Zebu blog

Category: Mutual Funds

  • Large Cap vs Mid Cap vs Small Cap: Key Differences That Actually Matter

    You don’t need to be an expert to invest in stocks. But knowing a few simple things makes the whole process a lot less confusing. One of those things is understanding what people mean when they talk about large cap, mid cap, and small cap stocks.

    Sounds technical, right? It’s not.

    It’s just about the size of the company — not the number of employees or buildings, but how much the company is worth on the stock market.

    Let’s break this down in the plainest way possible.

    What’s “Cap” Anyway?

    So, “cap” is short for “market capitalization.” That’s a fancy term for a simple idea.

    You take the price of one share. Multiply that by the number of shares the company has out there. That gives you the total market cap.

    If a company has 10 crore shares and each one is ₹100, the market cap is ₹1,000 crore.

    That’s it. No magic. Just basic math.

    Where Do Large, Mid, and Small Come In?

    Now that we know what market cap is, companies are sorted based on how big that number is.

    In India, there’s a general rule based on rankings:

    • Top 100 biggest companies = Large Cap
    • Ranked 101 to 250 = Mid Cap
    • Ranked 251 and below = Small Cap

    It’s not about the business being good or bad. It’s just where they stand in the pecking order.

    Let’s talk about what each one means for you, the investor.

    Large Cap: The Big Guys

    These are the companies most people have heard of. Names like Reliance, TCS, Infosys. They’ve been around for years, if not decades. They’re part of the system.

    When you invest in large caps, you’re usually getting into stable, well-established businesses. They tend to handle economic ups and downs better. They’ve got experience. They’ve got cash. And they’re usually under a lot of watch — media, analysts, regulators.

    Do they grow fast? Not really. That ship sailed years ago. But they can give you slow, steady returns. And sometimes they pay dividends too. You may not double your money in a year, but it’s not a rollercoaster either.

    They’re the kind of stocks you don’t have to watch every day. You can hold them and go about your life.

    Mid Cap: The Ones on Their Way Up

    Mid caps are interesting. They’re not new, but they’re not giants either. Think of them like fast-growing companies that have proven something — but still have room to run.

    These are businesses that might dominate in a specific region or niche. Maybe they’re expanding. Maybe they’re investing in new tech. They’re not done growing, but they’ve survived the early startup chaos.

    With mid caps, you get a mix. More growth potential than large caps. But more risk too. They might spike in good times and fall in a market dip. They’ve got the energy of small caps with a bit more structure.

    For investors who want something between steady and spicy, mid caps make sense. But you still have to pay attention. One bad quarter can hurt.

    Small Cap: The Wild Cards

    Here’s where it gets interesting. Small cap stocks are the smaller, younger companies that most people don’t know about. They’re new to the game, often under the radar.

    These can be game-changers. Or disasters. Or both — depending on when you get in and how long you stay.

    The appeal? They move fast. They can go from ₹20 to ₹200 in a year if something clicks — new product, new market, investor buzz. But the risk is just as real. They can crash just as fast. Sometimes for no clear reason.

    These stocks aren’t always easy to buy or sell. Volumes are lower. Prices swing more. You have to dig deeper, read reports, understand the business. And still, you’re betting on what might happen.

    Small caps are not for the faint-hearted. But they can offer serious upside if you choose well and time it right.

    So Which One Should You Pick?

    That depends. There’s no perfect answer. It’s about what you want from your investments.

    For those seeking stability, approaching retirement, or preferring not to monitor their portfolio frequently, large caps are a safe place to start.

    Those comfortable with some risk and aiming for higher growth than the industry leaders may find mid caps offer that extra edge.

    Younger investors with time on their side, who can handle market swings and are willing to do thorough research, may find small caps exciting—just be sure not to concentrate your entire investment in them.

    Most people do a mix. Some large caps for the base, some mid caps for growth, and a small slice of small caps for that extra pop.

    Can Companies Change Category?

    Absolutely. A small cap that grows steadily can become a mid cap. A mid cap that performs well year after year might get into the large cap club.

    This isn’t fixed. It shifts as companies succeed or struggle. So your portfolio might shift too.

    That’s why some investors check in every six months or so and make changes. Nothing fancy. Just making sure the balance still matches their comfort level.

    A Few Things to Keep in Mind

    1. Market mood matters.
      In bull markets, mid and small caps often shine. In downturns, large caps usually hold better.
    2. Liquidity can be an issue.
      Small caps might not have enough buyers or sellers at the price you want. That can affect your ability to get in or out.
    3. Noise vs. signal.
      There’s a lot of chatter around small and mid caps. Not all of it is useful. Don’t follow hype blindly.
    4. Track your blend.
      You might start with a certain balance between large, mid, and small. But as prices change, that balance shifts. A quick portfolio check every now and then helps.
    5. Don’t overreact.
      Stocks move. Some days will be red. Others green. Look at the business behind the stock, not just the price today.

    Wrapping It Up

    Large cap, mid cap, small cap — they’re just different sizes of companies. And each one plays a different role in your investing story.

    You don’t need to know everything. You just need to know enough to make decisions that feel right for you. What are you comfortable with? What are your goals? How much time do you have?

    This isn’t about picking the perfect stock. It’s about understanding what kind of ride you’re getting on.

    Some people want the expressway. Others don’t mind the bumpy road. The important part is knowing which vehicle you’re in — and where it’s taking you.

    Disclaimer:
    This blog is for informational use only. It does not offer investment advice or recommendations. Investing in the stock market carries risk. Always do your own research or consult a certified financial advisor before making decisions.

  • How SIP Investors Can Use Support & Resistance Zones to Build Confidence

    SIP investing is supposed to be simple. You pick a good fund or stock, set a monthly amount, and automate the rest. No emotions. No overthinking. Just consistency.


    But even the most disciplined SIP investors check their holdings once in a while—and wonder:
    “Did I just buy at the top again?”
    “Should I pause and wait for a dip?”
    “Is this stock really at a good level?”

    That’s where a basic understanding of support and resistance comes in—not to time the market, but to feel more in rhythm with it. At Zebu, we’ve seen more SIP users start to explore charts—not to become traders, but to make peace with volatility. And in that process, support and resistance zones have become quietly useful.


    What Are Support and Resistance Zones—Really?

    Forget the technical definitions for a moment. Here’s the simple version:

    • Support is a level where a stock or index tends to stop falling. It’s where buyers feel the price is “worth it.”
    • Resistance is a level where it tends to stop rising. It’s where sellers often step in.

    Think of support as a floor, and resistance as a ceiling. Prices may bounce off them or break through—but they often matter because many people think they matter.

    They’re not fixed lines. They’re zones. And they’re not predictions. They’re just reference points.


    Why Should SIP Investors Care?

    If you’re investing regularly—monthly, quarterly, or even annually—knowing where support and resistance zones lie can help you:

    Stay calm when prices dip near known support
    Avoid chasing stocks that are right at long-term resistance
    Choose better entry points when you manually top up
    Understand if recent performance is part of a pattern—or a potential shift


    Again, this isn’t about stopping your SIP every time a resistance is near. It’s about context.


    A Practical Example

    Let’s say you’re doing a SIP into a quality mid-cap stock—say, ABC Industries.

    You notice the stock has bounced from ₹720–740 three times in the last six months. That’s a support zone.

    On the upside, every time it hits ₹840–860, it pulls back. That’s a resistance zone.

    Now imagine your SIP executes at ₹850. It’s still okay—you’re building long-term. But knowing this zone exists might help you:

    • Manually top up if it dips again near ₹740
    • Pause optional additions if it runs ahead of earnings and hits ₹860
    • Stay patient if it dips post-purchase, because you expected that zone to attract buyers

    This isn’t prediction. It’s preparation.

    What the Market Is Doing Right Now

    In July 2025, Nifty is trading around 23,400, while Sensex hovers above 77,000. We’ve seen:

    • Recent support near 22,900 on Nift
    • Resistance around 23,500–23,600
    • PSU banks and capital goods showing relative strength
    • FMCG stocks pausing after strong runs

    If you’re SIP-ing into index ETFs or sector-specific funds, this information gives you a map—not a rulebook.

    For instance, a PSU-focused SIP may ride short-term momentum. An FMCG-focused one may cool temporarily. But support zones below recent dips suggest buyers remain active.

    Using Support & Resistance Without Overthinking

    You don’t need to spend hours on charts. Here’s a simple routine:

    1. Log into Zebu → Check the stock or index you’re investing in
    2. Use basic chart view → Select 6-month or 1-year timeframe
    3. Look for clusters → Price zones where moves repeatedly slow, reverse, or gather volume
    4. Set alerts → Use Zebu tools to notify you when your asset nears those zones

    Then forget it until you need it.

    These zones aren’t guarantees. But they help filter noise. Instead of reacting to a 3% drop, you’ll think, “Ah, back near support.” That mindset shift matters.

    Common Questions We Hear

    Q: Should I stop my SIP near resistance?
    Not necessarily. But you might choose to pause optional top-ups or diversify new funds elsewhere.

    Q: What if support fails?
    That happens. It doesn’t mean your SIP was wrong. But it might prompt a deeper look at why the stock or fund broke structure—news, results, sentiment.

    Q: Can I do this without charts?
    Basic support/resistance data is built into many Zebu screens. You don’t need to draw anything. Just glance.

    Where This Really Helps: Emotional Control

    The real benefit of using support and resistance as an SIP investor is not better timing. It’s less panic.

    • You’ll stop feeling like every market dip is a mistake
    • You’ll stop buying out of FOMO at resistance.
    • You’ll ride volatility with context.

    We’ve seen this play out across Zebu’s delivery-based users. The ones who use charts—not obsessively, but observationally—tend to hold better, longer, and with more confidence.

    Zebu Tools That Help You Do This Quietly

    Our platform supports non-intrusive investing. That means:

    • Chart views that aren’t cluttered with signals
    • Alerts tied to price levels—not just price change
    • Watchlist summaries that show bounce zones and momentum levels
    • Delivery snapshots that help you track entry points over time

    Because most SIP investors don’t want noise. They want a calm check-in now and then—enough to feel grounded.

    Final Thought

    Support and resistance zones won’t change your financial goals. But they might help you stay with them longer. If your SIP is into something solid, short-term movements shouldn’t throw you. But knowing where the price has historically turned can anchor your confidence—and make you feel less like you’re flying blind.

    At Zebu, we don’t want every investor to become a chart reader. We just want every investor to feel like they can see what matters. Because investing, when it’s done quietly and consistently, shouldn’t feel confusing. It should feel yours.

    Disclaimer

    This article is meant for educational purposes only and does not constitute investment advice or financial recommendations. Support and resistance zones are based on historical data and do not guarantee future performance. Zebu encourages users to consult with a certified advisor before making investment decisions based on technical indicators or personal interpretations.

  • What gives more profit in Mutual Funds – LUMPSUM or MONTHLY SIP?

    Hello there! Let’s discuss mutual fund buying in India and the age-old argument between lump payment and monthly Systematic Investment Plans (SIPs).


    What are these two categories of assets, first? Lump-sum investing refers to investing a significant amount of cash in a mutual fund all at once. SIPs, on the other hand, entail making regular, typically monthly, investments of a set amount of money.

    Let’s now examine the advantages and disadvantages of each strategy.

    For those who have a large amount of cash accessible to spend, lump sum investments can be profitable. If the market is favourable, the investor can profit from instant returns while also earning sizeable returns in a brief amount of time. However, because the investment is made all at once, there are also greater dangers involved. If the market does badly, the owner could sustain sizable losses.

    SIPs, on the other hand, provide a more methodical strategy to investing. Investors can benefit from the power of compounding and average out the cost of investment by consistently spending a set sum of money. Due to the fact that the funding is stretched out over time, SIPs also assist in minimising the effects of market volatility. The profits, however, might be lower than those from lump-sum investments, and buyers might lose out on the chance to make more money quickly.

    Which is preferable, then? Your risk tolerance and financial objectives are really what determine this. Lump sum investments might be a wise choice if you have a large sum of money accessible and are prepared to take on greater risks. SIPs, on the other hand, might be a better option if you’re looking for a methodical approach to spending and are prepared to contribute over an extended period of time.

    Benefits of Lumpsum Purchases

    The possibility for greater profits quickly is one of the most important benefits of lump sum investments. Compared to a SIP, the individual can achieve substantial profits on their investment in a quicker amount of time if the market circumstances are advantageous. For those who have a large amount of cash on hand and want to make a sizable investment, lump sum purchases may also be advantageous.

    Cons: However, lump sum purchases also carry greater levels of risk. Since the investment is made all at once, the individual may sustain sizable losses if the market performs badly. Lumpsum investments are also not a good choice for investors who don’t have a lot of cash on hand because they might not be able to benefit from the possible profits.

    SIPs:
    Pros:
    The methodical strategy to investing that SIPs offer is among their biggest advantages. Investors can form the practise of saving and investing by setting aside a set quantity of money at regular intervals. As the purchaser gets units at various rates over time, this strategy also aids in averaging out the cost of the investment. Due to the fact that the funding is stretched out over time, SIPs also assist in minimising the effects of market volatility.

    Cons: SIP profits, however, might be less than those from lump-sum purchases. The possibility of greater returns over a brief period of time is less likely because the expenditure is spread out over time. Additionally, the investor might receive lower returns than they would have if they had made a single amount investment if the market performs badly over the course of the investment.

    In summation, SIPs and lump sum purchases each have advantages and disadvantages. Before choosing a course of action, it’s critical to think about your financial objectives and risk tolerance. Invest wisely!

  • You Will Gain These 5 Benefits When Investments Compound!

    One of the best methods to gradually increase your money is through investing. However, did you know that one of the most effective and straightforward methods for increasing income is also one of the simplest? The idea of making interest on your interest is known as compound interest. The advantages of having your assets compound are listed below.

    Interest on interest creates speed

    Your money isn’t just sitting in an inactive account when you spend it. You are employing it. Furthermore, when your assets generate interest, that interest is reinvested into your account where it begins to generate interest of its own. This can have a snowball impact over time that can really build up.

    Long-term planning involves using compound interest

    Over the long run, compounding’s strength really manifests itself. Compounding may not be very helpful if you spend for a brief amount of time. Compounding, however, can help your money expand exponentially if you spend for many years.

    Using compound interest, you can achieve your money objectives

    Compound interest can assist you in achieving your objectives more quickly, whether you’re saving for retirement, a down payment on a home, or your child’s college schooling. You can hasten your funds and get where you want to be sooner by making interest on your interest.

    A inactive investment strategy is compound interest

    Compound interest is one of the best financial strategies because it takes little work from the investor. After making your original commitment, you can relax and watch the magic of compounding at work. You don’t have to constantly handle your investments or make difficult choices when it comes to your money.

    You can handle market instability with the aid of compound interest

    Buying can be a roller-coaster experience with ups and downs. However, you can more easily withstand market volatility if you spend for the long run and let your money compound. You can benefit from market downturns and emerge better on the other side by reinvesting your profits.

    There you have it, then. The advantages of allowing your assets to compound are numerous, and they can build up significantly over time. Compound interest is a potent instrument that can help you achieve your financial objectives, regardless of your level of investing experience or where you are in the process.

  • Why stability is preferable to high returns in mutual funds

    Many investors are lured to mutual funds that provide significant returns when it comes to mutual fund investment. It’s crucial to keep in mind, though, that large rewards frequently come with great risk. Instead, stability ought to be taken into account heavily while selecting mutual funds.

    Stability is preferred over large returns in mutual funds for a number of reasons, including its capacity to reduce risk. Compared to funds that aim for high returns, those with a history of stable, moderate returns are less likely to suffer substantial losses. This can make it easier for investors to sleep at night because they are less likely to suffer substantial losses on their investments.

    Stability is preferred above big returns for another reason: it can aid investors in achieving their long-term financial objectives. Investors may be tempted to make rash, short-term financial decisions when they are concentrated on large returns. This may result in a lack of discipline in the investment process, which might eventually result in shorter-term results. Contrarily, funds that place a premium on stability can assist investors in staying the course even when the market is choppy, which can provide superior long-term outcomes.

    Additionally, stability may bring about mental tranquilly, which is crucial for investors who are getting close to retirement. Investors may be less inclined to assume the risk involved with high-return investments as they go closer to retirement. They would want to make a more secure investment that would generate a steady revenue stream in the future.

    In mutual funds, consistency is also preferred to strong returns since it helps increase portfolio diversity. The total risk of a portfolio can be reduced by diversifying assets across several sectors, industries, and funds with varied objectives. This can lessen the effect of any one specific market or industry on the portfolio as a whole.

    It’s essential to remember that not all stable funds are the same. Before investing, it’s crucial to conduct your homework and comprehend the track record and investment philosophy of the fund. When selecting a mutual fund, it’s also crucial to take into account your individual risk tolerance and investing objectives.

    In conclusion, stability must to be a top priority when selecting mutual funds, even when big returns could be alluring. Risk can be reduced by investing in funds with a history of steady, modest returns since they are less likely to suffer major losses. Additionally, stability may provide investors peace of mind, diversify their portfolio, and aid in achieving their long-term financial objectives. Before making an investment, it’s crucial to conduct your homework, comprehend the fund’s performance history and investment philosophy, and take into account your own risk appetite and investment objectives.

  • The Importance of Long-Term Mutual Fund Investing

    Particularly when it comes to long-term savings and retirement planning, investing in mutual funds may be a great instrument for reaching financial objectives. A form of investment instrument known as a mutual fund pools the funds of several participants to buy a diverse portfolio of stocks, bonds, and other assets. The expert management given by mutual fund managers may assist guarantee that the portfolio of the fund is well-diversified and managed in a way that is in line with the fund’s investment objectives. This diversity can help reduce risk.

    The potential for long-term development is one of the biggest advantages of investing in mutual funds, though. The importance of long-term mutual fund investing can be seen in the following ways:

    Compounding Interest: By making long-term investments, you may benefit from the strength of compound interest. The interest earned on the initial investment as well as the interest earned on prior interest is known as compound interest. The more time compounding has to work, the longer the investment is kept, leading to bigger returns over time.

    Volatility: Short-term trading can be dangerous and the stock market can be unpredictable. Long-term investors may withstand market swings and resist the urge to sell when the market is down by sticking with their investments. By doing this, the investor can benefit from market recoveries and prevent investments from being sold at a loss.

    Diversification: As was already noted, mutual funds offer asset diversification, which reduces risk. Mutual funds can lessen the effect of any one investment on the whole portfolio by investing in a number of other securities. By diversifying, an investor may guarantee that their portfolio is well-balanced and isn’t unduly exposed to any one industry or market.

    Professional Management: Professional fund managers who have the knowledge and skills to make investment choices on behalf of the fund’s investors oversee the management of mutual funds. This might make sure that the portfolio is well-diversified and managed in a way that is consistent with the investment goals of the fund.

    Tax Benefits: Some mutual funds offer tax benefits that may aid investors with their tax obligations. For instance, some mutual fund categories, such those that invest in municipal bonds, can be qualified for tax-free dividends.

    Mutual funds can entail some risk, like with any form of investment, so it’s vital to do your homework and fully understand the fund before you invest. When selecting a mutual fund, it’s also crucial to take into account your individual risk tolerance and investing objectives.

    Finally, investing in long-term mutual funds can be a useful strategy for reaching financial objectives, especially when it comes to long-term savings and retirement planning. Compound interest’s potency, the capacity to withstand market volatility, diversification, expert management, and tax advantages may all help an investment expand over time. When selecting mutual funds, it is crucial to conduct research, take into account your personal risk tolerance, and have clear investing objectives in mind so that you can make an educated choice that is consistent with your investment plan.

  • How can investing in mutual funds help in retirement planning?

    Financial planning must include retirement planning in order to guarantee a pleasant and long-lasting lifestyle when one’s working years are done. It is essential to have a strategy in place to maintain financial stability and self-sufficiency because of the increase in life expectancies and rising medical expenditures.

    Investing in mutual funds is one of the best methods to accomplish this. A form of investment instrument known as a mutual fund pools the funds of several participants to buy a diverse portfolio of stocks, bonds, and other assets.

    Investing in mutual funds can help with retirement planning for the following reasons:

    Potential for long-term growth: Investors may see long-term growth with mutual funds. This is due to the fact that mutual funds invest in a diverse portfolio of stocks, bonds, and other securities, which over time may generate a consistent flow of income.

    Asset diversification: Mutual funds offer a diverse portfolio of assets, which reduces risk. Mutual funds can lessen the effect of any one investment on the whole portfolio by investing in a number of other securities.

    Professional management: Professional fund managers who have the knowledge and skills to make investment choices on behalf of the fund’s investors oversee the management of mutual funds. This might make sure that the portfolio is well-diversified and managed in a way that is consistent with the investment goals of the fund.

    Automatic contributions are available with many mutual funds, which can make it simple to consistently save for retirement. This may be a practical approach to accumulate savings over time without having to give it much thought.

    Tax benefits: Some mutual funds offer tax benefits that may aid investors with their tax obligations. For instance, some mutual fund categories, such those that invest in municipal bonds, can be qualified for tax-free dividends.

    It’s crucial to keep in mind that there is some risk associated with investing in mutual funds, so do your homework and fully comprehend the fund before you do. When selecting a mutual fund, it’s also crucial to take into account your individual risk tolerance and investing objectives.

    When preparing for retirement, it’s crucial to invest for the long term and concentrate on asset diversification to lower risk. A well-diversified mutual fund portfolio can help assure a comfortable living in retirement by generating a consistent stream of income over time.

    As a result of its potential for asset development and diversification, expert management, automated contributions, and tax benefits, investing in mutual funds can be a useful tool for retirement planning. When selecting mutual funds, it’s crucial to conduct your homework, take into account your personal risk tolerance, and have financial goals in mind so that you can make an informed choice that works with your retirement plan.

  • Everything You Need To Know About Thematic Mutual Funds – Part 2

    A thematic fund’s portfolio is made up of stocks from companies in different industries that have something to do with the theme of the fund. Some investors might not know how each of these industries is growing. You can decide if certain sectors can help you make a lot of money if you know enough about them and how they relate to the subject of the fund. So, thematic funds are a good choice for investors who like to keep up with the news and are good at researching a wide range of industries. Investors can decide if they want to put their money into a certain topic by keeping an eye on a lot of places and getting useful information.

    4. Things to think about before putting money into theme-based funds

    Investment Goals: Before buying these funds, you should be sure of what you want to do with them. If you want the best return on your theme fund investment, you should invest for more than five years. It’s not hard to see why. Any business needs enough time to reach its full potential. So, when you put money into these funds, you should have long-term goals in mind, like retiring early, paying for your child’s college, etc.

    Investment Risks: The benefits of investing in theme funds may seem appealing, but it’s important to know the risks that come with it. It is a very dangerous way to go. Because of this, people who have never invested before are told not to buy themed funds. Let’s look at the main risks that come with these funds:

    Semi-Diverse Portfolio: Compared to sectoral funds, which don’t offer any variety, a theme fund’s portfolio is a bit more diverse. It does, however, offer fewer ways to spread out your investments than other equity funds, like multi-cap funds, whose portfolios include securities from many different industries. Since these equity funds don’t have a theme, it’s less likely that all the stocks will fall at the same time than it is with thematic funds.

    Some themes could take longer to develop than expected. Even if some of us can see that a theme has a lot of potential in the near future, say in the next four or five years, our predictions are likely to be wrong. It might take longer than we thought. There were a lot of brand-new funds with themes, and many investors hoped to make money from them. Even though infrastructure has been a topic for more than ten years, there hasn’t been much progress. When investing in themed funds, an investor may have to wait up to 20 years to see a profit. There is a risk of time with theme funds.

    Expense Ratio:

    You need to be honest about the costs that cut into your profits. For managing the thematic funds you want to invest in, Asset Management Companies (AMC) will charge you a fee called an expense ratio. This fee is mostly used to pay for the fund’s overhead costs, such as the salary of the fund manager and marketing costs. The fee is charged once a year.

    5. Taxation of Thematic Funds

    What matters are the profits after taxes. You should know how taxes work with that kind of money. The capital gains you made when you sold your theme fund are taxed based on how long you held on to it.

    If you sell your investments within a year, the profits are considered short-term capital gains (STCG), and you have to pay 15% tax on them.

    Long-Term Capital Gain Tax (LTCG):

    Gains from any investment held for more than a year are considered Long-Term Capital Gains and are taxed (LTCG). Gains of up to Rs. 1 lakh are not taxed in a fiscal year. Gains of more than Rs. 1 lakh are taxed at 10%.

    These are the important things to know about Thematic mutual funds. To start investing in them, open your demat account with Zebu today.

  • Everything You Need To Know About Thematic Mutual Funds – Part 1

    Each mutual fund is based on an asset that brings in money. Large-cap funds’ underlying assets are the stocks of some of India’s biggest companies based on market capitalization. In a similar way, thematic funds are made up of stocks of companies that all have something in common with a certain theme.

    For example, a fund with an ESG theme will invest in companies from different industries that have done well in terms of the environment, society, and the way the company is run (from technology to financial services to FMCG to Consumer Durables).

    Because of this, thematic funds are different from traditional investment strategies like market capitalization (large-cap, mid-cap, small-cap), style (value & growth), and sectoral investing (pharma, technology, infrastructure). As long as it has something to do with the topic, it invests in many different industries and market values. SEBI also says that 80% of a company’s total assets must be invested in stocks and securities related to stocks of a certain theme.

    1. What are the pros of investing in thematic funds?
    More options for diversification than sectoral funds.
    When you invest in a sector fund, your portfolio is limited to that sector, so you don’t have any other options for diversification. Your portfolio will suffer if the sector is doing badly for any reason. Thematic funds, on the other hand, invest based on a theme and may include stocks from companies in different industries. This gives you a bit of diversity. For example, think about a fund whose main focus is on manufacturing. This fund puts its money into a wide range of engineering, chemical, and construction businesses. So, even if businesses in one area aren’t doing well at a certain time, businesses in other areas will keep your portfolio from falling apart in a big way.

    2.Returns that beat the market

    If the investor chooses the right theme to invest in, thematic funds may produce amazing returns. Still, we need to realise that getting the theme right is harder than it seems. It requires that you keep an eye on the things you’re interested in and pay attention to the news and headlines all the time. If, after all your hard work, you really nail the topic, thematic funds could pay off in a big way for you.

    3. Who is a good fit for thematic funds?

    Investors with a high risk tolerance:
    Thematic funds are one of the high-riskmutual funds. When a portfolio is put together with a theme in mind, it limits the kinds of investments that can be made. It would only be able to put money into companies with shares in that area. So your portfolio has a little bit of everything. If for some reason this theme doesn’t come true, there is a big chance of losses. So, these ETFs should only be bought by investors who can handle high risk.

    Investors Who Want Long-Term Returns: It might take a while for a subject to reach its full potential. For example, we’ve known since the early 1990s that software and internet technologies had a lot of potential. But now, 20 years later, we can really see how these ideas work in the real world. So, it takes time and hard work to turn these topics into profitable investments. If you’re an investor who wants to make money over the long term, thematic funds may be a good choice for you. People who are just starting out with investing are told not to put all of their money into themed funds right away.

  • The Different Types Of Mutual Funds

    There are several distinct types of mutual fund schemes available today, each designed to meet the specific requirements of a particular group of investors. The majority of mutual funds fall into one of three categories.

    Equity Funds, often called Growth Funds

    These investments focus mostly on equity, often known as shares of various corporations.
    The accumulation of wealth or an increase in value for the investment is the key goal.
    They have the potential to provide a bigger return, and as a result, the investments in them should be held for a longer period of time.

    These are some examples:

    “Large Cap” funds are funds that invest largely in businesses that are already quite large and well established.
    “Mid Cap funds” are investment vehicles that focus on mid-sized businesses. funds that invest mostly in enterprises of a medium-sized size.
    “Small Cap” funds are funds that invest in firms that are not very large.
    “Multi Cap” funds invest in a variety of different-sized firms, including both large and small ones.
    “Sector” funds are funds that invest in businesses that are all part of the same “sector” of the economy. For e.g. Technology funds that do not invest in any businesses other than those related to technology
    “Thematic” funds are funds that invest in a certain industry or sector. For e.g. Infrastructure funds that invest in businesses that would profit from the expansion of the infrastructure sector are called infrastructure investment funds.

    Tax-Saving Funds

    Funds of Income or Fixed Income from Bonds or Fixed Sources
    These are investments that are made in Fixed Income Securities, such as Government Securities or Bonds, Commercial Papers and Debentures, Bank Certificates of Deposit, and Money Market instruments such as Treasury Bills, Commercial Paper, and so on.
    These investments are less risky than others and are good options for anyone looking to generate income.
    Some examples are liquid funds, short-term funds, floating rate funds, dynamic bond funds, gilt funds, and corporate debt funds, among others.

    Hybrid Funds

    These make investments in both equities and fixed income, giving investors the opportunity to benefit from the potential for growth as well as the generation of income.
    Some examples include pension plans, child plans, and monthly income plans, as well as aggressive balanced funds and conservative balanced funds. Other examples include these types of plans and others.