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Which is a better mode to invest in Axis Focused 25 Fund?

Last Updated: Mar 28, 2020, 11.30 PM IST


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28 Mar, 2020

Investors can invest in Axis Focused 25 Fund via two modes - namely SIP & Lump sum.

SIP: Investors can give their investment a systematic approach by opting for SIP. Systematic Investment Plan or SIP is a systematic approach where investors can invest in mutual funds in a hassle-free manner. All an investor has to do is start a SIP, set-up the mandate/register the biller and the amount will be deducted every month on a predetermined date and directed to their mutual fund. SIP may also aid an investor in inculcating the discipline of saving regularly. Another great thing about SIP is that one may begin investing in a mutual fund with a small amount per month. Giving the mutual fund investment an SIP approach may also result in investors staying committed for a more extended period of time. In case investors want to invest a considerable amount of money in their mutual fund scheme, they may opt to invest via lumpsum at the beginning of the investment cycle.

Lumpsum: When investors have a surplus amount which they wish to invest in order to fetch some better returns, they may choose to pay the entire premium amount at the beginning of the investment cycle. This method of payment is known as a lumpsum investment.

Axis Focused 25 Fund is available for investors in two options: Growth and Dividend. In growth option, if there are any gains, these gains are invested back into the scheme. Over time, this may result in the growth in the net asset value of the scheme.

On the other hand, the dividend option refrains from reinvesting your gains or profits made by the fund. Investors have a payout option where these gains or profits made by the scheme are distributed in the form of dividends to the investor as and when declared by the fund house. The amount and frequency of dividends, however, are never guaranteed.

Should you go for Growth or Dividend option?

Well, the answer to this question may depend on what type of investor you are and your requirement of funds. If you are someone who is relying on your investments for a regular income, the dividend option could be a better option. When the markets are all time high (which might not be the case every time), investors may benefit from the dividend option. However, investors opting for dividends may lose out on the benefit of the power of compounding. Investors with a long term investment horizon might find growth option a bit more suitable for them, and these investors also stand a chance of benefiting from the power of compounding.

Mutual fund investments are subject to market risks, read all scheme related documents carefully.

Disclaimer: Content Produced by Axis Mutual Fund

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