Frequently asked Questions about Mutual Funds

What is KYC Process?

KYC is an acronym for "Know Your Customer" and is a term used for Customer Identification Process as a part of Account Opening process with any financial entity. KYC establishes an investor’s identity & address through relevant supporting documents such as prescribed photo id (e.g., PAN card, Aadhar card) and address proof and In-Person Verification (IPV). Read more

Do Mutual Funds invest only in stocks?

Do you visualize roller-coasters or toy trains first when you think of an amusement park? Probably the former. These rides are usually the biggest attractions in such parks which create a certain perception about amusement parks. ‘Mutual funds’ too carry a similar perception that they invest only in stocks and hence are risky. Read more

How do Mutual Funds help manage risk?

Risks appear in many forms. For example, if you own a share of a company, there is a Price Risk or a Market Risk or a Company Specific Risk. The share of just that company may dip or even crash due to any of the above reasons or even a combination of these reasons. Read more

Are Mutual Funds offered by Banks?

Banks are in the business of savings and loans while Mutual Funds are for investments. When you put your money in a savings account or in a fixed deposit, you are making savings whereas when you put your money in Mutual Funds, you are making investments. Banking and Mutual Funds are two completely different businesses, requiring specific domain and organizational expertise. Read more

What is the co-relation between risk and return?

In Mutual Funds, one often hears, ‘more the risk, more the return’. Is there truth in this? If ‘risk’ is measured as either, probability of loss of capital or as swings and fluctuations in investment value, then asset classes like equity are undoubtedly the riskiest, and money in a savings bank account or in a government bond is of course least risky. Read more

Are Debt Funds risk-free?

It’s a misconception that Debts Fund have no risk just because they don’t invest in equities. It’s true that Debt Funds are less risky compared to Equity Funds but that doesn’t mean Debt Funds guarantee that your money will never face any loss. Read more

How to choose a fund basis your risk appetite

Mutual Funds are market-linked products that carry various kinds of risks and their returns are not guaranteed. Choosing the right mutual fund involves not only looking at its investment objective, return potential but also an evaluation of its riskiness. Since every investor has a unique personality including risk preference, the choice of mutual funds will be unique to each investor. Read more

Are all Mutual Funds risky?

Every investment we make involves a risk, only its nature and degree varies. The same applies to Mutual Funds too. All Mutual Fund schemes do not carry the same risk when it comes to returns on investment. Read more

What is Systematic Risk?

Systematic risk is the risk that impacts the whole market or a big part of it. It's also known as market risk,. It is known as market risk. It is the risk inherent to the entire market, attributable to a mix of factors including economic, socio-political, and market-related events. Read more

Are fund managers necessary?

The answer is a huge, resounding YES! It is important to note that experience in managing money/making investments plays a vital role in generating good performance. The more the experience, the better is the probability of making profitable investment decisions. Read more

What are the benefits of investing in Mutual Funds?

Many of us dread the thought of managing our own investments. With a professional fund management company, people are put in charge of various functions based on their education, experience and skills. As an investor, you can either manage your finances yourself, or hire a professional firm. You opt for the latter when: Read more

What is a Mutual Fund?

To many people, Mutual Funds can seem complicated or intimidating. We are going to try and simplify it for you at its very basic level. Essentially, the money pooled in by a large number of people (or investors) is what makes up a Mutual Fund. This fund is managed by a professional fund manager. Read more

How will I evaluate my risk profile?

Every individual investor is unique. Not only with regards to investment objectives but even in approach and view of risk. This is what makes Risk Profiling absolutely crucial before investing. A Risk Profiler is essentially a questionnaire that seeks an investor’s answers to questions about both “ability” and “willingness”. Read more

Who keeps a record of my investments?

All Mutual Funds in India are regulated by the Securities and Exchange Board of India (SEBI). Mutual Fund regulations clearly define the roles and responsibilities of Asset Management Companies (AMC) and Custodians. Read more

How 2 years delay in SIP can cost you dearly

Stock market investing can be intimidating, especially if you are a beginner. However, there's a tried and tested investment strategy that not only makes investing in the stock market simple and easy but can also help you build long-term wealth: SIPs or Systematic Investment Plans.  Read more

What kind of returns should one expect from Mutual Funds?

Imagine asking: At what speed do vehicles run? Can you generalize the answer for the whole category? Different vehicles run at different speeds – even within one category, e.g. cars, while a car made for city roads may run at a certain maximum speed, the one made for racing can run much faster. Read more

How much of my investment can I withdraw?

Majority of Mutual Fund schemes are open end schemes, which allow an investor to redeem the entire invested amount without any time restrictions. Only under few instances  schemes impose a restriction on redemption, under extraordinary circumstances, as decided by the Board of Trustees. Read more

How often can I remove my money?

An investor has no restriction on redeeming money from an open ended scheme. While there may be an exit load in certain cases, which impacts final amount realised, all open end schemes offer liquidity as a great benefit. Read more

Does long term Investment mean less risk?

Investments in Mutual Funds require the appropriate time horizon. Having the right time horizon, not only provides a better chance of getting expected, investment returns, but also lowers the risk in the investment. Read more

How soon can I withdraw my money from Mutual Funds?

Mutual Funds are one of the most liquid assets, i.e. it is one of the easiest to convert into cash. In order to redeem funds through offline mode, the unit holder needs to submit a signed Redemption Request form to the AMC's or the Registrar’s designated office. The form requires details like unit holder’s name, folio number, scheme name, and number of units to redeem. Read more

What are loads?

On a long-distance road journey, sometimes a toll is charged when you enter the road or the bridge, and sometimes when you exit. In many cases, the toll bridge company is allowed to charge the toll only for a certain number of years to recover the building costs. After that period is over, the company is not allowed to charge the passengers any toll. Read more

What is Mutual Fund Dividend?

A Dividend is a distribution of earnings from a stock or a Mutual Funds . In Mutual Fund schemes, dividends are distributed when the fund has booked profits on the sale of securities in its portfolio. Read more

Is there an advantage in investing in funds with an exit load?

Let’s consider a Balanced Fund, which aims to provide growth and capital appreciation from the equity portion, and income and stability from the debt portion. This scheme still carries considerable risk, as the portion of equity could be as high as 60%. This is recommended only for investors with a healthy risk appetite and long term time horizon. Read more

How do I choose a Mutual Fund?

Imagine asking a travel agent, “How should I choose my mode of transport?” The first thing he/she will say is, “Depends on where you want to go.” If I were to travel to a distance of 5 kms, an auto rickshaw might be the best option, while for a journey from New Delhi to Kochi, a flight might be the best. Read more

What is Net Asset value (NAV)?

The performance of a particular scheme of a Mutual Fund is denoted by Net Asset Value (NAV). In simple words, NAV is the market value of the securities held by the scheme. Mutual Funds invest the money collected from investors in securities markets. Read more

How to Invest in Mutual Funds?

Investing in mutual funds is already convenient at your fingertips. They are easy to invest in instruments, they are flexible, and investors can even start with as little as Rs. 500 through the systematic investment plan method. Read more

Five reasons to start investing at an early age

People often wait until later in life to start investing, even though it is the most effective way to safeguard their financial future. It is more common for first-time jobbers to upgrade their lifestyle than to plan for their future. In other words, they don't start investing until later in life. Read more

Why you should start investing at a young age?

Two friends, Lata and Neha , started investing in mutual funds at different ages. When Lata was aged 25, she began investing Rs 5,000 each month, and  Neha did the same when she was aged 35. Assuming an average annual return of 12%, here’s what their investment portfolios would look like at age 60: Read more

Can Mutual Funds help create wealth?

Business and commerce allows us to create wealth by investing our money with those who are on the path to creating wealth. We can be investors in businesses of entrepreneurs, by investing in stocks of various companies. As the entrepreneurs and the managers run their businesses efficiently and profitably, the shareholders get the benefits. Read more

What is inflation?

Simply put, inflation is the rise in prices over time, relative to the money available. In relatable terms, a certain amount of money buys you much less today, than it did years ago. Read more

Investing in Mutual Funds for short-term goals

Mutual funds are commonly viewed as tools to build long term wealth, but there are types of mutual funds which are suited for short term goals also. Mutual funds for short-term goals are investment instruments designed to cater to financial objectives with a relatively brief time horizon. Read more

What are Mid Cap Funds?

Market capitalisation is the average of full market capitalisation of the stock on all recognised stock exchanges where it’s listed, or the full market capitalisation of the stock on the single exchange where it’s listed. Fund managers invest in companies as per the fund’s investment objective and investors know what they are investing in. Read more

How can one track a Mutual Fund performance?

In this digital and information age, it has become relatively easy to keep track of investment and portfolio performance. While financial experts like mutual fund distributors or investment advisors are irreplaceable partners in your financial journey, it is best for investors to have a little knowledge about their own investments. Read more

Mutual Funds vs Shares: What’s the difference?

From where do you get the vegetables for dinner? Do you grow them in your backyard, or purchase it from the nearest mandi/supermarket depending on what you need? Growing your own veggies is a great way of eating healthy food, but effort is spent on seed selection, manuring, watering, pest control, etc. Read more

Aren’t safe investments enough to meet financial goals?

One must keep in mind that the regular expenses as well as the cost for various financial goals rise over a period. If the inflation is at 6% per year, the cost of a goal doubles over approximately 12 years. However, if the inflation is at 7%, the doubling happens roughly in ten years. Read more

A plan for every goal

Yes, Mutual Funds are ideal to help you plan your life goals! ·   Mr. Rajput eventually wants to move away from the city, into a farmhouse on a hill station when he plans to retire after 15-20 years. Read more

Choose the right SIP amount to reach your goal

SIP (Systematic Investment Plan) is a disciplined manner of investing in mutual funds. In this plan, an investor can invest a fixed amount in mutual fund schemes (of their own choice) at a fixed interval (daily, weekly, monthly, or quarterly). Read more

Can minors invest in Mutual Funds?

Anyone under the age of 18 (minor) can invest in Mutual Funds, with the help of parents/legal guardians until the age of 18. The minor must be the sole account holder represented by the parent/guardian. Read more

Is there some external help I can get to plan my financial goals?

“My son is in the 9th grade. I am not sure what his interests are or what stream in education he should pursue. Should he go for Science, Commerce or Arts? Can someone help?” Many parents have such concerns. That is where one may approach an education, or a career, counselor, who has evaluated various options available for youngsters. Read more

How is ULIP different from Mutual Fund?

A ULIP is Unit-Linked Insurance Plan. It is a life insurance policy with an investment component that is invested in various financial markets. The returns generated by the investment component determine the value of the policy. However, the sum assured on the death of the policy holder may not be a function of the market – the minimum sum assured may remain unaffected. Read more

How do I fulfill my financial goals?

To begin with, it is important to select the right scheme for your investment need. Look at it this way. How do you decide what mode of transport you should take when you travel? Whether you want to walk it up, take an auto rickshaw, a train or a flight, it all depends on your destination, on your budget and travel time available. Read more

Do Mutual Funds issue a passbook?

While banks and certain small savings schemes issue a passbook, Mutual Funds do not issue a passbook, they issue an Account Statement instead. The main purpose of a passbook is to keep track of all transactions with a bank: deposit, withdrawals, credit of interest etc. Read more

Is it possible to change SIP amount every month?

SIP in Mutual Fund is like running a marathon. Marathon runners practice throughout the year but keep stepping-up their targets every year starting from dream run, moving to half marathon and finally a full marathon. The same goes with SIPs. Read more

Can I start with ₹ 500, and keep adding?

The popular investment concept for creating wealth is ‘Start Early. Invest Regularly. Stay invested for Long Term’. Even if the investment is as low as ₹ 500, it is important as it marks the beginning of a journey. Read more

How to start investing in Mutual Fund schemes?

Investing in Mutual Funds has now become so easy and simple that one can think of investing in any number of funds without much additional documentation. First-time Mutual Fund investors need to complete their KYC which is a one-time process. Read more

What is Systematic Investment Plan (SIP)?

Systematic Investment Plan (SIP) is an investment route offered by Mutual Funds wherein one can invest a fixed amount in a Mutual Fund scheme at regular intervals– say once a month or once a quarter, instead of making a lump-sum in Read more

Have Mutual Funds been around for a long time?

Collective and pooled investments have existed in various traditional formats across the world for some time. Mutual Funds as we know it came into existence in 1924, with the creation of Massachusetts Investors Trust. The Mutual Fund industry growth was accompanied by three broad trends: Read more

What are the best Mutual Fund schemes for a five-year period?

Let us understand what could be a proper answer to the above question. Through numerous interactions with investors, we feel that in most cases the hidden, oft-unexpressed need is to find out the scheme that would deliver outstanding returns over the period that the investor plans to invest. Read more

What are Liquid Funds?

On watching the video on the left, you will notice that in all the situations, the money is lying idle for a short period of time. In certain cases, the exact time when the money needs to be taken out may not be known. What does the investor do? Where should the money be parked? One must consider a few things here: Read more

What are Debt Funds?

A debt fund is a Mutual Fund scheme that invests in fixed income instruments, such as Corporate and Government Bonds, corporate debt securities, and money market instruments etc. that offer capital appreciation. Debt funds are also referred to as Fixed Income Funds or Bond Funds. Read more

What is a Hybrid Fund?

Our choice of meals when we dine depend largely on the time at hand, the occasion and of course, our mood. If we’re in a hurry, say during an office lunch or eating before boarding a bus/train, we may opt for a combo meal. Or if we know a combo meal is famous, we may not bother to go through the menu. A leisurely meal would mean ordering individual items from the menu, as many as we’d like. Read more

What are interest rates in Mutual Funds?

There’s no free lunch in this world. We pay for every product or service we consume, either directly or indirectly. For instance, you pay a parking fee for the time you use the parking space. When you send a courier, you pay for the weight of the courier and the distance it needs to travel to reach the recipient. Read more

The advantages of Gold ETFs and Gold Funds

Gold ETFs invest in 99.5% purity gold bullion that is as good as investing in the physical metal. If you are looking to accumulate gold for the long-term, investing in Gold ETFs is a wiser option than holding it in physical form or investing in a gold fund.  Read more

How are Index Funds different from other Mutual Funds?

Mutual Funds and Index Funds provide diversification by investing across many stocks. While mutual funds have the flexibility to choose stocks in order to generate returns in line with their stated investment objective, Index Funds track a specific index. Hence Index Funds invest in the same stocks that are included in the index. Read more

How to plan for your Retirement with Mutual Funds?

Most people don’t think about their retirement until they are close to retirement. The entire working life is spent attending to one requirement after another right from owning a vehicle, a home, raising a family, on kids' education to their weddings. Once these responsibilities have been taken care of, we start looking at how much is left for the retired life that’s around the corner. Read more

How to invest in Direct Plans

Mutual Funds may sound easy to some while others may find it complicated to understand. New investors may not understand completely how a Mutual Funds works and what kind of risks does it face. Read more

What is Lock-in Period in Mutual Funds?

There are a few type of mutual funds that impose a ‘lock-in period’ on your investment. These include equity-linked savings schemes (ELSS), Fixed Maturity Plans (FMP) in debt funds and closed ended mutual funds. A lock-in period refers to the minimum duration for which investors must hold their investment. Read more

Why should one invest in Mutual Funds?

One should never invest in Mutual Funds, but should invest through them. To elaborate, we invest in various investment avenues based on our requirements, e.g. for capital growth - we invest in equity shares, for safety of capital and regular income - we buy fixed income products. Read more

What is dividend distribution tax?

Dividends are paid from the profit made by Mutual Fund schemes purely out of investment activities pertaining to the scheme’s portfolio and are at the discretion of the trustee. If the scheme makes a loss in a falling market, the trustees may decide to forgo dividend payout announcement. Read more

How should one compare the performance of any two schemes

When you want to buy a car, how do you shortlist the models? Do you first pick up the latest models or decide the type of car? If you are still unsure, you visit a dealer and the first question you are asked is what type of car are you looking for e.g SUV, hatchback, sedan?  Read more

What is CAS? (Consolidated Account Statement)

Just like a school report card shows the score of a child in various exams held during the academic year across different subjects that are taught by different teachers, a Consolidated Account Statement(CAS) is a physical statement that captures all financial transactions done by an investor across different Mutual Funds d Read more

Which Fund should a new Investor invest in?

Many people are interested in investing in Mutual Funds for their potential to generate better return than most other asset classes over the long-term, but they just don’t know where to begin. Since Mutual Funds are risky, most prospects are skeptical of putting in their hard-earned savings into it. Read more

What are Unregulated Deposit Schemes?

There have been many instances wherein gullible investors have been lured into investment schemes that promise higher returns than what is available in the market without much downside risk. Such unregulated investment schemes are called Ponzi schemes and have very high risks. Read more

What are Sectoral Mutual Funds?

Sectoral funds are Equity Mutual Funds that focus on businesses operating within a specific industry, like technology, healthcare, energy, or financial services or any other sectors. They invest at least 80% of the funds in stocks from that sector, offering potential returns when the sector performs well. However, this investment approach comes with higher risk due to sector concentration. Read more

Cost of Delay in Investments

Suppose you have a malfunctioning air conditioner (AC) during the winter season. You assume that you won't require it at the moment and put off repairing it. But when summer arrives and the heat becomes unbearable, you must repair the AC. Unfortunately, it is the peak demand time, and finding a repair technician becomes challenging. Read more

How are Mutual Funds different from Portfolio Management Schemes?

While both Mutual funds and Portfolio Management Services (PMS) allow investors to invest in stocks and bonds by investing their money in a pooled investment vehicle that is managed by professional fund managers, they both are two different investment options serving different objectives and are meant for two different kinds of investors. Read more

Different types of risk in Equity Funds

Market risk is the primary risk affecting equity funds. Market risk is the risk of loss in value of securities due to a variety of reasons that affect the entire stock market. Hence market risk is also referred to as systematic risk i.e the risk that cannot be diversified away. Read more

Why is financial independence important for women?

Enough has been written and spoken about financial independence especially with reference to women in the last two decades. But what does financial independence for women mean? It is subjective and can mean different things to different women. For a working woman, it may mean being able to make her own financial decisions or being able to sustain herself financially. Read more

What are Small Cap Mutual Funds?

Small-Cap Funds are Mutual Fund schemes that invest at least 65% of their total assets in equity and equity-related securities of small-cap companies. Small cap companies are generally with a market capitalization of under Rs 100 crore, falling outside the top 250 companies by market capitalization, although their definition may vary among market intermediaries. Read more

What are Dynamic Bond Funds?

Dynamic Bond Funds belong to the category of debt funds known for their flexibility in managing investment durations. Their primary objective is to leverage shifts in interest rates within the economy as opportunities to enhance returns. Fund Managers achieve this by deftly adjusting the duration of bonds in the fund's portfolio, responding to prevailing interest rate trends. Read more

What are Index Funds?

Index Funds are passive mutual funds that mimic popular market indices. The Fund Manager doesn’t play an active role in selecting industries and stocks to build the fund’s portfolio but simply invests in all the stocks that make up the index to be followed. The weightage of the stocks in the fund closely matches the weightage of each of the stock in the index. Read more

What’s the right age to start financial planning for retirement?

The best time to start planning and investing for your retirement is to start today whatever may be your current age and financial position in life. The sooner you start investing for a goal, the more time your money gets to compound itself. Suppose, you are 30-year-old today and start a monthly SIP of INR 2000 for next 30 years. Your money gets a long time to compound and grow. Read more

How to Redeem Mutual Funds?

In the world of investment, flexibility is key, and there come moments when an investor needs to transform their mutual fund holdings into cash. The investor may choose to sell their Mutual Fund holdings, due to personal financial urgencies or the investor achieving the goal they had been investing for, tax credit, retirement etc... Read more

What is a Money Market Fund?

Money market funds are one kind of mutual fund that primarily invests in money market instruments that mature within one year. Money market means the financial market that deals with very short-term fixed-income instruments. Read more

What should investors consider while switching from Dividend to Growth option?

Imagine you’ve booked an 8 am flight from Bengaluru to Chennai on FlyIndia Airlines. You realise that the wrong flight was booked and needs rescheduling. What kind of charges do you think FlyIndia will charge you? You will have to pay a penalty for changing your mind even though it is the same airline, same date of travel, same destination and the same passenger! Read more

If Mutual Funds diversify risk then why are they considered risky?

Mutual Funds invest in securities, be it equity or debt, whose values fluctuate along with market movement. This makes them risky because NAV of the fund depends on the individual security values held in the fund’s portfolio. But since mutual funds invest in securities across different sectors, they diversify this market risk. Read more

How to deal with rumours while investing?

How often have you come across people you know who have lost money in the stock market because they couldn’t guess where the market would go next moment or who made money because they knew where the market was headed next? Read more

SIP Vs STP - Know the Difference

Systematic Transfer Plan (STPs) or Systematic Investment Plans (SIPs) are similar in the sense that they help to make regular investments at a fixed frequency. However, they are different in the way they function. We can understand both individually and the difference between SIP and STP. Read more

Why was KYC introduced in financial markets?

One of the main reasons for KYC to be introduced in financial markets was to limit/prevent cases of fraud, tax evasion and money laundering. In order to do that, the source and destination in case of any financial transaction must be found out. Read more

What impacts the performance of Debt Funds?

Debt Funds invest our money in interest-bearing securities like bonds and money market instruments that promise to pay regular interest. These interest payments are received by the fund which in turn contributes to the total return we, as investors of the fund, earn. Read more

What are Overnight Funds?

Overnight funds are considered the safest of all mutual funds. If you are new to Mutual Funds and want to try them out before going the whole hog, then overnight funds are for you.  Read more

What’s the easiest way to get started with Mutual Fund investments?

Just like opening a bank account requires some paperwork in the beginning and then you can use all its services in a hassle-free manner, investing in Mutual Funds also offers a similar experience. The basic requirement for starting your Mutual Fund journey is to complete your KYC by submitting the necessary documents for verification. Read more

What Is the Difference Between SIP and Mutual Fund?

Breakdown: Mutual Fund and SIPs A Mutual Fund is a financial product, while a SIP is a way to invest in Mutual Funds. When you choose the SIP method, you're still investing in a Mutual Fund scheme. Let's explore how investing in Mutual Funds and SIPs can help you secure your financial future What is a Mutual Fund? Read more

What is the Total Return Index (TRI) in a Mutual Fund?

The Total Return Index, (TRI), plays a crucial role in evaluating equity indexes.  Total Return variant of an Index (TRI) takes into account all dividends/ interest payments that are generated from the basket of constituents that make up the index in addition to the capital gains. Hence, TRI is more appropriate as a benchmark to compare the performance of mutual fund schemes. Read more

Understand Risk in Debt Mutual Funds

You’ve lent 5 lakhs to your friend who owns a start-up @8% interest (higher than current bank rate of 7%). Even though you’ve known him for years, you still run the risk that he may not return your money on time or may fail to pay back. Also, the bank rate may rise to 8.5% while you are stuck with 8%. Read more

How Safe are Overnight Funds?

If you are looking for a Mutual Fund that has no risk of loss, there aren’t any! All mutual funds are subject to some risk factor or the other. While Equity Mutual Funds are subject to market risk, debt funds are subject to interest rate risk and default risk. Read more

Here's What You Need To Know About ESG Funds

ESG stands for Environmental, Social, and Governance. The bulk of this fund's portfolio consists of shares and bonds from companies assessed for their environmental, social, and governance practices. By opting for such investments, you actively promote sustainable growth and responsible business conduct. Breaking down ESG  Read more

What Are the Benefits of SIP?

An SIP (systematic investment plan) allows investors to invest a fixed amount at  regular intervals into a mutual fund. Primarily, SIPs or Systematic Investment plans are simply investing small amounts regularly. The major benefits of an SIP are: Read more

Why should one invest in Fixed Income Mutual Funds?

A Fixed-Income Mutual Fund, (a form of mutual fund) channels investments into fixed-income assets such as corporate bonds, government bonds, money market instruments and other debt securities as per the asset allocation of the Fund and SEBI permissible guidelines and limits.  They aim to earn returns through interest and capital growth. Read more

Is it safe to invest in Mutual Funds Online?

Remember the first time you boarded a flight? Did you have butterflies in your stomach or a queasy feeling? Finally, when the flight was air-borne, didn’t you feel reassured? Flying at 30,000 ft, seat belt fastened and a warm cabin crew along with an able pilot to take care of you. Read more

What costs does one incur while redeeming Mutual Fund units?

Open-ended Mutual Funds allow investors to redeem their units after certain period at no cost. If an investor wishes to redeem his/her units before this stipulated period, an exit load is levied. Mutual Funds charge exit load if investors sell their investments before having completed a specified time in the fund. Read more

What is the difference between Growth and Dividend options?

Some investors get into Mutual Funds because they want to create wealth over the long term. They start investing from the early part of their careers. Then there are investors approaching retirement or have a retirement corpus to invest that can supplement their other sources of income during the retired phase of life. Read more

Here’s what you need to know about Ultra-Short Duration Funds

Ultra-Short Duration Funds invest in short-term debt securities with a Macaulay's duration  between 3 to 6 months. They may offer slightly higher returns than liquid funds with a low-risk approach  , subject to market risks. Their main goal is to generate returns over a short time frame and minimize the risk of capital losses due to interest rate changes. Read more

What is New Fund Offer (NFO) in Mutual Funds?

In the world of mutual funds, you might often come across the term NFO, which stands for New Fund Offer. Think of it as something similar to a company launching a new product in the market. In this case, the "product" is a mutual fund scheme, and an NFO represents the Offer of units of a new scheme.    Read more

Should I invest in an ETF?

ETFs are a low cost means to gain exposure to the stock market. They offer liquidity and real time settlement as they are listed on an exchange and trade like stocks. ETFs are a low risk option as they replicate a stock index, offering diversification as opposed to investing in few stocks of your choice. Read more

Should High or Low NAV of a scheme impact your Investment Decision?

When you order a ‘Large’ pizza over a ‘Regular’ one, do you find any difference in the taste of the two? Obviously not! Both are prepared using the same recipe and process. They just differ in their size and price. You get the same taste of a Farmhouse Pizza irrespective of the size you order from the menu. Read more

Why should you invest in an ETF?

If you are looking to invest in stocks but don’t have the time and research capabilities to choose the appropriate stocks for your portfolio, ETFs are a great saviour! ETFs help you participate in the stock market with much more ease than investing in individual stocks without compromising liquidity. Read more

Is there a dashboard for Mutual Fund performance?

When we think of investments, it’s natural to ask how much return we will earn. While the answer is straightforward for fixed deposits, and other traditional saving schemes, it is not so for mutual funds. Conventional savings products offer a guaranteed rate of return that we are familiar with. Hence choosing any of these products to put our savings is an easier decision. Read more

What is Rupee Cost Averaging?

When you drive around the city, sometimes you find an empty stretch and speed up to 80kmph while at other times you have to slow down to 20kmph due to traffic or a speed breaker. Finally, you end up clocking an average speed of say 45kmph or 55kmph depending on how often you had to slow down or speed up. Read more

Who Should Invest in Index Funds?

Index funds are a type of mutual funds designed to track the performance of a specific stock market indices (such as BSE Sensex, Nifty 50, Nifty Midcap Index etc.) These funds aim to replicate the investment returns of particular benchmark indices by holding a securities portfolio that closely mirrors the index's composition. But who should invest in index funds?  Read more

What are the benefits of ETFs?

Exchange Traded Funds(ETFs) offer several advantages over regular mutual funds. They’re a great investment vehicle for first time equity investors who are worried about losing money in mutual funds. Here’s why? Read more

Should you invest in Direct Plan of a Mutual Fund?

From thousands of Mutual Fund schemes available in the market, how does one choose 4-5 most appropriate funds for his/her portfolio? If you are new to Mutual Funds, investing with the help of a financial expert/mutual fund distributor through a Regular Plan is advisable instead of a Direct Plan, since you ne Read more

Who should invest in an ETF?

ETFs are low cost means to gain exposure to the stock market. They offer liquidity and real time settlement as they are listed on an exchange and trade, much like stocks. ETFs replicate a stock index, offering diversification as opposed to investing in few stocks of your choice.  Read more

Goal-based investing: SIP investments for each of your goals

We all have different goals in life. Sometimes they present themselves immediately, sometimes over a period of time. For example, when one starts working, they may not have too much on their mind except regular monthly expenses and some impulsive buys. But eventually, goals arise—a bike or car, weekend get-aways, international trips, marriage, so on and so forth. Read more

Won’t I need a large amount to invest in Mutual Funds?

People think that Mutual Funds are elite investments made only for the wealthy. The fact is: one does not need large sum to invest in Mutual Funds, you can start with a sum as low as ₹ 500, or 5000 depending on the kind of fund you choose. Why keep the minimum amounts as low as these? Read more

How to choose an ETF?

Just like other investments, choosing an ETF depends on your required asset allocation, financial goal, risk preference and time horizon. Read more

What is a Factsheet?

A factsheet is the most reliable guide an investor can access to get detailed information on a scheme at one go. Have you seen what a monthly report card of a student looks like? Read more

What are Arbitrage Funds?

Arbitrage Funds are Hybrid Mutual Funds that seek to exploit arbitrage opportunities for the same underlying asset in different capital markets. Arbitrage refers to taking advantage of price differentials of the same asset, such as in the spot and futures markets.  Read more

What is Absolute Return?

Have you heard people talking about their real estate investments, “I bought that house for 30 lakhs in 2004. It’s worth 1.2 cr today! It has grown 4 times in 15 years.” This is an example of an absolute return.  When you compare the final value of an investment with the price at which you invested in it, the growth experienced over time is a measure of absolute return.   Read more

Who should invest in (ELSS) Tax Saving Mutual Funds?

Tax Saving Mutual Funds or Equity Linked Savings Schemes are diversified equity funds that provide tax deduction benefits under Section 80C of the Income Tax Act. Hence, ELSS funds are suitable for any taxpayer who is willing to take the risk of an equity-oriented tax savings instrument. Read more

What are Thematic Funds? How do they work?

Say you care deeply about the environment, and investing in a company that disregards eco-conscious practices simply doesn't align with your values. So, now you're seeking a solution that not only aligns with your moral values but also offers an opportunity to earn potential returns. Read more

What is CAGR or Annualised Return?

Compounded Annual Growth Rate(CAGR) is a widely used return metric because it truly captures the year-on-year return earned by an investment, unlike absolute return that captures the point-to-point return from an investment without considering the time taken to earn it.  Read more

Portfolio Diversification & Its Benefits

"Never put all your eggs in one basket".  Achieving a balance between risk and return is crucial when making investment decisions. Diversification is a key strategy for achieving this balance, as it allows you to spread your investments across different asset classes and sectors, reducing your exposure to any one particular risk.  Read more

Know more about long-term Mutual Fund Strategy

Long-term investment involves holding assets for an extended period, typically for years or decades. This approach is advantageous as it effectively utilises compounding for substantial returns, allows investors to ride out market volatility, and provides stability against short-term fluctuations. Read more

What are the limitations of an ETF?

ETFs are passive investment tools that track an underlying index and trade on exchanges just like shares. But ETFs need to be bought and sold from the exchange through a broker. You need to have a demat account to trade in ETFs and need to pay commission to the broker for every transaction. Read more

How to find the track record of a Mutual Fund?

Gone are the days when people took important steps in their life without much prior information be it buying a car or marrying someone. But today, information is available at our fingertips. Even small things like what to order for the next meal is decided after some amount of research or comparison and Mutual Funds are no Read more

Should you invest in ELSS under the new tax regime?

The new tax regime effective from 1st Apr 2020 gives individuals and HUF taxpayers an option to choose between lower tax rates by forgoing certain exemptions and higher tax rates while availing exemptions (old tax regime). The newer tax regime may not suit everyone. Taxpayers need to evaluate the tax savings made under both the old and new regime to take a call.  Read more

How is Direct Plan different from Regular Plan?

Imagine you are planning a holiday to the Maldives and you don’t have much idea about the place. How would you plan your trip? You may either call up a travel agent and book your trip or spend hours researching places to stay, places to visit, modes of transport etc and finally draw up your itinerary, make your bookings. Read more

What are the risks of investing in ETFs?

ETFs offer diversification benefit at a low cost. In spite of these benefits, one should make note of the risks that are involved with such investments. Firstly, there are many kinds of ETFs available in the market including international and exotic ones. Read more

How to build retirement corpus with Mutual Funds?

Most people don’t realize that their retired lives can be as long as their working life and they’ll need an enormous corpus to last at least 25-30 years. Without proper financial planning, your savings may not be sufficient to cover all expenses and emergency needs. But how do you build a corpus to sustain 25-30 years of retired life? Read more

What are Multi Cap Funds?

Have you ever come across fund names like XYZ Multi Cap Fund while looking for information on mutual funds and wondered how these are different from the more popular large-cap funds? As the name suggests, a Multicap fund invests across large, mid, and small cap companies thus offering diversification across market caps in its portfolios. Read more

Who regulates Mutual Funds in India?

Mutual funds are the modern day's go-to investment option. Therefore, it is important to know who regulates the mutual fund industry in India. The Securities and Exchange Board of India or SEBI regulates all aspects of mutual funds in India. Read more

What are Target Maturity Funds?

With the awareness of mutual funds rising and falling interest rates on guaranteed savings products, many risk-averse investors who were used to conventional products like bank fixed deposits, PPFs, and NSCs, have moved toward Read more

Are Debt Funds like Fixed Deposits?

When you park your money in a bank Fixed Deposit (FD), the bank promises to pay fixed interest in return. Here you’ve lent money to the bank, and the bank is a borrower of your money, owes you a fixed periodic interest. Debt Mutual Funds invest in debt securities like Government bonds, Company bonds, Money market securities. Read more

Know more about Debt Funds.

Equity Mutual Funds buy stocks while Debt funds buy debt fund securities like bonds for their portfolio. Securities like bonds aare issued by corporates such as power utilities, banks, housing finance and the Government. They issue bonds with fixed interest rate to raise money from the public (investors) instead of taking a loan for new projects. Read more

Can Debt Funds provide regular income?

Debt Funds invest their investors’ money in interest-bearing securities like bonds, corporate deposits, G-secs, money market instruments, etc. These bonds are like certificates that carry an obligation on the part of the bond issuer to pay regular interests (coupons) to the bond investors. Read more

Where do Debt Funds invest our money?

Debt Funds invest the money pooled from investors in bonds issued by banks, PSUs, PFIs (Public Financial Institutions), corporates and the Government. These bonds are usually medium to long-term in nature. When a Mutual Fund invests in such bonds, it earns periodic interest from these bonds which contribute to the fund’s total return over time. Read more

What are Fixed Income Mutual Funds?

Fixed income mutual funds are those mutual fund schemes whose underlying assets are fixed-income securities, such as - government securities, debentures, corporate bonds, and other money market instruments. Read more

Are Debt Funds suitable for my Financial Goals?

Debt Funds provide lower but relatively stable returns as compared to equity funds. They provide stability to a portfolio as they trade in the fixed income market which is more stable in comparison to the stock market that impacts equity funds. Read more