For those looking at equity allocation in their portfolio, trading in stocks is not the only option. Today, there is a larger basket of products which allows investors to have equity allocation.

Here are some of those options:

Direct stocks

One of the traditional options, this one is still popular among those who love dabbling with stocks. With the Indian stock market increasingly getting matured and attracting global investors, the amount needed for equity trading has steadily gone up. A minimum investment of Rs 50,000 is needed if one aspires to acquire any of the top performing blue chip stocks from the index. Also, an investor has added costs to take care of such as brokerage on trading, demat account charges, etc. If the churn in the portfolio is done very often, one will also have to take care of short term gains which continue to be taxed at 15 percent even after the budget.

We are also providing the facility for online equity trading. For details Contact us

If one can set aside a larger corpus for stocks, PMS (portfolio management service ) can be another option. The amount to be parked ranges from Rs 5 lakh to a couple of crores. For PMS details, Contact us.

Mutual funds

Mutual funds too have exposure to equity,but one needs to have a different approach unlike direct stocks. The biggest advantage is the exposure to a basket of stocks unlike direct investment where the individual's ability will be restricted to a few stocks. More importantly , the risk of buy and sell is outsourced to a professional team and hence one need not worry about profit-booking . In fact, the decision to sell should be based on individual needs or liquidity needs.

There are plenty of innovative products to choose from. Besides diversified and thematic funds, there are schemes which provide risk management through trigger options. The biggest advantage with an MF is that one can start with as low as Rs 500.

Futures and Options

Another popular product for equity investors has been the emergence of futures and options. Unlike stocks, these are traded in lots and allow investors to bet on the future price of a stock. The risk is much higher and so is the potential to earn returns. These can be used as a hedge to manage risk in cash segment with a contra deal. For instance, an investor can go long with a stock in the cash segment and hedge with a short selling in the F&O segment . But unlike cash segment , the contract needs to be terminated which is one of the reasons why a wrong call can result in huge financial losses.

Equity through insurance and pension plans

Insurance, thanks to unit linked plans, has become a vehicle for equity exposure for many. Unlike mutual funds, insurance companies are long term players in the stock market which also means investors too need to think long. Both insurance and pension plans come with exposure to equity and long term investors with an investment horizon of more than 10 years, can sign up for unit-linked plans.