post 16
Dated18/5/2020
Mutual Funds
snippet Today we will find uncover all the major types of funds and their investment options

So we now have got Smart goals and now it’s the time to work for them. To plan for a financial goal we need to start saving….Rather investing as I would say, Because savings won’t grow your money rather inflation will eat away, So don’t save but invest

Now we need to agree upon a fund that can meet our required returns for a goal, Now if we are planning a long term asset we must consider the last 6 months for lower return of about 7%, Because when we reach near our goals, We should shift our money from high risk aggressive equity fund to a safer and stable debt oriented funds. This is a healthy practice to avoid last term uncertanities and failure of our smart Goal because a goal failing won’t be smart enough.

The several major types of Funds for consideration are
Equity Oriented for Long Term These are generally aggressive and have higher risk so these are apt for initial long term investments that can be used to raise aggressive returns. These should be avoid during last time period of our Goal
there are several calssification for a fund in Equity market but these are generally classified based on the market cap (size) of companies involved.

  1. Large Cap Funds funds investing in Large cap companies are referred to large capThe market capitalization of these companies is very high – above Rs20,000cr. Large-cap companies have strong market presence and their stocks are generally considered to be very safe (low risk). Most of these companies regularly disclose information through media, such as newspapers. In other words, information on large-cap companies is very readily available.

  2. Mid cap Funds These Funds have mid cap companies in their portfolio Mid-cap companies are considerably smaller than large-cap companies in all fields of comparison – revenue, profitability, employees, client base, etc.

What attracts investors to mid-cap stocks is the possibility of investing in a company that could become an overnight success. Mid-cap companies have a tremdendous scope for growth and can potentially give higher returns in the 3-5-year investment horizon.

  1. Small Cap Funds These funds have companies which are smaller in size and revenue Most small-cap companies are either start-up enterprises or companies in the development stage. Understandably, they have low revenues and a small number of employees and clients. Information on these companies isn’t easily available to all. This is exactly what makes small-cap stocks a big winner for investors with a long investment horizon and a moderate-to-high risk appetite – not a lot of people know about the stock! However due to their nature, small-cap stocks are considered to be a highly risky investment

  2. Multi Cap Fund This is a special mixed flavour of above all three and can have different ratios according to your needs,You can select one.
  3. Focused Funds These are several funds having some selected companies to focus their investment on, Axis Focused 25 fund, HDFC top 100 fund.

Now there are several funds those have their companies selectted based on a specific type of companies, like those of a specific sector of economy,
several examples are -

  1. Sectoral Pharma: Investing in only pharma companies
  2. Thematic Energy: Investinf in energy corporations etc

There are a lot more flavours, Keep your savoury eyes ready tomorrow for next dose @5:30 PM.
happy Investing