Best Canara Robeco Equity Mutual Funds

In 2007, Canara Bank formed a joint venture with Robeco Group to establish Canara Robeco Mutual Fund. Since then, the company has been catering to various investment needs by offering a range of instruments. As of March 2021, the fund house’s AUM stands at Rs.28241.44 crore. 

This AMC houses approximately 20 mutual fund schemes, including the best Canara Robeco equity mutual funds. 

A mutual fund that generally invests in stocks and shares of companies across all market capitalisations is an equity fund. Due to the widespread resource allocation across different sectors and companies, these funds generate higher returns than debt and hybrid funds. However, equity funds are dependent on market conditions. Therefore, any fluctuation in the market will affect the fund, making them a high-risk investment. 

Furthermore, there are several types of equity funds depending on market capitalisation, tax treatment, investment type, and sectoral diversification. 

Premised on market capitalisation, there are 4 types – small-cap, mid-cap, large-cap, and multi-cap. Two types of equity MFs are there based on tax treatment – ELSS and non-tax saving fund. Depending on the investment type, there are active and passive funds. And sectoral classification has two types – thematic and diversified. 

These classifications define where the top Canara Robeco equity mutual funds will invest the majority of their assets. For instance, mid-cap stocks will only invest in stocks of mid-cap companies. A thematic fund has to invest in companies pertaining to a particular theme or sector, like energy, infrastructure, et al. 

Also, a scheme will be defined as an equity mutual fund only if it invests more than 65% of its total assets in equity shares of various companies, according to SEBI. Depending on the objective, the balance amount can be invested in the money market or debt instruments. 

Due to its distribution across the market, the primary benefit of these funds is diversification. Some other positive points include flexibility and liquidity. On the flip side, even the best Canara Robeco equity mutual funds involve high to very high risk. However, the advantages and disadvantages vary as per the type of equity MF. 

Taxability

Canara Robeco offers around 8 equity mutual fund schemes depending on market capitalisation and theme. However, to choose a suitable scheme from the best Canara Robeco equity mutual funds 2023, it is essential to understand their taxability. 

Short-term Capital Gains Tax: This tax will be applicable to your gains if you sell units of the best Canara Robeco equity funds within a year of investment. An STCGT of 15% will be levied irrespective of your income tax bracket. 

Long-term Capital Gains Tax: In case you redeem your scheme after 12 months or more, an LTCGT will be applicable on your returns. If the amount is less than Rs.1 lakh, the returns will be tax-exempt. You are liable to pay tax at the rate of 10% on any amount exceeding that. 

TDS: Dividends earned from an equity mutual fund above Rs.5000 attract 10% TDS.

Factors to Consider Before Investing

In addition to this, one should consider certain factors before investing in the top Canara Robeco equity mutual funds. 

Investment objective; Investors set up financial goals for better management of finances. A clear idea about your purpose of investment can help in achieving these goals easily. Investing in the best Canara Robeco equity mutual funds is more fruitful when a fund’s objective aligns with your goals. 

Risk assessment: As mentioned, equity funds are susceptible to risks related to market ups and downs. Therefore, it is necessary to weigh your risk appetite prior to investing. Based on the level of risk you can digest, you can select a scheme per the risk-o-meter. 

Holding analysis: Holding analysis shows the places where your resources are invested. Upon knowing this, you can estimate your returns on the best Canara Robeco equity mutual fund. 

Expense ratio: AMCs charge a fee for administering and managing your mutual funds. The fund house will deduct this fee, denoted in %, from the returns. Therefore, it is essential to consider this aspect before choosing a scheme. 

Exit load: An exit fee charged by an AMC upon closing a scheme partially or fully within its lock-in period is the exit load. However, certain schemes do not charge an exit load on exiting a scheme. Therefore, it may be beneficial to take this factor into account before finalising a scheme. 

Fund performance: A fund’s past performance is an indicator of its trends in a dynamic market for a prolonged period. This is vital to consider before settling for a scheme. However, the previous performance of a fund does not reflect on its probable returns. 

Fund manager’s experience: Fund managers role in your investment is vital as they allocate your resources across the markets. This act requires thorough research and years of experience in the relevant fields. An experienced fund manager is likelier to recognise the markets and companies that can help in meeting scheme objectives more easily. Therefore, reviewing a fund manager’s expertise before investing is imperative. 

Thus, beginner and experienced investors can choose the best Canara Robeco equity fund by considering the aforementioned points and understanding the basics of mutual funds.