Mutual Fund Taxation depends on three factors:

1. Type of Mutual Fund
2. Holding period
3. Residential Status

Type of Mutual Funds 

Equity Mutual Funds 

For tax purposes, the fund that invests and maintains 65% of its assets invested in the listed equity shares of domestic companies, is called an Equity Mutual Fund. In the case of Fund of Fund (FOF), the fund invests 90% of its assets in funds that, in turn, invest 90% of its assets in domestic equity (like Equity ETFs or Equity MF).

Debt Mutual Funds 

If the fund invests in 65% portfolio in bonds or Money Market instruments, it is called as a debt mutual fund, including FoF., 

Other Mutual Funds

If any fund does not fall under the above-mentioned two categories, then they are considered as “Other Mutual Funds”. 

Holding Periods of Mutual Funds

The other factor which determines the tax on mutual funds is the holding period.

Equity Mutual Funds 

If you sell equity mutual funds before the competition of 12 months, the gains are called Short Term Capital Gain (STCG).

If you sell an Equity Mutual fund after completion of one year or 12 months, the gains will be termed as Long Term Capital Gain (STCG).

Debt Mutual Funds

The holding period does not matter in Debt mutual funds. The gains are taxable whenever you sell a debt mutual fund. The gains will be added to income and tax as per the income tax slab rate.

Other Mutual Funds

If you sell within two years or 24 months, the gain is considered short-term capital gain (STCG). If you sell after two years or 24 months, then the gain is considered as Long Term Capital Gain (LTCG). 

Equity Mutual Fund -Taxation of Mutual Funds FY 2024-25 / AY 2025-26

Debt Mutual Fund -Taxation of Mutual Funds FY 2024-25 / AY 2025-26

Security Transaction Tax (STT) for FY 2024-25

Security Transaction Charges or STT is levied whenever we buy or sell securities (excluding commodities and currency) through a recognized stock exchange.

These securities includes:

• Equity-oriented mutual funds
• Shares, scrips, stocks,
• Government securities of equity nature
• Bonds, debentures, debenture stock or other marketable securities
• Derivatives
• units or any other instrument issued by any collective investment scheme to the investors in such schemes;
• Security receipt as defined in section 2(zg) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002;
• Rights or interest in securities;

On every purchase of sell we pay STT.

What are the latest Security Transaction Tax (STT) FY 2024-25

What is Nifty India Tourism Index?

The Tata Nifty India Tourism Index Fund aims to replicate the Nifty India Tourism Index. The Nifty India Tourism Index stocks methodology is as follows:

• The eligible universe for the index entails Nifty 500 constituents that belong to the following basic industries:
   1. Hotel & Resorts
   2. Tour, Travel Related Services
   3. Restaurants
   4. Airline
   5. Airport & Airport services
   6. Companies that are into manufacturing trolley bags, suitcases, and luggage
• The Index can consist of a maximum of 30 stocks with a weight cap of 20%
• The index is reviewed Semi-Annually (March and September) and rebalanced quarterly (March, June, September and December) basis Free Float Market Capitalization.
• The Index P/E ratio is 58.42 and the P/B ratio is 21.77. While the dividend yield is 0.17.

Nifty India Tourism Index Returns

Fund Strategy

The Tata Tourism Fund is a passively managed Index fund that aims to replicate/track the performance of the Nifty India Tourism Index (TRI).

The Scheme invests in securities constituting the Index in the same proportion as in the Index. The Scheme will invest at least 95% of its total assets in the securities comprising the Underlying Index.

The Scheme may also invest in debt/money market instruments including units of Mutual Funds to meet the liquidity and expense requirements.

The fund is ideal for those investors who would like to invest in passively managed funds investing in a portfolio of companies forming part of Tourism as represented by the Index.

6 Reasons to Invest in Tata Nifty India Tourism Index Fund*

1. Surge in Travel Frequency: The number of people taking three trips a year increased by 25% in 2023 compared to 2019 (source: MakeMyTrip). Travel now includes short and long vacations, staycations, workcations, getaways, road trips, experience travel, and spiritual tourism. People want to have new experiences and feel new emotions.
    
2. Exploring Uncharted Territories: More people are driving to getaway locations and adding unexplored destinations near metros to their itineraries. They are booking experiential stays in places like Jim Corbett, Munnar, and Mysore. Searches for spiritual destinations like Ayodhya, Ujjain, and Badrinath have surged by over 90% in the last two years. Cities like Lucknow, Indore, and Bhubaneswar saw the highest rise in searches last year (Source: MakeMyTrip).
    
3. Growing Middle-Income Group: The middle-income group represents approximately 31% of India’s population and is expected to reach approximately 47% by 2031, driving growth in domestic appetite for travel and tourism (Source: PRICE). Increased domestic flight demand is now seen coming from Tier II and Tier III cities, with hotel chains expanding to these regions.
    
4. Government’s Spending on Infrastructure: Various government schemes such as launching new air routes, developing tourist destinations, and investing in airport infrastructure and semi-high-speed trains are boosting tourism.
    
5. Expansion of Airline Fleets: The development of new airports and expansion of airline fleets have made air travel more affordable. Coupled with increased disposable incomes, this has led to a surge in air travel passengers.
    
6. Evolving Food Industry Trends: As more women join the workforce and urbanization increases, there’s growth in Quick Service Restaurants (QSRs), food processing companies, and cloud kitchens. Urban consumers are eating out more, not just to dine but also to socialize and experiment with various cuisines, leading to a rise in dining out and ordering in behaviours.

*Entire data and reasons taken from Tata mutual fund website.

Why Choose Tata Nifty India Tourism Index Fund?

The Tata Nifty India Tourism Index Fund is well-positioned to benefit from these trends. The fund is offering investors an opportunity to capitalize on the robust growth of India’s tourism industry.

This Tourism index captures the full spectrum of the travel and tourism segment. Thus making it a smart investment choice, for those looking to tap into this booming market.
 

Why Choose an Index Fund?

Index funds offer several advantages:

• Simple and Cost-Effective: They provide a hassle-free and cost-effective way to invest in a specific segment.
• Transparency: Fund holdings are based on a well-defined index, ensuring clear visibility.
• Lower Costs: Typically, index funds have lower expense ratios as they are passively managed.
   

Who Should Invest?

This fund is ideal for:

• Long-Term Growth Seekers: Investors with a long-term investment horizon who believe in the growth potential of the Indian tourism sector.
• Risk-Tolerant Investors: Suitable for those with a high-risk appetite, willing to invest in sector-specific funds.
• Focused Investors: Individuals seeking focused exposure to the tourism segment without broad diversification.

Tata Nifty India Tourism Index Fund –Details

Conclusion

Tata Nifty India Tourism Index Fund is an open-ended theme-based Index Fund. The fund target is highly specific and therefore carries a high investment risk. The Fund is a passively managed fund tracking Index returns. The fund can be added to investment portfolio, if you want to add diversification in your portfolio.

But at any time, the fund should not be the core of your portfolio. This is true people love to travel and spend a lot of money travelling. This fund is capturing investment returns from this spending habit of ours. This fund is very new in this category and may perform well in the near future.

Investment Strategy

The fund aims to provide long-term capital appreciation by investing predominantly in equity and equity-related securities of companies engaged in the energy and energy-related sectors.

The fund’s investment strategy is, identifying and investing in companies across various sub-sectors within the energy domain. 

The fund managers employ a bottom-up stock selection approach, focusing on companies with strong fundamentals, robust business models, and attractive valuations.

Other funds in energy theme investment are SBI Energy Opportunities Fund, DSP Natural Resources and New Energy Fund and Tata Resources & Energy Fund.

Where money is invested?

• Power ancillary industries – heavy electrical equipments, energy efficiency
• oil and gas- petrochemicals, refining, marketing , lubricants etc
• renewable energy- solar, wind, hydrogen, bio & alternate fuels
• Green Energy – gas transmission, city gas distribution, LNG terminal
• Power – coal producer, power generation, transmission & trading
• Large cap buys companies 
• Investing and companies with long term bias

What is the Nifty Energy Index (fund-tracked Index)

The Nifty Energy Index is designed to reflect the behaviour and performance of a diversified portfolio of companies representing the commodities segment including sectors such as Petroleum, Gas and Power etc.

Why should you invest in the ICICI Energy Opportunities Fund?

India’s energy demand is expected to grow significantly over the next  decade 

• Renewable energy sources are getting traction driven by global and national initiative 
• Energy theme-based investment 
• Nifty Energy Index has outperformed the broader market recently. The Index valuations are reasonable, and investors may consider this scheme from a long-term perspective.
• There is a gap between India’s energy Demand & supply chain.

Who should invest in ICICI Pru energy opportunities fund 

• Looking for long term growth through exposure in energy theme 
• seeking diversification within an equity portfolio
•  interested in capitalising on the transition towards renewable energy while also focusing on traditional businesses

ICICI prudential Energy opportunities Fund -NFO details 

NFO Open-2nd July 2024 

NFO Close -16 July 2024

Fund type-Open-ended fund 

Minimum investment– Rs 5000 & in multiple of Rs. 1 

Entry load– not applicable 

Exit load -Redemption in less than 3 months -1% of fund

Redemption after 3 months- nil

Benchmark index- Nifty energy TRI

Risk category -high risk

Fund manager– Sankaran Narayan and Nitya Mishra, The overseas investment will be managed by Sharmila d Mello

Conclusion

The ICICI Prudential Energy Opportunities Fund offers investors a unique opportunity to participate in the energy sector’s growth.

ICICI energy fund aims to give better long-term capital appreciation with theme theme-based investment approach, active management, and diversification within the energy sector.

However, potential investors should carefully consider their risk tolerance and investment horizon before committing to the fund, given the inherent volatility and risks associated with the energy sector.

The fund’s future performance largely depends on Govt. Policies and people’s behavioural changes as per the projected energy consumption changes.

Thematic funds focus on highly specific themes, sectors, or trends rather than broad markets. The theme funds can give good returns if the theme performs well. But, such funds possess higher risks (concentration risk, market timing risk, sector-specific risks and regulatory and political risks) as compared to other funds.

What should investors do?

The fund can be added as a diversification in the portfolio for returns. However, the fund should not be the portfolio’s core as this can be highly risky.

As with any investment, it is advisable to consult with a financial advisor to determine if the ICICI Prudential Energy Opportunities Fund aligns with your overall investment objectives and risk profile.

What is SBI Silver ETF &  SBI Silver ETF FoF

The SBI silver ETF aims to generate returns that are in line with the performance of physical silver in domestic prices, subject to tracking error.

Where is money invested?

The Scheme will invest in the following instruments ;

1. Silver and Silver related securities/instruments
2. Government Securities including G-Secs, SDLs, treasury bills, Triparty Repo and units of liquid mutual fund

Understanding SBI Silver ETF

SBI Silver ETF shall be benchmarked against the domestic price of silver (based on London Bullion Market association (LBMA) Silver daily spot fixing price).

What are the investment strategies?

The Scheme will invest in silver and/or silver-related instruments and will endeavour to track the performance of physical silver in domestic prices. The scheme will use a “passive” or indexing approach to achieve the scheme’s investment objective.

Under normal circumstances, SBI Silver ETF will hold an allocation of 95% to 100% in Silver and / or silver related instruments and 0% to 5% in Government. Securities including Triparty Repo, and liquid mutual fund.

The scheme will use a “passive” or indexing approach to achieve the scheme’s investment objective.

The fund management does not make any judgments about the investment merit of a particular commodity, nor will it attempt to apply any economic, financial or market analysis. Indexing eliminates active management risks concerning over/ underperformance vis-à-vis a benchmark.

 SBI Silver ETF FoF – NFO Details

NFO Period – 24th June 2024- 27th June 2024 

Type of scheme – An open-ended fund replicating/tracking the domestic price of silver (

Minimum application amount –Lumpsum – ₹5000/- and in multiples of Re 1/- thereafter

Benchmark- Domestic price of silver (based on LBMA Silver daily spot fixing price)

Exit Load– Not applicable

Fund Manager-Ms. Vandna Soni.

Ms. Vandna Soni joined SBIFML in December 2021 as Equity Research Analyst and has been involved in tracking of commodities and related sectors such as Cement, Metal, Oil and Gas. She has overall 10 years of experience in the area of financial services.

Total Expense ratio -To be Announced

Should you invest in SBI Silver ETF FoF – Review?

Before understanding, should you invest or not? Let’s first understand return generated by other silver ETFs that are already available in the market.

Let’s compare ETFs first. So you will get to know which silver ETF is best?

From the above two charts, it is quite evident that most of the ETFs have been launched in the recent past. The ETF has given good returns in the last year. The Fund with the lowest expense ratio has given best return.

SBI Silver ETF and Fund of Fund present investors with a strategic chance to broaden their investments in silver, thereby capitalizing on its value as both an industrial and precious metal. With skilled management and a strong emphasis on long-term growth, these funds serve as a promising inclusion to investment portfolios in the face of changing economic circumstances.

As of today, we do not know the expense ratio ( tracking error ) of the fund. If you believe that commodities can give you a good hedge against equity, you can consider investing in silver ETF. But for the time being old and return-generating products should be chosen.

We will explore SIP investment safety in both long & Short term tenure with real-life examples of equity & debt funds.

SIP investments offer a disciplined approach to investing, enabling you to invest a fixed amount regularly in mutual funds.

With SIPs, you can mitigate risks by spreading your investments over some time, averaging out the purchase costs. This leads to the potential for higher returns in the long run. One of the key advantages of SIP investments is their affordability.

want no risk with your investment, but want to pay monthly – refer to the post below

Recurring Deposit Calculator- Features & Benefits

SBI RD Interest Rate 2024- Recurring Deposit

With a lower starting amount compared to lump sum investments, SIPs make it easier for individuals to commence their investment journey.

Additionally, SIPs provide flexibility, allowing you to increase or decrease your investment amount depending on your financial goals.

By incorporating the power of compounding and rupee cost averaging, SIP investments can help you create wealth over time.

So if you’re seeking a safe and effective way to grow your financial portfolio, consider exploring SIP investments for a brighter future.

What is SIP investment?

SIP investment is a systematic periodic investment in mutual funds. In simple words, it is a recurring ( daily/ weekly/ monthly/quarterly/half yearly /yearly ) investment for a fixed amount.

For Instance, Bestii Singh wants to start a SIP investment in a mutual fund. He starts a systematic investment plan ( SIP ) ICICI Prudential Bluechip Fund & invests Rs 3000 every month for 10 years.

Now this SIP amount is fixed here. He will pay initially and thereafter there will be an automatic deduction every period ( daily/ weekly/ monthly/quarterly/half yearly /yearly ).

Understanding the concept of systematic investment planning

Whatever we buy has a price tag, similarly, the mutual fund is bought in units. The mutual fund NAV ( price tag of one mf unit) is the purchasing price of one MF unit.

We invest regularly to purchase and accumulate Mutual fund units.

Benefits of SIP investment

There are numerous benefits of SIP investment. But the most important benefits are its high Liquidity ( except close-ended funds), ease of investing, Easy small investment amount to start with, wealth accumulation and more.

  Read more about – SIP Pros & Cons – What YOU Must Know?

How SIP investment works

Let’s understand with an example of Bestii Singh is investing a fixed amount of Rs 3000 monthly. His investment date is fixed. The money is deducted every month. The NAV is the price of one MF unit. He accumulates units every month.

Thus via investing through SIP, he can accumulate and grow his wealth over time.

Read more about: Step Up SIP Can Make You Millionaire- Know How?

SIP vs lump sum investment: Which is better?

People are often confused about whether to invest in one shot or invest a big chunk at one time. To get details about all pros and cons about SIP vs lump sum investment-

Please read: SIP Or LumpSum – Which Is More Profitable?

Choosing the right SIP investment plan

Choosing the right SIP investment plan is crucial for financial success. Read How to choose the right SIP investment plan.

SIP investment strategies for different financial goals

People have a common Financial goal of wealth accumulation. But you know, every individual risk appetite is different.

Hmm! What and how different? you may ask?

Few people need money exactly in 4-5 years and will have to invest in low to moderate-risk mutual fund while those who are not dependent on this money/ not at all dependent / partially dependent on this investment will have different risk profiles.

Is investment in SIP safe?

Let’s evaluate Systematic Investment Plan ( SIP) safety in different time frames. SIP investment is not 100% safe. SIP return may vary from fund to fund, time frame to time frame.

There is no guarantee of returns or capital invested. But if we look at the historical data of any fund, SIP may have given low returns in the short term. But usually, you get a good return in the long run.

The return of a one-year investment. Similarly, long-term investment returns may vary.

Do you want to see the SIP returns with yearly enhancements

SIP investment and tax benefits

What Are The Benefits Of SIP Account In Tax Saving?

ELSS Funds Meaning, Tax Benefit & How To Invest?

Mutual Fund Taxation – How Your Gains Are Taxed?

 Top 3 Easy Ways To Cancel SIP In A Click 

Conclusion: Is SIP investment right for you?

SIP investment can be the right choice for you. You can choose SIP as your goals and needs. SIP can also be used for wealth Creation. SIP can be used for multiple goals that may include short-term needs like asset purchase, retirement planning, wedding, education or other goals as well.

ICICI Prudential Freedom SIP- Worry Free Retirement Solution

The Nifty Defence Index mirrors Indian Defence sector growth, attracting investors seeking diversification.

Understanding the Nifty India Defence Index

The Nifty Defence Index is a specialised equity index that tracks the performance of stocks representing the defence sector in India. 

The NSE Defence index has a base date of April 02, 2018, with a base value of 1000.

NIFTY India defence index has pure exposure to defence stocks. The fund provides investors with an opportunity to gain exposure to this strategically important and rapidly growing industry.

Nifty India Defence Index Returns

 Motilal Oswal Nifty India Defence Index Fund – NFO Details

NFO Period – 13th June 2024 – 24th June 2024

Type of scheme – An open ended fund replicating/tracking the Nifty India Defence Total Return Index

Minimum application amount –Lumpsum and SIP – ₹500/- and in multiples of Re 1/- thereafter

Benchmark- Nifty India Defence Total Return Index

Exit Load- 1% if redeemed before 15 days of allotment, nil thereafter

Fund Manager-Mr. Swapnil Mayekar (For Equity Component) Mr. Rakesh Shetty (for Debt Component)

Total Expense ratio -To be Announced

Why should I invest in the Nifty India Defence Index Fund?

Investing in the Nifty India Defence Index Fund allows you to:

• Benefit from the robust growth of the defence sector.
• Gain exposure to companies with strong government support and favourable policy initiatives.
• Invest in a sector with technological innovation and resilience against economic downturns.
• Align your portfolio with the nation’s strategic priorities.

Nifty 50 Vs Nifty India Defence Index

Nifty 50 Index Fund provides broad exposure to the top 50 companies across various sectors in India

 Whereas, The Nifty India Defence Index Fund is focused exclusively on the defence sector. 

Thus Nifty 50 is a broader index tracking top 50 stocks on index whereas Defence Index tracks highly specific stocks in defence sector only.

This way we can say that Nifty 50 Index is a comparatively less riskier investment as compared to Defence Index.

Top 10 Stocks of Motilal Oswal Nifty India Defence Index Fund

What are the risks associated with investing in the Nifty India Defence Index Fund?

Nifty India Defence Index Fund is a thematic index fund thus it is risky as compared to broader indexes such as Nifty 50 etc. 

The primary risks include:

• Sector-specific risk: The fund’s performance is closely tied to the defence sector, which can be affected by changes in government policy, defence spending, and geopolitical factors.

• Market risk: The value of your investment can fluctuate based on market conditions and economic factors.

• Liquidity risk: Some defence companies may have lower liquidity, which could impact the fund’s ability to buy or sell shares.

How often is the Nifty India Defence Index reviewed and rebalanced?

The Nifty India Defence Index is reviewed and rebalanced semi-annually to ensure it accurately reflects the performance of the defence sector. 

This process involves adjusting the index’s composition based on the latest market data and company performance.

Who should consider investing in the Nifty India Defence Index Fund?

The Nifty India Defence Index Fund is suitable for investors who:

• Seek exposure to a high-growth sector with strategic importance.
• Are looking for a diversified investment within the defence industry.
• Have a long-term investment horizon and can tolerate sector-specific risks.
• Wish to align their investment portfolio with national security and technological advancements.

Defence Index SIP Returns (SIP Amount Of Rs.10,000/- Per Month)

Equity index funds and taxation

The nifty Defence Index is an equity mutual fund, that follows Equity taxation. The taxation of equity funds depends on the investment duration for which the investment is held. On the basis of the holding period is classified as STCG & LTCG.

Short-Term Capital Gains (STCG): If the holding period is less than a year, short-term capital gains tax is levied at a rate of 15%. Therefore if you redeem/sell your mutual fund units within a year of purchase, any profits will be taxed at 15%.

Long-Term Capital Gains (LTCG): If the holding period is more than a year, The gains are called as long-term capital gains.

The gains over and above Rs 1 lac are taxed at 10%.

Motilal Oswal India Defence Index Fund Review?

Motilal Oswal India Defence Index Fund tracks the Nifty defence Index, which is a focused investment in a stable sector with growth potential.

However, you must consider high sector-specific risks, limited diversification( since the index is investing in 10-12 companies only)and ethical implications before investing. The index fund performance may vary with Govt. policies or sector-specific risk. People who have good risk appetite can invest in Motilal Oswal defence fund.

ELSS stands for Equity Linked Savings Scheme. ELSS is a popular choice among investors because of its low lock-in period, tax benefits and potential capital appreciation.

But what exactly is ELSS? How does it work? And why should you consider it as part of your investment portfolio? These are all questions we will explore as we uncover the full form of ELSS. From understanding the different types of ELSS funds to determining the best time to invest, we will equip you with the knowledge you need to make informed investment decisions. So, if you’re ready to decode the world of ELSS and unlock its potential, let’s begin this enlightening journey together!

Understanding the full form of ELSS

Not all Equity Mutual funds can save your taxes under section 80C. But only a special category called Equity Linked Savings Scheme/ ELSS can.

The full Form of ELSS is Equity Linked Saving scheme. These ELSS mutual funds have a locking time of 3 years only, which is the least lock-in time among all tax saving schemes.

Benefits of investing in ELSS

• Tax Saving U/S 80C – You can get tax deduction U/S 80C for 1.5 lac in a financial year.
• Short Lock in Time- ELSS MF have lock-in period of 3 years only. An investor can withdraw money after completion of 3 years.
• Long-term wealth creation – ELSS funds allow the option to stay invested longer than 3 years. This way one can get much better returns. Since these funds are invested in equities, considerable wealth can be generated over time. 
• Promotes Saving Habit– Since you can invest through monthly instalments aka SIP, which bring in good saving habits.

ELSS vs other tax saving options

Other tax Saving options have greater lock in time and low returns as compared to ELSS mutual funds.

ELSS tax benefits and considerations

Why invest? If you invest in ELSS mutual funds you get tax exemption (of the invested amount )up to the limit of Rs 1.5 lakh in a financial year.

On withdrawal, after completion of three or more years, the gains are considered long-term capital gains. The LTCG gains are taxed at 10% if the profit is above 1 lakh.

Suppose Bestii Singh invested Rs 1.5 lac in Axis Long Term Equity Fund in Jan 2020. He redeemed money in Feb 2023. Let’s assume he sold MF in Rs 3 lac. His profit is 1.5 lac. Now from this money 1 lac is exempt and he has to pay 10% of Rs 50000 as taxes.

How to invest in ELSS MF?

The procedure to invest in ELSS MF is the same as that of a mutual fund. You can either invest a lump sum amount or as monthly/quarterly/half yearly/yearly regular payments. 

You can also invest in the same fund as and when you like. Even investing a lump sum amount and SIP in the same or different fund is also possible. Read more : SIP Or Mutual Fund – What Is The Difference & Example

Steps to invest in ELSS 

ELSS investment strategies

The best way to invest in ELSS mutual funds is SIP. 

Investing via SIP or STP offers value cost averaging and leverages the market volatility.

Common misconceptions about ELSS

Myth 1: ELSS investments are automatically redeemed after the lock-in period.

You need to submit a withdrawal request to withdraw money from ELSS. Although the locking time is only 3 years, but ELSS has an option to stay invested for years altogether.

.Myth 2: You can only invest up to Rs.1.5 lac.

ELSS Mutual fund tax exemption is up to an amount 1.5 lakh under section 80C but you can deposit any amount of your choice. 

Myth 3: Only a lump sum investment in ELSS qualifies for tax benefits

Whether you invest a lump sum amount or invest via SIP you get tax deduction both ways.

Myth 4: ELSS investments are ideal for the short-term.

You are eligible to withdraw money after completion of 3 years but to get good returns from equity linked saving schemes one need to stay invested for at least 5 years.

Myth 5:  you get tax deduction from all equity mutual funds.

All equity Mutual funds do not provide tax saving options this is a special category of mutual funds called as equity-linked saving schemes ELSS mutual funds only these Mutual funds provide tax benefits under section 80c

Conclusion: Why ELSS is a smart investment option

Tax-saving mutual funds can be a smart investment option if invested for the long term. These funds usually use a diversified approach for investing money, which means they invest across market caps i.e. large, mid & small caps. Thus, comparatively, they are less riskier than theme-based funds, and small-cap funds.

ELSS MF provides lots of flexibility, which other products do not. I mean, if at all, you do not want to pay or redeem after a certain time, you can. Whereas, in case of an insurance policy lapse, you have to bear huge losses.

Read more:

Fund Objective

Mirae Asset Mid Cap Fund aims to invest in high-quality mid-cap companies, that have the potential to be tomorrow’s large caps.

The fund aims to identify emerging companies that could benefit from strong earnings growth and P/E rerating.

Investment Strategy

The fund invests predominantly (>65%) in midcap equity and equity related instruments (101st -250th company in terms of full market capitalization).

The fund may also participate in other Indian equities based on factors like relative valuations, liquidity, and market sentiments.

Overall portfolio strategy is based on a bottom-up approach while identifying relative risk-reward on individual stocks. The fund managers have considered a two-prong approach to investing in the midcap space. First is to consider high-quality businesses and second is to participate in “deep in value” businesses

Diversified portfolio with participation across sectors.

Fund Manager – ANKIT JAIN (Since Inception) B. Tech (ICT), MBA (FINANCE)

Mr. Ankit Jain has professional experience of more than 10 years, and his primary responsibility includes Investment Analysis & Fund Management. He had joined the AMC as a Research Analyst since September 7, 2015. He was previously associated with Equirus Securities Pvt Ltd. and Infosys Ltd.

Mirae Asset Midcap Fund – Details

The fund has 97.7% investment in domestic equities of which 16.54% is in Large Cap stocks, 42.77% is in Mid Cap stocks, 12.71% in Small Cap stocks.

Index -NIFTY Midcap 150 (TRI)

Scheme Inception date – July 29, 2019

Type : Open Ended Fund. You can invest any time in this fund.

Minimum Investment – (one time- first time) – ₹5000

Minimum SIP -₹1000

Min investment amount (addtional purchase) – ₹1000

Exit Load-1.00%: If units are Redeemed or Switched Out within 1 year (365 days) from the date of allotment.

Nil after 1 year (365 Days).

Expense Ratio– 1.68%

Should you consider buying?

The fund has given 21.64% in last 3 years, a 27.93% return since inception. If we look at the risk ratios, the standard deviation and beta are in the range. But other risk ratios are negative as per moneycontrol stats. The other funds in midcap segment are giving better returns as compared to the Mirae Asset Midcap fund. Additionally, as of June 2024, the fund could not beat the index.

In my opinion, one should choose some other fund in the midcap segment. If you are keen to invest in Mirae funds, you can consider Mirae Asset Nifty MidSmall cap 400 momentum quality 100  ETF FOF – Review ( Detailed). ( Disclaimer: It is not an investment advice. Please consult with your Financial Advisor before taking any investment decision.

What are these special opportunities/ Situations ?

The  investment objective  of  the  scheme  is  to generate  long  term  capital appreciation  by  investing  predominantly  in  opportunities presented  by  Special Situations.

• Company Specific Events/Developments,
• Corporate Restructuring,
• Government Policy change and/or Regulatory changes,
• Technology led Disruption/ Innovation
• companies going through temporary but unique challenges and other similar instances.

An economy, industry or company have multiple challenges in their journey. Challenges lead to uncertainties and multiple uncertainties mean multiple opportunities.

Who should buy?

Kotak Special Opportunity Fund is suitable for long-term investors ready to take some risk with their investments.

Kotak Special Opportunities Fund– NFO details

Scheme Benchmark– Nifty 500 TRI

 The  NIFTY  500  index represents the top  500  companies selected based on full market capitalization from the eligible universe. 

The NFO opened on 10th June 2024 & Closes On: 24th June 2024.

Open for repurchase 25 June 2024

Minimum Investment – The minimum subscription amount required is Rs 100 and in multiples of Re 1 thereafter.

Minimum SIP – Rs 100 in multiples of Re 1 thereafter

Investment Objective– Long-term capital appreciation via investing in equity and equity-related instruments.

Category – Equity Fund (Thematic – special situation)

Exit load ( if 10%  of  the  initial  investment amount (limit) purchased or switched in within 1 year from the date of)– Nil

Exit load ( if withdrawal/redemption of more than 10% of initial  investment amount (limit) purchased or switched in within 1 year from the date of)- 1%

Exit Load ( if sold units after 1 year) – Nil

Benchmark Index– NIFTY 500 TRI

Fund Manager–  Mr Devender Singhal (Equity) & Arjun Khanna (For Overseas )will manage the scheme.

Mr. Devender Singhal has 22+ years of experience in the Indian Equity market. Fund management experience with Kotak is about 8 years. He has been successfully managing schemes such as Kotak Multi Asset allocator FOF ( along with Mr Arjun Khanna), Kotak Equity Savings, Kotak Debt hybrid & multicap fund.

Why Invest in Kotak Special Opportunities Fund?

Attempts to Make the Most of Market Changes: The stock market can be full of surprises and shocks. The fund aims to take advantage of these opportunities.

Invest in Unique Events: The fund looks for chances to invest in companies going through material changes like new government policies, management changes, temporary but unique challenges, and more…

Professional Management: Our experienced fund management team uses their expertise to identify and invest in Special Situations amongst ever-changing environment

Market Cap Agnostic: Our fund invests across all market capitalizations—large, mid, and small-cap—seeking opportunities regardless of company size.

Bottom-up Stock Selection: The fund identifies companies with a BMV approach

Asset Allocation: 

Click here for the detailed NFO presentation.

Kotak Special Opportunities fund -Review

The Special situation or special opportunities funds invest based on triggers such as corporate restructuring, government policies, regulatory changes or technology-led disruptions. The strategy is agnostic of market mood or valuations, that make these kind of funds ideal for current markets.

The special situations strategy identifies and capitalises on unique events or circumstances that can impact the value of a particular investment. Thus investing in this special situation fund can be a contrarian view to normal active funds and therefore may add diversification to the portfolio.

Before investing, bear in mind that the funds are highly risk and suitable for long-term investing only

Let’s first try to understand the underlying index.

What is Nifty 100 Low Volatility 30 Index?

Nifty 100 Low Volatility 30 Index aims to measure the performance of the low volatile securities in the large market capitalisation segment.

 The securities are selected from Nifty 100 index that are available for trading in the derivative segment(F&O). 

The benchmark composition is such that, it is suited for comparing the scheme performance.

Why Choose Kotak Nifty 100 Low Volatility 30 Index Fund over Nifty 100 or Nifty 50 Index Fund?

One should invest in Nifty 100 Low Volatility 30 Index for below mentioned reasons:

Reason # 1 – it has Outperformed with lower volatility

Source: KMAMC Internal. Data source: Motilal Oswal, Bloomberg and ICRA. Data as of 30th April 2024. Past performance may or may not be sustained in the future. The performance of the index shown does not in any manner indicate the performance of the Scheme.

Reason # 2 -The index has lower volatility as compared to broader indices

Reason # 3 – The Index has outperformed across time periods

Index Rolling Returns

Reason # 4 – The Index has outperformed as compared Nifty 50 & 100 over a long period.

Reason #5 – Lower Drawdown during market correction

Reason #6 -Better Index Rolling Returns

Returns are as on 30-April-2024.. Source: ICRA. Past performance may or may not be sustained in the future. For Rolling returns, the rolling period is the respective time period and the rolling frequency is one day. The performance of the index shown does not in any manner indicate the performance of the Scheme. Kotak Mahindra Asset Management Company Limited (KMAMC) is not guaranteeing or promising any returns/futuristic returns.

Reason #7 – Better Calender Year performance

In 10 out of 18 calendar years, Nifty100 Low Volatility 30 TRI has performed better than both Nifty 100 TRI and Nifty 50 TRI

Reason #8 –Portfolio Composition & Sector Exposure

Kotak Nifty 100 Low Volatility 30 Index Fund- stock selection criteria

The fund has a unique investment approach since it invests in stock universe Nifty 100 Stocks. The stock selection criteria is based on stock duration on index ( the stock should have a minimum listing history of 1 year.

stocks are selected on basis of below given parameters:

• Stock Universe Nifty 100
• Stocks should have minimum listing history of 1 year
• Stocks are selected based on the volatility Score
• Least volatile stocks receive the highest weight
• Rule based entry & Exit
• Index is Re-balanced on quarterly basis March, June, September and December to determine entry and exit of stocks

Where the fund will invest money? 

KOTAK NIFTY 100 LOW VOLATILITY 30 INDEX FUND -NFO Details

The NFO opened on 22nd May 2024 and it will remain till 31st May 2024. 

Minimum Investment – During the NFO period, the minimum subscription amount required is Rs 100 and in multiples of Re 1 thereafter.

Minimum SIP – Rs 100 in multiples of Re 1 thereafter

Investment Objective– Long-term capital appreciation via investing in equity and equity-related instruments.

Category – Index Fund 

Exit load – Nil

Benchmark Index- NIFTY 100 Low Volatility 30 Index (Total Return Index)

Fund Manager–  Mr. Devender Singhal, Mr. Satish Dondapati and Mr. Abhishek BisenUnderlying Index

Conclusion

This fund suits Equity investors targeting long-term capital appreciation by investing in an Index Fund. We can call it a smartly chosen index fund since money is invested based on various factors.

Suitable for people who want to take higher risks to get some better returns than other funds. People with low/moderate-risk appetite and who are dependent on the maturity of the fund should AVOID investing in the fund.