Corporate Mutual Funds are investment schemes that pool money from multiple investors and invest primarily in the securities of companies, such as equities and corporate bonds. They are designed for investors seeking better returns than traditional savings or fixed deposits, while still maintaining moderate risk levels. These funds focus on corporate growth and profitability, providing investors an opportunity to benefit from the performance of well-managed companies. Corporate mutual funds are managed by professional fund managers who analyze market trends, company fundamentals, and economic indicators to optimize returns. In this blog we will be discussing Corporate Mutual Funds meaning, features, benefits and tax implications.
Features of corporate mutual funds
- Commission free mutual fund investments
0% commission as our corporate mutual fund platform offers “direct plans” of mutual funds across Asset Management Companies (AMCs).
- Multi-level Authorization matrix
All orders placed follow the predefined authorization matrix (initiator/ approver) before being executed.
- Check investment policy breach through ‘Guardrails’ feature
Set up investment guardrails basis internal investment policy of your organization.
- Detailed analysis of your investments
Multiple portfolio level reports for analysing and tracking your investments, checking valuation and downloading reports.
Welcome to a whole new world of hassle-free investing! We offer you a one stop solution for all your needs in Mutual Fund investments.
Benefits of corporate mutual funds
- Professional management: Corporate mutual funds are managed by experienced fund managers who make investment decisions based on market research and analysis.
- Diversification: They invest across a mix of securities, reducing risk by spreading investments across multiple sectors and instruments.
- Liquidity: Investors can easily redeem their units at the prevailing net asset value (NAV), ensuring quick access to funds.
- Regulated investment option: These funds operate under SEBI regulations, ensuring transparency and investor protection.
- Suitable for short- and long-term goals: Depending on the fund type, investors can align their investments with their financial objectives.
- Potential for stable returns: Corporate mutual funds often invest in high-quality corporate debt instruments, which may offer better returns than traditional savings options.
Tax treatment
- Short-term capital gains (STCG): Gains from investments held for less than three years are taxed as per the investor’s income tax slab.
- Long-term capital gains (LTCG): Gains from units held for over three years are taxed at 20% with indexation benefits.
- Dividends: Dividends received from corporate mutual funds are added to the investor’s income and taxed according to their applicable tax slab.
Risks and limitations
- Interest rate risk: The value of debt securities may decline if market interest rates rise, impacting overall returns.
- Credit risk: If the issuing company defaults on interest or principal repayment, the fund’s performance can be affected.
- Market volatility: Fluctuations in the bond and equity markets can influence the NAV of the fund.
- Liquidity constraints: In certain market conditions, it may be difficult for fund managers to liquidate assets without losses.
- Lower return potential: Compared to equity funds, corporate mutual funds may offer lower long-term growth.
- Expense ratio: Fund management and operational charges can reduce the overall returns earned by investors.
Why register with Bajaj Finserv - Corporate Mutual Fund Platform?
Our Corporate Mutual Fund platform offers you a wide range of benefits and features to manage all your mutual fund investments.
1. Fully digital all in one DIY (Do-It-Yourself) platform for transacting in Mutual Funds for Corporates:
- A multi hierarchy / multi login platform
- Complete digital onboarding
- Paperless transaction capability
- Option to invest in Direct Plans across AMCs
- Track & analyse your existing investment portfolio through 24 customized reports
- Backend integration with BSE StarMF for seamless execution
2. Invest in ‘Direct Plans’ of Mutual Funds
- 0% commission on your investments as we offer “Direct Plans” across AMCs
3. In built Multi-level ‘Authorization Matrix’ for executing end to end transactions online
- Option to set transaction-wise multi-level authorization matrix
- Set authorization level as per employee hierarchy and/or transaction amount
- All orders placed follow the predefined authorization matrix before being executed
4. Check investment policy breach through ‘Guardrails’ feature
- Set up investment guardrails basis internal investment policy of your organization
- Total of 17 guardrails are available for customization & implementation
- Guardrails validation will check for breaches every time a new order is being placed
- Option for transaction ‘Authorizer’ to view all the guardrails/parameters that are getting breached & make decisions
- Simple & easy to access colour coded tabular representation of guardrails breach status
- Provision in the system to generate reports for post-facto monitoring of guardrails breach after the investment is completed and email notifications regarding any impact on guardrails
- Ease of tracking portfolio based on guardrails and option to take corrective action
5. Track external Mutual Fund investments portfolio
6. Option to track Mutual Fund investments across group companies / subsidiary companies through single login
7. No fee / charges* in year 1 for the platform – Exclusive to select Bajaj Finance customers
How to invest in Corporate Funds on Bajaj Finserv
To register with our Corporate Mutual Fund Platform, write to us on corporatemf@bajajfinserv.in and we will be glad to assist you.
Existing Corporate Mutual Fund investors
Please click here to transact with us.
