Investments idea In India

When it comes to term insurance, you are spoiled for choice. The life insurance market is flooded with different types of term insurance plans all of which promise the best coverage. In such a scenario, choosing the best term insurance plan is challenging.

However, there are certain parameters which can help you find the https://www.etmoney.com/term-life-insurance" target="_blank" rel="nofollow">best term insurance plan available in the market. Some of these parameters are as follows –

Coverage offered

Modern-day term plans go beyond the coverage against premature death. They come inbuilt with additional coverage benefits which protect you against disabilities as well as diseases too. So, when buying term plans, compare the available plans on the basis of the coverage that they offer. The best plan would be the one which would offer the most inclusive scope of coverage for all-round protection.

Premiums charged

As the coverage of term plans increase, their premiums become dearer. So, while comparing term plans, you cannot consider the coverage alone. Consider the premium as well and choose a plan which offers comprehensive coverage at a reasonable amount of premium which is light on your pockets.

Flexibility offered

Another thing to consider is the flexibility which the plan offers. This flexibility should be in terms of choosing the coverage benefits, paying the premium and also choosing the coverage tenure. A plan which is flexible can be customised and since insurance needs vary with individuals, flexibility would help you design coverage suitable to your needs.

When you consider these parameters in comparing term plans, you can pick the best plan available in the market. To make your job easier, here are three of the best term insurance plans which you can choose this year –

Max Life Smart Term Plan

Max Life is a leader in the life insurance business and its term plan is no less. https://www.etmoney.com/term-life-insurance/plans/max-life-smart-term-plan/30/2" target="_blank" rel="nofollow">Max Life Smart Term Plan is considered to be one of the best plans because of the following benefits that it offers –

The plan gives you the flexibility to choose from seven different types of death benefit pay-out options so that you can create a suitable source of income for your family in your absence

You can avail coverage up to 85 years of age

You can choose the refund of premium option and get the premiums refunded if you survive the duration of the policy

Max Life Smart Term Plan provides coverage against 40 critical illnesses and if you are diagnosed with any covered illness, you get a lump sum benefit which can be used for medical treatments

The plan offers you the benefit of increasing the sum assured if you get married or have children during the policy tenure

https://www.etmoney.com/term-life-insurance/plans/icici-prudential-iprotect-smart-life/29/1" target="_blank" rel="nofollow">ICICI Pru iProtect Smart

Another leading term insurance plan offered by a reputed life insurer, iProtect Smart provides you with the following benefits –

You can choose to avail coverage up to 99 years of age

The plan has an optional coverage against critical illness which covers 34 such illnesses. If you choose the optional cover and are diagnosed with any of the 34 illnesses, you get a lump sum benefit to meet your financial obligations in such an emergency

You can choose the death benefit pay-out to be in a lump sum, in uniform monthly incomes, in increasing monthly incomes or in the combination of both lump sum and monthly incomes

The plan has an inbuilt terminal illness benefit wherein the sum assured is paid if you suffer from a terminal illness including AIDS

You can further enhance the coverage of the policy by opting for the accidental death benefit rider

https://www.etmoney.com/term-life-insurance/plans/hdfc-life-click-2-protect-3d-plus-life/28/1" target="_blank" rel="nofollow">HDFC Life Click 2 Protect 3D Plus

As the name suggests, this plan provides surplus benefits to you that not only includes comprehensive coverage but also other value-added benefits. These benefits are as follows –

There are nine plan variants which cover death risk, illnesses and disabilities

You can avail coverage up to 100 years of age under the plan’s whole life variant

The plan allows you to increase the sum assured at important events of your life, i.e. marriage and childbirth when your responsibilities increase

There is an inbuilt terminal illness benefit which pays the sum assured if you suffer from a terminal illness

Premium discounts are available for females and non-smokers which make the plan more affordable

These are some of the best term insurance plans available in the market today. You can take your pick and invest in any of these plans for all-round protection. You can also buy these plans online from the best investment website ETMONEY.com. What makes ETMONEY.com the best investment website is the ease of purchases, instant policy issuance and online KYC verifications. So, choose ETMONEY’s https://www.etmoney.com/" target="_blank" rel="nofollow">best investment website and get insured under a term plan at the earliest.

A wise person once said, “Life is like a camera. Focus on what’s important and you will capture it perfectly.” Focused Funds have deeply imbibed this philosophy.

What are Focused Funds?

These are a type of equity mutual funds which invest in limited or certain selected kind of stocks. The core objective of these funds is to generate superior returns in the long run. Their stock selection criteria revolve around companies with high growth potential.

As per the recent re-categorization initiative of SEBI (Securities and Exchange Board of India), Focused Funds are permitted to invest in maximum 30 stocks. They need to clearly mention in the scheme objective the intended market capitalization (large, mid, multi or small cap) of stocks it wishes to invest in. The minimum equity exposure in these funds needs to be 65%.

Key features of https://www.etmoney.com/mutual-funds/equity/focused/77" target="_blank" rel="nofollow">Focused Equity Mutual Funds

Best focused mutual funds seek to offer specific market exposure to the investors rather than a broadly spread or diversified portfolio.

Portfolio Composition

Focused Funds are market-cap and sector agnostic. They are free to invest across all market capitalization segments. However, more than 10% of the portfolio is not allowed to be allocated in a single stock.

The fund manager of these funds undertake in-depth market research and allocate the corpus across a restricted number of stocks.

A diversified multi-cap fund?

Many might argue that a focused fund is similar in structure to a diversified multi-cap fund. But there is one major distinction. The portfolio of the best focused mutual fund is much more concentrated than a normal diversified equity mutual funds. So, while all focused funds can be diversified multi-cap funds, the vice versa may not hold true.

Risk

“Beta”, in mutual fund parlance, measures the associated risk of a scheme in comparison to the overall market risk. A value greater than one indicates that the scheme is more prone to volatility than the market. Best focused mutual funds tend to have a beta value higher than one. Also, their “variance” value or measure of volatility is on the higher side. Due to their highly concentrated investment they are considered a high risk instrument.

Return

High risk potentially translates into high returns. If the fund manager’s investment bets turn out good, then the best focused mutual funds can generate superior returns for the investors.

Should you invest in Focused Funds?

Three funds from this category have found themselves in the top five multi cap funds in the last year. So, if you are a seasoned investor with an aggressive risk appetite, you can surely consider investment in the best focused mutual funds. However, you should be okay to witness some short-term underperformance as these funds focus on steady wealth creation in the long run. Also, it is better to take a small exposure to these funds and balance the rest of the portfolio accordingly with other diversified options.

These funds may not be ideal for new investors (irrespective of their risk profile) as the frequent volatility can be quite overwhelming in the beginning. If you are on the lookout for safe or steady options to park your money, you should refrain from investment in focused funds.

Here is a list of the ten best focused mutual funds available in the Indian market.

• SBI Focused Equity Fund
• Axis Focused 25 Fund
• Motilal Oswal Focused 25 Fund
• IDFC Focused Equity Fund
• Principal Focused Multicap Fund
• Aditya Birla Sun Life Focused Equity Fund
• Franklin India Focused Equity Fund
• Nippon India Focused Equity Fund
• HDFC Focused 30 Fund
• ICICI Prudential Focused Equity Fund

Final Words

Focused Funds work on the principle that one needs to focus on the possibilities for success and not on the potential for failure. In fact, the focus is sometimes more important than intelligence. And focused equity mutual funds combine both these factors – focus on intelligent choices.

Equity Mutual Funds are a great investment vehicle for investors who are looking for solid returns in the long run. And the USP of https://www.etmoney.com/mutual-funds/equity" target="_blank" rel="nofollow">Equity Funds is that there is something for everyone- irrespective of your risk appetite, investment horizon and financial goal. These funds can be categorized basis four factors – market capitalization, diversification, themes(sectors) and solutions (ELSS). In this article, we will talk about the sub-category – market capitalization with a special focus on mid-cap funds.

Meaning of Market Capitalization

Market capitalization (or cap, as it is often referred to) is simply the market value of a company. It can be calculated by multiplying the number of outstanding shares with the current share price.

Basis the value of market capitalization, companies are further divided into three categories – Large, Mid and Small. Large-cap companies invest in the top 100 stocks and are often the market leaders or big players. The next in line are mid-cap companies. This segment consists of the next 150 stocks (i.e. stocks ranked between 101 and 250) in terms of market capitalization. Small-cap stocks invest in the 251st onwards companies.

What are Mid-Cap companies?

Companies in this category are often experienced players in an industry which is already on a solid growth path or expected to grow substantially. As per the SEBI re-categorization guidelines, mid-cap Funds need to invest a minimum 65% of their total assets in stocks (equity and related instruments) of mid-cap companies. In terms of the risk-return equation, mid-cap companies are placed in between large-cap and small-cap. Though there is no prescribed mandate on the value of market capitalization for mid-cap stocks, generally it lies between 5,000 crores to 20,000 crores.

Investors get attracted to mid-cap stocks as they have the potential for tremendous growth and may give good returns in the medium–long term period.

Key features of Mid Cap Equity Funds

• Growth Potential

Unlike large-cap stocks which are associated with stagnant or slow growth (as they are already at the top), mid-cap stocks are yet to reach their maximum potential. Hence, there is scope for fast growth and higher returns with these equity funds.

• Risk

The 2Rs (Risk and Return) go hand in hand. Mid-cap Equity Funds are riskier when compared to large-cap stocks. This is because in their attempt to grow faster and generate higher returns, they might invest in instruments with a higher risk profile.

• Moderately priced

Mid-cap stocks form the core of value investing. More often, companies with mid-cap stocks tend to be relatively undervalued. Hence, they can be a great addition to your portfolio as a means of wealth creation in the long run (when the market realizes its true worth)

Are mid-cap funds right for you?

Mid-cap funds add a dimension of diversification to the overall portfolio. They are suitable for investors with a moderate risk appetite who can commit to a medium to long-term investment horizon (i.e. 7-10 years). This is due to the fact that most companies in this category are either expanding or capitalizing on new growth opportunities.

It is important to note that mid-cap Equity Funds may be too overwhelming or risky for first-time or inexperienced investors.

Best Mid-Cap Mutual Funds

https://www.etmoney.com/mutual-funds/equity/mid-cap/35" target="_blank" rel="nofollow">Mid-cap Funds react more vigorously to market fluctuations as compared to large-cap stocks. Hence, unlike large-cap stocks, whose performance can be judged fairly accurately from past performance, the same yardstick does not apply to mid-cap stocks. One needs to analyze a wide range of factors (quality of management, growth potential, uniqueness of offerings, etc.) to judge a mid-cap stock.

Here is a list of the top 10 equity funds from the mid-cap category.

• Axis Midcap Fund
• Invesco India Mid Cap Fund
• Kotak Emerging Equity Fund
• Franklin India Prima Fund
• L&T Midcap Fund
• DSP Midcap Fund
• Edelweiss Mid Cap Fund
• Tata Midcap Growth Fund
• Nippon India Growth
• ICICI Prudential Midcap Fund

Final Words

A well-balanced portfolio requires some degree of mid-cap stocks. Good quality mid-cap equity funds have the potential to generate superior returns (even beat inflation) than large-cap stocks in the long run. However, it requires two commitments from investors – risk-taking ability and patience to remain invested for a long duration. As they say, patience bears a golden fruit!

Switch on any business news channel or speak to anyone who is knowledgeable in finance will ask you to invest in a https://www.etmoney.com/mutual-funds" target="_blank" rel="nofollow">Mutual Fund While you may be sold on the idea, you still need to know if it’s right for you basis your goals or objectives. After all, they say investments do not work on a one-size-fits-all approach. Before you decide to go for a mutual fund, you also need to know the kinds of mutual funds that exist - it’s always better to make an educated decision rather than a hasty one!

But first let’s talk about what mutual funds are - as the name suggests, these funds are formed when capital that is collected by several investors is invested in a company’s shares, stocks or bonds. These collective investments are managed by a professional called the fund manager who ensures you get the highest possible returns.

If you want to grow your wealth in the long run, there is no better and hassle-free way than a mutual fund. But remember you need to go for a credible fund house that has a fund manager who is experienced.

What are the different types of mutual funds?

Now that we know what mutual funds are, let’s deep dive into the types of mutual funds that exist:

Equity funds: As the name suggests, these funds invest in shares of companies having different market capitalisations and deliver potentially higher returns. An equity fund invests at least 60% of its assets in equity shares - it could be large-cap, mid-cap, small-cap or a mix of different market capitalisations. The remaining amount goes into debt and money-market instruments. It is the fund manager who decides if it’s the right time to buy or sell, based on the performance of the market.

Under equity funds, there are other sub-categories:

Sector-specific funds: These funds invest in a specific sector, be it infrastructure, banking or mining, or even segments like mid-cap, small-cap or large-cap segments. These funds works well for only those investors who have a high risk appetite - this means they are willing to take risks in the hope of high returns.

Index funds: This fund is a part of the mutual fund family, and invest in a broader market index, like the Sensex and Nifty. They are passively managed, which means the fund manager’s intervention is not allowed. There are two popular indices in India - BSE Sensex and NSE Nifty. In a nutshell, index funds track these funds. In addition, a low expense ratio is the highlight of these index funds. The total expense ratio for index funds is 1%, according to SEBI.

Tax-saving funds: As the name suggests, tax-saving mutual funds offer the benefit of tax saving to the investor. Also known as Equity-Linked Savings Scheme (ELSS), this mutual fund scheme primarily puts in money in the stock market. One reason why several investors prefer this financial instrument is because it has the shortest lock-in period, i.e; three years. In simple terms, this also means that even if you would like to, you can’t sell your investment until its maturity date.

Debt funds: A debt fund invests money in fixed-income securities such as corporate bonds, government securities, treasury bills and other money market instruments. The primary objective to invest in such funds is to earn interest and capital appreciation. The issuer decides the interest rate before hand as well as the maturity period, which is why it is called fixed-income securities.

Here’s a list of debt funds:

Dynamic bond funds: These bonds, as the name suggests, are dynamic in nature - this means the fund manager keeps changing the composition of the portfolio basis the fluctuating interest rates in the market. These funds take interest rates call and invest in instruments of different maturity periods.

Income funds: These funds decide the interest rates and invest in debt securities with extended maturities. This also makes them more stable than dynamic bond funds.

Short-term and Ultra Short-term Debt funds: Again, these are debt funds that invest in shorter maturities that range anywhere between a year to three years. These work well for risk-averse investors, since they are not impacted by interest rate fluctuations.

Liquid funds: These funds invest in debt instruments that have a maturity of about 9- days - this makes them risk-averse. What’s more, they are better than savings bank accounts that offer great liquidity and higher returns.

Gilt funds: These funds invest in government securities - these are highly-rated and you do not have to suffer from credit risk. This makes it ideal for risk-averse fixed-income investors.

Balanced or hybrid funds : If you are a dilemma and do not know if equity or debt is better for you - then it is best to invest in a hybrid or balanced mutual fund. Of course, your age, risk appetite and the current market conditions play an important role. As an investor, if you are looking for diversification of your portfolio, then balanced mutual funds are your best bet. You can also re balance your portfolio on a regular basis.

When you decide to go for these funds, remember you can enjoy the benefits of both worlds, and at the same time, have a low-risk profile

The bottom line

All in all, the idea is to not follow the herd and go for a mutual fund that is in sync with your goals and objectives. After all, it is your hard-earned money and you should take your time to decide where you must invest!