Best Equity Mutual Funds

Best Equity Mutual Funds

Here are some good equity mutual funds that you should include in your portfolio.

HDFC Top 200 Growth

• It’s an open ended equity diversified growth fund.
• Market capitalization of around 75% asset allocation in large and giant companies and remaining in mid caps.
• On sector wise, its main allocation is in banking and energy.

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Reliance Growth – Growth

• Open ended equity growth fund with major allocation in mid size and giant industries.
• Sector wise, financial is the major sector for asset allocation.

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Reliance Diversified Power Sector Retail Growth

• It’s an open ended equity power sector fund.
• 6 yr old fund with return of 40% since inception.

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Birla Sun Life Frontline Equity Fund - Plan A – Growth

• Open ended equity diversified fund with a return of 31% since launch.
• Its major allocation is again in giant industries mainly in financial and energy sectors.

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DSP Blackrock Top 100 Equity Growth

• Open ended equity diversified fund with major allocation in giant and large cap.
• It has strong 35% return since inception (a 7 yr old fund).
• Major asset allocation is in financial and energy.

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DSP Blackrock Equity Growth

• Open ended equity diversified, return of 26% since launch.
• Consistency is the virtue of this fund.
• It’s not a pure large cap holding fund. This fund now has its major portfolio in mid size companies.

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Hedging Funds Strategies

Hedging Strategies

Hedging is a practice followed by investors to safeguard their investment against market fluctuations. The term hedge fund is used to indicate a 'hedge' against investment deterioration.

When we pay an insurance premium for a new house, we hedge against unforeseen negative events. We can't prevent a negative event from its happening but by hedging, we can reduce its impact on our investment.

Hedging aims at maximizing the return on investment with minimal risk.
Hedge fund managers use a wide variety of different investing strategies to achieve this goal and generally these strategies are managed and executed by a portfolio manager.

Hedging is very popular in wide investment instruments like stocks/equities, derivatives and commodities.

Short selling is one such hedging strategy where an investor makes a short position on a falling stock and makes profit out of it. In short selling, investor borrows a contract from a broker and sells it at the market price with the understanding that it must later be bought back (hopefully at a lower price) and return it back to the broker. Difference in the selling and purchase price goes to investor as a profit.

This strategy is very useful in scenarios when a commodity price falls very sharply due to some unforeseen circumstances, e.g., due to natural disaster like cyclone or due to US jobless report came out in the media or could be due to inventory pile up.

Hedging is the practice of offsetting the price risk inherent in any cash market position by taking an equal but opposite position in the future market. A long hedge against the possible risk of rise in stock price refers to buy position in future market when a sell is already made on a similar stock. In the same way, short hedge refers to selling a future contract when a similar contract is already bought and market is showing a downtrend.