Direct & Indirect Taxes, Tax Ready Reckoner, Tax Management, Tax Act. & Rules, Tax Planning & Tax Savings.

Direct & Indirect Taxes, Tax Ready Reckoner, Tax Management, Tax Act. & Rules, Tax Planning & Tax Savings.

Equity Mutual Funds India

Equity mutual funds are those Mutual Funds which invest in Equity stocks, and as the value of the stock increases they are getting benefited by the rise in price in from of capital appreciation from this price rise, Not just that equity Mutual Funds are also get the benefit of dividend which the company declares to their investor.

But investing in equity is a very risky task because the equity market is very highly volatile and here the equity Mutual Funds role come into play as they have the professional who can manage this kind of risk and volatility and gain from there price rise in form of capital appreciation.

Equity Mutual Funds India
Equity Mutual Funds India

You wifi be surprise to know that almost one third of the mutual fund market is been acquired by equity Mutual Funds and almost more than 500+ schemes are there in equity mutual funds which a retail investor can choose to invest.

Investing in equity asset class can be proved to be a great wealth creator for the mutual fund investors to fulfill their financial goals such as:

  • Children’s Education
  • Buying the Own House
  • Buying a Car
  • Children’s Marriage
  • Holiday Trip Abroad
  • Retirement Planning

And more.

Usually it is been seen that for a period of 5 years and more equity as an asset class can do wonders in creating a great wealth.

And again the equity mutual fund class is further divided into following types:

  1. Large Cap Funds
  2. Mid Cap Funds
  3. Small Cap Funds
  4. Multi Cap Funds
  5. Large and Mid Cap Funds
  6. Contra or Value Fund
  7. Focused Funds (Focused Multi Cap)
  8. Dividend Yield Fund
  9. ELSS (Equity Linked Saving Schemes) Tax Saver Funds
  10. Sectoral Funds/Thematic Funds
  11. International Funds

We will discuss each and every category in detail and also discuss about top performing funds and the best performing funds in each and every category so that this book will not only help you to know what this funds are but also wifi become a guide to help you decide which category to invest in and what are the funds in which we can invest for better Returns.

Table of Contents

1.   Large Cap Mutual Funds in India

Large Capital Funds are those funds which are allowed to invest in Top 100 companies by market cap in recognised stock exchange in India and these Large Cap Funds have to invest a minimum of 80% of their total as that in their portfolio in the large cap companies.

Companies are generally considered to be the most stable in equity market scenario and the investment in large cap funds are less volatile than other funds and have consistent and stable return in long term. And not just that these company also declared dividend in regular intervals to their investor. These companies are generally the market leaders in their own businesses. And therefore they have a very good track record and sustainable stable management and these stocks are traded in large volumes and therefore the most important benefit comes by investing in large cap is of liquidity friends these are one of the highly liquid stocks available in the market And it proven that in difficult times in bear market large cap fund stay strong.

Lots of people say that large cap funds returns are not exceptional as midcap and small cap  which according to me is a wrong notion even large cap funds are capable of providing very good Returns in long term and sometime when more than 20% CGAR compounded return.
And in the market fall of 2018 we have seen the strength of large cap fund which is not only fallen less but also given returns better than that of midcap and small cap.

(1)   Should you invest in Large Cap Funds or not?

And the answer is a big yes as a mutual fund investor invest in large cap funds to gain stable returns from this category in your investment portfolio and this should be one of the most important category which must form part of core portfolio in your entire investment portfolio which will not give you a stable returns but also helps you in beating inflation in long term of more than 5 years and more and help you to create wealth with India’s top 100 company growth.

(2)   Best Performing Large Cap Mutual Fund Schemes

Fund Name Category Risk 1 Year Returns Rating Fund Size (in Cr)
Canara Robeco Bluechip Equity Fund Equity *Very High 47.9% 5* 3,691
Axis Bluechip Fund Equity *Very High 44.6% 5* 29,161
Mirae Asset Large Cap Fund Equity *Very High 46.8% 5* 27,435
BNP Paribas Large Cap Fund Equity *Very High 43.5% 4* 1,129
Edelweiss Large Cap Fund Equity *Very High 46.4% 4* 263

(3)   Average Performing Large Cap Mutual Fund Schemes

Fund Name Category Risk 1 Year Returns Rating Fund Size (in Cr)
Kotak Bluechip Fund Equity Very High 51% 4* 2,945
UTI Mastershare Unit Scheme Equity Very High 51.2% 4* 8,580
Invesco India Largecap Fund Equity Very High 49.1% 4* 369
ICICI Prudential Bluechip Equity Fund Equity Very High 48.9% 4* 28,288
IDFC Large Cap Fund Equity Very High 42.3% 4* 823
Principal Large Cap Fund Equity Very High 6.5% 4* 475
IDBI India Top 100 Equity Fund Equity Very High 52.4% 3* 486
SBI Bluechip Fund Equity Very High 49.7% 3* 29,244
LIC MF Large Cap Fund Equity Very High 45.1% 3* 568
PGIM India Large Cap Fund Equity Very High 48.1% 3* 332

(4)   Worst Performing Large Cap Mutual Fund Schemes

>          JM Large Cap Fund

>          Franklin India Bluechip Fund

>          Union Large cap Fund

>          PGIM India Large Cap Fund

>          Torus Large cap Equity Fund

>          Sahara Super 20 Fund

>          Baroda Large Cap Fund

>          IDFC Large Cap

2.   Midcap Mutual Funds in India

The Mid Cap Funds consists of Companies which are in terms of market capitalization in ranking of from top 101 to 250 companies in India. These are the mid-size companies which forms the part of portfolio of Mid Cap Funds and the Mid Cap Funds invest in these 150 companies to generate returns for the mutual fund investors. And according to the SEBI these Mid Cap Funds have to invest minimum of 65% of their portfolio in the Mid Cap Stocks. These Mid Cap companies has the growth potential to become future large cap companies but at the same time they are quite more volatile and risky than the large caps, but less than that of small cap. And in long-term it is proven that investing in mid-caps can generate a better alpha, more wealth and better returns than that of large cap.

But at the same time since these companies are not that big and stable like large cap, so investing in these companies could be a very risky decision as these companies are also greatly affected by the interest rate changes which seriously affect their balance sheet.

(1)   Shall We Invest in Mid Cap Funds or Not?

The answer is NO if you are investing for a shorter duration of time but if you are investing for a longer duration that is greater than 7 years to 10 years then midcap funds could prove to be a very good investment decision since these companies have large growth potential and due to this the investor can be benefited by the growth of this companies in long term.

It would be advisable to the mutual fund investors that you choose funds in Mid Cap category which are less volatile and give above average return on below average risk.

So aggressive investor it can be a part of their portfolio but for average investor or conservative investor midcaps are not the right funds to invest in since they are highly volatile.

Only if you have a heart to bear losses up to 20% in negative return then only you must opt for midcap funds.

(2)   Top Performing Mid Cap Mutual Funds

>>        Axis Mid Cap Fund

>>        Motilal Oswal Midcap 30 Fund

>>        Tata Mid Cap Growth Fund

>>        DSP Mid Cap Fund

>>        Kotak Emerging Equity

3)   Average Performing Mid Cap Mutual Funds

>>        Nippon India Growth Fund

>>        Sahara Midcap Fund

>>        Mahindra Unnati Emerging Business Yojana

>>        Mirae Asset Midcap Fund

>>        Franklin India Prima Fund

>>        BNP Paribas Mid Cap Fund

>>        Edelweiss Mid Cap Fund

(4)   Worst Performing Mid Cap Mutual Funds

>>        Invesco India Mid Cap Fund

>>        Torus Discovery (Midcap) Fund

>>        HDFC Mid-Cap Opportunities Fund

>>        ICICI Prudential Mid Cap Fund

>>        L&T Mid Cap Fund

>>        Baroda Mid-cap Fund – Plan A

>>        Sundaram Mid Cap Fund

>>        PGIM India Mid Cap Opportunities Fund

>>        UTI Mid Cap Fund

>>        SBI Magnum Mid Cap Fund

>>        Quant Mid Cap Fund

>>        Aditya Birla Sun Life Midcap Fund

>>        IDBI Midcap Fund

3.   Small Cap Mutual Funds

In mutual funds the small cap Universe consists of Companies which are not in top 250 companies listed in stock market which means that the company ranking from 251 and below in terms of market capitalization. And the mutual fund have large choice of stocks to invest in small cap funds almost greater than 1500 plus good companies.

And these small cap companies have large growth potential as they have enormous
growth opportunities compared to the large cap companies. And also so this makes them a probable multi-bagger in future.

But at the same time the small cap companies stocks are very volatile and risky for investment and there is also a greater risk of liquidity in small cap funds as they are less traded in stock market.

So with this kind of high risk investment it is very obvious that small cap fund is not meant for everyone because these funds have very big standard deviation and fluctuations in their Returns, like for example in 2018 down-market small cap funds have given a negative return ranging from — 25% to —35%, but at the same time this funds are also capable of giving 25% + Returns in long term.

See also  Bond (Fixed Income) Concepts under Mutual Fund Investment

1)   Should We Invest in Small Cap Funds?

And the answer for this question is only the investor which have very high risk appetite and which are very aggressive investors should only go for small cap fund and this small cap funds should not be the part of the core portfolio of a mutual fund investor instead this must be a part of satellite portfolio for add on to there for portfolio to give a boost to their Returns in their mutual fund investment.

And the investor who does not want to take so much of risk, and who are moderate and conservative investor they must strictly stay away from these small cap funds.

And one more point which small cap investor should keep in mind before investing in small cap fund is that never invest in small cap funds when they are at higher valuations. One should keep in mind that the small cap investment must be done when the markets are at all-time low at least 10 to 15% low.

(2)   Top Performing Small Cap Mutual Funds

>>        Axis Small Cap Fund

>>        SBI Small Cap Funds

(3)   Average Performing Small Cap Mutual Funds

>>        ICICI Prudential Small Cap Fund

>>        Franklin India Smaller Companies Fund

>>        DSP Small Cap Fund

>>        HDFC Small Cap Fund

>>        L&T Emerging Businesses Fund

>>        Aditya Birla Sun Life Small Cap Fund

>>        Canara Robeco Small Cap Fund

>>        Invesco India Small Cap Fund

>>        Kotak Small Cap Fund

>>        Nippon India Small Cap Fund

>>        Tata Small Cap Fund

>>        Edelweiss Small Cap Fund

(4)   Worst Performing Small Cap Mutual Funds

>>        Union Small Cap Fund

>>        Quant Small Cap

>>        Principal Small Cap Fund

>>        BOI AXA Small Cap Fund

>>        IDBI Small Cap Fund

>>        HSBC Small Cap Equity Fund

4.   Multi Cap Mutual Funds

From the name itself it is clear that the multi-cap funds are those funds which invest in all market capitalization that means all kind of stocks be at large cap stocks, Mid Cap stocks or small cap stocks. And fund has complete freedom of asset allocation also as there is no restriction of asset allocation percentage in their mutual fund portfolio so It can have zero to 100% in any of the market capitalization. The only restriction is that the multi-cap fund must have 65 % allocation in equity related instruments so that it qualifies for being equity fund and being taxable as equity funds.

And that makes multi-cap funds the most popular mutual fund among mutual fund investors.

And it has the capability to provide all season returns as the fund manager has the flexibility to switch from one market cap to another market cap as per the current market situation.
And this is one among those funds which forms an integral part of core portfolio of a mutual fund investor, the most important benefit of the diversification which they provide to a mutual fund portfolio because it diversifies your portfolio your risk among all the market capitalization.

And that’s make these funds a versatile fund to invest in mutual fund family.

(1)   Should We Invest in Multi-cap Funds?

Here I would like to be say that how can we leave such kind of fund which gives us of flexibility among all asset classes, among all market cap, among entire stocks available in the stock market. No we can’t and that’s why multi-cap funds is one of the most important fund in the portfolio of a mutual fund investor of all kind of risk profile of investors.

The only point, which we have to take care of before investing in multi-cap funds is that there are multi-cap funds which takes higher risk for higher returns and there are multi-cap funds which takes average risk for above average returns so for investor who is low on the risk appetite must go for the multi-cap fund which have lower risk and higher return and of course the mutual fund investors who have higher risk appetite can go for higher risk and that high return category of multi-cap mutual funds.

(2)   Top Performing Multi Cap Mutual Funds

>>       Axis Multicap Fund

>>        DSP Equity Fund

>>        JM Multicap Fund

>>        Parag Parikh Long Term Equity Fund

>>        Kotak Standard Multicap Fund

>>        SBI Magnum Multi Cap Fund

>>        Canara Robeco Equity Diversified

>>        BNP Paribas Multi Cap Fund

>>        UTI Equity Fund

>>        Tata Multicap Fund

>>        Motilal Oswal Multicap 35 Fund

>>        Edelweiss Multi-Cap Fund

(3)   Average Performing Multi Cap Mutual Funds

>>        PGIM India Diversified Equity Fund

>>        Baroda Multi Cap Fund – Plan A

>>        Quant Active Fund

>>        DSP 3 Years Close Ended Equity Fund

>>        HDFC Equity Fund

>>        Aditya Birla Sun Life Equity Fund

>>        Shriram Multicap Fund

>>        IDFC Multi Cap Fund

>>        Worst Performing Multi Cap Funds

>>        IDBI Diversified Equity Fund

>>        ICICI Prudential Multicap Fund

>>        Torus Starshare (Multi Cap) Fund

>>        L&T Equity Fund

>>        Invesco India Multicap Fund

>>        Franklin India Equity Fund

>>        HSBC Multi Cap Equity Fund

>>        Nippon India Multicap Fund

>>        Principal Multi Cap Growth Fund

>>        ITI Multi Cap Fund

>>        Sundaram Equity Fund

>>        Mahindra Badhat Yojana

>>        Sahara Growth Fund

>>        LIC MF Multicap Fund

>>        Essel Multi Cap Fund

>>        Union Multi Cap Fund

5.   Large and Mid-Cap Mutual Funds

According to SEBI the large cap and midcap funds are those funds which hold minimum 35% in large cap stocks and minimum 35% in midcap stocks. With this 35 % of restriction in each category of large cap and Mid Cap this form special category of large cap midcap fund which on the risk side is quite better than multi-cap fund as there is smaller allocation of small cap fund in their investment portfolio, and the investment tenure which is required for this kind of funds is minimum of 7 years to gain a good amount of Return out of this large and Mid Cap funds and returns which it gives is comparable to the multi-cap funds.

And therefore this newly formed category is one of the most important category which mutual fund investor should have there in their core portfolio, and also for those who don’t want much of the allocation to the small cap funds but want to hit the two market capitalization that is large cap and Mid Cap and with just one investment they can have the diversification of India’s top 250 companies.

And good performing fund are coming out in this category which has proven their metal by giving awesome Returns.

(1)   Should We Invest in Large Cap Midcap Fund?

The answer is yes why not when you can invest into market capitalization with just one investment then why not to have that fund in mutual fund investment portfolio.

The only thing which we have to you take as a caution is when the Mid Cap fund reach their higher valuation at that time one must not invest in this kind of funds.

(2)   Top Performing Large & Mid Cap Mutual Funds

>>        Mirae Asset Emerging Bluechip Fund

>>        Axis Growth Opportunities Fund

>>        Tata Large & Mid Cap Fund

>>        Kotak Equity Opportunities Fund

>>        Sundaram Large and Mid-Cap Fund

>>        LIC MF Large & Mid Cap Fund

>>        Invesco India Growth Opportunities Fund

>>        Canara Robeco Emerging Equities

(3)   Average Performing Large & Mid Cap Mutual Funds

>>        DSP Equity Opportunities Fund

>>        Edelweiss Large and Mid Cap Fund

>>        Aditya Birla Sun Life Equity Advantage Fund

>>        Essel Large & Midcap Fund

>>        SBI Large & Midcap Fund

>>        Quant Large and Mid-Cap Fund

>>        Principal Emerging Bluechip Fund

(4)   Worst Performing Large & Mid Cap Mutual Funds

>>        L&T Large and Midcap Fund

>>        ICICI Prudential Large & Mid Cap Fund

>>        BOI AXA Large & Mid Cap Equity Fund

>>        HDFC Growth Opportunities Fund

>>        Nippon India Vision Fund

>>        IDFC Core Equity Fund

>>        Franklin India Equity Advantage Fund

>>        UTI Core Equity Fund

>>        HSBC Large and Mid-Cap Equity Fund

>>        Motilal Oswal Large and Midcap Fund

6.   Value and Contra Mutual Funds

The next category in equity mutual fund which we are going to talk about is value and contra funds.

But before that have a quick look on what value investing and contra investing means two types of investing, one is growth investing and another is value investing, where in growth investing the mutual fund invest in those companies which are expected to grow at much faster rate in relation to stock market and therefore they are traded at premium valuation due to optimism in the stock market about these companies growth.

These stocks generally have low dividend yields and very high valuation high price to earnings ratio and high PB ratio.

And other investing style is the value investing style, And here the fund invest in the stocks which are known as value stocks. Value stocks which means that these stocks which are available at much discounted price or at very low price in relation to their earning or their fundamentals which can be improved in future when the market realize the true value of this stocks. And the approach which is use in this value investing stocks is the fundamental analysis approach in researching and analyzing the companies to invest in value funds.

And when we talk about Contra stock investing, here the contrarian approach is being used in analyzing the stocks to invest in by the mutual funds, and therefore Contra investing is one of the subset of value investing in contra investing the fund manager usually give its entire emphasis on investing against the market Trend in the Asset classes which are performing poorly at that particular time frame of market and selling them when the market performs well here also the same principle is been used of evaluating the stocks which are undervalued today which are trading on lower price to earnings and price to book values.

But in the long term they have a potential of growing as the company has strong fundamentals. The stocks which falls under contrary investing strategies are those stocks in the market which are available at very cheap price and the market has dump that is stock for now, but this is stock have potential to outperform in future when the market realize their true potential and that’s why sailing against the tide going against the market can prove to be a very risky decision As in contrary investing we are betting on the stocks which is lost the race in the current market scenario and that’s why the Contra funds are more risky than the value fund.

Now coming to the value and contra funds the strategy here which is being followed for investing is the strategy of Warren Buffet and other value investors, but India is a high growth market and finding a value or contra stocks over here is a very difficult task so applying the value and contra strategy completely is not easy for the fund managers and that’s why in value and contra fund there is a mix of value stocks and the growth stock also.

(1)   Should We Invest in This Contract Value Fund?

The first point of caution which I must tell to all my readers that contra or value fund will not do good when the market is at their High or in the Bull market so, if you can tolerate that patiently then only as an investor you should invest in this kind of funds Because watching your fund return struggling in a bull market can be a bit painful. But yes in long term this font can do wonders and can bring you a very good return.

See also  Scheme Information Document (SID) of Mutual Fund

So in nutshell this funds are for those who are a patient investors.

(2)   Top Performing Value & Contra Mutual Funds

>>        Kotak India EQ Contra Fund

>>        UTI Value Opportunities Fund

>>        Tata Value Fund — Series 2

>>        Invesco India Contra Fund

>>        Tata Equity PE Fund

>>        Nippon India Value Fund

(3)   Average Performing Value & Contra Mutual Funds

>>        JM Value Fund

>>        Sahara Star Value Fund

>>        L&T India Value Fund

>>        IDBI Long Term Value Fund

>>        HDFC Capital Builder Value Fund

>>        ICICI Prudential Value Discovery Fund

(4)   Worst Performing Value & Contra Mutual Funds

>>        Quantum Long Term Equity Value Fund

>>        Templeton India Value Fund

>>        SBI Contra Fund

>>        Indiabulls Value Fund

>>        IDFC Sterling Value Fund

>>        Sundaram Value Fund — Series IX

>>        Sundaram Value Fund — Series X

>>        Aditya Birla Sun Life Pure Value Fund

>>        Union Value Discovery Fund

7.   Focused Mutual Funds

Seventh category in equity mutual fund is of Focused Mutual Fund.

This is also a new category formed after Re- categorization of 2018 and focused fund by the name the life it is clear that this funds are going to have a focused approach investing and that’s why according to SEBI the focus funds are those funds which cannot keep more than 30 stocks in their entire portfolio at a time although the equity allocation must not be less than 65%, and that’s why due to the concentration of portfolio in just 30 stock design known as focus funds.

And this is the only restriction which has been put by SEBI on the focus funds otherwise it is completely a multi-cap fund or in better way we can say that these funds work like multi-cap funds only because there is no restriction of market capitalization in this focus funds. And therefore this fund have large allocation to a single stocks believing that the conviction of fund managers on this stocks are so high and these funds can do much better than the others funds in the same category in the regular multi-cap funds.

The benefit what a mutual fund get from the focus fund is when a bull market these funds are going to outperform other multi-cap funds due to high concentration and higher allocation in single stocks in the fund unlikely in multi-cap funds where the diversification is in done in almost 50 to 60 stocks in their portfolio allowing lesser consideration on single stocks.  But again it has a drawback to you since it has larger exposure to single stock in their portfolio, so in the bear market fall these funds tends to fall more than general multi-cap fund and that’s why the risk is on the higher side.

(1)   Shall we Invest in this Focused Mutual Fund?

The answer is invest in this funds only if you have a greater risk appetite and you are aggressive investor. And at the same time when it carries risk it will reward you with the better returns also the concentration in each stock is very high and when the stocks in portfolio of focus fund rises there will be a much greater return then the usual multi-cap fund.

(2)   Top Performing Focused Mutual Funds

>>        Mirae Asset Focused Fund

>>        IIFL Focused Equity Fund

>>        SBI Focused Equity Fund

>>        Axis Focused 25 Fund

>>        Sundaram Select Focus

>>        DSP Focus Fund

>>        Motilal Oswal Focused 25 Fund

>>        Principal Focused Multicap Fund

>>        JM Core 11 Fund

>>        Aditya Birla Sun Life Focused Equity Fund

>>        Franklin India Focused Equity Fund

>>        BNP Paribas Focused 25 Equity Fund

>>        L&T Focused Equity Fund

(3)   Average Performing Focused Mutual Funds

>>        IDFC Focused Equity Fund

>>        Nippon India Focused Equity Fund

>>        ICICI Prudential Focused Equity Fund

>>        HDFC Focused 30 Fund

>>        Quant Focused Fund

>>        IDBI Focused 30 Equity Fund

>>        Union Focused Fund

>>        Kotak Focused Equity Fund

(4)   Average Performing Focused Fund

>>        NIL

8.   ELSS Mutual Funds (Equity Linked Saving Schemes) or Tax Saving Mutual Funds (Section 80C)

Next category which we are going to talk about is one of the most attractive for the taxpayer mutual fund investors yes you got me right this is a category which is popularly known as ELSS are the equity linked saving schemes and also known as the tax saving mutual funds.

Because under the section 80c of Income Tax Act these points qualifies for income tax exemption of 1.5 lacs to their investors.

Not only these funds has given a much better option of investment to the investors in form of choice over ULIP insurance schemes which lacks in transparency and cost big to their investors.

And these funds has the lowest lock in period too, that is of just 3 years.

The gains in this funds are taxable as per the taxability of long term capital gains in equity investment in the current scenario.

And at the same time this funds can prove to be a great wealth creators as well as tax savers to the mutual fund investors and not only helping them to save tax but also creating a good wealth in long term.

ELSS nothing but the multi cap funds with the lock in period of 3 years, yes this funds  completely work in the format of multi cap funds and invest in all type of market capitalization be at large cap midcap and small cap without any restriction on the foundation of any percentage as allocation in particular market capitalization so these ELSS funds are also helpful in creating a very good diversify portfolio for the mutual fund investors.

(1)   Should We Invest in this ELSS Mutual Funds ?

Why not when you can hit two targets with same investment that is of wealth creation and tax saving with just one investment. Then why not invest in it. These funds are the great options available for the mutual fund investors in the current market with the lowest lock in period and highest return in terms of past performance of this year ELSS category trailing returns. And also so very good in perspective of diversification of investment portfolio.

The only caution is the mutual fund investor should select these funds very cautiously and not just with her mind set of only tax saving but also the mind set of creating a long term wealth by investing in this funds for at least 10 to 15 years. And this fund also provides a substitute to the multi cap funds also for the tax-payer’s investors.

(2)   Top Performing ELSS Mutual Funds

>>        Mirae Asset Tax Saver Fund

>>        Axis Long Term Equity Fund

>>        JM Tax Gain Fund

>>        Tata India Tax Savings Fund

>>        BOI AXA Tax Advantage Fund

>>        Kotak Tax Saver Scheme

>>        BNP Paribas Long Term Equity Fund

>>        DSP Tax Saver Fund

>>        LICMFTaxP1an 1997

>>        Canara Robeco Equity Tax Saver

>>        Motilal Oswal Long Term Equity Fund

(3)   Average Performing ELSS Mutual Funds

>>        Invesco India Tax Plan

>>        PGIM India Long Term Equity Fund

>>        UTI Master Equity Plan Unit Scheme

>>        HSBC Tax Saver Equity Fund

>>        Essel Long Term Advantage Fund

>>        UTI Long Term Equity Fund (Tax Saving)

>>        ICICI Prudential Long Term Equity Fund (Tax Saving)

>>        Edelweiss Long Term Equity Fund (Tax Savings)

>>        Aditya Birla Sun Life Tax Relief 96

>>        Torus Tax Shield

>>        Aditya Birla Sun Life Tax Plan

(4)   Worst Performing ELSS Mutual Funds

>>        IDFC Tax Advantage (ELSS) Fund

>>        Principal Tax Saving Fund

>>        IDBI Equity Advantage Fund

>>        Edelweiss Tax Advantage Fund

>>        Quant Tax Plan

>>        L&T Tax Advantage Fund

>>        Union Long Term Equity Fund

>>        Sundaram Diversified Equity

>>        Franklin India Tax Shield Fund

>>        Sahara Tax Gain 97 Fund

>>        SBI Magnum Tax Gain Scheme

>>        HDFC Tax Saver Fund

>>        Principal Personal Tax SaverELSS

>>        Baroda ELSS —96 – Plan A

>>        Mahindra Kar Bachat Yojana

>>        Nippon India Tax Saver Fund

>>        Indiabulls Tax Savings Fund

>>        Quantum Tax Saving Fund

>>        Parag Parikh Tax Saver Fund

>>        Shriram Long Term Equity Fund

>>        ITI Long Term Equity Fund

9.   Dividend Yield Mutual Funds

These mutual funds invest in stocks and follow strategy of investing in stocks which generates higher dividend yield.

And Dividend Yield fund are suitable for Investors who have advanced knowledge of macro trends and prefer to take selective bets for higher returns compared to other Equity funds.

And don’t just go by the name here because many of the mutual fund investors get confused by the name itself that Dividend Yield fund is going to pay them high dividend by investing in this mutual funds, but the bitter truth is that these funds invest a large portion of their assets in the stocks which can pay higher dividend or you can say the above average dividend regularly.

And many of the of the mutual fund investor will not like this funds because at times, these investors should also be ready for possibility of moderate to high losses in their investments as they are likely to underperform the Growth Fund, even though overall market is performing better or in the rising Bull market.

And this is because the fund managers of this Dividend Yield fund invest the major chunk of their investment portfolio in the top dividend yielding stocks which have higher cash flows and a record of paying dividends to their investors on regular intervals and consistently.

And due to this reason during downturn these funds tend to fall less than the growth funds and at the same time they get the regular income in form of dividend income from the stocks.

And dividend yield criteria give these funds of value-oriented investment style, because most of the dividend yield stocks are the value stocks which are not be favored by the market in the current scenario but in long term this stock has the ability to perform better. And the factors like low PE ratio low PB ratio and high dividend yield business that are inexpensive and currently present in market at low price and low value which may in future when the markets realize their true words can prove to be a good investment in value investing perspective.

(1)   Should We Invest in This Dividend Yield Funds?

From the above discussion we come to know that this funds can perform better in long term and falls less in bear or the down-market, but at the same time these funds cannot outperform the growth funds. So the aggressive investor should stay away from these points as these funds are not being able to generate expected returns in Bull market for aggressive investor but for the conservative investor this funds can prove to be a great investment choice in long term.

(2)   Top Performing Dividend Yield Mutual Funds

>>        Principal Dividend Yield Fund

>>        UTI Dividend Yield Fund

(3)   Average Performing Dividend Yield Mutual Funds

>>        Templeton India Equity Income Fund

>>        IDBI Dividend Yield Fund

(4)   Worst Performing Dividend Yield Mutual Funds

>>        Aditya Birla Sun Life Dividend Yield Fund

>>        ICICI Prudential Dividend Yield Equity Fund

10. Sectoral and Thematic Mutual Funds

As per the new norms of SEBI after the categorization of 2018 sectoral and thematic fund have to invest 80% of their portfolio in equity related instruments.

First we will talk about the sectoral funds, and from the name itself it is clear that the structural fund invest in particular sector only from their investment portfolio.

These sectors can be banking, infrastructure, FMCG, Technology and others.

And on the other hand the thematic fund are the funds which invest in particular type of theme rather than focusing on particular industry or a factor, like for example take the theme of rural consumption, so under this theme a mutual fund can invest in all the major drivers all the major stock all the major companies which are related to the rural spending, and all other major and minor rural economic activities. In future the rural economic growth and the spending power of the rural people grow then it can include other factors also like four wheeler autos, commercial vehicles, and others.

See also  Mutual Fund Investment– A Guide before Invest

When we compare sectoral funds and thematic funds the thematic funds are quite more diversified than the sectoral funds in terms of their investment portfolio but the major factor is in both the sectoral fund and thematic fund the investment is quite more confined and focused on few sectors and industries and there for enhancing the risk investment Unlike the diversify equity first which we talked about earlier in this book.

And therefore these sector and thematic fund cannot form a part of core portfolio, are the basic portfolio of a mutual fund investor, this fund can only form the satellite portfolio part of investment and just with the aim of enhancing and increasing Alpha in particular Sector or theme, assuming that the investor has a prior advance knowledge of business cycle and heavy weight sectors in the current market scenario.

(1)   Should We Invest in Sector and Thematic Funds?

The answer is no if you don’t have complete knowledge of business cycles and market cycles and about the sector which are going to perform well in a specific time period in that current economic situation.

But if you carry a good knowledge and understanding of market and know the knowhow of business cycles and market cycle then just for a purpose of enhancing your return, you can invest in some particular theme or sectoral fund, and it must not form a major part of your portfolio hardly 5 to 10 percentage of your portfolio if you are an aggressive investor only then it must consist of sectoral and thematic funds.

And few points one should keep in mind before investing veteran thematic funds are

  1. The valuation of that particular sector and themes must be attractive at the time of investment and must not be overvalued.
  2. The mutual fund investment provide Trigger which can act as a stop loss in case of the investment values goes below 15 to 20% in these funds.
  3. Must avoid investing in particular Sector or theme when it is already at their Boom.
  4. Check for the sustainability of the businesses in particular sector or theme.
  5. And last but not the least can you really afford to lose the allocated amount in particular sector or thematic fund if the worst happens.

If the answer is yes for all the five points mention above then you can go ahead to invest in sectoral and thematic funds or else better to avoid this funds.

(2)   Top Performing Sectoral / Thematic Mutual Funds

>>        Sahara Banking and Financial Services Fund – Banking

>>        Torus Banking and Financial Services Fund – Banking

>>        SBI Banking & Financial Services Fund — Banking

>>        Nippon India Banking Fund – Banking

>>        Sundaram Select Thematic Funds Financial Services Opportunities — Thematic

>>        Baroda Banking and Financial Services Fund – Plan A – Banking

>>        Aditya Birla Sun Life Banking and Financial Services Fund — Banking

>>        ICICI Prudential Banking and Financial Services Fund – Banking

>>        Sundaram Services Fund — Thematic

>>        Invesco India Financial Services Fund — Banking

>>        DSP Natural Resources and New Energy Fund – Energy

>>        IDBI Banking & Financial Services Fund — Banking

>>        Aditya Birla Sun Life MNC Fund – MNC

>>        UTI Banking and Financial Services Fund — Banking

>>        Mirae Asset Great Consumer Fund — Consumption & Demand

>>        Tata Banking And Financial Services Fund – Banking

>>        UTI India Consumer Fund – Consumption & Demand

>>        Sahara Power & Natural Resources Fund — Energy

>>        LIC MF Infrastructure Fund — Infra

>>        LIC MF BANKING & FINANCIAL SERVICES FUND – Banking

>>        Invesco India PSU Equity Fund – PSU

>>        Tata Resources & Energy Fund – Energy

>>        SBI PSU Fund – PSU

>>        SBI Magnum COMMA Fund – Thematic

>>        Aditya Birla Sun Life India GenNext Fund – Thematic

>>        UTI Transportation and Logistics Fund – Thematic

>>        ICICI Prudential Bharat Consumption Fund – Consumption & Demand

>>        ICICI Prudential Bharat Consumption Fund – Series 4- Consumption & Demand

>>        Sahara Infrastructure Fund — Variable Pricing — Infra

>>        Sahara Infrastructure Fund — Fixed Pricing — Infra

>>        Canara Robeco Consumer Trends Fund — Growth Sectoral/Thematic — Thematic

>>        BNP Paribas India Consumption Fund – Consumption & Demand

>>        Quant Infrastructure Fund — Infra

>>        ICICI Prudential India Opportunities Fund — Thematic

>>        SBI Infrastructure Fund — Infra

>>        ICICI Prudential Bharat Consumption Fund — Series 5— Consumption & Demand

>>        Invesco India Infrastructure Fund — Infra

>>        Sahara R.E.A.L. Fund – Thematic

>>        SBI Magnum Global Fund – MNC

>>        DSP Quant Fund Thematic

(3)   Average Performing Sectoral / Thematic Mutual Funds

>>        Franklin Build India Fund – Thematic

>>        Nippon India Consumption Fund – Consumption & Demand

>>        UTI Infrastructure Fund — Infra

>>        SBI Consumption Opportunities Fund – Regular – Consumption & Demand

>>        SBI Magnum Equity ESG Fund – Thematic

>>        L&T Infrastructure Fund — Infra

>>        Sundaram Infrastructure Advantage Fund — Infra

>>        Sundaram Rural and Consumption Fund – Consumption & Demand

>>        Torus Infrastructure Fund — Infra

>>        HDFC Infrastructure Fund — Infra

>>        Quant Consumption Fund – Consumption & Demand

>>        DSP India T.I.G.E.R. Fund — Infra

>>        L&T Business Cycles Fund – Thematic

>>        ICICI Prudential Bharat Consumption Fund – Series 1 – Consumption & Demand

>>        Canara Robeco Infrastructure — Infra

>>        Franklin India Opportunities Fund – Thematic

>>        UTI MNC Fund – MNC

>>        Mahindra Rural Bharat and Consumption Yojana – Consumption & Demand

>>        SBI Healthcare Opportunities Fund — Health & Pharma

>>        ICICI Prudential Bharat Consumption Fund – Series 3— Consumption & Demand

>>        DSP Healthcare Fund — Health & Pharma

>>        UTI Healthcare — Health & Pharma

>>        BOI AXA Manufacturing & Infrastructure Fund — Infra

>>        Tata India Consumer Fund – Consumption & Demand

>>        Aditya Birla Sun Life Infrastructure Fund — Infra

>>        Quantum India ESG Equity Fund – Thematic

>>        Nippon India Pharma Fund – Health & Pharma

>>        Nippon India Power & Infra Fund — Infra

>>        Aditya Birla Sun Life Manufacturing Equity Fund Thematic

(4)   Worst Performing Sectoral / Thematic Mutual Funds

>>        ICICI Prudential Exports and Services Fund — Thematic

>>        ICICI Prudential Infrastructure Fund — Infra

>>        IDBI Healthcare Fund — Health & Pharma

>>        ICICI Prudential Manufacture in India Fund— Thematic

>>        Tata Infrastructure Fund — Infra

>>        Mirae Asset Healthcare Fund — Health & Pharma

>>        Kotak Infrastructure and Economic Reform Fund – Infra

>>        Tata Ethical Fund — Thematic

>>        Nippon India Quant Fund – Thematic

>>        IDFC Infrastructure Fund — Infra

>>        ICICI Prudential FMCG Fund — Thematic

>>        Tata India Pharma & Heathcare Fund — Health & Pharma

>>      HDFC Housing Opportunities Fund – Series 1 — Thematic \Torus Ethical Fund — Thematic

>>        HSBC Infrastructure Equity Fund — Infra

>>        SBI Equity Minimum Variance Fund – Thematic

>>        Aditya Birla Sun Life Pharma & Healthcare Fund – Health & Pharma

>>        ICICI Prudential Bharat Consumption Fund – Series 2— Consumption & Demand

>>        ICICI Prudential MNC Fund – MNC

>>        Franklin India Technology Fund – Technology

>>        Aditya Birla Sun Life Digital India Fund — Technology

>>        SBI Technology Opportunities Fund — Technology

>>        Tata Digital India Fund – Technology

>>        ICICI Prudential Technology Fund – Technology

>>        Kotak Pioneer Fund — Thematic

>>        ICICI Prudential Commodities Fund Thematic

11. International or Global Mutual Funds

These are the mutual funds which invest the most part of their investment portfolio be at equity and debt or others which are listed outside Indian Territory. The only thing which can be good about these funds are gaining further the diversification to the investors investment portfolio via mutual fund in the stocks are the Asset classes outside India or the domestic market.

This fund can be further divided into

  1. Country specific International and global funds which invest in the equities of specific global countries
  2. Real estate is specific International and global funds which invest in the Asset of companies which are operating in real estate for real estate sectors in other countries globally
  3. Global gold funds which invest in equity shares of company which are involved in extraction and mining of gold in other countries globally
  4. Hybrid kind of International and global funds invest up to 65 % of their investment portfolio and domestic equal and the rest of in international stocks
  5. Region specific International and global fund invest in Companies in particular region or group of countries like Asia Pacific region and others
  6. Commodities specific International and global fund invest in Assets of companies located globally who are involved in business of commodities such as agriculture mining exploration and others.

(1)   Shall We Invest in International or Global Funds?

Invest in international or global funds only if you are a season investor and you know about global market. It can definitely provide your investment portfolio a greater diversification but at the same time you can put your investment portfolio on the greater risk too.

This also carry a special kind of risk which is known as currency risk which is apart from global market risk the currency rate fluctuations are the appreciation and depreciation in the value of particular currency could seriously impact your returns on investment, for example if the Rupee value is going to appreciate against dollar and if you are going to invest in countries following the dollars as their currency then the investment where you will decrease on par with the appreciation of value of Rupee against that currency.

(2)   Top Performing International / Global Mutual Funds

>>        Nippon India Japan Equity Fund

>>        ICICI Prudential US Bluechip Equity Fund

(3)   Average Performing International / Global Mutual Funds

>>        Aditya Birla Sun Life International Equity Fund – Plan B

>>        Franklin Asian Equity Fund

>>        Aditya Birla Sun Life International Equity Fund – Plan A

(4)   Worst Performing International / Global Mutual Funds

>>        Nippon India US Equity Opportunities Fund

>>        Sundaram World Brand Fund — Series III

>>           Aditya Birla Sun Life Commodity Equities Fund — Global Agri Plan

%d bloggers like this: