Mutual Funds offer various investment options in companies of varying market capitalization. A Fund needs to be chosen according to the investor’s risk appetite and financial goal. Investment into large cap mutual funds is one of the most recommended investment options today due to its large variety, less volatility, stable returns, etc.
Investors who wish to create wealth without taking much risk can consider investing in large cap mutual funds. Financial planners/advisors also suggest and encourage their clients to invest in the large cap mutual funds as large cap mutual funds are placed better and tend to give better returns even during market fluctuations.
Now, let us understand what are the best large cap mutual funds?
Best large cap mutual funds are those mutual funds that invest in companies that have large market capitalization and have an outstanding track record. The market capitalization of large cap companies is around Rs. 20,000 crores or more currently. When it comes to business, these companies are well experienced and are great players. The most important characteristic of the large cap companies is their good performance and stability during volatility in the market. If you are interested in investing for a long horizon and make a steady profit without much risk, large cap mutual funds are the best option for you.
Advantages and Disadvantages of Best Large Cap Mutual Funds
One of the major advantages of a large cap mutual fund is the stability that these funds bring to your portfolio. The large cap companies pay their dividends consistently and they have good records as well. Moreover, these large cap companies are present in the market for a long period, so you can obtain all the necessary details about them such as their management, performance, etc.
However, over the long term, the scope and potential for growth is quite less in case of the large cap companies hence large cap mutual funds tend to provide lesser returns as compared to the small and mid-cap mutual funds over the longer tenures.
Who should invest in Best Large Cap Mutual funds?
Best Large Cap Mutual funds are a very good investment option for beginners or first-time investors. Ideally, the investment option of an investor should depend on the goal of his investments, the tenure for which he is interested in investing and the level of risk he is willing to face in the investment.
Those investors who wish to earn their returns without being much exposed to the risk arising due to the uncertainties or fluctuations in the market should invest in the Best Large Cap Mutual funds. Since the large cap companies have good performance records and are financially strong, they tend to maintain stability during the market fluctuations. Even though there can be scenarios in which the returns from large cap funds might be lower than small and mid-cap funds, but they are relatively better protected from market falls which cancel out the effects of loss over the long term. Simply put, the returns obtained from the best large cap mutual funds tend to be less volatile.
Top large cap mutual funds
Let us have a look at the top 4 large cap mutual funds in which a risk-averse investor should think about investing.
|1||Aditya Birla SL Frontline Equity Fund|
|2||Axis Bluechip Fund|
|3||HDFC Top 100 Fund|
|4||ICICI Pru Bluechip Fund|
(As of 13th August, 2019)
The list mentioned above shows a detailed view of the top large cap mutual funds in India. You can use this data for reference while deciding about investing in large cap mutual funds.
Things an investor should consider when investing in Best Large Cap Mutual Funds
There are certain factors that an investor should keep in mind while investing in large cap mutual funds.
o Understand the objective of your investment
It is highly important that you understand and analyze the major goal or objective of your investment before making any investment. If you have clarity on your aim of investment, then you will be able to find out whether the objectives of the fund in which you are investing matches up with your goals or not.
If the objectives of the fund and your investment objectives do not align with each other, then the investment would not be of much use in the long run. Moreover, you should understand the methods by which the funds are being managed so that you can have the necessary knowledge of the performance of the fund in which you have invested.
o Past performance of the large cap mutual fund
It is quite crucial to know about the past performance of the large cap mutual fund in which you are planning to invest. You should look for the overall performance of the fund across all the conditions of the market. Most of the Best performing large cap mutual funds will perform consistently in all market conditions and you should choose such funds for investment.
o Fund Management
Fund manager and his level of experience play an important role in your selection of the best large cap mutual funds. A fund manager’s consistent handling of different market scenarios is very important for generating consistent returns. So, it is necessary to select the Fund Manager wisely.
o Expense Ratio
Expense Ratio, also known as the Management expense ratio, is a tool to measure how much assets of a fund are used in the administrative and other expenditure related to operations. It might also include charges like the brokerage fees, certain costs charged by Mutual fund houses, etc.
These Operating expenses tend to lower the assets of a fund and in turn reduce the returns to the investor as well. Before, investing in any Large Cap mutual fund you should understand and compare these charges and the returns with its peers to choose the best large cap fund. Best performing large cap mutual funds will have lower expense ratio and higher returns.
o Exit Load
Exit load is charged to the investor directly when he/she redeems his/her investment before the stipulated period. This exit load is a fraction of the return an investor receives. So, you should always check the applicable exit load of the large cap mutual fund in which you are planning. Choose a large cap fund that does not have any/low exit load or remain invested for the specified period to avoid incurring an exit load.
To summarize, best large cap mutual funds are an excellent investment option for those investors who want consistent returns from the funds. However, there are certain market risks involved in almost all investment options. So, it is always advisable to take help and guidance from Mutual fund advisors like IndiaNivesh before investment. You can always take control of your funds, but it should be done after gaining some experience about mutual funds.
Disclaimer: Investment in securities market / Mutual Funds are subject to market risks, read all the related documents carefully before investing.
Top Mutual Funds – How to Pick Top Trending Mutual Funds
The ‘Mutual Fund Sahi Hai’ wave has caught the nation in the last 3 years and there is a clear growing awareness & interest in Mutual Funds among people. More and more investors are trying to find out about this investment option and are actively searching answers on How to pick top trending mutual funds? In this article, we give you certain tips that will help you in ascertaining and picking up top performing mutual funds in India.Investing in mutual funds is simple but the bigger challenge is to find the top mutual funds to invest. Picking the best-suited mutual fund for yourself from the top-ranked ones involve a lot of attention to details like choosing the top performing mutual fund that focuses on offering higher returns on investment with a tap on the risk element. Mutual funds offer a bigger bait and investors perceive them as big winners when they strategically enhance their investment portfolio. Once you have decided to incorporate top performing mutual funds in your investment portfolio, there are certain parameters that you need to analyze like mutual funds’ performance history, the fund manager, the expense ratio report, etc., before picking the top performing mutual fund. Let us see the best ways to consider picking up top mutual funds.• Define Financial Goals: One of the golden thumb-rules while investing in mutual funds is to start with defining your financial goals and ascertaining your financial expectations from the mutual fund scheme. Defining your financial goals will help you to put forth clear roadmap and timelines for achieving your target. Thus, even if you are focusing on top mutual funds to invest your money in, there are certain questions that you need to ask yourself.o Do I want returns in a short duration or am I looking for long-term gains?o Whether the purpose of the investment is for fulfilling a dream like children education, marriage, etc. or for creating a retirement corpus?o How quickly do I want my money back?Thus, there are these and many more other questions that you must ask yourself while defining your financial goals. • Define your Risk Tolerance level: The next very important factor that you must focus before investing in top performing mutual funds is your risk appetite. Mutual funds are subject to market risks so defining your risk appetite and tolerance level will help you in being mentally ready for the upcoming challenges caused due to market fluctuations. Investors can set their risk tolerance bar by answering the below-stated questions: o Are you comfortable with market volatilities?o Do you want higher returns or are you comfortable with conservative returns?o Can you cope with the devaluation of your investment portfolio caused due to market fluctuations?o Are you ready to take the plunge in the high-risk investment zone? • Defining fund type and size of fund: Before investing in top mutual funds, it is important to define the type of returns that you are expecting from top ranked mutual fund. Every investor aims for capital appreciation so having a plan to invest will help in increasing the potential of your investment portfolio. For example: if you want regular income from your investment then investing in income funds is suitable but if you have a higher risk appetite and are aiming for a distant financial goal then investing in a long-term Equity fund will fetch good returns as these funds usually aim for capital appreciation. Pre-determining the size of the fund is equally important as it will diversify the portfolio and even the risk associated with it. Identifying proper fund type, its instruments and size of the fund will help in achieving investment goals in a pre-determined manner and timeframe. Similarly, it will help you to plan better to overcome potential market risks and help in clearly identifying the top mutual funds to invest. • Charges: Mutual fund companies charge fees in various forms for offering their services to the investors and they make money from the charges they imply on the investors. Asset Management companies charge in the form of front-end load, back-end load, administrative charges, level-load fees, etc. It is necessary for the investor to keep a close eye on the fees and management expenses charged by the asset management company usually referred to as the Expense Ratio. Expense Ratio refers to the various operating expenses charged by the Asset Management Company. In case, you have any queries related to fees, we recommend getting them clarified before selecting the top mutual fund. • Type of Management: Before selecting the top ranked mutual fund, it is important for the investor to determine its portfolio management. The mutual funds in India are managed in two manners viz. Active Management and Passive Management. Both types of management have their own set of advantages and disadvantages which investors should carefully look into and select the preferred type. Following are certain key differentiating points between both the types:o Actively managed funds charge higher fees as compared to passively managed funds.o Active funds work to surpass the performance of the index funds while passive funds duplicate their performanceo Passive funds are well diversified as compared to active fundso Passive funds are not traded frequently so they usually do not create huge taxable income, so this fund is preferred by investors with conservative risk appetite • Study of the Past Trends: Before investing in top performing mutual funds in India, one of the most important steps is to carry out extensive research and evaluate the funds’ past performance. Evaluating a fund's record of accomplishment will help in identifying its performance potential. Every mutual fund investor must ask themselves the following questions to gain clarity on the performance of the mutual fund:o How did the fund manager perform i.e. whether the portfolio manager’s decisions can generate better returns?o Did the fund deliver consistent results or were they volatile?Seeking answers to the above questions will help in getting an insight into the performance of the fund managers. Apart from tracking the decision-making potential of the fund manager, it is also important for the investor to track the past trends/performance of the mutual fund before investing in the fund. • Tax Implications: It is important to have first-hand knowledge about the tax implications, the funds will attract. There is a different tax structure for mutual funds depending on the type of mutual fund and the period of investment. Investing for long-term for more than 12 months in a listed equity fund is exempted from the income tax ambit, however; investing in an unlisted equity fund for more than 12 months attracts tax at 20% with indexation benefit. Similarly, the short term listed equity funds attract a 15% income tax. While investing in debt mutual funds for long-term attract an income tax rate of 20% with indexation benefit and for short-term, the income tax rate is levied as per slab rate.Conclusion:Investing in mutual funds is simple and easy as long as you are done with the most ardent part of mutual fund investing i.e. finding top mutual funds to invest. Therefore, it is always advisable to take expert advice from the professionals at IndiaNivesh who will offer their expertise to help you pick top mutual funds to invest and raise the bar of your investment portfolio. Disclaimer: Investment in securities market / Mutual Funds are subject to market risks, read all the related documents carefully before investing.
Trading Strategies - Day Trading Strategies for Beginners in India
Day trading is a popular trading strategy in the stock market and for many traders it acts a source of income. Day trading is also known as intraday trading strategies or short-term trading strategies. This kind of trading involves squaring off trade positions within a single trading session. Before we get into the details of day trading strategies, it is best to understand the concept in the layman’s terms. Under this type of trading strategy, a trader buys and sells the financial instrument on the very same day. This is an attempt to capitalize on short term price fluctuations. However, to make money out of day trading, one has to follow the right day trading strategies.To get this approach right, here are a few basic day trading tips for trading strategies that work. Basic Day Trading TipsThe basic trading tips help beginners to understand where to start and how to conduct day trading activities. - Risk BearingRisk bearing is all about the risk that you are willing to take financially. It is very important to decide in advance about the money that you want to invest in the stock market. If you are looking at an affluent win, you must also be prepared for any kind of loss. - Time Commitment and PatienceFor your stock trading strategies to do wonders, it is important to devote time. Merely, one-two hours a day is not going to achieve you much. Intraday trading strategies require constant monitoring and a sharp eye for identifying market fluctuations. Also, an important factor to bear in mind is that the market opens each day and the experienced traders will be able to quickly foresee the trades and profits on certain stocks and investments. However, this should not hamper your trading strategies. You must have the patience and the will to hold back for the first few minutes before making a thoughtful call on your trade for the day.- Small InvestmentsAs a beginner, starting small is the basic key for intraday trading strategies. Let your stock trading strategies play around 3-4 stocks a day and you should be good to go. This will help you learn and understand the market better and even if you incur a loss, you will be able to withstand it. Deciding What And When To BuyThis is where the tricky part comes in. Making sure when to buy and what to buy is the most crucial step for a beginner to learn and understand. Intraday trading strategies are all about making money out of minute price movements. This leverages a large amount from the investor’s pocket, which is at a risk. But with a calculated decision of what and when to buy, one can achieve the targeted goal. Trading strategies that work are related to three important pillars; Liquidity, Volatility and Trading Volume. - LiquidityLiquidity refers to how quickly an asset can be bought or sold in the market. Liquid stocks allow you to enter and exit a position at a good price. These stocks are more easily day-traded and they also have the tendency to be more discounted as compared to other stocks. - Volatility Volatility is the average difference between the daily high and low of stocks, divided by the stock price. This, in turn, gives you your potential profit range and you know that greater the volatility, higher will be the profits.- Trading Volume The trading volume indicates how many times the stock has been traded in the given period of time. In the case of day trading strategies, it is known as ‘average-daily-trading volume’. The higher the volume of the stock, the larger is the interest in the asset. When there is an increase in volumes it indicates a price jump, either higher or lower. Trading Strategies For BeginnersThere are numerous types of day trading strategies but we will speak of the traditional and most suitable stock trading strategies for beginners out of Scalping, Fading, Daily Pivots and Momentum.- Breakout Trading A breakout occurs when the price of an asset moves above or below the resistance area. To know when the price will start trending higher, look for a breakout to the upside from a chart pattern and visa-versa. Breakouts that occur on high volume show greater conviction. This means that the price is more likely to trend in that direction, resulting in higher profits. - Pullback Trading Pullback can be referred to as pulling back or taking a pause. It is basically a moderate drop in the pricing chart in comparison to the recent peaks or uptrend. The term is usually applied to pricing drops but these drops are of short duration and hence investing during a pullback can help you make a profit later on. Benefits Of Day TradingIntraday trading strategies provide opportunities to make huge profits if you follow the right practice. Some of the benefits of day trading are as follows:- When we talk of intraday trading, you can make a profit even if there is a falling market. This is a very important benefit for day traders because one can make profits in any direction with such trading’s. - Intraday trading provides traders a leverage amount. This, in turn, benefits them in purchasing more than what they have in their account and earning a profit on the entire sum. - If you know when to stop and how much to trade for, then intraday trading is very beneficial for you. It will help you earn a profitable sum in a day’s time. - Also, a huge factor that makes intraday trading beneficial is the brokerage cost. The brokerage commission for intraday trading is less than that of stock trading in other forms. - With intraday trading, you do not have to sleep with any kind of risk involved. There are no overnight positions and hence before the market shuts down you have your profit with you. This factor is very beneficial in the stock market because anything can change overnight. There can be a stock market crash or a stock market boom. But with such trading, you can enjoy a good night’s sleep. ConclusionWith the right strategies and knowledge, day trading can help you earn good profits. As a beginner you need to take baby steps till you get a good grasp of how market functions. Lastly, if you wish to trade, open a demat account with IndiaNivesh Ltd. And enjoy their seamless services. Disclaimer: Investment in securities market / Mutual Funds are subject to market risks, read all the related documents carefully before investing.
Are you Investment ready?
*All fields are mandatory