The ever changing and continuously evolving mutual fund industry has seen a recent surge in assets and sky-rocketing stocks in India. With banks reducing their rate on fixed deposits and low returns on other assets such as real estate and gold, investing in Mutual Funds has become the most desirable option amongst the masses and we, at Midas Money, offer a rich and diverse network of consultants who help with inculcating a proper understanding of the markets and the right way forward to swell one’s wealth.
We recommend our clients to invest in well run and reasonably valued companies which have deep and wide financial net around them, resulting in robust cash flows. Maintaining an appropriate mix of risk and return is important for a stable investment portfolio and we vouch for that with our clients.
Our diligent investment process ensures that the companies which we evaluate on their strengths and sustainability have demonstrated superior economics and growth trajectory in the past.
An open-ended fund is available for subscription and repurchase on a constant basis. These types of mutual funds do not have a fixed maturity period. Investors can conveniently buy and sell units at NAV related prices, which are declared on a daily basis. The key feature of open-ended fund is liquidity.
A close-ended fund has a specified maturity period e.g. 5-7 years. These funds are open for subscription only during a specified period at the time of launch of the fund. Investor can invest at the time of initial public issue and thereafter buying and selling of units on stock exchange where the units are listed. These mutual funds disclose NAV generally on a weekly basis.
Equity Funds normally invest a major part of their corpus in equity shares. Equity Funds are high risk funds and their returns are linked to the stock markets. They are usually considered high risk - high return funds. The aim of equity funds is to provide capital appreciation over the medium to long- term. They are best suited for investors who are seeking long term growth.
Sector Funds invest primarily in equity shares of companies in a particular business sector or industry. While these funds may give higher returns, they are riskier as compared to diversified funds. Investors need to keep a watch on the performance of those sectors/industries and must exit at an appropriate time.
These funds invest in the same pattern as popular stock market indices like CNX Nifty Index and S&P BSE Sensex. The value of the index fund varies in proportion to the benchmark index. NAV of such schemes rise and fall in accordance with the rise and fall in the index. This would vary as compared with the benchmark owing to a factor known as “tracking error”.
These funds offer tax benefits to investors under section 80C of the Income Tax Act, 1961. They are best suited for long term investors seeking tax rebate and looking for a long term growth.
Invest a mix of equity (at least 65% of the corpus) and debt. These funds are less volatile than pure equity funds because of the mixed portfolio. The debt investments provide stability in times of volatility. These funds are suitable for very conservative equity investors.
These funds invest predominantly in rated debt / fixed income securities like corporate bonds, debentures, government securities, commercial papers and other money market instruments. They are best suited for the medium to long-term investors who are averse to risk and seeking regular and steady income. They are less risky when compared with equity funds.
These funds invest in highly liquid money market instruments and provide easy liquidity. The period of investment in these funds could be as short as a day. They are ideal for corporates, institutional investors and business houses who invest their funds for very short periods.
These funds invest in Central and State Government securities and are best suited for the medium to long-term investors who are averse to risk. Government securities have no default risk.
As the name suggests, invest mostly in debt and a small part of the corpus in equity. The equity part of the portfolio would provide extra returns, but the exposure also makes them a little risky. Invest with a horizon of three years or more.