You would wonder why anyone would care for a primer on mutual funds when every investor in the country knows that 'Mutual Funds Sahi Hai'. True, a lot of investors have found the virtues of investing through mutual funds in the last few years. Most of them have been investing in mutual funds regularly, irrespective of the ups and downs in the market. However, the industry always attracts new investors who are not very sure about the basics of mutual funds. For the uninitiated, mutual funds are an investment vehicle you can use to invest in bonds, stocks (Indian as well as foreign), and commodities like gold. Mutual funds collect money from individuals, pool it together and invest the money on behalf of them in specified instruments. As said earlier, the investments can be in a specified instrument. For example, an equity scheme would invest in stocks. A debt fund would invest in bonds, a gold fund in gold. There are also hybrid funds that can invest in a combination of equity and … [Read more...] about What is a mutual fund?
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I am 33. I started monthly SIPs of Rs 60,000 in April 2019. My target was to build a corpus of Rs 25 lakh by end of February 2022. My debt allocation of Rs 40,000 comprises two short term funds and one low duration fund whereas the equity allocation of Rs 20,000 comprises one multi-cap and two large cap funds. After 13 months of investing, the NAV of my portfolio is -13%. Should I increase the SIP amount or invest in different category of mutual funds other than the above or change the overall allocation?Raj Khosla Founder and Managing Director, MyMoneyMantra.com replies: Currently we are witnessing an extraordinary market situation globally. Your fund allocation is well diversified. However, the goal of Rs 25 lakh by February 2022 is too ambitious. You must continue SIPs in the same funds for at least 5 years. It will help you reap benefits by averaging cost. A time horizon of 3 years is too short for yielding the best returns out of equity market investments. Either start a bank … [Read more...] about My mutual funds portfolio is delivering negative returns. What should I do?
An individual mutual fund distributor receiving commission from the asset manager for selling its schemes will not be able to be an investment advisor. This, along with a few other decisions, were taken in the board meeting of the Securities and Exchange Board of India on Monday, which was chaired by Ajay Tyagi — whose three-year term as the head of the capital markets regulator comes to an end next month. The government is currently in the process of shortlisting a candidate for the top position at Sebi. The Sebi board cleared norms for investment advisers, proposing separation of advisory and distribution activities at the client level to address a conflict of interest issue. Until now, investment advisors would provide advisory services as well as distribute financial products to the same client. The regulator said the new norms will also bring clarity in payment of fees and introduction of an upper limit on the fees charged to investors. Sebi, in a discussion paper, had … [Read more...] about Individual mutual fund distributor can’t be an investment advisor: Sebi
Mumbai: Please don’t break the SIP habit if you can: That’s the clear message from the mutual fund industry that’s now allowing savers to hit the pause button, but is urging them to do so only in case of job loss or a substantial fall in the income. Many savers are faced with salary cuts and loss of income with uncertainty on when things will get back to normal. Such investors who want a break from their SIPs due to income shrinkage could pause their systematic investment plans (SIPs) for some time. This facility can be used once in the lifetime of an SIP and is now offered by all fund houses. Investors who have an SIP registered through the physical mode can log into the fund house website, and request the fund house to pause their SIP for 3-6 months. They can also send an email to the fund house from their registered email ID, mentioning their folio number along with the start and end dates. “Only people with issues of cash flows should opt for the pause … [Read more...] about Don’t stop your mutual fund SIPs, advise financial planners
Sebi last week allowed mutual funds to list units of wound-up schemes on exchanges. Will this provide an exit route to investors stuck in shuttered schemes in future? Imagine, a Franklin Templeton like episode in future. Will investors in those schemes be able to sell their investments on exchanges and get their money back? Well, the answer is a bit complicated. First, let us look at the Sebi's permission that many interpreted was to help investors in the six debt schemes of Franklin Templeton Mutual Fund. The house shut six debt schemes, citing the poor liquidity situation in the bond market due to the Covid-19 pandemic. According to the new Sebi rule, the units of the schemes that are in the process of being wound up can be listed on stock exchanges. However, trading on stock exchange will not be mandatory. The investors are free to opt for the AMC to complete the liquidation and refund process. “There are certain roadblocks for retail mutual fund investors in the trading … [Read more...] about Will you be able to sell units of shuttered mutual fund schemes on exchanges easily?