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Mutual Funds or stock markets directly – where to invest, is one of the oldest debates when it comes to personal Wealth Management. Mutual funds allow you to invest a certain amount in a fund where the fund managers use their expertise to invest a client’s money in a variety of stocks to achieve the highest rate of return. Investing in stock markets gives you greater control over the investment on shares is made by the user. However, it makes them more prone to risks as they have to directly deal with the markets.
When compared on a risk Factor, stocks happen to be far riskier than mutual funds. The risk in mutual funds is spread across and hence reduced with the pooling in of diverse stocks. With stock,s one has to extensive research before investing, especially if you are a novice investor. Visit fincash for more details on the various areas of investments. In the case of mutual funds, the research is done, and the fund is managed by a mutual fund manager.
This service though is not free and comes with an annual Management Fee that is charged by the fund house under Total Expense Ration (TER).
If you are a new investor with little or no experience in the financial markets, it is advisable to start with mutual funds as not only the risk is comparatively lesser but also because the decisions are made by an expert. These professionals have the insight to analyze and interpret financial data to gauge the outlook of a prospective investment.
Though you have to pay a fee to mutual fund managers unlike in the case of stocks that you buy individually, the Economies of Scale also come into play. It is true that active management of funds is an affair that does not come free of cost. But the truth is that due to their large size, mutual funds pay only a small fraction of the brokerage charges that an individual shareholder pays for brokerage. Individual investors also have to pay the charges for DEMAT which is not needed in the case of mutual funds.
It is already established that mutual funds have the advantage of reducing the risk by diversifying a Portfolio.
Stocks on the other hand are vulnerable to the Market conditions and the performance of one stock can’t compensate for the other.
Remember when investing in stocks, you will be liable to pay 15 percent tax on your short term Capital gains (STCG) if you sell your stocks within a span of one year. On the other hand, there is no tax on capital gains on the stocks that are sold by the fund. This can mean substantial benefits for you. The tax saved is also available for you to invest it further thus making way for further Income generation through investment. But you will have to hold on to your equity for more than a year in order to avoid paying that short-term capital gains tax.
Long Term Capital Gain (LTCG) is taxed at 10% for gains exceeding 1 Lakh gain (As announced in Budget of 2018). which means one has to pay tax on gains incurred in period over an year (Long term) if amount exceeds 1 Lakhs in a year at a Flat rate of 10%.
In the case of mutual funds, the decision pertaining to the choice of stocks and their trading is solely in the hands of the funds manager. You do not have control over which stock is to be picked and for what duration. As an investor, if you invest in Mutual Funds you do not have the option to exit from some stocks that are in your portfolio. The decisions pertaining to the fate of the stocks rest in the hands of the fund manager. This way, an individual investing in stocks has more control over their investment than an investor who invests in mutual funds.
A well-diversified portfolio should include at least 25 to 30 stocks but that would be a huge ask for a small investor. With mutual funds, investors with small funds can also get a diversified portfolio. Buying units of a fund allows you to invest in multiple stocks without having to invest a huge corpus.
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When you invest directly, you will need to invest a lot more time and research into your stock while in the case of mutual funds you can be passive. The fund manager is the one who invests his time to manage your portfolio.
With an investment in mutual funds, you have the benefit of a fund manager who has extensive expertise and experience in the field. Whether it is picking the stocks or monitoring them and making allocations, you do not have to worry about any of it. This service is not available in the case of stock investments. You are responsible for picking and tracking your investment.
When investing in mutual funds, remember that you will have to give the funds at least 8-10 years to generate good returns as these have a longer-term growth trajectory. In the case of stocks, you can get quick and good returns if you choose the right stocks and sell them at the right time.
Despite all of this if the stock market and its intricacies are something that an individual is familiar with, they can invest directly. They must be ready to play a long term game where a stock doesn’t provide immediate returns and must also have an increased appetite for risk. Unlike investors in mutual funds, they do not have the expertise on Smart investment which fund managers can provide. Even in the best of times, investment in stocks is a risk. In comparatively tougher times, it is better to invest in mutual funds due to the advantage of portfolio diversification, professional management and constant monitoring.
The choice between mutual funds or stocks generally boils down to personal factors like trust and an individual’s ability to take risks. It is a decision to be taken with the utmost of thought with all the options carefully weighed down. However what is important for an individual is the decision to plunge into personal wealth management and attempt to make their savings useful through either mutual funds or stocks, rather than simply sitting on it.
Fund NAV Net Assets (Cr) 3 MO (%) 6 MO (%) 1 YR (%) 3 YR (%) 5 YR (%) 2023 (%) Nippon India Small Cap Fund Growth ₹146.073
↑ 0.59 ₹46,044 3.6 17.3 55.9 34.8 29.2 48.9 Invesco India Infrastructure Fund Growth ₹56.46
↑ 0.05 ₹904 12.9 35.3 71.2 35.2 26.8 51.1 Invesco India PSU Equity Fund Growth ₹57.29
↑ 0.33 ₹842 16.4 45.4 87.3 39.3 26.7 54.5 Note: Returns up to 1 year are on absolute basis & more than 1 year are on CAGR basis. as on 16 Apr 24
*Below is the list of best mutual funds based on 5 year CAGR/Annualized and AUM > 100 Crore.
The primary investment objective of the scheme is to generate long term capital appreciation by investing predominantly in equity and equity related instruments of small cap companies and the secondary objective is to generate consistent returns by investing in debt and money market securities. Nippon India Small Cap Fund is a Equity - Small Cap fund was launched on 16 Sep 10. It is a fund with Moderately High risk and has given a Below is the key information for Nippon India Small Cap Fund Returns up to 1 year are on The Scheme seeks to provide long term capital appreciation by investing in a portfolio that is predominantly constituted of equity and equity related instruments of infrastructure companies. However, there can be no assurance that the investment objective of the Scheme will be achieved. Invesco India Infrastructure Fund is a Equity - Sectoral fund was launched on 21 Nov 07. It is a fund with High risk and has given a Below is the key information for Invesco India Infrastructure Fund Returns up to 1 year are on To generate capital appreciation by investing in Equity and Equity Related Instruments of companies where the Central / State Government(s) has majority shareholding or management control or has powers to appoint majority of directors. However, there is no assurance or guarantee that the investment objective of the Scheme will be achieved. The Scheme does not assure or guarantee any returns. Invesco India PSU Equity Fund is a Equity - Sectoral fund was launched on 18 Nov 09. It is a fund with High risk and has given a Below is the key information for Invesco India PSU Equity Fund Returns up to 1 year are on 1. Nippon India Small Cap Fund
CAGR/Annualized
return of 21.8% since its launch. Ranked 6 in Small Cap
category. Return for 2023 was 48.9% , 2022 was 6.5% and 2021 was 74.3% . Nippon India Small Cap Fund
Growth Launch Date 16 Sep 10 NAV (16 Apr 24) ₹146.073 ↑ 0.59 (0.40 %) Net Assets (Cr) ₹46,044 on 29 Feb 24 Category Equity - Small Cap AMC Nippon Life Asset Management Ltd. Rating ☆☆☆☆ Risk Moderately High Expense Ratio 1.82 Sharpe Ratio 3.56 Information Ratio 0.92 Alpha Ratio 3.47 Min Investment 5,000 Min SIP Investment 100 Exit Load 0-1 Years (1%),1 Years and above(NIL) Growth of 10,000 investment over the years.
Date Value 31 Mar 19 ₹10,000 31 Mar 20 ₹6,750 31 Mar 21 ₹14,676 31 Mar 22 ₹21,150 31 Mar 23 ₹22,557 31 Mar 24 ₹35,036 Returns for Nippon India Small Cap Fund
absolute basis
& more than 1 year are on CAGR (Compound Annual Growth Rate)
basis. as on 16 Apr 24 Duration Returns 1 Month 7.5% 3 Month 3.6% 6 Month 17.3% 1 Year 55.9% 3 Year 34.8% 5 Year 29.2% 10 Year 15 Year Since launch 21.8% Historical performance (Yearly) on absolute basis
Year Returns 2023 48.9% 2022 6.5% 2021 74.3% 2020 29.2% 2019 -2.5% 2018 -16.7% 2017 63% 2016 5.6% 2015 15.1% 2014 97.6% Fund Manager information for Nippon India Small Cap Fund
Name Since Tenure Samir Rachh 2 Jan 17 7.25 Yr. Kinjal Desai 25 May 18 5.86 Yr. Tejas Sheth 1 Feb 23 1.16 Yr. Data below for Nippon India Small Cap Fund as on 29 Feb 24
Equity Sector Allocation
Sector Value Industrials 31.05% Financial Services 14.03% Consumer Cyclical 11.65% Basic Materials 10.44% Technology 8.9% Health Care 7.7% Consumer Defensive 7.31% Communication Services 1.71% Energy 1.07% Utility 0.86% Real Estate 0.33% Asset Allocation
Asset Class Value Cash 4.38% Equity 95.62% Top Securities Holdings / Portfolio
Name Holding Value Quantity Tube Investments of India Ltd Ordinary Shares (Industrials)
Equity, Since 30 Apr 18 | TIINDIA2% ₹1,020 Cr 2,924,163
↓ -343,396 Voltamp Transformers Ltd (Industrials)
Equity, Since 30 Sep 16 | VOLTAMP2% ₹761 Cr 864,398 HDFC Bank Ltd (Financial Services)
Equity, Since 30 Apr 22 | HDFCBANK2% ₹723 Cr 5,150,000 Multi Commodity Exchange of India Ltd (Financial Services)
Equity, Since 28 Feb 21 | MCX2% ₹697 Cr 1,851,010 Apar Industries Ltd (Industrials)
Equity, Since 31 Mar 17 | APARINDS1% ₹675 Cr 1,080,116 Hindustan Aeronautics Ltd Ordinary Shares (Industrials)
Equity, Since 30 Jun 19 | HAL1% ₹610 Cr 1,977,076
↑ 500,000 State Bank of India (Financial Services)
Equity, Since 31 Oct 19 | SBIN1% ₹606 Cr 8,100,000 NIIT Learning Systems Ltd (Consumer Defensive)
Equity, Since 30 Jun 23 | 5439521% ₹593 Cr 11,420,240 Karur Vysya Bank Ltd (Financial Services)
Equity, Since 28 Feb 17 | 5900031% ₹584 Cr 31,784,062 Bharat Heavy Electricals Ltd (Industrials)
Equity, Since 30 Sep 22 | 5001031% ₹569 Cr 25,000,000 2. Invesco India Infrastructure Fund
CAGR/Annualized
return of 11.1% since its launch. Ranked 24 in Sectoral
category. Return for 2023 was 51.1% , 2022 was 2.3% and 2021 was 55.4% . Invesco India Infrastructure Fund
Growth Launch Date 21 Nov 07 NAV (16 Apr 24) ₹56.46 ↑ 0.05 (0.09 %) Net Assets (Cr) ₹904 on 29 Feb 24 Category Equity - Sectoral AMC Invesco Asset Management (India) Private Ltd Rating ☆☆☆ Risk High Expense Ratio 2.49 Sharpe Ratio 3.45 Information Ratio 0 Alpha Ratio 0 Min Investment 5,000 Min SIP Investment 500 Exit Load 0-1 Years (1%),1 Years and above(NIL) Growth of 10,000 investment over the years.
Date Value 31 Mar 19 ₹10,000 31 Mar 20 ₹7,905 31 Mar 21 ₹13,511 31 Mar 22 ₹17,789 31 Mar 23 ₹18,787 31 Mar 24 ₹31,730 Returns for Invesco India Infrastructure Fund
absolute basis
& more than 1 year are on CAGR (Compound Annual Growth Rate)
basis. as on 16 Apr 24 Duration Returns 1 Month 9.7% 3 Month 12.9% 6 Month 35.3% 1 Year 71.2% 3 Year 35.2% 5 Year 26.8% 10 Year 15 Year Since launch 11.1% Historical performance (Yearly) on absolute basis
Year Returns 2023 51.1% 2022 2.3% 2021 55.4% 2020 16.2% 2019 6.1% 2018 -15.8% 2017 48.1% 2016 0.8% 2015 -2.6% 2014 83.6% Fund Manager information for Invesco India Infrastructure Fund
Name Since Tenure Amit Nigam 3 Sep 20 3.58 Yr. Data below for Invesco India Infrastructure Fund as on 29 Feb 24
Equity Sector Allocation
Sector Value Industrials 46.67% Utility 24.3% Basic Materials 9.52% Health Care 4.04% Energy 3.63% Consumer Cyclical 3.1% Financial Services 2.58% Technology 1.65% Communication Services 1.26% Real Estate 1.14% Asset Allocation
Asset Class Value Cash 2.12% Equity 97.88% Top Securities Holdings / Portfolio
Name Holding Value Quantity Power Grid Corp Of India Ltd (Utilities)
Equity, Since 30 Apr 22 | 5328987% ₹63 Cr 2,234,017 Larsen & Toubro Ltd (Industrials)
Equity, Since 29 Feb 12 | LT7% ₹59 Cr 169,760 Gujarat State Petronet Ltd (Utilities)
Equity, Since 30 Nov 22 | 5327024% ₹39 Cr 1,061,584 Tata Power Co Ltd (Utilities)
Equity, Since 31 Jan 21 | 5004004% ₹38 Cr 1,019,084 GAIL (India) Ltd (Utilities)
Equity, Since 31 Jan 23 | 5321554% ₹35 Cr 1,946,687 Bharat Electronics Ltd (Industrials)
Equity, Since 30 Nov 17 | BEL4% ₹33 Cr 1,623,224 Bharat Petroleum Corp Ltd (Energy)
Equity, Since 31 Jan 23 | 5005474% ₹33 Cr 543,643
↑ 35,819 Container Corporation of India Ltd (Industrials)
Equity, Since 31 Mar 17 | CONCOR3% ₹31 Cr 312,742
↑ 48,027 Thermax Ltd (Industrials)
Equity, Since 30 Jun 21 | THERMAX3% ₹28 Cr 76,244
↑ 507 NHPC Ltd (Utilities)
Equity, Since 30 Jun 23 | NHPC3% ₹27 Cr 3,039,056 3. Invesco India PSU Equity Fund
CAGR/Annualized
return of 12.9% since its launch. Ranked 33 in Sectoral
category. Return for 2023 was 54.5% , 2022 was 20.5% and 2021 was 31.1% . Invesco India PSU Equity Fund
Growth Launch Date 18 Nov 09 NAV (16 Apr 24) ₹57.29 ↑ 0.33 (0.58 %) Net Assets (Cr) ₹842 on 29 Feb 24 Category Equity - Sectoral AMC Invesco Asset Management (India) Private Ltd Rating ☆☆☆ Risk High Expense Ratio 2.46 Sharpe Ratio 3.35 Information Ratio -0.94 Alpha Ratio 1.88 Min Investment 5,000 Min SIP Investment 500 Exit Load 0-1 Years (1%),1 Years and above(NIL) Growth of 10,000 investment over the years.
Date Value 31 Mar 19 ₹10,000 31 Mar 20 ₹8,584 31 Mar 21 ₹12,144 31 Mar 22 ₹14,910 31 Mar 23 ₹16,919 31 Mar 24 ₹31,021 Returns for Invesco India PSU Equity Fund
absolute basis
& more than 1 year are on CAGR (Compound Annual Growth Rate)
basis. as on 16 Apr 24 Duration Returns 1 Month 8.6% 3 Month 16.4% 6 Month 45.4% 1 Year 87.3% 3 Year 39.3% 5 Year 26.7% 10 Year 15 Year Since launch 12.9% Historical performance (Yearly) on absolute basis
Year Returns 2023 54.5% 2022 20.5% 2021 31.1% 2020 6.1% 2019 10.1% 2018 -16.9% 2017 24.3% 2016 17.9% 2015 2.5% 2014 54.5% Fund Manager information for Invesco India PSU Equity Fund
Name Since Tenure Dhimant Kothari 19 May 20 3.87 Yr. Data below for Invesco India PSU Equity Fund as on 29 Feb 24
Equity Sector Allocation
Sector Value Utility 27.18% Industrials 25.7% Financial Services 25.62% Energy 19.79% Asset Allocation
Asset Class Value Cash 1.71% Equity 98.29% Top Securities Holdings / Portfolio
Name Holding Value Quantity Bharat Electronics Ltd (Industrials)
Equity, Since 31 Mar 17 | BEL9% ₹78 Cr 3,801,222
↑ 62,232 NTPC Ltd (Utilities)
Equity, Since 31 May 19 | 5325559% ₹76 Cr 2,254,157
↑ 16,754 State Bank of India (Financial Services)
Equity, Since 28 Feb 21 | SBIN9% ₹73 Cr 975,626
↓ -5,256 Coal India Ltd (Energy)
Equity, Since 31 Aug 23 | COALINDIA8% ₹67 Cr 1,526,429
↓ -106,386 Power Grid Corp Of India Ltd (Utilities)
Equity, Since 28 Feb 22 | 5328987% ₹60 Cr 2,126,667
↑ 477,183 Bharat Petroleum Corp Ltd (Energy)
Equity, Since 30 Sep 18 | 5005476% ₹50 Cr 833,087 Hindustan Aeronautics Ltd Ordinary Shares (Industrials)
Equity, Since 31 May 22 | HAL6% ₹49 Cr 157,644 NHPC Ltd (Utilities)
Equity, Since 31 Oct 22 | NHPC6% ₹48 Cr 5,435,618
↑ 144,875 Bank of Baroda (Financial Services)
Equity, Since 30 Jun 21 | 5321345% ₹38 Cr 1,431,527 Container Corporation of India Ltd (Industrials)
Equity, Since 31 Mar 17 | CONCOR4% ₹38 Cr 386,333
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