Newsletter Dated 13-10-2021

KNOWLEDGE CENTER

 

Categories of Mutual Fund

 

       

CATEGORY

DESCRIPTION FEATURES BENEFITS

   Large Cap Fund

Large-cap mutual funds are an open- ended equity scheme with a majority investment in the stocks of large-cap companies.

Large-cap mutual funds allocate a minimum of 80%  of the pool for investment in equity & equity related instruments of large-cap companies

The corpus of the large-cap mutual fund is invested in stable companies with a long track record of robust financial performance with established operations. They can have the lowest volatility among equity mutual funds because large-cap companies’ stock prices fluctuate less and these companies have years of business experience. You have the scope for a steady wealth creation opportunity by investing in largecap funds

Large & Mid Cap Fund A large & mid-cap fund is a mutual fund scheme that brings the benefits of investing in both large-cap and midcap companies

Minimum 35% of the total assets of the large and mid-cap fund consists of equity & equity related instruments of large-cap companies. Another 35% of the assets are made up of equity & equity related instruments of mid-cap companies.

 

Large and midcap funds capture the stability offered by the large-cap stocks and the growth opportunities of a mid-cap fund

   Mid Cap Fund

The mid-cap mutual fund schemes are an open-ended equity mutual fund that predominantly invests in shares of mid-cap companies.

Mid-cap mutual funds have a minimum investment of 65% of the total assets in equities & equity related instruments of the mid-cap companies. The mid-cap companies are  in a growing phase and have expansion plans. Hence, the mid-cap mutual funds are more aggressive than large-cap mutual funds.

 

The mid-cap mutual funds offer higher returns but also carry a higher amount of risk due to investment in midcap companies.

Flexi cap Fund

Flexi Cap Fund is an open-ended equity scheme that invests in shares of large-cap, mid-cap, and small-cap companies.

An open-ended scheme means that the mutual fund has no fixed maturity period. The scheme is always available for subscription and redemption
A Flexi-cap fund allocates a minimum of 65% of the total assets for equity & equity related instruments

Flexi-Cap funds are the most diversified equity funds. Hence, you have a lower risk as compared to individual large, mid or small-cap focused funds. You get the benefit of stability from large- cap and returns from mid and small-cap stocks. Thus, with the Flexi-cap fund, you have a Flexible portfolio with considerable returns. Flexi-Cap funds can be used to create long- term wealth. These are of great value to create a multipurpose corpus.

Small cap

 

A small cap fund is an open-ended equity scheme that invests a major portion in small cap stocks

A minimum of 65% of the total assets of the small cap mutual fund is invested in equity & equity related instruments of small-cap companies.

Small cap companies are future companies with very high growth potential. They have the highest risk but  also have the potential to generate the highest returns.

Small Cap mutual funds empower investors to earn profits from growing companies. While institutional investors are heavily invested in the more stable funds, individual investors can pick some of the best small cap growth funds, small cap value funds, and small cap index funds to earn high returns. Small cap mutual funds are ideal for aggressive investors who seek higher returns and are comfortable with high risk. It is worth noting that small cap companies

Value Fund

Value funds are an open-ended equity scheme that follows a value investment strategy

The portfolio of value funds is constructed on the principles of value investment strategy. The minimum investment in equity & equity related instruments is 65% of the total assets.

 

You benefit from value funds by the long- term wealth creation opportunities

 ELSS

ELSS is an open-ended equity- linked savings scheme with a statutory lock-in of 3 years

ELSS invests a minimum of 80% of total assets in equity & equity related instruments in accordance with Equity Linked Saving Scheme, 2005 notified by the Ministry of Finance.

ELSS investments allow tax deductions of up to Rs. 1.5 Lakhs under the Income Tax Act, 1961. Compared to other tax saving options ELSS have the lowest lock-in period of three years. ELSS funds have a lock-in period that helps in the reinvestment of returns and ultimately end up generating higher returns. Thus, ELSS serves the dual purpose of tax saving/ planning and generating higher returns from equity investment. Apart from that, you benefit from diversification, professional fund management and low-cost investment through SIP when you invest in an ELSS fund.

 

 Mutual fund SIP RETURNS-

 

 

  CATEGORY AVERAGE RETURNS

 

 

 

 

 - CA JAYESH GANDHI

 Disclaimer: This is an informative document and opinions expressed in it are our own and not any advice. We are certified investment advisors yet to be SEBI registered. We are AMFI registered MUTUAL FUNDS DISTRIBUTOR.

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At mygoalmyplan we make an attempt to understand the client’s ultimate goal, for which one wishes to build wealth; and advise them in choosing amongst various financial products to accomplish it. In our quest to provide seamless services, we have partnered with one of the leading MF distributors in India, NJ India Invest.

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