Religare Mutual Funds AMC was a mutual fund company that was part of the Religare Invesco Asset Management firm. In 2015, Religare Enterprises exited from the asset management space through sale of its 51% stake in Religare Investco Mutual Funds to its partner Investco. Since then, the business has been renamed as Invesco Mutual Fund AMC. Religare was one of the largest investment companies in the country and has net assets worth Rs. 21009 crores. And the number speaks for itself when it comes to being one of the largest asset management companies in the country. An asset management company is an organization where investors can benefit from pooling of money which forms the basis of mutual fund investments. Money invested by different individuals is then invested into different instruments with the intent of making the money grow.
Proper financial planning requires investors to save and invest money in the right instruments. The whole idea behind it is to achieve specific financial goals. There are a lot of benefits of investing in a mutual fund. It starts off with higher returns as compared to traditional fixed rate investments. Mutual funds provide investors access to a wide range of investment options based on the investor’s risk appetite. The following is a short list of the benefits when investing in mutual funds:
Managed Funds: A mutual fund gives investors access to professionally managed funds without having to pay a ton of money for making the investment.
Liquidity: Mutual funds on average provide higher liquidity than many other investment options such as shares, gold, real estate. The noteworthy exceptions to this rule include ELSS and closed end funds.
Inculcates Saving Habit: If one desires to make investing on a regular basis a habit, it is easy by using mutual funds SIPs and one will achieve their financial targets faster too.
Diversification: The age old saying of do not put all your eggs in one basket holds true for investments and this is where mutual funds come in. A varied range of products and investments allows investors to diversify their portfolio using mutual funds so that one gets steady returns without being over-exposed to a specific sector.
Why Religare Mutual Funds?
When an investor invests in any mutual funds by Religare, he/she gets instant access to all the benefits mentioned above and more. What he/she also receives is an exceptional amount of convenience by choosing mutual funds as the preferred investment route. Almost all major asset management companies allow one to purchase their funds online. Thus, investors are closer to their financial goals without breaking a sweat.
One can invest in any Religare mutual fund of their choice at any time of the day and from any part of the country. In order to garner a habit of regular investing, one can opt for a SIP or systematic investment plan. Here are some other benefits of choosing to invest in Religare Mutual Funds.
- Ability to buy and redeem units online, thereby making the investment convenient.
- Religare allows tax saving investments through ELSS, which investors can use to reduce theorr tax liability for a financial year.
- Investors get instant access to their preferred investment option online.
- With lots of options to choose from, investors are spoilt for choice no matter what their investment needs.
Mutual Funds offered by Religare Mutual Fund AMC are split into multiple fund categories and each represents a specific style/type of investment. Right from parking additional rainy day funds to going aggressive and investing in the capital market, one gets it all. The following are some key categories of mutual funds that Religare offers.
- Equity Funds
An equity based mutual fund primarily invests in stocks. In fact, most of the funds under this category have more than 90% of their fund value invested in the capital market. Since a major chunk of the fund value is invested in the capital market, the potential returns of these kinds of funds are quite good. On the flip side, equity funds are of higher risk. Depending on the different market capitalization size, one might have the option to invest in different fund types for instance, small cap equity funds, mid cap equity funds and large cap equity funds.
- Monthly Income Funds
Not all investors have an appetite for risky investments, monthly income funds are a category of debt fund for such individuals. If an investor wishes to invest in a fund that is conservative and will provide a regular source of income, monthly income funds add a lot of value. The fund invests in corporate and government debt instruments. Thus, the risk associated with these funds is much lower as well.
- Exchange Traded Funds
Exchange traded funds or ETFs are relatively newer addition to the Indian financial market. They are pretty much like stocks and commodities as they are listed on the exchanges. An ETF provides investors with good returns with high level of liquidity, as he/she can buy or sell ETFs through intraday trading just like shares. Since it largely involves the capital market, it is not for the faint hearted.
- Hybrid Funds
A hybrid mutual fund is a good example of diversification. The fund invests in the equity market instruments such as shares as well as debt instruments such as bonds. The combination provides one with potentially stable returns. Funds under this category include balanced funds and arbitrage funds.
Apart from the above fund types, there are a couple of wider categories that all mutual funds belong to.
- Open Ended Funds
Mutual funds that do not have any restrictions on the time period during which investors can buy or redeem units are called open ended funds. A vast majority of mutual funds are open ended in nature.
Some examples of open ended Religare funds are:
- Invesco India Contra Fund
- Invesco India Dynamic Equity Fund
- Invesco India Arbitrage Fund
- Invesco India Ultra ST Fund
- Closed Ended Funds
A closed ended mutual fund is available for individuals to invest in or redeem during only specific periods of time. Beyond these specific periods, investors cannot purchase or redeem the fund units.
Here are some of the most popular mutual funds from the Religare Invesco Asset Management firm.
- Invesco India Tax Plan
Invesco India Tax Plan is an open ended mutual fund that comes under the category of ELSS or Equity Linked Savings Scheme. Since, it is open ended there are no restrictions regarding investment timelines and one can invest in the fund whenever one wishes to.
This fund allows investors to generate wealth over a long-term horizon and invests primarily in equity and other equity-related instruments. Fund managers take a bottom-up approach while choosing stocks for this fund. Since its inception in the year 2006, the fund has managed to beat the benchmark multiple times.
The fund is an ELSS i.e. an equity linked savings scheme that one can receive dual tax benefits from. Money invested under this fund type allows tax deductions under Section 80C. As the fund primarily invests in equities, capital gains tax is applicable on the fund value. Currently, equity investments attract short term capital gains and long term capital gains tax. Since the fund has a lock-in period of 3 years, no short term capital gains are applicable to it, while long term capital gains is nil. Thus, as per the existing tax laws one does not have to pay any taxes on the proceeds from tax saver funds.
Investors can opt to invest in any one of the following options.
- Direct: One can choose to directly invest in the fund via the fund house or select third party entities. The expense ratio for direct funds is relatively lower when compared with the regular scheme. But on the flip side, they have a slightly higher NAV.
- Growth: If the primary goal is to see invested capital grow over a period of time, growth option makes a lot of sense. All the profits that are generated out of the fund are again reinvested in the fund value. Thereby giving investors the power of compounding and letting the capital grow over a longer period of time.
- Dividend: Dividend option is for those individuals who seek some form of regular income while still being invested in the fund. The profits made from the fund as passed on to the investors in the form of dividends. Though there is no guarantee as to when and what the dividend amount would be, as it is solely at the discretion of the fund house.
- Invesco India Liquid Funds:
Invesco India Liquid Funds is an open ended mutual fund belonging to the liquid funds category. Being an open ended fund, investors are free to invest in and redeem fund units whenever they wish to. The fund is primarily for individuals who seek decent returns out of their money without having to take any risks. The investments of the fund are focused on debt securities and some portion in the capital market. This provides the fund a potential balance between stable and decent returns. Invesco India Liquid Funds has provided its investors with steady returns year on year. The money that one invests in this liquid fund does not provide any tax deductions. However, if an individual stays invested in the fund for more than a year, all the proceedings are tax free.
The following are the options available to investors in the fund.
- Direct: Direct mutual funds allow investors to trim down the expense ratio, resulting in slightly higher returns. The NAV is a bit higher for the fund type, thus investors get a slightly lower number of units for their money.
- Growth: Growth option fits in perfectly for individuals who just wish to invest their money for the long term and forget about it. Since all the profits are reinvested into the fund again, one will see his/her capital growing steadily, all thanks to compounding.
- Dividend: When one opts for dividend as an option for their Invesco India Liquid Fund investments, the fund house will split the benefits among all the investors. This is ideal for individuals who seek some form of regular income without having to redeem their units. Since the profits are handed over to the investors, the fund value grows a bit slowly when compared to the growth option. However dividend payouts would depend on the fund’s performance as well as decision of the fund management.
- Invesco India Contra Fund
Invesco India Contra Fund is an open-ended mutual fund that comes under the category of diversified equity funds. Just as with all open ended funds, the investor does not have any limits on time or value of the investment. The fund managers invest most of their energy in figuring out the right equity asset to invest in. As the fund deals directly with the capital market, the risk levels are on the higher side. However, it allows the investor’s capital to grow much faster as well. Invesco India Contra Fund has consistently outperformed the benchmark indices since launch. The fund managers use something called as a contrarian strategy for investing. They are constantly on the lookout for undervalued stocks and invest in them whenever they find the right opportunity. One cannot seek tax deductions for funds invested under this scheme. However, as the fund deals largely with the equity market, capital gains tax is applicable for the same. If an investor sticks with the fund for more than a year, any profits generated by the fund are non-taxable.
An investor can invest in Invesco India Contra Fund using any of the following options.
- Dividend: This option is for individuals who want an additional source of income without having to redeem any units of their fund. As the fund accumulates profits, the same is passed on to investors in the form of dividend. This lets one utilize or reinvest the funds rather than waiting to redeem the available units.
- Growth: Growth option is ideal for investors who have long term plans and do not have any plans of redeeming their units immediately. As the fund garners profits, the fund managers reinvest those into the fund. This enables the investment to utilise the power of compounding and give respectable returns over time.
- Direct: Investing in direct funds lets investors cut down on the expense ratio of mutual funds. Due to higher NAVs, the investor will receive slightly lower number of units. But the lower expense ratio provides the advantage of better returns to the investor as compared to regular plan of the fund.