SBI Equity Mutual Fund

Investment Objective

SBI Equity Mutual Fund schemes strive to provide investors with the potential to enhance their wealth over time. These funds primarily invest in equities and equity-related instruments in the proportion mentioned in the fund’s scheme information materials. Following an in-depth study, the fund manager will select quality equities to ensure that portfolio returns remain in line with expectations and category benchmarks. It also happens when the fund’s declared dividends are reinvested to buy more scheme units. It must be noted that the SBI Equity Mutual Fund performance does not guarantee that the investment objective will be met.

Risks Involved in SBI Equity Mutual Fund

Compared to debt and balanced funds, the SBI Equity Mutual Fund risk ranges between moderate to high. The fund’s value may fluctuate in response to changes in the underlying stock price. Stock market price and volume movements, interest rates, exchange rates, government policies, tax regulations, and other economic factors may all have an impact on stock values. The degree of SBI Equity Mutual Fund risk is also determined by the degree of portfolio diversity. Investors must be aware of their level of risk tolerance before investing in SBI Equity Mutual Fund schemes.

Return Potential of SBI Equity Mutual Fund

Returns are incidental to the risk that an investor takes. The SBI Equity Mutual Fund return outperforms the returns from debt and balanced funds. Historically, these products have delivered average returns of roughly 12% over a 5-year period. However, the SBI Equity Mutual Fund returns are not guaranteed, and fund performance may vary over time. The fund managers allocate wealth based on the SBI Equity Mutual Fund performance.

Who Should Invest in SBI Equity Mutual Fund?

The SBI Equity Mutual Fund performance is appropriate for investors seeking long-term financial appreciation over a 5-year or longer time horizon. Owing to the fluctuation in the SBI Equity Mutual Fund risk with market movements, these funds are intended for investors with a higher risk tolerance. The SBI Equity Mutual Fund return potential makes them appropriate for long-term goals such as children’s education, retirement preparation, and property ownership. To realise the full potential of equity funds, you must remain involved for the duration of the investment horizon, which should be 10-12 years or longer. This may also include putting only surpluses in these funds that you will not need in the near future and are intended for long-term investing.

Things To Consider Before Investing in SBI Equity Mutual Fund

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

• Expense Ratio
• Fund Size
• Risk Reward Ratio
• Type of Equity Fund
• Investment Objective
• Time Horizon
• Risk Tolerance

Tax on SBI Equity Mutual Fund

Equity funds are mutual funds that invest over 65% of their total fund amount in company stock. If an investor redeems their equity fund units within a year, they will experience Short-Term Capital Gains (STCG). These profits are taxed at a 15% rate, regardless of their income tax slab.

If an investor sells their mutual fund units after owning them for over a year, they earn  Long-Term Capital Gains (LTCG). Any capital gain to a maximum of Rs 1 lakh per year is exempted from tax. Any gain above this ceiling is subject to a 10% LTCG tax with no indexation advantage.