SBI Equity Funds invest in stocks and stock-related assets. These funds aim to provide higher returns, making them suitable for aggressive investors focused on long-term wealth growth and financial goals Read More
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With 36 years of extensive experience in fund management, SBI Funds Management Limited. (SBIFML) leverages its expertise to consistently deliver value to investors. Rooted in a strong legacy, SBIFML is a joint venture between the State Bank of India (SBI), India’s largest bank, and AMUNDI (France), a leading global fund management company.
SBI schemes encompass a wide variety of options, including Government schemes, stocks and securities schemes, tax-saving schemes, and more, tailored to meet diverse financial objectives.
Amongst the best SBI Mutual Fund Schemes, the SBI Equity Mutual Fund stands out by ensuring that at least 65% of its investments are allocated to equities across various market capitalisations and the remaining 35% of the fund can be invested in debt and money market instruments, providing flexibility and potential stability.
The investment objective of SBI Equity Funds is to provide investors with an opportunity for long-term wealth growth. These funds primarily invest in equities and related instruments according to the fund’s mandate outlined in the scheme’s information documents. The fund manager selects quality stocks through a thorough analysis to ensure portfolio returns align with expectations and benchmarks.
The stock-picking strategy may focus on value, growth, or growth at reasonable prices. Capital appreciation occurs as the underlying stock prices increase over time and through reinvested dividends purchasing additional units of the scheme.
However, it’s important to note that SBI MF Equity Funds do not guarantee that the investment objectives will always be achieved. These funds aim to offer substantial growth potential, making them suitable for investors with a long-term investment horizon and a higher risk tolerance.
SBI Equity Funds come with moderately high to high market risk, especially compared to debt and balanced funds. The fund value fluctuates based on changes in the underlying stock prices, which can be influenced by stock market activity, interest rates, exchange rates, government policies, tax laws, and other economic factors.
The level of risk also depends on portfolio diversification. Sector or theme-based funds generally carry higher market risk than diversified equity funds. Likewise, small-cap and mid-cap equity funds are riskier than large-cap equity funds. Investors should assess their own risk tolerance before investing.
SBI Equity Funds typically generate higher returns compared to debt and balanced funds. Historically, these funds have delivered average returns of about 12% over more than 5 years. Returns are linked to the level of risk an investor takes.
However, the performance of SBI Equity Funds can vary over time. Due to the higher risk, focused funds may offer higher return potential than diversified equity funds. Conversely, large-cap funds tend to provide stable returns across different market cycles. To boost returns, consider adding small-cap or mid-cap funds to your portfolio for better diversification.
SBI Equity Funds are designed for investors who seek long-term capital appreciation over periods of 5 years or more. These funds are more suited for those with a higher risk tolerance, as their value can fluctuate with market movements. The potential for high returns makes these funds suitable for achieving long-term goals like funding children’s education, retirement planning, or purchasing a home.
To maximise returns, staying invested for 10-12 years or more can be beneficial. Therefore, investing money that won’t be needed in the near future and can be dedicated to long-term growth may be ideal.
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