In today's fast-paced world of finance, where market dynamics change at the blink of an eye, smart investing is all about diversification. Nippon India Japan Equity Fund-Growth is your gateway to international market exposure and a potential source of long-term capital appreciation. In this article, we delve into the intricate details of this fund, its performance, portfolio composition, and tax implications. Let's explore why investing in this fund could be a wise move for those seeking to broaden their investment horizons.
Current Net Asset Value (NAV) and Returns
As of October 30, 2023, the Nippon India Japan Equity Fund-Growth boasts a NAV of Rs 14.94 for the Growth option of its Regular plan. But numbers alone don't tell the whole story. Let's look at its trailing returns over various time periods:
- 1-Year Return: An impressive 11.97%
- 3-Year Return: A steady 1.12%
- 5-Year Return: A promising 3.59%
- Since Launch: A robust 4.5%
To put this into perspective, the fund has outperformed its category in the 1-year, 3-year, and 5-year return categories. This performance is a testament to its ability to navigate the Japanese equity market effectively.
Fund Size and Expense Ratio
Managing over Rs 286.80 Crore in assets as of September 30, 2023, Nippon India Japan Equity Fund-Growth is a substantial player in its category, demonstrating investor trust and confidence.
The fund's expense ratio is 2.45% for its Regular plan as of October 18, 2023. While this fee might appear on the higher side, it's essential to consider the opportunities it presents in the international equity space.
Exit Load and Minimum Investment
Investors in this fund should be aware of the exit load, which is 1% if redeemed within 1 year. This means that to fully benefit from the fund's potential, it's advisable to have a medium to long-term investment horizon.
The minimum investment required is Rs 5,000, and the minimum additional investment is Rs 1,000. For those who prefer the systematic investment approach, the minimum SIP (Systematic Investment Plan) investment stands at Rs 1,000. This flexibility caters to investors with varying risk appetites and financial capabilities.
Investment Objective and Benchmark
The primary objective of Nippon India Japan Equity Fund-Growth is to provide long-term capital appreciation to investors by primarily investing in equity and equity-related securities of companies listed on the recognized stock exchanges of Japan. Additionally, it aims to generate consistent returns by investing in debt and money market securities of India. This balanced approach seeks to capture the growth potential of Japanese equities while maintaining a certain level of stability.
The fund is benchmarked against the S&P Japan 500 Total Return index, emphasizing its focus on the Japanese market.
Asset Allocation and Portfolio Composition
The fund allocates approximately 93.58% of its assets in equities, indicating a significant exposure to Japanese equities. With diversification across various sectors and companies, this fund ensures that your investment is well spread out.
Notably, the top holding of the fund is TDK Corp, representing around 3.31% of the assets. This exemplifies the fund's strategy to invest in well-established and growth-oriented companies in the Japanese market.
Tax Implications
Understanding the tax implications of your investment is crucial. If you redeem your units within 3 years of investment, the entire gain will be added to your income and taxed as per your applicable income tax slab rate. For those with a longer investment horizon, gains will be taxed at a rate of 20% after considering indexation benefits. Indexation helps in lowering capital gains by accounting for inflation, which can significantly reduce the tax burden.
Dividend income from this fund will be added to your total income and taxed based on your respective tax slabs. For dividend income exceeding Rs 5,000 in a financial year, the fund house will deduct a TDS of 10% on such income.
Is Nippon India Japan Equity Fund-Growth a Safe Bet?
Nippon India Japan Equity Fund-Growth falls under the 'Very High' risk category as per SEBI's latest guidelines. While this may deter risk-averse investors, it presents an opportunity for those seeking the potential for high returns.
Investment Horizon
For those considering an investment in Nippon India Japan Equity Fund-Growth, it's advisable to have a medium to long-term horizon, preferably exceeding 3 years. A longer investment horizon can help mitigate short-term market fluctuations and enhance the predictability of returns.
Fund Managers
The Nippon India Japan Equity Fund-Growth is expertly managed by Kinjal Desai since May 25, 2018, and Akshay Sharma since December 1, 2022. Their experience and expertise in navigating international equity markets add another layer of trust to the fund.
In conclusion, Nippon India Japan Equity Fund-Growth offers a window to the dynamic Japanese equity market. With solid returns, a diversified portfolio, and skilled fund management, it's a worthy consideration for those looking to expand their investment horizons. However, always remember that any investment carries risks, and it's essential to consult with a financial advisor to align your investment with your financial goals and risk tolerance. Diversification into international markets can be a rewarding strategy, and this fund opens that door for investors willing to embrace global opportunities.
