IIFL Focused Equity Fund
Mutual funds have become a popular investment vehicle over the last decade. There is a mutual fund for every investor and risk category, whether high-risk or low. Equity funds are especially popular for helping investors grow their capital. The IIFL Focused Equity Fund is one such undertaking for people looking to grow a wealth corpus.
What is the scheme of the IIFL Focused Equity Fund?
The IIFL Focused Equity Mutual Fund has an open-ended equity scheme that invests in no more than 30 multi cap stocks.
What are the main features of the IIFL Focused Equity Fund?
Here are four main features of this Fund:
- Open-ended: The fund units are continuously available for repurchase or subscription; there is no fixed maturity period. Investors are not bound by a specific timeframe to buy and sell fund units.
- Focused but diversified investment: The fund invests in the stocks and shares of companies having varying market capitalisation and across various sectors. Therefore, the investment is diversified bringing both increased safety and better chances of returns.
- Flexible: It is flexible as the investment is spread across market caps without a bias for any particular market capitalisation.
- Dynamic allocation: The fund stays true to its core allocation but also adjusts its assets based on macro trends and the fund outlook.
Who should invest in the IIFL Focused Equity Fund?
This fund may be suitable for investors –
- Looking to grow their wealth over the long-term: You should remain invested in the fund for at least five years in order to beat inflation and enjoy capital gains.
- Wanting to invest in equity and equity-related instruments: This fund is both focused and well-diversified. As your investment is not bound to a single sector or market cap, so the risk is also stretched out. Your chances of success are heightened by its diversification across market sectors and capitalisations.
What are the advantages of investing in the IIFL Focused Equity Fund Direct Growth plan?
When you choose the growth plan, the profits that the fund makes are reinvested into the fund and the corpus of wealth is compounded. This compounding plays a huge role in long-term wealth creation and financial planning. With the dividend option, you are more likely to spend the dividends rather than reinvest them, this is not conducive to wealth creation.
When you invest in the IIFL Focused Equity Fund Direct plan, you invest directly with the mutual fund company. There are no middlemen involved and no commission or brokerage involved; thus, lowering the expense ratio. As an investor, the advantage is that your returns are higher due to the lower expense ratio. You can buy this plan directly online through the fund website or offline directly from the company’s branch office.
What is the minimum amount you can invest?
As a new investor in the IIFL Focused Equity Fund, you have to make an initial purchase of Rs 5000 at least. Thereafter, you can invest in just multiples of Rs 100. For an additional purchase, the minimum amount is Rs 1000 and again, in multiples of Rs 100 after that.
If you want to invest in the fund as a Systematic Investment Plan (SIP), then the minimum amount that can be invested every month is Rs 1000 for at least six months. If you choose to invest on a quarterly basis, then the minimum amount is Rs 1500 per quarter for at least four quarters.
What is the entry and exit load of the fund?
There is no entry load for the fund. There is an exit load of 1% if you redeem or switch out the fund units before 12 months have passed from the allotment of units.
What are the tax implications of the fund?
As per income tax laws in India, if your investment in an equity mutual fund crosses 12 months, then gains from the fund are considered to be long-term capital gains (LTCG) and subject to LTCG tax.
Details of LTCG tax:
- Gains of up to Rs 1 lakh are not taxable
- LTCG is charged at 10% on plus surcharge and cess without indexation on gains that cross Rs 1 lakh in a single financial year.
- Dividend earned is also taxable as per the investors’ applicable tax slab
Gains from the equity mutual fund held for less than 12 months are considered to be short-term capital gains (STCG) and are taxed at 15% plus surcharge and cess.
If you are willing to stay invested for the long term, the IIFL Focused Equity Fund may be an excellent option for growing your wealth. The mark of a good investment portfolio is diversification. Allow this fund to help add equity to your investment portfolio. And get the advantage of a fund investment with well-diversified asset classes.