EduFund Blogs

UTI is one of the pioneers of the Indian Mutual Fund Industry. With over Rs 2.4 lakh crore, the AMC is one of the most trusted names in the mutual fund space. The AMF offers products across asset classes.   Let us talk about the flagship product – UTI Focused Equity Fund. UTI-focused equity fund 1. Investment objective The investment objective of the scheme is to generate long-term capital appreciation by investing in equity & equity-related instruments of a maximum of 30 stocks across market caps. However, there can be no assurance or guarantee that the investment objective of the scheme would be achieved.  2. Investment process   The investment strategy of UTI Focused Equity Fund involves investing in companies that have sustainable business models, are run by seasoned management, and generate high returns on invested capital. The fund primarily relies on bottom-up stock picking to create substantial long-term wealth.  3. Portfolio composition  The portfolio holds the major exposure in large-cap stocks at 67% and sectoral major exposure is to financial services that account for roughly one-third of the portfolio. The top 5 sectors hold nearly 75% of the portfolio.  Note: Data as of 30th Sep 2022. Source: UTIMF  Performance over 1 year Note: Performance of the fund since launch; Inception Date – Aug 26, 2021 Source: utimf.com  The UTI-Focused Equity Fund has underperformed against the benchmark. This is mainly because the investment horizon is very short in this case as the fund is very new. Investors have to be invested for a longer investment horizon to see the fund outperforming the benchmark. Fund manager at UTI-Focused Equity Fund The fund is ably managed by Vishal Chopda. Mr. Vishal Chopda is the Vice President and Fund Manager in the domestic Equity Division of UTI Asset Management Company Ltd. Vishal joined UTI AMC in January 2011. In UTI he has worked for the past 7 years in the Department of Fund Management as Research Analyst. He has previously worked with CARE Ratings (Credit Analysis and Research Ltd). He is a CFA Charter holder from The CFA Institute, USA, and also holds a PGDM from Management Development Institute, Gurgaon. He has completed his B.E. from Mumbai University.  Who should invest in UTI Focused Equity Fund?  Investors looking to  Build their core equity portfolio for long-term wealth creation.  Own a portfolio of both large & mid-capitalization stocks.  Why invest in a UTI-Focused Equity Fund?  Investors looking for a high-conviction and concentrated portfolio backed by research expertise and risk assessment framework.  who have a long-term goal of wealth creation and balance an overall conservative portfolio construct.  Horizon  One should look at investing for a minimum of 5 years or more  Investment through a Systematic Investment Plan (SIP) may help in tackling the volatility of the broader equity market.  Conclusion  The UTI Focused Equity Fund is a relatively new fund with a focused portfolio holding. It is best for investors who are looking for a concentrated portfolio backed by research and want to create wealth in the long term by having a high-risk strategy in their portfolio.  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 over Rs 2.4 lakh crore, the AMC is one of the most trusted names in the mutual fund space. The AMF offers products across asset classes.   Let us talk about the flagship product – UTI Core Equity Fund. About UTI Core Equity Fund  Investment objective The objective of the scheme is to generate long-term capital appreciation by investing predominantly in equity and equity-related securities of large-cap and mid-cap companies.  Investment process   The UTI Core Equity Fund carries a top-down approach, going through short-term challenges and trading at below long-term averages. It focuses on stocks that are below their long-term averages or when it is cheap relative to market aggregates. Portfolio composition  The portfolio holds the major exposure in large-cap stocks at 50% and sectoral major exposure is to financial services that account for roughly one-third of the portfolio. The top 5 sectors hold nearly 75% of the portfolio. Note: Data as of 30th Sep 2022. Source: UTIMF  Top 5 holdings Name Sector Weightage % ICICI Bank Ltd. Financial Services 5.50 HDFC Bank Ltd. Financial Services 5.28 ITC Ltd. Consumer Goods 3.58 Federal Bank Ltd. Financial Services 3.56 State Bank of India Financial Services 3.55 Note: Data as of 30th Sep 2022. Source: UTIMF  Performance over 13 years Below are the rolling returns of the fund since inception.  Note: Data as of 30th Sep 2022. Source: UTIMF The fund has given consistent returns and has outperformed the benchmark over the period of 13 years by generating a CAGR (Compounded Annual Growth Rate) of 11.42%.  Fund Manager  The fund is ably managed by V. Srivatsa. Mr. V. Srivatsa. He is an Executive Vice President, Fund Manager – Equity at UTI AMC Ltd. He is a BCom graduate, C.A., C.W.A., and has a PGDM from IIM, Indore. He has been with UTI AMC since 2002. Prior to joining UTI, he worked with Ford, Rhodes Parks & Co., Chartered Accountants for 2 years, and as Officer-Audit in Madras Cements Ltd. He started in UTI AMC in the Department of securities research covering varied sectors such as Information Technology, Capital goods, and metals.  Who should invest in UTI Core Equity Fund?  Investors looking to  Build their core equity portfolio for steady wealth creation.  Own a portfolio of both large & mid-capitalization stocks.  Why invest in UTI Core Equity Fund?  Large-cap stocks endeavor to provide stability & liquidity and mid-cap stocks can potentially generate superior returns for the portfolio.  The Fund maintains a well-diversified portfolio and avoids sector as well as stock concentration.  Horizon  One should look at investing for a minimum of 5 years or more.  Investment through a Systematic Investment Plan (SIP) may help in tackling the volatility of the broader equity market.  Conclusion  The UTI Core Equity Fund is one of the oldest funds with a proven track record of 13 years and has delivered 11.42% CAGR consistently. Thus, it is best for investors who want stable returns with large-cap stocks and high growth potential with mid-cap stocks.  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 over Rs 2.4 lakh crore, the AMC is one of the most trusted names in the mutual fund space. The AMF offers products across asset classes.   Let us talk about the flagship product – UTI Long-Term Equity Fund.  About UTI Long-Term Equity Fund  Investment Objective The primary objective of the scheme is to invest predominantly in equity and equity-related securities of companies across the market capitalization spectrum. Securities shall also include fully/partly convertible debentures/bonds.  Investment Process  The UTI Long Term Equity Fund carries a top-down approach for sector selection and a bottom-up for stock selection. It follows a blended style of investing with a preference for companies with consistent cash flow generation, healthy balance sheets,s and reasonable valuations.  Portfolio Composition  The portfolio holds the major exposure in large-cap stocks at 76% and sectoral major exposure is to financial services which account for roughly one-third of the portfolio. The top 5 sectors hold nearly 75% of the portfolio.  Note: Data as of 30th Sep 2022. Source: UTIMF  Top 5 holdings Name Sector Weightage % ICICI Bank Financial Services 8.53 HDFC Bank Financial Services 7.58 Infosys Information Technology 6.35 Axis Bank Ltd. Financial Services 4.58 Bharti Airtel Ltd. Telecommunications 3.73 Note: Data as of 30th Sep 2022. Source: UTIMF   Performance over 22 years  If you would have invested 10,000 at the time of inception of the UTI Long Term Equity Fund, it would be now valued at Rs 2.22 Lakhs whereas the benchmark (Nifty 500 TRI) would have fetched you Rs 1.89 Lakhs. Note: Performance of the fund since launch; Inception Date – Dec 15, 1999 Source: utimf.com   The UTI Long Term Equity Fund has given consistent returns and has outperformed the benchmark over the period of 22 years generating a CAGR (Compounded Annual Growth Rate) of 14.65%.  Fund Manager  The fund is ably managed by Vishal Chopda. Vishal Chopda is the Vice President and Fund Manager in the domestic Equity Division of UTI Asset Management Company Ltd. Vishal joined UTI AMC in January 2011. After joining UTI, he has worked for the past 7 years in the Department of Fund Management as Research Analyst. He has previously worked with CARE Ratings (Credit Analysis and Research Ltd). He is a CFA Charter holder from The CFA Institute, USA, and also holds a PGDM from Management Development Institute, Gurgaon. He has completed his B.E. from Mumbai University.  Who should Invest in UTI Long-Term Equity Fund?  Investors looking for  Equity Linked Savings Scheme (ELSS) that aims to generate long-term capital appreciation by primarily investing in equity and related securities.  a long-term wealth creation vehicle investment horizon. Why Invest in UTI Long-Term Equity Fund?  Provides tax deduction up to the limits specified u/s 80C of the Income Tax Act, 1961.  The fund attempts to invest in businesses having healthy return ratios, cash flows, and sound management, with an aim to provide superior risk-adjusted return  Horizon  One should look at investing for a minimum of 5 years or more  Lumpsum is a better way to invest in ELSS to avoid a prolonged lock-in period on your SIP investments.  Conclusion  The UTI Long Term Equity Fund is the oldest fund with a proven track record of 22 years and has delivered 14.65% CAGR consistently. Thus, suitable for even first-time equity investors who want to earn better risk-adjusted returns and avail of tax exemptions at the same time.  DisclaimerThis is not recommendation advice. All information in this blog is for educational purposes only. 

We already saw some of the best investment plans in India for one year. Here, we’ll get to know some of the best investment plans in India for five years. There are many investment options available, majorly in the equity and debt funds segment. Investment plans in India for five years.  a) Equity funds and Hybrid funds  Equity mutual funds are investment instruments that primarily invest in stocks of various companies across different sectors. Equity mutual funds are the riskiest category of mutual funds because of the high exposure (at least 65%, according to the rules laid down by the Security and Exchange Board of India) to equity markets.  On the other hand, Hybrid funds are less risky than equity funds because they are a mix of equity and debt funds; also, hybrid funds are less liquid than equity funds. Both hybrid and equity funds are for investors with a time frame of 5-7 years.  b) Above-average to high-risk funds  If you search for more than the market returns, you should bear more than the usual risk. The best option, in this case, are equity mutual funds because of their very high exposure to the equity markets.  Within equity funds, small-cap and mid-cap funds are riskier. However, these funds provide the chance to make unusually high gains.  c) Long-term funds  When your investment horizon is long, say ten years. Your best road is to have equity in the highest proportion in your portfolio because, in the long run, the share markets outperform nearly every other standard asset class.  The best options for this type of investment are either purely equity-based funds or hybrid funds with very high exposure to equity (and a small investment in debt).  d) Other funds  Regarding the instruments mentioned above, there are other options as well.  1. Index funds  Track particular indices in the market and invest in the movement of the index.  2. Flexi-cap funds  These funds diversify the investment because they invest in a mix of large-cap, small-cap and mid-cap companies for greater exposure to the entire market.   Another less discussed investment option is the Dynamic Asset allocation fund – these funds are a type of hybrid fund, and, as the name suggests, the funds are invested and dispersed across stocks, bonds, real estate, etc.   Balanced funds that invest primarily in equities with some exposure to FD-like securities are known as aggressive hybrid funds; because of the diversification of investments, these funds are less risky than pure equity while providing nearly identical long-term returns. Source: Pexels Which funds are available in India?   Some available funds are:  1. Axis Midcap Fund  This scheme aims to achieve long-term capital appreciation by investing primarily in mid-cap stocks and equity-related assets.  2. DSP Midcap Fund  It primarily aspires to achieve long-term appreciation by investments in midcap firms and other equity-related assets.  3. Tata Index Nifty Fund  The Tata index super funds strategy generates medium to long-term financial returns by investing in equity shares of just those firms' part of the Nifty 50 index, in the same proportion index.  4. Navi Nifty Index Fund  The investment objective is to produce a return comparable to the Nifty 50 index by investing in stocks of companies that make up the index, subject to tracking error.  5. Parag Parikh Flexi Cap Fund  The fund’s aim is to achieve long-term capital growth from an actively managed portfolio comprising majority equity investments.  6. DSP Dynamic Asset Allocation Fund  This hybrid, dynamic asset allocation fund considers the CRISIL Hybrid 50+50 Moderate index as the benchmark. Investment in this fund carries a moderately high level of risk.  7. Tata Balanced Advantage Fund  Investment is in a mix of equity, arbitrage, and debt portfolios to maximize capital appreciation and income distribution. The scheme tries to follow the market trend with a good balance of debt and equity.  FAQs What is the best investment in India 2023? Some of the best investment options in India in 2023 are: Public Provident Fund (PPF)National Savings Certificate (NSC)Post Office Monthly Income Scheme.Government BondsNational Pension Scheme (NPS)Sovereign Gold Bonds (SGBs)Equity Mutual Funds.Unit-linked Insurance Plans (ULIPs) What is best investment for future in India? The best investment for future in India are mutual funds, stocks, bonds, index funds, ULIPs. Investment options are determined by your time horizon, risk tolerance and financial goal. Which SIP is best for 5 years in India? Some of the best funds that offer SIP are: Axis Midcap Fund DSP Midcap Fund Tata Index Nifty Fund Navi Nifty Index Fund Parag Parikh Flexi Cap Fund DSP Dynamic Asset Allocation Fund Tata Balanced Advantage Fund This is not an investment advice. Please consult your financial advisor before investing. Which investment is best for 5 years? Public Provident Fund (PPF)National Savings Certificate (NSC)Post Office Monthly Income Scheme.Government BondsNational Pension Scheme (NPS)Sovereign Gold Bonds (SGBs)Equity Mutual Funds.Unit-linked Insurance Plans (ULIPs) My son is in 9th grade, and I want to save for his college. What are some top fund options for a 5-year investment plan? Some of the top SIPs for 5 years in debt and equity funds are the following - ICICI Prudential Technology Fund, DSP Equity Fund, HDFC Balance Advantage Fund, Quant Infrastructure Fund, TATA India Consumer Fund, Nippon India Large Cap Fund, etc. Consult an expert advisor to get the right plan for you TALK TO AN EXPERT

Similar to how one might set up a systematic mutual fund investment plan, one can create a systematic withdrawal plan to get a stream of regular income from investments on a specific date each month. In this blog, let’s talk about SWP in mutual funds. What is SWP (systematic withdrawal plan) Bank fixed deposits or postal deposits are frequently the default choice for investors who want a consistent cash flow from their assets. Investors are now concerned about their future needs for income due to the falling interest rates on these programs. SWP, a mutual fund product, provides a remedy for this. SWP, or systematic withdrawal plan, is a mutual fund investing strategy that enables investors to take fixed distributions from their mutual fund investments at predetermined intervals, such as monthly, quarterly, or yearly. The AMC will credit the amount of the withdrawal to the investors' bank accounts on the day of the month, quarter, or year they specify. The SWP Plan redeems mutual fund scheme units at the specified frequency to produce this cash flow. As long as there are still available units in the plan, investors may continue with SWP. Benefits of SWP The following are the top benefits of SWP:  Flexibility: A SWP plan gives the investor the freedom to select the amount, frequency, and date in accordance with his or her needs. The investor may also stop the SWP at any moment, make additional investments, or withdraw money in excess of the fixed SWP withdrawals. Regular Income: SWP in mutual funds makes investing easier for investors by generating a consistent income from their holdings. For people who want constant cash flow to cover ongoing expenses, this becomes very beneficial and convenient. Capital appreciation: SWP in mutual funds makes investing easier for investors by generating a consistent income from their holdings. For people who want constant cash flow to cover ongoing expenses, this becomes very beneficial and convenient. No TDS: There is no TDS on the SWP amount for domestic individual investors. Tax efficiency through SWP When units are redeemed to get the SWP amount, the gains from the selling of the units are subject to capital gain (if the redemption NAV is higher than the purchase NAV). Depending on the factors listed below, a capital gain may be defined as short-term or long-term: Equity-Oriented Funds: These are considered short-term gains if redeemed within a year of the investment date and are subject to a 15% tax. Gains realized more than a year after the date of investment are considered long-term gains and are exempt from tax up to Rs 1 lakh every financial year. Only 10% of long-term capital gains over Rs 1 lakh are subject to tax. Non-Equity Funds: If redeemed within 36 months (treated as a short-term capital gain) from the date of investment, the gains are added to the investor’s income and taxed at the rate applicable to him/her. Gains made beyond three years are considered long-term and are subject to 20% taxation after indexation benefits. For domestic individual investors, there is no TDS on capital gains in mutual funds, unlike traditional savings (such as FDs and postal investments). In addition to TDS, interest income from FDs and the majority of post office modest savings plans are taxed at the investor's individual income tax rate. Since the AMC deducts TDS at a rate of 10% from the declared income, SWP in mutual funds is preferable to dividends in mutual funds. Additionally, investors must pay taxes on the dividends they receive. How can you withdraw from SWP?   In mutual funds, SWP enables investors to personalize their withdrawal schedules. A specific sum can be paid to a person every month, every six months, every three months, or every year. With an appreciation withdrawal, you can only take out the amount that has increased in value while leaving the rest invested to grow. Why is SWP a good investment? You can withdraw money from an SWP plan in accordance with your needs. An SWP might help with cash requirements if your plan calls for funding in stages. With an SWP plan, you can withdraw money in accordance with your demands. You can facilitate cash requirements with an SWP if your aim demands funding in stages. With regular withdrawals, an SWP can assist in preserving the value of your investment, particularly when the market is erratic. SWP plans are a tool that investors can use to plan their retirement income. It enables people to routinely get a fixed income on a set day to cover their cash needs. It may take some time to fully understand your alternatives when picking an SWP.  As a result, we advise you to weigh all of your options before making a purchase. The majority of mutual funds will let you create a schedule for withdrawals that you may follow FAQ What is SWP in mutual funds? SWP, a mutual fund product, provides a remedy for this SWP, or systematic withdrawal plan, is a mutual fund investing strategy that enables investors to take fixed distributions from their mutual fund investments at predetermined intervals, such as monthly, quarterly, or yearly. Is SWP better than FD? The benefit of investing in SWP in mutual funds is that you pay fewer taxes and you have more flexibility to change withdrawals. Can I stop SWP anytime? Yes, SWP investors can choose the amount they like. date of withdrawal, and amount. You can also stop and withdraw the money as well. Is SWP income taxable? SWP redemption is taxable. Consult an expert advisor to get the right plan TALK TO AN EXPERT

Are you looking for ways to start your investment journey? Are you confused between the lumpsum vs SIP investment route? Maybe mutual funds can be the right way of starting but which one you should choose?  Don’t worry, we’re here to help you!  Let’s get to know about Lumpsum and SIP: which is better and when to choose?  What’s lumpsum?  Investing in a mutual fund as lumpsum refers to investing a big sum of money to get locked up into a one-time investment. This is a one-time investment rather than spreading it out over time, like in SIP (Systematic Investment Plans).   Lumpsum investments are usually preferred by big players or investors who are actually dependent on company stocks for capital creation. For an investor with a massive funding quantity and a high-chance capacity, a lump sum mutual fund funding may be an amazing opportunity.  Suppose you get the whopping bonus at the end of the year and after settling all the expenses, you still have around Rs. 50,000 - 75,000 left! In this scenario, you can invest the money as a lump sum investment wisely as a lumpsum order in a fund of your choice. Benefits of lumpsum  With the lumpsum investment method, people can invest a large amount in one go. As a result, when the market shows a growth period, then the value which you have invested also increases.   Lumpsum investments are great for those who wanted to invest for the long term and have a bulk amount ready.   Lumpsum investments are great for the long term. If you are interested in a time horizon of nearly 10 years or more.  Investing in a long-term investment can be risky but still, it gives better returns.  While investing in long-term investment, gives the money more time to grow potentially. When to choose lumpsum investment?  If you have got a whopping bonus and after settling your expenses you can opt for lumpsum investment. If you are a freelancer and you’ve got a big amount after completing a big project then you can opt for a lumpsum investment. What’s SIP?  A Systematic Investment Plan (SIP), popularly called SIP, is a facility provided with the aid of using mutual funds range to the buyers to spend money in a disciplined way. SIP scheme allows investors to invest money at defined intervals in a selected mutual fund.  The starting Investment can be as low as Rs 500 and the defined interval can be weekly/monthly/yearly. It’s convenient as you can give instructions to debit the price every month.  SIP has been gaining a reputation amongst Indian Mutual Fund investors because it enables them in making an investment in a disciplined way without annoying marketplace volatility and timing of marketplace. Systematic Investment Plans presented by Mutual Funds are effortlessly an excellent manner to go into the arena of investments. Benefits of SIP  With SIP, you can even invest as low as Rs 500 each month and let it grow. SIP is super easy, easy to track, and also lets you save more.  The best feature of SIP is rupee cost averaging, where you can buy more, when the market is not at a peak point and buy less when the market is at a peak point. This is because of the built-in feature of SIP, where whenever the market is low, you can buy more which reduces your cost and gains more.  SIP provides amazing flexibility. Long-term investments are not that flexible. You can withdraw whenever you want to at your convenience. You can either withdraw the whole amount or half of it.  As compared to other investments, SIP provides you with better and higher returns.  SIP operates at the percept of receiving compound interest on your investments. In different words, a small quantity invested for the long term collects higher returns than a one-time investment.  When to choose a SIP?  If you are a person who earns every month or you are a salaried person then it can be suitable for you that you can save and invest every month. Or, if you earn very little then you don’t need to wait for a big sum of money, you can just start investing a little amount every month.  If you can’t opt for long-term investment or can’t invest a large sum of money then you can definitely go for SIP to start your investing journey. SIP vs Lumpsum Now that you know what is the lump sum vs SIP investment route, it's time to analyze which is better for you.  Investment as lumpsum or SIP has its own set of benefits and advantages. It’s hard to choose just one because both are good ways of investing.   The biggest difference between the two depends on how you are investing. In lumpsum, you need to invest in one go while in SIP, you can invest monthly.  Many investors choose SIP as it’s more convenient and more flexible. It is also a good choice for small investors who are just starting off and do not have a huge income. As a SIP investor, you can start saving with as little as Rs. 100 with certain mutual funds. Conclusion  You can never say that SIP is better than lumpsum or vice versa. There will be something in both of them which will be better than the others. An investor can never choose only one.   Both have similar benefits and differences. That’s the reason why it’s important to start investing early so that you can learn while investing in your journey.  It’s advised you to choose one which is better for you and suitable for you.  TALK TO AN EXPERT

While the Dow Jones Industrial Average and the S&P 500 receive the most media attention, investors should be aware that there are several stock indexes.   The Russell 2000, often regarded as the benchmark for smaller U.S. stocks, is one of the most popular indexes that does not cover significant corporations.  With that in mind, here's a quick review of what investors need to understand about the Russell 2000 Index. What is the Russell 2000 index and how does it work?  The Russell 2000 index follows the Russell 3000 stock index's 2,000 smallest public businesses by market capitalization. The Russell 1000 large-cap stock index contains the remaining 1,000 firms.   As small-cap companies, such as those in the Russell 2000, account for a substantially lower portion of the U.S. share market as compared to large caps, the Russell 2000 accounts for around 10% of the market capitalization of the entire market. The FTSE Russell Group ranks every company in the Russell 3000 based on market capitalization. It divides the top 1/3 into the Russell 1000 and the bottom 2/3 in the Russell 2000 to determine which companies make each list.   Every May, the FTSE Russell Group re-examines companies to see if their current ranking is appropriate - because corporations grow or shrink coverage, and new businesses that deserve to be in the indexes may emerge.  Eligible firms that go public via an initial public offering (IPO) and fit by market capitalization can be included in the Russell 2000 every quarter between the yearly rank day reconstitution. As a result, the Russell 2000 may occasionally monitor over 2,000 equities.  Breakup of index  Here is a look at some of the companies in the index and the sectoral breakup.  CompanyTickerAMC EntertainmentAMCAsanaASANCrocs Inc.CROXOvintiv Inc.OVVTetra Tech IncTTEKLattice SemiconductorLSCCIntella Therapeutics IncNTLAAvis Budget Group IncCARSilicon Laboratories IncSLABMacys IncM Related indices   FTSE for traders keen on tracking the performance of specific areas of the small-cap world, Russell Group divides the Russell 2000 into smaller indexes. The following are some of the additional indexes  Russell 2000 Defensive  Russell 2000 Dynamic  Russell 2000 Growth  Russell 2000 Value  Russell 2000 Growth-Defensive  Russell 2000 Growth-Dynamic  Russell 2000 Value-Defensive  Russell 2000 Value-Dynamic  The Russell 2000 Index performance  Since 2000, the Russell 2000 has outperformed the Russell 1000 (the Russell 3000's large-cap section) and the S&P 500 in terms of total yearly returns.  The Russell 2000 small-cap index follows the S&P 500 large-cap index rather closely, though there are periods when it moves more significantly on one side or the other.  Small-cap stocks are much more volatile than large-cap stocks in general. Thus, they react more significantly to market changes.  The Russell 2000 Limitations  Investors who desire to invest in small-cap stocks follow the Russell 2000. Keep in mind that the index excludes hundreds of companies that are too insignificant to be in the index.  The Russell 2000 does not include the "micro-cap" category, which represents the smallest companies on the market. They are, nevertheless, among the fastest-growing equities in the market.  Investors who rely too heavily on the Russell 2000 may be missing out on opportunities in other industries and areas. For example, the index favors financials, health care, tech, and industrials, but it has little representation of companies in the communications and materials industries.  What is the best way to invest in the Russell 2000 index fund?  You don't have to buy all 2,000 stocks in the Russell 2000 Index to invest in it. You can invest in the index through a mutual fund or an exchange-traded fund (ETF) that tracks it passively.  The Vanguard Russell 2000 ETF (VTWO), for example, invests in all of the stocks in the index based on their relative weights. The ETF's costs are low, with a 0.10 percent expense ratio, so its long-term returns should be nearly comparable to those of the index sectors.  Should you put your money in the Russell 2000 index?  The Russell 2000 index is a brilliant complement to any investment portfolio, but it isn't for everyone.  The Russell 2000 exposes investors to the greater risk and greater reward of small-cap investing without disclosure to any firm or industry because of its broad exposure.   This can provide investors with the perfect blend of a comfortable ride while allowing for the significant returns that small-cap firms may be better poised for. FAQs What is the Russell Index 2000? The Russell 2000, often regarded as the benchmark for smaller U.S. stocks, is one of the most popular indexes that does not cover significant corporations.  Which companies are in the Russell 2000? Companies in Russell 2000 are Crocs Inc. (CROX) Ovintiv Inc. (OVV) Tetra Tech Inc (TTEK) Lattice Semiconductor (LSCC) Intella Therapeutics Inc (NTLA) Avis Budget Group Inc (CAR) Silicon Laboratories Inc (SLAB) Macy's Inc (M) Is Russell 2000 a major index? Russell 2000 is one of the most watched and followed indexes in the USA. When should you invest in Russell 2000? The Russell 2000 exposes investors to the greater risk and greater reward of small-cap investing without disclosure to anyone firm or industry because of its broad exposure.   TALK TO AN EXPERT

Are you interested in investing in stocks with a range of market capitalizations? Do you wish to build your portfolio flexibly? Consider investing in Flexi-Cap Funds. It is a type of mutual fund that invests without limitations, primarily in large, mid, and small-cap companies. Fund managers optimize exposure to a specific market segment depending on the state of the market.  What are Flexi-Cap Funds? Flexi-Cap Funds make stock investments in various market capitalizations, topics, industries, and sectors. The fund must invest at least 65% of its assets in equities and securities related to equity, per SEBI regulations. Depending on the state of the market, the fund manager may choose to increase or decrease exposure to a particular market segment.  According to AMFI data, Flexi-Cap funds received the most money from equity funds in June 2022, amounting to Rs 2,511.74 crore. In addition, the Flexi-Cap Fund sector had a 31% average return for 2021. For example, Flexi-Cap Funds beat Multi-Cap Funds, ELSS, Small-Cap Funds, Mid-Cap Funds, Thematic Funds, and Thematic Sectoral Funds. Should you invest in Flexi-Cap Funds? If you have a more significant risk tolerance, consider investing in Flexi-Cap Funds. It is appropriate for individuals familiar with the market and may have a large allocation to mid-cap and small-cap firms. If this is your first time investing in the stock market, stay away from this one.  The stock market has been highly turbulent after Russia invaded Ukraine. It's because India imports over 80% of its energy needs, and global crude oil prices have also risen. Inflation in India is skyrocketing as domestic gasoline, diesel, and LPG costs increase. In the current market environment, Flexi-Cap Funds have chosen a novel strategy. For instance, the average asset allocation for Flexi-Cap fund schemes was 65% of assets allocated to large-cap stocks. Large-cap stocks have better stability and increased liquidity in a turbulent stock market; therefore, investing in them is a wise strategy. Large-cap companies are also more risk-adjusted during a market crash since they are more established and offer larger returns.  Flexi-cap funds have less risk to mid-cap and small-cap firms when the markets are unstable. It gives the portfolio more stability than mid-caps and small-cap stocks, which tend to tumble in a declining stock market. If you're looking for credible alternative investments in the present market since large-cap funds have recently underperformed, consider investing in Flexi-cap funds. Why invest in Flexi-Cap Funds? You can build a diversified portfolio with the aid of Flexi-Cap Funds for every market scenario. You are exposed to equities from various sectors, industries, and themes.  To maximize investment returns, Flexi-cap funds combine various investment strategies. For instance, the value style concentrates on inexpensive companies to maximize long-term profits, whereas the growth style concentrates on growth potential.  The Flexi-Cap funds are an option; they have outperformed peers and the benchmark index over time. Additionally, seek performers that deliver in both bull and bear markets. Whenever the stock markets are down, choosing Flexi-Cap funds, which have performed well, pays off. Examine the portfolio of the Flexi-Cap fund because some are more conservative and have a bigger risk to large-cap stocks. If your time horizon is greater than five years, only then are Flexi-Cap funds required. It's because equities funds can provide long-term gains that outpace inflation. Nevertheless, pick Flexi-Cap funds with a lower expense ratio, representing the fund management cost. Over time, it contributes to rising overall returns. In summary, Flexi-Cap funds are a wise investment in a turbulent stock market.  What is the difference between Flexi-Caps and Multi-Caps?  Fund managers for multi-cap schemes must ensure that 25% of their assets are invested in each of the three market caps, large-cap, mid-cap, and small-cap. Flexi-cap funds are exempt from this restriction in all three parts.  Who should invest in Flexi-Cap funds? Long-term investors with some investing experience should consider Flexi-cap funds. It allows owners and fund managers the flexibility to make asset investments based on their perception of the market.  It might be appropriate for investors with a five to seven-year investment horizon because it might offer better returns and possibly outperform inflation. They ought to be ready for potential ups and downs in their investments, though. Flexi-cap funds taxation  Flexi-cap funds are taxed under the Income-tax Act of 1961 as equity-oriented schemes. Regardless of the slab rate, profits from a Flexi-cap scheme are taxed at a flat rate of 15% within a year. After the first exemption of Rs. 1 lakh relates to all long-term capital gains, profits over 12 months are subject to a flat 10% tax rate. Conclusion  Investors should choose a Flexi-cap program very carefully. Before investing, they must be aware of their risk appetite and tolerance. Flexi-cap plans, for instance, may be conservative. Therefore, it is up to you if you are a risk-averse person or the opposite. Flexi-cap schemes, like other schemes, are subject to various market risks, including volatility, economic decline, and geopolitical conflicts. Other than that, if there's any confusion or you need any information, our team of efficient financial advisors is always available for you. Consult an expert advisor to get the right plan TALK TO AN EXPERT

Want to invest in India? Here are the best top 10 investment options in India available to park your money!  Every investor wants to enjoy ultra-high returns by undertaking ultra-low risk. However, this possibility is non-existent in reality. The risk-reward equation says that one has to experience more trouble to get high returns.   So, a sound risk-reward analysis must reap the highest possible benefits before choosing an investment. India is the land of possibilities. The Indian economy is growing at a great pace, with a vast population dividend to reap.   With India's ever-expanding infrastructure, high level of competitiveness with the other major global economies, and very significant economic influence, India will be a powerhouse of economic growth in the future. For you to become a part of this growth journey and increase your wealth in the meantime, we'll tell you about ten ways to invest in India.  There are two categories of investments in the broad aspect  Financial investment  Non-financial investment Financial investment includes stocks, bonds, and different bank products, whereas non-financial investment assets include gold and real estate Top 10 investment options in India 1. Equity shares Among all the investment products listed here, direct equity investment offers the highest returns in a combination of stock appreciation and dividends. Equity markets often tend to be considerably volatile in the short run but give better inflation-adjusted returns when a long-time horizon (10 years and beyond) is taken into account.  You can directly buy and sell shares of companies listed on the BSE (Bombay Stock Exchange) and the NSE (National Stock Exchange). You can take different types of trades like intra-day trade (buy and sell on the same day), swing trade (buy and sell over a week or a month), and invest for the long term. You can diversify your portfolio by purchasing stocks of companies from different industries – thus, taking into account the growth in various sectors of the economy. Because of the unpredictability of the world markets and the possibility of sectoral turbulence, equity is the riskiest asset class (not considering cryptocurrency here) out there to invest in. There always remains a chance of potential capital wipe-out when the markets crash during challenging economic scenarios.   2. Equity mutual funds Equity mutual funds are packages that invest in inequities. For example, instead of purchasing individual stock from a particular industry, you can purchase a mutual fund that encapsulates the growth of that industry, these are less risky because of their diversified nature.  According to SEBI rules, an equity mutual fund invests more than 65% in equity. An equity mutual fund may either be managed actively or passively. The returns on these mutual funds also depend on the fund manager's expertise.   3. Debt mutual funds As the name suggests, debt mutual funds invest most in debt securities – these funds appeal to investors with a low-risk appetite with the request for steady returns. Debt mutual funds make investments in government bonds, corporate bonds, treasury bills, and other money market instruments.   Low risk does not mean any risk. Debt mutual funds bring along credit risks and interest rate risks that you need to study well before investing in debt mutual funds.   4. Fixed deposits (FD) A bank FD is safer than almost all investment options out in the market. With a high degree of safety come meager returns. FDs are a way to keep your money (the returns are often so low that they do not even match inflation figures), not an instrument to grow your money.   In the case of bank default, the depositors get insurance for up to Rs 5 lakh each (under the Deposit Insurance and Credit Guarantee corporation).   5. Bonds Bonds are fixed-income securities representing a loan advanced by a borrower to the investor. When governments or even listed companies want to raise money in debt, they issue bonds to the public. You can purchase these bonds in the bond market.   Bonds offer fixed interest payments to the bondholders (a variable interest payment system is also there). Prices of bonds and the rate of interest move in the opposite direction. At maturity, the entire principal has to be paid back. There are different types of bonds, like government bonds, corporate bonds, and municipality bonds.    The risk of investment in bonds also arises from potential inflation outstripping the rate of interest on the bonds. Furthermore, when you buy bonds that are not well-rated, there remains a chance of default, wherein you might lose out on what you lent out.   6. Pradhan Mantri Vaya Vandana Yojna (PMVVY) This investment instrument is for senior citizens (age > 60 years). PMVVY provides a guaranteed return of 7.4% per annum. The payout offered is pension income payable either monthly, quarterly, bi-annually, or annually, with pension amounts ranging from Rs 1000 to Rs 9250.   The upper limit for the investment amount is Rs 15 lakh, with a tenure of 10 years. The senior citizen (or the nominee in case of the senior citizen's demise) receives the maturity amount.  7. National Pension Scheme (NPS) This is a retirement-oriented investment instrument managed by Pension Fund Regulatory and Development Authority (PFRDA). It is a mixture of equity, debt, fixed deposits, and liquid funds. You can decide the proportion of your investment according to your risk appetite. You can invest in this for as low as Rs 1000.    There exists a risk factor here as well – it comes from the underlying assets that the scheme invests in; depending upon the exposure to equity and debt (etc.), the risk is determined.   8. Public provident fund (PPF) PPF is a 15-year-long tax-free (interest) instrument. The interest on PPF accounts is reviewed by the government every quarter. A minimum of Rs 500 every month also works for a PPF account. A sovereign guarantee backs the interest earned here, and thus, PPF is a very safe investment.   9. Gold Gold is often known as a haven for investors. Gold will act as a hedge in your portfolio. Historically, gold has been a winner in times when the economy is in the doldrums. In the long run, the increasing price of gold makes it a good investment.   You can buy digital gold, sovereign gold bonds, gold ETFs, and physical gold. It is also a very liquid asset to possess.   10. Real estate Real estate investment is a humongous task for the general public. The real success of the investment depends on the type, location, and possible rental yield of the property. Also, the houses you reside in are not investments, because they do not generate positive cashflows.  The profits in real estate are generated through the price appreciation of the property and the rent that it yields. A suitable property can overhaul all negative returns in your portfolio, while a bad one can block your capital with no growth possibility. With the high investment amounts, asset illiquidity, and many regulatory approvals, real estate remains a less popular investment choice among the commoners.   Use your risk-reward analysis to choose the best option for you. FAQs How to choose the best investment options? To choose the best investment options, you need to first understand your goals, when you want to achieve them and the cost required. For example, your goal is to send your daughter to the UK to study abroad. You may have a time span of 10 years- 12 years (assuming your daughter is in school). This means you need 50-60 lakhs to fund her education and maybe more considering inflation. Once, you know your goal, you can now approach a financial advisor or explore yourself to figure out your investment options to get the amount. What types of investment options in India are suitable for an average person? There are many investment options in India that are suitable for the average Indian. They can go for Mutual funds, ETFs, Indian stocks, US stocks, Bonds, Gold, Digital Gold and much more. The investment options depend upon the short-term and long-term goals that the investor has set for themselves. Why should I check my risk tolerance before investing money? Risk tolerance refers to how much risk one is willing to take and how much money are they willing to expose. Markets are volatile by nature and are driven by multiple factors that can affect your investment. Understanding the risk involved and ensuring measures to minimize the impact allows you to check your risk tolerance. What do you mean by a diversified investment portfolio? A diversified investment portfolio gives you exposure to different investments. For example, investing in stocks, mutual funds, ETFs and US dollars can bring diversification to your portfolio. Diversification does not mean taking on different types of investments, it means seeking a balanced portfolio and exposure to different investments. It is important to consult a financial advisor for a diversified investment portfolio. Consult an expert advisor to find the right plan for you 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 Public Provident Funds (PPF) and mutual funds to see which is a better option for you. What are public provident funds(PPF)? The Public Provident Fund, popularly abbreviated as PPF is used as a tax-free savings vehicle to save aside a portion of one’s annual income for the future. PPF investors may get tax-free interest income on their capital if the amount was received on maturity. PPF is a risk-averse person's saving tool that is supported by the government. What are Mutual funds? Mutual funds, a popular method of investing, pool client money to purchase a range of securities, such as stocks, bonds, and money market instruments.  Mutual funds are governed by the Securities Exchange and Board of India (SEBI). Through mutual funds, investors have access to professional fund management. The fund management staff carefully considers the fund's objective before making any investing decisions. Assets like bank savings accounts and fixed deposits perform better than more traditional ones, thanks to skillful management. Equity and debt mutual funds are the two main types of mutual funds. Equity mutual funds' primary investments are equity and equity-related goods. The many forms of equity funds include large-cap, mid-cap, small-cap, multi-cap, sectoral or thematic, tax-saving, etc.  Conversely, debt mutual funds make investments in corporate bonds, government securities, and other financial goods. There are many different types of debt mutual funds, including liquid funds, dynamic bond funds, and short- and ultra-short-term funds, among others. Mutual Funds Vs PPF (Public Provident Funds). PPFs and mutual funds, each have their own set of perks and drawbacks. Therefore, it is a good idea to take into account their distinctions before choosing one at random. ParametersMutual FundsPublic Provident Funds (PPF)Investment run byFunding institutions or asset management firmsBy The Government of IndiaRequirementsTo achieve short- or long-term objectivesTo amass a retirement fundReturn on investmentsThe performance of the underlying assets affects the returnsAnnual returns calculations are madeTax benefitsThe sort of mutual fund investment and the length of the investment are what define itUp to INR 1.5 lakh of PPF investments are tax-free under Section 80C of the Income Tax ActMaturity PeriodNo fixed tenure15 years, which may be extended in 5-year chunks.LiquidityA high degree of liquidityLow degree of liquidityRisk/safetyRiskier than PPFsPPF is a risk-free investmentLock-in periodNo concrete lock-in period15 yearsDiversificationYesFixedPremature withdrawalThere are certain mutual funds that have a lock-in period; in these instances, SIP payments can be stopped, but withdrawals are not allowed prior to the maturity date.Only after the end of six fiscal years is a partial withdrawal permitted. PPF vs Mutual fund - Which is better for you? The decision between a PPF and a mutual fund relies on the objectives or aims of the investor. The latter operates more like a savings plan whereas, the first is a market-linked program.  While PPF delivers predictable returns and is most suitable for investors who are risk-averse. Conversely, mutual fund companies invest in a variety of securities, including government bonds, debt, and shares. As a result, it offers the potential for bigger profits, but because it is market-linked, the risk is also higher. FAQs Is PPF still a wise choice for investments? One of the most popular long-term and tax-saving programs for depositors is the PPF program since it offers a variety of benefits. If a person can make consistent investments for 15 to 25 years, compound interest might help them amass a sizeable wealth of about Rs 1 crore. The PPF interest rate is modified every three months. Which is preferable, PPF or SIP? SIP and PPF are both long-term investing strategies. They vary, nevertheless, in terms of maturity and lock-in time. A PPF has a tenor of 15 years and a 7-year lock-in period, whereas SIPs can be stopped and redeemed at any time. You can then take out a portion of the money after that. Which investment is good for a child's future? It is a great idea to start investing in equity mutual funds when your child is still young and you have at least 15 to 20 years before retirement. This makes it possible for you to resist shocks like volatility and stock market crashes. When developing investment plans, each person has their own way of thinking and attitude. While some people want larger profits, others want financial security. It's critical to assess your financial status before making any form of investment, including those in mutual funds or Public Provident Funds (PPF). Consult an expert advisor to get the right plan TALK TO AN EXPERT

Hybrid mutual funds are the type of mutual fund scheme that invests in two or more asset classes, i.e., equity, debt, and other asset class, depending upon the fund’s objective. This helps the fund manager to diversify the portfolio not only among the sectors but also among different asset classes. Hybrid funds are subdivided into different categories, i.e., based on equity-debt allocation, based on solutions, and others. Aggressive Allocation: The fund has the flexibility to invest 65-80% in equity & equity-related instruments and 20-35% in debt instruments. Balanced Hybrid: The fund has the flexibility to invest 40-60% in equity and equity-related instruments and 40-60% in debt instruments. Conservative Allocation: The fund can invest 10-25% in equity & equity-related instruments and 75-90% in debt instruments Types of Hybrid Funds Hybrid funds come in various types based on their asset allocation: Equity-oriented Hybrid Funds: These allocate 65% or more to equity and the rest to debt and money market instruments. Debt-oriented Hybrid Funds: They invest at least 60% in fixed-income securities and the remainder in equity. Balanced Funds: With a minimum of 65% in equity and the rest in debt, they offer tax benefits on long-term capital gains. Monthly Income Plans: These primarily invest in fixed income, with a small portion in equity, providing regular income to investors. Arbitrage Funds: These seek arbitrage opportunities by buying low and selling high, switching to debt when opportunities are scarce. They have a tax treatment similar to equity funds. Each type serves different investment goals, offering a range of risk and return profiles. Benefits of hybrid funds Hybrid funds offer several advantages: Simplified Diversification: They provide access to multiple asset categories within a single fund, reducing the need for multiple investments. Active Risk Management: Hybrid funds actively manage risk through diversification and asset allocation, investing in non-correlated assets like equity and debt. Enhanced Diversification: They diversify across various asset classes and sub-classes, such as different stock types and growth/value stocks, boosting portfolio diversification. Risk Catering: Hybrid funds cater to various risk profiles, accommodating conservative, moderate, and aggressive investors. Multi-Asset Class Exposure: Hybrid funds provide multi-asset allocation to the portfolio by investing in equity, debt, and other asset classes. Actively Managed: All the hybrid funds are actively managed by professional fund managers. So, as per the market condition, the fund manager has the flexibility to change the fund’s allocation. Top 6 hybrid funds S.No.Fund Name3-Yr Annualized Performance1Quant Absolute Fund Growth Option Direct Plan28.29 %2Bank of India Mid & Small Cap Equity & Debt Fund Direct-Growth25.71 %3Edelweiss Balanced Advantage Fund Direct Plan-Growth16.37 %4Baroda BNP Paribas Balanced Advantage Fund Direct-Growth16.05 %5Bank of India Conservative Hybrid Fund Direct-Growth14.74 %6Kotak Debt Hybrid Direct Growth12.17 %Note: Data as of July 25, 2022Source: Morningstar 1. Quant Mutual Fund Fund analysis: The fund has the flexibility to invest 65-80% in equity & equity-related instruments and 20-35% in debt instruments. The risk grade is above average, and the returns grade is high. The fund has given consistent performance over different trailing period returns. The fund has outperformed the category average over the period. It has invested in equity and debt securities. ProsConsFund has outperformed the category average with good margins. Attractive risk-to-reward ratio.Low Assets Under Management. Start Investing 2. Bank of India Mutual Fund Fund analysis: The fund's objective is to provide capital appreciation and income distribution to investors from a portfolio constituting mid and small-cap equity and equity-related securities as well as fixed-income securities. The fund holds major holdings in mid-cap companies and the cyclical sector holds 62.84% weightage followed by sensitive 20.52% and defensive 16.64%. The risk grade is high, and the returns grade is also high. ProsConsHigh growth potential. Invested in AAA quality bonds.High expense ratio. Start Investing 3. Edelweiss Mutual Fund Fund analysis: The fund’s objective is to generate capital appreciation with relatively lower volatility over a longer tenure of time. The Scheme will accordingly invest in equities, arbitrage opportunities, derivative strategies on the one hand, and debt and money market. instruments on the other. The Scheme may also invest in Infrastructure Investment Trusts and Real Estate Investment Trusts. The fund has outperformed the category average over the long-term period. The fund has a well-diversified portfolio of 113 equity holdings and 14 bond holdings. The risk grade is average and the returns grade is high. The fund has the flexibility to invest 0-100% in equity instruments and 0-100% in debt instruments. ProsConsFund has outperformed the category average with good margins. Fund has invested in both value & growth stocks along with AAA-rated bonds in the debt category.Fund has underperformed the category average over 3-Months & 6-Months trailing returns. Start Investing 4. Baroda BNP Paribas Mutual Fund Fund analysis: The fund has the flexibility to invest 0-100% in equity instruments and 0-100% in debt instruments. The risk grade is average, and the returns grade is high. The fund has a well-diversified portfolio of value & growth stocks and has invested across sectors. In the debt market, the fund has invested majorly in aaa-rated bonds and money market instruments. ProsCons5-star rated by Morningstar. The risk grade is average, and the returns grade is high.Fund has underperformed the category average over 3-Months & 6-Months trailing returns. Start Investing 5. Bank of India Mutual Fund Fund analysis: The fund can invest 10-25% in equity & equity-related instruments and 75-90% in debt instruments. The risk grade is high, and the returns grade is also high. The fund has a blended style of investing, indicating both value & growth stocks. The fund has invested across sectors and AAA-rated bonds. The fund has 23.99% in equity, 50.20% in bonds, and 25.81% in cash & money market instruments. ProsConsFund has outperformed the category average over different trailing period returns. The fund has captured the market well when it was falling & rising, better than the category average.High expense ratio. Start Investing 6. Kotak Mutual Fund Fund analysis: The fund’s focus is to provide regular income by investing in debt instruments, along with some exposure to equity & equity-related instruments to enhance returns. The fund may also invest in derivatives to hedge the position. The risk grade is average and the returns grade is high. The has given a consistent performance over the period and has also outperformed the category average by good margins. The fund has invested 24.88% in equity, 66.94% in bonds, and 8.18% in cash & money market instruments. ProsConsConsistent performance. The fund captured the market well when it was falling & rising, better than the category average.Fund has underperformed the category average over 6-Months trailing returns. Start Investing How do hybrid funds work?  Hybrid funds invest in both equity and debt. While equity has the potential to generate high returns, it comes with high risk. On the other hand, debt is a fixed-income instrument with low risk and returns. So, in hybrid, you can see a fund with moderate risk and return due to the availability of both asset classes. A hybrid fund gives you both asset classes in a single product. Equity provides long-term gain, whereas debt provides short-term stability or regular income.  Boost Your Financial Liquidity: Dive into the Top 6 Liquid Mutual Funds Read More Who should invest in hybrid funds? A hybrid fund is perfect for: First-time investors - Investors are looking for stability like fixed deposits and fear the risk of volatility over the short term. Hybrid funds give a good entry point to the equity market.  Investors with a 3-5 years horizon - For any medium-term goal like buying a car, school fees, etc., hybrid funds can be a good option as returns generated are relatively less volatile. Retired Investors: Investors who have retired can look to generate regular income with the help of hybrid funds and their unique asset allocation. Short-term investors - Arbitrage funds provide a good option for investors looking to park money in volatile market conditions. Taxation 1. Equity-Oriented Schemes - A fund with a minimum of 65% in equity or equity-related instruments is treated as equity funds for taxation. Arbitrage funds are also classified as equity funds for tax purposes. For equity, the taxation is as below -. Long-Term Capital Gains: If held for more than a year, it is known as long-term capital gains and comes with a 10% tax over Rs 1 Lakh gains which is tax-free. Short-Term Capital Gains: If held for less than a year, it is known as short-term capital gains and comes with a 15% tax 2. Other Schemes: Long-Term Capital Gains: If held for more than three years, it is known as long-term capital gains and comes with a 20% tax with an indexation benefit. Short-Term Capital Gains: If held for less than three years, it is known as short-term capital gains. Gains will be added to the investor's income and taxed as per their tax slab. Conclusion: Investors should consider hybrid funds as part of their portfolios. As they can provide you attractive risk-to-reward ratio along with low volatility. Talk To An Expert FAQs Is it good to invest in hybrid funds? Hybrid mutual funds are the type of mutual fund scheme that invests in two or more asset classes, i.e., equity, debt, and other asset class, depending upon the fund’s objective. This helps the fund manager to diversify the portfolio not only among the sectors but also among different asset classes. What is a hybrid fund example? Some hybrid fund examples are: Quant Absolute Fund Growth Option Direct PlanBank of India Mid & Small Cap Equity & Debt Fund Direct-GrowthEdelweiss Balanced Advantage Fund Direct Plan-Growth Is a hybrid fund better than equity? Hybrid funds are the best of both worlds - equity and debt funds! Investors who are willing to take moderate risks and gain high returns can consider this type of fund after consulting an investment advisor. Are hybrid mutual funds safe? Hybrid funds are safer than equity funds and less risky. 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

What is AUM in mutual funds? What does it stand for or how is it calculate? Let's answer what does it mean when investors talk about AUM in mutual funds! The aggregate market value of the investments held by a mutual fund is known as its Assets Under Management (AUM). On behalf of the investors, the fund manager handles these assets and makes all investment-related decisions. AUM is a measure of a fund house's size and performance. The assets managed by a fund can be easily compared with other similar funds' performance over time.  The returns a mutual fund receives are also factored into the AUM value. This can be used to purchase securities, hold them as specified by the investing mandate, or distribute dividends to investors.  Things to consider in AUM before investing?  Investors in mutual funds frequently evaluate the fund's AUM and are impressed if it is on the higher side. People assume that a fund must be good if so many investors have previously contributed to it. However, there are a lot of reasons why this number shouldn't matter when selecting a fund.  Some of the most crucial elements to consider are the expense ratio, the fund manager's reputation, and compliance with the investing mandate. Let's examine the significance of AUM in relation to various fund types.  1. Large-cap funds  Let's examine an example of how AUM affects large-cap mutual funds. Two large-cap equities funds are HDFC Top 200 and Mirae Asset India Opportunities. The former's AUM is Rs.14,655 crore compared to the latter’s just Rs.4,738 crore. Most investors may choose to invest in HDFC Top 200 for this reason. However, the Mirae has historically earned higher returns over various periods.  2. Small-cap funds  Small-cap funds typically limit the inflow of cash after a specific threshold. A well-known case of this is the DSP BlackRock Micro Cap Fund. This typically happens when a mutual fund's assets exceed a certain threshold. When the market fluctuates, the fund might not be able to quickly trade its shares if it becomes a major stakeholder in a company. Due to this, small-cap funds frequently stay away from lump-sum investments and instead opt for SIPs.  3. Debt funds  If you’re considering investing in debt funds, AUM is an important factor to consider. The fixed fund costs might be split among more investors in a debt fund with higher capital. This can lower the cost per individual and hence boost fund returns. Additionally, more assets under management assist the fund organization in securing fair interest rates from debt issuers.  4. Equity funds  Here, stability in returns and commitment to the investing mandate by the fund company is more important than AUM. By stability, we mean surpassing the benchmark during both the highs and lows of the market. As a result, rather than popularity or size, an equity fund depends on the asset manager's ability to produce strong returns consistently.  How to calculate AUM in mutual funds?  Fund houses use different techniques to determine assets under management. When a fund continuously generates positive returns, its total investment value will increase. Growth in AUM might result from the attraction of new assets and investors due to strong performance.  Similarly, assets may drop if the market value or investment performance declines. The same applies to sudden fund closures and share redemptions by investors. Capital that has been invested in the firm's goods is included in its assets under management, which also includes the stock of the company's executives.  Formula to calculate AUM: "AUM = Net Asset Value (NAV) * Total number of units.”  AUM's impact on the expense ratio or fee  Every fund house charges a fee called a management fee that is based on the size of the fund. Investors are charged based on the number of units they own at a single cost for the entire fund. The fees are unaffected by the performance of the fund. It just pays for administrative costs and establishes the asset manager's pay for his work. The annual costs to run a mutual fund are measured by the total expense ratio (TER). According to SEBI, the AUM must always be more than the TER.  source: pixabay High AUM's effects on mutual funds  AUM growth can occasionally hurt an equity fund's performance. However, there is hardly any data to suggest that a bigger AUM either helps or hurts the fund's performance. The fund manager is the one who should seize market opportunities and buy or sell a stock at the appropriate moment. Larger assets under management have frequently made it more difficult for the manager to make rapid judgments regarding investments. Before investing, evaluate the fund's performance in relation to the benchmark and its rivals. Higher AUM means the manager needs to be on point and well-experienced. Check the experience of the manager in handling high assets before investing in such funds.   AUM and market fluctuations  Market movements have a significant impact on the assets managed. The assets of the fund will increase when it generates returns and decrease when it suffers losses. This impacts the mutual fund fee as well. Lower expenses typically equate to lower value. For instance, imagine that a mutual fund that has produced 10% returns has received a total investment of Rs. 10,000 from 100 investors. If so, Rs. 11,000 would be the fund's AUM. After all, businesses determine the worth of their assets under management using a variety of techniques.  AUM is a great way to evaluate a fund's popularity and performance. However, it should not influence your decision to invest in that fund. Should you consider AUM before investing? AUM is an essential factor that helps you in shortlisting the funds. The higher the AUM, the more stable the fund could be. Often you will see Analysts mentioning AUM > Rs 1000 crore is a good benchmark as it defines the fund's stability.  Also, the expense incurred to manage the fund gets spread, and the expense ratio reduces with rising AUM. Let us see the impact of AUM on equity funds and debt funds -  1. Equity funds In equity funds, consistency and sustenance of returns are more critical than AUM. Thus, the investment process and philosophy should be given more importance.  2. Debt funds In debt funds where the investment is in different fixed-income instruments, it is critical to consider AUM. While benefits such as expense ratio and reputation are one thing, the essential thing in debt funds is getting reasonable rates with debt issuers. With higher AUM, the fund manager tends to get better rates which add to the performance. Also, higher AUM in debt funds for retail investors adds to the fund's stability. Impact of high AUM in mutual funds While a high AUM is good for the stability of the fund but huge AUM often impacts your performance. For example - in the case of Large Cap Equity funds, if a fund reaches are very high AUM, the performance is likely to get impacted as the universe of stocks in which the money can be deployed is minimal and beyond a point outperforming the benchmark in large-cap space (where information inefficiency is negligible) is often tricky.  Thus, while AUM is necessary for the stability of a fund, it is not the only and single most critical factor on which the decision to buy or sell a fund should be dependent. FAQs What is a good AUM in mutual fund? AUM is a measure of a fund house's size and performance. AUM size only matters in certain funds. What is AUM vs NAV? NAV refers to the prices of shares in a fund while AUM refers to the value of assets managed by the advisor. How is AUM calculated? Here is the formula to calculate AUM: "AUM = Net Asset Value (NAV) * Total number of units.”  Consult an expert advisor to get the right plan for you TALK TO AN EXPERT

UTI Asset Management Company (AMC) UTI is one of the pioneers of the Indian Mutual Fund Industry. With over Rs 2.4 lakh crore, the AMC is one of the most trusted names in the mutual fund space. The AMF offers products across asset classes. Let us talk about its flagship product – UTI Master share Unit Scheme  About Fund  1. Investment objective The fund seeks to generate long-term capital appreciation for investors by investing in equity and related securities of large-cap companies. It is India’s first equity-oriented fund launched in October 1986.   2. Investment process   The Fund takes a top-down view of the sector and then takes a bottom-up approach to select the stocks within the sectors. The fund is a well-diversified portfolio and avoids sector as well as stock concentration.  3. Portfolio Composition  The portfolio holds the major exposure in large-cap stocks at 87% and sectorally major exposure is towards financial services which account for roughly one-third of the portfolio. The top 5 sectors hold nearly 63% of the portfolio.   Note: Data as of 30th Sep 2022. Source: UTIMF  Top 5 Holdings  Name Sector Weightage % ICICI Bank Financial Services 9.52 Infosys Information Technology 7.12 HDFC Financial Services 6.12 Bharti Airtel Telecom 4.52 Reliance Oil and Gas 3.93 Note: Data as of 30th Sep 2022. Source: UTIMF  Fund performance over 35 years  If you would have invested 10 lakhs at the inception of the fund, it would be now valued at Rs 18.20 crore whereas the benchmark (S&P BSE 100) would have fetched you Rs 11.88 Crore.  Note: Performance of the fund since launch; Inception Date – October 15, 1986. Source: utimf.com  The fund has given consistent returns and has outperformed the benchmark over the period of 35 years by generating a CAGR (Compounded Annual Growth Rate) of 15.56%.  Now, let’s look at the fall of the fund during market corrections. Source: utimf.com The above table explains that the fund has seen less fall/correction compared to the market correction. While corrections are painful for the short-term investor, at the same time, it is an opportunity to make higher returns for the long-term investors.  Fund manager  The fund is managed by Swati Kulkarni and Karthikraj Lakshmanan. Swati has over 36 years of experience and has been managing the fund since December 2006. Karthikraj has over 17 years of experience and is a new entrant in this fund management.  Who should invest in UTI Mastershare unit scheme?  Investors looking to  Own large-cap businesses with sound management, steady cash flow, and earnings growth  Build core equity portfolio for long-term wealth creation with steady growth  Why invest in the UTI Mastershare unit scheme?  India’s first equity-oriented fund with a proven track record of over 35 years and over Rs 10,000 crore in Assets Under Management currently.  Strong stock selection approach with a diversified portfolio reducing concentration risk  Horizon  One should look at investing for a minimum of 5 years or more  A systematic investment Plan (SIP) is an ideal way to take exposure as it helps tackle market volatility  Conclusion  The fund is the oldest fund with a proven track record of 35 years and has delivered 15.56% CAGR consistently. Thus, suitable for even first-time equity investors who are looking to take a little higher risk DisclaimerThis is not recommendation advice. All information in this blog is for educational purposes only.