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How to Do Algo Trading in India?

The stock market no longer operates solely on human decisions, but also with the help of fast computer systems and smart algorithms. This is why a large number of trades are being executed automatically everyday. Several reports indicate that the use of automated trading is steadily increasing in both the equity and derivatives segments. This blog is for you if you’re curious about how this all works and where a novice investor can begin. Here, we’ll go over how to approach this kind of trading step-by-step, what needs to be ready, and which platforms work best for it.

What is Algorithmic Trading?

Algorithmic trading, commonly referred to as algo trading, is the process of buying and selling stocks or derivatives using computer programs and mathematical models. This trading is based entirely on pre-established rules, and human emotion has no role to play.

Example :

If the price of a stock goes above ₹200, buy it immediately.
And if the same stock price falls below ₹195, sell it.

Now, whenever this market situation arises, the computer program will automatically execute the order. This eliminates the need for you to watch the screen or make decisions based on emotions.

How does this work ?

Strategy Design : First, the trader or firm develops a trading strategy. These rules can be based on technical indicators (such as moving averages, RSI), price patterns, volume, or quantitative models.
Coding and Platform Integration : The strategy is coded in a language like Python, R, or C++, or set up on a low-code/no-code platform. This code is then integrated with the broker’s API (Application Programming Interface).
Market Data Feed : The system continuously receives live market data (price, volume, order book updates)- retail feeds often update in milliseconds, high-frequency trading systems feeds can offer microsecond or microsecond latency. Always confirm the data tier and latency you’re using.
Signal Generation : When the market data matches the rules entered into the algorithm, the system generates a buy/sell signal. This decision is completely automatic.
Order Routing and Execution : Generated orders are transmitted directly to the exchange (NSE/BSE) via the broker’s API. This latency is limited to microseconds to milliseconds on high-frequency trading systems.
Post-Trade Management : After execution, the system performs risk management checks, such as stop-loss, position sizing, and exposure limits. Performance logs and trade history are also saved for later review and optimization.

Why Should You Learn Algo Trading?

Fast and Accurate Execution : Fraction of a second delay in execution can make a difference in the market. The distinctive feature of Algo Trading is that orders are sent out automatically when a predefined condition is satisfied. This reduces human-caused problems like delays and slippage.
Emotion-Free Decision Making : Fear, greed, or impatience often lead to losses in trading. Algorithms are not influenced by emotions; they operate solely on data and established rules. This makes their decisions more disciplined and consistent.
Backtesting of Strategies : It’s not wise to implement any new strategy directly with real money. Algo Trading allows you to test the same strategy on historical data first to see how it will perform under different conditions.
Diversification across multiple markets simultaneously : Humans can monitor a limited number of stocks at a time, but algorithms can monitor hundreds of investable instruments and markets. This means greater diversification and the ability to scale trading strategies on a larger scale.
Opportunities for small investors too : Automated trading used to be a game exclusively for large institutions. But now thanks to APIs and easy platforms, retail traders can also get in on the act. With a little preparation and the right platform, any investor can run automated strategies.

Pre-Requisites Before You Start Algo Trading

Even though algo trading might seem easy, there are a few things you should know before you begin. Later issues may occur if this fundamental preparation is not made.

Market Understanding : First, you need to have basic knowledge of the stock market, such as how stocks, futures, and options operate, what liquidity means, and the differences between different trading styles (intraday, swing, and positional). With this foundation firmly established, understanding and using algorithms will be easier.
Technical Skills : Algo Trading is purely based on technology. That implies you need to have at least a basic understanding of one programming language (e.g., Python, R). It’s also important to understand broker APIs, as these are the gateways between your system and the exchange.
Data and Tools : Any strategy relies on its data. Accurate historical data is essential for backtesting, and real-time data is essential for live trading. You can get basic data from NSE and BSE, but for advanced strategies, you may need to rely on good data providers or premium tools. Poor or delayed data can lead to wrong trades, traders should always verify data sources.
Regulatory Framework : Algo trading in India is strictly governed by SEBI regulations. Retail traders must use broker-approved APIs and avoid unregulated or unauthorized software. SEBI has mandated risk controls to ensure automated trading systems do not introduce unnecessary risks into the market.

How to Start Algorithmic Trading (Step-by-Step Guide)

Algorithmic trading is no longer limited to large institutions. Today, any individual trader can automate their strategy. But before you get started, it’s important to have a thorough understanding of every step from broker selection to live deployment.

Step 1: Choose the right broker and API provider

The first and most important step in algorithmic trading is choosing a reliable broker and API partner. Your API platform acts as a bridge between your code and the stock exchange. Therefore, it must be fast, secure, and have low-latency.

Pocketful API is a modern API trading platform in India that provides ready-to-use infrastructure for algo traders. It provides real-time market data, smooth order execution, and easy integration, allowing you to get your algo setup up and running in just minutes.

Points to consider while choosing an API Provider:

Criteria	Description
Speed & Latency	No execution delays so orders are executed immediately
Data Access	Both live and historical data are available
Security	Have encrypted API keys and authorized access
SEBI Compliance	Ensure the API and broker follow all regulatory norms.
Support & Documentation	Have developer-friendly guides and a responsive support team

Step 2: Develop your trading strategy

Now it’s time to create your trading strategy. The success of algorithmic trading depends on your strategy when to buy, when to sell, and how much capital to invest. You can use coding languages like Python, R, or Node.js, or you can design your strategy in a no-code environment by plugging in the Pocketful API.

Keep these things in mind while creating a strategy:

Clearly define market signals and indicators.
Entry and exit rules should be clear.
Define risk management controls like Stop Loss, Target Profit, etc.
Choose a realistic backtesting period (avoid cherry-picking the time frame)

Step 3: Backtesting – Test the Strategy

Backtesting means running your strategy on historical data to see how it performed in the past.

This will give you an idea of how consistent and profitable your strategy is.

Analyze in Backtesting:

Parameter	Why is it important
Win Ratio	Tells the success rate of strategy
Drawdown	Maximum percentage of capital loss
Profit Factor	Total profit / total loss
Slippage & Transaction Cost	Helps measure the gap between expected and actual results

Step 4: Paper Trading (Simulation Mode)

The next logical step after backtesting is paper trading, which means testing your strategy in live market conditions without real money. This provides a real-world test of your algorithm’s execution, timing, and stability.

Advantages of Paper Trading:

Zero financial risk
Execution accuracy is demonstrated
Strategy debugging is made easier
Performance is understood under market volatility

Step 5: Start Live Trading

Once your strategy shows consistent performance in testing, you can deploy it for real trades.

To do this, you’ll need to connect your broker account and generate API keys.

Notes during live deployment:

Start with small capital
Review trade logs regularly
Enable auto-error handling
Use real-time monitoring dashboards

Step 6: Performance Monitoring and Optimization

Algo trading isn’t “set and forget.” Market conditions constantly change, so it’s important to monitor and optimize your strategy’s performance.

Step 7: Risk Management and Compliance

The biggest risk associated with automation in algo trading is uncontrolled losses. Therefore, it’s important to set up risk controls from the outset.

Required Risk Control Parameters:

Control	Objective
Stop Loss Limit	Stop losses within a predefined limit
Max Capital Allocation	Don’t tie too much money into one strategy
Auto Cut-Off Rule	Stop trading when the drawdown exceeds
Manual Override	Human control in any emergency
Circuit Breaker Alert	Halts trading in extreme volatile environment

Step 8: Scaling and Diversification

Once your strategy starts generating stable returns, you can gradually increase capital or add multiple strategies. You can diversify across different instruments (Equity, Options, Commodities) or different timeframes (Intraday, Positional).

Remember, diversification reduces dependency on a single market factor but doesn’t eliminate risk completely.

Read Also: How to Start Algorithmic Trading?

Algorithmic Trading: Risks and Challenges

Algorithmic trading offers speed and efficiency, but it also comes with some practical challenges. It’s important to understand these to avoid unexpected losses or mistakes.

Technical Issues : Algo trading relies heavily on technology. Internet slowdowns, server crashes, or API glitches can delay or fail orders. Therefore, it’s important to always have a backup setup and a stable connection.
Over-Optimized Strategy : Many traders tweak their strategies based on historical data to the point where they rely solely on past performance. This can lead to failure in the live market. To avoid this, realistic backtesting and paper trading testing are essential.
Market Volatility : The market is unpredictable. Any unexpected news or economic event can cause prices to change suddenly. Therefore, it’s crucial to include stop-losses and volatility filters in your strategy.
Security Risks : API keys and account credentials are sensitive in trading. Keeping them secure is crucial. Use SSL, token authentication, and two-factor verification, do not share keys with third-party platforms. The Pocketful API complies with these standards.
Regulatory Compliance : SEBI regulations in India require that algorithmic trading be conducted only with authorized brokers and approved APIs. The Pocketful API is SEBI-compliant, ensuring safe and legal trades.

Read Also: Best Algorithmic Trading Books

Conclusion

Algorithmic trading is a resourceful and smart way to enter the markets but is not something you want to rush into. Start with smaller positions — test, learn, and familiarize yourself with how your method operates in real-time. Markets are fluid, so patience and flexibility will be essential. Monitor your system, learn from each trade, and adjust accordingly. If you stay patient and consistent, algo trading can be a reliable way to work toward your financial ambitions.

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4	Best Artificial Intelligence (AI) Stocks In India
5	What is Quantitative Trading?
6	Best Algorithmic Trading Books
7	How to Use AI for Stock Trading
8	Best AI-Based Trading Strategies Explained
9	Types of Traders in the Stock Market
10	Best Intraday Trading Apps in India
11	Best Brokers Offering Free Trading APIs in India

Frequently Asked Questions (FAQs)

What is algorithmic trading?
It’s a trading method in which orders and strategies are executed through automated software.
How can I start algo trading in India?
To get started, first gain basic knowledge, develop a strategy, paper trade, and then start live trading.
Do I need programming skills for algo trading?
Not necessary, but knowing Python or basic coding is helpful.
Is algo trading risky?
Yes, market volatility and technical issues pose risks. Therefore, risk management is important.
How much capital do I need to start algo trading?
A large amount of capital is not necessary to begin with; even a small amount can be used for practice and learning.

November 15, 2025

Difference Between Large Cap vs Mid Cap Mutual Fund

When it comes to investing in mutual funds, you will find multiple options at once. Each of these options offers you a different risk and return ratio. At the same time, the asset allocation for these funds differs as well. While some focus on equity or debt, there are a few funds that invest in both assets to offer a better balance.

But there are two types of funds that are usually considered more if you are looking for stable returns. These are the mid-cap and large-cap funds. Though both these invest in the equity, there are certain differences between them that you must know.

So, if you are new to investing and looking to know the details, then read this guide. Explore the mid-cap vs large-cap details and understand which of these is a better choice of investment for you.

What Is a Large-Cap Fund?

A large-cap fund is a type of equity mutual fund. It is the one that invests primarily in companies with a large market capitalization. These are the top 100 companies that are listed on the stock exchange. The main reason for the selection of these companies is their history and strong performance.

These companies have a proven record of performance, which makes them a better choice. But at the same time, these are the ones that have reached the top, hence at times you will find less potential for growth.

Key Features of Large Cap Funds

Stable Returns: The fund mainly focuses on the financially sound companies. This ensures that the investors get a steady long-term growth potential.
Lower Volatility: Most of the companies in the large-cap segment are not affected by market fluctuations. This makes them a safer choice when compared to mid and small-cap funds.
High Liquidity: Shares of large-cap companies are actively traded. This ensures that the trader can enter or exit the market easily at any time with no hassle.
Consistent Dividends: Many large-cap companies offer regular dividends. This is an additional income to the profits that the investors make.
Suitable for Long-Term Investors: These funds are better for those who invest for a long time. These funds offer stability and have comparatively low risk. Hence, if you invest with the aim of wealth creation, these are better.
SEBI Guideline: The large-cap funds must invest at least 80% of their assets in the top 100 companies by market capitalization.

What Is a Mid-Cap Fund?

A mid-cap fund is another type of equity mutual fund. This is the fund that invests in medium-sized companies. Now, if you see, these are the next best set of companies. As per market capitalization, they rank between 101 and 250 on the stock exchange.

These companies are still growing. They might be with the plans of expansion or with some innovative ideas. Hence, the potential is more. But at the same time, the risk is high as well. Any change in the market conditions can impact these companies greatly. This can lead to losses.

Key Features of Mid-Cap Funds

High Growth Potential: This is the fund that mainly invests in companies that are in their growing stage. This is why the fund can deliver higher returns over time.
Moderate to High Risk: Mid-cap stocks can fluctuate more. This can be due to market sentiment and business performance. This increases the overall risk associated with the investment.
Diversified Portfolio: Investing in these funds helps the investors benefit from exposure. This is mainly across emerging industries and sectors, which can be great.
Ideal for Long-Term Goals: These funds work best for investors with a longer investment horizon. The risk is high and so it is not good for conservative investors.
SEBI Mandate: Mid-cap funds are required to invest at least 65% of their assets in companies ranked from 101 to 250 by market capitalization.

Pros and Cons of Large Cap Funds

When investing in the large-cap funds, you focus on long-term growth and low risk. But there are other pros and cons to know. These are as follows:

Pros of Large Cap Funds

Companies with a proven record and performance are included.
Good for offering steady and reliable returns.
Considered to be the funds with low risk involved.
They are very liquid, which makes entry and exit simpler.
Better for conservative and long-term investors.

Cons of Large Cap Funds

Moderate returns as compared to other funds.
Growth potential is limited and low.
Performance may slow down during market rallies led by smaller stocks.

Pros and Cons of Mid-Cap Funds

Just like any other fund, investing in mid-cap funds also comes with certain risks and challenges. Knowing them can help you make the right investment call and ensure that you make good profits. So, here are the top ones to know.

Pros of Mid-Cap Funds

High growth potential based on future plans.
Allows for earning a higher rate of returns in a bullish market.
Provides for better diversification.
Chance to invest in innovative schemes and ideas.
Good option for investors seeking capital appreciation over time.

Cons for Mid Cap Funds

Quite volatile and risky in nature.
Recovery in case of a downturn is long.
Liquidity can be lower as mid-cap stocks are less frequently traded.

Large Cap vs Mid Cap Funds: Key Differences

Now that you know what the large-cap and mid-cap funds are, the next step is to find the difference. Knowing the difference will ensure that your investment calls are based on proper understanding and analysis.

So, here is the large-cap vs mid-cap difference that you should know.

Basis	Large Cap Funds	Mid Cap Funds
Market Capitalization	Invest in the top 100 companies with large market capitalization	Invest in companies ranked 101 to 250 by market capitalization
Risk Level	Lower risk due to stable and established businesses	Moderate to high risk as companies are still in the growth phase
Return Potential	Offer steady but moderate returns	Can deliver higher returns during favorable market conditions
Volatility	Less volatile and more stable during any downturns	More volatile and sensitive to market movements
Liquidity	High liquidity, as large-cap stocks are actively traded	Moderate liquidity since mid-cap stocks are less traded
Investment Horizon	Ideal for long-term investors seeking stability	Suitable for long term investors with a higher risk appetite
Suitable For	Conservative investors looking for steady growth	Aggressive investors aiming for higher capital appreciation

Which Is Better – Large Cap or Mid Cap Fund?

When it comes to selecting between the large-cap and mid-cap funds, there are various factors that you need to consider. Of these, the key ones include:

Profit potential
Patience of the investor
Risk taking capacity

So, if the investor prefers stability and low risk, then the large-cap is a better choice. The growth would be slow, but there will be stability. But if you prefer faster growth with moderate high risk, then you can go for the mid-cap funds as well. There will be fluctuations, and so it will require better monitoring as well.

In short:

Choose large-cap funds for safety and stability.
Choose mid-cap funds for growth and higher return potential.

Conclusion

Both large-cap and mid-cap funds are a great choice for investment. Where one offers you stability, the other gives you speedy growth. But when it comes to selecting anyone, it will be based on the choice of the investor themselves.

But if you are new to investing and are looking to develop a balanced portfolio, then ensure to include both. You must be wondering why? Well, combining both will offer you moderate risk and moderate returns. Where one will help you with wealth creation, the other will guide you to faster results.

But yes, as said before, it is important that you start right and with expert guidance. This is where you can opt for Pocketful. Open your account today. Get expert support as you need. Ensure you make the right investments through your journey.

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Frequently Asked Questions (FAQs)

What is a large-cap fund in simple terms?
A large-cap fund invests mainly in the top 100 companies with high market capitalization. It offers low risk and stable returns.
Which is safer, large cap or a mid-cap fund?
When you compare the two, the risk associated with large-caps is less. Hence, these are safer during all market conditions.
Can I invest in both large-cap and mid-cap funds?
Yes, combining both can balance risk and reward. You can benefit from the stability of large-cap funds and the growth of mid-cap funds at the same time.
Who should invest in mid-cap funds?
Mid-cap is good for growth-seeking investors. They are ready to take moderate risks. Also, they are the ones looking for high returns.
How long should I stay invested in large-cap funds?
If you are looking for a good return, then you must stay invested for 3-5 years minimum in large-cap funds.

November 15, 2025

What Is CMP in Stock Market?

When you visit the market, you will find different prices for the product. There is the retail price, and then there is the discounted price as well. But is this applicable in the market only or elsewhere as well? Well, when it comes to pricing, there is a term CMP in the stock market.

In the simplest terms, CMP full form is the current market price. It is actually the price at which the stocks are trading in the market. You usually find this price on the NSE or BSE listing while you are trading.

But to ensure that you use it properly, you need to understand the concept of CMP well. So, let us explore all the details linked to the CMP here in this guide.

What Is CMP in Stock Market

In the stock market, CMP or Current Market Price refers to the latest price at which a stock is being traded on an exchange such as NSE or BSE. It keeps changing throughout the trading session, depending on the demand and supply of that stock.

In simple words, CMP shows you the real-time value of a company’s share in the market.

For example, if Tata Motors is trading at ₹360, that ₹360 is its CMP. The moment investors buy or sell shares, the CMP adjusts automatically to reflect the new market value.

Key Importance of CMP in Stock Market

Understanding the CMP in the stock market is vital for anyone involved in trading or investing. It not only reflects the real-time price of a stock but also acts as a guide for decision-making. Here’s why it matters:

1. Shows Real-Time Value

The CMP reflects the latest price at which a stock is traded. It keeps updating as buyers and sellers place orders, helping you see the live market activity.

2. Guides Investment Decisions

CMP helps you plan your entry and exit points. A lower CMP might indicate a good buying opportunity, while a higher CMP can help you lock in profits.

3. Indicates Market Sentiment

If CMP continues to rise, it shows growing investor confidence. A decline often reflects caution or a bearish trend among traders.

4. Supports Market Analysis

CMP is a key data point used in both technical and fundamental analysis. It helps compare stock performance and identify price trends over time.

5. Helps Evaluate Portfolio Performance

Tracking the CMP of all your holdings gives you a clear picture of your portfolio’s current market value and potential gains or losses.

How CMP Differs from Market Price or Intraday Price

While many people assume CMP in trading is the same as market price or intraday price, there are subtle differences you should know. CMP is the current value of a stock, but the market price or intraday prices represent broader price movements during the trading session.

CMP shows the latest traded price at a given moment.
Market Price often refers to the general price trend or range within which a stock trades.
Intraday Price tracks price fluctuations throughout the day, showing highs and lows within that period.

In short, CMP is a snapshot, while market or intraday prices give you the bigger picture of a stock’s movement and volatility during the session.

How to Find CMP of a Stock

Finding the CMP in the share market is simple and can be done through several reliable platforms. Knowing where to check it helps investors make informed trading decisions.

1. Stock Exchange Websites

Visit the official websites of NSE or BSE. Search for the company’s name or stock symbol to view its CMP along with details like day’s high, low, and trading volume.

2. Brokerage Platforms

Most online trading apps and websites display CMP beside every stock you own or track. These prices update in real time as trades are executed.

3. Financial News Portals

Websites such as Moneycontrol, Economic Times, and Bloomberg provide live CMP updates along with charts and market insights.

4. Market Widgets and Apps

Various financial widgets and mobile apps send live CMP alerts, making it easier to track stock prices without constant manual checks.

5. Trading Terminals

For active traders, trading terminals show CMP instantly along with bid-ask spreads and order book details, ensuring faster and more accurate decision-making.

How to Use Current Market Price in Trading

When you understand what CMP is in the share market, it becomes easier to make timely trading decisions. CMP helps you know the exact value at which a stock is trading, allowing you to plan your buy or sell actions more effectively.

1. Market Order

A market order executes instantly at the current market price (CMP). It’s preferred by traders who want their order completed immediately without waiting for a specific price. This helps you experience how CMP in the stock market works in real time.

2. Stop Loss Order

A stop loss order protects you from sudden price drops. For a buy trade, it’s set below the CMP, and for a sell trade, above it. Knowing what CMP is in stock helps you place these levels correctly to control losses.

3. Limit Order

A limit order allows you to set the exact price at which you want to buy or sell. The trade happens only when that price matches the CMP. Hence, this is one of the most practical uses when learning what CMP is in trading.

These orders show how CMP guides traders to manage risk, plan trades, and act with precision in the stock market.

LTP vs CMP

When trading or checking stock prices, you’ll often see both LTP and CMP listed side by side. Many beginners think they mean the same thing, but there’s a small difference that can affect how you read market data. The table below makes it simple to understand.

Basis of Difference	LTP (Last Traded Price)	CMP (Current Market Price)
Meaning	The price at which the last transaction took place.	The latest available price at which the stock is currently trading.
Time Reference	Refers to the most recent trade completed.	Refers to the current live market value.
Price Movement	May remain static until a new trade happens.	Keeps changing every second with market activity.
Market Relevance	Indicates the past price of execution.	Represents the most actionable price right now.
Usage	Used for understanding the last trade details.	Used for placing new trades or tracking live price updates.

In short, LTP records the last executed price, while CMP tells you what the market is currently offering. Traders rely on CMP for real-time action and on LTP for analysing recent trades.

Conclusion

Understanding CMP in the stock market helps you make smarter investment choices. It shows the real-time price of a stock. Hence, it forms the base for analysing trends, placing orders, and evaluating portfolio performance. Once you know the CMP, you can trade better.

Si, if you’re ready to start analysing live prices and exploring smarter trading opportunities, learn and invest with Pocketful. It is your trusted partner in building better market knowledge.

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Frequently Asked Questions (FAQs)

Can CMP be the same for all exchanges?
Not always. A stock listed on both NSE and BSE may show slightly different CMPs due to variations in trading volume and demand.
Does dividend announcement affect CMP?
Yes. When a company declares dividends, its CMP may rise before the record date and slightly drop after, as the dividend value gets adjusted.
Is CMP the same as closing price?
No. CMP reflects the live trading price, while the closing price is the final price recorded at the end of the trading session.
How often does CMP change?
CMP changes every time a trade is executed. During high-volume trading hours, it can fluctuate within seconds.
Can beginners rely on CMP alone for investment decisions?
No. CMP should be combined with other indicators like company fundamentals, volume trends, and moving averages. This helps with accurate analysis.

November 14, 2025

Top 10 High-Return Mutual Funds in India

We all want our money to grow faster, don’t we? That is exactly why high-return mutual funds get so much attraction. They kind of give long-term growth that can move the needle for your financial goals, whether it is building wealth, saving for a house, or planning an early retirement.

Mutual funds, especially equity-based ones, have become one of the most popular ways for Indians to invest and grow their money over time. But here is the truth: not every fund performs equally well. Some manage to consistently outperform the market, while others fall short. In this blog, we will look at some of the best high-return mutual funds in India for 2025, understand what makes them move, and talk about how to pick the right ones for your goals.

What are High Return Mutual Funds?

High-return mutual funds are funds that have performed better than the market or have given higher-than-average returns over the years. But before getting an adrenaline rush from those big numbers, it is worth taking a closer look at what is really driving them. Most high-return mutual funds invest mainly in equities; in simple terms, they put your money into stocks of different companies. Stocks have the potential to grow much faster than traditional options like fixed deposits or bonds, especially if you stay invested for the long term. That is what makes them attractive for wealth creation.

But those higher returns do not come for free. Equity markets can be unpredictable, and prices move up and down all the time. So, while these funds can help your money grow faster, you also have to be comfortable with a bit of short-term volatility.

Let us have a glimpse at the types of mutual funds that often offer higher returns:

Large Cap Funds – Invest in big, well-known companies. They are relatively stable and great for long-term investors who want stable growth.
Mid Cap Funds – Invest money into mid-sized companies with strong growth potential. They create a good balance between risk and reward.
Small Cap Funds – Focus on smaller, emerging businesses. These can give you impressive returns, but only if you are comfortable with short-term ups and downs.
Sectoral or Thematic Funds – These target specific industries like technology, manufacturing, or infrastructure. When a sector does well, these funds can rise, but they can also fall quickly if trends change.
Flexi Cap or Multi Cap Funds – These invest across large, mid, and small-cap stocks, giving fund managers the freedom to chase opportunities during different market dynamics.

List of the Top 10 High-Return Mutual Funds in India

S. No	Funds	5 Yr Returns (%)	Expense Ratio (%)	Launch	Net Assets (Cr)
1	ICICI Prudential Infrastructure Fund	36.19	1.14	2005-08-31	8,231
2	HDFC Infrastructure Fund – Regular Plan	34.02	1.13	2008-03-10	2,585
3	Aditya Birla Sun Life PSU Equity Fund – Regular Plan	33.82	0.56	2019-12-30	5,532
4	Quant Small Cap Fund	35.29	0.71	1996-11-24	30,504
5	Franklin Build India Fund – Regular Plan	31.76	0.98	2009-09-04	2,947
6	SBI PSU Fund	33	0.85	2010-07-07	5,714
7	DSP India T.I.G.E.R. Fund – Regular Plan	32	0.66	2004-06-11	5,506
8	Motilal Oswal Midcap Fund – Regular Plan	33	0.7	2014-02-24	37,500
9	ICICI Prudential India Opportunities Fund	33	0.66	2014-02-24	32,669
10	Nippon India Power & Infra Fund	32	1	2004-05-08	7,325

Factors to Evaluate Before Investing

Every time you invest, it is important to pause and take a closer look because you will be putting in your hard-earned money. Below are a few simple points to keep in mind;

1. Risk and Return Go Hand in Hand

The promise of high returns is undoubtedly tempting, but remember, there is no free lunch in investing. Funds that can give big returns also tend to fluctuate more. Small-cap or sector funds, for example, can perform well in a bull market but may drop sharply when markets fall.

2. Look for Consistency

Anyone can have a lucky streak. Instead of getting carried away by one or two strong years, check how the fund has performed over 3, 5, or even 10 years. A good fund stays strong across different market conditions

3. The Fund Manager Matters

Think of the fund manager as the loco-pilot of your financial train. Their experience, strategy, and discipline play a big role in how well you are driven to your destination. Look for managers with a stable track record and a long-term approach.

4. Watch the Expense Ratio

Every mutual fund charges a small fee to manage your money, which is called the expense ratio. A slightly higher fee might not seem like a concern now, but over the years, it can quietly eat into your returns.

5. Time Is Your Best Friend

Equity mutual funds need time to show their growth. If you can stay invested for at least 5-7 years, you will give your money a chance to grow and recover from short-term market swings.

How to Choose the Right Fund

1. Decide Your Goal First

Ask yourself why you are investing in the first place. Are you saving for long-term wealth, retirement, or a down payment on a house? Once you know that, it becomes easier to pick a fund type that aligns with your purpose.

2. Know How Much Risk You Can Handle

Be honest here. If market swings make you anxious, large-cap or flexi-cap funds are safer bets. But if you do not mind some short-term ups and downs, mid- and small-cap funds can work well for you.

3. Look at the Fund’s Track Record

Don’t fall for last year’s best performers. Check how the fund has done over 3, 5, and 10 years. A good fund gives steady results across different market phases.

4. SIPs Are a Great Place to Start

If you are unsure about timing the market, go with a Systematic Investment Plan (SIP). It is one of the easiest ways to invest regularly, reduce volatility, and slowly build wealth over time.

Common Mistakes to Avoid

1. Chasing Past Performance

Just because a fund did great last year does not mean it will repeat that performance. Markets change, and so do trends. Your focus should be on consistency

2. Ignoring Risk

Do not choose a fund just because it gives big returns. If you are not comfortable with volatility, you might panic during market dips and sell at the wrong time

3. Switching Too Often

Jumping from one fund to another hurts your returns and stops compounding from doing its magic. Stick with your plan unless there is a reason to switch.

4. Not Reviewing Your Investments

You do not need to track your funds daily, but reviewing them once or twice a year helps. Make sure they are still aligned with your goals and performing close to their benchmarks, since your goals can also change with time.

5. Lack of Diversification

Putting all your money in one type of fund, say, all small-caps or all thematic funds, can backfire. Mix it up with a blend of large, mid, and small-cap funds to balance growth and stability.

Conclusion

High-return mutual funds can be a good option for building long-term wealth, but they are not magic. The truth is, the higher the possible returns, the more patience and discipline they demand. It is alluring to run after the top-performing fund of the moment, but the concept is to find one that fits your goals, risk level, and time frame. Start small, stay consistent, and let compounding play the game while you sit back and relax. SIPs are a great way to get started since they give you the benefit of rupee cost averaging. And most importantly, give your investments time; that is where the real growth happens.

Remember, investing is not about getting lucky. It is about being calm and steady. If you stay the course, the markets will surely reward you with returns.

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Frequently Asked Questions (FAQs)

Which mutual fund gives the highest return in India?
There is no single “best” fund for everyone. Small-cap and mid-cap funds often deliver higher returns, but as we know, high returns come with high risk. The right choice depends on your goals and time horizon,
Are high-return mutual funds risky?
A little, yes, most of them invest in stocks, so market ups and downs will affect them.
How long should I stay invested in a mutual fund?
It is suggested to invest for at least 5 to 7 years. That gives your money enough time to grow and recover from market dips while enjoying the benefit of compounding
Can I invest in high-return funds through SIPs?
Yes, SIPs are one of the smartest ways to invest. They help you stay disciplined and reduce the stress of timing the market.
How many mutual funds should I have?
You do not need a dozen of them. A mix of good funds across categories like large-cap, mid-cap, and flexi-cap is usually enough.

November 14, 2025

Best Defence Sector Mutual Funds in India

India’s defense budget increased rapidly in 2025 and this is why defense sector mutual funds have become a big topic of discussion among investors today. If you want to know which is the best defense mutual fund or what is the complete defense mutual fund list, then this guide is for you. Here we will understand how mutual funds investing in the defense sector can bring long-term strength to your portfolio and why mutual funds in the defense sector are being considered as an emerging opportunity nowadays.

What are Defence Sector Mutual Funds?

Defence Sector Mutual Funds are mutual funds that invest primarily in defence and related industries. These include companies involved in aerospace, weapon manufacturing, engineering, electronics and defence equipment. In simple terms, these are mutual funds investing in the defence sector that directly bet on companies whose business is related to defence.

These funds fall under the category of sectoral/thematic funds, which is recognized by SEBI (Securities and Exchange Board of India). This means that their investment is focused on a single sector, while diversified equity funds invest in many different industries. The main objective of these funds is to take advantage of the long-term opportunities provided by India’s growing defence needs and the Atmanirbhar Bharat initiative. It is important to note that since these are mutual funds in the defence sector, they also carry higher risk, and investors should always consider these funds from a long-term perspective.

Defence Sector Mutual Funds List 2026

Fund Name	Current Nav	AUM	6M Returns	1 year Return
Motilal Oswal Nifty India Defence Index Fund	₹ 10.25	₹3,703.3 Cr	27.23%	19.49%
HDFC Defence Fund	₹ 24.38	₹7,024.99 Cr	26.18%	11.67%
Aditya Birla Sun Life Nifty India Defence Index Fund	₹ 11.41	₹721.82 Cr	27.01%	18.97%
Groww Nifty India Defence ETF FoF Direct Growth	₹ 11.70	₹78.84 Cr	26.38%	16.95

(Data as on 15-10-2025)

1. Motilal Oswal Nifty India Defence Index Fund

This fund invests in leading companies in India’s defence sector. Its minimum SIP starts from ₹500 and the fund manager is Swapnil P Mayekar. The top holdings of this fund include Bharat Electronics Ltd. (20.6%), Hindustan Aeronautics Ltd. (20.46%), Solar Industries India Ltd. (11.54%), Bharat Forge Ltd. (11.50%), and Mazagon Dock Shipbuilders Ltd. (7.46%). Due to the strong growth of the defence industry and government support, this fund can be a good option for long-term investors.

2. HDFC Defence Fund

HDFC Defence Fund is managed by Priya Ranjan and it invests directly in defence and related capital goods companies. The fund’s key holdings includeBharat Electronics Ltd. (18.88%), Hindustan Aeronautics Ltd. (15.21%), Solar Industries India Ltd. (11.67%), Bharat Forge Ltd. (9.58%), and BEML Ltd. (8.83%). Apart from this, companies like Bharat Forge and Premier Explosives are also part of the portfolio. This fund is an ideal choice to capture direct growth of the defense sector.

3. Aditya Birla Sun Life Nifty India Defence Index Fund

This fund also focuses on defense sector companies and is managed by Priya Sridhar. The minimum SIP starts from ₹500. Bharat Electronics Ltd. (21.24%), Hindustan Aeronautics Ltd. (21.10%), Solar Industries India Ltd. (14.83%), Mazagon Dock Shipbuilders Ltd. (8.72%), and Cochin Shipyard Ltd. (6.01%). This fund covers key stocks in the defense industry and is a better option for investors looking for index-based options.

4. Groww Nifty India Defence ETF FoF Direct Growth

This fund is managed by Akash Chauhan and its SIP starts from just ₹500. This fund invests 100% in Groww Nifty India Defence ETF, i.e. it directly tracks the performance of the defense sector index. Investors who do not want to invest directly in ETFs can take advantage of the growth of the defense sector through this fund of funds (FoF). This is a new and simple option, especially for beginner investors.

Why Defence Sector Mutual Funds are Gaining Popularity

India’s Defence Investments at an all-time high : The Union Budget 2025–26 has allocated ₹6.81 lakh crore for the Defence sector, an increase of about 9.5% from last year and accounting for about 13.5% of the total budget. This huge investment has made defence sector mutual funds an attractive option.
Make in India + Export Expansion : India recorded an 18% growth in defence production in 2024–25, reaching ₹1.50 lakh crore. Also, defence exports reached ₹23,622 crore, a 12% year-on-year growth with the private sector contributing ₹15,233 crore. This provides a strong foundation for the “Make in India” and “mutual funds investing in defence sector” themes.
Geopolitical tensions and global demand : International conditions and security challenges have accelerated the pace of warfare technology and defence production. For example, manufacturers such as Solar Group are increasing production of 155 mm ammunition amid the Russia–Ukraine conflict.
Good performance of defense companies in the stock market : Hindustan Aeronautics Limited (HAL), Bharat Electronics Ltd (BEL), Bharat Forge and other defense companies have performed well in recent years, which is a positive sign for investors looking for the best defense mutual fund.

Advantages of Investing in Defence Sector Mutual Funds

The government’s Make in India initiative, growing defence exports, and cutting-edge technology innovations have made it attractive for investors in the long run. At such a time, investing in defence sector mutual funds can prove to be a wise move. These funds not only provide an opportunity to invest in companies that contribute to national security, but also strengthen investors’ portfolios.

Strong growth potential : India’s defence budget is constantly increasing and with it, new deals and projects are increasing in the industry. For example, companies like Hindustan Aeronautics, Bharat Electronics and Solar Industries are expanding rapidly. By investing in these funds, you can directly benefit from the growth of this sector.
Stable investment for the long term : The defence sector is not a short-term investment theme. This sector will grow in the long run, as there is continued government and private investment. Such funds provide investors with an opportunity for stable and long-term returns.
Diversification in portfolio : Through these funds, you can invest in both government (PSU) and private defense companies. This diversifies your investment and balances the risk.
Benefit from government policies and incentives : Increasing FDI limit by the government, promoting local manufacturing and giving policy incentives for the defense sector is continuously strengthening this sector. Investing in such an environment can prove to be beneficial in the long run.
Long term wealth creation : If investors stay patient for a long time, then these funds can give good capital appreciation and returns. Continuously increasing government and private investments strengthen the companies of this sector, giving long-term benefits to the investors.

Risks & Challenges Investors Should Know

Defence sector mutual funds are attractive, but it is important to understand the risks involved. If you want to invest in these funds, pay attention to the following five key aspects:

Risk of centralised investing : Defence funds often invest in just a few large companies, such as Hindustan Aeronautics and Bharat Electronics. If there is any instability in these companies, the entire fund can be affected. Therefore, it is important to understand that your money is concentrated on the entire sector, not individual industries.
Dependence on government policies : The defence industry is dependent on government policies and budgets. If the defence budget is reduced or new deals are delayed, the earnings of companies can be affected and your fund’s returns can also be low.
High valuation of stocks : Defence sector stocks have risen rapidly in the last few years. This means that their valuations (P/E or P/B) are high. In such a situation, future returns may be limited and prices may fall during market correction.
Global and geopolitical risks : The defense sector is affected by international events. Wars, agreements or international tensions can directly affect the orders and supply chain of companies. At such times, investors are likely to incur losses.
Investor advice : If you are a retail investor, invest only 5–10% of your portfolio in defense funds. Invest for the long term and be patient. This will balance the risk and increase the chances of getting better returns.

Read Also: Types of Mutual Funds in India

Conclusion

Defense sector mutual funds are a good option for those who want to earn good returns by investing for a long time. These funds invest primarily in large defense companies of India and strengthen the portfolio. Keep in mind, being a sector-focused investment, there are some risks and global events can have an impact.

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Frequently Asked Questions (FAQs)

What are defence mutual funds?
These are funds that invest in India’s defence and related sector institutions.
Who should invest in defence mutual funds?
These funds are ideal for investors with a long-term investment horizon and a moderate risk appetite.
What is the minimum SIP to start with?
Most funds have a minimum SIP starting at ₹500.
Are these funds risky?
Yes, as these are focused on a single sector, they come with higher risk.
Can these funds give high returns?
These can give good returns in the long term, especially when the sector players are performing well.

November 13, 2025

What is Collateralized Debt Obligation (CDO)?

What if you have multiple products and you want to sell all these products, but individually selling all these products can be a bit slow. But what if you create a combo basket of all these products and sell them togetherly.

Surprisingly similar things happen in the financial world as well, let’s talk about banks that have a lot of different types of loans available, like home loans, car loans, and even credit card debt. Instead of holding onto them for years, banks bundle all these loans into one big package and this cumulative package is known as the Collateralized Debt Obligation (CDO). It’s simply a mix of different debt products crafted into a single product that can be sold to investors.

How Does a Collateralized Debt Obligation (CDO) Work?

The journey of creating a CDO is like a financial assembly line. It turns everyday loans into a complex investment product through a few key steps.

It all starts when a bank or a financial institution gathers a huge pile of loans. These can be anything from mortgages to business loans. This large pool of loans acts as the “collateral” that supports the CDO. In simple terms, it’s the assurance that money will keep coming in from the borrowers who originally took those loans.

Next, the bank sells this pile of loans to a brand-new, separate company. This new company is called a Special Purpose Entity (SPE), and this step is most important. By selling the loans, the bank gets them off in their own books. This means the risk that people might not repay their loans is now passed on from the bank to someone else.

The SPE now needs cash to pay the bank for all those loans. To get this money, it issues and sells bonds to investors and these bonds are the CDOs. The money from the investors goes back to the bank, which is now free to use that cash to give out even more loans.

And just like that, the system is up and running. The people who took out the original loans keep paying their monthly installments. This money now flows to the SPE, which then passes it along to the investors who bought the CDO bonds. This steady stream of payments is how the investors earn a return.

The Structure of a CDO

CDOs are complex due to their structure and it doesn’t act like one big investment block, instead it is divided into different layers which are called “tranches” – meaning slices in French.

Picture it like a multi-story building where the money from the loan payments flows from the top to the bottom.

Senior Tranche: This is the top most level and is the safest slice of the CDO, here investors who buy these tranches are the very first to get paid from it because it is very safe as the interest rates offered are very low. This slice usually gets a top ‘AAA’ credit rating and is popular with less risk taking investors.
Mezzanine Tranche: This is the middle floor and is a bit riskier than the senior tranche. Investors get paid once everyone on the top level has been paid in full. To make up for this extra risk, a higher interest or return is offered..
Equity Tranche: This is the ground level and is considered as the riskiest part. These investors are the absolute last in line to get paid and if people start defaulting on their loans and the money dries up, this tranche is the first to lose everything. But with great risk comes the potential for the greatest reward, so it offers the highest potential returns.

Types of Collateralized Debt Obligations

Collateralized Loan Obligations (CLOs): These are packed with business or corporate loans.
Collateralized Bond Obligations (CBOs): These are backed by a collection of corporate bonds.
Mortgage-Backed CDOs: These were the worst performing and most problematic CDOs during the 2008 crisis. They are filled with mortgage-backed securities (MBS), which are themselves pools of home loans.
Synthetic CDOs: These are the most mind-bending of all as they don’t actually hold any loans. Instead, they are made up of financial bets called credit default swaps (CDS), which work like insurance policies on loans. They let investors bet on whether loans will be repaid without ever owning them.

The Role of CDOs in the 2007-2008 Financial Crisis

In the early 2000s, investors all over the world were hungry for CDOs. To keep making more of them, banks needed a constant supply of new loans to stuff inside. This created a giant “demand engine” for mortgages, due to which lending standards were neglected and banks started handing these to people who have shaky credit histories as well and the main goal was simply to create more loans, package them into CDOs, and sell them off for a quick fee.

Also during this time we have noticed that credit rating agencies, like Moody’s and S&P gave many of these CDOs, even the ones filled with the riskiest subprime mortgages, their highest ‘AAA’ rating because the same banks that were creating the CDOs were also paying the agencies to rate them and the computer models used to predict risk were deeply flawed with assumptions that house prices would always go up, and that a wave of mortgage defaults in one part of the country which wouldn’t affect another.

When the US housing market finally started to wobble in 2007, the whole system fell apart, people with subprime mortgages began to default on their loans in huge numbers leading to slow funds accumulation in CDOs and all these losses completely wiped out the equity and mezzanine tranches. Even the “super-safe” AAA-rated senior tranches started to lose money. The value of these CDOs plummeted, causing devastating losses for banks and investors everywhere, setting off a chain reaction, freezing up credit markets and pushing the world into the worst financial crisis since the Great Depression.

The Evolution of CDOs

After the 2008 crisis, the world of finance knew things needed to be changed and Governments stepped in by introducing new rules to stop a disaster like that from ever happening again.

The most important act was the Dodd-Frank Act in which the idea was to mandate the sponsors of residential mortgage backed securities retain at least 5% of the credit risk associated with the mortgage they securitize and the idea is that if they have their own money on the line, they’ll be much more careful about making sure the loans inside are actually good quality.

The “CDO” brand name became so toxic after the crisis that it’s rarely used now. Instead, the market has shifted towards their cousin, the Collateralized Loan Obligation (CLO). CLOs are mostly backed by corporate loans, which are seen as more stable and easier to understand than the subprime mortgages of the past. The structures are also generally safer, with more built-in protection for investors.

Conclusion

Collateralized Debt Obligation is just a financial tool in the market, if used responsibly, it can be a good thing, helping to spread risk around the economy and freeing up banks money giving them a higher lending power and investors more choices.

Although after the 2008 crisis lesson, we have learnt what can happen if complexity is used to hide risk, and the chase for fees goes completely aside. Through CDOs we know that while financial innovation can be a force for good, it must be balanced with strong rules, clear transparency, and common sense.

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Frequently Asked Questions (FAQs)

Difference between a CDO and a regular bond?
A regular bond is a straightforward loan to a single entity, like a company or a government, on the other hand CDO is a security backed by a whole pool of different loans (like mortgages, car loans, etc.).
Can small investors buy CDO?
No,as CDOs are very complex products that are sold to big institutional investors like banks, insurance companies, and hedge funds.
Are CDOs and Mortgage-Backed Securities (MBS) similar?
They’re related, but not quite the same. An MBS is a product that is backed only by a pool of mortgages and CDO is generally a broader kind of package that can actually hold an MBS inside it.
Are CDOs legal after the 2008 crisis?
CDOs are still created and sold today with stricter rules and largely they’ve moved towards what are considered safer versions, like Collateralized Loan Obligations (CLOs).
Why were CDOs rated higher by the rating agency in 2008?
There was a major conflict of interest, as the banks creating the CDOs were the same ones paying the agencies to rate them and also the computer models used by the agencies were fundamentally flawed.

November 13, 2025

Fixed Income Arbitrage Explained: Strategies, Risks & Examples

Have you ever bought vegetables from a shop vendor besides your home and in the local wholesale mandi. You have always noticed the price difference between the vendors as all the shop vendors buy the vegetables from these mandis where they buy in bulk which is cheap and sell it at a high price. This small price difference is their profit.

This simple idea of profiting from price differences is the strategy that we can also witness in the financial world as well, where you get fixed interest rates just like a company’s bond. In a nutshell, we will learn about fixed income arbitrage. In this blog, we will explore and look at some common fixed income arbitrage strategies, and walk through a fixed income arbitrage example.

How Does Fixed Income Arbitrage Work?

Fixed income arbitrage is a strategy that exploits small, temporary price differences between similar fixed-income securities like bonds. Investors buy the cheaper bond and sell the more expensive one simultaneously, expecting the market to correct the mispricing. Profit comes from the price gap closing over time.

For this to work, the two bonds must be nearly identical, such as from similar issuers with matching maturity dates. This similarity reduces risk by ensuring the price difference is temporary, not due to fundamental value changes. The strategy relies on exploiting market inefficiencies before prices realign.

Liquidity is crucial, as the securities must be easy to trade quickly before the price gap disappears. This strategy is market-neutral, meaning profits come from price convergence, independent of overall market movements. Traders do not rely on market direction but focus solely on relative price changes.

Fixed Income Arbitrage Strategies

Generally this type of investment is mainly done by institutions like hedge funds, not individuals, because it requires a lot of money and powerful computers. Let’s look at some common strategies.

1. Convertible Bond Arbitrage

A convertible bond is a special bond which can be changed for company shares. If the bond’s price doesn’t quite match the stock’s price, traders see an opportunity. They might buy the ‘cheap’ bond and sell the company’s stock at the same time (called “shorting”). This is a classic fixed income arbitrage example where the trader profits from this temporary mismatch.

2. Yield Curve Arbitrage

In this type the interest rate on a 10-year government bond should have a sensible relationship with a 5-year bond. If a trader feels this relationship is out of order, let’s say the gap in interest rates is too big and they can bet that it will return to normal. They might sell the 10-year bond and buy the 5-year bond, waiting for that gap to close.

3. Swap-Spread Arbitrage

This is the most complicated one as it involves profiting from the difference between the interest rate on a government bond and this rate is used in another financial contract called an interest rate swap. It’s a highly technical trade used almost exclusively by large financial institutions.

Risks Associated with Fixed Income Arbitrage

Leverage Risk: As profits based on each trade are tiny, traders borrow huge sums of money (leverage) to make it worthwhile. But just as leverage increases profits, it can even increase your losses even more.
Convergence Risk: The whole strategy revolves around the closing price gap. But what if it doesn’t go as planned and there is a panic in the market, that small gap could become huge leading to big losses.
Execution Risk: If a trader isn’t quick enough to place both the buy and sell orders instantly, the opportunity is gone as these price gaps can vanish in a flash.
Model Risk: Traders rely on fancy computer models to spot these “mispriced” securities. But models are just pre designed models, sometimes they can be wrong, especially when something unexpected happens in the market.

Advantages and Disadvantages of Fixed Income Arbitrage

Advantages

Lower Market Risk: As investors are buying one thing and selling a similar one, they really don’t bet on the whole market going up or down. This offers some protection from big market swings.
Stable Returns: The aim is to make small, steady profits from the market’s little imperfections, which can lead to more consistent returns.
Works Well in Volatile Markets: When markets are volatile and prices fluctuate wildly, more pricing mistakes occur, creating extra opportunities for traders.

Disadvantages

Capital Intensive: The profits on each trade are wafer-thin and to make real money, you need to invest a massive amount of capital. This is why it is generally done by big institutions, limiting individual investors.
Complex Nature: This isn’t a simple buy-and-hold approach as it demands powerful computers, complex math, and a team of experts to pull it off.
The “Steamroller” Risk: The heavy use of leverage money means that one bad trade can lead to a catastrophic loss that wipes out all the small gains you made before.

Conclusion

Fixed income arbitrage looks fascinating from outside but is also complex in nature, also it is reserved for the financial giants. The mix of high complexity, huge capital needs, and the ever-present risk of the “steamroller” makes it a difficult investment for most of us. Understanding the concept is great to know about how the markets work.

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Frequently Asked Questions (FAQs)

Are all fixed-income arbitrage risk-free?
Absolutely not, they are generally termed as ‘low-risk’, but it doesn’t denote that they are completely risk free. Sometimes these strategies can fail if prices don’t move as predicted, and the use of borrowed money means a small loss can quickly become a huge one.
Why should individual investors not prefer this strategy?
It is due to massive amounts of money, the ability to borrow even more (leverage), and the super-fast trading technology to spot and act on these opportunities in seconds. Most individuals don’t have access to these.
What is the best time these strategies work, is it during rising or falling markets?
These are designed to be “market-neutral,” so rising and falling really don’t affect it, though it often finds more opportunities when the market is very volatile (when prices are jumping around a lot), as this creates more temporary pricing mistakes.
What do “long” and “short” positions mean?
“Long” is just buying something, hoping its price might go up and by going “short” it is the opposite as here you sell something you’ve borrowed, hoping its price will fall so you can buy it back cheaper, return it, and keep the difference.
Is it different from a government bond?
Buying and holding a bond is a simple investment where you collect interest over time. Fixed-income arbitrage is an active, high-stakes trading strategy which is about simultaneously buying and selling different things to profit from tiny, fleeting price gaps, not holding on for interest payments.

November 13, 2025

Best Silver Mutual Funds to invest in India

Silver has always had a special place in our lives, from family gifts to festive silver coins, but lately, it has been making headlines for a different reason. It is no longer just a glittery metal to own; it is gradually becoming a smart way to invest. With the rise of electric vehicles, solar panels, and new-age technologies, silver’s demand is increasing across the world.

The good news is that you do not need to buy physical silver to be part of this trend. Silver mutual funds let you invest in silver’s price movement, right from your phone or laptop.

In this blog, we will walk you through what silver mutual funds are, why they are becoming so popular, and the best ones to consider in India for 2026, along with a few simple points to look for before you invest.

What are Silver Mutual Funds?

Silver Mutual Funds are an easy way to invest in silver without buying or storing the metal for real. Instead of dealing with physical silver, these funds put your money into Silver Exchange Traded Funds (ETFs), which track the daily market price of silver in India.

So, when silver prices go up, the value of your investment rises too, and when they fall, your fund’s value may dip slightly. The big advantage is convenience, no worries about purity, safety, or storage. You get to benefit from silver’s price movements in a completely digital manner.

List of Best Silver Mutual Funds:

S. No	Funds	Minimum Investment	Expense Ratio (%)	Exit Load	6 Mth Ret (%)	1 Yr Ret (%)
1	Aditya Birla Sun Life Silver ETF FoF – Regular Plan	100	0.3	0.5	54.83	61.78
2	Axis Silver FoF – Regular Plan	5,000	0.16	0.25	51.1	59.7
3	HDFC Silver ETF FoF – Regular Plan	100	0.23	1	51.8	60.1
4	ICICI Prudential Silver ETF FoF	100	0.12	1	51.8	59.8
5	Kotak Silver ETF FoF – Regular Plan	100	0.14	0.5	52.2	60.6
6	Nippon India Silver ETF FoF – Regular Plan	100	0.27	1	52.53	60.5
7	SBI Silver ETF FoF – Regular Plan	5,000	0.3	1	53.2	61.5
8	Tata Silver ETF FoF – Regular Plan	5,000	0.2	0.5	49.5	58
9	UTI Silver ETF FoF – Regular Plan	100	0.15	1	51.8	59.6
10	Zerodha Silver ETF FOF Direct Growth	100	0.17	0	38.6	–

Read Also: Best Silver ETFs in India

Important Points to Consider before Investing

Before you decide to invest your money in silver mutual funds, you should quickly check these points mentioned below;

1. Prices Can Be Volatile

Silver prices move up and down quite a bit, they depend on global demand, industrial use, and even investor mood. There is no need to panic over short-term swings.

2. Returns Might Differ Slightly from Silver Prices

Since these funds invest in Silver ETFs, there can be a small difference between the actual price of silver and your fund’s return and this is called a tracking error.

3. Check the Expense Ratio

Every fund charges a small fee to manage your money. A lower expense ratio generally means more of your returns stay with you.

4. Think Long-Term

Silver is not about instant gains. Give your investment at least 3-5 years to even out the ups and downs.

5. Use It for Diversification

Silver works best as a small part of your portfolio, maybe 5 -10% to balance your exposure to equity and debt investments.

Read Also: How to Invest in Silver in India?

Conclusion

Silver mutual funds make it easy to add a bit of sparkle to your portfolio. As industries like electric vehicles, solar power, and electronics continue to grow, silver’s demand is only getting stronger day by day. However, silver prices can fluctuate depending on the global trends and supply. Think of it as a small but smart value addition. If you are looking for a simple, paperless way to benefit from silver’s long-term story, silver mutual funds are definitely worth a look in 2026.

S.NO.	Check Out These Interesting Posts You Might Enjoy!
1	Mutual Fund vs ETF. Are They Same Or Different?
2	What are ETFs? Are ETFs good for beginner investors?
3	ETF vs Index Fund: Key Differences You Must Know
4	How to Invest in ETFs in India – A Beginner’s Guide
5	What is Nifty BeES ETF? Features, Benefits & How to Invest?
6	What is Gold ETF? Meaning & How to Invest Guide
7	Types of ETFs in India: Find the Best for Your Investment
8	Best ETFs in India to Invest
9	Top Gold Mutual Funds in India
10	Digital Gold vs Gold ETF: Which is Better?
11	Best ETFs in India to Invest
12	List of Best Gold ETFs in India
13	List of Best Commodity ETFs in India
14	How to Compare Mutual Funds in India?
15	Best Silver Stocks in India

Frequently Asked Questions (FAQs)

Are silver mutual funds safe to invest in?
They are safe, but remember silver prices can fluctuate. It is best to stay invested for a few years and manage those price swings.
What is better, a Silver ETF or a Silver Mutual Fund?
If you have a Demat account and are comfortable with trading, a Silver ETF is a good option. On the other hand if you prefer investing through regular mutual fund platforms, a Silver Mutual Fund is easier.
How much do I need to start investing?
Not much, You can start with as little as ₹500 through a SIP.
Can silver replace gold in my portfolio?
Both asset classes have different roles. It is better to own a bit of both for a balance.
How long should I stay invested?
Try for at least 3 to 5 years. Silver can be unpredictable in the short term, but over time, it generally gives better stability and growth.

November 12, 2025

What is Oversubscription in IPOs?

A company wishing to go public, offers shares through an Initial Public Offering (IPO), giving the public a chance to become partial owners of the business. Sometimes, the company is hyped, and the demand for its shares exceeds the number of shares available. This is what is known as oversubscription. It is usually seen as a good sign; it shows that investors are excited and have confidence in the company. But it also means you might not get all the shares you applied for.

In this blog, we will break down why oversubscription happens, what it means for both investors and companies.

What is Oversubscription in IPOs

A scenario of Oversubscription happens when more people want to buy a company’s shares than the company is offering. To simplify, when demand exceeds supply. Suppose a company is offering 1 crore shares, but investors apply for 5 crore shares. That means the IPO is oversubscribed by 5 times, a sign that the company is popular. While oversubscription is usually a good sign, it also means you might not get all the shares you applied for. In such cases, the shares are usually distributed either proportionally or through a lottery system, so everyone gets a fair chance.

How Does Oversubscription Happen?

Here is how it usually comes about,

Limited Shares, High Interest – Companies only offer a set number of shares. If the company’s price is attractive, more investors apply than there are shares available.
Excess Hype & Advertisement – Media coverage, analyst recommendations, or just the general hype around a company can make investors rush in.
Strong Fundamentals – Companies with good growth prospects, stable financials, or a well-known brand draw more attention from investors.
Many Applications – Retail investors, high net worth individuals, and institutions all apply. When everyone’s combined demand is higher than the supply, oversubscription happens.
Fair Allocation – When there is oversubscription, shares are usually allotted either proportionally or through a lottery system, so everyone gets a fair chance.

Causes

Attractive Pricing – If the IPO is priced reasonably or even slightly cheaper than similar companies, investors see it as a great deal. Everyone likes to get their hands on companies which look undervalued.
Positive Market Mood – When the stock market is in an uptrend and people are feeling confident, they are more likely to take chances on new IPOs. A strong market often brings in more applications.
Familiar or Trusted Brands -If the company is already well-known or has products people use every day, investors feel more comfortable putting their money in. It becomes easier to trust a brand you already know.
Past IPO Success Stories – When recent IPOs have given good listing gains, it naturally builds excitement. Investors start thinking, “Maybe this one will perform just as well,” and rush to apply before it’s too late.

Read Also: What is the IPO Allotment Process?

Recent List of Oversubscribed IPO

S. No	Company	Oversubscription	Listing Date
1	Urban Company Ltd	103.6x	17 September 2025
2	LG Electronics India	54x	14 October 2025
3	Srigee DLM Ltd	107x	12 May 2025
4	VMS TMT Ltd	102x	24 September 2025
5	National Securities Depository Ltd (NSDL)	41x	6 August 2025

Impact of Oversubscribed IPO

1. For Investors

When an IPO gets oversubscribed, it simply means there are more buyers than shares offered by the company. So, there is a fair chance you will not get all the shares you applied for. The allotment is usually done through a lottery or on a pro-rata basis, which means you might get just a small portion of what you wanted, or sometimes, none at all.

2. For the Company

An oversubscribed IPO is a big confidence booster for the company. It signals that investors believe in its business and future growth. It also helps in creating a strong brand image and makes it easier for the company to raise funds later if needed.

3. For the Market

When several IPOs get oversubscribed around the same time, it usually points to positive market sentiment. It shows that investors are feeling optimistic and willing to take part in new opportunities.

Conclusion

If an IPO gets oversubscribed, it usually means investors are excited and believe in the company’s story. It is a strong sign of trust and enthusiasm in the market. But there is another side to it, too; not everyone will get all the shares they apply for, and hype does not always translate to profits.

As an investor, it is important to look past the hype. Check the company’s financials, understand what it does, and see if the pricing makes sense. Oversubscription can be because of advertisement and popularity, but smart investing comes from research, patience, and timing, not just hype.

S.NO.	Check Out These Interesting Posts You Might Enjoy!
1	What are the Different Types of IPO in India?
2	What is the Book-Building Process in an IPO?
3	Why Does a Company Go Public & Launch IPO?
4	Performance Of IPOs Launched
5	OFS vs IPO: Key Differences and Benefits
6	Apply in IPO Through ASBA- IPO Application Method
7	What Is An IPO Mutual Fund? Should You Invest?
8	What is IPO Listing Time?
9	Strategies To Boost Your IPO Allotment Chances
10	From Private to Public: Decoding the IPO Journey
11	Why Invest in an IPO and its Benefits?
12	Top 10 Largest IPOs in India
13	Anchor Investors in IPOs – Meaning, Role & Benefits
14	What is Grey Market, and How Are IPO Shares Traded?

Frequently Asked Questions (FAQs)

What does it mean when an IPO is oversubscribed?
It simply means more people applied for shares than the company had to offer.
How are shares allotted when an IPO is oversubscribed?
In such cases, the company cannot give everyone what they asked for. So, shares are distributed either through a lottery system (for retail investors) or proportionally (for bigger investors like institutions and HNIs).
Does oversubscription always mean the stock will list higher?
Not necessarily. While high demand often hints at a strong listing, the actual performance depends on market conditions, valuations, and overall sentiment on the listing day.
Can I apply multiple times to increase my chances?
You can apply through different family members’ demat accounts if they have separate PAN numbers. But applying multiple times with the same PAN will get your application rejected.
Is an oversubscribed IPO always a good investment?
Not always. Sometimes hype plays a big role. It is better to focus on companies with strong fundamentals, business models, and realistic pricing.

November 12, 2025

Best Liquid ETFs in India 2026

We have all been there where you have extra cash sitting in your bank account. It is not a fortune, but enough that you know it should not just lie around earning 3% interest. You do not want to lock it into an FD either, because what if you need it next week? So, where do you park that money safely and make it work a little harder for you? This is where Liquid ETFs come in, the middle ground between “doing nothing” and “taking too much risk.”

In this blog, we will explore how Liquid ETFs work, why investors are increasingly using them for short-term parking, and which ones are currently the best options in India.

So, if you have ever wondered how to make your idle money a little more productive without losing sleep over it, this is for you.

What are Liquid ETFs?

Liquid ETFs are one of the easiest and most convenient ways to park your short-term money while earning a decent return.
These ETFs invest in ultra-short-term instruments such as Treasury Bills, Commercial Papers, and Certificates of Deposit, all of which are considered very safe. Since the investments mature within 91 days, the risk of losing money is extremely low.
You can buy or sell Liquid ETFs anytime during market hours through your demat and trading account. There is no lock-in period, and you get your money almost instantly when you sell.
Since Liquid ETFs track the Nifty 1D Rate Index, their returns are usually in line with short-term interest rates, which is generally better than what a savings account offers.
They also come with low expense ratios and no exit load, making them a good option for investors looking for safety, liquidity, and a little extra return on idle cash.

List of Liquid ETFs

S. No	Funds	Expense Ratio (%)	Launch Date	Net Assets (Cr)	1 Wk Ret (%)	1 Mth Ret (%)	3 Mth Ret (%)	6 Mth Ret (%)	1 Yr Ret (%)
1	ICICI Prudential BSE Liquid Rate ETF – Growth	0.25	2025-03-13	769	0.08	0.41	1.3	2.61	—
2	Mirae Asset Nifty 1D Rate Liquid ETF – Growth	0.15	2024-11-07	285	0.08	0.41	1.31	2.64	—
3	Nippon India Nifty 1D Rate Liquid ETF – Growth	0.49	2025-07-23	11,474	0.1	0.42	1.24	2.39	—
4	SBI NIFTY 1D Rate Liquid ETF – Growth	0.2	2025-08-08	29	0.08	0.4	0.37	–	—
5	Kotak Nifty 1D Rate Liquid ETF	0.08	2023-01-24	1,230	0.1	0.41	1.33	2.64	5.81
6	Zerodha Nifty 1D Rate Liquid ETF	0.27	2024-01-17	5,431	0.08	0.41	1.4	2.62	5.74
7	DSP BSE Liquid Rate ETF	0.3	2024-03-27	381	0.07	0.27	1.09	2.62	5.71
8	Bajaj Finserv Nifty 1D Rate Liquid ETF – Growth	0.19	2024-05-28	645	0.08	0.40	1.27	0.58	5.61
9	Groww Nifty 1D Rate Liquid ETF	0.29	2024-09-24	100	0.08	0.40	1.12	2.86	6.76
10	Shriram Nifty 1D Rate Liquid ETF	0.42	2024-07-05	39	0.08	0.40	1.25	2.52	5.56

Benefits of Investing in Liquid ETFs

If you are looking for a safe place to park your money for a short while, maybe between trades, or just until you decide on your next investment move, Liquid ETFs can be a great option. Some of the benefits of these ETFs are mentioned below.

1. Easy Access to Your Money

The biggest perk of Liquid ETFs lies in the name, liquid. You can buy or sell them anytime during market hours, just like any other stock. No waiting for redemption or settlement delays, your money is available whenever you need it.

2. Get Better Returns Than a Savings Account

Liquid ETFs usually offer returns that are a bit higher than what you would get from a savings account. They invest in short-term, low-risk instruments like Treasury Bills and Certificates of Deposit, so your money is put to work, even while it is “resting.”

3. Low Costs, No Extra Fees

These ETFs come with very low expense ratios and no entry or exit loads.

4. Transparent and Flexible

Because they are traded on the stock exchange, you can always see their price and portfolio in real time. You are in complete control, buy, sell, or hold whenever you like.

5. Safe and Steady Option

Liquid ETFs stick to high-quality, short-term debt instruments, which makes them one of the safest options out there. They do not swing wildly with the market, so they are perfect for conservative investors who want peace of mind.

Who Should Invest in Liquid ETFs?

Below is who can benefit the most from a liquid ETF:

1. Salaried Professionals and Young Investors

If you are someone who wants to park your salary surplus or emergency savings without locking it away, Liquid ETFs are a great choice. You get more than a savings account, and your money stays just as accessible.

2. Traders and Short-Term Investors

Traders often keep extra funds ready to grab market opportunities. Instead of letting it sit idle, they use Liquid ETFs to get small but steady returns between trades and move it back into equities whenever they find a good deal.

3. Corporations and Business Owners

Companies or business owners who need to manage temporary cash flows can use Liquid ETFs for short-term parking. They are safe, flexible, and can be redeemed quickly when funds are needed for operations.

5. Anyone Looking for a Better Alternative to Savings Accounts

If your money is just sitting in a low-interest savings account, you could shift a portion into Liquid ETFs. You will have easy access to it, but with better returns and no long-term commitment.

Risks Involved

Liquid ETFs are not completely risk-free. The risks are small, but you still should know what you are investing in.

1. Low Trading Volumes at Times

Even though they are called Liquid ETFs, some of them do not trade very actively on the stock exchange. This can lead to a small difference between the buy and sell price (called a price spread), especially if you are trying to trade larger amounts.

2. You will need a Demat Account

Unlike a liquid mutual fund, you cannot invest directly from your bank account. You will need a demat and trading account to buy or sell Liquid ETFs. It is not complex, but it adds an extra step if you are new to investing.

3. You Can Trade Only During Market Hours

Liquid ETFs can be sold only when the stock market is open. So if you need cash urgently at night or on a Sunday, you will have to wait until trading hours resume.

Read Also: List of Best Gold ETFs in India

Conclusion

Liquid ETFs are a simple way to make your idle money earn a little extra while keeping it completely safe and accessible. They bring together the best of two: the stability of a liquid mutual fund and the flexibility of stock trading. If you have cash in your savings account or you want a place to park your money for a short while before investing it elsewhere, Liquid ETFs are an ideal option, low-cost, transparent, and easy to buy or sell whenever you need.

However, remember to go for well-known options with good trading volumes so you do not face liquidity issues.

S.NO.	Check Out These Interesting Posts You Might Enjoy!
1	Mutual Fund vs ETF. Are They Same Or Different?
2	What are ETFs? Are ETFs good for beginner investors?
3	ETF vs Index Fund: Key Differences You Must Know
4	How to Invest in ETFs in India – A Beginner’s Guide
5	What is Nifty BeES ETF? Features, Benefits & How to Invest?
6	What is Gold ETF? Meaning & How to Invest Guide
7	Types of ETFs in India: Find the Best for Your Investment
8	ETF vs Stock – Which One is the Better Investment Option?
9	Top Gold Mutual Funds in India
10	Digital Gold vs Gold ETF: Which is Better?
11	Small-Cap ETFs to Invest in India
12	Best ETFs in India to Invest
13	SBI Gold ETF vs HDFC Gold ETF: Where To Invest?
14	Gold BeES vs Gold ETF: Meaning, How It Works, Taxation
15	Sovereign Gold Bonds vs. Gold ETF: Which is a Better Investment?
16	List of Best Commodity ETFs in India

Frequently Asked Questions (FAQs)

How are they different from Liquid Mutual Funds?
Liquid ETFs trade on the stock exchange, while liquid mutual funds are bought directly from fund houses. ETFs are usually cheaper and have no exit loads.
Do I need a demat account to invest?
Yes, you will need a demat and trading account to buy or sell Liquid ETFs.
Are there any extra charges or exit loads?
No, Liquid ETFs do not have entry or exit loads; you just pay regular brokerage charges.
How are Liquid ETFs taxed?
They are taxed like debt funds, and any gains are added to your income and taxed according to your income tax slab.
Can I sell them anytime?
Yes, you can sell them anytime during market hours and get your money back within a day.

November 12, 2025

Blog

What is Algorithmic Trading?

How does this work ?

Why Should You Learn Algo Trading?

Pre-Requisites Before You Start Algo Trading

How to Start Algorithmic Trading (Step-by-Step Guide)

Step 1: Choose the right broker and API provider

Step 2: Develop your trading strategy

Step 3: Backtesting – Test the Strategy

Step 4: Paper Trading (Simulation Mode)

Step 5: Start Live Trading

Step 6: Performance Monitoring and Optimization

Step 7: Risk Management and Compliance

Step 8: Scaling and Diversification

Algorithmic Trading: Risks and Challenges

Conclusion

Frequently Asked Questions (FAQs)

What is algorithmic trading?

How can I start algo trading in India?

Do I need programming skills for algo trading?

Is algo trading risky?

How much capital do I need to start algo trading?

What Is a Large-Cap Fund?

Key Features of Large Cap Funds

What Is a Mid-Cap Fund?

Key Features of Mid-Cap Funds

Pros and Cons of Large Cap Funds

Pros of Large Cap Funds

Cons of Large Cap Funds

Pros and Cons of Mid-Cap Funds

Pros of Mid-Cap Funds

Cons for Mid Cap Funds

Large Cap vs Mid Cap Funds: Key Differences

Which Is Better – Large Cap or Mid Cap Fund?

Conclusion

Frequently Asked Questions (FAQs)

What is a large-cap fund in simple terms?

Which is safer, large cap or a mid-cap fund?

Can I invest in both large-cap and mid-cap funds?

Who should invest in mid-cap funds?

How long should I stay invested in large-cap funds?

What Is CMP in Stock Market

Key Importance of CMP in Stock Market

1. Shows Real-Time Value

2. Guides Investment Decisions

3. Indicates Market Sentiment

4. Supports Market Analysis

5. Helps Evaluate Portfolio Performance

How CMP Differs from Market Price or Intraday Price

How to Find CMP of a Stock

1. Stock Exchange Websites

2. Brokerage Platforms

3. Financial News Portals

4. Market Widgets and Apps

5. Trading Terminals

How to Use Current Market Price in Trading

1. Market Order

2. Stop Loss Order

3. Limit Order

LTP vs CMP

Conclusion

Frequently Asked Questions (FAQs)

Can CMP be the same for all exchanges?

Does dividend announcement affect CMP?

Is CMP the same as closing price?

How often does CMP change?

Can beginners rely on CMP alone for investment decisions?

What are High Return Mutual Funds?

List of the Top 10 High-Return Mutual Funds in India

Factors to Evaluate Before Investing

1. Risk and Return Go Hand in Hand

2. Look for Consistency

3. The Fund Manager Matters

4. Watch the Expense Ratio

5. Time Is Your Best Friend

How to Choose the Right Fund

1. Decide Your Goal First

2. Know How Much Risk You Can Handle

3. Look at the Fund’s Track Record

4. SIPs Are a Great Place to Start