Category Archives: Mutual Fund Investments

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Insights of Mid and Small Cap Fund.


When it comes to equity mutual funds, small cap and mid cap mutual funds are termed riskier than their large cap counterparts. However, these small cap and mid cap mutual funds can deliver substantial gains especially when the economy is on the recovery mode.These are the companies that move fast and take quicker advantage of the improved economic conditions. The stock rises faster with even a little bit of influx in investments. No wonder in 2015, when the Nifty 50 and Sensex took a beating, BSE Small Cap and BSE Mid Cap rose by 5.4 and 6.7 percent respectively.

Global uncertainties prove to be a blessing in disguise for small and mid-cap companies. This is because large companies or large caps depend on global markets for a major share of their earnings. So when foreign investors exit emerging markets due to panic over rate increase in the US, there is pressure on large caps. Also in 2015, China found its currency devalued, resulting in rise in production costs and low consumption. Indian small and mid cap companies witnessed an increase in revenue because the ones that invested in textiles, chemicals and capital goods bolstered their exports.

Top performing small cap and mid cap mutual funds reflect the ability of companies to deliver superior growth in difficult economic conditions. One of the best performing mid cap mutual funds in the past five years is Mirae Asset Emerging Bluechip Fund. It has delivered 24.54 percent return over a 5-year period. It avoids companies that have weak cash flow like public sector banks, construction projects and companies that generate less than Rs.100 crore cash per annum. Small cap mutual funds have even outperformed their mid cap peers. DSP Micro Cap Fund has delivered 40 percent in 3 years, followed by Franklin India Smaller Companies Fund that has given 35 percent returns.

Should you invest in mid cap and small cap mutual funds?
Depressed prices of commodities, continuing slowdown in China and falling interest rates are likely to contribute to the growth of small and mid-cap mutual funds at least for the next two or three years. Efforts by the government to push investments can lead to faster growth for small and medium-sized companies. Sectors like capital goods, textiles, consumer goods and chemicals are perceived to be good sectors by most fund managers.

A long-term investor with a 5-year horizon can opt for small and mid cap mutual funds. If you have a high risk appetite, you can allocate 25 to 30 percent of your investment in these mutual funds; if want to take moderate risk, you can invest 15 to 20 percent in them. While choosing a fund, check how it has performed along the years and in different market cycles.

In the past five years, small cap and mid cap mutual funds have delivered an average of 30 percent and 25 percent. So, if you had invested Rs. 1 lakh five years ago in both these funds, it would have earned you around Rs.3.5 lakh and Rs.3 lakh respectively. As we mentioned, this is just an average, the best ones have given 20 percent returns in the past five years, there are three-year returns that have pushed 30 percent returns, too. Compare this to the Sensex that gave just 7 percent during the 5-year period!

Conclusion: Investment in Small and Mid Cap Mutual Funds can deliver superior returns as we have seen in the past considering a long term investment cycle say  5 to 7 years and more.Also you should have patience to take the big dip as well when market falls without worrying much about the market and just keep your investment going.This the main mantra of secret wealth hiding behind Small and Mid Cap Mutual Funds.

Happy Investing


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Best Small Cap Mutual Fund for 2018.


  Reliance Small Cap Fund:

Reliance Small Cap Fund(Growth) has been a consistent out performer since its inception.It has beaten the benchmark return every year from its inception since 2010.This fund has been ranked 2 in “Small & Mid cap” category by Crisil for quarter ended September 2017.You may consider investing in this fund keeping in mind your risk profile.Remember that this fund is highly volatile since providing a superior return and if you can digest the market downturn as well then you may go for this fund.

Fund Performance:

Period Return(%)
1 mth 3.7
3 mth 12.1
6 mth 13.1
1 year 50.8
2 year 27.1
3 year 22.7
5 year 32.1
7 year(31.10.2010) 31.14

 Therefore, you can see from above that the return of this fund for last 5 & 7 years have been tremendous. If one can bear the high risk for a longer horizon say 7 to 10 years he may have the probability of earning a good inflation adjusted return.However, one should keep in mind one thing as well that past performance must not be the only criterion for any fund selection.Other factors such as financial goals,one’s risk profile, income level ,time horizon and etc.

Now, let’s see this fund’s  XIRR for last seven years on monthly SIP basis.

Investment Period
Nov 01, 2010 to Oct 01, 2017
No of Investments 84
Monthly SIP ₹2,000.00
Total Amount Invested (Rs) 168,000.00
Total Units Purchased 11,888.12
Investment Value as on Oct 01, 2017 464,180.96
Latest NAV
42.86000 (as on Nov 17, 2017)
The return or XIRR ( XIRR for series of investments) of this Fund for the period 01.11.2010 to 01.10.2017 XIRR =29.14%


The XIRR of this SIP is coming out to be 29.14%.So, you can see that this fund has really outperformed its peers in terms of returns. Also, the return generation (29.14%) is quite attractive as compared to other funds.

Let’s have a look at this fund’s portfolio composition.

The top 10 holdings are shown below.

Top sector wise allocation is given below.

This fund contains high risk due to its inherent investment nature.Investors who are risk averse should not invest in this fund.On the other hand those investors who can bear the pinch of volatility may invest in this fund and they might get a hefty return in the long term.

” Happy Investing”




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Bharat 22 ETF

As of now all the Mutual Fund investors must have known or be informed that The Govt. Of India’s dream divestment(conferring its stake to others) project of Central PSEs in the form of ” BHARAT 22 ETF ” has come to an end on 17.11.2017. Which was available for Non Individual investors only for 14th November 2017  and 15th to 17th November 2017 for retail investors only. This NFO is expected to be oversubscribed for 2-5  times than its initial offer for  8500 Cr.

Now, we must know what is ETF or Exchange Traded Fund. As the term itself suggests that unlike a Mutual Fund an ETF is traded in Stock exchanges. Exchange Traded Funds (ETF) is defined as a security that tracks an index, a commodity or a basket of assets like an index fund but trades like a stock on an exchange and the  price of the fund changes throughout the day as it is bought and sold.

The great benefit of ETF is that it is very transparent regarding its underlying assets and is very low cost even compared to Mutual Funds since it is not required to be actively managed like other instruments due to its inherent nature of tracking a particular index only or underlying basket of assets,which is S&P BSE BHARAT 22 index for this case.

Salient Features of ” BHARAT 22 ETF ” :

First of all this ETF is being offered at 3% discount by G.O.I for NFO only. Which enriches its attractiveness in return perspectives.

It will primarily invest in 22 Blue chip stocks of Central Public Sector Enterprises(CPSEs) and out of which 16 stocks belong to the categories of Maharatna, Miniratna and Navaratna .This ETF  has a large-cap oriented composition (nearly 92 per cent), while the remaining are in quality mid-cap companies.The ETF is well diversified across six sectors — industrials, energy, utilities, finance, fast-moving consumer goods and basic materials. Also there are 3 private sector companies like Axis Bank,L&T and ITC, which the GOI holds a stake due to its legacy system of UTI. The maximum investment in a particular stock is restricted to 15% and for a particular sector is 20%.Every year in march there will be a portfolio re balancing and might be a scope of profit booking if so needed.  The portfolio composition is given below .



Now the big question is should you invest in this ETF. Many experts have said a “YES” on the other hand many experts said a “NO”. The reasons they provided for not investing is that they feel that this ETF would function like a Thematic fund and there is limited scope of out performance. But with my understanding and preference I would personally go for investing in this ETF considering key factors like very low expense ration of 0.0095% for first 3 years ,3% discount for initial offering  or NFO subscription,diversification across various 6 sectors, best blue chip companies of the country and also last but not the least Govt. of India’s recent initiatives towards rapid sustainable growth within 2020 or mission 2020.Also, I would suggest here that don’t invest here keeping in front of your emotions only.If you are comfortable in remaining invested for say more than 5-10 years, then only there is a probability that you may earn a superior returns and be a part of this long term growth opportunity.

Caution:No one can guarantee that this ETF would definitely fetch a greater return in future but the underlying stocks of the companies of this ETF and their continuous growth scenario indicate that this fund also have the potential to deliver a superior returns at a very very lower expense ratio as compared to Mutual Funds.

“Happy Investing”


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Top Mutual Funds for investment in 2018


Best Performing Large Cap Mutual Funds :

The following funds have performed extremely well in the past and is expected to deliver superlative returns in future as well.

Top 10 Holdings for above schemes:

#1. Aditya Birla Sunlife Frontline Equity:

HDFC Bank,ICIC Bank,Infosys,ITC, Maruti Suzuki,Bajaj Finance,IndusInd Bank,Hindalco,Kotak Mahindra,Yes Bank.

#2. SBI Bluechip Fund:

HDFC Bank, L&T,HPCL,ITC,  Nestle India,Mahindra & Mahindra,IndusInd Bank,SBI,Bharat Electronics,Kotak Mahindra Bank.

#3. Kotak Select Focus Fund Regular Plan:

HDFC Bank,Reliance Industries,HDFC, Hero Moto Corp,ITC, Maruti Suzuki,IndusInd Bank,SBI,ICIC Bank,L&T.

#4. Motilal Oswal MOSt Focused Multicap 35

HDFC,HDFC Bank,Maruti Suzuki,HPCL, IndusInd Bank,BPCL,Bajaj Finance,PNB Housing Finance,Eicher Motors,Max Financial Services.

NB:Mutual Fund investments are subject to market risks. Please read the scheme documents carefully before investing. Also the returns as mentioned above does not guarantee that the funds would perform the same in future as well.They are only just depiction of past actual performance.

You may choose any of the four funds shown above. Though most of the stock picking for each funds are kind of same especially for financial sectors.We don’t recommend to go for all four schemes together otherwise this will lead to portfolio overlapping.You may choose any one or two for investments.Diversification does not mean investments in too many funds of the same category. Though Large cap funds are  supposed to be on the safer bets , it is seen from the above tabulation that if  investment is done on regular basis in Mutual Funds irrespective of the category ,it has potential to meet your financial goals with ease by providing superlative returns.



” Happy Investing”


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Personal Finance – Let’s start with Mutual Fund


The success stories of all the wealthy people have one thing in common and that is perseverance and discipline.If we invest for longer tenure in any equity instrument it will definitely beat the little monster inflation  and bring us back a hefty amount which is also tax free.The most crucial part of mutual fund is that any earning from equity mutual fund is completely tax free if the investment is held for more than 12 months.
This means if we can afford a little amount every month and put it into a safety net of mutual funds over the period of at least 8 to 10 years believe me friends it will certainly give us a post tax return of 12 to 15% which is better than any fixed nature of securities.That does not mean Mutual Fund investment provides a guaranteed return or it does not have any investment risk associated with it,Of course it has investment risk associated with it.But we can  beat this by staying invested for a longer time horizon.

I would also like to add one thing here that mutual fund is not any investment tool,rather it’s a medium of indirect investment in equities and debts.
This is really a great tool for those who don’t have any or want to have direct exposure to stock markets.There comes the safety hands of Fund managers who on behalf of investors push the money to stock market.
One important thing everyone must know that the market as previously the statistics shows if  starts with a bull phase then it would certainly end with a bear phase within a span of 5 to 7 years.That means during this period we need to consolidate our investment portfolio and wait for the money to grow to reach our financial needs with ease.Also to keep in mind that nothing is permanent in Equity market.Not necessarily the market would follow the past trends.It might not follow the trend and start a new trend itself.
In today’s scenario for the lower middle class people Mutual Fund has become the only medium to save a hefty amount for their future and sunset times.I personally feel that Mutual Fund should be everyone’s first priority if one can spare even if a very small amount even 100 Rupees monthly and start an SIP from the very beginning of earning period. SIP helps in reducing average cost of investment by investing your money at different market or index level.

Here I would end up with quoting a great saying of market Guru Warren Buffet “Spend what is left after investment”. That is Income – Savings=Spending.
Only this discipline approach will take you closer to your financial dreams more than your expectation.

Quick Tip: Never try to time the market, rather spend more time in the market.There is no perfect time for investment in Equity market.Investment in equity market at any index level is embraced by the market itself.



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Liquid Mutual Funds


 Insights of Liquid Mutual Funds:

This is a type of debt mutual funds which primarily invests in money market instruments for a very short period say even one day. As, the name suggests this funds are more liquid and the returns are less fluctuating due to its inherent investment nature in securities for ultra short time duration.Further,  liquid mutual funds very easily deliver a return way ahead of saving deposits.Liquid mutual funds deliver lower return in comparison to other debt funds since these funds invests in fixed securities for a very shorter durations which can even be for a day.


There is neither an entry load nor an exit load in Liquid mutual funds.These funds provide better returns in high inflationary situation when interest rates are high but RBI induces a lesser amount in the market to control liquidity. This is also to mention that if a person withdraws money from liquid funds he has to pay a short term capital gain tax based on his applicable income tax slab rate.Though the interest income from savings account is also taxable above Rs.10,000/- but it does not get the benefit of indexation unlike liquid mutual funds after three years. And the gains from liquid mutual funds after three years gets indexation benefits and gets long term capital gains @20%.

Liquid funds are easy to redeem. One can redeem money with one day prior notice, if you redeem your liquid fund investment before 2 PM, you will get money by 10 AM next morning in your account. Other major benefit is, you can do partial withdrawals in debt funds, which is not possible in case of bank FD.

To summarize, these funds are a good substitute to regular saving account since the liquidity is high, deliver more returns than regular saving account and have taxation benefits. Therefore, investors can invest their emergency funds in liquid funds.

“Happy Reading”




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Mutual Funds investments through Digital wallets???


Yes! This is really a very much awaited news for the investors in Mutual Funds.Finally, the Mutual Fund regulating body SEBI has shown the green flag and allowed the investors to invest in Mutual Funds through Digital wallets.The idea behind this move was to channelize the household savings into Capital markets and also the promotion of Digital wallets across the investment sectors.

SEBI Board has permitted investors to invest into Mutual Funds up to ₹50,000/- in a financial year and its redemption of such investments to the bank account of the unit holders.

However, the board has also prohibited  the e wallet issuers from offering any cash backs,discounts either directly or indirectly for investing in mutual fund scheme through their wallets.Also, the balance loaded in e- wallets only through cash,debit cards or internet banking can be utilised for investments in mutual fund scheme.Balance loaded through credit cards,cash backs can not be used for this investment.

Along with this,SEBI has allowed the mutual fund and asset management companies to accord instant online access facilities to resident individual investors in liquid schemes.Here also, the maximum limit would be ₹50,000 or 90% of the portfolio whichever is lower.

SEBI has warned the AMCs no to borrow any amount to meet its liquidity demand.They have to meet the liquidity demand from the available balance from the scheme and also asked them to put in place a mechanism to meet the liquidity demand.Investments in mutual fund schemes through payment banks also permitted provided necessary approval from RBI has been taken.

Presently, there are  a total 41 nos. of active AMCs who are quite hopeful now about the introduction of e wallet facility and they apprehend that this move of SEBI would catch the eyes of young generation whose first priority has become the e wallets and spending through it.


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ELSS- Reliance Tax Saver Fund Regular – Growth


Though the performance of this fund for  last few quarters are not so satisfactory but over a long term this fund has delivered quite an eye catching returns in comparison to its peers.

This fund is ranked 3 in ELSS(Equity Linked Saving Scheme) category by Crisil for quarter ended December 2016.

Investment Objectives: The primary objective of the scheme is to generate a long term capital appreciation from a portfolio that is  predominantly invested in equity & equity related instruments.

Fund Details:-

Inception Date 23 August, 2005
NAV as on 31.03.2017 ₹54.87
Average AUM(Crores) as on 31.03.2017 ₹6,916.32
Expense Ratio(%) 1.99
Fund Manager Ashwani Kumar
Designation Senior Fund Manager Equity
Qualification, MBA-Finance
Experience 22 Years

Fund Performance:

Period Return(%)
1 Month 3.73
3 Months 16.06
6 Months 10.1
1 Year 28.45
3 Years 24.23
5 Years 20.81
10 Years 15.22

Now, let’s see how the fund has delivered returns for last 6 years.

Investment Period May 03, 2011 to April 03, 2017
Monthly SIP ₹2,000.00
No of Investments 72
Total Amount Invested ₹144,000.00
Total Units Purchased 4944.38
Investment Value as on April 03, 2017 ₹273,643.53
Latest NAV 55.34 (as on April 03, 2017)

Here, XIRR(Extended I.R.R) is 38.08%.As you can see this return is quite lucrative.Also, return has been calculated on the basis of XIRR and not on CAGR.Since, the number of investments is in series and therefore XIRR is the appropriate method to calculate the return.

Now, let’s see this data in a graphical format.

By investing ₹2000/- p.m for 6 years the total investment comes to ₹1,44,000/- and the present accumulated unit is 4944.38 and the value of investments is ₹273,643.53.There is a gain of ₹129,643.53 in just 6 years.This has been possible just because disciplined investment approach and patience to let your money grow.One important aspect I would like to highlight here is that during this period of 6 years many downturn came into the stock market but what has happened actually is that during those downturn the investor did not panic and continue his investment and accumulated more and more units.

This is the actual beauty of mutual fund SIP and the magic of compounding.

Now , let’s just look into the portfolio of this fund i.e the stocks where money is being invested for this fund.

Value(₹ Crore)
Asset %
TVS Motor Automotive 626.97 9.07
SBI Banking/Finance 440.97 6.38
Tata Steel Metals & Mining 434.43 6.28
Infosys Technology 391.8 5.66
ICICI Bank Banking/Finance 336.01 4.86
Axis Bank Banking/Finance 212.03 3.07
HDFC Bank Banking/Finance 211.43 3.06
ITC Tobacco 210.02 3.04
Ramco Cements Cement 203.69 2.95
Honeywell Autom Telecom 199.31 2.88

Let’s see the sector wise allocation of this fund.

% Allocation
Amount( ₹ Crore)
Banking/Finance 24.85 19.8
Automotive 15 15.06
Engineering 11.13 17.61
Metals & Mining 7.96 5.78
Technology 7.85 1.48
Cement 5.96 4.7

Not all the sector was possible to show here.Only top sector wise allocation has been depicted.

To conclude, I would just suggest that only disciplined approach for investment,patience and purpose oriented investment can help you to achieve your goals easily.Also, past return does not guarantee for future performance.This is only indicative.


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