What is a better choice?

PersonalFN

What is a better choice?
Purchase at retail price? OR Purchase at wholesale price?

Every person, on average, has a strong preference for making purchases of any kind of goods that are both of high quality and are available at low price. Because of this, we choose to purchase most of our goods at the wholesale price rather than the retail price because the wholesale price is significantly lower than the retail price and the quality is still maintained.

Benefits of buying at wholesale price

You can save money by buying at wholesale prices.
You can make an additional purchase.
You can get a better offer at cheaper rates.
Whether you buy wholesale or retail, the quality is the same.

Due to the inherent consistency of human nature, when it comes to making a purchase, almost everyone exhibits the same pattern of behaviour.
In the same way, when someone plans to invest, their mindset regarding lending their money to any investment also needs to be the same as when they buy other things. This is because lending money for any investment is essentially the same thing as buying something.
One who consistently engages in this pattern of purchasing commands the market. And then it extracts the most possible profits from the market.

What is Nfo?

Fund houses offer different types of mutual fund schemes to their investors. When a mutual fund launches a new fund, it can raise capital from investors through the New Fund Offer (NFO) period. The money raised during this period is invested in securities as per the scheme’s objectives.

The Securities and Exchange Board of India (SEBI), the market regulator, states that a new fund can be initially subscribed to for a maximum of 30 days. During the NFO period, the price of one unit, or the net asset value (NAV), of the new fund is set at Rs. 10. After the NFO, investors are allotted units of the funds as per their investment amount

Benefits of investing in an NFO

Give investors the option to make a small investment when the cost of existing mutual fund units is higher in a specific subject, like tax reductions, or a specific sector.

NFOs are a great option if you want to make a long-term investment in a particular type of mutual fund. Therefore, they are best suited for those who can hold their investments for a long time.

If you think a certain industry or business will grow in the future and an AMC launches an NFO in that industry or business, you have a great chance to make money on your investment.

You can get more units through an NFO than you would if you bought them later in a lump sum or through a systematic investment plan (SIP).

 

Words for TATA

It is one of India’s largest and most respected industrial groups, renowned for its adherence to business ethics. The Group has always believed in returning wealth to the society that it serves. With this we can analyze the TATA Mutual Fund’s performance since their inception. Many people are unsure whether they should invest at Rs 10 NAV during the NFO period or wait for the NAV to be reduced before investing. Compared to that, our perspective around here is very different. If you look at the chart below, you will see that those who invested during the NFO period when the NAV was 10 rupees have already made a profit. You can observe how well the NAVs have performed ever since they were first launched.

Data Source – Advisorkhoj, data as per 13th January 2023, Disclaimer: Mutual funds are subject to market risks. Past performance may or may not be sustained in the future.

Performance Evaluation of ₹10,000 Invested in various TATA MUTUAL FUNDS

Graphical Representation Of The Above Chart

Data Source – Advisorkhoj, data as per 13th January 2023, Disclaimer: Mutual funds are subject to market risks. Past performance may or may not be sustained in the future.

  • In the year 2018, an investor had invested ₹10,000 in the Tata Small Cap Reg Gr Fund and the current value of his investment as of 12th January, 2023 is ₹23,810, with the CAGR of 14% since its inception. The total amount of profit he earned during this period is ₹13,810.
  • In the year 2019, an investor had invested ₹10,000 in the Tata Balanced Advtg Reg Gr Fund and the current value of his investment as of 12th January, 2023 is ₹15,306, with the CAGR of 36% since its inception. The total amount of profit he earned during this period is ₹5,306.
  • In the year 2019, an investor had invested ₹10,000 in the Tata Focused Equity Reg Gr Fund and the current value of his investment as of 12th January, 2023 is ₹15,530, with the CAGR of 24% since its inception. The total amount of profit he earned during this period is ₹5,530.
  • In the year 2021, an investor had invested ₹10,000 in the Tata Business Cycle Fund Reg Gr Fund and the current value of his investment as of 12th January, 2023 is ₹11,724, with the CAGR of 84% since its inception. The total amount of profit he earned during this period is ₹1,724.

From the above chart we can analyze that the value of other TATA MUTUAL FUNDS have taken a growth and their current NAV is quiet high, that entails that grabbing the opportunity at the right time gives you the most of the opportunity.

TATA Mutual Fund is offering a unique chance to explore various market caps through its new fund offer, the “TATA Multicap Fund,” which is going to launch on January 16, 2023. It is an open-ended equity scheme that will invest in large-cap, mid-cap, and small-cap stocks, providing a disciplined tour around all market caps. The new fund offer (NFO) will remain open until January 30, 2023.

Tax Analysis of Multicap Funds

According to the tax laws, multi-cap funds are classified as equity-oriented funds because their investment goal is to invest at least 65% of their net assets in stocks and other securities that are related to the stock market. If the dividend income from a mutual fund exceeds Rs. 5,000, 10% TDS (Tax Deduction at Source) will be withheld. This is in addition to the investor’s regular tax rate.  When an investor redeems mutual fund units, the increase in the investment’s value is taxed as a capital gain. Investments held for less than a year generate short-term capital gains (STCG), which are taxed at 15% (plus applicable cess and surcharge). However, if such mutual fund units have been held for 12 months or more, the gains are classified as long-term capital gains (LTCG). Gains from the sale or redemption of equity shares or equity-oriented mutual funds are subject to taxation at 10% (plus applicable cess and surcharge), subject to an annual exemption of Rs. 1 lakh.

Why Tata Multi Cap Fund

  • Well-rounded investment strategy
  • Combination of investment ideas across earnings cycle
  • Portfolio construct flexible in terms of market cap
  • Each segment plays a role in optimizing risk-return trade-off
  • Diversified portfolio

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Mutual Fund Investments are subject to market risk, read all scheme related documents carefully.

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