Mutual funds recommendations from WealthTrust for the year 2017-2018


About WealthTrust

WealthTrust is a zero commission wealth manager app. It helps you find and invest in direct mutual funds, but there are no commissions on their services. In most mutual fund advisory services, you will lose a small percentage of your returns as you pay the broker’s commission.

With zero commission direct plans from WealthTrust, you can save up to 1.5% of your returns. Compound these savings and over a long-term period, you can save up to 30% of your returns from being wasted in mutual fund advisory fee, when all they do is provide a basic, computer-enabled service with no personal financial advisor or portfolio management.

WealthTrust also has paid plans in which they provide services like complete portfolio management and research-recommended top funds.

They have an in-house team of expert financial advisors registered with SEBI. The funds recommended by WealthTrust have consistently outperformed their peers.

What are Mutual Funds?

Mutual Funds are an aggregated investment option. Instead of investing in only on one stock or one financial instrument (bonds, etc.), your money is invested in multiple different sources in order to get maximum returns and minimize the losses.

When you invest in mutual funds, you are allocated a certain amount of NAV (Net Asset Value). Each NAV unit has a unit price that fluctuates as per fund performance. Higher this price goes, higher will be your returns from your mutual fund investments.

Equity Mutual Funds

Equity Mutual Funds primarily invest only in the stock markets. Investing in equity funds is a high volatility and high-risk transaction. Therefore, it is advised to invest in equity funds with a horizon of at least 5 years. That’s when you will see decent returns on your equity mutual fund investments.

Equity Funds are divided into 3 main categories Large Cap, Mid Cap, and Small Cap funds.

Large Cap Funds

These funds invest in large-cap companies with a great brand value in the market and a relatively stable share price. Such companies have matured business practices and efficient corporate governance policies. These are highly trustworthy, blue-chip giants which a reputation for consistent high returns over a long term. Although by nature equity funds are most volatile, but large cap equity funds project lease volatility among all types of equity funds.

During a bear market, these funds are able to handle the pressure well. Even though large-cap companies will lose share price in the bear market, other category companies will be losing much more because large-cap companies are trustworthy and hence better protected from market fluctuation.

Mid Cap Funds

Mid cap funds invest in mostly mid cap stocks. Their general movement trend is for the extremes. That means when the markets are high, their returns will go up but when the bear market (downward slide) strikes, they also lose NAV value quickly.

Small Cap Funds

When you invest in small cap funds, your money will be distributed across stocks of small cap companies with growth potential. Small cap funds are highly volatile but also give the best returns in any category over a long holding period.

Small cap funds invest in stocks of relatively small, young companies. Such companies sell innovative solutions for current world problems. They are generally undervalued but operate with higher efficiency and therefore grow faster than some of the larger companies. Ultimately, the benefits are passed on to the investors.

Multi Cap Funds

These funds invest in all companies regardless of their size or share price. They are also highly volatile funds with a good potential of returns over a sufficiently long term. 

Balanced Funds

Not all investors will have the risk appetite as high as required for equity funds. Balanced Funds are perfect for investors who seek high returns of equity funds but also want some cushion of debt funds.

Balanced funds can be debt oriented or equity-oriented funds. A debt oriented fund manager will aim to keep at least 65% of the fund’s investments in debt instruments. An equity-oriented fund will follow the same 65% rule but for equity instruments.

Managers of balanced funds have to take care in maintaining this 65-35 balance. So, if an equity fund’s debt investments go above 35%, the fund manager will book profit from debt instruments to rebalance the ratio.

As for returns, balanced funds tend to have lower returns than equity funds but they also often outperform debt funds. Taxation rules for balanced funds are same as taxation rules for equity funds.

ELSS Funds

Return on all debt funds is taxed. For equity and balanced funds, only withdrawals within the first year are taxed, after which the returns are tax-free. The Section 80c prescribes a number of other financial instruments like FD, PPF, and ELSS funds with tax-free returns.

The catch with all instruments mentioned in 80c is that they all have a lock-in period. ELSS funds have the lowest lock-in period (3 years) of all 80c financial instruments.

Since ELSS funds are carefully diversified by fund managers, their returns generally tend to be considerably higher than direct equity stock investments.

How to invest in mutual funds

Gone are the days where you would have to:

  1. Spend days in researching and getting all doubts clarified.
  2. Choose the best fund options
  3. Arrange all the documents
  4. Go to company’s office
  5. Fill a form

Simply going to an office would often take a full day. Regular middle class and working people don’t have a full day. Thanks to the miracle of technology, everything from groceries to clothes, software packages to mutual funds can be bought over your mobile phone – yes, even mutual funds can be bought and sold over your smartphone!

You just have to download the app from your app marketplace and get started. You get all features at your fingertips and documents can be uploaded from your phone or their website. All this will take less than a few minutes (after the basic research, of course) and you don’t need to spare a full day or go to mutual fund company’s office.

With WealthTrust mutual fund apps, you can start your SIP (systematic investment plan) while returning from work back to home!


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