Simple Way To Earn Extra Money With SBI Long Term Equity Fund

To open an account in mutual funds only takes 20 minutes and it will take 5 seconds to earn extra income every year. One of the popular ELSS Funds offered by mutual funds provides you with the benefits of tax savings. SBI Long Term Equity Fund is one of the best tax-saving funds that will give you a chance to provide tax benefits. You can save up to 1.5 lakh in ELSS funds.

In this article, we will delve into the fund objective of this fund, and some pros and cons, can you invest in this fund using the SIP investing option? Understanding the role of the fund manager.

What are the Objectives of this Fund?

The SBI Long Term Equity Fund was introduced by SBI Mutual Fund on March 31st, 1993. As a diversified Equity Linked Saving Scheme (ELSS), it provides tax benefits to investors under Section 80C of the Income Tax Act, of 1961.

Managed by Dinesh Balachandran, the fund allocates a significant portion of its investments across sectors such as financial services, IT, automobile and auto components, capital goods, healthcare, and oil, gas & consumable fuels.

The scheme aims to generate investment returns by investing in a diverse portfolio of equity shares while simultaneously offering tax deductions. It also aims to distribute income periodically based on available surplus.

At least 80% of the fund’s assets are invested in equities, cumulative convertible preference shares, fully convertible debentures, and bonds. Additionally, it has the flexibility to allocate up to 20% of its assets in money market instruments.

To receive the tax benefits under Section 80C, the scheme requires investors to agree to a statutory lock-in period of three years.

Pros and Cons of SBI Long Term Equity Fund

Pros of SBI Long Term Equity Fund:

Tax Benefits: As an Equity Linked Saving Scheme (ELSS), the fund offers tax benefits under Section 80C of the Income Tax Act, allowing investors to avail deductions on their taxable income.

Long-term Growth Potential: The fund primarily invests in equities with a long-term horizon, offering potential for capital appreciation over time.

Diversification: SBI Long Term Equity Fund diversifies its investments across various sectors, reducing the risk associated with concentrated holdings.

Professional Management: Managed by experienced fund managers, the fund benefits from active monitoring and strategic portfolio adjustments to capitalize on market opportunities.

Regular Income Distribution: The fund aims to distribute income periodically based on available surplus, providing investors with regular income streams.

Cons of SBI Long Term Equity Fund:

Market Volatility: Being an equity-oriented fund, SBI Long Term Equity Fund is subject to market fluctuations, which may lead to short-term volatility in returns.

Lock-in Period: The fund has a statutory lock-in period of three years, restricting investors’ liquidity and flexibility to redeem their investments.

Performance Risks: Despite professional management, there is no guarantee of returns, and the fund’s performance may vary based on market conditions and fund management decisions.

Sector Concentration Risk: While diversification is employed, the fund’s significant exposure to certain sectors like financial services, IT, and automobiles may pose concentration risks if these sectors underperform.

Market Timing Risks: Investors may face risks related to market timing, as the fund’s performance is influenced by market movements and economic cycles.

Investors should carefully consider these pros and cons along with their own financial goals, risk tolerance, and investment horizon before investing in SBI Long Term Equity Fund or any other mutual fund scheme. Consulting with a financial advisor can also provide personalized guidance based on individual circumstances.

Can we invest in this fund via SIP?

Systematic Investment Plan (SIP) is an investment strategy that allows investors to regularly contribute a fixed amount of money into a mutual fund scheme at periodic intervals, typically monthly or quarterly. With SIP, investors commit to investing a predetermined sum regularly, regardless of market conditions.

Here’s how SIP works:

Regular Investments

Investors choose the amount they want to invest in the mutual fund scheme and the frequency at which they want to invest (e.g., monthly, or quarterly). This amount is automatically deducted from their bank account and invested in the chosen mutual fund scheme.

Rupee Cost Averaging

SIP helps in practicing rupee cost averaging. When market prices are high, the fixed investment amount buys fewer units, and when prices are low, it buys more units. Over time, this helps in averaging out the purchase cost of units and reduces the impact of market volatility.

Discipline and Convenience

SIP promotes discipline in investors’ investment habits by encouraging regular savings and investment. It eliminates the need for investors to time the market and allows for hassle-free investing through automated deductions from the bank account.

Flexible Investment Options

SIPs offer flexibility in terms of investment amount and frequency. Investors can increase or decrease the investment amount or stop the SIP anytime as per their financial goals and requirements.

Long-term Wealth Creation

SIPs are particularly suitable for long-term investment goals such as retirement planning, education funds, or wealth accumulation. By consistently investing over time, investors can benefit from the power of compounding and potentially achieve their financial objectives.

In summary, SIP is a convenient and disciplined way of investing in mutual funds, including schemes like the SBI Long Term Equity Fund. It provides investors with the opportunity to build wealth gradually over time while mitigating the impact of market fluctuations.

The Most Search Fund on Google in 2024

The one of the best fund that is searched on Google is SBI Energy Opportunity Fund a mutual fund scheme offered by SBI Mutual Fund that focuses on investing in companies within the energy sector. Its objective is to provide investors with long-term capital appreciation by investing in a diversified portfolio of energy-related stocks. Managed by experienced professionals, the fund aims to capitalize on growth opportunities within the energy industry. Investors should consider their investment goals and risk tolerance before investing in this fund. Consulting with a financial advisor is recommended for personalized guidance.

Sector Exposure: The SBI Energy Opportunity Fund provides access to the thriving energy sector.

Growth Focus: With a long-term outlook, the fund targets capital growth fueled by the global demand for energy.

Expert Management: Run by experienced professionals, the fund employs a research-driven strategy for potential returns optimization.

Understanding the Role of Fund Manager

Balachandran began on his career at Fidelity in Boston, USA, in 2001, where he assumed the role of an analyst. During his tenure, he focused on analyzing Structured Finance and the local US fixed-income market. His responsibilities involved evaluating various financial instruments and assessing market trends to inform investment decisions.

Balachandran holds a Bachelor of Technology (B.Tech) degree from the prestigious Indian Institute of Technology (IIT) in Mumbai, showcasing his strong academic foundation. Furthermore, he pursued higher education and obtained a Master of Science (M.S.) degree from the renowned Massachusetts Institute of Technology (MIT). His academic pursuits provided him with in-depth knowledge and expertise in finance and related fields.

In addition to his academic achievements, Balachandran is a Charter holder of the CFA Institute, USA. This certification reflects his commitment to professional excellence and adherence to high ethical standards in the field of finance.

Overall, Balachandran’s diverse educational background, coupled with his practical experience in financial analysis, positions him as a seasoned professional capable of making informed investment decisions and contributing to the success of investment firms.


Investing in mutual funds presents a simple yet effective way to earn extra income and achieve financial goals. Funds like the SBI Long Term Equity Fund and SBI Energy Opportunity Fund offer investors opportunities for long-term growth and exposure to thriving sectors such as energy. With the convenience of SIP investing, investors can commit to regular contributions, harnessing the power of compounding and mitigating market volatility.

Moreover, understanding the role of a fund manager, such as Balachandran, underscores the importance of expertise and experience in navigating complex financial markets. His background in analysis and academic qualifications exemplify the dedication to professional excellence required in the field.

In summary, by carefully considering the objectives, pros and cons, and investment options available in mutual funds, investors can make informed decisions aligned with their financial objectives. Consulting with a financial advisor can provide personalized guidance, ensuring a well-rounded investment strategy tailored to individual needs and preferences.

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