Mahindra Rural Bharat and Consumption Yojana (Equity) - An Insight Into Equity Mutual Funds

Equity funds or Growth fund is a fund that invests primarily in shares/stocks/equity or equity related instruments. Equity Funds are also known as Stock Funds and the objective of these schemes is to provide medium to long term capital appreciation. Every investor has a different risk appetite and investors with a very high risk appetite and a long term investment outlook should invest in such funds.

An Equity Fund can be Active or Passive (Index) in Nature. Active Equity Funds are those funds whose Fund Manager conducts market research of stocks and companies and finally invest in the best stocks. In the case of Passive funds, the fund manager builds a portfolio which tracks a particular market index or mirrors a specific index like Sensex or Nifty.

Mahindra Mutual Fund launches an NFO scheme ‘Mahindra Rural Bharat and Consumption Yojana’ targeting those investors who’re seeking an alternative to traditional investment method. This scheme also aims to yield high returns for the investors having a very high risk profile by investing in Equities. Mahindra Rural Bharat and Consumption Yojana if appropriately managed by the Fund Manager, will undoubtedly yield high returns in the long term for the investors.

TYPES OF RISKS THAT EXISTS IN MUTUAL FUNDS

There exists a possibility in every uncertainty and mutual funds are no exception. This implies that mutual funds can be profitable investment plans but are less risky than stocks. By investing in Equity Mahindra Rural Bharat and Consumption Yojana NFO, you can expect that the scheme will be able to achieve its objective. Investors should also note that the past performance of the fund does not guarantee the same performance in the future.

The risks associated with the mutual funds depends on the type of instruments, the mutual fund invests in. Debt funds investing in bonds are less risky than the Equity funds, while equity funds primarily invest in the stocks. However, the higher the risk associated with a mutual fund, more significant is the potential for earning high returns.

Before investing in any Equity funds, investors should ensure a rational and clear understanding of the risk factors involved during the investment period with their financial planner. Although such funds are suitable for only investors with high risk portfolio, yet the investors should discuss with their fund manager about how they’ll manage the various risks and unpredictable fluctuations associated with the fund, under varied market conditions.

HOW FUND MANAGER MANAGES AN EQUITY FUND

Fund managers are the most critical people of the Mutual Fund Industry. The actions of the Fund Manager and his team will decide the performance of the Fund. However, the fund manager has to work within the established guidelines of the mutual fund Regulator and the Fund House.

It is the Fund Manager who decides the stocks to be picked, sectors to invest in, booking of profit and losses, cash Management etc. The fund Manger has to work as per the scheme mandate. He has to decides the type of approach for investment. The fund manager can follow a bottom up approach or top down approach and even both. In Top down approach, the manager invests in stocks and sectors that can be beneficial to invest, depending on the current economic scenario. In bottom down approach, the fund manager focuses only on the company’s financials and invests in stocks with strong fundamentals, without any regard for the current economic situation.

Managing a Mutual Fund is a teamwork whose leader is Fund Manager. He is assisted by a team of Researchers, analyst, and Chief Investment Officer. The team mines an investment strategy and hunt for sectors and stocks that could fulfill the Investment Objective.

CONCLUSION

Mahindra Rural Bharat and Consumption Yojana is an innovative money making profitable investment scheme and is designed to meet the expectations of the investors. It is an open-ended scheme and is based on rural India theme. The scheme is particularly favorable for those investors who have a long term time horizon. The past performance of the mutual funds offered by Mahindra can give the investors the confidence that this NFO is suitable for their investment needs. As the last date for this NFO i.e. 2^nd November, 2018 is approaching, you should consult your financial planner to trace your suitability for this product. For any queries regarding this NFO or other financial advice please feel free to contact Swaraj Wealth supporting team. We give best solution to every financial problem.