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Posted by Divesh Bajaj

What is ESG Mutual Funds

November 19, 2020Financial Awareness, Mutual Funds 0

ESG is nothing but Environment, Social and Governance, as the investment theme is still New for India, ESG investing is making a portfolio of companies that meet high environmental, social and governance standards. This is popular in developed markets where fund managers have invested huge amounts into such companies.. The fund may be a multi-cap fund and invest in a mix of large-, mid and small-cap companies that are ESG compliant.

ESG fund contains only those securities of the companies with a high sustainability score and would exclude companies with, for example, poor records on pollution, labor relations or management practices. It would also exclude the sovereign bonds of governments with similar poor records. It seems logical too as use of ESG in security selection leads to better-informed investment decisions, and that sustainability funds can perform better than non-sustainable ones, partly because of better risk management over contentious issues., for example, companies which are less damaging the environment and also good in corporate governance would face lower regulatory or societal risk than a polluter, and so its shares should be less volatile over time.

This concept is gaining momentum in developed markets as investors too wants a contribution to cut global warming and adding to human development and less polluted ecosystem, without compromising on financial returns

As we discussed ESG funds are portfolios of equities and/or bonds for which environmental, social and governance factors have been taken care into the investment process. This means the equities and bonds contained in the fund must have passed stringent tests over how sustainable the company or government is regarding its ESG criteria. Though is new concept for India but we can consider this theme as a future of funds because we all know laws related to pollution , corporate governance etc will be more stringent with the time, so there will be a time only profit alone will not be a factor for the fund selection. Some Research suggests that in America ESG funds are delivering higher returns with comparison to normal funds

Important: ESG Fund too offer SIP, Lump sum Investment and all other features and Taxation what a normal Equity based Mutual Fund offers it is only different in the way of Securities selection

ESG Fund Currently Available in India

SBI Magnum Equity ESG Fund

Quantum India ESG Equity Fund

ICICI Prudential ESG Fund

Mirae Asset ESG Sector Leaders ETF

Axis ESG Equity Fund

Posted by Divesh Bajaj

Best Multi Cap Funds to invest in 2019

July 25, 2019Mutual Funds 0

What are Best Multi Cap Funds to invest in 2019?

Before knowing the list of Best Multi Cap to invest in 2019, lets know what are Best Multi Cap Funds, Multi Cap Funds Invest in the shares of different Market Capitalization Companies, namely Large Cap, Mid Cap and Small Cap, to make it more clarified Top 100 companies in terms of 6 month Average Market Capitalization are Large Cap Companies, from 101 to 250th Companies in terms of 6 month Average Market Capitalization are Mid Cap Companies and all other companies are Small Cap Companies, as far as risk return parameter is concerned Large Cap Funds are considered safer in comparison with Mid Cap and small Cap, where Small Cap is Considered more volatile in nature

Why Multi Cap or Best Multi Cap

Best Multi Cap Category Covers all categorization of market, where Large Cap offers stability to the fund and Small cap & Mid cap provide chance to outperform during market rally, so investor need not to invest in all three category separately to tame the market or to get best out of the market, at a same time it gives advantage to the fund manager to analyze and pick stocks according to his/her outlook of the share market, even multi cap funds gives advantage to fund manager to switch funds across different categorization according his/her prediction of movement.

Our Criteria for Best Multi Cap funds

We tried our best to select fund on the basis of 5 years, 10 years return, rather going for 3 years or last year returns. When we consider return we check for Compounded Annual Growth Rate (CAGR) instead of Annualized Return as CAGR gives correct picture of performance, apart from this we also check performance of the fund against benchmark historically, We also consider performance of the Fund Manager, Fund Manager previous performance, performance of the others Funds managed by the same Fund Manager and we also check Funds on the parameters of various financial tools available to analyze the risk-adjusted returns, means what excess return investors are getting in the given fund over and above return given by the risk free investment option

Performance as on Dec-18

Remark

If you don’t have time to track market every now and then, don’t have correct tools to gauge the performance of the stocks and don’t have much knowledge how to pick stock in the given market , then go for Mutual Funds Distribution Services offered by NDI Consultants Pvt Ltd, We have option for both offline and online Investment , our website for Online Investment is www,investwithndic.com

Disclaimer : Mutual Fund investments are subject to market risks, read all scheme related documents carefully, The order of funds doesn’t suggest any recommendations. Investors may choose the funds as per their goals. Returns are subject to change.

Posted by Divesh Bajaj

Tata Ethical Fund

July 25, 2019Mutual Funds 0

The investment objective of the Scheme is to provide medium to long-term capital gains by investing in Shariah compliant equity and equity related instruments of well-researched value and growth-oriented companies.

What is Shariah Law

Islamic law (shariah) prohibits a variety of activities:

Riba (Prohibition of Interest ) : Paying or charging interest. “All forms of interest are riba and hence prohibited”. Islamic rules on transactions (known as Fiqh al-muamalat ) have been created to prevent use of interest.

Haraam : Investing in businesses involved in activities that are forbidden (haraam). These include things such as selling alcohol or Pork, or producing media such as gossip columns or pornography

Murabahah : Charging extra for late payment. This applies to murabahah or other fixed payment financing transactions, although some authors believe late fees may be charged if they are donated to charity, or if the buyer has “deliberately refused” to make a payment.

Maisir: This is usually translated as “gambling” but used to mean “speculation” in Islamic finance. Involvement in contracts where the ownership of a good depends on the occurrence of a predetermined, uncertain event in the future is maisir and forbidden in Islamic finance.

Gharar: Gharar is usually translated as “uncertainty” or “ambiguity”. Bans on both maisir and gharartend to rule out derivatives, options and futures. Islamic finance supporters believe these involve excessive risk and may foster uncertainty and fraudulent behavior such as are found in derivative instruments used by conventional banking.

Engaging in transactions lacking “`material finality`. All transactions must be “directly linked to a real underlying economic transaction”, which generally excludes “options and most other derivatives”.

How I Earn is as important as how much

Tata Ethical Fund

Objective Tata Ethical Fund is an open ended equity Mutual Fund fund which invests in a diversified equity portfolio based on principles of Shariah. The investment objective of the scheme is to provide medium to long-term capital gains by investing in Shariah compliant equity and equity-related instruments of well-researched value and growth-oriented companies.

Who Should Invest

Ideal for Investors:

Keen to invest in companies which are from Shariah compliant universe of stocks

Key Attributes:

o Investments in well-researched value and growth oriented companies from Shariah compliant sectors

o Avoids investments in companies involved in activities like alcoholic beverages, gaming/casinos, non halal food products and conventional financial institutional based on Riba (interest)

o Avoids companies with higher debt to equity ratios and thereby invests in low leverage companies

o Purification of any prohibited income on yearly basis as advised by Shariah advisor

Asset Allocation

Equity & Equity Related instruments of Shariah compliant companies (80-100%)

Other Shariah compliant instruments including Cash (0-20%)

Tata Ethical Fund has Certificate from Taqwaa Advisory and Shariah Investment Solutions for Compliance of Shariah law …Click the link for Certificate

“Mutual Fund Investments are subject to market risk, read all scheme related documents carefully”

Posted by Divesh Bajaj

New Debt Funds Category in India -After SEBI Categorization of Mutual Fund

December 3, 2018Mutual Funds 0

After SEBI’s Categorization and Rationalization of Mutual Fund there are 16 types of Debt mutual Fund in India lets understand what kind of assets they will invest

Type of Debt Mutual Fund — New Debt Funds Category in India -After SEBI Categorization

Overnight Funds: Open Ended Debt Scheme seeks to generate returns by investing in debt and money market instruments with overnight maturity, means securities with a maturity of one day

Liquid Fund: Open Ended Debt Scheme seeks to generate income with good liquidity by investing in debt and money market securities with a maturity of up to 91 days

Ultra Short Duration Funds: Open Ended Ultra-Short Term Debt Schemes seeks to generate income with reasonable liquidity by investing in instruments with a maturity between three months and six months

Low duration Fund: Open Ended Debt Scheme seeks to generate income by investing in primarily highly rated debt securities with a maturity between 6 months and 12 months

Money market funds: Open-Ended Debt Schemes seeks to generate income by investing in cash equivalent securities of money market with a maturity of up to one year.

Short Duration Funds: Open-Ended Debt Schemes seeks to generate stable returns by investing in fixed Income Securities with Maturity duration between one year and three years.

Medium duration Funds: Open Ended Debt Schemes seeks to generate regular income and capital appreciation by predominantly investing in a portfolio of debt securities with a duration between three years and four years.

Medium to Long Duration Funds: Open-Ended Debt Schemes seeks to provide investors an opportunity to generate regular income through investments in debt and money market instruments with a duration between four years and seven years.

Long Duration Funds: Open-Ended Debt Schemes seeks to generate regular returns by investing in instruments with a duration of greater than seven years

Dynamic bonds: Open-Ended Debt Schemes seeks to generate returns by investing in debt and money market instruments of across durations.

Corporate Bond Funds: Open-Ended Debt Schemes seeks to generate returns by investing predominantly to meet the highest profit and it can be more involved each services by my cleaning angel house cleaning in highest-rated corporate bonds. These schemes should invest at least 80 per cent of total assets in corporate bonds, only in highest-rated instruments

Credit Risk Funds: Open-Ended Debt Schemes seeks to provide returns and capital appreciation through investment in highest-rated corporate bonds. They should invest at least 65 per cent in corporate bonds.

Banking and PSU Funds: Open-Ended Debt Schemes seeks to generate stable returns by investing (80 per cent of assets) in debt instruments of banks, public sector undertakings and public financial institutions Financial Institutions.

Gilt funds: Open-Ended Debt Scheme aims to generate returns by investing in a portfolio of Central/State Government securities of various maturities. These schemes should invest a minimum of 80 per cent of its total assets in G-secs.

Gilt Fund with 10-year Constant Duration: Open-Ended Debt Scheme seeks to provide returns to the investors generated through investments predominantly in Government securities issued by the Central Government and/or State Government with a constant maturity of 10 years. These schemes should invest at least 80 per cent of the total assets in G-secs.

Floater Funds: Open-Ended Debt Scheme aims to generate regular income through investment in a portfolio comprising substantially of floating rate debt / money market instruments, it may also invest a portion of its net assets in fixed rate debt securities and money market instruments. These schemes will invest at least 65 per cent of the total asses in floating rate instruments.