IDBI Equity Mutual Funds

Investment Objective

IDBI equity mutual funds aim to give investors a chance to build wealth over time. According to their mandate, defined in their plan information documents, these funds invest primarily in equities and equity-related securities in a particular proportion. After conducting a thorough study, the fund manager will select high-quality equities to guarantee that the IDBI equity mutual fund returns continue to meet expectations and category benchmarks. Additionally, it takes place when the dividends paid out by the fund are reinvested to buy more units of the plan. The fund does not, however, promise that the investment goal will be met.

Risks Involved in IDBI Equity Mutual Funds

IDBI equity mutual fund risks are fairly high to high as compared to debt funds and balanced funds. The value of the fund may change as and when the price of the underlying stock does. Changes in the stock market's price and volume, interest rates, currency rates, governmental policies, tax regulations, and other economic developments could impact stock values. The degree of portfolio diversity also affects how much risk there is. IDBI equity mutual funds risk is higher for the sector- or theme-based than for diversified equity funds. Comparatively speaking, large-cap equity funds will be less risky than small-cap or mid-cap equity funds. Before investing in a scheme, investors may take into account their personal risk tolerance.

Return Potential of IDBI Equity Mutual Funds

Returns are a byproduct of the investor's assumed risk. Compared to debt funds and balanced funds, IDBI equity mutual fund returns are higher. These funds have a track record of producing returns that hover around 12% on average during periods longer than five years. IDBI equity mutual fund performance may change from one period to the next, and they do not promise assured returns. A focused fund may have a larger return potential than a broad equities fund due to its increased risk. On the other hand, large-cap funds are renowned for offering consistent returns during all market cycles. One may think about diversifying the overall portfolio with a few small- or mid-cap funds to increase IDBI equity mutual fund returns.

Who Should Invest in IDBI Equity Mutual Funds?

IDBI equity mutual funds are appropriate for investors seeking long-term capital appreciation over a 5-year or longer time horizon. Because the fund value fluctuates with market movements, these funds are intended for investors with a higher risk tolerance. The IDBI equity mutual fund's return potential makes them ideal for long-term goals such as child education, retirement planning, and home purchase. To realise the full potential of equity funds, you must remain invested for the duration of the investment horizon, which should be 10-12 years or longer. This may also imply putting only surpluses in these funds that you will not need in the near future and are intended for long-term investments.

Things To Consider Before Investing in IDBI Equity Mutual Funds

The following things must be considered before investing in IDBI equity mutual fund schemes.

• The expense ratio, which is distinct from fund performance, is an important indicator of how well the fund is managed operationally. The lower the expense ratio, the better for the investor.
• Examine key risk indicators for equity funds such as standard deviation and beta. The former informs you about the volatility of the fund's returns or the expected fluctuations in its returns. The latter measures the fund's sensitivity to market movements.

Tax on IDBI Equity Mutual Funds

The taxes levied on IDBI equity mutual fund vary depending on the investment's tenure. If an investor redeems a capital gain on an asset that has been held for less than a year, it is considered a short-term capital gain, and a 15% tax is levied. If the investment's tenure exceeds a yearly limit, the long-term capital gain is taxed at 10%.