L&T Emerging Business Fund: A Smart Investment Strategy

L&T's Emerging Businesses Fund is an equity-focused small-cap fund that was launched on May 12, 2014. The fund aims to generate long-term capital appreciation by investing in a diversified portfolio of equity and equity-related securities, with a focus on emerging companies (small-cap stocks). It carries a high risk and has provided a Compound Annual Growth Rate (CAGR) return of 23.7% since its launch. As of 2024, the fund's Net Asset Value (NAV) is around ₹85-97, and it has delivered returns of 46.1% in 2023, 1% in 2022, and 77.4% in 2021. The minimum SIP investment amount is ₹1,000, and the fund is suitable for investors seeking very high returns over a period of at least 3-4 years.

Investment options: monthly SIP or one-time lump sum

When considering how to invest in the L&T Emerging Businesses Fund, you have two main options: a monthly SIP (Systematic Investment Plan) or a one-time lump sum investment. Here is a detailed comparison of these two investment routes.

Monthly SIP

SIP is a method of investing a fixed amount in a mutual fund scheme at regular intervals, typically monthly or quarterly. With an SIP, you commit to investing a set amount each month, regardless of the market conditions. This approach has several benefits. Firstly, it helps you cultivate a disciplined investment habit by making it easier to budget and plan your investments. Secondly, SIPs allow you to take advantage of rupee-cost averaging, which smooths out market volatility by purchasing more units when prices are low and fewer units when prices are high. Over time, this can lower the average cost per unit. SIPs are also a good option if you are a conservative investor or are investing for the long term, as they reduce the risk of investing a large sum just before a market downturn.

One-Time Lump Sum

With a lump sum investment, you invest a larger amount of money all at once, rather than in smaller instalments over time. This approach can be beneficial if you have a substantial amount of money available and want to take advantage of immediate market opportunities. If you are confident in your ability to time the market, a lump sum investment can potentially generate higher returns than an SIP. Additionally, with a lump sum, you may be able to meet your investment goals faster, as your entire investment starts working for you immediately.

The decision between a monthly SIP and a one-time lump sum investment depends on your financial situation, risk tolerance, and investment goals. SIPs are generally recommended for long-term investors who want a disciplined, systematic approach to investing, while lump sum investments may be more suitable for those with a higher risk appetite and the ability to closely monitor market movements. It is important to carefully consider the pros and cons of each option before making a decision.

Minimum investment: INR 500 for SIP, INR 5000 for lump sum

To start investing in the L&T Emerging Businesses Growth Direct Plan, you can use Kuvera, which makes mutual fund investments simpler and faster. Here are the steps you can follow:

Step 1: Create an account on Kuvera

If you don't already have an account, sign up on the Kuvera website or app. Kuvera offers access to over 5000 direct mutual funds from leading AMCs in India.

Step 2: Login and navigate to the L&T Emerging Businesses Growth Direct Plan

Once you have logged in, click on "Invest" and select "Mutual Funds". You can either search for the L&T Emerging Businesses Growth Direct Plan by name or scroll through the list of available funds until you find it.

Step 3: Choose your investment option and amount

Decide whether you want to invest through a Monthly SIP or a one-time lump sum investment. The minimum SIP amount required for the L&T Emerging Businesses Growth Direct Plan is INR 500, while the minimum lump sum amount is INR 5000. Enter the amount you wish to invest and select the date for the investment to be made.

Step 4: Complete the fund transfer

Finish the investment process by transferring funds to your Kuvera account. Your investment in the L&T Emerging Businesses Growth Direct Plan is now complete!

Please note that the L&T Emerging Businesses Growth Direct Plan is considered a high-risk investment. Be sure to carefully consider the risks and consult a financial advisor before making any investment decisions.

Investment account: create an account on Kuvera

To create an investment account on Kuvera, you can follow these steps:

Step 1: Sign Up

Firstly, you will need to sign up for a Kuvera account. You can do this by providing your email address and mobile number.

Step 2: KYC Verification

After signing up, you will need to complete the Know Your Customer (KYC) verification process. This typically involves providing proof of identity and address, such as a passport or driver's license, and a recent utility bill or bank statement.

Step 3: Add Your Bank Account

Once your KYC is verified, you will need to link your bank account to your Kuvera account. This will allow you to deposit and withdraw funds for investing.

Step 4: Explore Investment Options

Kuvera offers a wide range of investment options, including mutual funds, stocks, and fixed deposits. You can explore the different investment options available on the platform and research the ones that align with your financial goals and risk appetite.

Step 5: Start Investing

Once you have decided on the investment option you want to proceed with, you can follow the steps provided by Kuvera to make your investment. For example, if you want to invest in the L&T Emerging Businesses Growth Direct Plan, you can search for it by name, check the fund's performance and fundamentals, and then choose between a Monthly SIP (Systematic Investment Plan) or a one-time lump-sum investment.

Step 6: Monitor and Manage Your Investments

After making your investments, you can monitor their performance through your Kuvera account. The platform provides features such as portfolio tracking, tax harvesting, and the ability to set financial goals. You can also add multiple accounts under one login, including joint and family accounts, to manage investments for your relatives and family members.

By following these steps, you can create an investment account on Kuvera and start investing towards your financial goals.

Investment process: log in, search for L&T Emerging Businesses Growth Direct Plan, select investment option and complete the process

To invest in the L&T Emerging Businesses Growth Direct Plan, you will need to follow these steps:

Log in to your investment platform account

You can use a platform such as Kuvera, which offers mutual fund investments, to get started. Sign up if you don't already have an account.

Search for the L&T Emerging Businesses Growth Direct Plan

Use the search function on the platform to find the fund. You can search for it by name or scroll through the list of available mutual funds.

Review the fund details and select your investment option

Before investing, it is essential to review the fund's performance, fundamentals, and risk category. The L&T Emerging Businesses Growth Direct Plan is an equity small-cap fund with a very high-risk category. The minimum SIP amount is INR 500, and the minimum lump sum investment is INR 5000. Depending on your risk appetite and investment goals, you can choose between a Monthly SIP (Systematic Investment Plan) or a one-time lump sum investment.

Complete the investment process

After selecting your investment option, follow the platform's instructions to complete the investment process. This typically involves providing payment details and confirming the investment amount.

Remember that mutual fund investments are subject to market risks, and past performance does not guarantee future returns. It is essential to carefully review the scheme information and related documents before investing.

Returns: 54.4% over the last year, 30.6% over 3 years, 31.6% over 5 years, 24.6% since inception

The L&T Emerging Businesses Growth Direct Plan is an equity small-cap fund. It has a minimum SIP amount of INR 500 and a minimum lump sum investment amount of INR 5000.

The fund has generated the following returns: 54.4% over the last year, 30.6% over the last 3 years, 31.6% over the last 5 years, and 24.6% since its inception.

The fund's performance has been strong, as evidenced by the returns generated over the last year and in the long term. Over the last year, the fund has provided investors with impressive returns of 54.4%, outperforming many other investment options. This highlights the fund's ability to deliver substantial gains in a short period.

Looking at the longer-term performance, the fund has consistently generated solid returns over 3 and 5 years, with 30.6% and 31.6% returns, respectively. This indicates the fund's ability to provide steady growth over time, which is a crucial factor for investors seeking long-term investment opportunities.

Additionally, since its inception, the fund has returned 24.6%, demonstrating its ability to deliver positive results over its entire lifespan. This consistency in performance is a key consideration when evaluating investment options.

The L&T Emerging Businesses Growth Direct Plan's returns showcase its potential for generating attractive returns over different time horizons. The fund's performance has been notable, especially in the short term, with impressive gains of over 50% in the last year. The longer-term returns also indicate steady growth, making this fund a viable option for investors seeking capital appreciation.

Frequently asked questions