Earn Maximum Returns by Investing in Equity Fund

Equity Fund

Want to rejoice benefits of equity in your investment portfolio? Well, for that you are required to remain invested for a longer term in order to get better returns. And if you are a young investor, then absolutely you can look to maximize your wealth for 10 years time in order to achieve healthy returns. Equities no doubt invest in the stocks or shares of the company. It also provides capital appreciation provided you stay for a longer term.

Equity Fund

As equity markets have lots of fluctuations, investors, therefore need to be cautious about this aspect too and carefully plan their investment allocation. If you have a high risk appetite and you have just started your career although having no dependents, then equities must be a favourable option for you.

Equity fund also predicts higher risk, higher returns formula. So, you need to be patient enough to pool in maximum returns in order to leverage the benefits of stock market fundamentals in your portfolio. Also, there are several equity funds which you can look for irrespective of the risk taking capacity you have.

When you invest in mutual funds equity, you should consider the pattern of handling these types of funds by fund managers. Although equity funds are actively or passively managed where active style aims to excel the market as against to a particular benchmark as compared to a passive style which emulates the investment holdings of a specific index. Whichever equity product you would select is based upon the returns it generates as per the fund’s investment objective.

However, you should seek the investment objective of equity fund you may choose to invest as it should perfectly match with your investment objective. Then only, you will be able to amass effective returns provided you should invest for a longer horizon(more than 5 years). So, it’s appropriate to select your equity fund suitably in order to get consistent returns in your equity investment.

Types of Equity Fund

The following schemes are categorized under Equity/Growth plans :

Index Scheme : Index scheme is a widely considered concept in the west. This scheme operates on a passive investment principle where the investments track in commensurate to the movement of benchmark indices like Nifty, Sensex etc.

Sectoral Scheme: These funds invest in specific sectors like IT, infrastructure, pharmaceuticals, etc. or capital market segments like large caps, mid caps, etc. This scheme provides relatively high-risk return avenues within the equity framework.

Tax-Saving :  This scheme offers tax benefits to its investors. These funds are entitled to income tax deductions under  Section-80 C of the Income Tax Act, 1961 with a 3-year lock-in period. The taxes are saved under Equity Linked Savings Scheme(ELSS) which offer long-term growth opportunities.

Hybrid Funds: Give your investment portfolio a mix composition by maintaining atleast 65% of holding in equities that too for tax purposes only. Hybrid funds mean a balanced combination of both equity and debt. When we talk about hybrid equity funds, it means more exposure to equity and less on debt. The schemes show less volatility as compared to pure equity funds because of their mixed portfolio. Although the debt investments too offer stability in volatility times. But it is preferable for you only if you are a very conservative equity investor. No doubt, these funds are apt for the novices in the stock market.

Equity Funds India

In order to determine the types of equity funds, several asset management companies have to offer, look for the top performing equity funds where you can potentially invest.

Top Performing Equity Mutual Funds

Assess the types of equity mutual funds based on their category and CRISIL ranking. Let’s see the CRISIL Based Rank 1 equity funds(growth) along with their 1-year, 2-year and 3-year returns as on September 7, 2017 under following sub-categories.

  1. Large Cap

Aditya Birla Sun Life Top 100 Growth Fund

  • Returns (in %)
  • For 1st year: 15.7%
  • For 2nd year: 18.7%
  • For 3rd year: 13.0%

Kotak Select Focus Fund-Regular Growth

  • Returns (in %)
  • For 1st year: 19.0%
  • For 2nd year: 21.6%
  • For 3rd year: 17.4%

SBI Blue Chip Fund-Growth

  • Returns (in %)
  • For 1st year: 12.9%
  • For 2nd year: 17.6%
  • For 3rd year: 14.4%
  1. Small & Mid Cap

L&T Emerging Businesses Fund-Retail Plan-Growth

  • Returns (in %)
  • For 1st year: 39.7%
  • For 2nd year: 34.2%
  • For 3rd year: 25.4%

L&T MidCap Growth Fund

  • Returns (in %)
  • For 1st year: 33.5%
  • For 2nd year: 27.4%
  • For 3rd year: 24.1%

Mirae Emerging Bluechip Fund

  • Returns (in %)
  • For 1st year: 26.5%
  • For 2nd year:28.7%
  • For 3rd year: 25.0%
  1. Diversified Equity

Motilal Focused MultiCap 35-Retail Plan-Growth

  • Returns (in %)
  • For 1st year: 30.0%
  • For 2nd year:25.9%
  • For 3rd year:26.7%

Principal Emerging BlueChip Fund-Growth

  • Returns (in %)
  • For 1st year:24.4%
  • For 2nd year:26.3%
  • For 3rd year:22.0%
  1. Thematic-Infrastructure Fund

DSP-BlackRock Natural Resources-Retail Plan-Growth

  • Returns (in %
  • For 1st year:43.3%
  • For 2nd year:44.9%
  • For 3rd year:24.1%
  1. ELSS

Tata India Tax Savings Fund -Regular

  • Returns (in %)
  • For 1st year:6.1%
  • For 2nd year:25.2%
  • For 3rd year:22.0%
  1. Index

Kotak Nifty ETF

  • Returns (in %)
  • For 1st year:11.4%
  • For 2nd year:34.4%
  • For 3rd year:25.0%

 

Disclaimer : Mutual Funds are subject to market risks. Please read the scheme related documents carefully before investing.

 

Kunal Jaiswal is a digital marketing Executive and has written many topics in the related field.

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