Mutual funds offer a way for a group of investors to effectively pool their money so they can invest in a wider variety of investment vehicles and take advantage of professional money management through the purchase of one mutual fund share. Mutual fund companies essentially collect the money from their investors, or shareholders, and invest that pooled money into individual investment vehicles according to some risk profile, money management philosophy, or financial goal. The mutual fund then passes along the profits (and losses) of those investments to its shareholders.
More & more people are learning about mutual funds as a means of investment. From putting ones money into fixed deposits or investing in real estate, people are becoming aware of mutual funds as lucrative choice of savings & investments. It is becoming the most sought-after method of investing but having limited or no knowledge of it can hamper ones plan to go ahead with mutual funds completely. Here, we will give you a summarized info about all you need to know about mutual funds & the benefits it carries.
Equity
CAPITAL PLUS are the members of both NSE and BSE, have a robust infrastructure and trading platform to execute the trades. CAPITAL PLUS provides Technical/Fundamental research services for investment in Equities, which has been giving stellar returns to our clients. Our online trading platform on the internet and mobile application enables the convenience of investing on the go from anywhere.
One can open a trading account online and start to trade immediately once the application is approved. Traders can also read through the stock tips and suggestions that are available on the website and receive right guidance when it comes to the trading process.
Capital Plus is one firm that provides trading across various platforms be it Web, Mobile, Desktop or Call-n-trade. Traders can watch share market live, watch news related to share markets, search and study the market research reports, check the data of various stocks from BSE and NSE and learn about new investment opportunities.
Derivatives
It is a financial instrument which derives its value/price from the underlying assets. Originally, underlying corpus is first created which can consist of one security or a combination of different securities. The value of the underlying asset is bound to change as the value of the underlying assets keep changing continuously.
A bond is a fixed income investment in which an investor loans money to an entity (typically corporate or governmental) which borrows the funds for a defined period of time at a variable or fixed interest rate. Bonds are used by companies, municipalities, states and sovereign governments to raise money and finance a variety of projects and activities. Owners of bonds are debt holders, or creditors, of the issuer.
Different kinds of Bonds
Bonds Credit Ratings
Investment grade issuer credit ratings are those that are above BBB- or Baa. The exact ratings depend on the credit rating agency.
For Standard & Poor’s, investment grade credit ratings include. AAA, AA+, AA, and AA-. Companies that have credit ratings in this category have a very high capacity to repay their loans, with AAA rated companies having the highest capacity to repay.
The next category down includes companies with A+, A, and A- ratings. These are companies that have a strong capacity to repay their financial commitments. These companies are currently stable and easily able to repay their debts, but could face challenges if economic conditions deteriorate. The bottom tier of investment grade credit ratings includes BBB+, BBB, and BBB-. These companies are considered "speculative grade" and are vulnerable to changing economic conditions and could face big challenges if economic conditions decline. When rated, however, these companies have demonstrated both the capacity and capability to meet their debt payment obligations.
Debentures
A debenture is a type of debt instrument that is not secured by physical assets or collateral. Debentures are backed only by the general creditworthiness and reputation of the issuer. Both corporations and governments frequently issue this type of bond to secure capital. Like other types of bonds, debentures are documented in an indenture.
Types of Debentures
CAPITAL PLUS PMS (Portfolio Management Services) is Portfolio Manager specializing in Identifying, Investing and managing listed equity stocks that are fundamentally strong and have good growth potential.
Benefits of Portfolio Management Services :
Professional Management that give you the Portfolio edge.
PMS Portfolio Strategy
Historical Performance
AIF
In India, alternative investment funds (AIFs) are defined in Regulation 2(1) (b) of Securities and Exchange Board of India (Alternative Investment Funds) Regulations, 2012. It refers to any privately pooled investment fund, (whether from Indian or foreign sources), in the form of a trust or a company or a body corporate or a Limited Liability Partnership (LLP). Hence, in India, AIFs are private funds which are otherwise not coming under the jurisdiction of any regulatory agency in India.
Categories of Alternative Investment Funds (AIFs)
As per Securities and Exchange Board of India (Alternative Investment Funds) Regulations, 2012 Alternative Investment Funds shall seek registration in one of the three categories
Mainly invests in start- ups, SMEs or any other sector which Govt. considers economically and socially viable.
These include Alternative Investment Funds such as private equity funds or debt funds for which no specific incentives or concessions are given by the government or any other Regulator.
Alternative Investment Funds such as hedge funds or funds which trade with a view to make short term returns or such other funds which are open ended and for which no specific incentives or concessions are given by the government or any other Regulator.
Gold ETF
Gold ETFs are a great way to take exposure to gold. Gold ETFs are Exchange Traded Funds that allow investors to invest in gold on the exchange. So an investor eager to get into gold ETF can buy and sell the same on the exchange. They eliminate a lot of issues which come when buying physical gold.
Physical gold does not generate income and the cost of making jewellery is also high. So gold ETF is the best option for a retail investor.
Why to Invest in Gold ETF
Gold ETF are transparent vehicle and provide an effective and efficient platform for small investors to diversify in to GOLD.
Gold is considered as a Global Asset Class and there are various reasons why GOLD ETF is a must in retails investors portfolio, and how they are better than traditional forms of investing in Gold.
The expenses incurred in buying and selling Gold ETF is much lower than the cost incurred in buying, selling, storing and insuring physical gold.
Advantages of Gold ETF
Gold ETF has many advantages over the physical gold which makes it an attractive alternative to an investor. Some are discussed below:-
1. Impurity Risk - In physical gold, the impurity risk is present. For a retail investor, it is very hard to determine the purity of the gold. Besides, when an investor goes to sell the gold which he bought 10 years ago, he may not get the same weight and purity when he bought.
2. Liquidity - Liquidity is one of the most important factors of an investment. Physical gold is less liquid than Gold ETF. An investor can buy and sell Gold ETF anytime during the trading session. While for selling a physical gold, an investor has to go to a goldsmith.
3. Transaction cost - The transaction cost of the physical gold is also higher than Gold ETF. The expense ratio of Gold ETFs is around 1% while the making charge of physical gold is around 10% to 20% in case of ornaments.
What are the types of funds available in NPS ?
There are three types of NPS funds available. They are as below.
Recently a new fund category by name Alternate investment has been introduced.
List of NPS Fund Managers
Currently, there are 8 Fund Managers who are managing our NPS corpus and they are as below.
Some of the benefits of the National Pension System (NPS) are
CURRENCY
Gone are the days when currency was an exclusive trading instrument for a few financial institutions, corporates and hedge funds. With greater global interdependence and increase in international trade and financial awareness, the currency market offers a new avenue for trading. As a trader, currency markets are a lucrative investment option wherein you can spot opportunities and take advantage of the volatility arising in global markets.
Commodity Market
A commodity market is a physical or virtual marketplace for buying, selling and trading raw or primary products, and there are currently about 50 major commodity markets worldwide that facilitate investment trade in approximately 100 primary commodities.
Commodities are split into two types: hard and soft commodities. Hard commodities are typically natural resources that must be mined or extracted (such as gold, rubber and oil), whereas soft commodities are agricultural products or livestock (such as corn, wheat, coffee, sugar and pork).
Advantages of Investing in Commodity Market
1. Diversification - Commodities can diversify a portfolio. Commodity returns usually have low or negative correlations with the returns of other major asset classes. So often, when bonds and stocks fall, commodities rise. Sometimes, there may not be any connection between the returns at all. Factors that affect returns on stocks and bonds, for example, do not affect returns on commodities in the same manner. Besides, commodities may react differently from other assets in various economic and geopolitical situations. For example, the prices of stocks may fall during a financial crisis. But gold prices may rise as demand for this safe asset increases. A diversified portfolio with a low correlation between its assets tends to have less volatile returns. Thus, investing in commodities ensures diversification and improves risk-adjusted returns.
2. Inflation protection - Inflation has a different impact on commodities than financial assets like stocks and bonds. This is because inflation causes currency to depreciate. This erodes the real value of financial assets like stocks and bonds. Commodities, however, maintain their value and price even during high inflation. In this environment, investors can turn to hard assets such as gold and other precious metals.
3. Hedge against event risk - Events such as natural disasters, wars, and economic crises can lead to depreciation of an investor’s assets. This is an ‘event risk’. Such events affect financial assets like stocks and bonds negatively. They may also lead to a rise in the prices of certain commodities. For example, supply disruptions due to wars may raise the prices of commodities like oil. So, these commodities may act as a potential hedge against some event risks—a buffer against losses.
4. Liquidity - Unlike investment in assets like real estate, investment in commodity futures offers high liquidity. It is easy to buy and sell commodity futures. An investor can liquidate his position whenever required.
5. Trading on lower margin - An investor in commodity futures needs to deposit a certain amount as a margin with the broker. The margin can be close to 5–10% of the total value of the contract. This is much lower than the margin required for other asset classes. Thus, the investor can take larger positions while investing less capital. This also helps increase the potential for high profits.
6. High returns - Commodity markets are volatile. They can experience huge swings in prices. For example, war in a major oil-producing country like Iraq can cause oil prices to shoot up. Smart investors can take advantage of these price swings to make gains. Well-planned commodity investments can provide higher returns than investments in other assets.
