers routinely include ESG signals and factors in the investment analysis and decision-making process.  4. Climate investing This thematic investment strategy aligns portfolios with the transition to a low-carbon economy and limits global warming to far below 2 degrees Celsius.  5. ESG for index investing ESG investors can benefit from index investing in various ways, including diversification and transparency. Index methods give investors a simple way to acquire broad diversification in their portfolios, which improves risk management.  Thus, the pioneer of ETFs should be taken into account whilst creating a portfolio! FAQs What are State Street Global Advisors known for? State Street Global Advisors is an investment management firm located in the USA. It offers the following services such as portfolio management and advisory services to individuals, institutions, trusts, private funds, charitable organizations, and investment companies Where is the Headquarters for the State Street Global Advisors? The headquarters for State Street Global Advisors is in Boston, Massachusetts, United States. Who are State Street's clients? State Street's clients are Consumer Healthcare Products Association (CHPA) CIGNA. Everytown for Gun Safety Action Fund. Health Partners Plans. Lilly USA Is SSGA an established investment firm? State Street Global Advisors (SSGA) is State Street Corporation's investment management subsidiary and the 4th largest asset manager, with roughly $4.14 trillion in assets under administration as of December 31, 2021.   TALK TO AN EXPERT

This article will look into the three best large-cap categories of ETFs. But before that, let's understand what large-cap is. What is a large cap?  Even if they're young, large-cap corporations are likely to be well-established and dominating in their respective industries. Some corporations go public and have a market cap of more than $10 billion right away.   A corporation having a market capitalization of more than $10 billion is known to be a large-cap (or "big cap"). According to the Wilshire 5000 Overall Market Index, large-cap companies account for roughly 93 percent of the total U.S. equity market.  Large-cap corporations are usually well-known, having a track record of generating high-quality goods and services. Many of these businesses have grown their businesses beyond the United States and may have a diverse business that spans multiple industries.   As these businesses seek to expand, they will look for possibilities to buy smaller businesses or even consolidate with competitors of similar size. Large-cap companies are less volatile and less susceptible to significant price movements. As a result, large-cap stocks are a safer investment option.  Key indices to track the large-cap market  1. Dow Jones Industrial Average Apart from transportation and utilities, the DJIA exclusively analyses the performance of 30 businesses considered "blue chips," or those that are dominating champions in their respective industries. The DJIA is not indicative of the large-cap market as the S&P 500 Index. a 2. S&P 500 Even though it focuses primarily on the large-cap sector, the S&P 500 is the benchmark for the U.S. stock market.   This index measures the performance of the 500 most significant and most profitable corporations in the United States across 11 distinct industries. Top 3 ETFs in the large-cap category  Rank ETF1 Schwab International Equity ETF 2 BlackRock U.S. Carbon Transition Readiness ETF 3 Schwab Emerging Markets Equity ETF  Schwab International Equity ETF   SCHF delivers a market-like basket of worldwide stocks. The fund's portfolio closely resembles our benchmark in performance statistics and sector coverage.   SCHF removes most of the small caps in our standard, although this hasn't substantially influenced performance. The fund is also unique because it includes South Korea. Korean shares wind up in the basket because the fund's index classifies South Korea as an advanced nation.  Unlike many of its competitors, it also carries Canadian stocks. The MSCI ESG Fund Rating for the Schwab International Equity ETF is AAA, based on 8.93 out of 10.   The MSCI ESG Fund Rating assesses a portfolio's long-term resistance to risks and opportunities posed by environmental, social, and governance variables. Performance  Performance [as of 14/03/22]1 year3 years5 years10 yearsSCHF-5.52%6.52%6.33%5.65%MSCI World ex USA IMI Index-3.89%6.67%6.37%5.86% SCHF Top 10 Countries’ exposure Source: etf.com SCHF Top 10 Holdings  Source: etf.com SCHF Details BrandSchwabExpense Ratio0.06%YTD Return-10.91%AUM$27.25BNumber of Holdings1491Avg. Spread ($)$0.01Average Daily $ Volume$309.56M BlackRock U.S. Carbon Transition Readiness ETF  Firstly, LCTU strives to outperform its index, the Russell 1000 Index, a broad equity index comprising the 1,000 largest U.S. corporations. The fund employs proprietary scoring criteria to evaluate companies' readiness for a low-carbon economic transition in comparison to their industry peers when selecting shares from the Russell 1000.   Five categories make up the 'transition ready' score: fossil fuels, clean technology, energy management, waste management, and water management.   LCTU favors high-scoring companies while minimizing risk. Firms may also be evaluated on their governance in addition to their strategy. The fund adviser may invest in Russell 1000 securities that aren't necessarily green economy investments despite the low-carbon orientation.   The MSCI ESG Fund Rating for BlackRock U.S. Carbon Transition Readiness ETF is A.A., based on 8.02 out of 10. The MSCI ESG Fund Rating assesses a portfolio's long-term resistance to risks and opportunities posed by environmental, social, and governance variables.  Performance Performance [as of 14/03/22]1 month3 monthsYTDLCTU-5.37%-10.67%-13.31%No underlying index. The fund performed poorly not because of its inherent structure but due to the volatile markets and emerging uncertain geopolitical situations as of March 2022.  The fund invests entirely in the USA.  LCTU Top 10 holdings  Source: etf.com LCTU details BrandBlackrockExpense Ratio0.14%YTD Return-13.31%AUM$1.34BNumber of Holdings329Avg. Spread ($)$0.05Average Daily $ Volume$215.49K Schwab Emerging Markets Equity ETF   According to FTSE, SCHE follows the FTSE Emerging Index, which comprises large and midcap companies from emerging market countries. Market capitalization is used to choose and weigh stocks.   South Korea is not a part of the index as an emerging market, notable from other comparable indices. Instead, countries like India and China have gained more clout. Every March and September, component are assessed on a semi-annual basis.   The MSCI ESG Fund Rating for the Schwab Emerging Markets Equity ETF is BBB, based on 5.56 out of 10. The MSCI ESG Fund Rating evaluates a portfolio's long-term resistance to risks and opportunities posed by environmental, social, and governance variables.   The best ESG Fund Rating is AAA, while the poorest ESG Fund Rating is the worst (CCC).  Performance Performance [as of 14/03/22]1 year3 years5 years10 yearsSCHE-18.35%2.69%4.52%2.33%MSCI Emerging Markets Investable Market Index-17.99%3.31%4.98%2.53% SCHE Top 10 countries Source: etf.com SCHE Top 10 holdings Source: etf.com  SCHE Details BrandSchwabExpense Ratio0.11%YTD Return-13.54%AUM$8.51BNumber of Holdings1708Avg. Spread ($)$0.01Average Daily $ Volume$75.29M FAQs What is the large-cap category?  A large-cap company refers to a corporation having a market capitalization of more than $10 billion. What is an example of a large-cap stock? Some examples of large-cap stocks are Microsoft, TATA, Apple, Amazon, Alphabet, Reliance, and Facebook. What are the top 3 ETF large-cap funds? Schwab International Equity ETFBlackRock U.S. Carbon Transition Readiness ETFSchwab Emerging Markets Equity ETF Is S&P 500 all large-cap? S&P 500 is a market index that contains large-cap stocks. One should look out at these ETFs before investing in the large-cap category in the USA. Consult an expert advisor to find the right plan for you TALK TO AN EXPERT

In the previous article, we read about what are equity mutual funds. In this article, we will talk about the benefits & types of equity mutual funds. Equity mutual funds invest in shares of different companies. The fund manager aims to maximize the returns by diversifying the portfolio across stocks of various industries and companies with varying market capitalization. There are various types of equity mutual funds based on different categories. Let us have a look at them Types of Equity Mutual Funds Market capitalization-based differentiation  1. Large-cap funds These equity mutual funds invest more than 80% of their assets in the shares of large-cap companies (companies with a market capitalization of > Rs 20000 crores).  Large-cap funds are safer than mid-cap and small-cap funds because the stocks in the large-cap funds are of stable and solid companies with a proven historical track record. 2. Mid-Cap funds As the name suggests, equity mutual funds invest around 65% of the total amount in shares of mid-cap companies (companies with a market capitalization of > Rs 5000 crores but < Rs 20000 crores).  These funds tend to provide slightly better returns than large-cap funds because most of the stocks in these funds are of companies that are still growing to become bigger and better. Apart from offering higher returns, the funds are relatively more volatile. 3. Small-cap funds  Small-cap equity mutual funds invest around 65% of the assets in equity shares of small-cap companies (companies having a market capitalization of < Rs 5000 crores).  This is the riskiest type of fund in the market-cap-based category because the fund invests in companies that are potential superstars that may multiply your money by significant amounts and the risk of capital wipeout if the company fails.  A considerable number of companies in India fall into this category Investment style-based categorization 1. Active funds  These equity mutual funds are ones that fund managers actively manage; they use their knowledge of the markets and situation of the industries to choose stocks that become a part of the portfolio. 2. Passive funds Usually imitate a particular segment of the market, and with that, the stocks that will become a part of the portfolio are determined. A fund manager plays no active role in this regard 3. Sectoral funds These types of equity mutual funds invest the majority amount in particular sectors; that is, there is a concentration of investment into specific sectors in the economy, like FMCG, pharma, technology, PSUs (Public sector undertakings), etc. Only investing in a particular industry concentrates your portfolio on all the close activities in the industry. Taxability based categorization ELSS (equity-linked savings scheme) funds allow deductions under section 80C of the Income Tax Act. ELSS schemes allow for up to Rs 1.5 lakh deductions under the act mentioned above of law.  Equity-linked savings scheme funds invest more than 80% of total assets in equity and related instruments. Also, there is a lock-in period of 3 years for these schemes. Other than ELSS, all the additional equity mutual funds in the market are subject to given rates of capital gains tax. Benefits of Equity Mutual Funds 1. Diversified portfolio Equity mutual funds offer diversification by investing in various sectors thereby offering better exposure to the market. 2. Capital appreciation As the company grows, it earns more profits and invests it back in the company, thereby leading to the company's growth, which in turn is reflected in the stock price and thus benefits the fundholders. 3. Small ticket size  Sometimes, buying stocks of companies can be costly, as some good companies' shares are trading in a high price range. However, you can invest in equity funds starting with amounts as low as Rs 500 to Rs 100. 4. Professional management In the event of an actively managed fund, your money is being taken care of by professionals who have tremendous experience in the market. Your money is invested in a way such that your returns are maximized. 5. Risk mitigation  A fund manager follows the rules laid out by asset management companies (AMCs) to mitigate various risks. For example, the risk is reduced by limiting over-exposure to any particular stock or industry. Additionally, parameters like volatility and liquidity are also studied for better risk mitigation strategies. FAQs What are the types of equity mutual funds? Equity mutual funds are divided into three categories- Large-cap mutual funds, Mid-cap mutual funds, and Small-cap mutual funds. Large-cap mutual funds invest more than 80% of their assets in the shares of large-cap companies. While mid-cap mutual funds invest around 65% of the total amount in shares of mid-cap companies. Small-cap equity mutual funds invest around 65% of the assets in equity shares of small-cap companies. Which type of equity mutual fund is the best? Equity Linked Savings Scheme funds offer investors high returns over a long time compared to other funds under Section 80C. For new investors, large-cap mutual funds are the best as they are safer compared to mid-cap and small-cap mutual funds as they invest in big companies with good reputations. Large-cap mutual funds are not likely to offer higher returns than mid-cap and small-cap mutual funds. What are the four types of mutual funds? Mutual funds usually fall into four categories—money market funds, stock funds, bond funds, and target date funds. What are the benefits of equity mutual funds? There are many benefits to investing in equity mutual funds. Equity mutual funds offer diversification by investing in various sectors, thereby offering better exposure to the market. It provides capital appreciation. Professional fund managers look after your portfolio, reducing investment risk. A fund manager follows the rules laid out by asset management companies (AMCs) to mitigate various risks.