Shriram Mutual Fund

If an investor is new to the investment process and do not know how to judiciously invest their money, they can certainly opt for the mutual fund system. Mutual funds are managed by asset management companies which bring together a specialized team to help invest money pooled by multiple investors into various bonds, stocks and other securities.

As an investor, when one purchases a mutual fund unit, it actually represents his/her “shareholding” in the fund. An investor can purchase or redeem the units as needed and are liable to receive a share of the profits depending upon the size of the investment. As the NAV of the units held by the investor changes, the value of the investments also changes.

Advantages of Mutual Fund:

• One of the most important advantages of investing through the mutual funds is that one can access a professionally managed investment which is rather impossible to create with less capital.
• It also reduces transaction cost of the investors. Thus investors can grow their savings faster. Buying a mutual fund is like buying multiple securities through a single transaction.
• Mutual funds are available through farms, online investments, companies, banks and insurance combines thus making the account opening process hassle-free.
• They might have hundreds and thousands of securities where one can invest and they have lot of sub-categories and specialized area. An investor can invest in one mutual fund or be smart and invest in different areas.
• Almost all mutual funds have a minimum initial investment process.
• The cost to manage a mutual fund is less than other variable influences.
• It’s simple and flexible process for both beginner and advanced investors.

If the investor wants to invest directly to the mutual fund, then visit their website the authorized branches to save commission and complete and monitor the formalities.

An Asset Management Company (AMC) manages mutual funds on behalf of the investors. At the applicable NAV, an investor purchases or redeems the Mutual Fund. Mutual funds come in various forms – Equity funds, Debt Fund, Balance Funds, Money Market Mutual Funds, Gilt Funds etc. While talking about money, in simple words, we can divide it in four criteria –

Monthly Commitments: We keep aside money for our immediate expenses such as rent fees or life and health insurance. This also includes the EMIs which might be payable by us.

Short Term Investment: This kind of scheme is helpful when one has to save for a down-payment on a new car or an upcoming vacation. In this case, the money should be kept aside at regular intervals. Though RD and FD were the preferred solutions earlier debt fund schemes are gaining popularity as interest rates decline across India.

Long Term Money Investment: This scheme is for the period of 15 to 35 years mostly for post retirement years or children’s education and marriage purposes. Here investors need to be aware of the inflation that may occur as the value of the investor’s money can be reduced. Equity funds can be a handy solution for this scheme.

Tax saving Investment: Government often encourages investors to save money for their long term goals by providing tax-breaks. It’s a good idea to invest in tax saver ELSS fund to save money and taxes at the same time.

The sponsorship is from Shriram Credit Card Company (SCCL) which is under the name of Swastik Credit Card Limited. The key engagements of SCCL is to give security money on movable and immovable properties, deal in negotiable securities and instruments, deal with the Government or local company regarding stocks, shares etc. and finally to act as a sponsor to Mutual Funds and deal with all the related activities. It is in a well position to take the group in the next level and also to grow the subsidiary businesses. The current subsidiary company of these sponsors include:

• Shriram Fortune Solution Limited
• Shriram Insight Share Broker Limited
• Shriram Wealth Advisor Limited
• Shriram Financial Product Solution Limited

As per existing data the Shriram Equity and Debt Opportunities fund is a low-volatility investment   that focuses on equity and equity derivatives while holding additional investments money market and debt instruments such as bonds. Investors who are thinking of building a short to medium term financial position within 3 to 5 years would find this product suitable. The scheme shall invest an estimated 65% to 85% of its assets in equity and equity derivatives. This scheme is suitable for investors who think of avoiding full equity exposure but also do not want to miss the opportunity of the upside potential that the equity investments offer.

Ms. Gargi Bhattacharya Banerjee serves as the Fund Manager of Shriram Mutual Fund with an experience of over 16 years in her career. She has an MBA in Finance and before joining Shriram, she held a key position in Zack’s Research Private limited and Shriram Insight Share Brokers Limited.

This scheme offers two different plans – regular plan and direct plan. Under each plan, investors can get growth and dividend option which offers dividend payout and reinvestment facility. The latest AUM of the fund was recorded at Rs.43 crores on 31^st December, 2017. The expense ratio was 2.31% for regular plan and in case of direct plan it was 1.76% for the same period.

The investment style is a classic ‘top down’ that is, which company is going to surpass and the ‘bottom down’ that is when the company is going to perform its best regarding value for money. The minimum investment required for this scheme is Rs.5000 and higher investments are allowed in multiples of Re.1. Under the systematic plan, the minimum individual investment is fixed at Rs.1000. The exit load is @1% if exited before 365 days from date of unit allocation and there is no entry load. The minimum SIP monthly investment is Rs.1000 (minimum 12 installments) and quarterly is Rs.4000 (minimum 4 installments).

When one invests in the Shriram Debt and Equity Fund, the Tax Treatment of the dividend, as per the current tax law is ‘tax free’. Moreover, if the investments are held for more than a year from the date of allotment, then there is no long term capital gains tax unless such gain exceeds Rs. 1 lakhs. In case of gain over Rs. 1 lakh from the fund, 10% LTCG is applicable even if the units are held beyond a year.

The main objective of this scheme is the generation of capital appreciation in the long run while providing the benefit of reduced volatility through a balanced and diversified portfolio consisting of equities, equity derivative as well as money market and debt instruments.

The fund is suitable for investors who are looking at:

• Appreciation of capital in the long run along with income benefits while staying invested
• Willing to take moderate risk including risk to principal invested
• Seeking to invest in a diversified portfolio of equities, equity derivatives, debt instruments as well as money market instruments.

Mutual funds are not risk free. A key risk to consider is the market risk. The NAV may go up and down due to changing market/economic conditions, affecting the rate of return. In the risk meter, it is rated within ‘moderately high risk’ category due to its high exposure to equities and equity derivatives.

Shriram Mutual Fund follows all the specified guidelines to service its customers. These guidelines include:

• Protection of client’s interest
• Adherence to SEBI Mutual Fund Guidelines and Regulations
• Providing the latest information regarding portfolio, fact sheets, brochures and all the available schemes according to the client’s need.
• Highlighting the risk factors of each scheme to avoid any misinterpretation
• Maintaining confidentiality of the investors

Mutual Funds create a lucrative opportunity to invest however, like everything investment mutual funds have risk factors that need to be considered before applying for it. Though it has risk but it gives decent benefits too with different options of the various schemes and applicable offers.