Best Mahindra Equity Mutual Funds

Mahindra Manulife Investment Management Private Limited is a joint venture between Manulife Investment Management Singapore Pte Ltd. and Mahindra & Mahindra Financial Services Limited. It is incorporated under the Companies Act 1956. As of March 2021, the average quarterly AUM of this AMC stood at Rs.5271.07 crore. 

Its current offerings consist of more than 15 schemes distributed across debt, equity and hybrid types. They also include the best Mahindra equity mutual funds.

Equity mutual funds pool resources for investing just like any other MF scheme. However, they predominantly make investments in stocks of companies in specific proportions. A minimum of 65% of assets is invested in stocks, while the remaining 35% can be allocated to money-market or debt instruments. 

The best Mahindra equity mutual funds accompany a significant level of market risk. In a bearish market, investors can realise massive losses. Having mentioned that, this factor also makes them capable of yielding substantial returns for investors. Equity funds generate sizeable returns in a bullish market. In general, equity funds offer healthy, averaged out earnings in the long run.

There are primarily two types of equity MF schemes – active and passive. The former’s portfolio is based on detailed market analysis and research, whereas the latter tracks a market index. 

In addition to the segregation of these funds as active or passive, these funds can be classified based on market capitalisation. Per this classification, there are mid-cap, large-cap, micro, small-cap, and multi-cap funds. 

Furthermore, these funds can be classified as diversified or thematic/sectoral. A diversified equity fund invests in stocks distributed across the whole market. A thematic or sectoral fund restricts its investments to a particular sector or theme, such as infrastructure or infotech.

While making investments in equity mutual fund schemes, the investment mandate is followed. This implies that thematic equity schemes would make investments in equities around a particular theme, and large-cap schemes would not make investments in small-cap organisations.

More than 5 equity funds feature in the current scheme offerings of Mahindra Manulife.

Taxability

It is imperative to be aware of the above details. But, at the same time, investors must also keep in mind the taxability of the top Mahindra equity mutual funds.

TDS: If the dividend income is above Rs.5000 for a given financial year, TDS at 10% will get deducted per section 194K.

Short-term Capital Gains Tax: On redeeming the equity fund units within a year of holding, an investor earns short-term capital gains (STCG). It attracts an STCG tax at a 15% rate, irrespective of the income tax slab of an investor.

Long-term Capital Gains Tax: On selling or redeeming equity fund units after a holding period of 1 year or more, investors will earn LTCG or long-term capital gains. It is eligible for tax exemption if the amount is below Rs.1 lakh in a financial year. However, LTCG tax at 10% applies without indexation benefit if these gains exceed this limit.

Factors to Consider Before Investing

Investors must also note the following parameters associated with the best Mahindra equity mutual funds along with taxability.

Investment objective: Every MF scheme features a particular investment objective, defining the investment strategy and expected returns and risks. Individuals may want to check the purposes of the best Mahindra equity mutual funds 2023 to ensure alignment with their outlook. 

Expense ratio: The expense ratio refers to the amount charged by mutual fund houses as a fee for managing a portfolio. A fund manager’s fee and costs of record-keeping fees are also included here. Investors must keep in mind that an equity fund scheme having a low expense ratio would yield higher take-home returns as the charge is deducted from one’s final returns.

Risk appetite: A substantial amount of risk is associated with an equity mutual fund, and investors must take note of that before diving into the equity investment domain. Therefore, one must consider their risk appetite to select the best Mahindra equity mutual fund.

Mode of investment: One can invest in a Mahindra Manulife equity mutual fund in two ways – SIP and lump-sum. The former allows individuals to deposit fixed sums periodically, enabling them to buy a varying number of units at different NAVs. Lump-sum is where investors can make a one-time deposit to buy units at that date’s NAV.

Investors venturing into the investment domain for the first time might find it difficult to choose an apt scheme among the best Mahindra equity mutual funds. Nevertheless, having the basics clear and referring to the details described above as a guide can ensure an informed choice.