Mutual Funds

Mutual Funds

Mutual Funds “Common Investor neither have skills or expertise nor have the capital and time to directly invest and also track his investments in capital & bond markets. Mutual funds is one of best investment instruments available to common man for long term wealth creation. Investing in a Mutual fund offers an excellent opportunity for diversifying risk as well as Investment portfolio”. One could have Proper Asset Allocation through Investments in to various categories of Mutual Funds schemes.“

What is Mutual Fund?

Mutual fund is where money of different investors with common objective is pooled in with an aim of investing in various securities. With mutual funds you may invest in multiple instruments like stocks, bonds, money market securities, gold (in ETF through gold Fund) or by combining these instruments to invest your funds in diverse areas. To help investors attain their financial goals, these schemes are handled and maintained professionally.

Benefits of Investing

  • Professional Management of money
  • Diversification to your portfolio
  • No Entry Loads
  • Highly Liquid in nature
  • Well regulated
  • Low cost of investment due to economies of scale
  • SIP Investing Plan

Investing in Mutual Funds can also be done by Systematic Investment Plan (SIP). It helps you in preparing for future by integrating a systematic and disciplined investment to allow you benefit from the powerful tool of rupee-cost averaging & power of compounding. Systematic Investment Plans is one of the most powerful tools of financial planning. SIP aims at creating wealth by investing small amount of money at regular intervals over a specific period of time. SIP also cultivates the idea of investing money at early stage of life so that the investors find their financial goal by resting on pillars of discipline & consistency.

Advantages of Investing in an SIP:

  • Disciplined approach for investing.
  • SIP can be started with small amount of INR 500 or INR 1000.
  • Through SIP, you cannot go wrong with the timing of investments due to continuity of investments over a period of time.
  • Road map to save for big events in life like child’s education, child’s marriage, buying a house step by step..
  • The thumb rule of compounding serves as effective tool for wealth creation by reaping cumulative returns over the years
  • The principle of rupee-cost enables you to lower the average cost of investment.

Types of Mutual fund

Equity Fund

Equity funds mean to typically invest your money in stocks of companies. These aim at yielding comparatively higher return. Equity fund has moderate to high degree of risk. This type of fund is ideal for investors who have long term investment goals. There are different categories as here under:

  • Large Cap Funds
  • Multi Cap Funds
  • Mid-Cap & Small Cap Funds
  • Sector Specific Funds
  • Tax Savings Funds (ELSS)

The gains from Equity fund are not taxed after one year. One could invest in to ELSS /Tax Saving Fund to get exemption U/S 80 c of IT act.

Debt Fund

Debt Funds invest in long-term borrowing of the government or corporate issuers at fixed rates of interest. Funds in this earn returns from interest payments which are received from bonds or gilts and the fluctuations in the market price of their holdings. Debt funds are suitable for investors who look for low risk rate. There are different categories in debt funds and these include Income Funds, Monthly Income Plan, Gilt Funds, Dynamic Bond Fund, Credit opportunities Fund, Short term & Ultra Short term and Liquid Funds etc.

Balanced Funds

With hybrid funds, you invest in both equity as well as debt markets. Hybrid funds or hybrid investments are good for investors who seek to have higher return in comparison to debt funds. Hybrid funds have higher risk level. Hybrid funds can give an additional boost to your investor’s portfolio as it includes investment of your money in equity markets too.

Balanced Funds

Shriram Equity & Debt Opportunity Fund

Asset Allocation

Asset allocation is a significant element of financial planning. Depending on the performance and risk level of different asset classes, it becomes difficult for investor to decide how to distribute funds. One needs to constantly keep an eye on macro-economic factors and forecast to evaluate and analyze the right time to have a portfolio mix. This is how and where asset allocation-oriented mutual funds come in.

Shriram Equity and Debt Opportunities Fund

Shriram Equity and Debt Oriented Fund is an open ended equity oriented asset allocation scheme. Depending on the outlook of the market, with this scheme you can move across equity, debt or cash. By taking bets on the relative valuation of different assets, the scheme seeks to create superior risk adjusted return. The scheme was launched on 8th November 2013 and re-opened for ongoing sale & repurchase on 6th December 2013.

What is the suitability of this scheme?

This scheme is beneficial for investors who have an aim to build long term wealth within 3-5 years. The minimum amount is Rs.5000.00 for lump sum investment and therein multiples of Re.1. Minimum investment for monthly SIP amount is Rs 1000 per month.

What is the Fund management process & investing style?

The fund has robust investment process which encloses profitability, business attractiveness, competitive positioning, balance sheet strength, management track record, corporate governance, valuations etc. This investment type follows a combination of top down and bottom up approach. For example, the AMC uses top down approach to focus on a particular industry which it believes will likely outperform. Once the sector is decided, it uses bottom up approach to finalize the company which will give better value for money.

How did the scheme perform?

The Fund has so far declared 24.5% dividend since launch.

Who is the Fund Manager?

The Fund is managed by Mr Partha Ray who is an alumnus of IIT, Kharagpur and IIM, Bangalore with more than 20 years’ experience in the banking industry. While focusing on quality stocks, the scheme has performed well.

Other Schemes
  • Tax Saving Schemes:
    Tax-saving schemes offer tax rebates to the investors under tax laws prescribed from time to time. Under Sec.88 of the Income Tax Act, contributions made to any Equity Linked Savings Scheme (ELSS) are eligible for rebate.
  • Index Schemes: Index schemes work on attempting to replicate the performance of a particular index like BSE Sensex or NSE 50. The portfolio of these schemes consist of only those stocks which comprise of this index. The percentage of each stock is identical to the stocks index weightage of the total holding. The returns in these schemes is more or less equivalent to those of the Index.
  • Sector Specific Schemes: According to these schemes or funds, you invest in securities of only those industries or sectors that follow a specified document. These include Pharmaceuticals, Software, Fast Moving Consumer Goods (FMCG), Petroleum stocks, etc. Returns in these schemes are dependent on the performance of the respective industry or sector. These schemes or funds have higher rate of risk and give higher returns. In these schemes, the investors must keep a keen eye on the performance and know the most appropriate time to exit.
  • Gold Fund: This includes investing on gold as an asset by gold fund. Gold Funds are open-ended mutual fund schemes which invest in units of Gold ETF. Investors can buy, sell, hold, and conduct SIP/STP/SWP in these funds. This is a cost-effective way of investment as investors do not have to incur any charges for de-mat account or brokerage charges and can accumulate through SIP.

    Gold Sector Funds is another gold fund sector for investment. In this, the funds will be invested in shares of companies that work in gold mining and processing.


  • “Mutual Fund Investments are subject to market risks, read all scheme related documents carefully before investing.”


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