Principal Smart Equity Fund

Principal Smart Equity Fund is being managed by Anupam Tiwari. The fund has performed better than its benchmark and peers in its one and half years of existence. But this is hardly sufficient to judge its ability to perform in the future. We advise new investors to avoid this fund and go with older, better performing funds. 

Where does Principal Smart Equity Fund invest your money?

Principal Smart 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. Principal Smart Equity Fund has 18% exposure to mid size companies and 82% exposure to large companies. Apart from equities the fund’s portfolio also holds corporate bonds to the tune of 9% of the total portfolio.

Suitable for what?
  • Child's education
  • Child's marriage
  • Planning for retirement
  • Home Purchase
Not suitable for?
  • Creating wealth
  • Lifestyle needs
  • Short term needs
Our recommendation for fresh investment
Not Recommended
Our recommendation for existing investment
How Principal Smart Equity Fund has performed in the past?

If you had invested Rs 1 lakh when the fund was launched at Dec 2010, your value of investments would have stayed close to Rs 1 lakhs.

Assume you had invested Rs 10,000 every month in Principal Smart Equity Fund through SIP for the past 1 year today you would have around Rs 1.62 lakhs.

How Principal Smart Equity Fund will 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 8% then you can expect top performing mutual funds to give you returns in excess of 14%.

Mutual fund schemes that have exposure to mid sized companies tend to show results when their bet on few companies comes true. 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 twice a year. Too much attention is not good.

What charges apply?

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 Principal Smart Equity Fund is 2.66%. 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 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 an equity mutual fund are absolutely tax free, provided you do not withdraw within 1 year. Principal Smart Equity Funddoes not qualify for sec 80C ELSS benefits.

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