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Equity Mutual Funds, simply the long-term investing mutual fund schemes that help investors accumulate a large corpus for their big and prominent goals, like retirement. In last some, we witnessed a good ration of inflows in these funds.
Roughly said, in May 2021, equity mutual fund witnessed a total inflow of Rs 10,082 crore, while in June 2021, equity mutual fund got an inflow of Rs 5,988 crore. The inflow was low but it continued!
This data clearly shows that, in the last some months, equity mutual funds emerged as the most popular asset class for several financial objectives or aims, one of them being retirement. Typically, investors are investing mostly in equity mutual funds for their long-term investment objectives.
Equity mutual funds yield good returns; however, they are also associated with high risk. Experts say thoughtful planning with a long-term investment vision in equity mutual funds can help an investor to build a sizeable corpus.
While investing in equity mutual funds, several factors come into play, an investor should keep a note of these factors. If they miss any of these factors, that may deteriorate their equity funds investment!!
Here are certain factors listed below that must be considered by investors while planning their investment in Equity Mutual Funds!
Your Objective Or Goal Of Investment!
Investors have different goals, for which they plan to save, invest, and create. Like some people have big goals, typically goals that are far away, like retirement, for these goals investors should plan with a long-term investment vision.
While some people have goals like buying a car or planning for a vacation, these are goals with a short-term period, and thus they should be planned in short-term investment.
Basically, for their big goals with are far away and required a good big corpus, investors must invest in equity mutual funds while for short-term goals or near goals, investors must invest in short-term debt funds.
Here investors must keep in his mind that investment objective works as the deciding factor and help you pick up the most reliable funds scheme for your specific goal.
Units Held In Mutual fund Schemes!
The units derived from the amount invested in mutual funds represent the investor’s holding individually. While liquidating the fund, the return is calculated based on the number of units held by the investor and the current NAV, at which the redemption request is submitted.
Basically, while you invest in equity mutual funds for the long term you should look that you end up adding a greater number of units to your portfolio. The best way to do that is, invest in mutual funds via SIP.
When you invest via SIP you invest a certain amount every month irrespective of the trend in the market, whether down or up. In this scenario, you automatically end up adding a greater number of units when the market is low and a smaller number of units when the market is high.
In this, you end up creating a strong portfolio with greater mutual funds units while investing in equity mutual funds for the long term.
Net Asset Value (NAV) Of The Scheme Invested In!
The NAV is the method or process by which the net asset per unit of a scheme is calculated as net assets/number of outstanding units of the scheme is the NAV.
Typically, the NAV of the scheme is considered to change with every change in the net assets of the scheme. Thus, it is suggested to investors to keep watch on the value of the NAV of the fund they have invested in.
This will help them know about the changes in the strategy of the fund, and thus they can make active changes in their allocation ratio if needed.
Let Us Sum Up!
Experts say creating a corpus for retirement or other big goals is not difficult with Equity mutual funds, only what you need to do is follow the right strategies to invest and time to time review and reallocation, to keep your goals aligned with the objective of the funds.
Stay invested for an ample time period so that your fund gets enough time to let your money grow to its full potential! Do not hesitate to consult a financial expert, for any doubt if you are a DIY investor!
For more details or suggestions on Strategies To Decide Your Asset Allocation, you can get in touch with our executives, either make a call- 0612-6604453 or drop your query at- [email protected].
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For any kind of query, you can contact us at Shri Ashutosh Securities Pvt Ltd., we are here to help you in any way possible.
Happy Investing!
(Mutual Fund investments are subject to market risk Illustrations are for example only, there is no guarantee of returns. Past performance is not an indicator/guarantee to future returns).