Smart Strategies for Investing in Mutual Funds: A Guide to Maximising Your Returns One of the most well-liked investing options for people looking for expert management and diversification without having to choose individual equities is a mutual fund. One of the easiest ways for people to accumulate wealth over time is through mutual fund investments. Mutual funds combine the capital of numerous individuals to invest in a diverse portfolio of stocks, bonds, and other securities, in contrast to direct stock market investing, which necessitates considerable time, study, and risk tolerance. Mutual funds are a well-liked option for both new and experienced investors due to their expert management and diversification. But merely investing in a mutual fund and crossing your fingers seldom yields the best outcomes. A comprehensive approach that matches the appropriate fund selection and management strategies with your financial objectives, risk tolerance, and investment timeline is nece...
The SENSEX or Sensory Index was launched by
the "Bombay Stock Exchange" (BSE) on January 1, 1986. It is one of
the major stock market indices of India. This Sensex was established to know
the fluctuations in the share prices of companies in the market. In this,
fluctuations in share prices of 30 companies are evaluated. These 30 companies
are large, well-known and financially strong according to market value. If the
SENSEX is rising, it shows that the stock price of most of the BSE companies
has gone up and if the SENSEX has decreased, it shows that the share price of
most of the BSE companies has dropped. The base year of SENSEX is 1978-79 and
the base index value is set at 100 for this time. This means that in 1978 the
Sensex was assumed to be at the level of 100 points which was at 113.28 points
in 1979 and today the BSE is hovering around 39000 points due to increase in
market value. The one more important thing is to know the full form of the
Sensex. SENSEX- Stock Exchange Sensitive Index.
The BSE Sensex has been calculated on a daily
basis in the market capitalization account of 30 listed companies.
List of SENSEX 30 companies
|
S
NO |
Company
Name |
Industry |
Weight |
|
1 |
RELIANCE IND. |
Integrated Oil
& Gas |
12.38% |
|
2 |
HDFCBANK |
Banks |
11.34% |
|
3 |
HDFC |
Housing Finance |
8.91% |
|
4 |
INFOSYS |
IT Consulting & Software |
7.14% |
|
5 |
ICICIBANK |
Banks |
6.71% |
|
6 |
ITC |
Cigarettes, Tobacco Products |
5.17% |
|
7 |
TCS |
IT Consulting
& Software |
5.21% |
|
8 |
HINDUNILVR |
Personal Products |
5.12% |
|
9 |
KOTAK BANK |
Banks |
5.17% |
|
10 |
L&T |
Construction & Engineering |
3.00% |
|
11 |
BHARTIARTL |
Telecom
Services |
2.98% |
|
12 |
AXISBANK |
Banks |
2.79% |
|
13 |
ASIAN PAINT |
Furniture, Furnishing, Paints |
2.25% |
|
14 |
SBIN |
Banks |
2.18% |
|
15 |
BAJFINANCE |
Finance
(including NBFCs) |
1.90% |
|
16 |
NESTLEIND |
Packaged Foods |
1.82% |
|
17 |
MARUTI |
Cars &
Utility Vehicles |
2.14% |
|
18 |
HCLTECH |
IT Consulting & Software |
1.54% |
|
19 |
SUN PHARMA |
Pharmaceuticals |
1.52% |
|
20 |
TITAN |
Other Apparels & Accessories |
1.28% |
|
21 |
POWERGRID |
Electric
Utilities |
1.12% |
|
22 |
ULTRACEMCO |
Cement & Cement Products |
1.12% |
|
23 |
TECHM |
IT Consulting
& Software |
1.02% |
|
24 |
NTPC |
Electric Utilities |
0.99% |
|
25 |
ONGC |
Exploration
& Production |
0.94% |
|
26 |
BAJAJ-AUTO |
2/3 Wheelers |
1.00% |
|
27 |
M&M |
Cars &
Utility Vehicles |
1.12% |
|
28 |
HEROMOTOCO |
2/3 Wheelers |
0.78% |
|
29 |
TATASTEEL |
Iron &
Steel |
0.68% |
|
30 |
INDUSINDBK |
Banks |
0.69% |
How is Sensex Fluctuation calculated?
Suppose the Sensex is currently at the level of 40000. For convenience we assume that there are only two registered companies in BSE, one of which is named "Kotak" and the other is named "Axis". Suppose one share of Kotak is worth Rs 400 and it has total outstanding shares of 10000 whereas one share of Axis is worth Rs 1000 and it has a total outstanding shares of 7500. BSE will have total market capitalization due to these two companies (Rs 400 x 10000) + (Rs 1000 x 7500) = Rs 115 lakhs.
Now suppose that the next day, Kotak Company's
share price rises 25% to 500, and Axis Company's share price decreased by 10%
to 900. Now the total market capitalization of BSE will be at these new share
prices: - (Rs 500 x 10000) + (Rs 900 x 7500) = Rs 117.5 lakh.
The market capitalization of BSE increases by
2.17% to 117.5 lakhs due to fluctuations in the prices of shares of both
companies. Due to this, the Sensex will reach 40868, which is 2.17% higher than
40000.
Similarly, if the share prices of both
companies decrease, the total market capitalization of BSE will also decrease.
In the BSE, this fluctuation happens every minute. If there is more buying of
shares of companies, then the Sensex goes up and if the selling is more, then
the Sensex comes down.
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