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Financial Planning for Studying Abroad

Financial Planning for Studying Abroad

Financial planning plays a crucial role in ensuring a successful study abroad experience. One aspect of this process involves exploring the option of an education loan, which can provide the necessary financial support for pursuing international education. This article provides an overview of the financial planning process for studying abroad, with a focus on understanding and utilizing an education loan effectively. Assessing the Financial Requirements  Before embarking on the journey of studying abroad, it is essential to assess the financial requirements involved. This includes estimating the tuition fees, living expenses, travel costs, healthcare coverage, and any additional expenses that may arise during your time abroad. By carefully evaluating these financial aspects, you can determine the amount of funding needed to support your education overseas. https://www.youtube.com/watch?v=tdwqQH0xkFw Researching Education Loan Options  Exploring Loan Providers: Begin by researching different loan providers that offer education loans specifically designed for studying abroad. Look for reputable financial institutions or government-backed programs that offer competitive interest rates, favorable repayment terms, and flexible borrowing limits. Consider comparing multiple options to find the loan that best suits your needs.  Loan Eligibility: Understand the eligibility criteria set by each loan provider. Factors such as academic achievements, co-signers (if required), credit history, and collateral requirements may influence your eligibility for an education loan. Ensure that you meet the necessary criteria before proceeding with the application process.  Loan Terms and Conditions: Thoroughly review the terms and conditions of each loan option. Pay close attention to the interest rates, repayment schedules, grace periods, and any additional fees or charges associated with the loan. Comparing the terms and conditions of different loans will enable you to make an informed decision and choose the most suitable option.  https://www.youtube.com/watch?v=Dhe2ezcmKJw Applying for an Education Loan  Gathering Documentation: Collect the required documentation for the loan application process. This typically includes proof of admission to an educational institution, academic records, identification documents, income proof (if applicable), and any other documents specified by the loan provider. Ensure that you have all the necessary paperwork ready before applying.  Loan Application Process: Follow the loan application process outlined by the chosen loan provider. This usually involves filling out an application form, submitting the required documents, and providing any additional information as requested. Be mindful of deadlines and submit the application well in advance to allow for processing time.  Loan Approval and Disbursement: After submitting the application, the loan provider will evaluate your eligibility and assess your creditworthiness. If approved, you will receive a loan offer outlining the approved amount, interest rate, and repayment terms. Upon acceptance, the loan amount will be disbursed directly to your educational institution or your designated bank account.  Managing the Education Loan  Budgeting and Repayment Planning: Create a budget to manage your finances effectively while studying abroad. Consider factors such as tuition fees, accommodation, daily expenses, and loan repayment obligations. By planning your expenses and allocating funds accordingly, you can ensure timely loan repayments and avoid financial strain.  Loan Repayment Options: Familiarize yourself with the repayment options offered by the loan provider. Some lenders may offer grace periods or flexible repayment schedules. Explore whether interest-only payments, deferment options, or income-driven repayment plans are available. Understanding the repayment options will help you strategize and manage your loan obligations efficiently.  Building Credit History: Timely repayment of your education loan can positively impact your credit history. This can be beneficial for future financial endeavors, such as applying for other loans or credit cards. Ensure that you adhere to the loan repayment schedule and maintain a good credit record.  How to build a strong support network while studying abroad? Read More Seeking Financial Guidance  If you feel overwhelmed or require additional assistance with the financial planning process, consider seeking guidance from financial advisors or professionals specializing in educational loans. They can provide personalized advice, help you navigate the complex financial landscape, and offer insights to optimize your financial planning for studying abroad.  Remember, thorough financial planning and understanding the education loan process are essential steps in making your study abroad experience financially feasible and successful. By following these guidelines and seeking appropriate support, you can lay a strong foundation for achieving your educational goals abroad.  Exploring Scholarship and Grant Opportunities  While education loans provide financial assistance, it is equally important to explore scholarships and grant opportunities for studying abroad. Scholarships and grants can significantly reduce the financial burden and offer additional support for your education expenses. Research various scholarships offered by educational institutions, governments, private organizations, and foundations. Pay attention to eligibility criteria, application deadlines, and required documentation. Applying for scholarships and grants alongside an education loan can increase your chances of securing additional funding and reduce the overall loan burden.  Monitoring and Adjusting the Financial Plan  Studying abroad is a dynamic experience, and financial circumstances may change over time. It is crucial to regularly monitor your financial plan and make necessary adjustments. Keep track of your expenses, review your budget periodically, and assess whether any modifications are required. Stay proactive in managing your finances, and if needed, consult with financial advisors to ensure your financial plan remains on track and aligned with your goals.  Seeking Guidance on Tax Implications and Exchange Rates  Studying abroad involves navigating various financial aspects beyond loans and expenses. Understand the potential tax implications of studying in a foreign country. Research tax treaties, exemptions, and reporting requirements to ensure compliance with tax laws. Additionally, keep an eye on exchange rates as they can affect the overall cost of studying abroad. Stay informed about currency fluctuations and explore options such as foreign exchange services or opening a local bank account to manage your finances efficiently.  https://www.youtube.com/watch?v=uR6eKIa8tHY Building Financial Literacy and Money Management Skills  Studying abroad not only provides educational opportunities but also serves as a valuable experience for personal growth, including financial literacy and money management skills. Take advantage of this opportunity to enhance your financial knowledge and skills. Educate yourself on budgeting, saving, investing, and making informed financial decisions. Utilize online resources, attend workshops or seminars, and engage with financial communities to develop a strong foundation of financial literacy that will benefit you throughout your life.  Evaluating repayment strategies and Loan refinancing options  Once you complete your education and secure employment, it's important to assess your repayment strategy for the education loan. Evaluate various repayment options, such as making extra payments to reduce the loan term or considering loan refinancing to obtain better interest rates or more favorable terms. Research refinancing options available in both your home country and the country where you studied. Understand the associated costs and potential benefits to determine if refinancing is a viable option for you.  Conclusion By carefully considering the financial planning process for studying abroad and utilizing education loans effectively, you can make your educational dreams a reality. With diligent financial management and proper guidance, you can embark on a rewarding and financially viable study abroad journey. 
How to place a lump sum order on Edufund App?

How to place a lump sum order on Edufund App?

Placing a lumpsum order on the EduFund app is quick and easy! Simply log in, select the desired investment fund, specify the amount, and confirm the order. https://www.youtube.com/watch?v=tdwqQH0xkFw Enjoy hassle-free investing and take control of your education savings with EduFund.  Log in to the EduFund App  To begin, open the EduFund app on your device and log in using your credentials. You can easily make an account if you don't already have one by going through the signup process. Logging in grants you access to all the features and functionalities of the app.  PlayStore App AppStore App Navigate to the Investment Section  Once you're logged in, find the "Investments" or "Investment Funds" section within the app's interface. It may be located in the main menu or on the home screen, depending on the app's layout. This section provides an overview of the available funds you can invest in.   Choose the Desired Investment Fund  Within the investment section, you'll find a list of available funds. Take your time to explore the options and select the fund that aligns with your investment goals and risk tolerance. Consider factors such as historical performance, fund manager reputation, and any associated fees. The app may provide detailed information about each fund to help you make an informed decision.   Specify the Lumpsum Investment Amount After selecting the fund, it's time to specify the lumpsum investment amount you wish to contribute. Enter the desired sum in the appropriate field or use the app's intuitive interface to adjust the investment amount. The app may provide additional options, such as minimum investment requirements or maximum investment limits, ensuring flexibility for investors.   Review and Confirm the Order Before finalizing your lumpsum order, take a moment to review the details. Double-check the investment fund, the lumpsum amount, and any applicable fees or charges. It's crucial to ensure accuracy to avoid any unintended mistakes. Once you are satisfied, click on the "Confirm" or "Place Order" button to proceed. The app may also provide a summary of the order for your reference.  Monitor Your Investment Congratulations! You have successfully placed a lumpsum order on the EduFund app. Now, it's essential to stay informed about your investment. Utilize the app's tracking and reporting features to monitor the performance of your chosen fund. The app may provide real-time updates, including the current value of your investment, performance charts, and transaction history. Regularly reviewing your investments can help you make informed decisions and adjust your strategy if needed.  Explore Additional Features and Tools  While placing a lumpsum order is a significant step, the EduFund app offers a range of additional features and tools to enhance your investment experience. Take some time to explore these options within the app. You may find features such as goal tracking, portfolio diversification suggestions, educational resources, and personalized investment advice. These tools can help you make more informed decisions and optimize your education fund.   Set up Automatic Contributions To maximize your savings and maintain a consistent investment approach, consider setting up automatic contributions on the EduFund app. This feature allows you to schedule regular transfers from your linked bank account into your education fund. By automating the process, you can stay disciplined and ensure a continuous investment effort without manual intervention.  Stay Informed About Market Updates Education funds are subject to market fluctuations, and staying informed about the latest market updates is crucial. The EduFund app may provide access to news articles, market analysis, and economic trends. Keeping an eye on these updates can help you make timely adjustments to your investment strategy and take advantage of potential opportunities.  Seek Professional Advice if Needed While the EduFund app offers user-friendly features and guidance, it's always wise to seek professional advice if you have complex investment needs or specific financial goals. Consider consulting with a financial advisor or an investment professional who specializes in education savings. They can provide personalized advice tailored to your unique circumstances and help you make informed decisions regarding your lumpsum order and overall investment strategy.  Regularly Review and Adjust Your Investment Strategy As your education fund progresses, it's important to regularly review and adjust your investment strategy. Life circumstances, financial goals, and market conditions can change over time, and it's essential to adapt your approach accordingly. The EduFund app can assist you in evaluating your portfolio performance, making necessary modifications, and ensuring your investments align with your evolving needs.  Conclusion Placing a lumpsum order on the EduFund app is just the beginning of your education savings journey. By exploring additional features, setting up automatic contributions, staying informed about market updates, and seeking professional advice when needed, you can optimize your investment strategy. 
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How to start a SIP on the EduFund App?

How to start a SIP on the EduFund App?

Are you eager to invest in your child's education? Look no further than the EduFund App! In this guide, we'll walk you through the simple steps to start a Systematic Investment Plan (SIP) on the EduFund App, ensuring a secure and convenient way to save for your child's future. Let's get started!  https://www.youtube.com/watch?v=tdwqQH0xkFw Download and Install the EduFund App  To begin, visit your device's app store and download the EduFund App. Once the installation is complete, launch the app and create a new account. Include any necessary information, such as your name, address, and preferred login information.  Playstore App App Store Complete the KYC Process  To comply with regulatory norms, the EduFund App requires you to complete the Know Your Customer (KYC) process. This step involves providing essential identification and address-proof documents. Simply follow the instructions on the app, upload the necessary documents, and wait for verification.  Link Your Bank Account  To facilitate seamless transactions, link your bank account to the EduFund App. Enter the required bank details securely within the app's interface. Ensure that the information provided is accurate and up to date to avoid any payment or withdrawal complications.   https://www.youtube.com/watch?v=wEA3dKj7q5U Explore Investment Options  After setting up your account and completing the necessary verifications, it's time to explore the available investment options. The EduFund App offers a range of SIPs specifically designed for educational purposes. Take your time to study the different plans, their returns, and associated risks. Consider factors such as investment duration, affordability, and your financial goals.   Select the Desired SIP Plan  Once you have evaluated the available options, select the SIP plan that best aligns with your investment objectives. Pay attention to factors such as the SIP duration, minimum investment amount, and expected returns. The EduFund App typically offers various SIP durations to suit different investment horizons.   Set the Investment Amount and Frequency  After choosing the SIP plan, specify the investment amount you wish to contribute regularly. Select a frequency that suits your financial situation, such as monthly, quarterly, or annually. It's important to decide an amount that you can comfortably invest over the chosen duration to maintain consistency.  Review and Confirm  Before finalizing your investment, review all the details thoroughly. Double-check the chosen SIP plan, investment amount, frequency, and duration.  If everything appears accurate, proceed to confirm your investment.   Monitor and Adjust  Once your SIP investment is confirmed, keep a close eye on its progress using the EduFund App. Regularly monitor the returns and review the performance of your chosen plan. If required, consider adjusting the investment amount or frequency in line with your evolving financial situation and goals.  Automate Your SIP Contributions  To ensure consistency in your savings, take advantage of the automation feature offered by the EduFund App. Set up an automatic deduction from your linked bank account on the specified date of each month. This way, you won't have to worry about manually making the contributions and can stay committed to your investment plan.   Benefit from Rupee Cost Averaging  One of the advantages of SIP investing is rupee cost averaging. As the market fluctuates, your fixed investment amount buys more units when prices are low and fewer units when prices are high. Over time, this strategy can help reduce the impact of market volatility and potentially enhance your long-term returns.   Consider Portfolio Diversification  While investing in a SIP, it's essential to diversify your portfolio. The EduFund App may offer various SIP plans, including equity-based, debt-based, or balanced funds. Diversification helps spread the risk and allows you to benefit from different asset classes. Consider diversifying your investments based on your risk appetite and investment goals.   Rebalance Your Portfolio Periodically  As time passes and market conditions change, it's advisable to review and rebalance your portfolio periodically. Some SIP plans may require adjustments based on the performance of different asset classes. Rebalancing ensures that your investments remain aligned with your risk tolerance and financial objectives.   Leverage Tax Benefits  Certain SIP investments may offer tax benefits under Section 80C of the Income Tax Act. Educate yourself about the tax implications of your chosen SIP plan and take full advantage of any applicable deductions. Consult with a tax advisor or refer to relevant tax guidelines to maximize the tax benefits available to you.   Stay Informed and Seek Professional Advice  Keep yourself updated on market trends, economic developments, and any changes in regulations that may impact your SIP investments. The EduFund App may provide resources like market insights and educational materials to enhance your financial knowledge. Additionally, consider consulting with a financial advisor to receive personalized guidance and ensure that your investment strategy remains aligned with your goals.   Stay Committed for the Long Term  SIPs are designed to be long-term investment vehicles. Stay committed to your investment plan and avoid making impulsive decisions based on short-term market fluctuations. By maintaining discipline and adhering to your chosen SIP duration, you increase the potential for achieving your desired educational savings goals.  Starting a SIP on the EduFund app is a convenient and reliable way to save for your child's education. By following the step-by-step process outlined in this guide, you can set up your SIP with ease and begin building a solid educational fund.  
SIP
HDFC Large and Mid Cap: Overview, Portfolio, and Performance

HDFC Large and Mid Cap: Overview, Portfolio, and Performance

HDFC Asset Management Company Ltd. (HDFC AMC) is one of India's largest mutual fund companies. It is among one of the most profitable asset management companies (AMC) in the country. The company manages assets worth Rs. 4,49,766.281 Crores (excluding domestic fund of funds) as of 31st March 2023.  HDFC Largecap and Midcap fund Investment objective To generate long-term capital appreciation/income from a portfolio of equity and equity-related securities of predominantly large-cap and mid-cap companies.  Investment process   The Scheme would predominantly invest in companies spanning the entire market capitalization, which:  Are likely to achieve above-average growth  Enjoy distinct competitive advantages  Have superior financial strength  Are trading at relatively attractive valuations  Have value-unlocking potential.  Portfolio Composition  The HDFC Large and Mid-cap Fund had invested more than 98% of the funds in equity, and the remaining amount was held in the form of cash and cash equivalents as on 31st March 2023. It holds significant exposure in large-cap equity at 57%, and the significant sectoral exposure is to banks which account for over 16% of the portfolio. The top five sectors hold up to 44% of the portfolio.  Note: Data as of 31st March 2023. Source: HDFC MF, Value Research Top 5 Holdings for HDFC Largecap and Mid-cap Fund  Name Weightage % HDFC Bank Ltd. 5.39 ICICI Bank Ltd 3.99 Infosys Limited 3.14 State Bank of India 2.74 Reliance Industries Ltd. 2.64 Note: Data as of 31st March 2023. Source: HDFC MF   Performance  Fund name 1Y 3Y 5Y Since Inception HDFC Large Mid-cap Fund Direct-Growth (%) 4.55 34.31 13.18 11.18 NIFTY Large Mid-cap 250 Index 0.62 31.98 12.13 14.46 Data as of 31st March 2023                     Date of Inception of Direct Plan: 01st January 2013 Note: Returns over one year are annualized Source: HDFC MF HDFC Top 100 Fund Read More Fund Managers Mr. Priya Rajan (Since 01st May 2022) – Senior Equity Analyst and Fund Manager for overseas Investments - Collectively over 15 years of experience.  Mr. Gopal Agrawal (Since 16th July 2020) – Collectively, over 17 years of experience in Fund Management and two years in Equity Research   Who should invest in HDFC Large and Mid-cap Funds?  Investors looking to invest in an equity portfolio with very high risk and seeking better returns than the debt instruments can consider this fund. However, investors should remain invested long-term to witness wealth creation.  Why invest in this Fund?  Large-cap funds offer an excellent opportunity to generate high long-term returns, while Small & Mid-cap stocks allow one to go beyond the usual large blue-chip stocks and present possible higher capital appreciation.  This fund has consistently generated good returns and outperformed the NIFTY Large Mid-cap 250 Index benchmark.    Time Horizon  One should look at investing for a minimum of three years or more.  Investment through Systematic Investment Plan (SIP) may help in tackling the volatility of the broader equity market.  INVEST NOW Conclusion  The HDFC Large and Mid-cap Fund is a good option for investors willing to take exposure to large and mid-cap equities with some additional risk for good returns over the long term. However, investors should remain invested long-term to witness wealth creation. 
Why are ETFs so tax efficient?

Why are ETFs so tax efficient?

Exchange-traded funds (ETFs) are well-known for their low costs and liquidity, but many investors ignore an additional, undervalued benefit of ETFs: tax efficiency. In this crucial aspect, ETFs outperform Mutual Funds by a long shot.   ETFs may owe this tax efficiency to their very structure and their trading, creation, and redemption. Structural components contribute to tax efficiency; lower turnover in passive strategies than active strategies, secondary market trading possibilities, and the structural tax advantages of in-kind redemptions.  As a result, ETF investors have more control over when they pay taxes, i.e., when they sell their shares, rather than when other shareholders buy and sell.   In the USA in 2018, only 10% of ETFs paid out capital gains to investors, but 61% of mutual funds did. Mutual funds paid an average of 4.5 percent capital gains as a percentage of NAV, while ETFs paid only 0.2 percent.   Source: pixabay How are ETFs so tax efficient 1. Passive turnover   According to Morningstar, only 4% of mutual funds are passive, compared to 89 percent of ETFs. Passive strategies, on average, have lower portfolio turnover than active methods.   As a result of the decreased turnover, there are fewer instances of securities selling at a profit, and hence fewer opportunities for shareholders to receive capital gains.   Thus, the very basis of the management of a fund leads to lower or higher tax efficiency. A passive ETF is more tax-efficient than actively managed ones, as passive strategies eliminate the need for continuous rebalancing.   2. Secondary market trading  Unlike mutual funds, exchange-traded funds (ETFs) get traded on stock exchanges. Only 10% of ETF trades affect the underlying portfolio through the primary market, with the rest occurring between investors in the secondary market.   On the other hand, all activity of mutual funds has to occur in the primary market, affecting the underlying portfolio.  When a mutual fund investor requests a redemption, the fund has to sell the securities to cover the obligation. On the other hand, when an individual investor wishes to sell an ETF, he simply sells it in the secondary market. For the ETF, there is no bother and so no capital gains transaction.  This structural difference limits the fund-level transactions. As a result, compared to mutual funds that invest in similar assets, this has a lower cost of ownership and higher returns.  ETFs vs Stocks Read More 3. Structure  Instead of selling securities for cash, the ETF issuer can satisfy redemptions and portfolio rebalance in-kind (exchanging securities for ETF shares) in the ETF primary market.   This in-kind transaction does not result in a taxable event for the fund. It can protect fund shareholders from capital gains from other shareholders' buying and selling decisions.  When an AP redeems ETF shares, the issuer does not immediately rush to sell ETF shares to pay the AP in cash. Instead, he's paid "in-kind" by delivering the ETF's underlying assets.   No capital gains, therefore. Additionally, the ETF provider selects the stocks to be given to the AP, making sure that the shares with the lowest tax liability are given to the AP.  This leaves the ETF issuer with only shares acquired at or even above the market rate, lowering the fund's tax burden and, as a result, providing investors with better after-tax returns.  For some ETFs, the mechanism does not augur well. Fixed-income ETFs are less tax-efficient than other ETFs due to higher turnover and recurrent cash-based creations and redemptions.   That said, ETFs win hands down, with two decades of evidence pointing out their high tax savings compared to any other investment avenue.  FAQs Are ETFs a good investment for a new investor? Exchange Traded Funds are usually considered to be low-risk investments as not only are they low-cost but also hold various stocks and securities, thus increasing diversification. What is an ETF? An ETF stands for exchange-traded fund (ETF). One single ETF is a basket of securities that can be bought and sold like mutual funds through a brokerage firm. ETFs track a specific index such as S&P, sector, commodity, or other assets. Much like stocks, ETFs can be traded on the market. How to invest in ETFs? You can invest in ETFs using the EduFund App. All you need is a US account to start investing. Get started using this link Consult an expert advisor to get the right plan for you TALK TO AN EXPERT
ETF
Can education loans finance a joint degree program in different schools or countries?

Can education loans finance a joint degree program in different schools or countries?

Welcome to the world of joint degree programs! If you're dreaming of earning degrees from two different schools or countries, but are worried about financing it, an abroad education loan can be your gateway to realizing your educational aspirations. Discover how to make it work for yourself.  Understanding Joint Degree Programs  Joint degree programs offer students a unique opportunity to earn degrees from two different schools or countries. These programs often combine the expertise and resources of multiple institutions, providing a diverse and enriching academic experience. Before exploring how to finance such programs, it's essential to have a clear understanding of the joint degree program you wish to pursue.  1. Researching Abroad Education Loan Options  Identify Lenders: Start by researching financial institutions or lenders that specialize in providing education loans for international students. Look for lenders with experience in funding joint degree programs specifically.  Loan Criteria: Understand the eligibility criteria, interest rates, repayment terms, and other conditions associated with abroad education loans. Compare different lenders to find the best loan options that suit your needs.  Loan Application Process: Familiarize yourself with the loan application process. Gather the necessary documents, such as admission letters from both institutions, financial statements, and identity proofs, to support your loan application.  https://www.youtube.com/watch?v=4gTQkdePOWM 2. Financial Planning and Budgeting  Tuition and Living Expenses: Determine the total cost of the joint degree program, including tuition fees, accommodation, transportation, health insurance, and other living expenses. Create a comprehensive budget to estimate the amount of funding required.  Loan Amount: Calculate the loan amount you need to cover your expenses. Consider both tuition fees and living costs, ensuring you have a realistic estimate to avoid any financial difficulties during your studies.  Collateral and Guarantor: Some lenders may require collateral or a guarantor to secure the loan. Understand the collateral options available, such as property or investments, and assess the feasibility of providing a guarantor if necessary.  https://www.youtube.com/shorts/rTHsIe85tMY 3. Loan Repayment and Financial Management  Repayment Plans: Understand the repayment plans offered by the lender. Consider options such as deferred repayment, interest-only payments during the study period, and flexible repayment terms. Choose a plan that aligns with your financial situation and future goals.  Financial Management: While studying, practice effective financial management to ensure you make the most of your borrowed funds. Keep track of your expenses, stick to your budget, and explore opportunities for part-time work or scholarships to supplement your income.  Post-Graduation Financial Planning: Plan for the post-graduation phase, including job prospects, expected income, and repayment strategies. Develop a realistic financial plan to manage your loan repayments effectively once you start working.  https://www.youtube.com/shorts/uPGJr3BiXpI 4. Seek Professional Guidance  If you're uncertain about the loan process or need assistance in financial planning, consider seeking guidance from educational consultants, financial advisors, or student loan counselors. Their expertise can provide valuable insights and help you make informed decisions about financing your joint degree program.  Remember, an abroad education loan can open doors to incredible educational opportunities. By understanding the loan options available, conducting thorough research, and planning your finances wisely, you can turn your dream of pursuing a joint degree program into a reality.  https://www.youtube.com/watch?v=tdwqQH0xkFw 5. Scholarships, Grants, and Other Funding Sources  Explore Scholarships: Research scholarships and grants specifically designed for joint degree programs or international students. Many universities, governments, organizations, and foundations offer financial aid opportunities that can significantly reduce your financial burden.  Application Deadlines: Pay close attention to application deadlines for scholarships and grants. Start the application process early and ensure that you fulfill all the requirements and submit the necessary documents on time.  Additional Funding Sources: Look beyond scholarships and grants to explore other funding sources. This could include part-time jobs, crowdfunding platforms, sponsorships from companies or organizations, or even family contributions. Every little bit of additional funding can make a difference.  Banks for education loans? Read More 6. Consider Cost-Saving Measures  Exchange Programs: Investigate the possibility of participating in student exchange programs between the two institutions. These programs often offer reduced tuition fees or other cost-saving benefits, making your joint degree program more affordable.  Housing Options: Explore affordable housing options such as student dormitories, shared apartments, or off-campus accommodations. Choosing a cost-effective living arrangement can significantly lower your overall expenses.  Budgeting Strategies: Implement effective budgeting strategies to manage your finances efficiently. Cut down on unnecessary expenses, prioritize essential items, and take advantage of student discounts and special offers whenever possible.  How to transfer an education loan? Read More 7. Continuous Communication with Financial Institutions  Maintaining open lines of communication with your chosen financial institution is crucial throughout the process. Stay in touch with your loan officer or representative to address any concerns or questions that may arise. Inform them about any changes in your academic plans, financial circumstances, or repayment options to ensure a smooth and well-coordinated financing experience.  8. Understand the Risks and Responsibilities  Loan Repayment Obligations: Be aware of the responsibilities that come with an abroad education loan. Understand the repayment terms, interest rates, and consequences of defaulting on loan payments. Make informed decisions and ensure you have a clear plan to manage your debt effectively.  Currency Exchange Rates: If you're studying in a different country, fluctuations in currency exchange rates can impact your loan repayment amounts. Stay updated on currency trends and consider hedging options to mitigate the risks associated with exchange rate fluctuations.  9. Embrace the Opportunities  While financing a joint degree program through an abroad education loan may seem challenging, it opens doors to extraordinary educational experiences and global networking opportunities. Embrace the journey, make the most of the resources available to you, and stay focused on your academic and career goals.  Remember, with careful planning, research, and financial management, you can successfully use an abroad education loan to finance your joint degree program and embark on a transformative educational adventure.  Conclusion By exploring abroad education loan options, seeking scholarships, practicing financial discipline, and making informed choices, you can turn your dream of a joint degree program into a reality. Embrace the opportunities that lie ahead and embark on a remarkable educational journey.  Consult an expert advisor to get the right plan Talk To An Expert
How to save for your child's college? Where, how, and how much?

How to save for your child's college? Where, how, and how much?

Investment advisors say this all the time - Save smartly, Save for your child's college. Saving for your child’s college education is a financial project in its own right. It requires planning, research, investing, and consistency. There are several things you need to do to ensure you have the necessary funds when you need them. Let’s understand why you need to save before understanding where, how, and how much! Why saving for your child’s college is important? The reason why you need to save is education inflation. Just to give you a heads up on the costs, as of 2022, a four-year undergrad course in the US can cost you anywhere from Rs. 70 lakhs to Rs. 1 crore, while a 2 year's master will cost you Rs. 60-70 lakhs. Other countries are comparatively cheaper. So, if you start working with the US figures, you are fairly well taken care of for the other countries. Yes, the amount may seem huge and it will keep going up over the years, but if you start well in advance, you will have the power of compounding working for you. And with the right investment strategies, putting together the corpus you need is quite achievable. Source: Pixabay How to start saving? 1. Collect information · Start Early: Your kid is bound to go to college, whether in India or abroad so start early! · Select the country: Pick a country that you know you will be comfortable sending your child to when the time comes. · Identify the universities: Get a handle on the kind of universities you would like to send your child to, and work out ballpark numbers in terms of fees, years of study, etc. · Talk to your friends: Even if your child is really young yet, start speaking to parents who have recently sent their children overseas. There are several insights that you will get when you speak to someone who has actually walked the path you wish to traverse. 2. Chat with a financial planner · Talk to experts: Once you have a fix on the funds you need to accumulate to send your child overseas, have a serious chat with your financial planner. · Set your goals: Define your goals, and strategies that will help you put together the corpus you will need and exceed it by a bit as well. · Plan your funds: Take inflation, currency exchange rate, and rising education, and travel costs into consideration. 3. Choose your investment instruments carefully 1. Long-Term Investments: (12 – 15-year horizon) You can consider investing in equities, and stocks. These instruments can give you high returns as the stock market grows over the decade. But these are also high-risk investments. You must have the patience to stay invested even when the market indices fall, for ultimately, they do go up. That is why you need a longer horizon to invest in these instruments: so, you can wait for the markets to correct and get the best return on investment. You can also balance the risk with investment in a provident fund, which gives one of the highest rates of return in the fixed-return market. 2. Mid-Term Investments: (7–11-year horizon) If this is your investment horizon, Mutual funds are your best bet. You can choose a basket of mutual fund schemes that are best suited for your kind of risk appetite: there are funds that invest in equities, small-cap, mid-cap, and blue-chip companies, and also debt funds. The last two are quite safe and give you better returns than the standard savings or Fixed deposit options. You must note that mutual fund investments are dependent on the market movement and will be impacted by the rise and drop in the indices. But compared to Equities, they are less volatile and the good ones are known to outperform the market index over a long period of time. 3. Short-Term Investments: (4 – 7 years) If you will be requiring the funds within the next few years, you must invest carefully ensuring your capital is protected at all times and the investment can earn you some additional benefits beyond the Fixed deposit rates. You can invest in debt instruments and bonds directly or invest in debt mutual fund schemes. These are quite safe and can earn you better interest than your regular savings options. But do keep in mind, that most of these also come with a lock-in period, so check that out before you commit your money. Apart from the capital market instruments, families also look at the traditional avenues of investment to block their monies. Real estate, gold purchases, gold bonds, and real estate mutual fund schemes are some of the other options that can be considered for long-term investments. Financial planning can be tricky if you are just starting out. With so many saving and investment opportunities, it's important to understand which ones will help you get to your goals faster. So, don’t shy away from seeking help and building a strong saving plan! FAQs Why saving for your child’s college is important? The reason why you need to save is education inflation. Just to give you a heads up on the costs, as of 2022, a four-year undergrad course in the US can cost you anywhere from Rs. 70 lakhs to Rs. 1 crore, while a 2 year's masters will cost you Rs. 60-70 lakhs. The cost of education is rapidly increasing in India - it takes roughly Rs. 30 lakhs to raise a child in India till the age of 18 years. This cost is likely to increase and investments can help you keep up with the fees and other expenses. What is the best way to invest for your child's college? The best way is to invest via equity based mutual funds if you have a long-time horizon like 12 to 15 years. Based on your investment period, you can choose an investment plan that can get you closer to your financial goal and send your child to a college of their choice. How to start saving for your child's college? · Start Early: Your kid is bound to go to college, whether in India or abroad so start early! · Select the country: Pick a country that you know you will be comfortable sending your child to when the time comes. · Identify the universities: Get a handle on the kind of universities you would like to send your child to, and work out ballpark numbers in terms of fees, years of study, etc. · Talk to your friends: Even if your child is really young yet, start speaking to parents who have recently sent their children overseas. There are several insights that you will get when you speak to someone who has actually walked the path you wish to traverse. Consult an expert advisor to get the right plan for you TALK TO AN EXPERT
What are technology ETFs?

What are technology ETFs?

With the tremendous growth of the technology industry, tech stocks have established a solid footing in the stock market, making it an attractive yet challenging place for first-time investors.   ETFs (exchange-traded funds) can significantly simplify the investing process. ETFs tempt investors who want to minimize the risk of engaging in individual securities while generating income over time.   Tech industry exchange-traded funds (ETFs) trade in shares of electronics and information technology manufacturers and service providers, which make up the technology sector.   This industry's technological solutions vary from consumer items to enterprise software. These companies' stocks often trade at high earnings multiples compared to other sectors and have a history of driving market cycles.   Small-cap and microcap companies, as well as large-cap and microcap companies like Apple Inc. (AAPL), Microsoft Corp. (MSFT), and Alphabet Inc. (GOOG), contribute to the sector's outlook and growth.  What are technology ETFs? Technology ETFs could be an excellent place to start for market players interested in investing in this industry. Continue reading to learn more about what you should know before buying a technology ETF.  There are roughly 110 technology ETFs in the United States, according to ETF.com. Some are focused on specific sectors, like artificial intelligence ETFs or fintech ETFs, but the Invesco QQQ Trust ETF is the largest technology ETF with remarkable capital gains (NASDAQ: QQQ).   It had US $195.26 billion in assets under management as of February 4, 2022.  Despite the generic nature of most tech ETFs, investors still have the option of selecting the market that most interests them. Apple (NASDAQ: AAPL), Microsoft (NASDAQ: MSFT), and Meta Platforms (NASDAQ: FB) are among the most crucial tech businesses tracked by the iShares US Technology ETF (ARCA: IYW).  The PureFunds ISE Mobile Payments ETF (ARCA: IPAY), which tracks the mobile payments industry, is another ETF that monitors a specific market within the tech sector. PayPal (NASDAQ: PYPL), Mastercard (NYSE: MA), and Visa are among its top holdings (NYSE: V).  There are several high-performing options for investors wishing to obtain exposure to the lucrative semiconductor business, including the iShares Semiconductor ETF (NASDAQ: SOXX) the VanEck Semiconductor ETF (NASDAQ: SMH), and the Direxion Daily Semiconductor Bull 3x Shares (NYSE AMERICAN: SOXL).  Source: pixabay Based on data obtained from the ETF database as of February 2022, some of the better ETFs are ParameterTechnology Select Sector SPDR Fund (XLK)First Trust NASDAQ Technology Dividend Index Fund (TDIV)ProShares S&P Technology Dividend Aristocrats Fund (TDV)IssuerState StreetFirst TrustProSharesPerformance Over One-Year12.6%11.8%10.5%Expense Ratio0.10%0.50%0.45%Annual Dividend Yield 0.67%1.78%1.11%Three-Month Average Daily Volume13,524,775106,04812,147Assets Under Management$45.9 billion$1.8 billion$110.7 millionInception DateDec. 16, 1998Aug. 13, 2012Nov. 5, 2019 XLK tracks the Technology Select Sector Index, broadly indicative of the S&P 500 Index's technology sector.   Companies involved in technology hardware, storage, peripherals; software; communications equipment; semiconductors and semiconductor equipment; and various related services are the focus of the fund.  TDIV follows the NASDAQ Technology Dividend Index, an index of technology and communications businesses listed on the NASDAQ, NYSE, or NYSE Amex.   Companies must meet minimum market capitalization, average daily dollar trading volume, and yield standards to be included in the index and have paid an ordinary dividend in the previous 12 months.  How ETFs are different from mutual funds? Read More TDV invests in the S&P Technology Dividend Aristocrats Index, which comprises well-established technology companies that have grown their dividends for at least seven years.   The index's companies have solid fundamentals and a successful growth and profitability track record. The data processing and outsourced services firms, semiconductors, and tech hardware, storage, and peripheral companies are the significant holdings of the large-cap growth fund.  Even if investors are unsure about market intricacies, tech ETFs can help them get started. They're seen as a safe and straightforward method to start in the industry, with a better chance of making a profit.   Market participants who want more control over their technology stock investments should go elsewhere. ETF shares don't provide much flexibility because they simply track an index or commodity. FAQs What are technology ETFs? Technology ETFs could be an excellent place to start for market players interested in investing in this industry. Continue reading to learn more about what you should know before buying a technology ETF.  There are roughly 110 technology ETFs in the United States, according to ETF.com. Are ETFs a good investment for a new investor? Exchange Traded Funds are usually considered to be low-risk investments as not only are they low-cost but also hold various stocks and securities, thus increasing diversification. How to invest in ETFs? You can invest in ETFs using the EduFund App. All you need is a US account to start investing. Get started using this link - https://edufund.in/us-market TALK TO AN EXPERT
ETF
Benefits of US Investments

Benefits of US Investments

Investing in US stocks offers numerous benefits like exposure to the world’s largest and fastest growing economy, a chance to invest in the US dollar, and attractive returns from big companies like Apple, Microsoft, and Tesla. This article explores the benefits of US investments, why it is the right time to invest in the USA from India, and the ease of investing globally in our times. Benefits of US investments  The benefits of investing in US stocks from India can bring about several advantages. Here are some significant advantages to think about:  Diversification: Investing in US stocks allows for portfolio diversification. By adding US stocks to your investment mix, you can reduce the risk associated with having a concentrated portfolio solely focused on Indian stocks. Diversification across different markets can help mitigate the impact of market fluctuations and economic conditions.  Access to Global Giants: The US stock market is home to numerous multinational corporations and tech giants, such as Apple, Amazon, Microsoft, and Google. Investing in these companies provides an opportunity to be a part of their growth and success. These global giants often lead innovation, enjoy stable financials, and may provide potential long-term growth prospects.  Exposure to Different Sectors: The US market encompasses a wide range of sectors, including technology, healthcare, finance, and consumer goods. By investing in US stocks, you can gain exposure to industries that may not be as prevalent or well-developed in the Indian market. This diversification across sectors can help you capture opportunities and reduce sector-specific risks.  Stable and Mature Market: The US stock market is one of the most established and regulated markets globally. It has a long history of stability, investor protection, and transparency. This stability can instill confidence in investors, especially those seeking a secure investment environment.  Why is investing important?  Investing plays a crucial role in wealth creation and financial planning. Here's why investing is important for individuals in India:  Wealth Accumulation: By investing, you can increase your wealth over time. By investing your savings wisely, you have the potential to earn higher returns than traditional savings accounts. Through compounding, your investments can generate additional income, helping you achieve your financial goals.  Beat Inflation: Inflation erodes the purchasing power of money over time. Investing in avenues that generate returns above the inflation rate helps preserve the value of your wealth. By investing in the US market, you can explore opportunities for potentially higher returns and hedge against inflation risks.  Invest in USA with EduFund Can I invest in US Stocks from India?  Yes, as an investor in India, you can invest in US stocks through various channels:  Direct Stock Purchase Plans (DSPPs): Some US companies offer DSPPs, which allow international investors to buy their stocks directly. This enables you to invest in specific US companies without going through a broker.  Global Depository Receipts (GDRs) and American Depository Receipts (ADRs): GDRs and ADRs are financial instruments that represent shares of foreign companies listed on US stock exchanges. They provide an indirect way for Indian investors to invest in US stocks.  Mutual Funds and Exchange-Traded Funds (ETFs): Several Indian mutual funds and ETFs provide exposure to US stocks. By investing in these funds, you can gain access to a diversified portfolio of US stocks managed by professionals.  EduFund's US Investment page offers Indian investors a comprehensive platform to explore and invest in the US stock market. With expert guidance, diversified portfolios, and a focus on long-term growth, EduFund empowers individuals to capitalize on the benefits and opportunities of US investments. So, if you're looking for a US investment page then consider ours.  Invest in the US market: A world of Opportunities  Investing in the US market opens up a world of opportunities for investors in India. The benefits of US investments, including diversification, access to global giants, exposure to different sectors, and a stable market environment, make it an attractive option. With various investment channels available, Indian investors can explore the US stock market and potentially benefit from its growth and performance.  The growth potential of US stocks  One of the key reasons why investing in US stocks from India is appealing is the growth potential these stocks offer. The US economy has a track record of consistent growth, and its stock market has demonstrated resilience and the ability to recover from downturns. This growth potential can translate into attractive returns for investors.  The US stock market is known for fostering innovation and entrepreneurship. It is home to a vibrant ecosystem of startups and established companies that continuously strive for technological advancements and market dominance. By investing in US stocks, Indian investors can participate in the growth of these dynamic companies, potentially benefiting from their success stories.  Moreover, the US market provides access to a large consumer base. The country's robust consumer spending and high standard of living create a favorable environment for companies to thrive. Investing in US stocks allows Indian investors to tap into the purchasing power and consumption patterns of American consumers, which can present lucrative opportunities.  What is the US Stock market timing? Read More Global economic influence  The US economy holds a significant influence on the global stage. As the world's largest economy, its performance and policies have far-reaching effects on financial markets worldwide. By investing in US stocks, Indian investors can align themselves with this influential market and leverage its economic impact.  The US dollar is also the main reserve currency in the globe. Investing in US stocks exposes investors to currency fluctuations, providing an additional avenue for potential gains. The value of the US dollar against the Indian rupee can impact the returns on US investments, offering opportunities for diversification and currency-related profits.  Mitigating risk through research and expertise  Investing in any market comes with risks, and the US market is no exception. However, with proper research, due diligence, and professional guidance, investors can mitigate these risks and make informed investment decisions.  To invest in US stocks successfully, it is crucial to stay updated on market trends, economic indicators, company fundamentals, and geopolitical developments. Various financial research platforms, brokerage firms, and investment advisors provide valuable insights and analysis to assist investors in navigating the US market effectively.  Furthermore, leveraging the expertise of fund managers and portfolio managers who specialize in US investments can be beneficial. Mutual funds and ETFs focused on US stocks often have experienced investment professionals who actively manage portfolios, aiming to generate favorable returns for investors while minimizing risks.  Conclusion Investing in US stocks from India provides an array of benefits, including diversification, access to global giants, exposure to different sectors, and potential for growth. With research and guidance, Indian investors can seize opportunities in the dynamic US market for long-term financial success. 
What are the key factors of investing?

What are the key factors of investing?

In this article, we will discuss key factors of investing. This article will make it easier for you to make intelligent investment decisions.   Everybody wants to become wealthy quickly and have a lavish lifestyle, but as we all know, Rome was not built in a day. You must have patience, practice financial discipline, and most importantly, make sensible investments if you want to become wealthy.   5 Factors of Investing   1. Have a clear financial plan Investments made without a purpose are of no use. Therefore, the secret to your financial success is a solid financial strategy.   Your existing income, obligations and short-term and long-term goals should all be accounted for in a sound financial plan. Most significantly, your financial strategy should be on the basis of your financial objectives, risk tolerance, and capacity for bearing losses.   Only once you have a detailed financial blueprint should you move forward with your investments.  2. Start early As emphasized by us in many previous blogs, starting investments at an early age is a considerable advantage for you because your money gets much more time to show the compounding effect.   The early investment allows you to use compounding - reinvesting your investment profit to increase your earnings.   The first is reinvestment and the second is time - both essential factors for compounding to function.  Example: Let us understand this with an example - Reshma invests Rs 10,000 at 6% in her first year of investing. Instead of taking out the Rs 600 (Rs 10,000x1.06) that she earned in year one, she reinvests it in the same instrument.   Assuming the interest rate remains the same, she earns Rs 11,236 (Rs10,600x1.06) by year two. Thus, just by staying invested, her money begins to compound, and her wealth increases yearly – this is called the Power of Compounding.  3. Diversification Proper asset allocation is a crucial aspect of investing. No matter how appealing the profits may seem, you should never put all your eggs in one basket.   Your risk is distributed when you invest across asset classes like equity, debt, commodities, and real estate - because different asset classes carry varying levels of risk and do not necessarily move in the same direction.   Source: pixabay 4. Beware of Inflation Your assets may lose value rather than gain if you do not invest your hard-earned cash wisely this is a result of inflation, which is the gradual increase in prices that can reduce the purchasing power of your money.  Let us observe what happens. Say A hides 50,000 rupees in a mattress for 15 years. In 15 years, the value of money would have been rupees 23,160 if the average annual inflation rate were considered 5%.  Therefore, you mustn't let your money sit about idly; instead, choose investments that outperform or at the very least stay up with inflation.   5. Stay invested for the long term You should always keep your long-term objectives, such as purchasing a home, funding your children's education, getting married, and retiring, while making investments.   Avoid letting market highs and lows derail your course toward achieving the long-term objectives that you have set.   The ideal course of action for you is to make a predetermined investment plan where you decide on a predetermined amount of money to be put across various asset classes in inflation-adjusted instruments.   Investments must be made in a disciplined manner over some time without being distracted from your long-term goals. FAQs What are the key factors to consider before investing? The key factors to consider before investing are your financial goals, your risk factor, the time horizon of investment, your investment amount, and your portfolio management. What are the 5 golden rules of investing? The 5 golden rules of investing are - knowledge of investing, keeping track of your investments, diversification, understanding the risk involved, and investing for the long term. Does inflation impact your investments? Yes, inflation has a huge impact on your investments. This is why choosing the right type of investment for the long-run is important. Investors are encouraged to invest in assets that can yield returns that beat inflation so that their money holds value in the long term horizon. Consult an expert advisor to get the right plan for you TALK TO AN EXPERT
Ultimate beginner's guide to investing in US ETFs

Ultimate beginner's guide to investing in US ETFs

ETFs (exchange-traded funds) are a straightforward method to begin investing. ETFs are easy to understand and can generate significant returns with little cost or effort.  Here is everything you need to know about ETFs, including how they work and how to do investing in US ETFs. What is an exchange-traded fund (ETF)?  An ETF, an exchange-traded fund, enables investors to buy many shares or bonds at once. Investors purchase ETF shares, and the funds are employed to invest in a specific way.   If you buy a Nasdaq 100 ETF, your money is put in the index's 100 companies. The ETF trading on the exchange is precisely like a regular stock.   Throughout the trading day, ETFs are bought and sold, and the price of an ETF share might swing above or below its net asset value (NAV) according to supply and demand.  Although ETFs and Mutual Funds appear to be similar on the surface, both are bundles of assets in which thousands of owners regularly invest; they have a few key differences.   Mutual Funds, for example, are usually actively managed. Unlike ETFs, which trade continuously throughout the day, mutual funds are transacted once daily.   Mutual fund prices are determined once every 24 hours based on the NAV at the end of the trading day.  ETFs have two categories: passive and active. Passive ETFs (also known as index funds) monitor a stock index like the S&P 500. Passive ETFs replicate the performance of an index. Active ETFs hire portfolio managers to invest their money. Active ETFs aim to outperform a benchmark index.  5 Steps on how to Invest in US ETFs The first step is to open an account with a brokerage firm. This account can be used to buy and sell stocks, ETFs, commodities contracts, and other securities. For all deposits, the broker acts as a custodian. A broker which provides services in India and the USA must be selected.  Make an ETF investment strategy that suits your goals and risk profile.  Once the investor decides on his investment strategy, he should focus on the ETFs. He should research the various types of ETFs available in the market.  The final step in the ETF purchase process is to purchase the ETF. The investor must first deposit monies into the brokerage account from which the purchase will be performed. After ensuring that the funds are sufficient, the investor must look for the ETF ticker symbol and make a buy order. The investor must also specify the number of ETF shares he wants to buy. ETF shares cannot be purchased in fractions in most cases. Confirm the order.   Since the investor has purchased the shares, he must prepare an exit strategy for minimizing losses (if any) or minimizing capital gains taxes.  What to look for in the ETFs before buying/investing?  Expense ratio: Expenses eat into the earnings of the investor, so the smaller the expense ratio, the better. In addition, an investor should consider the costs charged by an ETF to maintain a portfolio.  ETFs often have lower costs than actively managed funds since they track an underlying index. When purchasing specialty ETFs, however, an investor must use caution.  Volume: ETF volume reflects the ETF's trading potential and, as a result, its liquidity. Higher volume means lower spreads and more liquidity.  Underlying Holdings: Look at the underlying holdings of the ETF.   Performance: Look at the fund's past performance and compare that to its peers.   Market price: An ETF should ideally trade near its NAV. Before making any acquisitions, investors should consider the NAV.   Beta: Beta measures how much security is likely to go up or down daily concerning the tracking Index. It is, in essence, a measure of a security market or systemic risk.   For example, a stock having a beta =1.0 swings in tandem with the general market, so a 1% increase or decrease in the underlying index is mirrored by a 1% gain or fall in the ETF's price.  Alpha: Alpha is referred to as 'excess return', which measures the return earned by a stock above or below the market's demand for its risk class.  Age of the ETFs: The age of the fund can be used as a proxy for the reliability of the fund. A fund that has been around for a considerable time must have a proven track record.   Why should you invest in US ETFs?  All key US stock exchanges have companies listed worldwide, making it a potential investment destination. If you invest in the US share market, you diversify your financial portfolio while investing in worldwide companies.   The equity market in the United States is the largest in the world. The US financial markets accounted for 54.5 percent of worldwide stock market value as of December 2021.  Investments in US stocks can help you get a good return on your money because global corporations are there, and the return you receive will be high due to various factors.  Unlike India, you can hold US stocks in fractions. After all, buying a single Google share is out of range for most individuals. You can own a part of the company for as little as Rs 1,000 or even less.  According to historical data, the Indian Rupee has been losing value against the US dollar, and there is a probability that this trend may continue.  The rupee-to-dollar exchange rate influences the profit you make from foreign equities. Any rupee weakening helps boost profits if dollar-denominated investments such as US shares appreciate.   Even if global markets are disappointed or remain steady, you benefit if the rupee falls against the dollar.  How to send money to the United States?  All residents, including minors, are entitled to freely transmit up to USD 2,50,000 per financial year (April – March) for any permissible current or capital account transaction, or a combination of both, under the Liberalized Remittance Scheme.  Furthermore, residents can use the foreign exchange facility for up to USD 2,50,000 for the purposes listed in paragraph 1 of Schedule III of the FEM (CAT) Amendment Rules 2015, dated May 26, 2015.  Indian residents can use the LRS to send money overseas for tourism, education, medical treatment, stock and property purchases, care of family living abroad, presents, and donations.   Individuals may also create, manage, and retain foreign currency deposits with foreign banks to conduct transactions. The scheme does not cover corporations, partnerships, trusts, etc.  All about taxation when investing in the US Market Let us sum up the taxation aspect in an easy-to-understand flowchart  1. Dividends  An intended distribution of a company's profit to its shareholders is known as a dividend. You must thus pay the tax on the dividend you receive because your investment is lucrative.  2. Capital gains on the sale  You can choose to make money or lose money when you sell a stock. If you experience a loss, no tax is owed; but, if you experience a profit, you must pay capital gains tax.  The capital gains tax rate is based on how long the stock has been held. Foreign investors in US stocks are not subject to the country's capital gains tax. However, the Capital Gains Tax plan in India requires you to pay taxes.  a) Long-Term Capital Gains Tax Rate (LTCG)  If you own a stock for more than 24 months, the profit from selling it would be taxed at the Long-Term Capital Gains rate in India. Long-term capital gains are taxed at a rate of 20%. (Plus, any additional surcharge and cess).  b) Short-Term Capital Gains Tax Rate (STCG)  If a sale is made before the 24-month period, it will be considered normal income, and the tax rate will depend on your tax bracket.  Understanding some critical ETF terms  Smart Beta ETFs - "Factor-based" or "Strategic Beta" ETFs are other names for Smart Beta ETFs. These ETFs wisely select their underlying assets in keeping with their namesake.  These ETFs choose the primary assets based on factors other than market capitalization.  ETF liquidity - 2 different types of allied liquidities - Primary and Secondary.  Primary Liquidity is the Liquidity associated with the ease of creating and redeeming ETF shares with the help of underlying securities.   The Liquidity of the underlying securities plays a significant role in determining the Liquidity of the ETF shares in the primary market.  Secondary Liquidity is the Liquidity associated with the already created ETF shares in the stock market. This Liquidity is generally the visible Liquidity on the market.   The non-institutional investors or investors with a smaller scale of operations generally are concerned with this type of liquidity. Investors buy and sell ETF units on the secondary market without the involvement of the ETF issuer.  Tracking difference - which can be either positive or negative, indicates how well a fund has outperformed or underperformed its benchmark index.   It's derived by subtracting the fund's total return from the benchmark's total.  Tracking error - reflects how much variability occurs among the individual data points that make up the fund's average tracking difference.  The value of a fund's assets subtracted the value of its liabilities is known as net asset value (NAV). The term "net asset value" is frequently used in the context of mutual funds and ETFs, and it refers to the value of the assets owned in the fund.  If the ETF's price is higher than its NAV, it is considered to be trading at a "premium." In contrast, if the ETF's price is below its NAV, the ETF is considered to be trading at a "discount." Spread - At any given point in the market, there are two prices: the sale price, i.e., 'ask' and the other to buy, i.e., 'bid'. Buyers of ETFs aim to pay a fair price and, if possible, a discount on the market price of the core securities in the ETF, while sellers want to get the highest price -leading to the existence of spreads.   International investments allow you to diversify your portfolio and acquire exposure to new markets. Geographic diversification can help mitigate country risk, such as the chance of bad events affecting India's domestic economy.   Furthermore, when comparing investing in Indian vs US markets, US stocks have traditionally displayed lower volatility, higher returns, and greater foreign exposure.  FAQs What is an exchange-traded fund (ETF)? An ETF, an exchange-traded fund, enables investors to buy many shares or bonds at once. Investors purchase ETF shares, and the funds are employed to invest in a specific way.   If you buy a Nasdaq 100 ETF, your money is put in the index's 100 companies. The ETF trading on the exchange is precisely like a regular stock. What to look for in the ETFs before buying/investing?  There are many parameters to look out for while buying an ETF: performance, expense ratio, volume, market holdings, age of the ETFs, etc. What are the two types of ETFs? ETFs have two categories: passive and active. Passive ETFs (also known as index funds) monitor a stock index like the S&P 500. Passive ETFs replicate the performance of an index. Active ETFs hire portfolio managers to invest their money. Active ETFs aim to outperform a benchmark index.  Consult an expert advisor to get the right plan for you TALK TO AN EXPERT
ETF
Find out how present market volatility affects your investments

Find out how present market volatility affects your investments

Nifty50 is one of the two leading stock indices used in India. The recent volatility in the market has caused a wave of shock amongst investors and traders. This article will address what has caused the current market volatility, and how you can deal with the same with a few tricks.  https://www.youtube.com/watch?v=tdwqQH0xkFw Reasons for the tank in the markets  The bearish view tightened its grip on the Indian equity markets on 13th June, as inflation concerns and fears of aggressive interest rate hikes by the US Fed spooked investors. \Nifty tanked by 2.5%, breaking below the 15800 levels, and Sensex fell by 1500 points. All sectors bled in red, with banks, metals, and realty falling the most under selling pressure. The main reasons for this significant correction are:   High Inflation Rates: The consumer inflation rate in May, hit a 40-year high of 8.6% in the US and the CPI inflation is expected to stay above % in India.   Aggressive Rate Hikes: There was a significant gap in the markets opening on Monday. The global markets are witnessing a significant sell-off amid the fear of major interest rate hikes by the US Fed.  Crude Oil Price Volatility: Major losses were incurred by investors in the oil as both Brent Crude, and WTI Crude slipped by 1.4%.  Rupee Depreciation and FII Exit: The INR fell to a record low of Rs.78.15 against the US Dollar due to fear of high-interest rates and volatile crude oil prices. Also, there has been persistent selling of Foreign Institutional Investors (FIIs), which has weakened market sentiments. Nifty Performance Source: EduFund Research Team The graph shows the Nifty performance from June 2021 to June 2022.  The market fell significantly, touching the floor prices during the pandemic. Post this, the market started picking up in April 2021. The market continued to stabilize till October 2021, reaching 17500 levels. But this sweet story ended when the market faced a significant fall in November 2021.   The market rebounded in January 2022. It again reversed when the market fell to extreme lows amidst the geopolitical issues between Ukraine and Russia. It faced a significant fall in February, after which it quickly recovered in March.   But since mid-March, the market started falling due to various reasons like high inflation rates, FII exit, hikes in interest rates, and escalation of Ukraine – Russia war.   This continuous fall has led to the Nifty falling to such an extent that it reached a 0% return over one year. The dotted line on the graph shows Nifty in June 2022 at the same level as Nifty in June 2021. What can you do as an investor?  Lumpsum Investment: A lumpsum investment can help you attain units of a Mutual Fund at a relatively cheaper NAV in the current market conditions. If you have a long investment horizon and a good risk appetite, invest in mid-cap or small-cap funds, which will give you good capital growth when held for more than five years. In the case of a short to medium investment horizon, you could invest in a Hybrid fund, more like a Dynamic Asset Allocation fund, where you get the best of both equity and debt.  Rebalance your Portfolio: Now is the right time to rebalance your portfolio. If your portfolio has significant losses, you can balance it out in two ways.   You can average out your losses by buying more units of that fund or equity now at a lower price to reduce the total loss.   Allocate more funds in your portfolio to mutual funds and equity that have a value which means they have a potential for high growth and performance.  Invest in US ETFs: You can make the most of the INR depreciation by investing in the US Dollar market. There is a wide range of ETFs, namely, large-cap, small-cap, mid-cap, sectoral, etc. This is again the right time to invest in US ETFs as they are trading at significantly low prices. These funds expose you to the US Stock market with an expert managing your funds.  Power of Rebalancing  One fundamental matrix many investors use is portfolio rebalancing when there is high volatility. Portfolio rebalancing is moving closer to the initially decided asset allocation strategy.  The idea behind asset allocation is to balance risk and return in your portfolio by spreading your investment among different types of assets based on market conditions. Source: EduFund Research Team Let's assume that here you have a SIP of Rs. 20,000 monthly. The asset allocation here is taken in Equity, Gold, and Debt.   A rebalanced portfolio captures the market better during upward market movement, whereas there is a lag or shortfall in the portfolio that is not rebalanced.   Moreover, even when the market returns are negative, an actively rebalanced portfolio ensures that the equity, debt, and gold allocation is done so that the portfolio still generates a positive return and efficiently captures the market volatility.  In June 2022, the percentage of Nifty returns (1 year) was 0. The monthly Nifty returns are at –4.53%. The rebalanced portfolio is at a positive level, whereas a non-rebalanced portfolio yields negative returns.  How do advisors help you?  Investors are not required to go through the hassle of rebalancing the portfolio quarterly on their own. This is what RIAs are here for!  Registered Investment Advisors (RIAs) are certified and experienced to help you with periodical portfolio rebalancing. When your portfolio is not managed actively by an RIA, your portfolio's asset allocation remains unchanged throughout the period unless and until you change it on your own. But when an RIA manages your account, your portfolio is rebalanced periodically based on the market requirements.  Therefore, having an experienced RIA with expertise in the market makes your life easier and ensures that the portfolio volatility is maintained at minimum levels even with high market volatility. FAQs What is market volatility? Market volatility is a way to track price variation in a market and to check how the market performance will change and fluctuate. How much market volatility is normal? Market volatility is fairly common. Investor should watch their investments carefully. Price fluctuations across investments, if the volatility increases to a point of bear market scenario then it's time to rethink your strategy. How can you lessen the impact of market volatility? To minimize the effect of market volatility, investors should diversify their investments, choose low-risk investment baskets, rebalance their investments to avoid loss, and keep investing for the long run with expert guidance.  Consult an expert advisor to get the right plan for you TALK TO AN EXPERT
When to start investing in child's education?

When to start investing in child's education?

In the previous article, we discussed what is a better asset to invest in a child's future. It is common knowledge that parents should start investing in a child's education. But when should you start? How do you start? In this article, we will talk about when to start investing in a child's education. Saving up for children's education is a daunting task for parents. The question "When should you start to save for your child/children's education has a universal answer. The answer is "as early as possible".   Every parent aspires to provide their child with the most extraordinary life possible. Parents, particularly when it comes to their children's education, are always looking for methods to stay one step ahead.   Parents who take a proactive approach and invest methodically from an early age can protect their children's futures. As a result, financial planning is critical for achieving a goal as important as supporting a child's education.   https://www.youtube.com/watch?v=wUiUws6L2aY Time is the most critical component. The powerful notion of compound interest benefits you more the longer you invest.   Education costs are rising faster than inflation. As a result, the expense of sending your child to a university or college will almost certainly double every six to seven years.  Tax Benefits of Investing in Child's Education Read More An undergraduate course at the Indian Institute of Technology (IIT) costs around 2 Lac per year. The IIM charges roughly 20 lakhs for a two-year diploma program.   Starting investing early is the only way to protect your wealth against inflation and save enough money to send your child to a prestigious college.   While the annual rate of return and the original investments are essential, the length of time you invest the money is the most crucial element. So, if you want to put money aside for your child's education, get started immediately.  Example   Let us take an example to understand why you should not delay the investments for your child's future education:   Two mothers, Anita and Archana, want to save for their respective daughter's education. Both intend to save money and invest a lump sum of Rs 2,00,000 in equity-focused mutual funds (offering 12% per annum yearly returns).   However, the difference is that Archana made the lumpsum investment when her daughter turned ten years old, while Anita invested as soon as her daughter was born.   So, the time horizon for Archana is eight years and the time horizon for Anita is 18 years. Let us see the difference between the accumulated amount at the end for both mothers.    Anita will have Rs 15.3 lakhs for her daughter's college by the time she is 18, while Archana will have only approx. Of Rs 4.9 lakhs. In other words, by investing ten years sooner, Anita could save over three times as much as Archana.  The visual below gives a good representation of the example:  In the above example, Archana and Anita put money into the same mutual fund. The amount they invested and the rate of return were identical.   The only variation was the investment period. Anita continued to save for another ten years, but her final corpus was three times that of Archan.    For savers hoping to build money through compounding, time is everything. FAQs When to start investing in a child's education? Ideally, parents should start investing in their child's education before they are born. This can help them keep up with the rising costs of education which is growing at a faster rate of inflation than income. Planning, investing, and saving for a long duration allows one to take advantage of compounding. Why parents should invest early in their child's education? Parents should invest early in their child's education because education is costly. The cost is increasing every year due to high competition and education inflation. Saving and investing early on can help them take advantage of investment assets like mutual funds, ETFs, and stocks that can beat inflation and help them preserve the value of their money. What age is too late to start investing in your child's education? It's never too late to start investing. You can start with low-risk investments that can help you save up more in a short duration. You can consult a financial advisor to figure out your options based on your risk appetite. Consult an expert advisor to get the right plan for you TALK TO AN EXPERT
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