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Grab the Benefits of the Market!!! Invest in Mutual Funds!

The sudden hit of Sensex beyond the milestone index of 60,000 has become the buzzing matter among Indian investors. The consistency in growth and return in several stocks, bonds and mutual funds has increased the probability of a less volatile and stable market in which the investors can believe. After the trauma of the 2nd wave of COVID 19 in India, the market is gaining its strength. So, it is high time to grab the benefits of the market through investing in several schemes of mutual funds.

We know very well that mutual fund investments are subject to market risk. When the market provides a consistent return, so many investors refrain from investments from the fear that the market might fall again. On the other hand, there are prospective investors who choose a bull market to invest in because a bull market ensures that the condition of the economy is favourable and the market has more potential to rise.

The Sensex index hit 61,305.95 today (14 October 2021) at the end of the week. It crossed the historical index of 60,000 for the first time on 24 September 2021, less than a month ago. In the meantime, it has fallen for a few days but it came back once again and is on rising till the date. The present scenario proves that the Indian market has regained its stability. The small and medium cap companies (as per the present market capitalisation) are rising almost simultaneously with the large-cap companies.

Mutual Fund is the most reliable way when you think of flexibility and high return simultaneously. Despite the volatile market during the COVID 19 phase in 2020 and 2021, most of the funds proved themselves capable enough to fight in any hard situation. Even there have been few funds that we’re able to secure more than 50% annual return. So, one thing is very clear, mutual funds were able to scatter the risk factor when the market was volatile. Because the mutual fund portfolio follows diversification so that the investors get a standard return even when there is a bear market.

So, it is quite clear that mutual funds are able to bring you high returns in the bull market. The market is able to provide you with a post-positive return in this condition. Market’s staying with the historical index of 60,000 for a longer period assures you the probability of handsome return in the coming period of timeTo be able to catch the benefits of the market, we may consider the following while investing:

  • Invest in mutual funds rather than stocks. When you have a chance to lose capital for a specific stock, mutual funds comparatively lower the risk factors through diversification.
  • Invest for the long term. at least for a three years’ locking period for a desirable return.
  • Though most investors invest in equity mutual funds, it is better to keep 20-30% of your investments in other funds like focussed funds, hybrid funds, or debt funds.
  • Determine your risk appetite and investment horizon wisely before choosing any fund.
  • Read fund related documents carefully before you proceed with investments.

You can grab the benefits of the market when you invest sensibly and wisely. To determine the level of benefit you can get from the present market a sincere study on the market condition of the present and the past is essential. You may consult an AMFI registered mutual fund distributor for more information.

Equity PMS: A Tailor-Made Portfolio Management System

Equity PMS

Why Equity PMS?

Most of the investors are aware of the Mutual Fund investments and at the same time, they are unaware of Equity PMS, a more customisable way of creating an investment portfolio. Financial investment is not a child’s game but a matter of sincere education and continuous research. There are so many plans and funds across the market which promise you to give a very good return by its face value. But if you do not study sincerely all the terms and conditions before investing, you are prone to a great loss that might be unbearable. So, you need to be cautious and think about the risk factors clearly before making any decision. Equity Portfolio Management System is a way to organize your investments according to their risk factors and returns. If you can know the ultimate risk and the probable return of your investments, you can deal with your investments and set your financial goal better. 

Equity Portfolio Management System is monitored and managed by professionals in the fields of financial investments to help you to manage your wealth and investments. These dedicated portfolio management professionals provide you with the right guidelines to invest in different equities, debts, and funds in the contemporary markets so that you can be conscious of the risk factors and returns over the course of time. The specialized management team guides you to choose specialized investment strategies to invest in the right funds. As you give the management powers to your investments to the portfolio management professionals, they invest in different large, medium, and small capitals to reduce and scatter the risk factors and ensure the best possible return out of the market situation. You have more freedom over the investments when you are investing through equity PMS because, unlike mutual fund investment, you bear risks of your investments here.

Different types of Equity Portfolio Management System

Equity Portfolio Management System has different types on the basis of tenure and risk factors. A large-cap oriented equity PMS has a moderate risk factor and moderate return history. It has a 12-15% average return history when invested in a tenure of 3-5 years. A multi-cap-oriented equity PMS has a high risk and high return history; it has provided a 15-18% return in the time horizon of 5-7 years. A mid and small-cap equity PMS is run over a period of 7-10 years. This type of equity PMS is the most attractive investment scheme for those who can take a high risk to get a probability of maximum return out of their investment. This type of equity PMS has more than 18% return history in the last few years. 

Though Equity PMS has ensured many investors high returns in the last few years, it is not always suitable for medium or low budget investors. As per the records of the companies which operate Equity PMS across India, the investors here invest a big amount not less than 25 lakh per year. Hence, unlike Mutual Funds, Equity PMS can hardly attract the middle class and lower-middle-class customers in their financial schemes.  When mutual funds offer so many flexible options to choose investments in so many ways as per the financial capabilities of the customers. But if you want freedom in financial investments and if you want to organize your investments in several categories according to their risk factors and return possibilities, Equity PMS is a good option for you. 

You can call equity PMS the tailor-made portfolio management system that helps you to organize your investments as per your needs and investment goals. This is more specific than mutual funds and a more customized way of investment especially for you. A dedicated team of professional portfolio management systems does research and analysis for you before you opt for any scheme in the market. Hence, equity portfolio management system might help you to get the best return by reducing the risk factors of your hard-earned investments. You can consult an AMFI registered mutual fund distributor for your tailor-made portfolio management system. 

How to choose the best Mutual Funds for SIP?

If you are looking for the best Mutual Funds portfolio for SIP, you have to think of a few factors before investments. The performance of all existing SIP portfolios changes from time to time. Hence you need to do a sincere study of the SIP portfolios of several mutual funds over a course of time to determine the scope of return and risk factor.  Many mutual funds offer you a readymade as well as personalized SIP portfolio according to your need. You have to be highly aware of your own financial goal and risk profile before choosing the right scheme. 

Determiners for the Best Mutual Funds for SIP

A sound past record: A sound and consistent SIP portfolio over a few years increase the reliability of a mutual fund. Every mutual fund pulls investments from individuals to research a specific financial goal. Track the record of return over an SIP scheme of a mutual fund over the course of the last three-five years and calculate the wealth it can offer you in the longer run.  If the financial goal of a mutual fund SIP scheme matches your financial goal, you may consider it for investment.  

Risk factor: Only a consistent record of return over the past few years doesn’t calculate the risk profile of a mutual fund. Rather you should determine it through investing the type of funds these mutual funds invest. Through an SIP, you invest in the various schemes of a mutual fund. Mutual funds invest a major portion of your amount in equities. You need to verify the SIP portfolio to determine where is your money going and how is the risk factor. Mutual funds investing money through SIP in large-cap equity funds are less volatile, though this might bring you comparatively low returns. If the mutual funds invest in medium and small-cap funds through the SIP money, this becomes comparatively riskier. However, you get the chance of a maximum return in such schemes. So, it is very essential to determine your own risk appetite before choosing a mutual fund for SIP. 

Duration of investment: You should know your own timeline of investments when you are opting for. If you wish a comparatively secured return in short term investments, you should choose the mutual funds whose SIP portfolio mainly consists of debt funds. If you think of long term investments (more than 5 years), invest in equity funds through SIP. Determining your own timeline would help you to choose the right mutual fund for SIP. 

Return scheme: Investments in equity funds through SIP for a long time is likely to bring a handsome return for an investor. Equity funds or stock funds are ideal for those who want to get a higher return with their long term investments through SIP. But these types of investments are comparatively volatile. If you are satisfied with a comparatively low but secured return, you can invest in debt funds through the SIP of a mutual fund. Debt funds are owned by government bodies, big corporates, and organizations; and hence it carries lesser risk. In mutual fund investments, risk factors are mostly parallel to the return possibilities. If you have a greater risk appetite, you are entitled to get higher returns. Choose a mutual fund on the basis of their investment portfolio so that you get the desired return through your investment in it. 

Amount and frequency: Mutual funds offer you the chance to invest amounts according to your own financial condition. You can invest an amount as low as Rs 500 in a specific interval (weekly, monthly, quarterly) through an SIP in a mutual fund. Determine the surplus amount after all your liabilities and select a plan that goes with your profile and investment goal. Mutual funds provide you flexible schemes of SIP through which you can increase, or decrease the amount of your investment. 

A systematic investment plan (SIP) is ideal for new generation investors who are willing to take a smaller risk for a higher return. Choosing the best mutual fund for starting your SIP is necessary because everyone has different dreams and different financial goals. You can invest online in any scheme of a mutual fund according to your investment goal and risk appetite. Hope our guideline will help you to choose the best mutual funds for beginning your SIP. You may consult an AMFI registered mutual fund distributor for proper guidelines before your investment. 

How to choose the best SIP plans?

How does an SIP work?

Mutual Fund investment has become accessible to all types of investors due to its flexibility and variety of schemes. Systematic Investment Plan (SIP) is one of the popular investment plans among mutual fund investments. Through the SIP scheme of a mutual fund, an investor invests a fixed amount in fixed intervals. Mutual funds create a common portfolio with an amalgamation of equity, stocks, bonds, securities of different types as per the present market condition. Then it divides the investment value among the investors into different terms as per the financial capabilities of investors. SIP is like the recurring deposits in public and private banks. But the difference is that you count a fixed annual interest rate (generally 5-8%) when you invest in banks’ recurring schemes. In SIP, your return might be much higher than the banks’ recurring scheme as per the market condition. There is a risk factor too in SIP, but the skilled professionals engaged in mutual funds try to get the best return from the market. 

When you invest online in SIP of a mutual fund, a fixed amount is deducted from your bank account after a fixed interval. Then you are provided with the units according to the Net Asset Value (NAV) of the mutual fund. NAV is the total asset subtracting the total liabilities of a mutual fund; it is divided among all the investors in that fund. You get additional units after every instalment paid. After a fixed tenure, you can encash your investments. You can also withdraw a portion after the lockin period.  Unlike recurring deposits or fixed return plans of insurance companies, mutual fund investments bring you opportunities for more returns with a minimum risk factor. The reason behind this is that it is an almost commission-less investment, and you can manage everything online virtually. 

Best SIP Plans

Which are the best SIP plans in the market? This question is a common one among investors nowadays. But the answer is not simple. Determining the best SIP plans depends on the nature of the investment, your financial capability, and your investment goal. A focus on the classification of the SIP will help you to choose the best Systematic Investment Plan (SIP) for you. 

Flexi SIP & Top-up SIP: Flexible SIP plan or Flexi SIP offers you the opportunity to invest as per your financial capability from time to time. Unlike most other SIPs, you are not liable to invest a fixed amount, rather you can increase and decrease it. On the other hand, top-up SIP offers you the chance to add an extra amount to the existing amount of your SIP instalment. This helps you to reach your goal faster with the progression of your income. 

Perpetual SIP & Trigger SIP: In perpetual SIP, you don’t have to follow a mandatory lock-in period, you can close and withdraw your money anytime. Trigger SIP gives you the option to switch your investment plan according to the market condition. 

Advantages of SIP

SIP provides you with the following advantages which are missing in a fixed or recurring deposit in a bank or other financial organizations:

  • You can invest in top companies with a minimum amount like Rs 500 per month through an SIP. 
  • The return rate of SIP is much higher. 
  • You get the option to increase/decrease the value of your investments in SIP.
  • You can withdraw your money after a lockin period or anytime based on your plan. 
  • SIP under the ELSS scheme provides you tax benefit U/S 80C.
  • SIPs are managed by skilled professionals. You have the chance to get the best return. 
  • SIP plans are flexible and customized according to your need, financial condition, and financial goal. 
  • SIPs are offered by mutual funds registered under SEBI
  • Your investment in SIP is almost commissionless and paperless. You can invest yourself online. 
  • SIPs grow your wealth and make you a disciplined investor. 

If you can invest wisely in SIPs of mutual funds, you can grow your wealth faster. However, mutual fund investments are subject to market risk. You need to go through all the terms and conditions before any investment. You may consult an AMFI registered mutual fund distributor to know more. 

Mutual Fund vs Asset Management Company (AMC)

A Mutual Fund company is also known as an Asset Management Company (AMC) that collects funds from so many individual investors to invest in diversified portfolios containing equities, shares, debts, and securities. In Equity PMS, an investor recruits a personal portfolio manager for managing all his investments. This is not possible for the middle class and lower-middle-class investors. An Asset Management creates an opportunity for investing in securities like stocks, bonds, debts for the investors irrespective of financial status. They create a Mutual Fund of a diverse portfolio by investing in large and small-cap equities as well as debts and other securities. The skilled fund manager organizes a common financial investment portfolio on the basis of present market conditions. Then money is pulled from individual investors and it is invested against that portfolio. As Mutual Fund companies do all the things under the supervision of skilled professionals, you possess a high chance of a handsome return. You can be a part of this goal-based investments just through investing online

An Asset Management Company recruits highly qualified professionals for the perfect allocation of investments. They organize the funds thinking of return prospects and risk factors. An equity-oriented mutual fund gives priority to return and it invests more than 60% of its wealth in equity shares of different companies. A debt oriented mutual fund gives priority to safety, it invests the major portion of wealth in debt securities of government, municipal corporations, and corporates for a systematic return. At first, an AMC creates a portfolio considering the risk and return factors, then it pulls up the funds from the investors and invests in the market. An AMC offers so many schemes for the investors according to the financial goal of an investor. You have to read carefully the details of all the schemes before investing. 

Mutual Fund companies need to abide by specific norms of the Reserve Bank of India (RBI), and the Security and Exchange Board of India (SEBI) for running their business. On the basis of their company profile, wealth management scheme, capitals, past records, and other factors, SEBI provides registration to the AMCs for running schemes with Mutual Funds. Before investing online in a Mutual Fund, an investor needs to investigate the profile of the AMC, its past record of return over the past few years, and the flexibility of the schemes. The SEBI registered Mutual Fund Companies* (as of October 20, 2020) are:

  1. Axis Mutual Fund
  2. Baroda Pioneer Mutual Fund
  3. Birla Sun Life Mutual Fund
  4. BNP Paribas Mutual Fund
  5. BOI Axa Mutual Fund
  6. Canara Robeco Mutual Fund
  7. CRB Mutual Fund – Suspended
  8. DHFL Pramerica Mutual Fund
  9. DSP Blackrock Mutual Fund
  10. Edelweiss Mutual Fund
  11. ESSEL Mutual Fund
  12. Franklin Templeton Mutual Fund
  13. HDFC Mutual Fund
  14. HSBC Mutual Fund
  15. ICICI Prudential Mutual Fund
  16. IDBI Mutual Fund
  17. IDFC Mutual Fund
  18. IIFCL Mutual Fund (IDF)
  19. IIFL Mutual Fund
  20. IL&FS Mutual Fund (IDF)
  21. Indiabulls Mutual Fund
  22. Invesco Mutual Fund
  23. ITI Mutual Fund
  24. JM Financial Mutual Fund
  25. Kotak Mahindra Mutual Fund
  26. L&T Mutual Fund
  27. LIC Mutual Fund
  28. Mahindra Mutual Fund
  29. Mirae Asset Mutual Fund
  30. Motilal Oswal Mutual Fund
  31. Nippon India Mutual Fund
  32. PPFAS Mutual Fund
  33. Principal Mutual Fund
  34. Quant Mutual Fund
  35. Quantum Mutual Fund
  36. Sahara Mutual Fund
  37. SBI Mutual Fund
  38. Shriram Mutual Fund
  39. SREI Mutual Fund
  40. Sundaram Mutual Fund
  41. TATA Mutual Fund
  42. Taurus Mutual Fund
  43. Trust Mutual Fund
  44. Union Mutual Fund
  45. UTI Mutual Fund
  46. Yes Mutual Fund

The Association of Mutual Funds in India (AMFI), a non-profit organization promotes mutual funds based financial investments in India. 44 of the SEBI registered Asset Management Companies (AMCs) are its members. Consult with an AMFI registered mutual fund distributor for getting more details about the mutual funds’ schemes and investment guidelines. 

*Source: The official website of Securities and Exchange Board of India (SEBI)