Q. What is a small-cap fund? Should I begin investing in it by way of SIPs? Can you please counsel just a few names?
Kumar Dev
Answers by Sanjiv Bajaj, joint chairman and managing director, Bajaj Capital:
You could begin investing within the small-cap funds by way of systematic funding plan (SIP), supplied you will have working mutual fund SIPs in large-cap and mid-cap fund schemes. Also, word that your complete publicity in small-cap funds shouldn’t be greater than 20% of your complete portfolio.
There are greater than 7,000 listed firms in our nation. The high 100 are counted as large-cap firms, the following 150 are categorised as mid-cap firms and the remaining are clubbed as small-cap firms. Small-cap funds put money into rigorously chosen firms of your complete record of over 6,000 firms, excluding the highest 250.
Average returns for small-cap class since inception has been round 18% every year. But please word that previous returns are not any indication of future returns.
The high three small-cap fund schemes when it comes to dimension of funds being managed are Nippon India Small Cap Fund, HDFC Small Cap Fund, and SBI Small Cap Fund.
Also, word that the massive dimension of any fund scheme doesn’t essentially imply that it is suggested for funding.
Q. I’ve invested ₹5 lakh in Floating Rate Saving Bonds. I wish to know whether or not I’m allowed to withdraw the quantity earlier than the seven-year lock in. If sure, what are the foundations?
Ritesh
Investment in Floating Rate Saving Bonds is finished for a interval of seven years. However, if you wish to encash your bonds earlier than maturity, the foundations are fairly stringent:
Note that for the primary 4 years nobody is allowed to take a pre-mature withdrawal.
In the fifth 12 months of funding, you’ll be able to request for pre-mature withdrawal, supplied you’re 80 and above. Full funding can be refunded with none penalty on the principal quantity.
Similarly, within the the sixth 12 months, you’ll be allowed to make a pre-mature refund, in case your age is 70 years and above.
And within the seventh 12 months of funding i.e., after the expiry of 6 years from the unique date of funding, you could take again your cash supplied your age is 60 years or above.
As already talked about, there is no such thing as a penalty from on the principal quantity in case of pre-mature withdrawal. However, curiosity cost is lowered to 50% for the final six months interval, earlier than the date of withdrawal.
Also, word that these bonds are non-transferable and will not be traded on any inventory trade.
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