Fidelity Equity Fund

Fidelity Equity Fund is one of the better performing funds in its category. This fund is managed by Sandeep Kothari & Anirudh Gopalakrishnan. Sandeep has been managing the fund from July 2006 while Anirudh joined in October 2010. If you already hold units in this fund this is a good one to keep.

Where does Fidelity Equity Fund invest your money ?

Fidelity Equity Fund is a large cap fund which means most of your money will be invested in giant and large companies. And just to give kicker returns the fund has some exposure in mid cap companies as well. Large cap companies tend to be stable compared to mid cap and small cap companies. This fund invests around 79% in large cap companies, 17% in mid cap companies and 3% in small cap companies.

Suitable for what?
  • Child' s Education
  • Child's Marriage
  • Retirement Planning
  • Home Purchase

 

Not Suitable for?
  • Creation of wealth
  • Short Term Goals
  • Lifestyle needs
How much to invest?

Minimum one time investment is Rs 5000 and minimum SIP is Rs 500 per month. Do not make Fidelity Equity Fund as part of your core portfolio. Do not do the mistake of investing in too many mutual fund schemes. At any point of time do not have more than two mutual fund schemes in your core portfolio. Core portfolio is investments that are made for your basic goals. Fidelity Equity Fund can be part of the satellite portfolio.

Our recommendation for fresh investment
Not Recommended
Our recommendation for existing investment
Recommended
How has Fidelity Equity Fund performed in the past?

If you had invested Rs 1 lakh when the fund was launched in April 2005, your value of investments would be around Rs 3.2 lakhs. If you had invested Rs 1 lakh five years back it would have become Rs 1.54 lakhs. The performance has been better or similar to other mutual funds in this category. The fund has been giving at around 9% every year for those who stayed invested for last 5 years.

Assume you had invested Rs 10,000 every month in Fidelity Equity Fund through SIP for the past 5 years today you would have around Rs 7.86 lakhs.

How will Fidelity Equity Fund perform in the future?

Needless to say no one can predict the future of markets. We have firm belief in the future prospects of the Indian economy. If the Indian economy grows at 9% then the leading companies tend to do well. When the companies do well their stock prices follows their performance. So if you expect the economy to grow at 9% then you can expect top performing mutual funds to give you returns in excess of 15%. 

We advise you to avoid too much of star gazing and future prediction. Be reminded that equities are one of the asset classes that have the potential to beat inflation. Your aim for core portfolio should be to beat inflation.

When to review the performance?

Once you invest in the fund do not get into the habit of checking the NAV daily or monthly. Review the performance once a year. Too much attention is not good.

What charges apply?

A onetime fee of Rs 100 is charged on investments over Rs 10, 000 made through distributors. If you are a first time investor in mutual funds an additional Rs 50 is charged to cover KYC expenses. This is deducted from your investment and can be skipped if you buy directly from the mutual fund via their website or offices.

If units are sold within a year an exit load of 1% is deducted from your total returns. No exit load applies for units withdrawn post one year. Expense ratio of Fidelity Equity Fund is 2.22%. This is charged to recover the fund management company’s expenses on securities’ transactions, commissions, registrar fees, etc. Your mutual fund returns will be total returns less expense ratio.

When to enter?

Now! There is no good time to invest rather than now. Do not try to time the market and especially so if it is an SIP. Do not follow news channel and other experts to know the right time to invest. In the long run it does not matter. Mutual fund is unlike a stock where you are looking at the right price. This job will be done by the mutual fund scheme manager. If you have planned your investments and decided on the amount you want to invest do not think further, just go ahead.

When to exit?

Withdraw when your goals are close to achievement. Do not remove the money when the markets go up or down. Do not panic. Stick to your goals.

What are the tax implications?

The returns in a mutual fund are absolutely tax free, provided you did not withdraw within 1 year. Fidelity Equity Fund does not qualify for sec 80C ELSS benefits.

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