RESUME APPLICATION PAY PREMIUM
Fund Performance

Fund Performance

Knowledge Center

Knowledge Center

About Us

About Us

Tools and Calculators

Tools & Calculators

Quick links

Mobile (Download app)
  • Webpages
  • Documents
  • HDFC Life ClassicAssure PlusInvestment
  • HDFC Life ClassicAssure PlusInvestment
  • HDFC Life ClassicAssure PlusInvestment

For NRI Customers

(To Buy a Policy)

(If you're our existing customer)

For Online Policy Purchase

(New and Ongoing Applications)

Branch Locator

For Existing Customers

(Issued Policy)

Fund Performance Check

RESUME APPLICATION PAY PREMIUM

What do you want to do?

Quick links

Mobile (Download app)

Download HDFC Life App

Buy plans, track your policy, make renewal payments & monitor fund performance with HDFC Life App, Download Now!

Apple Logo Go to Google Play Store

Equity Mutual Funds - what constitutes the risk

down-arrow
March 11, 2019

There are a lot of investment options that are available in the market today. One of these options is investing in Mutual Funds. Mutual Fund are basically investment options that serve as market linked investment products and come with a lock in period of 3 years and offer various fund instruments for investment purposes. The tax benefit of mutual funds is exclusive for some fund instruments and not generally for all the instruments. There are exclusive tax-efficient mutual funds that are actually ELSS (Equity Linked Saving Schemes). These are the funds that offer tax deductions on investment and unlike other types of mutual funds, have some degree of tax-effectiveness. Generally, when you invest in mutual funds, your mutual fund advisor or manager decides the allotment of fund values in different fund options. These options may be chosen from a host of available ones and may be equity-based, debt-based or a mix of debt and equity-based options.

Equity-based mutual funds invest in equity or a specific part of the ownership shares of a company. Such mutual funds are of various types depending on the stock-evaluation of a company, fixed sectors and the type or mode of investment pattern being followed. Equity-based mutual funds may be large-cap, mid-cap or small-cap. Large-cap stocks are maintained by topmost corporate companies who have a credible and publicly-known brand value and therefore, form a low-risk investment medium. Mid-cap stocks are those that are maintained by mid-level companies that are not as large in operations, staffing, revenue etc. as large-cap ones but are not as low as small-cap companies. The risk factor of investing in such stocks is low-to-medium. Lastly, there are small-cap stocks that are maintained by small or newly formed companies. Though the risk involved in such investments is huge, yet there are chances of higher returns than mid-cap or large-cap options.

The risk factor in equity-based mutual funds is constituted by a range of parameters that depend on the market-risks or overall fluctuation, depreciation in the rate of interest offered on the returns or the risks associated with a one-sided investment portfolio. There may be a situation, especially so with small-cap stocks, where the issuing company may go bankrupt within a short period of time. In such a case, the loss of investment is total and all the invested funds vanish. On the other hand, there may be a situation where the stock-value of the issuing company may shoot up favorably in a short period of time and therefore, the returns gained by the investor become immense. In simple terms, the various risks associated with equity-based mutual funds must be kept in mind while investing and any decision to invest in any such fund option must be taken after due thought and due evaluation.

HDFC Life offers saving and investment schemes for providing a stable growth of your funds and for ensuring durable returns over a period of time. For details, click on the mentioned link:https://www.hdfclife.com/savings-plans.

Term Plan Articles Term Plan Articles

Investment Articles Investment Articles

Savings Articles Savings Articles

Life Insurance Articles Life Insurance Articles

Tax Articles Tax Articles

Retirement Articles Retirement Articles

ULIP Articles ULIP Articles

Health Plans Articles Health Plans Articles

Child Plans Articles Child Plans Articles

Popular Calculators Popular Calculators

Francis Rodrigues Francis Rodrigues

Francis Rodrigues has a decade long experience in the insurance sector, and as SVP, E-Commerce and Digital Marketing, HDFC Life, manages the online sales channel, as well as digital and performance marketing. He has had hands-on experience in setting up sales channels and functional teams from scratch over a career spanning 2 decades.

LinkedIn profile
Author Profile Written By:
Vishal Subharwal Vishal Subharwal

Vishal Subharwal heads the Strategy, Marketing, E-Commerce, Digital Business & Sustainability initiatives at HDFC Life. He is responsible for crafting and ensuring successful implementation of the overall organisation strategy.

LinkedIn profile
Reviewed By Reviewed By:

Here's all you should know about life insurance.

We help you to make informed insurance decisions for a lifetime.

Preserving Your Investment: How New Tax Rules Affect Real Estate Sales Before 2024

Preserving Your Investment: How New Tax Rules Affect Real Estate Sales Before 2024

Discover how new tax rules affect real estate sales before 2024, impacting capital gains, deductions, and property transactions. Stay informed for smarter decisions.

Financial Freedom for Women Entrepreneurs: Unlocking Success with the 50-30-20 Strategy

Baby Steps to a Secure Future: Financial Planning and Wealth Management

Charting New Beginnings: Financial and Mental Well-being for Single Parents

Essential tips and strategies for enhancing both financial and mental well-being for single parents, empowering you to thrive and support your family.

Charting New Beginnings: Financial and Mental Well-being for Single Parents
Investment Choices to Make Your Money Work for You Previous
Switch Investment Mix with ULIP Next
HDFC life
HDFC life

HDFC Life

Reviewed by Life Insurance Experts

HDFC LIFE IS A TRUSTED LIFE INSURANCE PARTNER

We at HDFC Life are committed to offer innovative products and services that enable individuals live a ‘Life of Pride’. For over two decades we have been providing life insurance plans - protection, pension, savings, investment, annuity and health.

Popular Search

Popular Searches