Mutual Funds

Don’t just invest in Mutual Funds… Invest in customized Mutual Funds Plan!

How to choose correct Mutual Funds

I’ll be the odd one out here, where I’m asking not to invest in Mutual Funds.

Whereas, the entire country is abuzz with Mutual Funds growth story & one can see smart campaigns, on why they are the best?

To start with, I have this usual question, do you understand Mutual Funds?

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Mutual Funds Sahi Hai… but, how to select mutual Funds?

Are there different funds for different goals

Mutual Funds murmur is all over the town today, we can see Ads virtually all across, i.e. TV, Cinema halls, Bill boards, Print-media, and all this promoted thru various stake holders.

But the big question, like the most common Ad by AMFI, “Mutual Funds Sahi Hai”, is how to select funds?

There are more than 2000 primary mutual fund schemes in India, offered thru 43 Mutual Fund companies. Primary schemes will further have many variants, known as plans (for e.g. Dividend, Growth etc.). If all of them are taken into account, there would be more than 11k+ schemes. Data from Wikipedia.

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Direct Plan Vs Regular Plan in Mutual Funds Investment

should-you-go-for-mutual-fund-direct-plans

I am confused?
There is a big hoo-ha in the market & media now a days related to “direct plans”.
What is a direct plan? How does one benefit from a direct plan? And compared to regular plan, which is better?

Let’s first understand Mutual Fund charges.
Mutual fund (MF) investments come with an inbuilt fee structure or charges, which is certain percentage of the amount invested. This charge, which is usually between 1.75% to 2.5% for equity schemes annually, is debited on the total investment made or the AUM (Asset under management) every year. In simple terms, if one wants to invest 1lac in some equity MF scheme, where annual charges is 2.5%, Rs.2500/- will be debited by the AMC (Asset management company) towards

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Rebalancing of Portfolio

Portfolio Re-balancing is important?

“Re-balancing of Portfolio” is the term, which is widely used in the mutual funds industry, by the so called media-prophets & with most of the advisors with banks/ brokers/ CFP.

What does re-balancing means? And how does it applies to one’s portfolio?

As per Investopedia: Re-balancing is the process of buying and selling portions of your portfolio in order to set the weight of each asset class back to its original state. In addition, if an investor’s investment strategy or tolerance for risk has changed, he or she can use re-balancing to readjust the weightings of each security or asset class in the portfolio to fulfill a newly devised asset allocation.

In an ideal scenario on portfolio recommendation, which is based on tenure of goals & the risk tolerance score,

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Want to cut risk and tax without compromising on returns?

While equity mutual funds are expected to beat other class of funds in the long term, short-term volatility is unbearable for some investors. For them, balanced funds are a better option because their equity exposure is usually restricted to 65-75%, and the debt portion of 25- 35% lends stability to the fund. “Though the returns from balanced funds will be lower than that of equity funds in the long term, their volatility will also be lower. So, on a risk-adjusted basis, it should give better return on a 5-7 year holding period,” says Vikram Dalal, Managing Director, Synergee Capital Services.

Both equity and debt are expected to do well in the coming years, because the expected decline in interest rate will be good for both asset classes. “Balanced funds make immense sense in periods like this, when both equity and debt are expected to do well,” says Nikhil Kothari, Director and Chief Financial Planner, Etica Wealth Management.

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Why Mutual Funds are better option for beginners?

mutual funds better option for beginner

When considering investment opportunities, the first challenge that almost every investor faces is a plethora of options. From stocks, bonds, shares, money market securities, to the right combination of two or more of these, however, every option presents its own set of challenges and benefits.

So why should investors consider mutual funds over others to achieve their investment goals?

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