large&midcap

It’s time to invest in this Large & MidCap Fund

The finance ministry’s corporate tax rate-cut gift to India Inc. last weekend was well-received by capital market participants as domestic & foreign investors pumped in the capital in expectation of a spur in the earnings recovery rate. Modi’s visit to the Oval Office is expected to garner positivity for the Indian economy – especially around strengthened trade relations, improved tourism sentiment, and an influx of foreign capital into the home economy.

Having said that, Indian capital markets have been quite resilient in the face of such escalating tensions between two super-economies as it basked in the comfort of an immediate consumption and earnings revival.

Investors are advised to continue investing in a systematic fashion, sticking to asset allocation. If permitted by one’s risk & investment profile, preferences can be skewed towards a large & midcap allocation blend (large-cap orientation) and funds with meaningful exposure to banks, automobiles & IT as sectors.

One such large & midcap fund is “Mirae Asset Emerging Bluechip Fund Direct-Growth.

  • This 5-star rated fund (rated by Morningstar, CRISIL, and Value Research) provides a CAGR of 17.06% (past 5 years), which is 7.59% more than its benchmark (NIFTY Large Midcap 250 Total Return Index @ 9.47% past 5 years) — thus making it the #1 in the Large & MidCap category.
  • This fund provides a perfect blend between large and mid-caps by investing 99.64% in Indian stocks, of which 52.41% is in large-cap stocks, 34.03% is in mid-cap stocks and only 13.2% in small-cap stocks — hence managing the above-average risk it faces.

Subscribe to this hot-selling NFO at Rs. 10/unit!

When a fund house introduces a new mutual fund scheme, it goes by the name New Fund Offer, allowing the firm to raise capital for purchasing securities. One such fund house – Motilal Oswal has launched a New Fund Offer in the large & midcap category – Motilal Oswal Large & Midcap Fund. The category & NFO is expected to benefit from the evolving economic scenarios by way of capturing the uptrend and insulating against headwinds in an optimal fashion.

The fund is suitable for investors having a long-term investment horizon and seeking optimal appreciation across cycles.

Fund Overview:

  • The best part of this NFO is its price for its early investors. Be it the NAV or the exit load, this NFO is the best in its category because the rate at which the NAV is offered is just INR 10/unit and the fund has an exit load of 1% if redeemed within 15 days and none thereafter.
  • The investment objective is to provide medium to long-term capital appreciation by investing primarily in Large and Mid-cap stocks with a targeted ratio at 50:50. However, the AMC may have an underlying philosophy of maintaining at 35:35 with the rest being flexible for allocation between equities and debt. Thus giving you an excellent balance of relative conservatism with great growth opportunities.
  • Given our research team’s primary interaction & understanding with the executives at Motilal Oswal, the fundamentals and philosophy seem well-positioned considering currently evolving market dynamics.

Its simple, be an early adopter, get lower NAVs and achieve higher gains!

NFO

Motilal Oswal Large & Midcap Fund (27 Sep’19-11 Oct’19)

Motilal Oswal has launched a New Fund Offer in the large & midcap category – Motilal Oswal Large & Midcap Fund. The category & NFO is expected to benefit from the evolving economic scenarios by way of capturing the uptrend and insulating against headwinds in an optimal fashion.

The fund is suitable for investors having a long-term investment horizon and seeking optimal appreciation across cycles.

Fund Overview:

The fund will be managed by Aditya Khemani & Abhiroop Mukherjee (star fund managers at Motilal Oswal). The targeted ratio between large & midcap is expected to be at 50:50; however, the AMC may have an underlying philosophy of maintaining at 35:35 with the rest being flexible for allocation between equities and debt. The fund has an exit load of 1% if redeemed within 15 days and none thereafter. Offer NAV at INR 10/unit.

Given our primary interaction & understanding with the AMC, the fundamentals and philosophy seem well-positioned considering currently evolving market dynamics.

Rationale:

The case for large-caps (NIFTY15) remains evergreen as it has known to withstand headwinds and leverage tailwinds effectively while continuing to grow efficiently. The case for large-caps is further strengthened by the current stimulus-orientation with the understanding that such measures will percolate from top to bottom of the market-cap pyramid across sectors.

As far as midcaps are concerned, Midcaps’ relative valuation (P/E) vs. NIFTY is at 2012-13 level lows – also the zone which marked the beginning of the midcap bull rally through 2014. The Nifty Midcap-100 market-cap is currently at a 5-year low with the rolling1-yr differential b/w NIFTY midcap-100 & NIFTY being at a historical extreme. Though there’s a strong case for a revival in the midcap space (albeit by tagging-along with the broader market), quality of stock-selection has become all the more critical within the space. We are confident that Motilal Oswal through its fund management team & framework along with institutional depth has the ability to deliver.

Find out how a cut on corporate tax rate affects your investments

“To fight is a sign of courage, but to live to fight another day is wisdom.”

The first full-time lady finance minister of independent India has turned Santa Claus with the biggest gift in the form of a corporate tax rate cut.

The basic tax rate for corporates has been trimmed down from an effective 34.94% to a much lower 25.17% (only if for companies who agree to forego all other concessions & exemptions).

For some companies who choose to remain under the old rate, the MAT reduction from 18.5% to 15% could benefit.

Minimum Alternate Tax ensures that companies with profits under a threshold are covered under the tax rate though the tax liability may be minimal or even zero.

Tweet tax cut

Our Economy
This improved liquidity with a competitive landscape will enable companies to spend more towards driving sales in a more aggressive fashion.

Once consumerism is spiked, and the supply-side starts reacting, we will have the economic engine push with higher horsepower.

The Highlight
Commercial banks and IT are expected to benefit the most from the move. Given that these sectors have a significantly high-weighted representation on the indices, we could expect to see index valuations getting enriched as well.

tax rate

Investor Gain
Investors must capitalize on this opportunity while bearing in mind the government and central bank’s collaborative alignment towards reviving the Indian economy by buying equities in the form of Direct Mutual Funds while averaging their cost at all junctures.

3 FAQs about the safety of your investments on MyWay Wealth

With 3 months left, the year 2019 has witnessed total SIP contributions of Rs 32,867 crore, thereby, clearly indicating that financial products are gaining high popularity among Indians. Even though MyWay Wealth makes it very easy to signup and finishes paperless KYC in 5 minutes to start investing in Direct Mutual Funds, yet many of our users do hesitate to make their first investment. As Head of Research at MyWay Wealth, I have answered some of the questions that you may have regarding your investments with MyWay Wealth app:

1. What happens to my investments in case MyWay Wealth shuts down?

MyWay Wealth is just a distributor of Direct Mutual Funds. As an intermediary, your money never comes directly to MyWay Wealth. Instead, your money goes to the AMC (Asset Management Companies such as SBI, ICICI, Motilal Oswal, etc) associated with the Mutual Fund you invest in. Thus your money moves from your bank account to the mutual fund’s bank account directly. Similarly for redemption, your money is credited by AMC directly to your bank account. If the app/platform shuts down, your units would be safe as long as you have the folio number (which you can get from your eCAS i.e. Consolidated Account Statement which is available from Karvy, CAMS or SBFS) – and then you would just need to find a different app for your mutual fund redemption/investments.

2. But the markets are falling, should I withdraw my investments?

Its common to panic and stop SIPs when the markets are down due to fear of loss. However, a fall in the market is an opportunity to buy more at lower prices, and this will help you achieve your long-term goals. Remember: Every bear trend is followed by the bull, resulting in the recovery of the market. Thus, time in the market is vital rather than timing the market.

3. Is it safe to invest on MyWay Wealth?

MyWay Wealth is a SEBI Registered Investment Advisor (INA200005323) & registered with the Association of Mutual Funds in India (AMFI). Moreover, these reasons make MyWay Wealth the safest and secure investment platform in India:

  • Our payments are routed via BillDesk (PCI – DSS Compliant)
  • All orders placed on MyWay Wealth are executed via the Bombay Stock Exchange (BSE).
  • Our app uses 256-bit Secure Socket Layer (SSL) encryption, to offer bank-grade security.

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