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Mutual Funds

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The category of Equity MFs with the highest inflows in the last one year is NOT Small Cap Funds. The money flown into Sectoral/Thematic funds (INR 70,072 crores) topped the charts and is even higher than individual categories of large, mid & small cap put together! New Fund Offerings (NFOs) have contributed significantly to this trend. A trend by the way which poses risks to the investors they are not even fully aware of. We…

‘Should I continue my SIP or stop?’, Owing to the recent market conditions, this is one question a lot of investors have asked and a question we have heard far too many times. But here’s a fact. The mutual fund industry in India added ~9.15 Lacs new SIPs every month of last FY (as per AMFI released data). The SIP contribution in India is increasing because investors are becoming more and more aware of the…

Since 2013, SEBI has been trying to police the way mutual funds are being presented to the investors, trying to make it increasingly transparent. At first, there were the color-coded risk-profilers that came along with the mutual funds. But in 2015, SEBI probably thought the investors were having to indulge in a lot of logical reasoning trying to match the colours with the risk profiles, and thus introduced the Riskometer. A standard Riskometer is a…

In the current scenario, when fixed deposits are providing paltry interest rates, many savers are desperately looking for alternative investment avenues that come with lower volatility, a reasonable degree of safety and higher post-tax returns. Due to its tax efficient structure, debt mutual funds are rapidly gaining prominence among Indian investors. Debt Mutual Funds vs Fixed Deposits Despite its huge potential, many investors are unaware or do not know how to choose a debt mutual…

In the past few months, on the back of rising crude oil and the depreciating currency, there has been a spurt in market interest rates which spooked many debt fund investors. The historical returns on investment done in the period of the last 18 months have been showing unimpressive returns leading to disappointments. The 10-year Govt. bond yield is up from 6.5% in early 2017 to 8.15% now in a very short span of time.…

For many investors, the easiest way to select a mutual fund scheme for investment is to look at its historical returns. Many investors and their advisers use past returns to extrapolate the future performance. Even popular star rating websites give much higher weight-age to past performance for mutual funds rankings. However, this strategy is fraught with danger due to its misleading interpretation. Historical returns should not be seen in isolation but in the context of…

Of late there have been queries from some of our clients regarding investment in some newly launched close ended mutual funds products. We squarely advised them not to invest money in these products. We thought of educating investors regarding close ended products, why they are launched and why they are recommended by many salespersons and mutual fund distributors. Close Ended Equity Schemes are those which are open for investments only for a limited period. Post…

Does Net Asset Value (NAV) of mutual funds matter? Many investors believe it does matter. Yesterday, we had a conversation with a prospective client and we recommended some schemes which we believed were suitable for his investment objectives. The next question he asked was “What is the NAV of the scheme?” This is not the first time a prospective client asked this question. And every-time someone asks this question, our answer is “We don’t know”.…