Know Your Investments
Index funds are passively managed mutual funds or exchange-traded funds (ETFs) designed to replicate the performance of a specific market index, such as the S&P 500. These funds aim to track the index's returns by holding a similar portfolio, providing investors with broad market exposure.
Index funds and ETFs typically have lower fee structures compared to actively managed funds. The fees, known as expense ratios, cover the fund's operating expenses and are expressed as a percentage of the fund's average net assets. Due to their passive nature, index funds and ETFs often have lower expense ratios, making them cost-effective investment options.
The fees that an index fund can charge are capped at 1.5%.
Fund of Funds allocates its assets across various mutual funds, aiming for diversification and risk management. The asset allocation strategy involves investing in a mix of funds that focus on different asset classes, regions, or investment styles, providing investors with a well-rounded and balanced portfolio.
A Fund of Funds overseas/domestic is a mutual fund that invests in other mutual funds, either internationally or domestically. It provides investors with diversification by allocating assets to a range of underlying funds, each specializing in specific asset classes or regions, enhancing portfolio risk management and potential returns.
TER in respect of Fund of Funds investing liquid schemes, index funds & ETFs has been capped @ 1%
TER of Fund of Funds investing in equity-oriented schemes has been capped @ 2.25%
TER of Fund of Funds investing in other schemes than mentioned above has been capped @2%.
A retirement fund is a specialized investment account designed to accumulate savings for individuals to support their financial needs during retirement. It often includes a mix of stocks, bonds, and other assets, with the goal of providing a reliable income stream and maintaining financial stability in retirement years.
A Retirement Fund will have Lock-in for at least 5 years or till retirement age whichever is earlier.
- Retirement funds typically have a diversified asset allocation, balancing equities for long-term growth with bonds and fixed-income instruments for stability. The allocation may evolve over time, becoming more conservative as the investor approaches retirement, aiming to preserve capital and provide a reliable income stream during retirement years.
A children's fund is an investment vehicle designed to accumulate savings for a child's future needs, such as education, marriage, or other significant life events. It often involves a mix of equities, debt, and other instruments, aiming to provide long-term growth and financial security for the child.
A Children’s Fund will have Lock-in for at least 5 years or till the child attains age of majority whichever is earlier.
- Children's funds typically adopt a balanced allocation, investing in a mix of equities for long-term growth and debt instruments for stability. The allocation aims to accumulate wealth over the child's formative years, ensuring a well-rounded portfolio to meet financial needs such as education and other significant milestones in the future.
Who Should Invest In Equity Mutual Funds
Types of Mutual Funds
EQUITY
Equity funds primarily invest in stocks, aiming for capital appreciation, offering growth and higher returns while also subjecting investors to market volatility and risk.
DEBT
Debt funds primarily invest in fixed-income securities like bonds, providing stability and income generation. Which make them suitable for risk-averse investors.
HYBRID
Hybrid mutual funds allocate investments across both stocks and bonds, providing investors with a balanced portfolio of growth and stability through diversification.
SOLUTION ORIENTED
Other funds include index funds replicating market indices and FOFs investing in other mutual funds, providing diversified investment options.
