Bank of India Flexi Cap Fund for Better Returns Invest Now

This is where Bank of India flexi cap fund comes in to the picture. This open-ended equity scheme dynamically invests across large-cap, mid-cap, and small-cap stocks.

With investors specifically looking into the Bank of India flexi cap fund regular plan, it is essential to know the structure of the plan, Growth option in the plan, approach to the portfolio, risk, cost analysis and past performance before taking an investment call.

What Is the Bank of India Flexi Cap Fund?

The Bank of India flexi cap fund is a part of the flexi cap segment of equity mutual funds.

Understanding the Flexi Cap Fund Category

A flexi cap fund is a fund that allows the fund manager discretion on what kind of market cap segment they are buying into.

How the Fund Invests Across Market Capitalizations

The scheme also understates that during normal market conditions, it can allocate 65% to 100% of its corpus to a diversified portfolio of equity and equity related instruments of large cap, mid cap and small cap companies.

Large-Cap, Mid-Cap and Small-Cap Exposure

Large-cap companies usually are more established companies. Mid-cap companies fall between the large and small cap companies in terms of market capitalization and small-cap companies could provide investors with exposure to companies that might have more growth potential but also may react more strongly to changes in the market.

These segments can be used to diversify exposure within the equity segment and form a flexi cap strategy.

Key Features of the Bank of India Flexi Cap Fund

It is advisable to familiarize yourself with the basic structure of the scheme before investing.

The Bank of India flexi cap fund has the general features noted below:

• It is an open-ended equity scheme with Dynamic option.
• It invests in all large cap, mid cap and small cap companies.
• Its purpose is to achieve long term capital appreciation.
• It is based on BSE 500 TRI as benchmark.
• Alok Singh is the head of the scheme.
• As per the riskometer of the fund house, the scheme is categorized under Very High risk category.

Open-Ended Equity Scheme

The open-ended fund offers flexibility to the investor to buy and sell units as per the NAV and scheme regulations.

Liquidity is an important characteristic, therefore. Meanwhile, there are no promises of returns or capital protection when it comes to liquidity.

Investment Objective

The scheme will seek to achieve long term capital appreciation through a major focus on equity and equity related securities with an emphasis on market capitalizations. The fund house explicitly mentions that there can be no assurance on achieving the investment objective.

The latter is the one that is important to keep in mind. Mutual funds invest in market-linked securities, as an objective is what the scheme aims for, and not a promise.

Benchmark

The benchmark of the scheme is BSE 500 Total Return Index (TRI). A benchmark is a standard to measure something. Rather than considering the fund’s return as a stand-alone, investors may want to look at the fund’s return relative to that of the relevant benchmark for similar time periods.

Fund Manager

Alok Singh is in charge of the scheme. He claims to have about 20 years of experience and 16 of which in the mutual fund industry, according to the fund house.

Experience, however, is not a reason enough for you to make an investment choice, although a fund manager’s experience is certainly a good clue. Another aspect to consider is the consistency, risk and costs of the fund’s strategy and portfolio.

Risk Level

The fund house now has the riskometer of the scheme at Very High.

What does it mean for that to be important? Equity investments can have significant volatility in their short-term returns. If a temporary dip in your investment’s value will make you uneasy, you’ll need to carefully consider if this type of equity exposure is right for you.

Understanding the Bank of India Flexi Cap Fund Regular Plan

The Bank of India flexi cap fund regular plan is a plan for the investors having invested in the Regular Plan as opposed to the Direct Plan.

What Does Regular Plan Mean?

Generally, a Regular Plan will require the participation of a distributor or intermediary in the investment process.

How Regular and Direct Plans Differ

The main distinction is that the distribution is different.

In a Regular Plan, an investor normally invests via a distributor/intermediary. Direct Plan – the investor invests directly; the investor bypasses the distributor structure.

This disparity may impact on the expense ratio and thus the NAV and long-term returns.

Role of Distributors and Intermediaries

A distributor can assist an investor in selecting a fund, and conducting transactions and other investment assistance. It may prove handy for investors who prefer a helping hand, not to be doing all the work themselves.

What matters is to grasp what you’re buying and how those expenses are incorporated into your investment plan.

What Does the Growth Option Mean ?

Another vital aspect of Bank of India flexi cap fund regular plan is the Growth option.

How Growth Option Works for Bank of India Flexi Cap Fund

The Growth option is similar but income generated within the Growth option is not paid out as dividends, but re-invested within the option instead.

The NAV will continue to rise or fall in value depending on the value of the investments within the fund.

Why Investors May Consider Growth for Long-Term Goals

If investing for the long-term to build wealth is the investment objective then the Growth option may be appropriate for investors who are not seeking periodic cash distributions.

The selection of Growth does not mean that there will be compounding or positive returns, however. The investment is still influenced by the market performance, expenses and changes in the portfolio.

Conclusion

The Bank of India flexi cap fund provides investors with an active equity strategy with exposure to large, mid and small cap companies.

If you’re considering investing in the Bank of India flexi cap fund regular plan, you should understand the difference between the Bank of India flexi cap fund regular plan and the Bank of India flexi cap fund direct plan, how the option for growth works, the costs, how the portfolio is managed and how much volatility in the equity markets you can tolerate.

FAQs

1. Is Bank of India Flexi Cap Fund suitable for long-term investment?

Ans) The Bank of India flexi cap fund aims at achieving long-term capital appreciation through market-cap weighted, primarily equity and equity related investments. It is however rated as Very High and investors should take into account their investment goals, investment horizon and risk tolerance before investing.

2. What is the Bank of India Flexi Cap Fund Regular Plan?

Ans) The Bank of India flexi cap fund regular plan is the Regular Plan of the scheme, in which the investors predominantly invest through a distributor or distribution partner or an intermediary. The cost of the Regular Plan may be different from that of the Direct Plan.

3. Does the Growth option provide regular income?

Ans) In the Growth option, it is unlikely that you will receive any income from the scheme other than the initial sale of the fund. The NAV is subject to ongoing changes based on the net worth of the underlying portfolio, and on the applicable expenses.

4. Can investors use SIP for this fund?

Ans) Yes, SIP is one of the features of the scheme. SIP is a systematic investment plan that can be used to make systematic and regular investments, however it does not ensure returns nor is the risk of the market avoided.

5. Is the Bank of India Flexi Cap Fund risk-free?

Ans) No. The Bank of India flexi cap fund is an equity-oriented fund, and is shown with a Very High rating of the riskometer. It may vary from time to time due to the changes in the equity market and securities of the scheme.