If you have your eyes set on a Unit-Linked Insurance Plan (ULIP), it is important to choose the right fund option. An opportunities fund is one option you can consider for long-term wealth creation. It is a type of ULIP fund where the fund manager (who is responsible for allocating the money to the right stocks) looks at and analyses market trends to seize wealth-generating opportunities.
Let’s learn more about what an opportunities fund is.
Understanding Opportunities Fund
- Usually, fund options have a fixed direction. For instance, in large-cap funds, the fund manager focuses only on companies with a large market capitalisation. Another example is a sector-based fund. For instance, pharma funds include investments in pharmaceutical or healthcare funds.
- In contrast, when you opt for opportunities fund in a ULIP plan, your money is invested in diverse stocks where the fund manager sees an opportunity to generate wealth. There is no fixed criterion as to what type of stock or sector the money will be directed towards. Instead, the fund manager uses their expertise to analyse market trends and seek high-growth market-linked options.
- These opportunities may come from changes in government policies, sector changes, easing or tightening of restrictions, global trade affairs, and more. Based on these, your money is invested in the right stocks to gain the optimum returns possible.
- The returns the policyholder receives depend on the opportunities fund’s performance. Hence, it is advisable to invest in the fund with caution. Use tools like the ULIP calculator and read the terms and conditions carefully before investing.
- Note that an opportunities fund can be equity-oriented as well as debt-oriented. The investor can choose an appropriate direction as per their risk tolerance capacity. Consider ULIP taxation rules for equity and debt funds before deciding.
In Conclusion
Knowing what an opportunities fund is can help you determine if it is the right option for you. If you prefer a dynamic investment journey where your money moves towards new avenues consistently, an opportunities fund can be an ideal addition to your portfolio. It is recommended to invest in opportunities fund as a part of a balanced and diverse portfolio.