Every person has one or more financial objectives that are particular to them and their needs. Investments in conventional instruments could not meet your expectations given the rising rate of inflation. Investments in mutual funds can be beneficial in this situation and are regarded as one of the best approaches to attain your financial objectives. Mutual funds offer a range of programmes to accommodate different investor needs. The mutual fund basket contains options for everyone, regardless of whether you are a cautious or aggressive investor, have a short-term or long-term goal, or have a small or large amount to invest.
Types of mutual funds:
There are many different types of mutual funds that can be purchased, but the majority of them fall into one of four broad groups: stock funds, bond funds, target-date funds, and the money market fund.
- Stock Funds: This fund mainly invests in equities. There are numerous subcategories within this group. Some equity funds are labelled as small-, mid-, or large-cap based on the size of the companies they invest in.
- Bond Funds: The fixed income category includes mutual funds that produce a minimum return. A fixed-income mutual fund focuses on assets comprising corporate bonds and government bonds that have a fixed rate of return. Interest produced by the fund is distributed to the investors.
- Index Funds: Stocks that track an important market index, are purchased by index funds. These funds are often created with cost-conscious investors because this needs less study from experts and consultants, which results in lower costs being passed to investors.
- Balanced Funds: Stocks, bonds, money market instruments, or alternative assets are all included in the mix of asset classes that balanced funds invest in. Also referred to as an asset allocation fund, this fund seeks to lower the risk of exposure.
- Money Market Funds: The short-term debt instruments that make up the money market are secure, risk-free investments, mostly Treasury bills. A typical yield is marginally higher than the interest generated in a standard checking or savings account and marginally lower than the normal certificate of deposit.
- Income Funds: Income funds are named for their objective, which is to deliver current income consistently. These funds generally invest in government and top-notch corporate debt, holding these bonds until they mature to generate interest streams.
- Exchange Traded Funds (ETFs): The exchange-traded fund (ETF) is a variation on the mutual fund. They have the benefits of stocks in addition to being set up as investment trusts that can trade on stock markets.
- Target date funds: Bonds, stocks, and other investments are all mixed together in target date funds. The mix changes over time in accordance with the fund’s strategy. Also referred to as Lifecycle funds, are created for people having precise retirement epochs in mind.
PGIM INDIA ELSS tax saver fund:
The open-ended ELSS equity programme is known as PGIM INDIA ELSS tax saver fund and is run by the PGIM India Mutual Fund House. In domestic equities, the PGIM INDIA ELSS tax saver fund has a 93.18% position, of which 65.15% are large-cap companies, 11.38% are mid-cap stocks, and 4.58% are small-cap stocks. Government securities make up 0.21% of the fund’s investment in debt. It Is Suitable For Investors who want to invest money for at least three years and who also want to save on their taxes in addition to expecting bigger profits. In addition, these investors need to be prepared for a three-year lock-in period and the potential for modest losses on their assets.
The main goal of the PGIM INDIA ELSS tax saver fund Scheme is to enable eligible investors to take advantage of a deduction from their total income as provided by the Income Tax Act, 1961, as amended from time to time, while also generating long-term capital growth by investing primarily in stock and equity-related securities.
The ability of the PGIM INDIA ELSS tax saver fund programme to deliver returns consistently is comparable to that of the majority of funds in its class. It has an average aptitude to limit losses in a depressed market.
The financial, energy, technology, healthcare, and automobile sectors are where the fund holds the majority of its investments. Compared to other funds in the category, it has less exposure to the financial and energy industries. As of April 20, 2023, the PGIM INDIA ELSS tax saver fund’s expense ratio is 2.52% and AUM, or assets under management, was 471.15Cr. As of 19 April 2023, the NAV of the PGIM India ELSS Tax Saver Fund Regular Growth is 24.39. 500 rupees is the minimum SIP investment for the PGIM INDIA ELSS tax saver fund. There is no Exit Load for the PGIM INDIA ELSS tax saver fund.