Managed Funds

Managed Funds are professionally managed funds with pre-specified objective, risk exposure, management style, strategy and some other attributes as per the client’s requirements and financial objective. We can have a number of advantages while investing in professionally managed funds like diversifications, cost efficiency in regard to research’s works, software & technology and others. Furthermore, we don’t need to track, analyse, interpret all market driving factors as a qualified professional will do all these on our behalf. The broad categories of Managed funds that we offer are:

1. Mutual Funds: Mutual Funds are a pool of funds where numbers of people put their money having similar objectives, goals and risk appetite. We can have different investment modes or frequency for investment in mutual funds like one time (Lumpsum) and periodically like daily, weekly, monthly, quarterly. There are different types of mutual funds matching one’s requirement across different asset classes like equity, debt, gold, real estate. We can even also invest in foreign companies through mutual funds. Some of the broad categories in mutual funds are as below:


Equity Funds

These funds invest in equity shares of listed companies in recognised stock exchanges. The investment strategy, risk exposure may differ in different funds. However, there are numbers of reasons to invest in equity funds like diversification, attractive returns in long term, professional management, different investment strategy and others. These funds can be broken down to few categories based on market capitalisation; management type i.e. active and passive; strategies like growth based, value based, theme-based, sector based, etc. These funds generally have moderately high to high risk exposure. A special kind of equity funds also exists known ELSS (Equity Linked Savings Scheme) where an investor can put money for a good capital appreciation along with an advantage of tax deduction U/S 80C up to 1.5 Lakh/FY. This fund has a lock-in period of 3 years.


Debt Funds

These funds invest in debt instruments like govt. securities, commercial papers, corporates deposits, treasury bills, money market securities etc. Debt funds carries debt instruments of different tenure and credit ratings and based on this we can have a few categories like Liquid Funds, Short-term funds, Income funds, Dynamic debt fund and others. These funds can help to cater needs like parking of ideal money, or accruing a regular income or even can be used for retirement planning. These funds generally have low to moderately low risk exposure.


Hybrid Funds

As the name suggests, these funds invest in both equity and debt instruments as per the fund’s specifications. This fund is further categorised as equity-oriented hybrids and debt-oriented hybrids. Equity-oriented hybrid funds generally has higher exposure to equity instruments between 65% - 80% and similarly debt has high exposure to debt instruments making the funds suitable to different investors as per the need. We should always consider our investment goal before choosing any of the funds. There are also some funds where the fund manager can put up to 100% corpus to either equity or debt as per the market scenario and these funds are popularly known as Asset Allocation funds.


Other Funds

There are also some other types of funds like Fund of Funds, which invest in other funds without directly investing in any instruments. These funds also have certain investment objective which guides the fund managers to allocate corpus to asset classes like equity and debt. Another type of fund is ETF or Electronic traded funds which reflects a certain market index like NIFTY50 or SENSEX by carrying the same securities as in the Index itself. These funds are available in exchange too. Some other types of funds include Real Estate Funds which invest in real estate properties and companies engaged in real estate business.

2. Structured Products: Structured Products or Market Linked Debentures are more like a strategic product that invests in debt instruments for a fixed return and additionally takes a position in market-linked derivative contracts for equity exposure. This instrument earns a fixed return with an equity flavor and thus, it is labeled with the hybrid category. This instrument carries a credit rating and one should follow it before investing. The minimum investment amount in such products is ₹ 10 Lakh and is typical privately placed.

3. Portfolio Management Services: Portfolio Management Services or popularly known as PMS is a type of professionally managed funds available typically for High Net worth Individuals as the minimum investment in any PMS is ₹ 50 Lakhs and the net worth of the Individual must be at least 5 crores. The service can either be discretionary or non-discretionary. In the former service type, the manager manages the portfolio in alignment with the investor’s requirement whereas in the latter, the manager provides advice and information to the investor who themselves take the decisions on investment choices and timing of the investment.A discretionary PMS provides the benefits of professional management of the portfolio with the decisions being taken by the portfolio manager but of course, some higher service comes. There are numbers of PMS available to meet specific preferences of the investors such as asset classes to invest in, holding concentrated portfolios to enhance returns or different proportions of asset classes. A non-discretionary PMS puts the onus of decision making on the investor, with the portfolio manager providing support and execution facilities.

4. National Pension System: National Pension System or NPS is a social security scheme offered by the central government and governed by PFRDA. This scheme has been launched to build a retirement corpus for the government employees and the general public except for officials from armed forces. The scheme also attracts a deduction in IT fillings U/S 80C. NPS has some approved pension fund managers who are only eligible to run such funds and NPS subscribers have options to choose between them as per their profile. Furthermore, NPS subscriber has the option to allocate their investments across different asset class available like Equity, Corporate Debt, Government Bond and AIF with certain rules or subscriber can also set select an Auto choice mode where the funds get managed as per pre-specified rules matching subscriber’s profile. NPS is considered a good option for retirement planning for conservative Investors seeking a Disciplined and long-term avenue.

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