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As an investor, you may have heard about three broad types of funds equity funds  hybrid funds  debt funds  In this article, we will be trying to put out a comparison between debt funds and hybrid funds. We will try to differentiate them based on risks-returns and tax assessment. Difference between Debt funds and Hybrid funds 1. Debt fund A debt fund is a mutual fund, an exchange-traded fund (ETF), or any other pooled investment instrument that invests primarily in fixed-income assets. Debt funds have lower fees than equity funds due to lower management costs. Investors in debt funds can choose between passive and aggressive solutions. Credit funds and fixed-income funds are common names for debt funds. These funds are popular among investors looking to preserve their capital, along with the generation of low-risk income. Debt funds invest in a wide range of securities, each with its own set of risks. Companies with a steady outlook and high credit quality issue investment-grade debt. High-yield debt is usually issued by low-credit-quality businesses with good growth potential and a larger risk-return profile.  Debt funds are appropriate for people with short to medium-term investment horizons, where “short-term” refers to 3 months to one year, and “medium-term” refers to a period of 3 to 5 years.  2. Hybrid funds A hybrid fund is a mutual fund scheme that invests in a mix of equity and debt instruments to create a balance between the risk and returns of the instruments mentioned above.   The risk of investing in a hybrid fund is dependent on the allocation of funds between equity and debt.   Hybrid funds obtain their returns effectively in two parts:   From the risk-free debt instrument   The risky and high-delivering equity segment is volatile as well.  A comparative analysis of Debt and hybrid funds  1. Comparison of the risk-return scale Without a second thought, hybrid funds are riskier than debt funds because of equity components.   The riskiest ones within hybrid funds are those with more than 65% of equity exposure; among debt funds, the fund with low credit quality and high growth prospects carry a riskier profile.  Returns are dependent on the risk you take so returns will vary depending upon your separate exposure to equity and debt, though debt funds are categorically safer than a hybrid.  2. Comparison of the funds on the taxation scale These funds are subject to taxation on capital gains and dividend distribution tax. Funds are categorized into equity (if equity exposure is >65%) and non-equity.  Equity funds are subject to STCG of 15% if held for less than one year and LTCG of 10% if held for more than a year. On the other hand, non-equity funds (debt funds and hybrid funds with <65% equity) are taxable according to your income-tax slab.   If held for less than three years, LTCG is payable at 15% with an indexation benefit. Equity and non-equity funds attract Dividend distribution tax (DDT) of 10% and 25%, respectively.  So, while choosing the fund you wish to invest in, you have to account for your risk-return equation before deciding. FAQs What are debt funds? A debt fund is a mutual fund, an exchange-traded fund (ETF), or any other pooled investment instrument that invests primarily in fixed-income assets. Debt funds have lower fees than equity funds due to lower management costs. Investors in debt funds can choose between passive and aggressive solutions. What are hybrid funds? A hybrid fund is a mutual fund scheme that invests in a mix of equity and debt instruments to create a balance between the risk and returns of the instruments mentioned above.   What is the difference between debt funds and hybrid funds? Hybrid funds predominantly invest in equity whereas debt funds invest in debt and debt-related instruments. Consult an expert advisor to get the right plan for you TALK TO AN EXPERT

Investment tips can be a life savior. Especially when life today is expensive and getting costlier. Education, housing and other costs of living are certainly not getting any cheaper. Your savings will only take you so far and thus, financial planning and investment have become a necessity today. Education planning in India is getting popular, especially for parents looking to send their kids to study abroad without taking out education loans. If you are a beginner investor, and thinking about child investment plans or other strategies, here are some things you should know. 1. Invest with a plan You should always invest with a plan. It is very important to be clear from the get-go about what your financial goals are. Investments in a house, investments for buying a car, investments for retirement, and investments for child education are all very different financial goals. Some financial goals require short-term planning while others require planning long-term.  For example, buying a car is a short-term goal, while creating a proper education plan for your child or planning for retirement are long-term goals. A diversified short-term investment plan is much more suitable for the former and a long-term investment scheme will be more useful for your long-term goals. If you are a beginner, it can be a good idea to invest with a financial service that manages your investments for you. A personalized and customized financial plan created by experts is useful when you are short on time or expertise yourself. If you want to create a solid education plan for your children, you can invest your money in mutual funds and ETFs through EduFund.  2. Educate yourself about the stock market While it may be tempting to leave everything to the experts and rest stress-free, that is not a very good attitude to have. You should educate yourself about what you are investing in and why. A lot of beginner investors follow trends and invest in whatever is being talked about the most. There is a chance of this being profitable in the short term but this definitely not a good long-term strategy. For that, you will need to educate yourself on the stock market. You need to understand how the stock market works and what it means when a stock rises or falls. What is a stock and what does it mean when you buy a stock? You should also educate yourself on the jargon. What is BSE, NSE, Sensex, Nifty, etc.? What is the difference between investing and trading? First-time investors also need to specifically look at what they are investing in and learn as much as possible about it. If you are investing in ETFs, it is important to first understand what an ETF is and why they are so popular with beginner investors.  Sometimes, the experience can also be a teacher. When you enter the market as a rookie, you may make mistakes and suffer losses. Take these losses as a learning experience to understand what to do and what not to do. Knowledge is your friend when you are an investor and not all of this knowledge needs to be bookish. 3. Understand market risk When you invest your money into the market, you can either make a profit or suffer a loss. The more money you have invested, the more your exposure and consequent risk.  Volatile or trendy stocks and options can be risky. Balanced mutual funds, real estate, and high-income bonds are relatively low risk. Bank savings deposits, fixed deposits, and government bonds are the lowest-risk investments. As an investor, what you need to do is determine how much risk you are willing to take. It is always a good idea to start slow. Do not speculate too much too quickly. Rather, plan things out and invest according to your goals. Your risk tolerance will also differ depending on your financial goals. If you are investing to fund your child’s education plan, which is an expensive, long-term investment, you should not take unnecessary risks.  Diversification is a great idea to lower risk as this ensures that your invested principal is not tied up in only one thing. This balances out your risk. Investing in ETFs and mutual funds is a great way to do this. These funds are already diversified and their investment portfolio is structured and balanced to ensure relatively lower risk. 4. Invest in what you know We have recently seen big booms and falls in the prices of certain stocks like GameStop. A lot of people invested in these stocks due to the hype and media attention. While many of them made huge profits, when the stocks eventually fell, many investors ended up losing a lot of money as well.  This is a great example of what happens when you invest out of herd mentality, without fully understanding what you are investing in and why. While these types of investments can be good for a quick and sudden cash fall, they are completely inappropriate as a long-term investment strategy.  When you invest in a stock, you purchase yourself a stake in the company. As a stakeholder, you should do your due diligence about the company and its stocks. Understand how the company makes its money and stays profitable. If you don’t do this, you will not be able to predict or understand when a company’s stock may fall and put you in a financial crisis. If you don’t understand how or why a particular stock shot up, it's not a good investment. 5. Stay calm This is perhaps the most important aspect of investing. The stock market with its highs and lows can lure you into making impulsive, emotion-driven decisions. It is important to have self-control in these matters and stick to proven investment strategies rather than variable market trends. It is also equally important to understand that short-term market fluctuations, by and large, don’t affect your long-term investments in the long run. With financial goals like education plans and home ownership, any rise and fall in stock prices can make you nervous. However, it is important to have faith in your long-term investments. If you have done your due diligence and research in picking the right plans and strategies for yourself, the only thing you need to do is relax and keep faith in your investments. Conclusion Investment is a strategy for creating wealth in the long term and requires patience, faith, knowledge, and planning. It is important to educate yourself as much as possible about all relevant issues and keep in touch with experienced advisors and analysts. FAQs What is the best strategy for a beginner investor? You should always invest with a plan. It is very important to be clear from the get-go about what your financial goals are. Investments in a house, investments for buying a car, investments for retirement, and investments for child education are all very different financial goals. Some financial goals require short-term planning, while others require long-term planning.    How can I invest smartly? Stay calm. This is perhaps the most important aspect of investing. The stock market, with its highs and lows, can lure you into making impulsive, emotion-driven decisions.   It is important to have self-control in these matters and stick to proven investment strategies rather than variable market trends.   It is also equally important to understand that short-term market fluctuations, by and large, don’t affect your long-term investments in the long run. What should beginning investors invest in? Invest in what you know. When you invest in a stock, you purchase a stake in the company. As a stakeholder, you should do due diligence on the company and its stocks.    Understand how the company makes its money and stays profitable. If you don’t do this, you will not be able to predict or understand when a company’s stock may fall and put you in a financial crisis.    If you don’t understand how or why a particular stock shot up, it’s not a good investment.   What are 5 tips for beginner investors? Invest with a plan   Educate yourself about the stock market   Understand market risk   Invest in what you know   Stay calm  

The question of how much salary to invest in mutual funds is a burning question for many salaried professionals.   There are many thumb rules; for example, the 50:30:20 rule is a great example that shows how, typically, on average, a person should invest 20% of a month’s salary.   Before investing in any instrument, the first thing that needs to be taken care of is your fixed obligation-to-income ratio. Fixed obligations are those expenses that are necessary to sustain your life.   So, whatever remains after paying your fixed obligation should go towards investing.   How much in mutual funds?   The question is how much of that 20% of investments should go into mutual funds. Mutual funds are a very popular form of investment giving better returns than your savings account and are also a hassle-free investment strategy.   There are various types of mutual funds depending on your risk appetite. Some of them are index funds, debt funds, multi-cap funds, hybrid funds, and equity funds.   Equity funds are the riskiest because they have the highest exposure to equity markets.   The amount that you will invest in mutual funds will depend upon your salary range and the expenses you will cover. But the percentage, as shown above, is usually 20%.   At least half of it is 10% of the total salary and should be in mutual funds in the form of SIP investments because mutual funds have the power to generate high returns in the long run. Far more than FDs and savings accounts.  Example:   Suppose person A earns ₹40,000 per month.   50% of 40,000 = 20,000   So, ₹20,000 should go towards the necessities like rent, bills, etc.   30% of 40,000 = 12,000   Then, ₹12,000 should be spent on movies, gyms, restaurants, etc.   20% of 40,000 = 8,000   The remaining ₹8000 should be saved or invested.  In that ₹8,000, at least ₹4,000 should be invested in mutual funds, which is 10 percent of the total salary. The remaining 10 percent can be saved or invested depending on your financial goals.  Source: Pexels Long term goals   Your investment in mutual fund SIPs should align with your future goals as an individual or even for your family. It completely depends on how much wealth you would like to have in the long run (given your desired time horizon).   Your long-term financial goals will also decide how much you want to invest and which type of mutual funds you should invest in to get the desired type of returns.   You can arrive at any amount depending upon the type of expenses you will undertake in the future. You must carefully analyze the total amount of your SIP investment in mutual funds.  Investing some portion of your monthly income will go a long way in your dream of wealth creation in the future. You need to remain consistent with your investments.   Also, keep on increasing the size of your investment in your desired instrument with every hike in your salary.  FAQs What % of your salary should you invest in mutual funds? The thumb rule that most investors follow is the 50:30:20 where 20% of your income should be invested. However, the percentage differs based on the individual's salary, financial goals, and assets/debts. How much in mutual funds?   The amount that you will invest in mutual funds will depend upon your salary range and the expenses you will cover. But the percentage, as shown above, is usually 20%.  To figure out how much to invest, you can always consult an expert. Can a salaried person invest in mutual funds? Yes, salaried persons can invest in mutual funds/stocks and ETFs. There are many investment options available to salaried persons in India and even abroad such as investing in US stocks and ETFs. How much to invest in mutual funds and how to choose a mutual fund is best answered with the help of an advisor! Consult an expert advisor to get the right plan for you TALK TO AN EXPERT

Many students have aspirations of studying abroad, but the exorbitant fees involved can be a significant barrier. Thankfully, there are nontraditional financing solutions that can help turn this ambition into a reality. Crowdfunding and peer-to-peer lending, including the best peer-to-peer lending in India, are two such strategies that have grown in popularity recently. Peer-to-peer lending has benefits like cheaper interest rates and simpler access to funds, but there are also drawbacks to take into account.   On the other hand, crowdfunding enables students to raise money through social media channels, but success is not always assured. In this article, we'll examine the benefits and drawbacks of these alternate educational finance strategies, such as peer-to-peer lending for student loans and crowdfunding for international education. Crowdfunding for education abroad  For students looking for alternative financing options to pay for their studies abroad, crowdfunding has grown in popularity. Using social media and online fundraising platforms, crowdfunding is asking a lot of people for money to support a certain cause, like studying abroad.  By the use of crowdfunding, students can design a unique fundraising campaign where they can communicate their motivations, objectives, and financial requirements with a larger audience. By the use of social media, students can rapidly and effectively solicit donations from friends, family, alumni, and other possible donors using this strategy.  One benefit of crowdfunding for international education is that it can be a successful approach to generating money without taking on debt. Crowdfunding campaigns, in contrast to traditional loans, do not need repayment, and the money received can be used to pay for a range of costs related to studying abroad, such as tuition, transport, lodging, and living costs.  It is crucial to remember that the success of crowdsourcing campaigns cannot be guaranteed, therefore students should carefully prepare their initiatives and establish sensible objectives. To ensure the success of their fundraising efforts, students should be ready to communicate with potential donors and aggressively publicize their campaigns.  In conclusion, crowdfunding can be a helpful source of finance for students who want to pursue an international education, but it should be combined with other funding options to guarantee that all costs are met.  Peer-to-peer lending for education abroad  Peer-to-peer lending (P2P lending) has become a different kind of funding for students who want to pay for their studies abroad. P2P lending platforms let borrowers engage with lenders one-on-one, bypassing traditional financial institutions and giving them access to lower interest rates.  P2P lending allows students to borrow money from private lenders for their international studies, frequently at interest rates lower than those of traditional student loans. Additionally, this kind of funding offers students more flexible loan repayment terms so they can adjust their loan repayments to their financial situation once they graduate.  P2P lending has a number of benefits, one of which is that it may rapidly and effectively give students access to money for their studies abroad. With loan approval and disbursement occurring in just a few days, the loan application process is often straightforward and efficient. P2P lending can also be a viable choice for students who may not have a good credit history because individual lenders might be more ready to offer loans based on other criteria, like academic performance and possible future earning ability. To make sure they are obtaining the best deal possible, it is crucial for students to thoroughly research and evaluate P2P lending sites and loan terms. Students should also be aware of any hazards related to peer-to-peer lending, such as the absence of governmental monitoring and the possibility of dishonest lenders.  In conclusion, peer-to-peer lending can be a helpful source of finance for students who want to pursue an international education, but it should be combined with other funding options to guarantee that all costs are met.  Microloans for education abroad  Another alternative financing choice for paying for education abroad is microloans. Microfinance institutions (MFIs) give people who would not have access to conventional forms of financing microloans, which are modest loans often between a few hundred and a few thousand dollars.  Students can get tiny loans through microloans for international education to pay for things like tuition, travel, and living costs while they're away from home. Students with low financial resources or those who might not be eligible for conventional student loans because of a lack of credit history or collateral may find these loans to be very helpful.  The ability to rapidly and easily receive microloans for international education is one of their key benefits. Students can now get money in only a few days thanks to the shortened loan application procedures implemented by many microfinance firms. Additionally, microloans frequently have interest rates lower than those of conventional loans, making them a desirable choice for students looking for inexpensive funding.  It is crucial to keep in mind that microloans are frequently only offered in small quantities, which could not be sufficient to pay for all of the costs related to studying abroad. Also, to make sure they are obtaining the best deal possible, students should carefully investigate and contrast microfinance organizations and loan conditions.  Overall, microloans can be a helpful source of finance for students who want to pursue an international education, but they should be combined with other funding options to guarantee that all costs are met.  Conclusion  Finally, while studying abroad might be a once-in-a-lifetime opportunity, it can also be very expensive. Fortunately, students who wish to study abroad but cannot afford to do so have a variety of different financing choices. Students have access to cash quickly and effectively through crowdfunding, peer-to-peer lending, and micro-loans, typically at interest rates that are lower than those of conventional student loans.  To find the one that best meets their needs, students should carefully investigate and analyze the available financing options. Each financing option has benefits and drawbacks. To make sure that all costs are paid, students can also investigate other financial options like grants, scholarships, and work-study opportunities. In the end, students can choose the best funding solution to enable them to fulfill their aspirations of studying abroad without racking up excessive debt with careful planning and research. 

Investing in equity has never been an easy task. It demands a lot of time and effort from your side to understand the company’s business, analyze the financials, develop the investment philosophy, and whatnot. So, you invest in mutual funds, giving your money to a professional fund manager who will manage and invest it in equity markets. But he is going to charge fees for his professional services, and there is no assurance that he will be able to generate a good return. Then you might ask if there is any way by which you can invest in equities where you will not be required to put the effort like a professional fund manager or pay hefty professional fees, and yet you can earn a decent return. The answer to this question is index funds. In this article, we will see an index fund, its benefits and limitations, how to invest in index funds in India, how to buy index funds in India, and some points about ETFs. What is an Index Fund? Index Fund is a mutual fund where the fund manager invests in stocks that are part of a particular index called the underlying index. Here, the fund manager does not use his professional skills but replicates the index with the objective of earning a return (before fees and expenses) that is commensurate with the return of the underlying index. Since the fund manager does not apply his professional skills and the fund is managed passively by just copying the index, the expense ratios of index funds are also very low. Hence, index funds are the best passive funds. https://www.youtube.com/shorts/78mX8bcNPcM Benefits of Index Funds Lower Fees: Since the fund manager is not required to manage the funds actively and invest by replicating the underlying index, index funds have lower expense ratios than actively managed funds. Zero Risk of Fund Management: The risk of the fund manager's decisions going wrong is eliminated because the fund manager mimics the underlying index. Easy to Invest: Index funds are easiest to invest in because it requires very little application of financial knowledge than actively managed funds. Diversification: Generally, indices are well diversified, and since index funds invest in stocks that form part of that index, you get the benefit of diversification automatically. Due to the benefits mentioned above, index funds are the best passive funds to invest in. Limitations of Index Funds The only considerable limitation of index funds is that you don’t make returns higher than the index; you can make the maximum that index has made but not more than that. How to invest in Index Funds in India? Once you have decided to invest in index funds, you can follow the following approach for investing in index funds. Selection of the appropriate underlying index: Based on the time horizon and your risk appetite, you must select an appropriate underlying index for your investments. Selection of appropriate index fund: Once you have chosen the underlying index appropriate for you, you have to select the index fund with the index that you have chosen as its underlying. With the help of the following factors, you can decide the best index fund to invest in. AUM: Consider the funds with the highest AUM because the higher the AUM, the more the chances of being better managed. Expense Ratio: Since there is no active management of funds, you should consider the funds that have the lowest expense ratio, so you incur lesser costs. Tracking Error: Tracking error measures the difference between the returns generated by the index fund and the underlying index. The lower the tracking error, the better it is, as you get returns like the underlying index as much as possible. How to buy Index Funds in India? After deciding to invest in index funds, you might have a question about how to buy index funds in India. Don't worry. The procedure to buy an index fund is simple and the same as the procedure for buying any other mutual fund. You can visit the official website of the mutual fund, complete the standard KYC procedure, and fill up the required information for buying the index funds. You can also invest in index funds in India using our EduFund App without paying any commission in a simple and hassle-free manner. What is an ETF? ETF is also an index fund. The only difference is ETFs are traded on stock exchanges like normal stocks. There are also ETFs based on commodities like gold, silver, etc. You can consider the parameters of liquidity and volume in addition to the approach given above to decide the best ETF to invest in India. You can also invest in the best ETFs in India through our EduFund App. https://www.youtube.com/shorts/ufTDh0aPOG8 Conclusion Index funds and ETFs are the best way to start investing, considering the benefits and limitations. However, time spent in the market is much more essential to create wealth. Hence, it would help if you focused more on staying invested for a longer duration than deciding which is the best index fund or the best ETF to invest in.  TALK TO AN EXPERT

ICICI Prudential Mutual Fund is the second-largest asset management company in India. With over Rs 5 Lakh crore, the AMC is among the most trusted names in the mutual fund space. The AMC offers products across asset classes. Let us talk about the flagship product – ICICI Prudential Small Cap Fund.  ICICI Prudential Small Cap Fund  Investment objective: The scheme's primary objective is to seek to generate capital appreciation by predominantly investing in equity and equity-related securities of small-cap stocks.  Investment Process: The Scheme will invest in 40-60 stocks which will be selected based on extensive research and screening. Some stock filters and parameters include Corporate Governance, Sector Opportunity, Leverage and RoE, Earnings potential, and Valuations, etc. Stocks selected for investment will be reviewed periodically.  Portfolio Composition:  As per its investment objective, the equity exposure is majorly in small-cap stocks at 61.97%. The funds are invested across all the sectors without any specific sector being given more importance. The top 5 sectors hold nearly 36% of the portfolio.  Note: Data as of 28th Feb. 2023. Source: ICICI Pru AMC  Top 5 Holdings for ICICI Prudential Small Cap Fund  Name Sector Weightage % Cyient Ltd. Technology 3.96 PVR Ltd. Services 3.77 Rolex Rings Ltd. Capital Goods 3.5 EPL Ltd. Materials 3.15 CCL Products (India) Ltd. Consumer Staples 3.14 Note: Data as of 28th Feb. 2023. Source: ICICI Pru AMC  Performance since inception  If you had invested 10,000 at the fund's inception, it would now be valued at Rs 52,020.  Note: Fund performance since launch; Inception Date – 23rd May 2008.  Source: icicipruamc.com  The fund has given consistent returns and has outperformed the benchmark by generating a CAGR (Compounded Annual Growth Rate) of 11.36% since inception.  Fund manager  The fund is ably managed by Harish Bihani, who has 11 years of experience and manages four funds.  Who should invest in the ICICI Prudential Small Cap Fund?  Investors who wish to benefit from the higher growth potential and re-rating scope of small companies could consider taking long-term exposure in this scheme.  Why invest in ICICI Prudential Small Cap Fund?  The scheme allows investors to participate in the price discovery of small-cap stocks, usually below their full potential.  The scheme provides access to well-researched small-cap companies with a higher return potential and could grow to become tomorrow's market leaders in their respective segments.   Time Horizon  One should look at investing for a minimum of five years or more.  Investment through a Systematic Investment Plan (SIP) may help tackle broader equity market volatility.  Conclusion  ICICI Prudential Small Cap Fund provides access to well-researched small-cap companies with a higher return potential and could grow to become tomorrow's market leaders in their respective segments. The fund has consistently outperformed its benchmark. Hence, investors seeking to invest for a long-term time horizon to generate high returns with higher risk can consider this fund.  Disclaimer: This is not recommendation advice. All information in this blog is for educational purposes only. 

HDFC Asset Management Company Ltd. (HDFC AMC) is one of the largest mutual fund companies in India. It is among one of the most profitable asset management companies (AMC) in the country. The company manages assets worth Rs. 4,48,493.89 crores as of 31st Dec. 2022. Let us talk about the consumer product – HDFC Top 100 Fund.  About the HDFC Top 100 Fund  Investment objective: To provide long-term capital appreciation/income by investing predominantly in large-cap companies.   Investment process:   The fund follows the investment style of a blend of growth at a reasonable price and value, wherein the stocks are selected using a bottom-up approach. The stocks are filtered based on factors such as Business Models, Management, Financial Metrics, Valuations, etc.  Portfolio composition:  HDFC Top 100 Fund holds significant exposure in large-cap equity at 94%, and only 6% is invested in mid-cap stocks. The significant sectoral exposure is Banks, which account for over one-fourth of the portfolio. The top five sectors hold more than 60% of the portfolio.  Note: Data as of 28th Feb. 2023. Source: HDFC Mutual Fund  Top 5 Holdings for HDFC Top 100 Fund Name Weightage % ICICI Bank Ltd. 8.97 HDFC Bank Ltd. 8.84 Reliance Industries Ltd. 6.34 Infosys Ltd. 6.13 HDFC Ltd. 5.58 Note: Data as of 28th Feb. 2023. Source: HDFC Mutual Fund  Performance: Fund name 1Y 3Y 5Y 7Y 10Y HDFC Top 100 Fund Direct-Growth (%) 5.86 28.16 11.58 14.04 13.82 S&P BSE 100 TRI -0.17 26.67 11.88 13.71 13.26 Data as of 21st Mar. 2023. Note: Returns over one year are annualized Source: Value Research Online  Fund Managers for HDFC Top 100 Fund  Mr. Rahul Baijal (Since 29th Jul. 2022) – Senior Fund Manager - Collectively over 21 years of experience in equity research and fund management.  Mr. Priya Rajan (Since 01st May 2022) – Senior Equity Analyst and Fund Manager for overseas Investments - Collectively over 15 years of experience.  Who should invest in HDFC Top 100 Fund?  Investors looking to invest in an equity portfolio without the very high risk and seeking better returns than the debt instruments can consider this fund. However, investors should remain invested long-term to witness wealth creation.  Why invest in this Fund?  Large-cap funds are relatively lesser risky than mid-cap and small-cap stocks. Since this fund invests most of its funds in large-cap stocks, the downside risk is comparatively less than the other actively managed funds.  Large-cap funds provide an excellent opportunity to generate high returns over the long term.  As per the data released by AMFI for Oct-Dec. 22 quarter, HDFC AMC is the third largest AMC in India.  This fund has consistently generated good returns and outperformed the S&P BSE 100 TRI.    Time Horizon  One should look at investing for a minimum of three years or more.  Investment through Systematic Investment Plan (SIP) may help in tackling the volatility of the broader equity market.  Conclusion  The HDFC Top 100 Fund is one of the oldest funds with a track record of over 25 years and has delivered over 18% CAGR since its launch. Thus, it is best for investors willing to take some additional risk for good returns over the long term. Disclaimer: This is not recommendation advice. All information in this blog is for educational purposes only. 

One of the largest AMCs in India, DSP has been helping investors make sound investment decisions responsibly and unemotionally for over 25 years. DSP is backed by the DSP Group, an almost 160-year-old Indian financial giant.  The family behind DSP has been very influential in the growth and professionalization of capital markets and the money management business in India over the last one-and-a-half centuries. https://www.youtube.com/shorts/35bgR0Abv4w Let us talk about the consumer product – DSP Small Cap Fund.  About the DSP Small Cap Fund  Investment objective: The primary investment objective is to seek to generate long-term capital appreciation from a portfolio substantially constituted of small-cap companies' equity and equity-related securities.  Investment process:  DSP Small Cap Fund invests in some of the smallest, fastest growing & innovative Indian companies.   It considers companies with strong business models in high-growth sectors and efficient management teams focused on utilizing resources wisely to unlock high-growth potential eventually.  Some of these companies could be just starting out and still in the early stages of proving their business plans- generally under-owned, under-researched & under-valued.  Portfolio composition:  The portfolio holds significant exposure in small-cap stocks at 86%, and major sectoral exposure is to Industrial Products, which account for roughly 14% of the portfolio. The top five sectors hold more than 50% of the portfolio.  Note: Data as of 28th Feb. 2023. Source: DSP MF  Top 5 Holdings for DSP Small Cap Fund Name Weightage % Cyient Limited 4.09 Suprajit Engineering Limited 3.66 Ratnamani Metals & Tubes Limited 3.56 Triveni Engineering & Industries Limited 3.29 K.P.R. Mill Limited 2.95 Note: Data as of 28th Feb. 2023. Source: DSP MF  Performance:  If you had invested 10,000 at the fund's inception, it would now be valued at Rs 1,09,789.   Note: Data as of 28th Feb. 2023. Source: DSP MF  Since its inception, the fund has generated a CAGR (Compounded Annual Growth Rate) of 16.46% Fund Manager  Vinit Sambre has been managing this fund since June 2010 as a Co-Fund Manager. Vinit joined DSPIM in July 2007 as Portfolio Analyst for the firm's Portfolio Management Services (PMS) division, which manages discretionary accounts and provides advisory services to institutional clients. As a research analyst, he focused on sectors like Pharmaceuticals, Power Utilities, Chemicals, Fertilizers, and Textiles. Vinit specializes in the small and mid-cap space and has over 16 years of relevant work experience. Vinit is a Chartered Accountant from the Institute of Chartered Accountants of India.  Resham Jain has been managing this fund since March 2018 as a Co-Fund Manager for the Equity portion. Resham joined DSP Investment Managers in March 2016 as Assistant Vice President of the Equity Income Team. He has over nine years of experience. Before joining DSP Investment Managers, he worked for B&K Securities (I) Private Limited, Jaihind Projects Ltd & Arvind Ltd.  Abhishek Ghosh has been managing this fund since March 2013 as a Co-Fund Manager. Abhishek has a total work experience of 14 years. Abhishek joined DSP investment managers in September 2018 as Assistant Vice President of the equity team. His prior experience includes working in Motilal Oswal, IDFC Securities, BNP Paribas, B&K securities, and Edelweiss Financial Services. He has an MBA in finance and holds a Bachelor's in Electronics Engineering.  Jay Kothari has been managing this fund since March 2013 as a Co-Fund Manager. Jay Kothari, Vice President & Product Strategist -Jay has been with DSP Investment Managers since May 2005 and has been with the Investment function since January 2011. Before joining DSPIM, Jay worked for Standard Chartered Bank for a year in the Priority Banking division. Jay completed his Bachelor of Management Studies (Finance & International Finance) from Mumbai University and an MBA in Finance from Mumbai University.  Who should invest in DSP Small Cap Fund?  Consider this fund if you  Are you looking to tactically allocate 10-15% of your portfolio to high-risk opportunities?  Understand that very high risk is involved in this category of funds in the quest for high returns.  Have the patience & mental resilience to remain invested for a decade or more.  Recognize market falls as good opportunities to invest more.  Why invest in this Fund?  This high-risk, high-return strategy offers the potential to 'earn big' returns.  It can help you beat the impact of rising prices over the long term.  It can be a suitable choice for tactical allocation.  Time Horizon  One should look at investing for at least ten years or even more.  Investment through Systematic Investment Plan (SIP) may help in tackling the volatility of the broader equity market.  Conclusion  The DSP Small Cap Fund has a proven track record of more than 15 years, where it has delivered a CAGR (Compounded Annual Growth Rate) of 16.6%. Thus, it is the best option for investors who are willing to take small-cap exposure with high risks for a long-term time horizon.   Disclaimer: This is not recommendation advice. All information in this blog is for educational purposes only. 

One of the largest AMCs in India, DSP has been helping investors make sound investment decisions responsibly and unemotionally for over 25 years. DSP is backed by the DSP Group, an almost 160-year-old Indian financial giant.  The family behind DSP has been very influential in the growth and professionalization of capital markets and the money management business in India over the last one-and-a-half centuries. Let us talk about the consumer product – DSP Value Fund.  About the DSP Value Fund  Investment Objective: The primary investment objective of the scheme is to seek to generate consistent returns by investing in equity and equity-related or fixed-income securities which are currently undervalued.  Investment Process   This fund is designed on fundamental value-investing principles & forms its portfolio through a carefully constructed framework.  It aims to invest in 'good' Indian & international companies at 'good', reasonable prices.  It aims to allocate up to 35% to global 'value' stocks via internationally renowned value managers like Berkshire Hathaway, Lindsell Train, Harding Loevner, Veritas, etc.  Portfolio Composition  The portfolio holds major large-cap stocks and global funds exposure at 36% and 26%, respectively. Significant sectoral exposure (apart from the mutual funds) is to Pharmaceuticals & Biotechnology, which account for roughly 10% of the portfolio.  Note: Data as of 28th Feb. 2023. Source: DSP MF  Top 5 Holdings of DSP Value Fund Name Weightage % Veritas Global Focus Fund 7.06 Berkshire Hathaway Inc - Class B 6.87 Harding Loevner Global Equity Fund 5.55 Lindsell Train Global Equity Fund 5.39 WCM GLOBAL EQUITY FUND 5.15 Note: Data as of 28th Feb. 2023. Source: DSP MF  Performance  If you had invested 10,000 at the fund's inception, it would now be valued at Rs 13,075.   Note: Data as of 28th Feb. 2023. Source: DSP MF  The fund was launched on 10th Dec. 2020. Since it has been only two years, investors must stay invested longer to see the fund outperform the index.  Fund manager  Aparna Karnik has been managing this fund since May 2022. Aparna Karnik is Head-Quantitative Investments and Analytics (QIA). Aparna has 17 years of experience in investment, credit and operations risk management. Before joining DSP, she worked with CRISIL Ratings in their Structured Finance Division, Large Corporates Group.  She holds a Masters's in Management Studies from Jamnalal Bajaj Institute of Management Studies.  Prateek Nigudkar has been managing this fund since May 2022. Prateek Nigudkar is a Quantitative researcher at DSP Investment Managers Pvt. Ltd. (DSPIM). Before joining DSPIM, Prateek headed a team of Quantitative analysts in the Equity Smart-Beta team for State Street Global Advisors (SSGA) in India. Prateek holds a Master's in Quantitative Finance from the University of Washington and is FRM certified. He has also cleared all three levels of the CFA examination from the CFA Institute.  Jay Kothari has been managing this fund since December 2020. Jay Kothari, Vice President & Product Strategist -Jay has been with DSP Investment Managers since May 2005 and has been with the Investment function since January 2011. Before joining DSPIM, Jay worked for Standard Chartered Bank for a year in the Priority Banking division. Jay completed his Bachelor of Management Studies (Finance & International Finance) from Mumbai University and an MBA in Finance from Mumbai University.  Who should invest in DSP Small Cap Fund?  Consider this fund if you  Are a first-timer or a relatively new equity market investor?  Have the patience & mental resilience to remain invested for a decade or more.  Recognize market falls as good opportunities to invest even more.  Accept that equity investing means exposure to risk.  Do not chase the highest possible returns at all times.  Why invest in this Fund?  Offers the potential to earn relatively risk-free, stable returns higher than those from pure fixed-income investments.  Get the benefit of equity taxation despite the low-risk orientation.  Time Horizon  One should look at investing for at least ten years or even more.  Investment through Systematic Investment Plan (SIP) may help in tackling the volatility of the broader equity market.  Conclusion  The DSP Value Fund is a good option for those who believe in the principles of value investing. Investors investing in this fund should remain invested long to reap the benefits of compounding.   Disclaimer: This is not recommendation advice. All information in this blog is for educational purposes only. 

In the previous article, we discussed taxation in mutual funds. In this article, we will discuss the types of risks associated with mutual funds. Mutual funds are excellent investment options for both novice and seasoned investors; they are currently a very popular investment option due to their capacity to provide inflation-beating returns.   Mutual funds combine money from a range of individuals and institutions and invest in various asset classes such as shares, debt, and other money market instruments after conducting thorough research to maximize capital appreciation or income generation.  The investors are subject to risks like volatility risk, management risk, liquidity risk, interest rate risk, and inflation risk. We shall now discuss all such risks that come up with an investment in mutual fund schemes; a sound knowledge of these is helpful to an investor in making the investments.  There are two types of mutual funds: equity mutual funds and debt mutual funds. Risks associated with mutual funds There are major two types of risks associated with mutual funds that the article will discuss such as risks associated with equity mutual funds and risks associated with debt funds. 1. Management risk A company's management refers to the group steering the organization on the right path.   Changes in the management team and their activities, such as pledging shares, decreasing or increasing promoter stakes, and so on, can impact the price of a company's stock.   While principles such as solid corporate governance and high transparency benefit a company's stock, mismanagement, team conflicts, and other factors depress the stock price and thereby affect your mutual fund investments as well if that particular stock is a part of your investment.  2. Liquidity risk When it comes to equity investments, long-term investing has the best possibility of securing investment profitability.   Thus, it is difficult for equity mutual funds to quickly buy or sell stock investments to profit or minimize a loss leading to a situation where the scheme's liquidity is insufficient to meet investors' redemption requests.   A liquidity crisis like this is most prevalent when investors make a high number of redemption requests due to prolonged bad market inequities.   Many equity funds invest a small amount of their capital in debt and money market instruments to mitigate this risk and ensure more substantial returns.  3. Volatility risk An equity mutual fund invests mainly in the stocks of publicly traded corporations.   As a result, an equity fund's value is in line with the performance of the companies in whose stocks it has invested. Current macroeconomic conditions have an impact on the company's performance.   Government, Sebi, and RBI policies, consumer preferences, the economic cycle, and other macroeconomic changes are all examples of factors that directly impact the price of company stock, either positively or negatively.   The value of an equity fund is affected by this movement. Large-cap corporations, on average, are less prone to such volatility than mid-cap and small-cap market enterprises.   Similarly, when compared to thematic or sectoral equity, funds are diversified. Equity funds are less likely to be influenced by such volatility. Risks associated with debt funds 1. Inflation risk Bonds and money market instruments are fixed-rate instruments because their coupon rates are fixed. As a result, rising inflation erodes the coupon rate-based revenues that the debt fund aims to receive.   As a result, rising inflation causes bonds to trade at a lower price on the bond markets, lowering their potential returns for the debt funds investors. On the other hand, lower inflation tends to push bond prices and debt fund investment values higher.  2. Credit risk Government securities, corporate bonds, certificates of deposits, commercial papers and other debt and money market instruments are among the items that debt funds invest in.   Credit ratings such as AAA, AA+, AA, AA- and so on are offered by credit rating agencies such as CRISIL, ICRA, and Fitch they evaluate the credit quality of these investments, which vary depending upon the issuer.   A specific risk is that the borrower fails; they do not pay the principal and/or interest on the loan.  3. Interest rate risk A risk linked with debt funds is interest rate risk. Bonds are exchanged in the same way as stocks, and their prices fluctuate.   The economies' interest rates mainly influence the movement in bond prices; the link between interest rates and bond prices is the opposite. As a result, as the economies' interest rate rises, the values of current bonds fall since they continue to offer the same interest rate.   Interest rate risk refers to price variation in bonds caused by changes in interest rates it is a market-wide element that influences bond prices and, as a result, the value of all debt mutual funds.   The degree of interest rate sensitivity varies by debt fund type and is shown by the adjusted duration of the debt fund.   In general, debt funds that invest in shorter-term assets are less vulnerable to interest rate risk than those that invest in longer-term products.  With regard to the above-mentioned risks, it is vital to note that while mutual fund performance is always subject to numerous risks, every fund house employs a variety of tactics to reduce, if not eliminate, these well-known dangers.   As a result, even if your investment gains are not guaranteed, your chances of developing your wealth are good if you invest with a well-known fund house, choose a fund with an established track record, and make the investment with a long-term horizon. FAQs What are the three main risks associated with mutual funds? The three main risks associated with mutual funds are: Management risk Liquidity risk Volatility risk Do mutual funds have high risk? All mutual funds are risky. Its terms and conditions specify that mutual funds are volatile in nature and are subject to market ups and downs. There are different levels of risk involved in mutual funds. What is the biggest risk for mutual funds? The biggest risk for mutual funds is inflation. Inflation affects different types of funds differently. Rising inflation causes bonds to trade at a lower price on the bond markets, lowering their potential returns for debt fund investors. On the other hand, lower inflation tends to push bond prices and debt fund investment values higher. Consult an expert advisor to get the right plan for you TALK TO AN EXPERT

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 UTI Mutual Fund offers products across asset classes. Let us talk about the flagship product – UTI Dividend Yield Fund.  UTI Dividend Yield Fund  Investment Objective: The objective of the scheme is to generate long-term capital appreciation and income by investing predominantly in dividend-yielding equity and equity-related securities. However, there can be no assurance or guarantee that the investment objective of the scheme would be achieved.  Investment Process:    The UTI Dividend Yield Fund would follow a bottom-up approach for stock picking following a value investment style and maintaining a well-diversified portfolio. By virtue, the fund tends to be less aggressive (less risky) than other types of funds, such as growth stock mutual funds.  Portfolio Composition  The portfolio holds the major exposure in large-cap stocks at 69% and sectoral major exposure is to Information Technology, which accounts for roughly one-fourth of the portfolio. The top 5 sectors hold more than 70% of the portfolio.  Note: Data as of 28th Feb. 2023. Source: UTIMF  Top 5 Holdings in UTI Dividend Yield Name Sector Weightage % Infosys Ltd. Information Technology 8.01 ITC Ltd. Consumer Goods 6.49 NTPC Ltd. Power 6.06 Tech Mahindra Ltd. Information Technology 5.43 Mphasis Ltd. Information Technology 4.38 Note: Data as of 28th Feb. 2023. Source: UTIMF  Performance Since Inception  If you had invested 10,000 at the time of inception of the fund, it would be now valued at Rs. 1,02,531, whereas the benchmark (Nifty 500 TRI) would have fetched you Rs1,06,452. Note: Performance of the fund since launch; Inception Date – 03rd May 2005 Source: utimf.com   The fund has underperformed against the benchmark. Investors have to be invested for a longer investment horizon to see the fund outperforming the benchmark.  Fund Manager  The fund is ably managed by Mr. Amit Premchandani. Mr. Amit Premchandani is Senior Vice President & Fund Manager - Equity. He holds a PGDM from IIM Indore and a CFA charter from CFA Institute, USA. He has completed a CA from ICAI. He graduated with a Bachelor of Commerce in 2001 from Heramba Chandra College, Kolkata. Amit joined UTI AMC in 2009 as a Senior Research Analyst and has covered Banks, NBFCs, telecom, and cement in his research role. In addition, he took up portfolio responsibilities in June 2014. He has over 13 years of experience.   Who should invest?  Investors looking to  Supplement their core equity portfolio with a differentiated portfolio strategy  Increase their equity allocation with the intention of relative downside protection  A twin benefit of capital appreciation as well as dividend yield Investment Horizon  Why Invest?  The Fund endeavor to benefit from investing primarily in dividend-yielding equity shares at the time of investment.  The advantage of a portfolio with a 'value' style is that it provides a significant upside potential when a revival results in value unlocking.  Dividend-yielding stocks tend to have higher downside protection. Being rich in cash generations from their business result in a fair amount of stability and tend to be less aggressive (less risky) than other types of funds, such as style-based or market cap-based funds.   Probable twin benefit of capital appreciation and dividend yield from the fund.  Horizon  Ideal for investment with a time horizon of, preferably, five years or above   Investment through Systematic Investment Plan (SIP) may help in tackling the volatility of the broader equity market.  Conclusion The UTI Dividend Yield Fund has delivered consistent returns in the long run. Investors looking for relatively less risky funds with consistent dividends and capital appreciation returns can consider this fund.  Disclaimer: This is not recommendation advice. All information in this blog is for educational purposes only. 

Investing money for monthly income can be a great way to generate a steady stream of cash flow. However, it is important to carefully consider your options and create a diversified portfolio that meets your income needs and risk tolerance. If you have saved up to 25 lakhs and are ready to invest it, it is the best way of earning a passive income, as it can be a great way to earn extra money without having to put in a lot of work. Investment can be the best and easiest way to earn money if done properly. Tips on how to invest INR 25 lakhs for monthly income 1. Understand your income needs Before investing, it's important to have a clear understanding of your income needs. Consider your monthly expenses, your long-term financial goals, and any other sources of income you may have. This will help you determine how much income you need each month and what type of investments to consider. 2. Consider fixed-income options Now, addressing the concern of where to invest 25 lakhs for monthly income, there are a few options. Fixed-income investments like fixed deposits and debt mutual funds can offer a steady stream of income. These investments provide a fixed rate of return and can be a good option for conservative investors who want a predictable source of income. However, keep in mind that fixed-income investments may not offer high returns and may be subject to inflation risk. 3. Invest in dividend-paying stocks Dividend-paying stocks can provide a steady source of income through regular dividends. These stocks are typically issued by stable, established companies that have a history of giving out dividends. Investing in dividend-paying stocks can be a good option for investors who want to generate income and also participate in the potential for capital appreciation. Consider investing in a diversified portfolio of dividend-paying stocks to minimize risk. Types of Investment available in India Read More 4. Consider rental property Investing in rental property can be a good option for a stable monthly income. Rental income can provide a steady source of cash flow, and the property may appreciate in value over time. However, investing in rental property requires a significant amount of capital and comes with additional risks like property management and tenant turnover. Hence, so be sure to do your research and work with a professional to ensure that your investments are successful. 5. Bonds as an investment  Bonds are another popular option for generating monthly income. When you buy a bond, you are essentially lending money to the issuer in exchange for regular interest payments. You can invest in individual bonds or in bond funds, which are mutual funds that invest in a variety of different bonds. Keep in mind that bonds are subject to interest rate risk, so their value may fluctuate based on changes in interest rates. Why investing is important? Read More 6. Invest in mutual funds Mutual funds that invest in a combination of equity and debt securities can be a good option for generating monthly income. These funds provide diversification and can offer a balance between income and growth potential. Look for income-oriented mutual funds and a systematic withdrawal plan. Consider investing in hybrid mutual funds or monthly income plans that are designed to provide regular income. Diversify your investments and reinvest dividends and capital gains. Start Investing in Mutual Funds 7. Invest in annuities An annuity is a contract between you and an insurance company that provides a guaranteed stream of income over a set period. There are different types of annuities, but fixed annuities can be a good option for generating monthly income. With a fixed annuity, you pay a lump sum upfront, and the insurance company guarantees a fixed rate of return for a period of time. 8. Consult a financial advisor Investing Rs. 25 lakhs for monthly income requires careful planning and consideration. It's a good idea to consult a financial advisor who can help you create a diversified portfolio that meets your income needs and risk tolerance. A financial advisor can also provide guidance on tax-efficient investment strategies and help you create a comprehensive financial plan. Our team at EduFund has efficient financial advisors constantly available for your help and advice, whether it is about how to invest 25 lakhs for monthly income in India or any other financial concerns you may have. Conclusion  In summary, there are different ways to invest money for monthly income, but investing Rs. 25 lakhs for monthly income requires careful consideration and planning. Consider fixed-income options, dividend-paying stocks, rental property, and mutual funds, and consult a financial advisor to create a diversified portfolio that meets your income needs and risk tolerance. With smart investment decisions, you can generate a steady stream of monthly income and achieve your long-term financial goals. And for any issue regarding these investments, our team of financial advisors is just a call away.

ICICI Prudential Mutual Fund is the second-largest asset management company in India. With over Rs 5 Lakh crore, the AMC is among the most trusted names in the mutual fund space. The AMF offers products across asset classes. Let us talk about the flagship product – ICICI Prudential Bluechip Fund.  ICICI Prudential Bluechip Fund Investment Objective To generate long-term capital appreciation and income distribution to investors from a portfolio predominantly invested in equity and equity-related securities of large-cap companies.  Investment Process   The scheme aims to maintain a minimum exposure of 80% towards equity and equity-related instruments of large-cap companies, selected based on a bottom-up approach focusing on long-term wealth creation.  Portfolio Composition  As per its investment objective, the equity exposure is majorly in large-cap stocks at 91.35%. Significant sectoral exposure is to banks that account for roughly one-fourth of the portfolio. The top 5 sectors hold nearly 58% of the portfolio.  Note: Data as of 28th Feb 2023. Source: ICICI Pru AMC  Top 5 Holdings for ICICI Prudential Bluechip Fund Name Sector Weightage % ICICI Bank Ltd Financial Services 9.34 Reliance Industries Conglomerate 8.02 HDFC Bank Ltd Financial Services 7.08 Infosys Ltd. Information Technology 6.65 Larsen & Tubro Ltd. Construction 6.55 Note: Data as of 28th Feb. 2023. Source: ICICI Pru AMC  Performance over 16 years  If you had invested 10,000 at the fund's inception, it would now be valued at Rs 66,660.  Note: Fund performance since launch; Inception Date – 23rd May 2008.  Source: icicipruamc.com  The fund has given consistent returns and has outperformed the benchmark over 15 years by generating a CAGR (Compounded Annual Growth Rate) of 13.77%. Fund Manager  The fund is ably managed by   Anish Tawakley – Managing this fund since Sep. 2018 & has overall 26 years of experience.  Vaibhav Dusad - Managing this fund since Jan. 2021 & has an overall nine years of experience  Who should invest?  The scheme is suitable for investors who wish to invest in large-cap stocks   That is relatively less volatile than other stocks,  Have a well-proven track record and solid fundamentals, and can deliver consistent long-term returns.  Why invest?  The scheme provides diversification to investors who wish to park their funds across various themes and sectors.  The benchmark sector-neutral approach gives investors confidence that the funds parked are invested in line with the benchmark.  Horizon  One should look at investing for a minimum of five years or more.  Investment through Systematic Investment Plan (SIP) may help tackle broader equity market volatility.  Conclusion  The fund has consistently outperformed its benchmark. Also, since it is a large-cap fund, it has the potential for capital appreciation with less volatility than small-cap and mid-cap funds. Hence, investors seeking to invest for a long-term time horizon intend to generate good returns with relatively lesser risk.  Disclaimer:This is not recommendation advice. All information in this blog is for educational purposes only.