Flexi-Cap Funds - A Beginner's Guide

 

Flexi-cap funds are mutual fund instruments that invest in equity associated and equity instruments across market caps like large, mid, and small. Flexi-cap funds are dynamic equity funds that balance the portfolio's risks and returns by shuffling between stocks with varying market capitalisations. For this reason, it provides both growth and value to the investors with greater investment diversification. 

Learn About Flexi Cap Funds

According to SEBI (Securities and Exchange Board of India) guidelines, flexi-cap funds must invest at least 65% of the total Asset Under Management (AUM) in equity and equity-related investment instruments. The best flexi-cap mutual funds offer diversification to investors since they invest in equity shares across market capitalisations. Hence, these funds can reduce portfolio risks significantly for investors who want capital market exposure.

The fund manager in flexi-cap funds estimates the growth of different companies regardless of the companies’ size. After getting an estimation, they invest money in the best stocks with better-than-average growth potential.  

Who Should Invest in the Best Flexi Cap Fund?

Investing in flexi-cap funds is no mean feat. One of the most critical points to keep in mind about flexi-cap fund investments is to find out what you can gain from them. Before investing in the best flexi-cap fund, you must identify your financial goals. Additionally, it would help to be mindful of the risks when choosing the fund scheme you think is right.

Reasons to Invest in Flexi Cap Funds

There are different reasons why you should invest in flexi-cap funds -

Mitigate Risks

Asset allocation flexibility lets these funds invest in mid, small and large stocks. The risk of the portfolio decreases due to diversification. The fund managers of flexi-cap funds keep the market conditions in mind. They sell or buy stocks of various market capitalisations and industries to maximise the wealth of the investors, which is why you should invest in the best flexi-cap mutual funds.

Allocation of Corpus

In a flexi-cap fund, fund managers can invest across large, small, and mid-cap companies' stocks. This allows investors to get stellar returns. You can get stability when the fund managers increase the weightage of large-cap stocks in your portfolio. They may also increase the small-cap stock exposure to generate higher returns when the market conditions are conducive.

Splendid Opportunities

Fund managers of flexi-cap mutual funds constantly look for opportunities to beat benchmarks and offer excellent returns. These managers are trained experts who can efficiently pick, analyse and invest in the best stocks and time-tested impactful decisions.

Should You Invest in Flexi-Cap Mutual Funds?

You should invest in flexi-cap mutual funds only if it is according to your investment objectives and if you are comfortable taking on such risks. Flexi cap funds can invest in small and mid-cap stocks. You can invest in these funds if you are an aggressive investor with an investment horizon of more than five years.

Considerations before Opting for Flexi Cap Funds

Here are the top things you must consider when investing in the best-flexi cap funds: 

Expense Ratio

The expense ratio is a fee that a mutual fund house levies on investors every year. Fund houses need this money to run the mutual fund scheme efficiently and pay staff salaries. It is better to check and compare multiple flexi-cap funds’ expense ratios before investing.

Fund Manager’s Experience

After complete research and analysis, flexi-cap fund managers make all purchase and sale decisions. The scheme's performance depends heavily on the fund manager's competence. Hence, checking the fund manager's track record before investing is important.

Past Returns

When looking at a flexi-cap fund's past returns, it will be easy to determine if the funds are consistent or not. You will also discover how they perform in different market cycle phases.

Conclusion

Finding the best flexi-cap fund is no more a challenge when PGIM Mutual Fund is by your side to assist you. Experience income stability with PGIM's profit-making mutual fund schemes and get unparalleled returns on your investments.

Various Types Of Insurance Plans - How To Choose The Right Plan

 

There are a plethora of insurance plans in the market, and choosing the right one needs careful study. Any insurance plan which you select must fulfil your goals. That is to say, your financial goals. If you wish to grow your money, a unit-linked insurance plan, or ULIP, may be suitable. However, if the idea is to just get a life cover and accept the amount the insurance company wants to payout at maturity, then a simple term insurance plan is enough. 

Term life insurance plans are generally a life cover in their basic form. This offers a life cover of a certain sum in exchange for a fixed premium payable annually. However, this type of plan has certain advantages. The premium for these is lower than for other plans. The maturity amount includes the premium paid as well as interest and bonus. 

Therefore, the insured knows that he will get a certain sum at a specific time in the future. Such plans are useful for planning financial goals, such as expenses for higher education for siblings or marriages. Then again, loans are available against such policies, so that sudden requirements of funds can be met by taking a loan against the policy. 

Term life insurance policies may also be modified to include a clause that ensures that double the sum assured is payable in the case of accidental death. This means a slightly higher premium but is certainly a useful clause to have.

However, if the idea is to increase the amount of premium that the insured is paying, then the best idea would be to invest in a unit-linked insurance plan. This is known as ULIP in short. The benefits of such a policy are dual. The first benefit is that there is a life cover, which is usually 10 times the premium. A higher sum assured can be negotiated with the insurance company. Therefore the basic function of life insurance is present in this policy. 

The other advantage of such a policy is that a portion of the premium can be deployed as an investment in market instruments. This means that the money being paid to the insurance company as a premium will grow. The maturity amount will obviously be higher. 

The type of investment and the portion to be invested ( from the premium amount) is for the insured to decide. He may apportion a larger amount or a smaller amount for this purpose, depending on what financial goals he has set himself to achieve. There are three ways in which this investment may be planned. The first is the steady income low, risk and low gain type of investment. Here while the gains are low, the risks are low. Then there is the high risk and high gain type of investment. If there is the capacity to take risks, then this type of investment can bring in a high rate of return. This policy offers income tax relief under Sec. 80C of the I.T. Act. Therefore savings, life cover and investment gains are all present in this policy. Young applicants should consider such a policy. However, it is necessary to plan a unit-linked insurance plan carefully. How much to invest and in what sort of market instruments. It is best to check out the plans being offered by various companies online. Also, check out sites which offer under one umbrella policies of different companies. Choose the one that suits your needs and offers the best returns.