Dilzer Consultants - Investments and Financial Planning

An ISO 9001 (2008) Certified Company

   SEBI REGISTERED INVESTMENT ADVISOR

Mutual Fund Options

 

As per SEBI Guidelines of 2013 Mutual funds are to be divided as per risk profile of the client needs:

 

(BLUE) investors understand that their principal will be at low risk

(YELLOW) investors understand that their principal will be at medium risk.

(BROWN) investors understand that their principal will be at high risk

 

Debt funds (BLUE)

These funds invest in fixed income bearing instruments like corporate bonds, debentures, government securities, commercial paper and other money market instruments. These funds are relatively low-risk-low-return schemes. The returns from debt funds include interest receipts and capital gains. If you desire relatively stable performance, these schemes are right for you.

Debt funds can be further categorized into –

  1.         Money market/floating rate schemes.
  2.         Gilt funds.
  3.         Income funds
  4.         Fixed Maturity Plans (FMPs)

 

Hybrid Funds (YELLOW)

 

These funds invest in equities and debt investments in varying proportions.

  1.  Monthly Income Plans.
  2.  Balanced Funds.

 

Equity Funds (BROWN)

Equity funds invest predominantly in equities with a small portion in money market securities. The objective is to generate potentially superior returns by taking on higher risk. As these funds invest in stocks, returns do fluctuate thereby posing higher risk. Therefore, these funds are not for risk-averse investors.

Equity funds can be further categorized as –

  1.  Diversified funds
  2.  Sectoral funds
  3.  Index funds
  1. Equity Linked Savings Schemes (ELSS) and the Rajiv Gandhi Equity Schemes (RGESS) 

1.   Exchange Traded Funds (ETF): ETF is a fund whose units trade like a stock on the stock exchange. These could be based on a stock index or any other underlying asset. These can be bought and sold only in the stock market at real time prices which could be different from its unit NAV. These have lower expense ratios when compared to index funds and other equity funds. You would need a demat account to invest in these funds. These funds aim to closely mirror the returns generated by the underlying asset.

2.  Gold ETFs: Gold ETFs are funds that are based on gold. You can bet on gold without buying physical gold by investing in these gold ETFs. With these funds, you are not only relieved of the hassles of safekeeping your gold but are also assured of purity since these funds invest in certified gold bars. You are also spared of the wastage and making charges that you would typically incur when you buy gold from jewelers. With certain forms of paper gold, you also get the option of converting it to physical gold with select jewelers.      

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 3. Fund of Funds (FoF): FoFs invest in other mutual funds either of the same fund house or others. There are funds that invest in mutual funds abroad. There are multi asset funds too that invest in units of debt, equity and gold too. It is easy to achieve diversification and lower risk through FoF. However, you will have to bear higher management expenses.

4. International funds- These funds invest in international markets relating to a theme like BRIC or US markets, depending on market and economic conditions.

For more information and investment in the same, please contact us