There has been an increase in the variety of equity offerings in the mutual fund industry lately.

This has been advanced by several factors like :

·      Increase in Inflow

·      Growing market sentiment & Retail Exposure

·      SEBI’s re-categorization exercise

Increasing retail exposure has meant that investors are now more aware about mutual funds in general, this has led to higher expectations with regards to product offerings.

SEBI’s re-categorization exercise has also meant that AMC’s now cannot have more than one active fund in a category except for thematic funds.

All of the aforementioned points have resulted in mutual fund companies looking for newer products to penetrate the retail space even further while staying in compliance.

The recent influx of momentum funds in a short space of time is a result of that.

SBI Focused Equity Fund as the name suggests is a focused fund that can invest in not more than 30 stocks at any given time.

It was initially launched as a Small & Mid cap fund by the name of SBI Emerging Businesses Fund but was later renamed as SBI Focused Equity Fund and re-categorized as a focused fund due to SEBI’s re-categorization exercise in 2018.

Ever since its re-categorization the fund has seen a heavy tilt to large cap stocks which is a departure from its earlier investing stance.

Stepup Sip

Besides regular sip investments, there’s something called as Stepup Sip.

A Stepup Sip is an avenue via which your sip amount increases periodically either via a fixed percentage or amount.

Unlike a traditional SIP investment you will have to mention the fixed percentage or amount prior to starting a Stepup Sip and the entire process is automated.

A Stepup Sip gives you the facility to increase your sip amount at a pre-determined date and thereby not allowing procrastinating to set in.   

While a regular sip investment is a very convenient and affordable manner by which you can achieve your financial goals, adding to them periodically is the need of the hour.

Rising expenses, erosion of rupee, multiple life goals, etc. have all made an addition to your regular sip investment a nice and comfortable option to resort to.

It is always better to have it and not need it than to need it and not have it.

 What is a Flexi cap mutual fund?

A flexi cap mutual fund is a mutual fund that would by mandate need to invest a minimum of 65% into equity at all times.

The remaining 35% can either be invested in debt, international equity, cash or any of the above caps or all.

This 65% is only minimum which can even go up to 100% in case the fund manager so desires.

Whatever the allocation is between 65% to 100%, there is no restriction with relation to large cap, mid cap or small cap stocks.

Basically, the fund would be run as how erstwhile multicap mutual funds were being run.

Why must you invest in a falling market?

Imagine a smartphone you really like that you were considering buying, now imagine its price has fallen by 15-20%.

Nothing has changed except for the price, would you not buy just because the price has fallen?

Of course not!

The same is true for investing in a falling market, why would you not invest in a falling market when you have the opportunity to accumulate more units at a lower price?

This applies only if the fundamentals of your investments remain the same, it is only natural for your investments to also see a dip if the broader market is also going through a fall.

You should also be careful to not try to time the market and instead stagger your investments.

Get the Basics right

Before delving into the world of mutual fund investing it is imperative that you get the basics right.

This implies getting a few things in order before going ahead.

To use an analogy, imagine the foundations of a building being solidified before the storeys are given a thought.

Insurance: Make sure you have term insurance in case you have financial dependents.

Health Insurance: Along with term insurance this is another necessity, health expenses are never cheap and inflation will always make sure the struggle gets even harder.

Emergency Fund: Always keep aside a minimum of 12 months worth of expenses set aside before venturing in to any form of investment, you never know when life decides to take a nosedive.

The equity markets are at an all-time high with Sensex recently breaching the 80k mark.

This has been a reality due to improved earning results of Indian companies along with the slow and gradual shift is assets from savings account to mutual funds.

The continuation of the previous government has also played a role since this would imply the extension of the previous policies.

Whenever the equity markets hit a new high, it brings along with it a unique set of challenges for investors.