Groww Banking and Financial Services Fund Review - Everything to Know Before You Invest

22 January 2024
4 min read
Groww Banking and Financial Services Fund Review - Everything to Know Before You Invest
whatsapp
facebook
twitter
linkedin
telegram
copyToClipboard

The growing demand for mutual fund investments leads AMC and fund houses to launch unique New Fund Offers. Similarly, Groww Mutual Fund (formally known as Indiabulls Mutual Funds) launched an NFO, Groww Banking & Financial Service Fund. This scheme opened on January 17, 2024, and will close on January 31, 2024. 

For more details on this BFSI fund, read till the end. 

NFO Details

  • Type of Scheme: Open-ended equity scheme
  • Category: Sectoral Banking
  • NFO Period: January 17, 2024 to January 31, 2024
  • Benchmark: NIFTY Financial Services Total Return Index
  • Exit load: NIL
  • Taxation: 15% on STCG and 10% for LTCG on returns above Rs. 1 lakh

What the BFSI Fund Scheme Aims to Achieve?

The following points highlight the objectives that the Groww BFSI mutual fund aims to achieve.

  • Invest Towards India’s Growth

This fund seeks to earn significant benefits with investments in India’s growing economy. As India’s GDP takes flight, the returns from this mutual fund will also increase. Improving GDP is a sign reflecting this sector’s potential to thrive.

  • Aims to Build Long-term Wealth

Building wealth for the long run is one of the primary objectives of this mutual fund. This implies that if you are looking ahead for long-term capital growth with mutual fund investment, this BFSI fund is right for you. 

  • Regulated Sector

The banking and financial service sector is closely regulated by bodies like RBI, SEBI and IRDA. Investing in this banking and financial service fund can reduce risks of major losses for investors with moderate to high-risk appetites. 

  • BFSI is One of the Optimum Sectors

With a decrease in non-performing assets and growing profitability, the BFSI sector seems to bounce back. This provides a highly potential and favourable environment for investors to explore. 

  • Diversified Approach

To be among the best banking and financial sector mutual funds, this fund scatters your investment across different assets. This allows investors to opt for portfolio diversification. Consequently, your investment is not solely focused on one asset alone. This helps cushion your finances against major losses occurring due to rapid changes in market conditions. 

Is Investing in the BFSI Sector Viable for Investors?

Take a look at the points below to know whether investing in the BFSI sector is a viable option for investors. 

  • Retail and Corporate Credit

According to a report, India’s household credit to GDP ratio is among the lowest compared to leading global economies.

One of the primary reasons behind this is a large group of Indians who still opt for loans from the unregulated sector and non-institutional debt. Considering that, the banks and NBFCs in India still have a long way to go to bridge the gap. 

  • Mutual Fund and Wealth Management

The mutual fund industry growth trajectory grew by five times in the last 10 years. Furthermore, the monthly SIP instalments have also doubled every four years since 2016. Yet, there are only 4 crore unique investors in India contributing to GDP growth at 14%. Also, wealth under professional management in India is 14%.

These metrics make India the lowest-penetrated market in this sector. 

  • Insurance Penetration

In terms of insurance and medical coverage, 83% of Indians are still uninsured. In the past, India has had a track record as a self-pay market in past years. As compared to India's contemporaries, this insurance penetration gap is very high, and India must pave a long way to cover the same. 

Is There a Right Time to Invest in the BFSI Sector?

The BFSI sector seems to stand out in terms of its growth and earning potential. Factors like favourable price-to-earnings multiples, sustained net interest margins, and strong growth of earnings help determine the right time to invest in banking and financial service funds

Who Should Invest in This Scheme?

If you are an investor with a high-risk appetite and wish to diversify your portfolio, you can opt for the Groww Banking and Financial Services fund. Also, investors with long-term investment plans are eligible to invest here. 

The Bottom Line 

With India’s BFSI sector showing potential for growth, it seems to be a good time to invest in a BFSI fund. However, consult your financial adviser before investing to make an informed investment decision. Grow Banking and Financial Services Fund NFO closes on 31 January 2024.

Disclaimer

The stocks mentioned in this article are not recommendations. Please conduct your own research and due diligence before investing. Investment in securities market are subject to market risks, read all the related documents carefully before investing. Please read the Risk Disclosure documents carefully before investing in Equity Shares, Derivatives, Mutual fund, and/or other instruments traded on the Stock Exchanges. As investments are subject to market risks and price fluctuation risk, there is no assurance or guarantee that the investment objectives shall be achieved. NBT do not guarantee any assured returns on any investments. Past performance of securities/instruments is not indicative of their future performance.
Do you like this edition?
LEAVE A FEEDBACK
ⓒ 2016-2024 Groww. All rights reserved, Built with in India
MOST POPULAR ON GROWWVERSION - 4.7.4
STOCK MARKET INDICES:  S&P BSE SENSEX |  S&P BSE 100 |  NIFTY 100 |  NIFTY 50 |  NIFTY MIDCAP 100 |  NIFTY BANK |  NIFTY NEXT 50
MUTUAL FUNDS COMPANIES:  GROWWMF |  SBI |  AXIS |  HDFC |  UTI |  NIPPON INDIA |  ICICI PRUDENTIAL |  TATA |  KOTAK MAHINDRA |  DSP |  CANARA ROBECO |  SUNDARAM |  MIRAE ASSET |  BANDHAN |  FRANKLIN TEMPLETON |  PPFAS |  MOTILAL OSWAL |  INVESCO |  EDELWEISS |  ADITYA BIRLA SUN LIFE |  LIC |  HSBC |  NAVI |  QUANTUM |  UNION |  IDBI |  ITI |  MAHINDRA MANULIFE |  360 ONE |  BOI |  TAURUS |  JM FINANCIAL |  PGIM |  SHRIRAM |  BARODA BNP PARIBAS |  QUANT |  WHITEOAK CAPITAL |  TRUST |  SAMCO |  NJ |  BAJAJ