Achieve Your Financial Dream: How Equity Mutual Funds Can Help You Grow Your Wealth
17 July, 2024
Synopsis
Equity mutual funds invest primarily in companies' stocks to provide inflation-beating returns over the long term, apart from diversification across market caps and sectors.
The HDFC Bank SmartWealth App simplifies the investment process, allowing users to choose funds aligned with their objectives and risk tolerance with just a few clicks.
Risk management strategies for equity fund investing include aligning investments with long-term needs, diversifying across sectors and styles, and by investing regularly.
Roommates Isha and Riya are new-age Indian youngsters - confident and financially aware. The duo often discuss investment-related matters, and when recently Isha changed her job, the matter cropped up again.
Isha: I have just joined a new company and I want to start investing in mutual funds for good returns. But I’m not sure whether to go for equity mutual funds or debt mutual funds. What do you think?. What do you think?
Riya: I’d go for Equity funds. they are one of the best investment tools to realise long-term financial objectives.
Isha: Fine. Please tell me how to invest in equity mutual funds through a seamless process. I would want to go for long-term investments.
Riya: Equity funds mainly invest in shares of different companies. These funds aim to give good returns in the long run. If your objective is to get high returns, then equity funds is what you are looking for. Make your investment journey smooth and simple by investing using the easy-to-use HDFC Bank SmartWealth App. This DIY App allows you to invest not only with just a few clicks but enables you to choose funds that are aligned with your objective and risk tolerance.
Some of the advantages of investing in equity mutual funds include:
Professionally managed schemes that invest majority corpus in shares of various companies.
Aim to provide inflation-beating returns over fixed-income options in the long run.
Involve higher volatility associated with equity markets.
Offer diversification across market capitalisations, sectors, themes, etc.
Managed by experienced fund managers who handle stock selection, portfolio rebalancing, etc.
Low initial investment amount makes them accessible to retail investors.
Variety and flexibility to match different investment objectives, horizons, etc.
Tight stock market regulation by SEBI ensures investor protection and transparency.
Isha: Sounds good! But aren't equities risky? I don't want too much risk.
Riya: You're right; equity funds carry a higher risk than debt funds. But with some smart strategies, you can manage the risk easily.
Isha: Oh, okay, please share those strategies! I want to be a smart investor.
Riya: Align your investments with your long-term plans so that you easily ride out short-term volatilities. Also, diversify your portfolio across sectors, market caps and fund styles.
Isha: Got it! Anything else?
Riya:
Invest regularly, even in small amounts.
Don't time the market.
Take advantage of rupee cost averaging.
Isha: I see; regular investing helps average market ups and downs. This is helpful!
Riya: Right! Now, let's see how to invest in equity funds on SmartWealth.
Isha: Yes, please! I just downloaded the app.
Riya: Follow these simple steps:
On the 'Discover’ tab,' go to 'Explore and Invest' and tap on Equity Funds.
Browse Top Recommended Funds or use filters to shortlist one matching your goals.
Analyse details like past performance, fund manager, etc. before choosing.
Click on ‘Add’ and confirm the necessary details.
When ready, go to the cart and place your order to complete the purchase
Fund units will be allotted based on next day’s NAV. Track performance in the app.
Isha: Wow, so quick and easy! No paperwork needed?
Riya: Nope, the entire process is digital.
Isha: Good to know! Thanks for answering all my doubts, Riya. Now, I can invest in equity funds confidently.
Riya: You're most welcome, Isha! Wishing you a successful investment journey ahead.
FAQs
What is the minimum amount to invest in equity mutual funds?
The minimum amount to invest in equity mutual funds is generally ₹100 for SIP and ₹5,000 for lumpsum. However, different mutual fund houses and schemes may have different norms.
Does Equity SIP give monthly returns?
Your investment returns from daily SIPs will vary with market movements. When the market rises, daily SIPs may yield higher returns. A declining market can result in lower returns compared to monthly SIPs. However, investing in Large-cap funds through daily SIPs generally yields more stable returns.
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