Top 5 Flexi Cap Fund Picks By Sharekhan To Start SIP In 2022

With the counter of the Russia-Ukraine crisis and a good rebound in economic indicators, the market is projected to see additional corrections in the near future. In the face of market uncertainty, experts feel that diversifying your portfolio can safeguard your returns from market downturns and that Flexi Cap funds are the best category to invest in.

When the market goes down, equity mutual funds struggle, but investors should not be worried about the risk. Alternatively, starting to invest in Flexi Cap funds, which invest in companies across the market capitalisation range, i.e. large-cap, mid-cap, and small-cap stocks, would be beneficial for moderate risk investors looking to build long-term wealth from equity while the market is volatile and betting on a single sector will not be favourable. As a consequence, we've compiled a list of the top 5 Flexi Cap funds chosen by brokerage firm Sharekhan in April 2022 to begin a Systematic Investment Plan (SIP) in order to combat the turbulence of the equity market.

Franklin India Flexi Cap Fund Direct Growth

Value Research has rated Franklin India Flexi Cap Fund Direct-Growth as a 3-star fund, with Rs 10,113.58 crores in assets under management (AUM) as of 31/03/2022 and a NAV of Rs 1,052.5630 as of 13/04/2022. The fund was established in 1994 and is ideally suited for long-term investors with a 5-year or longer financial goal. Franklin India Flexi Cap Fund Direct-Growth returns are 29.50 percent during the last year. It has had an average yearly return of 16.56 percent since its inception.

The fund has equity asset allocation across Financial, Technology, Consumer Staples, Energy, Automobile sectors and the fund's top 5 holdings are ICICI Bank Ltd., Infosys Ltd., HDFC Bank Ltd., Axis Bank Ltd., Bharti Airtel Ltd.. The fund has a 1.15 percent expense ratio, and SIPs can be started with as little as Rs 500.

Period	Absolute Returns	Annualised Returns	Category Avg
1 Week	-1.00%	-	-0.56%
1 Month	6.52%	-	6.36%
3 Month	-4.11%	-	-4.44%
6 Month	-2.21%	-	-2.91%
YTD	1.06%	-	-0.36%
1 Year	29.50%	29.50%	26.56%
2 Year	120.08%	48.35%	42.26%
3 Year	64.51%	18.01%	18.43%
5 Year	94.17%	14.18%	14.62%
Since Inception	314.90%	16.56%	15.32%
Source: moneycontrol.com. Data as of 13th April, 2022

UTI Flexi Cap Fund Direct Growth

Value Research has given UTI Flexi Cap Fund Direct-Growth a 5-star rating, and the fund was founded on May 18, 1992. As of 31/03/2022, UTI Flexi Cap Fund Direct-Growth has Rs 24,898.96 Crores in assets under management (AUM) and a NAV of Rs 247.9612 as of Apr 13, 2022. The 1-year returns of UTI Flexi Cap Fund Direct-Growth are 15.31% and it has returned an average of 12.88 percent every year since its inception.

The fund has its sector allocation across Financial, Technology, Healthcare, Services, Materials and the fund's top 5 holdings are Bajaj Finance Ltd., Larsen & Toubro Infotech Ltd., HDFC Bank Ltd., Infosys Ltd., ICICI Bank Ltd.. The fund has a 0.93 percent expense ratio, and SIPs can be started with as little as Rs 500 per month.

Period	NAV (%)	Nifty 500 Index(%)	Nifty 50(%)
1 Year	15.31	22.29	20.26
3 Years	19.35	16.78	15.86
5 Years	16.4	14.55	15.14
Since Inception	12.88	11.92	0
Source: utimf.com. Data as of 31 Mar 2022

HDFC Flexi Cap Fund Direct Growth

The HDFC Flexi Cap Fund is a diversified equity fund that invests in big, mid, and small-cap stocks. Its benchmark is the NIFTY 500 Total Returns Index. This product is ideally suited for long-term investors with a financial objective of three years or more. The fund was founded on January 1, 1995, and as of 31/03/2022, HDFC Flexi Cap Direct Plan-Growth has Rs 27,496.23 crores in assets under management (AUM) and a NAV of Rs 1,120.08 crores as of 13th April 2022.

The previous one-year growth returns of the HDFC Flexi Cap Direct Plan were 34.87 percent. It has had an average yearly return of 15.37 percent since its inception. The fund's equity asset allocation is spread across the Financial, Energy, Capital Goods, Technology, and Materials sectors, with State Bank of India, ICICI Bank Ltd., Reliance Industries Ltd., Infosys Ltd., and National Thermal Power Corp. Ltd. as its top five holdings.

The fund has a 1.07 percent cost ratio, and SIPs can be started with as little as Rs 500 per month. Value Research has given the fund a two-star rating, indicating that investors should be cautious.

Period	Absolute Returns	Annualised Returns	Category Avg
1 Week	-0.39%	-	-0.56%
1 Month	8.03%	-	6.36%
3 Month	1.25%	-	-4.44%
6 Month	2.86%	-	-2.91%
YTD	7.59%	-	-0.36%
1 Year	34.87%	34.87%	26.56%
2 Year	120.04%	48.34%	42.26%
3 Year	57.21%	16.25%	18.43%
5 Year	97.62%	14.59%	14.62%
Since Inception	277.29%	15.37%	15.32%
Source: moneycontrol.com. Data as of 13th April, 2022

Canara Robeco Flexi Cap Fund Direct Growth

Canara Robeco Flexi Cap Fund Direct-Growth has been rated 5-star by Value Research and the scheme was founded on 16-Sep-2003. Canara Robeco Flexi Cap Fund Direct-Growth has Rs 7,256 crores in assets under management (AUM) and a NAV of Rs 222.08 as of 13-Apr-2022.

Canara Robeco Flexi Cap Fund Direct-Growth returns over the last year have been 20.82 percent, with an average annual return of 18.18 percent since inception. The fund has equity sector allocation across Financial, Technology, Healthcare, Energy, Automobile and the fund's top 5 holdings are Infosys Ltd., HDFC Bank Ltd., ICICI Bank Ltd., Reliance Industries Ltd., Bajaj Finance Ltd..

The fund has a 0.57 percent expense ratio, and SIPs can be started with as little as Rs 1000 each month.

Period	Canara Robeco Flexi Cap Fund - Growth	Scheme Benchmark (S&P BSE 500 TRI)	Additional Benchmark (S&P BSE Sensex TRI)
CAGR since Inception	18.18 %	16.60 %	16.76 %
1 Year	20.82 %	22.26 %	19.50 %
3 Year	17.96 %	17.06 %	16.06 %
5 Year	16.20 %	14.79 %	15.94 %
Source: canararobeco.com. Data as of Mar 31 , 2022

SBI Flexi Cap Fund Direct Growth

Before beginning to discuss the scheme's major takeaways, investors should be aware that SBI Flexi Cap Fund Direct-Growth is rated 3-star by Value Research. SBI Flexi Cap Fund Direct-Growth was established on September 29, 2005, and as of 31/03/2022, it has Rs 15,736.38 crores in assets under management (AUM) and a NAV of Rs 83.73 crores as of Apr 13, 2022.

The product has a 0.87 percent expense ratio, and SIPs can be started with as little as Rs 500. Financial, Services, Energy, Technology, and Consumer Discretionary are the fund's top sector allocations. HDFC Bank Ltd., ICICI Bank Ltd., HCL Technologies Ltd., Axis Bank Ltd., and ITC Ltd. are the fund's top five holdings. The 1-year returns for SBI Flexi Cap Fund Direct-Growth are 26.31 percent. It has had an average yearly return of 17.36% since its inception.

Period	Absolute Returns	Annualised Returns	Category Avg
1 Week	-1.31%	-	-0.56%
1 Month	5.36%	-	6.36%
3 Month	-2.71%	-	-4.44%
6 Month	-1.67%	-	-2.91%
YTD	1.87%	-	-0.36%
1 Year	26.31%	26.31%	26.56%
2 Year	101.63%	41.99%	42.26%
3 Year	63.32%	17.73%	18.43%
5 Year	97.91%	14.62%	14.62%
Since Inception	340.91%	17.36%	15.32%
Source: moneycontrol.com. Data as of 13th April, 2022

Disclaimer:- The views and investment tips expressed by author of IPOOnly, should not be construed as investment advice to buy or sell stocks, gold, currency, or other commodities. Investors should certainly not take any trading and investment decision based only on information discussed on IPOOnly We are not a qualified financial advisor and any information herein is not investment advice. It is informational in nature. All readers and investors should note that author of the articles, would not be responsible for any decision taken based on these articles. Please do consult a professional advisor. 

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5 SIPs To Invest For October 2021 That Are Rated “No 1” By CRISIL

 

Here is a list of mutual funds that are rated as No 1 by CRISIL, in their respective categories.

Name	Category	1-year returns	3-year returns
BOI AXA Mid & Small Cap Equity & Debt Fund	Hybrid	78.26%	15.62%
PGIM India Flexi Cap Fund	Flexi Cap	68.98%	23.47%
Canara Robeco Bluechip Equity Fund	Largecap	47.14%	17.14%
IDBI India Top 100 Equity Fund	Largecap	51.69%	14.53%
Franklin India Bluechip Fund	Largecap	46.70%	12.27%

Why we are recommending only the above 5?

 To begin with given where the stock markets are we believe that spectacular returns as in the last 1-year is out of the question. We are hence recommending only the hybrid, flexi and largecap mutual funds. In fact, we do not even like flexi cap mutual funds, given that they would have exposure to small and midcap stocks as well.

At the moment we are recommending only hybrid funds, where the fund manager has the flexibility to switch between debt and equity. We will be covering Hybrid mutual fund SIPs in a separate article. We also urge investors to start switching to debt mutual funds, given the way markets have rallied in the last 1-year. I mean, it may also be time to protect your capital, if not entirely than partially at the very least.

Source- Goodreturns.in

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How to calculate the actual return of SIP of mutual funds?

These days, people are quite aware of the importance of personal finance and investment. People prefer to invest via mutual funds as they offer an opportunity to diversify portfolios over various asset classes. 

Mutual fund is an ideal option for those investors, who are embarking on their journey in the equity market as it is managed professionally and has lower risk as compared to direct equity. Investment in a mutual fund can be done in two ways i.e. via lumpsum & SIP. Generally, people prefer to invest via SIP as they can invest in small amounts and also, get the benefit of rupee cost averaging. So, now, the question arises as to how can we calculate the actual return on our SIP investments? The answer to this question is – by using the XIRR function in excel.  

XIRR or extended internal rate of return is the function that can be used to calculate your real investment return. Calculation of returns in the case of SIP becomes quite difficult as you make multiple investments at distinct times. Calculating return on lumpsum investment is quite simpler than SIP as there are no complications related to a distinct time. Besides, multiple amounts of investments can be done on a regular basis. However, you can also calculate returns by XIRR in case of lumpsum investment.  Let’s look at the illustration of how XIRR is calculated:  

Illustration:  

Suppose, you are going to make 12 monthly installments of Rs 5,000 and the maturity amount stands at Rs 65,000. The start date of SIP is January 1, 2021, and the date of redemption is December 31, 2021, then what rate of return will you receive?  

Following are the steps to calculate actual investment return on investment:

Step 1: Open MS Excel sheet and enter the dates of your investment and investment amounts.  

Step 2: Use the XIRR function. The formula of XIRR in MS Excel is = XIRR (values, dates, guess).  

Step 3: Fill required fields in the XIRR formula and you will get your real investment rate. 

As you can see, in the above table the returns generated are 16.64% if you invest 5000 every month for 12 months. As you can see there are multiple cashflows at distinct dates that’s why we have used the XIRR function in order to compute rate of return. What if in above example the investment was done in lumpsum, what will be rate of return if we calculate using XIRR function:

Computation of return using XIRR function

In the above table, we calculated returns generated by investing lumpsum amount using XIRR function and normal rate function. As in case of lumpsum investment we can calculate return on investment using normal rate function as there are no complications like SIP. We can see there is nominal difference in outcome of both functions. So, in case of lumpsum investment you can use any of the above function but incase of SIP you can only use function either XIRR in case of uneven or irregular interval of time or IRR incase of even or regular interval of time.

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Success Story: lakhpati started investment from Rs. 500 in a SIP

Uma Shanker, a 43-year-old mutual fund investor, started his investment journey 14 years ago, with a small amount of Rs 500 via SIP in an ELSS or tax saving mutual fund scheme in October 2005.

“It was a big decision for me that time because before that I was investing in NSC (National Saving Certificates) only for tax saving. It took a lot of courage as I was afraid of the market,” says Uma Shanker, who works in a PSU. Since Uma Shanker was not well-versed with investments, he hired Ashish Modani, a Jaipur-based financial planner and advisor, as his mutual fund advisor.

Like many novices, Uma Shanker had his share of doubts about investing his money in an equity-linked scheme. He started reading about mutual funds and discussing his doubts with his mutual fund advisor to be doubly-sure about whether he was making the right decisions.

“I was happy to see my investment go up day by day in the equity market. I continued reading about mutual funds, and particularly about my scheme (an ELSS from Reliance Mutual Fund). It gave me confidence,” Uma Shanker says.

After he gained the confidence, Uma Shanker increased his SIP amount in 2008 and made it equal to his PF deduction amount.

“I increased the amount once I thought that I understand the basics of mutual fund investing,” he adds.

However, things didn’t go as per his plans. The year 2008 was a scary one for the equity markets all over the world, including India. And Uma Shanker wasn’t prepared for the meltdown.

“I saw my investment value coming down by 50% and all my profits vanished. I thought about stopping my SIP and to restart it again after the market stabilizes. It was a tough time but I kept my faith because of my own readings and my mutual fund advisor,” says Uma Shaker.

My mutual fund advisor reassured me, and said that nobody can predict the market. “If you are a long term-investor, focus only on long term. Short term tremors shouldn’t disturb you,” Ashish Modani, my mutual fund advisor, told me.

After the short-term tremors of 2008 were over, Uma Shanker had all his investments in mutual funds, apart from his pension and PF. “I still remember my colleagues suggested not to make this mistake of keeping the money in the market. However, my understanding of the market and advice from mutual fund advisor made me confident of my choice,” says Uma Shanker.

With the same faith, Uma Sanker continued his SIP and by 2014, the tiny amount he invested had become a considerable corpus. From 2008 to 2014, Uma Shanker tried educating, motivating more people, including his colleagues and family, to start SIPs to beat inflation.

“Approximately 120-150 people started their SIP only on my words. I even started my father’s SIP after his retirement in 2010, until his retirement, my father used to invest all savings in FD, NSC and his PF,” says Uma Shanker.

Uma Shanker says that he has seen many bear and bull market phases in his journey by now. However, he has understood that what really matters at the end of the day is how much your portfolio has earned in the long term. “I increased my SIP amount again and continued till date. Now we are in a bear market, but still I have percentage return more than the average inflation in the last 10-15 years,” says Uma Shanker.

“In the last 14 years, I learnt only one thing: keep your investments simple and don’t keep tracking the market. Focused and consistent approach with goals set never fails you. It didn’t fail me. One more thing, never race for returns and don’t switch funds regularly for best performance because you can’t predict which fund is going to perform at what time,” says Uma Shanker.

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How to create good mutual fund portfolio & wealth?

Everyone aims to create a good corpus in their lifetime. However, if you can plan well and create a good mutual fund portfolio, creating good wealth is possible in the medium to long term. In this article, we will understand how to create long-term wealth. We will also see model mutual fund portfolios for high-risk, moderate-risk and low-risk investors.

Before we jump on the ideal mutual fund portfolio, let us see how you can make up your mind for investing in some of these mutual fund schemes.

Step-1 – Create a goal first

Create a goal that is SMART. It should be SPECIFIC, MEASURABLE, ACHIEVABLE, RELEVANT and TIME BOUND.

Examples of incorrect goals are

1) Want to earn Rs 1 Crore

2) I want to earn good money in 10 years

3) I want to earn good money for my child’s education

4) I want to earn 100 crores by investing Rs 5,000 per month

Examples of SMART goals are

1) I want to earn Rs 1 crore in 10 years as a kitty for charitable purpose.

2) I want to earn Rs 35 Lakh for my child’s education in five years.

3) I want to accumulate Rs 2 crore in the next 20 years of my retirement.

In all the above examples, the goals are specific (to achieve specific amount), measurable (we can measure year on year till the tenure), achievable (these are possible tasks) and time bound (specific tenure is given).

Step-2 – Start Saving Money

If you create a goal that is not enough, start saving money as much as you can. There is no hard rule how much money you can save out of your earnings. Work on saving maximum amount every month.

Step-3 – Invest in mutual funds through SIP

Every rupee saved can be invested in mutual funds. You can invest as low as Rs 500 per month through SIP. Increase the SIP amounts every year to achieve your SMART goal.

Step-4 – Invest in a diversified mutual fund portfolio

You would have heard of saying “don’t put all assets in one basket”. Don’t invest your mutual funds in one asset category. You are seeing how the mid cap or small cap funds are taking a beating now. Hence, you should invest in a diversified mutual fund portfolio to get good returns even when markets are under performing.

How many mutual funds should one invest in, in each asset category?

Many investors would think about how many funds they should invest in each mutual fund category. There is no standard rule here. Investors can invest in 5-7 mutual fund schemes.

Best Mutual Fund Portfolio to create wealth in the long term – High Risk investors

Below is the model portfolio for High Risk investors. It contains funds which are from large cap, multipcap, Midcap, smallcap and balanced categories.

1) ICICI Prudential Blue Chip Fund – (Large cap)

This scheme predominantly invests in large cap companies. This fund gave 16% annualized returns in the last 10 years and 20% annualized returns in the last 5 years proving this as a consistent performer in the long term.

2) Aditya Birla Sunlife Frontline Equity Fund – (Large cap)

The scheme seeks long term growth by investing in a diversified portfolio across various industries / sectors as its chosen benchmark index, Nifty 50. This fund gave 15% annualized returns in the last 10 years and 21% annualized returns in the last 5 years proving this as a consistent performer in various market cycles.

3) Mirae Asset India Opportunities Fund – (Multicap)

This MF scheme aims to maximize long term capital appreciation by finding investment opportunities across industries. This fund gave 18% annualized returns in the last 10 years and 25% annualized returns in the last 5 years, making this as a unique scheme among multicap funds.

4) SBI Focused Equity Fund – (Multicap)

The mutual fund scheme aims to provide capital appreciation by investing in a concentrated portfolio of equity and equity related securities. This fund gave 18% annualized returns in the last 10 years and 23% annualized returns in the last 5 years, making this as another unique scheme among multicap funds.

5) HDFC Midcap Opps Fund – (Midcap)

This fund invests predominantly in mid cap companies in India. This fund gave 21% annualized returns in the last 10 years and 30% annualized returns in the last 5 years making this as a unique Midcap scheme.

6) Reliance Small Cap Fund – (Smallcap)

This fund invests in equity and related instruments in small cap companies in India. This fund gave 20% annualized returns in the last 8 years from launch and 38% annualized returns in the last 5 years which is highest among the small cap funds. This stellar performance, making this fund as one of the best small cap fund.

7) Franklin India Smaller Cos fund - (Smallcap)

This fund invests in equity and related instruments of small cap companies. This fund gave 20% annualized returns in the last 10 years and 31% annualized returns in the last 5 years, which is second highest among the small cap funds.

Best Mutual Fund Portfolio to create wealth in the long term – Moderate Risk to High Risk investors

Below is the model portfolio for Moderate Risk to High risk investors. This portfolio consists of large cap, multipcap, Midcap, smallcap and balanced funds. This portfolio reduces the Midcap/small cap funds to only one.

1) Aditya Birla Sunlife Frontline Equity Fund – (Large cap)

2) Mirae Asset India Opportunities Fund – (Multicap)

3) Reliance Small Cap Fund – (Smallcap)

4) ICICI Prudential Equity and Debt Fund - (Balanced)

This scheme invests in equity and related instruments between 60% to 80% in equity and balance up to 20% in debt instruments. This fund gave 15% annualized returns in the last 10 years and 20% annualized returns in the last 5 years, which is second highest among the balanced funds.

5) HDFC Hybrid Equity Fund - (Balanced)

Even this scheme invests in equity and related instruments between 60% to 80% in equity and balance up to 20% in debt instruments. This fund gave 16% annualized returns in the last 10 years and 22% annualized returns in the last 5 years, which is highest among the balanced funds.

Best Mutual Fund Portfolio to create wealth in the long term – Low Risk to Moderate Risk investors

Below is the model portfolio for low Risk to moderate risk investors. This portfolio consists of large cap, multipcap and balanced funds.

1) Aditya Birla Sunlife Frontline Equity Fund – (Large cap)

2) Mirae Asset India Opportunities Fund – (Multicap)

3) SBI Focused Equity Fund – (Multicap)

4) ICICI Prudential Equity and Debt Fund - (Balanced)

5) HDFC Hybrid Equity Fund - (Balanced)

How should we invest in these mutual fund schemes?

Investors can invest through SIP in these mutual fund schemes. Every year they can increase the SIP amount in existing funds or can add 1 or 2 and invest a maximum of 5-7 funds. If you see market correction of say 1,000 or 2,000 points, you can invest a lump sum amount too.

Suresh KP, The author of this article is founder of Myinvestmentideas.com.

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