Overview

Mutual funds are great for investors who wish to invest in different kinds of investment schemes that have different goals but don't have the time or expertise to choose the most profitable stocks. Mutual fund investments offer the benefit in professional oversight, less transaction costs, as well as diversification, liquidity, and tax benefits.

Advantages of Mutual Fund

  • One of the main advantages of investing in mutual funds is the fact that your funds are handled by experienced money managers who have many years of experience investing.
  • Its performance can be evaluated in relation to the returns they provide. Mutual funds have historically provided higher returns than any other investment option, including Bank FDs.
  • Since mutual funds are invested in a mix of bonds, stocks and so on. It is possible to have an array of portfolios that are diverse even with a modest sum of money, which helps to reduce risk too.
  • Mutual funds are regulated by SEBI. The strict regulations ensure that mutual funds adhere to transparent procedures and that the investors' rights are safeguarded.
  • You can also invest into tax saving funds called ELSS which applicable for tax deduction up to Rs 1.5 lakh/annum under Section 80C of the Income Tax Act, 1961.

Equity Link Saving Schemes

An ELSS – Equity Linked Savings Scheme is akin to a Diversified Equity Fund. It is a type of mutual fund that qualifies for tax exemption under section 80 c. Also unlike those equity funds which require minimum investments of Rs. 5000, one can invest in ELSS with as low as Rs. 500 by means of SIP (Systematic Investment Plan). The returns from ELSS depend on the stock market and hence tend to be volatile, but then they are generally higher than the returns generated from traditional tax saver instruments
An ELSS is an equity oriented mutual fund scheme in which the majority corpus (about 80-100%) is invested in equities. As the allocation is done in equity which are considered as high return assets, the primary aim of such funds is capital appreciation. As it is linked to equity, it carries higher risk and is not as safe as NSC, PPF etc. It has a 3 year lock in period (which is very less compared to NSC, PPF etc.) post which it is like an open ended mutual fund. Investor needs to pay tax on premature withdrawal.

It is a classic investment option as it offers two benefits at once:

1. Capital Appreciation
2. Tax benefits
Tax Benefits in ELSS: Investment in ELSS is deductable from taxable income, hence reducing the taxable amount for the investor. Basically, the investor shall save tax at a rate depending on his income slab.
Tax free returns: Income/Returns on ELSS schemes (dividend and on redemption) is tax free under EEE (Exempt – Exempt – Exempt) regime of the Income Tax Act.

Equity Fund

Our team of Research Analysts and Advisory Managers guide you with solutions, backed by research, knowledge and expertise on a regular basis. We constantly help you with strategies for equity and derivatives investment, recommendations for trading on futures & options, hedging with Nifty and other products and opportunities of near risk free arbitrage between various segments.

Our Edge

  • Equity advisory team with trained equity professionals, who act as your Equity Advisor and help you take informed equity and derivatives investment decisions and build a healthy portfolio
  • Research support by a pool of skilled research analysts
  • We have dedicated RMs and Dealers
  • Focused services which make investments in equities simple.
  • Competitive brokerage rates
  • Call & Trade facility through a simple phone call

A robust trading platform

Debt Fund

These funds invest only in debt instruments and are the ideal option for investors who are averse to the idea of taking the risk associated with equities. We help you invest in Income funds, Floating rate funds, Gilt funds, Liquid funds and others based on your investment horizon.

Systmatic Investment Plan

Simply put, investing via an SIP entails making regular investments (generally) in smaller denominations as opposed to making an one-time lump sum investment. The intention is to capitalise on the volatility in equity markets by lowering the average purchase cost. While few would dispute the utility that an SIP can offer, there is a flipside to the same as well. In this article, we discuss the pros and cons of SIP investing.
How an SIP helps..

1. Lowers the average purchase cost

Perhaps the single most important advantage offered by an SIP is the opportunity to lower the average purchase cost. This is achieved in periods when equity markets experience a turbulent patch. Since the investment amount for each installment is fixed, the investor gains by receiving a higher number of units. An example will clarify this better. Suppose the monthly investment installment is Rs 1,000 and the fund's net asset value (NAV) is Rs 50; this will lead to 20 units of the fund being credited to the investor. However, in the next month on account of the volatile markets, the fund's NAV falls to Rs 40. This will lead to a lowering in the average purchase cost; as a result, the investor will have 25 units credited to his account. In other words, an SIP can help investors benefit from volatility in equity markets.

2. Induces disciplined investing

Lack of disciplined investing is one of the major reasons for investors not achieving their financial goals. For example, often monies that are kept aside for investment purpose end up getting used for extraneous purposes. As a result, the investor is even further divorced from his goals. An SIP ensures that the investor continues to be invested in a disciplined manner and thereby stays on course to achieve his financial goals.

3. Lighter on the wallet

An often heard excuse for not investing is lack of monies. SIP takes care of this problem by lowering the minimum investment amount. For example, while the minimum investment amount for a lump sum investment in a diversified equity fund could typically be Rs 5,000, for an SIP it can be as low as Rs 500. As a result, investing via the SIP route becomes lighter on the wallet.

4.Makes market timing irrelevant

Alongwith cricket and movies, timing the market ranks as a popular pastime. Investors have an inexplicable urge for timing markets and trying to get invested when markets have bottomed out. It's a different matter that timing markets to perfection and doing so consistently is beyond most investors. An investment via the SIP route makes market timing irrelevant. On account of the on-going investments, investors can afford to bid adieu to one of their favourite pastimes and concentrate on more pressing matters