Investment tools for creating children's education fund

Investment tools for creating children's education fund

Where to invest in children's education? What are the best investment tools for creating children’s education fund? How much do you need to get started? Let’s find out in this article.  If you're thinking about setting aside money for your children's educational needs, it's time to get moving and avoid delay at all costs. Education inflation is rising considerably more quickly than general inflation. Parents are finding it more and more difficult to cover the rising fee structure and other expenditures involved with education.   This is true from basic to secondary to higher education. Saving in assets that can produce returns that outpace inflation is crucial. This is why it is important to make a rough estimate of the course's inflation-adjusted cost now, even before you begin saving. Your child might be interested in it in a few years.  Public Provident Fund (PPF), Sukanya Samriddhi Yojana (SSY), or equity mutual funds are the top three investment options for many parents while saving for their children's education expenses. Let's look at what PPF, SSY, and equity MF as the best investment tools for creating child’s education fund:  1. Public Provident Fund (PPF)  Even little children's names can be used to open PPF accounts. A total of Rs. 1.5 lakh per year may be invested in both the parent's own PPF account and the child's PPF account. To construct a tax-free corpus for the child that is secured by a government guarantee for the debt part, one could think about investing in child PPF. The PPF donation made to the child's PPF account may also provide tax benefits to the parent. PPF is a 15-year plan, and when a child turns 18, they can utilize the same account to make partial withdrawals to reduce their tax burden.  The PPF may be extended after 15 years in blocks of 5 years, thus for the child, it will be a 5-year PPF. The interest rate on the PPF account is currently 7.9% per year, compounded yearly, and paid at maturity.  2. Sukanya Samriddhi Yojana (SSY)  The Sukanya Samriddhi Yojana program is designed to meet a girl child's financial needs. The youngster must be younger than 10 years old, and the program matures when the child turns 21. Only the first 15 years must be covered by the parent's SSY deposits. The SSY regulations permit the plan to be terminated after the child becomes 18 as long as it is only done so to facilitate marriage. The interest earned is tax-free, while the SSY contributions are eligible for a tax break under section 80C. The interest rate is currently 8.4% per year, compounded yearly, and paid upon maturity.  While the compounding and tax advantages of SSY and PPF are comparable, SSY has a greater interest rate. A PPF for a girl kid can be formed with only a tiny part of money entering into it, even though SSY can be given precedence for a girl child.  3. Equity mutual funds  Since PPF and SSY are both debt investments, returns will almost certainly fall short of inflation over the long term. One needs to be exposed to equity mutual funds in order to achieve strong inflation-beating returns. Create a mutual fund portfolio by combining at least two to three open-ended, diversified MF schemes, including an index fund, a large-cap fund, and a mid-cap fund. Pick investments that have consistently outperformed their benchmark throughout time. Connect them to your child's goals and keep SIPs going in them till the objective is three away.  The number of years before a goal can also influence a person's choice of plans.  4. Children's mutual fund schemes  There are mutual fund schemes specifically designed to meet the needs of children, but they have a lock-in period. When the market declines, immature investors typically have a tendency to sell their positions. They are unaware that keeping an investment for the long term, despite market volatility, is necessary to get returns that outperform inflation. On the other hand, fund management is given the freedom to make some risky decisions in order to maximize returns.  5. Child insurance plans  There are life insurance policies designed specifically to meet the needs of children. Such child insurance policies have a "waiver of premium" provision that guarantees the child will receive the intended amount of money when it is needed, even if the parent passes away during the policy's term. Such plans are more expensive because they guarantee the necessary sum for a child's demands.  No one investment can be the best. Diversify among all three of these investments based on the number of years till the target and your risk tolerance. Aim to use the long-term potential of equities through equity mutual funds rather than becoming significantly invested in debt products like PPF or SSY.  FAQs What are the best investment tools for your child's education? Public Provident Fund (PPF) Sukanya Samriddhi Yojana (SSY) Equity mutual funds Children's mutual fund schemes Child insurance plans How do I create a child education fund? There are many ways to create a child's education fund. Here are some tools that you should consider building your child's education fund Mutual Funds, US stocks, Sukanya Samriddhi Yojana for girl children by the Indian government, child insurance plans, and Public provident fund. These are effective ways to build wealth for big financial goals like your child's college fees or for your house. Is SIP good for child education? SIP is one of the best tools to invest in your child's education planning. It allows you to create a fund gradually and systematically without spending a huge amount in one go. It is a disciplined way to invest and allows you to stay invested for a long period of time. Consult an expert advisor to get the right plan TALK TO AN EXPERT
What is a student credit card?

What is a student credit card?

Student credit Card is meant for students and their expenses. They are extremely helpful with daily payments, offer rewards on shopping and travel, and can help a student build their credit score over the years. While the concept of student credit cards is literally new in India, it is fast emerging as a tool for financial independence and growth. Let’s find out what is a student credit card, how it works, and its benefits. What is a Student credit card and how does it work in India?    A student credit card is a credit card meant exclusively for college students. Students must be above the age of 18 years of age to avail of this card. Only some specific banks like SBI and HDFC banks offer this facility in India. A majority of college students going abroad generally opt for credit cards or forex cards. It is a new and emerging financial concept in the country.  Some state governments help students get student loans at a concessional rate and have also launched Student Card Schemes such as West Bengal Student Credit Card Scheme and Bihar Student Credit Card Scheme.   In order to apply for these cards, students must be above the age of 18 and enrolled as a student in a recognized institution. These cards are valid for 5 years with minimal or no annual fees. Banks do not charge a maintenance fee for student credit cards. Student credit cards have a relatively low credit limit so that students do not end up overspending.  It is a great way to help your child learn finances and budgeting. Maintaining their credit limit and credit score can help them create a healthy financial record over a long period of time.   Who can apply for these cards?     The basic criteria for student credit cards are age and enrolment. A student needs to be above the age of 18 years and must have a valid student ID from a recognized university/institution. Being enrolled in college is one of the most important criteria for acquiring this card. Why should you get a Student credit card?    There are many reasons to get a student credit card, let’s look at some of them:    Student credit cards help build creditworthiness and credit score. Students can start building a financial record and gain financial independence. It helps them understand the importance of limit utilization, regulate their spending habits, and understand reward features, and repayment mechanisms while building a strong credit score for their adult lives.   Student credit cards can be a backup and an emergency plan. If you as a student are in need of funds but don’t have cash reserves, then you can use your credit card immediately. It allows you to make the repayment later and fulfill your financial obligations  Helps in saving money and using discounts. A student credit card can get you amazing offers and discounts. It can help you minimize your expenses since books, stationery and gadgets can be expensive. Many platforms offer exclusive offers exclusively to students. This can help you stay on budget and build savings for yourself as well.  Another reason to get a student credit card is to gain financial independence and learn budgeting. As a cardholder, you will be responsible for all your expenses and repayments. This will help you analyze your spending habits and understand how to stay on track. Defaults on credit cards reflect poorly on your credit score and history, this is a good incentive to manage your repayments and spending carefully.  List of best student credit cards    Here are some of the best student credit cards in India    SBI Student Plus Advantage Card  Axis Bank Insta Easy Credit Card    ICICI Bank Student Travel Card  HDFC Bank's ISIC Student ForexPlus Card  What is the application process for student credit cards in India?     You do not require a list of documents to apply for a student credit card in India. Here are the following documents you must provide along with an application form given by the bank:  PAN or any other government-approved photo ID    Aadhaar Card or any other government-approved address proof    Birth Certificate    College Identity Card or any other proof of enrolment    Passport-sized photographs    Evidence of Education Loan and or Fixed Deposit (as per the credit criteria of the bank)    Consult an expert advisor to get the right plan TALK TO AN EXPERT FAQ What is a student credit card? Student Credit Card is meant for students and their expenses. They are extremely helpful with daily payments, offer rewards on shopping and travel, and can help a student build their credit score over the years. What are the eligibility criteria for a student credit card?  The basic criteria for student credit cards are age and enrolment. A student needs to be above the age of 18 years and must have a valid student ID from a recognized university/institution. Being enrolled in college is one of the most important criteria for acquiring this card. What are the benefits of getting a student credit card? Student credit cards have many benefits, they help with the following:  Provide financial independence  Helps you learn budgeting and financial management   Builds credit history and score  Have a reward system   Useful during emergencies What are some of the best credit cards in India?  Here are some of the best student credit cards in India:    SBI Student Plus Advantage Card   Axis Bank Insta Easy Credit Card     ICICI Bank Student Travel Card   HDFC Bank's ISIC Student ForexPlus Card  Student credit cards are the best teachers of financial management and spending. They have a relatively low credit limit and students are less likely to misuse the financial tool. It helps them learn about budgeting and build creditworthiness for borrowing funds in the future. In the modernized world, the advantages of student credit cards are unlimited, they help students make transnational payments and come in handy during emergencies.
How much do you need to save for a child's higher education?

How much do you need to save for a child's higher education?

Parenting is difficult. There are too many things going on at once. Without a doubt, you devote a lot of time to caring about the safety, academic success, and social skills of your children. To help them achieve great things, you need to start setting money aside for your child's education as soon as possible. But in order to save effectively, you need a plan and a cautious estimate of future costs. The following formula can be used to determine how much money you should set away for your child's education. How much do you need for your child’s higher education? Let's look at the price of several well-known courses in India at prestigious institutions and estimate their future cost 15 years from now, assuming inflation at 10% p.a., to determine the amount of the Investment Corpus necessary. How to invest in child investment plans? If you want to be completely prepared for any circumstance, you should invest time and effort into your child's future. When deciding when to begin investing, the following factors should be taken into consideration. The length of time you intend to continue making the commitment is one of the most crucial factors to take into account when planning future investments, therefore you must decide on the time frame for your investment. The advantages are frequently greater as the time horizon gets longer. The second factor to be taken into account is the typical expense of your child's future education. Although this varies by school, costs for postgraduate study might occasionally be more than those for graduation. Consider whether you want your child to have a local or a global education as well. You may also take into account your child's graduation from high school in your own country and their following post-graduation in a different country. You must first assess your existing condition before formulating future goals. Consider all of your options carefully before making a decision. If you're investing a portion of your money in a child plan, you should be fully aware of its current worth. Knowing the current worth of an investment may help you avoid overspending on other financial goals, such as retirement. Please don't utilize the Child plan for other low-priority expenses like home improvements. It's a good idea to always be ready for the unexpected. Other expenses, such as rent and pocket money, might be included. In addition to school and tuition fees, there are a number of other considerations after your child reaches high school. Even if these amounts initially seem small, they could wind up costing you more over time. It is much more crucial if your child intends to pursue graduate or postgraduate education abroad. Different investment options for your child It's possible that fixed deposits and other conventional products won't be sufficient to pay for your child's education expenses. It is important to consider other products like shares, balanced funds, and equity funds. Depending on your time range, you can choose one of the following investing strategies: If your child will want the cash within five years, debt mutual funds are the best choice. Such funds have the ability to produce returns that are higher than the rate of inflation while also supplying liquidity. For long-term objectives, you can combine several financial instruments. Gold, equities, and debt are all investment options available to you. Although being exposed to the stock market might be risky, buying stocks allows investors the possibility to make more money over time. One of the best investment alternatives for supporting a child's education is the PPF. You must start this early and invest continuously in order to build up a sizeable capital. A variety of kid-focused services are offered by several insurance companies. You may decide to put more responsible rules into place when your child needs the money to pursue further education. Investment strategy for children's investment plan List specific goals upfront, such as the child's preferred education and related costs. After paying all of your regular costs, you'll be able to estimate how much you can afford and how much you'll need to set aside each month. However, you must remember that loans can also be utilized to fund your education. As a result, you do not have to sacrifice other expenditures like healthcare and retirement to save for your child's education. As the financial goal draws near, reduce your stock exposure to lessen the likelihood of adverse market movements. Children's investment plans can assist you in preparing financially for rising education costs, unexpected illnesses, and unfortunate circumstances. As soon as you can, you should start making plans for your child's future. By doing this, the associated risks are dispersed and your assets have more time to grow. Consult an expert advisor to get the right plan TALK TO AN EXPERT
Smart ways to plan short-term and long-term goals

Smart ways to plan short-term and long-term goals

When it comes to planning and investing for all your goals, the saying “one plan fits all” doesn’t do. Just like one investment will not cater to all your goals and objectives. Every goal is different and has its own requirements. For example, based on the time horizon itself, short-term goals are those which have to be achieved immediately whereas long-term goals have a good time horizon to be planned and saved for.  Now, are you wondering how all the goals can be achieved by you? In this article, we will tell you how you can smartly plan for your short-term and long-term goals.  Types of Goals  Short-term goals: These are the goals that you want to achieve in the near future. The near future can be today, this week, this month, this year, or within 2 years. These are goals that need you to plan and be prepared immediately to ensure you achieve them on time.   Some examples of short-term goals are: Paying for your child’s school fees every year.  Purchasing a smartphone.  Purchasing a laptop.  Purchasing jewelry for an occasion, etc.  Planning for an international trip with your family?  Long-term goals: These are the goals that provide you with good bandwidth to plan and be prepared to achieve them. There is no specific definition of what long-term really means. It has a timeline of anywhere more than 5 years.   Some examples of long-term goals are:  Saving for your child’s higher education when your kid is young.  Saving for your child’s wedding.  Planning to purchase a car  Planning to buy a house.  Saving up for your retirement corpus.  Investment for short-term goals  There are multiple ways to save for short-term goals which will suit your risk appetite, the tenure of your investment, and your needs.  Savings Accounts: You can always maintain a cash balance to fulfill your immediate goals and objectives. But usually, it is not ideal to maintain your savings only in your savings accounts as it does not even generate inflation-beating returns. In long run, you may end up losing money. It is advised to only maintain an emergency corpus in your savings accounts to have some liquid cash.  Fixed deposits: Fixed deposits are where you invest in an FD with a bank and there is an interest on the investment received by the investor. FDs have a lock-in ranging between 7 days to 10 years. But even after the interest rate revision by the Central Bank, the FD rates are still not generating inflation-beating returns, which causes a loss to the customer.  Debt mutual funds: This is the best option to save for your short-term goals. There are multiple options for an investor to choose from. For example, if an investor has a very short tenure for a goal, one can choose from an ultra-short duration fund, a money market fund, or a liquid fund. Likewise, with a little longer horizon, an investor can choose from a corporate bond, medium-term bond, etc. Debt funds generate returns that are at par with the inflation rate.  Investment for long-term goals  One has multiple instruments to invest to achieve their long-term goals as well, based on the risk appetite, tenure, and requirements.  Direct Equity: An investor can directly invest in the stocks of a company as an investment option. One thing to note here is that direct equity investing is time-consuming. One cannot just randomly choose a stock. Detailed research and analysis have to be done to select a stock. Also, while having direct equity exposure, one has to be prepared for either major profits or major losses due to the high market volatility.  Mutual funds: While investing for long-term goals, an investor has options of both equity mutual funds and hybrid mutual funds. One does not have to do such detailed analysis while doing stock picking for a mutual fund. The fund managers actively manage and rebalance the portfolio as per the market conditions. So, there is always an added advantage of an expert management team in mutual funds.   Real estate: In India, real estate is the most sought for long-term investments. Yes, having a property in one’s name is good and sounds powerful. But it does not provide liquidity to an investor. It may so happen that at the time of achieving a goal, one may not be able to sell the property. The smart way of investing for short-term and long-term goals  An individual will never have just one goal. There will be multiple goals. As discussed above, just like “one size does not fit all”, one investment does not cater to all goals and objectives.   The best solution for this is following a goal-based planning approach. In this approach, all goals are properly planned for.  First, the goals and objectives are clearly mentioned along with a monetary value attached to them. For example, if one of the goals is to pay for the child’s school fees the amount needed is also mentioned along with the goal.  Then, the time horizon is specified. After setting the goals, the investor has to set how much time the investor has to save up and achieve the goal.  After specifying the time horizons, investors’ investment characteristics are specified. What does this mean? These characteristics include the risk appetite of the investor and what amount the investor is able to invest to achieve all his goals.  Sounds scary and lengthy right? Not to worry. You can always approach a Registered Investment Advisor to help you with a detailed investment plan to make your investment journey smoother. Conclusion  Goal-based planning is the smartest way for you to make one detailed investment plan to help you achieve all your goals so that you do not miss out on your dreams! A Registered investment advisor also ensures that your portfolio is well diversified and periodically rebalanced to optimize the portfolio’s risk and volatility.  Consult an expert advisor to get the right plan TALK TO AN EXPERT
How to budget for short-term and long-term goals?

How to budget for short-term and long-term goals?

Do you plan on buying a laptop? Do you also wish to save for your child’s education? These are two different financial goals, and both require good planning and execution. This blog will discuss “How to Budget for Short-Term and Long-Term Goals”.  It is better to be aware of your financial situation and the different expenses that you incur to plan accordingly.   Budgeting helps to identify financial spending and understand how to allocate the leftover money to various needs for a better future. It encourages people to stay organized and appreciate the value of accounting. Steps needed to budget for short-term and long-term goals Step 1: Prepare for life’s contingencies Life is unpredictable, and it is necessary to be prepared for any events that might set you back, like recession, job loss, illness, or even death. Prepare for some of the contingencies with the help of insurance plans, for example, health insurance or Mediclaim plans are suited for illness and hospital bills, and life insurance plans like term insurance for financial assistance in case of death.  For a recession or job loss, you need to create an emergency fund where you put aside some money regularly. Automate these payments so that they can continue without any hassles.  Step 2: Define the financial goals Identify both short-term and long-term financial goals so that it becomes easy to segregate them and make budgeting plans accordingly. Short-term goals can be credit card payments, emergency funds, or personal expenses, whereas long-term financial goals often include retirement funds, a child’s education fees, and paying off the mortgage.  Define the financial goals and be specific with the goal, be it about buying a new house in 5 years or your child’s education down the line, or a retirement fund? Step 3: Prioritise the financial goals Once you have defined and sorted out the financial goals, it becomes imperative to prioritize them. Consider the time you have in hand to meet them and how vital these goals are for yourself and your family’s future.  Step 4: Consider the timeline  By this time, you have identified and segregated the financial goals and have a few specific goals in mind. Think about the time in hand for instance, for the child's education goal, you need nearly 10 - 15 years, but for buying a house, you need 5 years. Step 5: Consider the money  The next question to consider is the money you will need to fulfill the financial goal, for instance, the estimated price of the house you want to buy (nearly INR 80 Lakhs) or the amount you want to save for the education corpus (nearly INR 60 Lakhs).  Step 6: Review all your expenses Record all the spending for at least a month to know how much and where you have been spending. Review these expenses and identify which ones are necessary, which ones can be reduced and how much money you have left after meeting them.  Step 7: Set a savings target The money must work for you and provide maximum advantage hence look for ways to save it. There are numerous short-term and long-term investment plans available in the market, like SIP, liquid funds, debt funds or PPF, etc.  Take the help of a financial advisor at Edufund to know more about short-term and long-term investment options. Look at your total savings and make sure it accounts for everything from the contingency fund to the long-term and short-term financial goals. The ideal ratio for spending and saving should be 50:50, but you can mold it as per your requirements up to 60:40. Any more spending will create worries hence try to maintain a balance. Step 8: Divide the savings for important goals Divide your savings for all the important goals. Prioritize necessary long-term goals like education corpus for the child, retirement plan, and necessary short-term goals like purchasing a home. Now put the focus on comparatively less important goals like marriage, family vacation, home renovation, etc., and lastly, consider the short-term lifestyle goals.  Tips to make budgeting a success The premium of health insurance and life insurance policies must be on time. Automate the process from your salary account to avoid any discrepancies. Always keep the contingency fund aligned with current income and expenses. Club similar lifestyle purchases and expenses to get better value. Take the help of a credit card to pay for your expenses but pay back the amount within the stipulated time to avoid any charges.  Conclusion It takes both planning and budgeting to stretch your money to the last unit and meet your financial dreams effectively. Once individuals are aware of how to budget for short-term and long-term goals, then it becomes easy to manage their expenses and put focus on spending that will have more value. Consult an expert advisor to get the right plan TALK TO AN EXPERT
How to align short-term and long-term goals

How to align short-term and long-term goals

Planning to align your short-term and long-term plans and want to know the best way to do so? Well, this blog will answer your queries and explain how to go about it systematically. Individuals often have a list of financial goals that will secure their financial future. Both, short-term and long-term goals are equally important and serve different purposes in real life. In most cases, you cannot achieve one without the other. Hence, it becomes feasible to align them as short-term goals depend, to a great extent, on long-term strategy. What are short-term goals? Short-term goals are the goals that have to be met in the immediate future and cannot be avoided. For instance, you might be interested in creating and managing an emergency fund or have to make regular payments towards an insurance scheme that you have taken out or simply your credit card payments. Short-term goals are actionable steps that improve productivity and help to remain focused.   What are long-term Goals? The long-term goals are the financial goals for the future or down the line in the next 10 or 15+ years. These often include a child’s education corpus, retirement fund or mortgage payments, as these will be needed after several years and not just now. Long-term goals give direction and help to develop plans and steps that will take an individual towards his dream.  Steps for aligning short-term and long-term plans 1. Look into the financial goals Look at your financial goals and divide them into two different categories short-term and long-term. Be aware of your goals to know where you have to spend your money. Are you creating an emergency fund or paying rent, or making home improvements? These are short-term financial goals, but if you want to maintain a retirement fund or an education fund for your child, then these will be treated as long-term goals.  2. Prioritize your goals Identifying the various goals is the easy part but prioritizing them is a very different scenario. Every goal looks important at the onset hence you need to sit down and think carefully about the ones with the maximum impact.  3. Be realistic People need to be realistic about their expectations because you need to have the means to fulfil your wishes. Look at the amount left after meeting your expenses and decide how to manage it constructively. You can take the help of the 50/30/20 equation or adjust it according to your personal needs. Realistic and clear goals will enable the alignment process and lead to success.  4. Set long-term goals before the short-term tactics There is a misconception that you have to set up short-term goals first because they are related to the present and need to be addressed first. The truth is that aligning both sets of goals requires you to set clear and defined goals for the future at first. When you know the direction, you need to take it becomes easier to break the long-term goals into specific and measurable short-term tactics, follow a definite timeframe and uphold the long-term vision.  5. Break the long-term goals into shorter goals Aligning and solidifying the short-term and long-term plans will have a positive impact on future objectives, and one of the best ways is by breaking the long-term goals into small defined goals that can be achieved within a specific and small timeframe. Make sure the long-term goals are identifiable and concrete because vague goals will make the alignment process difficult. 6. Specific goals When the goals are specific, it becomes easy to create and follow a definite plan of alignment. For example, if a person has INR 4000 left for savings and investment and he has to pay INR 1000 every month towards his retirement plan, then his path is clear. It becomes vital to keep up with your rising income. If at the start of your professional career, you were saving and investing only a small amount because of a small salary, then you should increase your savings as your salary increases.  7. Take the help of financial experts Sometimes it is better to opt for expert advice and work accordingly. Financial counsellors at Edufund can create a financial plan that will align your short-term and long-term goals perfectly. This will make the journey comparatively easy.  Conclusion  It is important for short-term planning to align with long-term goals and not the other way around. When an individual has a specific long-term plan which is concrete and identifiable, then it becomes easy to mould the short-term tactics and uphold the longer visions. Consult an expert advisor to get the right plan TALK TO AN EXPERT
ICICI Prudential Large & Mid Cap Fund. Who should invest?

ICICI Prudential Large & Mid Cap Fund. Who should invest?

ICICI Prudential Mutual Fund is the second-largest asset management company in India. With over Rs 3 Lakh crore, the AMC is one of the most trusted names in the mutual fund space. The AMF offers products across asset classes.   Let us talk about the flagship product – ICICI Prudential Large & Mid Cap Fund. About ICICI Prudential Large & Mid Cap Fund Investment objective To generate long-term capital appreciation from a portfolio that is invested predominantly in equity and equity-related securities of large-cap and mid-cap companies. However, there can be no assurance or guarantee that the investment objective of the Scheme would be achieved.  Investment process   The Scheme follows a blend of top-down and bottom-up approaches to in-stock selection. The focus of the top-down approach is alpha generation through active sectoral rotation. While a bottom-up seeks to identify companies with reasonable profitability and scalability supported by sustainable competitive advantages.  Portfolio composition  The equity exposure is majorly in large-cap stocks at 78% and major sectoral exposure is to Banks and IT-Software. The top 5 sectors hold nearly 54% of the portfolio.  Note: Data as of 30th Nov 2022. The bar graph shows the top 5 sector weightage of the fund’s portfolio. Source: ICICI Pru  Top 5 holdings Name Sector Weightage % HDFC Bank Ltd. Bank 7.84 Bharti Airtel Ltd. Telecom Services 6.05 ICICI Bank Ltd. Bank 5.41 Infosys Ltd. Information Technology 3.44 State Bank of India Ltd. Bank 3.32 Note: Data as of 30th Nov 2022. Source: ICICI Pru Performance over 24 years  If you would have invested 10,000 at the inception of the fund, it would be now valued at Rs 5.93 lakhs. This fund has outperformed the benchmark in all time horizons. Note Performance of the fund since launch; Inception Date – July 09, 1998. Source: icicipruamc.com  The fund has given consistent returns and has outperformed the benchmark over the period of 24 years by generating a CAGR (Compounded Annual Growth Rate) of 18.17%  Fund Manager  Mr. Ihab Dalwai is the fund manager of the Scheme. He has been managing this scheme for 8 years. He is is a Chartered Accountant as well as a CFA. He is associated with ICICI Prudential AMC since April 2011. He has over 11 years of industry experience.  Who should invest?  Investors looking for  Long-term wealth creation solution.  Looking to invest in both large-cap and mid-cap stocks.  Why invest?  This scheme provides an opportunity for higher capital appreciation over the long term.  The major portfolio composition of large-cap stocks helps in reducing the overall portfolio volatility and provides less volatile and reasonable returns.  Horizon  One should look at investing for a minimum of 5 years or more  Investment through a Systematic Investment Plan (SIP) may help in tackling the volatility of the broader equity market.  Conclusion  The fund is good for investors who want exposure to equity and equity-related instruments but with optimized risk. It helps an investor with long-term wealth creation in a much more stable way as compared to instruments with a higher risk appetite. 
What are the Invesco PowerShares? All you need to know about

What are the Invesco PowerShares? All you need to know about

Invesco PowerShares (previously PowerShares Capital Management) is a Chicago-based investment management firm that oversees exchange-traded funds (ETFs).   Since 2006, the company has been a subsidiary of Invesco, which markets the PowerShares product. PowerShares funds were founded in 2002 and use quantitative indices as a benchmark.  There are more than 200 PowerShares ETFs available right now. The PowerShares QQQ (Nasdaq: QQQ) is designed to imitate the NASDAQ-100 Index. The PowerShares QQQ is one of the most popular stocks on Wall Street.   PowerShares ETFs also invest in commodities, diverse stocks, and small and microcap firms. Through an ETF, the PowerShares DB Commodity Index Tracking Fund, or DBC, established with Deutsche Bank, individual investors can participate in things. The PowerShares DB Oil Fund (DBO) covers the crude oil index.  Invesco was the first company to launch an intelligent beta ETF in the market. It is one of the top 4 ETF providers in the United States.   The company has over $ 288 billion in assets under management in ETFs. The exchange-traded funds also come with various strategy options to choose from.   Different types of ETF strategies employed by the company are  Factor investing   Fixed-income factor investing  Equal weight investing   Quest for income Access commodities   Low volatility   Momentum solutions  Fundamental investing   Pure EBeta suite   Pure style   Conquer Currencies   Bulletshares ETFs  BulletShares ETF products are created on basis of the basic concept of bond laddering. Bond laddering is the practice of accumulating bonds with varying maturities in the same portfolio.   The goal is to diversify and spread risk along the interest rate curve to protect against erratic rate movements. There will not be a long lock-in period in any bond if the maturity dates are staggered. This method is used by risk-averse investors who choose income overgrowth.  It is a fixed-income ETF. The firm also provides a variety of innovative ETFs.  Source: Pexels The six-step method is used to create these ETFs.  Step 1:  Start with an innovation - The foundation of these products is the NASDAQ-100 and NASDAQ NextGen 100 indexes, which provide access to innovative companies.   Step 2: Exclude non - ESG activities, like companies whose business activities are incompatible with ESG principles, such as controversial weapons or tobacco products.   Step 3: Remove controversial companies - Each company must have a rank of four or lower on a 5-point controversy scale (lower is better).   Step 4: Screened for risk - Each company must be ranked lower than 40 on a 100-point ESG risk rating score (lower is better).   Step 5: Company weights are adjusted are to be tilted toward companies with more attractive ESG scores and lastly, innovation with ESG criteria. The result is two new indexes that our products track, the NASDAQ-100 ESG Index and NASDAQ NextGen 100 ESG Index  Examples of such innovation ETFs are US EQUITY Invesco ESG NASDAQ 100 ETF and US EQUITY Invesco ESG NASDAQ NextGen 100 ETF.  Along with such innovative ETFs, the company also provides ETFs that track blockchain companies and bitcoin cryptocurrency.   Invesco Alerian Galaxy Crypto Economic ETF and Invesco Alerian Galaxy Blockchain users and Decentralized Commerce ETF are the company's funds. Invesco Alerian Galaxy Crypto Economic ETF targets the crypto economy's critical segments—miners, enabling technologies, buyers and crypto trusts, and exchange-traded products (ETPs).   Decentralized Commerce ETF and Invesco Alerian Galaxy Blockchain Users have access to the same vital segments as the Invesco Alerian Galaxy Crypto Economy ETF (SATO) but add exposure to companies that use blockchain technology.  Along with ETFs, the company also offers several different financial products to meet clients' requirements. Invesco offers a broad range of mutual funds which can be actively managed or passively managed.   They can also provide exposure to domestic and international markets. Fixed-income mutual funds are also on offer, which can customize the client's portfolio.   The company offers four different asset class type mutual funds Alternatives  Balanced  Equity and   Fixed income.   The corporation also allows access to the Muni market, i.e., the bonds issued by municipal bodies through the static income strategy.   Some mutual funds are Invesco DB Agriculture Fund, Invesco DB Base Metals Fund, Invesco DB Energy Fund, etc. FAQs What are the Invesco PowerShares? Invesco PowerShares (previously PowerShares Capital Management) is a Chicago-based investment management firm that oversees exchange-traded funds (ETFs).   Since 2006, the company has been a subsidiary of Invesco, which markets the PowerShares product. PowerShares funds were founded in 2002 and use quantitative indices as a benchmark. What do PowerShares ETFs invest in? PowerShares ETFs invest in commodities, diverse stocks, and small and microcap firms. Is Invesco the same as PowerShares? PowerShares is now called Invesco ETFs, after Invesco's merger. What is Powershare ETF popular for? Invesco PowerShares is a Chicago-based investment management firm that oversees exchange-traded funds (ETFs). PowerShares funds were founded in 2002. It is a fairly valued index and one of the most famous international stocks. Consult an expert advisor to get the right plan TALK TO AN EXPERT
ETF
What is Rupee Cost averaging?

What is Rupee Cost averaging?

Have you always heard Fin Gods in your circle saying it is next to impossible to time the market? Have they also told you that “Buy Low, Sell High” is the mantra that you should follow when you are investing in equities? Well, you have a way to bypass this myth and build a large piggy bank for yourself despite the fluctuations in the market. All you need to do is have some financial discipline and make sure that you invest a fixed amount on the same day every month without breaking the chain. Rupee cost averaging As the name suggests, you are averaging your costs and buying the mutual fund units accordingly. For instance, when the onion prices are hiked up to Rs 80/Kg, you cut down on your onion consumption and limit yourself to say 1 kg/month. But when the prices are on the lower end, you would want to feast on various onion delicacies like pakodas, spicy sabzis and garnish every dish with onions. Similarly, you would want to buy lesser units of mutual funds when the prices are high and more when the prices are low (since the markets are high/low, the underlying securities or stocks would be high/low ? Increased/decreased price of the mutual fund units invested in them). As an investor, however, I would give into the market euphoria and buy when the markets are high and sell the units when the market has taken a downturn (in the hope to limit my losses). As one can see in the above table, the average price that was in the market was Rs 52.14 and when one had invested in a SIP, the average price at which the units were purchased was Rs 44.93. Averaging gives you the advantage of riding along with the market. A SIP could be considered one of the best strategies in market up as well as downturns. Invested lump sum in April itself7000Price/Unit50Number of Units140Investment value in March - 21*2800Alternatively, if invested in SIP as followsSIP Investment Value in March -21*            4,818.15  Consider, an investor who invested in the market by deploying a lumpsum amount. For example, in the following case, the investor buys the units in the month of March 20 (consider that the investor attempted to time the bottom, and the market was going down before the investment). Market Downturn AmountPrice/UnitNumber of unitsFeb-2050050                  10.00 Mar-2050046                  10.87 Apr-2050045                  11.11 May-2050042                  11.90 Jun-2050040                  12.50 Jul-2050035                  14.29 Aug-2050032                  15.63 Sep-2050029                  17.24 Oct-2050025                  20.00 Nov-2050024                  20.83 Dec-2050022                  22.73 Jan-2150021                  23.81 Feb-2150020                  25.00 Mar-2150020                  25.00 Total7000                 240.91  FAQs What is Rupee Cost Averaging? In the rupee cost averaging approach, an investor keeps investing a fixed amount of money at regular intervals irrespective of market behavior. What is rupee cost averaging for example? The rupee cost averaging approach allows an investor to buy more when the market is down and less when the market is high. For instance, when the onion prices are hiked up to Rs 80/Kg, you cut down on your onion consumption and limit yourself to say 1 kg/month. But when the prices are on the lower end, you would want to feast on various onion delicacies like pakodas, spicy sabzis and garnish every dish with onions. What is the benefit of cost averaging? Cost averaging is the way to spread out your investments over a period of time. It allows you to invest your money in equal portions, at regular intervals, regardless of the ups and downs in the market. You can get started on your investment journey with a SIP on the EduFund platform. You have all the top mutual funds in the country to choose from and a corpus to be made.
Aditya Birla Sun Life Mutual Fund: NAV, Performance & Latest MF Schemes

Aditya Birla Sun Life Mutual Fund: NAV, Performance & Latest MF Schemes

Aditya Birla Sun Life Mutual Fund is a joint venture between two well-known brands- Aditya Birla Group from India and Sun Life Financial from Canada. The strategic joint venture blends the rich experience of Aditya Birla Group in the Indian market and the vast global experience of Sun Life to bring some of the best mutual funds and wealth creation opportunities for customers. The fund was set up in 1994 and has played an important role in expanding the penetration of mutual funds in India. Apart from offering mutual funds, it also offers pension funds, real estate investments, wealth management, and portfolio management services. Based on the domestic average AUM, Aditya Birla Sun Life is considered one of the largest fund houses in the country. As of March 31st, 2020, the total fund size of the AMC has reached a whopping ₹247521 crore. Known for its impressive and diversified product suite, strong performance, well-defined investment strategies, and simplified processes, the fund has grown its investor portfolio count to almost 7 million. The Aditya Birla fund house deals in 4 main fund classes- Equity Funds Debt Funds Income Funds  ELSS Funds Having completed more than 20 years in its journey, all these funds have a good credit rating and offer excellent wealth creation solutions to their customers. Aditya Birla Sun Life Mutual Fund Name of the AMCAditya Birla Sun Life Mutual FundFund Setup DateDec-23-1994Date of IncorporationSep-05-1994SponsorAditya Birla Capital Ltd. / Sun Life (India) AMC Investments Inc.TrusteeAditya Birla Sun Life Trustee Private LimitedChairmanMr Kumar Mangalam BirlaCEO / MDMr. A. BalasubramanianCompliance OfficerMs. Hemanti WadhwaInvestor Service OfficerMs. Keerti GuptaAssets ManagedRs. 214591.96 crores (as of Jun-30-2020) AuditorsMessrs Deloitte Haskins & Sells LLP - For Asset Management Company / S. R. Batliboi & Company - For Mutual FundRegistrarsComputer Age Management Services Pvt. LtdAddressOne India Bulls Centre, Tower 1, 17th Flr, Jupiter Mill, 841, S.B. Marg, Elphinstone Rd. Mum - 400 013Fax Nos.022-43568110/8111E-mailcare.mutualfunds@adityabirlacapital.comSource - AMFI 10 top-performing Aditya Birla SunLife Mutual Fund Schemes Leveraging the extensive knowledge and deep understanding of Aditya Birla Group along with the global experience of Sun Life, Aditya Birla Sun Life Mutual Fund has displayed consistent performance and become a credible name in the industry.  With over 140 MF schemes across categories, the fund caters to all kinds of investors, regardless of their financial goals, risk appetite, and investment time horizon. Here we are listing ten top-performing Aditya Birla Sun Life Mutual Funds across various fund categories. 1. Aditya Birla Sun Life Digital India Fund (Category-Equity: sectoral) It is an open-ended growth scheme launched on 15 Jan 2099 with the key objective of long-term growth of capital. The fund has a portfolio with a target allocation of 100% equity, with a focus on investing mainly in technology and technology-dependent companies, software, telecom, media, hardware, peripherals and components, and other technology-enabled companies. The fund has a NAV of  ₹98.8 (as of 28 Apr 21). Key information Minimum InvestmentINR 1,000Minimum Additional InvestmentINR 1,000Minimum SIP InvestmentINR 1,000Minimum WithdrawalINR 1,000Exit Load1% for 0-365 Days (1%) and above(NIL). Return Since InceptionCAGR/Annualized return of 11.4% since its launch. Absolute return for 2020, 2019, and 2018 was 59%,  9.6%, and  15.6% respectively. Assets ₹ 1,148 crores (As of 31 Mar 21) Expense Ratio2.6.% (as of 31st March 2021) 2. Aditya Birla Sun Life Gold Fund (category- Gold) An Open-ended fund of-funds scheme, with a NAV of ₹14.5162 (as of 28 Apr 21), it has an investment objective to offer returns that track returns provided by Birla Sun Life Gold ETF (BSL Gold ETF).  This Gold fund by ABSL mutual fund was launched on 20 Mar 12 and comes under the moderately high-risk category.  Key information Minimum InvestmentINR 1,000Minimum Additional InvestmentINR 1,000Minimum SIP InvestmentINR 1,000Minimum WithdrawalINR 1,000Exit Load1% for 0-365 Days (1%) and above(NIL)Return Since InceptionCAGR/Annualized return of 4.2% since its launch. Return for 2020, 2019, and 2018 was 26, 21.3 and 6.8% respectivelyAssets₹212 crores (as of 31 Mar 21)Expense Ratio0.48% (as of 31st March 2021) 3. Aditya Birla Sun Life Index Fund (Category-Index fund) An open-ended index-linked growth scheme, the fund has a NAV of ₹146.259 (as of 21 Apr 21). The objective of the fund is to generate returns that are aligned with the performance of Nifty subject to tracking errors. The fund was launched on 18 Sep 02 and cones under the moderately high-risk category  Key information Minimum InvestmentINR 1,000Minimum Additional InvestmentINR 1,000Minimum SIP InvestmentINR 1,000Minimum WithdrawalINR 1,000Exit Load1% for 0-365 Days and NIL for above Return Since Inception CAGR/Annualized return of 15.5% since its launch. Return for 2020, 2019  and 2018 was 15.2, 12.4 and 3.2% respectivelyAssets₹239 crores (as of 31 Mar 21) Expense Ratio0.64% (as of 31st March 2021) 4. Aditya Birla Sun Life Focused Equity Fund (Category-Equity-Focused) It is an open-ended growth scheme with a NAV of ₹76.7779 (as of 28 Apr 21). Launched on 24 Oct 05, the fund has the objective to offer medium to long-term capital appreciation, by investing mainly in a diversified portfolio of equity and equity-related securities of top 100 companies (based on market cap). Key information Minimum InvestmentINR 1,000Minimum Additional InvestmentINR 1,000Minimum SIP Investment1000Minimum Withdrawal1000Exit Load1% for 0-365 Days and NIL for above Return Since Inception CAGR/Annualized return of 14% since its launch. Return for 2020, 2019 and 2018 was 16%, 11.3% and -4.1% respectivelyAssets₹4610 Crore (as of 31st March 2021)Expense Ratio2.04% (as of 31st Mach, 2021) 5. Aditya Birla Sun Life Equity Fund (Category-Equity - Multi-Cap) An Open-ended growth scheme with a NAV of ₹964.83 (as of 28 Apr 21), the fund has an objective of long-term capital growth through a portfolio with a target allocation of 90% equity and 10% debt and money market securities. It was launched on 27 Aug 98 and is placed under the moderately high-risk category Key information Minimum InvestmentINR 1,000Minimum Additional InvestmentINR 1,000Minimum SIP InvestmentINR 1,00Minimum Withdrawal-Exit Load1% for 0-365 Days and NIL for above Return Since Inception CAGR/Annualized return of 22.3% since its launch. Return for 2020, 2019, and 2018 was 16.5, 8.1 and-4.1% respectively, Assets₹13,026 Crores (as of 31st March 2021)Expense Ratio1.89% (as of 31st March 2021) 6. Aditya Birla Sun Life International Equity Fund - Plan A(Category-Equity-Global) Open-ended diversified equity with a NAV of ₹30.002 (as of 28 Apr 21), the fund has an objective to generate long-term capital growth, by investing mainly in a diversified portfolio of equity and equity-related securities in the international markets. The fund was launched on 31 Oct 07 and is placed under the high-risk category. Key information Minimum InvestmentINR 1,000Minimum Additional InvestmentINR 1,000Minimum SIP InvestmentINR 1,000Minimum WithdrawalINR 1,000Exit Load1% for 0-365 Days and NIL for above Return Since Inception CAGR/Annualized return of 8.5%  Return for 2020, 2019 and 2018 was 13.2, 24.7 and 4.1% respectivelyAssets₹110 Crores (as of 31st March 2021)Expense Ratio2.53% (as of 31st March 2021) 7. Aditya Birla Sun Life India GenNext Fund (Category-Equity-Sectoral) With a NAV of ₹111.99 (as of 28 Apr 21), this one-ended growth scheme has the objective to focus on capital growth by investing in equity/equity-related instruments of companies that are likely to benefit from the rising consumption patterns in India (fuelled by disposable incomes of Generation Next). The fund was launched on 5 Aug 05 and is placed under the high-risk category. Key information Minimum InvestmentINR 1,000Minimum Additional InvestmentINR 1,000Minimum SIP InvestmentINR 1000Minimum WithdrawalINR 1,000Exit Load1% for 0-365 Days and NIL for aboveReturn Since Inception CAGR/Annualized return of 16.6% since its launch. Return for 2020, 2019, and 2018 was 14.6, 14.6 -1.6% respectivelyAssets₹1,937 Crores (as of 31st March 2021)Expense Ratio2.49% (as of 31st March 2021) 8. Aditya Birla Sun Life Balanced Advantage Fund (Category-Hybrid - Dynamic Allocation) The key objective of the scheme with a NAV of ₹66.46 (as of 28 Apr 21) is to generate long-term capital growth and income distribution relatively lower. The fund invests primarily in a dynamically balanced portfolio of equity & equity-linked investments and fixed-income securities. It was launched on 25 Apr 00 and is placed under the moderately high-risk category. Key information Minimum InvestmentINR 1,000Minimum Additional InvestmentINR 1,000Minimum SIP InvestmentINR 1,00Minimum Withdrawal-Exit Load1% for 0-365 Days and NIL for aboveReturn Since InceptionReturn for 2020, 2019, and 2018 was 15.4, 8.1 and 0.7% respectivelyAssets₹3,181 Crores (as of 31st March 2021)Expense Ratio2.06% (as of 31st March 2021) 9. Aditya Birla Sun Life Financial Planning FOF Aggressive Plan (Category-Others-Funds of the fund) The Scheme with a NAV of ₹29.5771 (as of 28 Apr 21), primarily aims to generate returns by investing in mutual fund schemes selected as per the BSLAMC process and the risk-return profile of investors. There are 3 plans under the scheme, each of which has a strategic asset allocation based on satisfying the needs of a specific risk-return profile of investors. The fund was launched on 9 May 11 and is placed under the moderately high-risk category. Key information Minimum InvestmentINR 1,000Minimum Additional InvestmentINR 1,000Minimum SIP InvestmentINR 1,000Minimum WithdrawalINR 1,000Exit Load1% for 0-365 Days and NIL for aboveReturn Since Inception CAGR/Annualized return of 11.5% since its launch. Return for 2020, 2019, and 2018 was 19.2, 6.9 and-2.6% respectivelyAssets₹146 Crores (as of 31st March 2021)Expense Ratio1.33% (as of 31st March 2021) 10. Aditya Birla Sun Life Government Securities Find (Category-Debt-Government Bond) An open-ended government securities scheme with a NAV of  ₹63.6537 (as of 28 Apr 21) has the objective to generate income and capital appreciation by investing exclusively in Government Securities. It was launched on 12 Oct 99 and is placed under the moderate risk category. Key information Minimum InvestmentINR 1,000Minimum Additional InvestmentINR 1,000Minimum SIP InvestmentINR 1,000Minimum WithdrawalINR 1,000Exit Load0.5% for 0-90 Days (0.5%), and NIL above 90 Days Return Since Inception (16th July 2019:CAGR/Annualized return of 9% since its launch. Return for 2020, 2019, and 2018 was 12.1, 11 and 6.9% respectivelyAssets  ₹518 crores (as of 31st March 2021)Expense Ratio1.18% (as of 31st March 2021) How can you invest in Aditya Birla SunLife Mutual via EduFund? Investing in ABSLAMC is quite simple and quick with EduFund, for both seasoned and first-time investors. All you need to do is visit EduFund to pick from a diverse list of chosen funds that are specially designed, keeping in mind the varied risk profile and investment objectives of investors. At EduFund, you can be assured of a quick and hassle-free process of selecting any product from ABSLAMC, The process requires just one KYC formality that will take not more than 5 minutes of your time. Here is the stepwise procedure for investing with EduFund- Step 1: Select the fund(s) of your choice and the amount you want to invest every month. Step 2: Provide all your details. Step 3: Make the payment, and you are done. Other important details - KYC verification through EduFund is a simple process. You can either verify by: i. Using an OTP sent to your Aadhaar-registered mobile number  Or ii. By uploading photos/scan copies of the required documents ID Proofs You need to submit a Xerox copy of your PAN Card, Aadhaar Card, Passport, Voter ID, Driving License or any other central government-approved documents Residential proofs For residential proof, you need to submit the same ID proof (except PAN) if the address on it is your current residential address. Other documents that you can use include a rental/lease agreement, utility bill, and ration card. In case your permanent address and correspondence address are different, you need to submit proof for both. Leading fund managers at Aditya Birla Sun Life Mutual Fund ABSLAMC has a powerful mix of experience and expertise in their fund managers who have the qualification and acumen to identify opportunities and the ability to maneuver investor portfolios and help them achieve optimal returns. Here are the top 5 fund managers at ABSLAMC- 1. Mr. Mahesh Patil - Co-Chief Investment Officer Mr. Patil is the Co-Chief Investment Officer (Equity) at ABSL fund. He holds an Engineering degree from VJTI in Mumbai and an MBA in Finance from Jamnalal Bajaj Institute in Mumbai. Apart from this, he is also a charter holder from ICFAI in Hyderabad.   With an extensive industry experience 27 years, he joined Aditya Birla Sun Life Mutual Fund in 2005 and was later promoted to Co-Chief Investment Officer (Equity) in 2008. Heading a team of 20 expert analysts and fund managers, Mr. Patil and his team manage funds to manage a massive amount of 92,000 Crores in the equity market both in the form of Birla Sun Life One Time Investment and  Birla Sun Life SIP. Being an Equity expert, Mr. Patil manages various top-rated equity funds, including Aditya Birla Sun Life Frontline Equity Fund, Aditya Birla Sun Life Focused Equity Fund, and Pure Value Fund. 2. Mr. Maneesh Dangi - Co-Chief Investment Officer Managing various fixed Income-related funds, Mr. Dangi has rich experience and expertise in handling Debt Funds, Corporate Bonds, PSU Debt Funds, and much more.  He heads a big team of more than 20 analysts and fund managers with expertise in handling a portfolio of more than 1.6 lakh Crores both in the form of Birla Sun Life SIP and Birla Sun Life One Time Investment. Among the key funds managed by Mr. Dangi include Aditya Birla Sun Life Short-term Opportunity Fund, Aditya Birla Sun Life Banking, PSU Debt Fund, Aditya Birla Sun Life Corporate Bond, and Aditya Birla Sun Life Credit Risk Fund. 3. Mr. Ajay Garg - Sr Fund Manager An electronics engineer from Bangalore University and an MBA in Finance from Mumbai University, Mr. Garg also holds a degree from Hartmann College Class of 1987. Before joining the ABSL fund, he had been working with the American Express bank and other stockbroking firms. Want the extensive experience of more than twenty-five years of managing equity-oriented funds for Aditya Birla Sun Life Mutual Fund, Mr. Garg is an expert in equity. 4. Mr. Anil Shah - Sr Fund  Manager As a senior fund manager with Aditya Birla Sun Life AMC Limited, Mr. Shah brings with him more than three decades of rich professional experience in Indian equity markets. Before joining ABSLAMC in 2012, he was a part of RBS Equities (India) Limited for around 15 years. Mr. Shah is a qualified CA and cost accountant by qualification and executes and regularly reviews various investment strategies for equity portfolios. 5. Mr. Kaustabh Gupta - Sr Fund Manager A senior fund manager with Aditya Birla Sun Life AMC Limited (ABSLAMC), Mr. Gupta brings with him 15+ years of extensive investment experience. He has previously worked in areas such as treasury finance and liquidity management in various capacities. Me. Gupta is a chartered accountant and CFA (Level 2) by qualification. Before joining ABSLAMC in 2009, he worked with ICICI Bank for 5 years in the Asset Liability Management team. Why should you invest in Aditya Birla Sun Life Mutual Fund? Aditya Birla Sun Life Mutual Fund works with the mission of maximizing investors’ wealth and becoming a leader in the integrated financial services business. The AMC follows a long-term, fundamental approach to investments to identify companies with strong fundamentals and excellent growth prospects to be able to offer profitable and sophisticated investment schemes to the investors. The key focus of ABSL fund's financial planning department is to prioritize clients’ requirements and create niche solutions leading to desired results. With expertise in screening while dealing with clients, the team at ABSL fund connects with clients directly and evaluates their financial status, investment goals, tenure, and source of income to build up a tailored financial plan using the deliberated process of financial planning. ABSLAMC consistently review the performance of the schemes to analyze their returns’ potential 8n various market scenarios regularly. Further, the team at ABSL continuously measures the risk factors of the schemes to bring out the plans that best suit the investors' risk appetite. Apart from this, the key benefits of ABSL funds schemes include- ABSL saving solutions benefits Helps you save money Offer available liquidity Much better & tax-efficient return  compared to FD and saving accounts  The key commitment of ABSLAMC is to enhance mutual fund penetration in India. As of May 2019, there are more than 83.2 million mutual fund folios in India, aggregating over 25.43 trillion and Aditya Birla Sun Life mutual fund has played a key role in it.  Select EduFund for investing in Aditya Birla Sun Life Mutual Fund EduFund makes the process of investing in Aditya Birla mutual funds convenient. EduFund's experienced consultants give you customized solutions for all your financial goals. You can start investing from a lowly INR 5,000 and grow your capital comfortably. With EduFund, you get the following benefits: Customized Research -  EduFund's scientific fund tracker screens over 1 lakh data points and 400 financial scenarios to recommend you the best mutual funds.  Invest Less, Earn More - EduFund also offers you the option to invest in US Dollar ETFs and international mutual funds. Customer-Friendly Counsellors -EduFund has professionally trained counselors to handle all your queries and resolve issues to help you create a robust financial plan. No Technical Expertise Required - With EduFund, you do not need to finance experience to understand which mutual fund is the best for you. EduFund does it for you. Secure Transactions - EduFund is RIA-registered and es the best 128-SSL security to enable safe and secure transactions. Use Free Tools - EduFund offers multiple free tools for its customers, including College Savings Calculator, SIP calculator, and more Value-Added Benefits - offer value-added benefits like no commission, free advisory, and nil hidden charges. FAQs Which is the best mutual fund in Aditya Birla Sun Life? Aditya Birla Sun Life Digital India Fund (Category-Equity: sectoral)   Aditya Birla Sun Life Gold Fund (category- Gold)   Aditya Birla Sun Life Index Fund (Category-Index fund)   Aditya Birla Sun Life Focused Equity Fund (Category-Equity-Focused)   Aditya Birla Sun Life Equity Fund (Category-Equity – Multi-Cap)   Is Aditya Birla Sun Life Mutual Fund good? Aditya Birla Sun Life Mutual Fund is a joint venture between two well-known brands- Aditya Birla Group from India and Sun Life Financial from Canada. Based on the domestic average AUM, Aditya Birla Sun Life is considered one of the largest fund houses in the country. The Aditya Birla fund house deals in 4 main fund classes-   Equity Funds   Debt Funds   Income Funds    ELSS Funds   Having completed more than 20 years in its journey, all these funds have a good credit rating and offer excellent wealth creation solutions to their customers. Please get in touch with a financial expert before you consider investing in the fund.   Is Aditya Birla good for SIP?   Aditya Birla Sun Life Mutual Fund works to maximize investors' wealth and become a leader in the integrated financial services business. With expertise in screening while dealing with clients, the team at ABSL fund connects with clients directly and evaluates their financial status, investment goals, tenure, and source of income to build up a tailored financial plan using the deliberated process of financial planning.   ABSLAMC consistently reviews the schemes' performance to analyze their returns' potential 8n various market scenarios regularly. Further, the team at ABSL continuously measures the risk factors of the schemes to bring out the plans that best suit the investors' risk appetite.   Apart from this, the key benefits of ABSL funds schemes include-   ABSL saving solutions benefits   Helps you save money   Offer available liquidity   Much better & tax-efficient returns compared to FD and saving accounts    Please get in touch with a financial expert before you consider investing in the fund Can I close SIP after 1 year? It is not advisable to withdraw your investment prematurely when you have a financial goal that you are working towards. If you are still sure about withdrawing the SIP amount, you can do it with the help of the agent if you have invested via a mutual fund distributor.    TALK TO AN EXPERT
How to compare two mutual funds?

How to compare two mutual funds?

Comparison is an integral part of our life. Be it our constant nemesis Sharma Ji ka beta or be it our “friend” who always has everything that we aspire to. We all have parameters and factors with which we compare ourselves – salary, number of cars/bungalows owned, or something else. Similarly, there are factors that one should consider when one is planning to invest in mutual funds. There are n (n tending to infinity) number of options in the market for different goals and risk appetite of the investor. So, how do you evaluate a mutual fund and make the choice? Read on to understand the same! Expense ratio The expense ratio is the management fees that the fund charges – for managing your money and giving you the promised returns. This is generally a % of your investments, hence will impact your earnings from the fund. Always chose the fund with a lower expense ratio, as it forms a smaller dent in your long-term earnings. The expense ratio of a regular plan tends to be more than a direct plan. This is due to the intermediary distributor in the value chain who would also need a piece of the pie. For example, if a regular plan has an expense ratio of 2%, 1% goes to the fund and 1% goes to the distributor. However, in the direct plan, you would be charged only 1% which is attributed to the efforts of the fund. While comparing two funds, ensure that you are comparing direct-direct and regular-regular plans. (Apples to apple comparison) Benchmark SEBI mandates that each fund declare a benchmark, as it promises the investor that it would aim at achieving a return that is higher than the market. For example, ABC fund has declared the Nifty 50 as its benchmark. When the market rallies by 15% and the fund have delivered a return of 12%, it indicates that the fund has underperformed. However, when the market falls by 12% and the fund declines only by 10%, it indicates that the fund has outperformed the benchmark. Hence, a fund should beat the benchmark during market upturns and should decline lesser than the market in case of a downturn. Hunt for funds that have consistently performed better than their benchmarks.  Risk measurement A typical thumb rule or mantra in the financial industry is that - higher risk implies higher returns (Bank FD interest rate < Stock Returns). However, measuring the risk with only the returns becomes complex in the case of mutual funds, as there are factors such as sector allocation and other market conditions which affect the returns of the fund. Alpha and Beta then come to your rescue. These Greek alphabets are your crystal balls which give you a fair idea about the risk involved. Alpha indicates the surplus return generated by the fund when compared to its benchmark. Beta indicates the volatility or risk involved in the fund. For example, Fund ABC generated an alpha of 1 and had a beta of 1.5 whereas Fund XYZ had an alpha of 1 and a beta of 2. Then chose Fund ABC, since the risk is lower and the return generated is the same – in finance parlance, the risk-adjusted returns of Fund ABC > Fund XYZ. Allocation of sectors within the fund Consider a large-cap fund, SEBI mandates it to invest over 65% of its portfolio into large-cap companies. However, there is no restriction on the sector in this case. The fund manager may choose to invest in the pharma sector which has seen a boom post-COVID or could invest in the FMCG industry or the financial sector. Sector exposure also determines the risk of the fund. Depending on your risk appetite, and your preference for the sectors - accordingly do a right swipe on your fund match. Category average One last factor to consider would be a comparison against the Category average. What is the category you ask? Large-cap, mid-cap, and small-cap would classify as the category. The category average is the median of all the data of the funds. This gives insights into how our fund has performed when compared to all the other players in the market. There could be cases where your fund has provided returns greater than the benchmark, but all the other funds in the category have also outperformed the benchmark. Comparing with the average in the same class (Category) gives you another realistic indicator of how your fund has performed. For example, if the category average is 33% and your fund has given you returns of 39%, it indicates that your fund has outperformed its peers.  FAQs How can I compare the best mutual funds? There are a few categories to consider when comparing mutual funds such as returns generated over 3 - 5 years, fund managers and their professional history, category average, asset allocation, and portfolio diversification, benchmark, risk management, and expense ratio. Where we can compare mutual funds? You can also compare the mutual fund performance manually, through online investment sites, or ask your financial advisor for help. What is the 15x15x15 rule in a mutual fund? The 15x15x15 rule in mutual funds is a popular rule in investment which says that investing Rs.15, 000 for 15 years at a 15% interest rate can make any investor a crorepati. When there are two mutual funds How will you compare and take investment decisions? By comparing mutual funds' Net Asset Value, you can determine their potential and make the right choice. You can also consult a financial advisor if you are new to the field of investment. Conclusion You can get detailed information on the performance and other aspects covered above on the EduFund app. You can start your investment journey with EduFund and even get advice from wealth experts to invest in the top mutual funds in the country.
What are Index Funds? Cons of index funds

What are Index Funds? Cons of index funds

We sometimes mimic the best strategies or life plans of our role models. Similarly, the index funds track or mimic the market indices such as Nifty 50, Sensex, etc. These funds use a passive investment strategy, where the responsibility of the fund manager is to only mimic the composition of the Index. This is the opposite of the active investment strategy used by mutual funds which promise to beat the benchmark or market returns, where the fund manager carefully analyses the market for opportunities and picks the perfect stocks for the portfolio by constantly buying and selling stocks and other assets to deliver the best return.  Whereas, the Index fund merely mirrors the companies or securities present in a particular index. For example, if ABC stock makes up 5% of the value of the Index, then the fund manager of XYZ fund with a Net Asset Value (NAV) of 10,000 will allocate 5% which is 500 to buy ABC stock. The idea of this investment strategy is “If you can’t beat them, then join them” – where one receives the average market return. Hence the responsibility of the manager is limited to only following the composition of the index and including the same in the fund, with an objective to deliver similar returns (with the same risk exposure) as the index. Index funds deliver a return smaller than the benchmark that they are tracking. Since there is no such thing as a free lunch, this is the expense ratio which is the fees charged by the fund to manage your money. An Index fund tracking Sensex (India’s benchmark stock index. Its composition is 30 of the largest and large-cap stocks), would invest in the same 30 stocks in the same proportion. Index funds can track different assets such as – stocks, bonds, commodities (Such as Oil, Gold, etc.), and currencies.  Cons of Index funds 1. Vulnerability to market crashes and market risks These funds are exposed to the same risk as that of the indices that they mimic. For example, if the Sensex comes down in value (similar to the crash of the Sensex in March 2020, where it fell by 23%), the funds tracking this index would follow the decline and have wealth destruction or decrease in NAV. Index funds which track bonds (This financial instrument are similar to the loan. Here, the investor is the lender, and the party which issues the bond is the borrower. The lender/investor receives a periodic interest payment – also known as a coupon. However, the bonds are tradable on stock exchanges), are prone to changes in interest rates. When the interest rates in the market decrease (regulated by RBI), the demand for bonds increases, and hence the price of the bonds increases. This leads to an increase in the NAV or the Index funds which track these bonds. Whereas, when the interest rates increase, the bonds decline in value and hence put these funds in the danger zone. 2. Less Flexibility & Limited Gains The fund cannot invest in a sector that is performing extremely well if it is not a part of the Index that it tracks. Hence, the gains that could be earned in case of a sector boom become limited. The investor only earns the returns of the market, whereas an investor in an actively managed fund could earn higher. Why should you consider investing in Index Funds? 1. Lower Expense Ratio? Lower cost (Paisa Vasool) As mentioned earlier, due to the passive investment strategy, the expense ratio or the fee charged to the investor is lesser when compared to actively managed funds which frequently buy and sell. charge higher for these transactions and services provided. This could drag down the growth of the portfolio over a longer period of time. This is illustrated by an example as shown below. If an investor had invested Rs.50,000 in 1991 (30 years ago) in Index fund A, he would have received a return of 11.7% and his investment would amount to 12.2 lakhs. Whereas, in Fund B it would amount to 10.1 lakhs (as shown in the figure). This difference of 2.1 lakhs is due to the lower expense ratio of the Index fund. Hence, in the longer term, these funds perform better than the actively managed funds offering similar returns. It is important to check the benchmark of an actively managed fund and decide if it is doing justice for the higher expense ratio that is being charged. Hence by surrendering to war with the market, you actually win.      2. Diversification: Ensuring that you don’t put all your eggs in one basket These funds are an indirect instrument of buying into the entire market, which implies that as an investor you are exposed to the entire market and its risks. If a sector such as Pharma was in the boom during March 2020, but the Financial sector stocks saw a decline – the stocks that are appreciating make up for the ones that are declining to keep the returns constant or increasing – implies a diversified portfolio.  FAQs What are Index Funds? Index funds are investment funds that follow a benchmark index like Nifty 50, Sensex in India and globally, S&P 500 or the NASDAQ 100. Are index funds a good investment? Index funds are a good investment for long-term investors. It passively tracks the benchmark index like S&P 500 or the NASDAQ 100 and invests in companies that have a proven history of profit. What is index funds for beginners? Yes, Index funds are a good investment for long-term investors. It passively tracks the benchmark index like S&P 500 or the NASDAQ 100 and invests in companies that have a proven history of profit. What is an example of an index fund? Here are some examples of index funds in India -IDFC Nifty 50 IndexNippon India Index S&P BSE Sensex Why Should You Consider Investing In Index Funds? Index funds replicate indices such as Nifty 50 and SENSEX which means they are not actively managed and the expense ratio for these funds is low. Another benefit of investing is portfolio diversification as the fund invests in companies across sectors from finance to pharma. Conclusion When you are choosing an Index fund, aim to invest in a fund that tracks a large portion of the market hence giving a wider range of a diversified portfolio. Also, chose a fund with low tracking error – which is the difference between the Index returns and the funds' returns. Hence a fund with a low tracking error indicates that it mirrors or tracks the index closely. Another aspect to consider while choosing the fund is the cost of the fund and past performance.
Mutual funds: Everything a young investor needs to know

Mutual funds: Everything a young investor needs to know

What is a Mutual fund? Mutual funds are investment vehicles that pool money from a large set of investors and invest this net corpus into various asset classes such as government securities, corporate bonds, stocks of companies, money market instruments, etc., to earn the promised returns to its investors. Fund manager who plays the role of the driver to the investment train and channels the pool of investments to align with the investment mandate and objective. Multiple schemes are launched by Asset Management Companies (AMCs) or fund houses to match the investment objectives of various investors. Why are mutual funds better than direct equity? Direct equity or investing in stocks all by yourself requires a detailed study of the company, its business, financials, quarterly earnings, expected growth, and all the recent news updates around the industry and company to make an informed choice. Investing in stocks gives flexibility to the investor to pick and invest in the companies and the sectors. However, the probability of a loss or risk is also very high in these investment vehicles, which is also coupled with a prospect of high return. Investors with a deep knowledge of the markets balance the risk and return of their portfolios, but for the rest of the pool of investors, mutual funds are the most convenient vehicles for investment. These vehicles also provide the diversification required to satiate the risk appetite of the investor by investing in various asset classes, and in various sectors within the asset class in a portfolio. Advantages of Mutual Funds 1. Low ticket size, with good returns Some of the shares of Bluechip companies have high prices, which often tend to be inaccessible to the investor. For example Hindustan Unilever Ltd, the leading FMCG company has a stock price of around Rs 2400. An investor who has a lower ticket size of investment of Rs 500 or Rs 1000, would find this lucrative stock to be out of his/her investment orbit. However, with mutual funds, one can buy units of the fund starting from Rs 500, which invests into these companies with the pool of money collected from the investors, hence providing every penny with diversified returns. 2. Professional management Mutual funds offer the expertise and an army of research analysts who perform a detailed study of the market conditions, industry outlook, company’s business, and financials and make an informed decision of investing the pool of money to earn the best returns. Everyone does not have the time and the knowledge to perform research and identify the right stocks and mutual funds to provide these services on a platter! 4. Liquidity Liquidity indicates the ease of entry or exit into any instrument. For example, Company A, a renowned company with strong financials is traded more frequently than Company B, a stock of an underperforming company, implying that the stocks of Company A are more liquid and easier to trade than Company B. Similarly, mutual funds are also liquid instruments, where an investor can buy units of the fund, and in an open-ended fund, he/she can sell the shares at NAV (Subject to exit load conditions of the fund). This ensures that the investor gets fair value for the units/shares of the fund. 5. Management of risk As individual investors, we often lack the expertise to assess the risk of our portfolio. We could also put all the eggs in one basket and lose our hard-earned money overnight. However, AMCs have risk management guidelines that limit or restrict the fund manager’s investments in some sectors and stocks. This ensures that the risk in the portfolio is well calculated and within the limits as promised to the pool of investors. The fund could also invest in various asset classes – bonds, commodities, stocks, gold, etc, which not only aids in diversification but also in gaining from the high potential returns from the asset classes. The fund manager’s decisions are also backed by strong research and analysis of each sector, asset class, and the conditions of the economy. 6. Choice or variety of funds Each of us has a different personality. Some of us are aggressive with our investments and can withstand a certain percentage of volatility, whereas some of us are risk-averse investors who cannot stand the thought of losing our money. Mutual funds are available that are approximately tailored to our risk profiles. For example, an aggressive investor can choose a diversified equity fund, whereas a risk-averse investor could choose to invest in a balanced fund. 7. Taxation Mutual funds offer indexation benefits for being invested in the fund for more than a year, which finally results in tax-free gains.  7. Transparency As an investor, you can see where your money is being invested. The strategy for investing is publicly declared by the fund. The NAV also updates daily, giving a lucid picture of the investment value to its investors How can mutual funds help in saving for education? Saving for your child’s education can be a daunting task, given the rising cost of education. In our previous generation, our parents depended on FDs, gold, and PPFs to fund our education, but the returns from these asset classes would not be sufficient to beat the current educational inflation. Investment in equity would be the best route for grabbing the maximum returns over every penny. However, investing in direct equity requires detailed analysis and research coupled with the volatility of the asset class. Mutual funds would be the one-stop solution for all your long-term goals providing you with financial discipline (through SIP) and also providing the required returns to beat inflation. If the child wants to pursue his/her higher education in a reputed college for costing around INR 25- 28 lakhs today, it will multiply to a much higher amount of over INR 1-1.5 cr in the next 15 years, given the educational inflation around the globe. To save for this scenario one would have to invest approximately Rs 15,000 – Rs 22,500 per month to accumulate the final corpus. One could also rely on an educational loan in the future but could accumulate 60% of the required corpus by investing Rs 9000 per month as a SIP into the fund.    1 Cr1.5 Cr0.6 CrMonthly saving required 14,959 22,438 8,975 Expected return rate15%15%15%Time Period  15 15 15 Maturity amount      1,00,00,000 1500000060,00,000  Types of Mutual Funds A plethora of options of mutual funds is available in the market, which allows the investor to choose based on the investment horizon, risk appetite, amount for investing, etc. The funds are categorized into the following types based on the - Principal Investments Maturity Period a) Maturity Period Classification 1. Open-ended funds The majority of the funds (approximately 59%) are open-ended. These provide the flexibility to buy and sell units of the fund at any point in time. There is no maturity period. It is like buying a stock, where you transact at the Current Market price – in mutual funds you buy and sell units at NAV. There is no exit load (subject to lock-in conditions). The key feature of these types of funds would be liquidity. 2. Close-ended funds These funds have a maturity period (of 3-5 years). Investors can have an entry into the fund only at the time of the New Fund Offer (NFO). However, the exit has two routes -  Sale of units through the stock exchange: In the case when the investor needs to withdraw the amount, he/she can sell it on the exchange. However, this route could be illiquid, as one may not find enough buyers for the sale of the unit and could also result in a potential loss (by selling the units at a lower price) The second exit route is at maturity. Some mutual funds give the option to sell and exit the fund through the periodic repurchase of units at NAV 3. Interval Funds These funds have the characteristics of both open and closed-ended funds, where the fund allows the purchase/sale of units at pre-defined intervals. b) Principal Investments Classification 1. Equity funds These funds invest in Equity and equity-related instruments. The fund manager aims to beat the market/benchmark by spreading across various sectors or by picking companies across different market capitalizations. They earn more returns than the Debt and Hybrid schemes. SEBI has defined 11 categories of these funds. It has also defined the variation between the categories as follows: Large-Cap: First/Top 100 companies in terms of Market Capitalisation Mid-Cap: 101-250 companies ranked according to Market Capitalisation Small–Cap: Companies ranking above 250 with respect to Market Capitalisation 2. Debt Schemes These funds invest in fixed-income securities such as Government Bonds, Corporate bonds, commercial papers, and other money market instruments. The maturities of these are fixed, implying that the returns are unaffected by the fluctuations in the market if held until maturity. These schemes are hence considered less risky when compared to the Equity Schemes. SEBI has defined 16 categories in these funds. 3. Hybrid Schemes These schemes invest in a combination of debt and equity to create a specific investment objective. Each hybrid fund has a different % of the allocation to debt and equity. Equity Oriented These invest >65% in equity and equity-related instruments. The remaining 35% is invested into debt and other money market instruments.  Debt Oriented These invest >60% of assets in fixed-income instruments or debt instruments such as G-secs, bonds, debentures, etc. The remaining 40% is invested in equity. 4. Balanced Funds These funds invest a minimum of 65% in equity and equity-related instruments. The remaining is invested in cash and debt securities. For taxation purposes, these are considered equity-oriented funds where a tax exemption of Rs 1 lakh can be obtained on the long-term gains from the fund. Conclusion Having a financial discipline aids in having a corpus for all your long-term goals. Mutual funds act as a convenient vehicle for driving you to your financial destinations (goals). As an investor one must consider their risk profile, investment horizon, goals, and investment amount before jumping into any fund. FAQs What is a Mutual Fund? Mutual funds are investment vehicles that pool money from a large set of investors and invest this net corpus into various asset classes such as government securities, corporate bonds, stocks of companies, money market instruments, etc., to earn the promised returns to its investors. Why Are Mutual Funds Better Than Direct Equity? Both mutual funds and direct equities have their merits and demerits. If you understand the market and have a well-researched strategy then direct equity can be beneficial. If you are a newbie, then mutual funds can be helpful. These are managed by experts who monitor the market regularly to ensure the best returns for their investors. Another difference is that direct equity gives you exposure to a single stock while mutual funds can offer exposure to multiple stocks and industries at once. What are the advantages of Mutual Funds? Low Ticket Size, With Good Returns Professional Management Liquidity Taxation Transparency Reduced management risk How Can Mutual Funds Help In Saving For Education? Saving for your child’s education can be a daunting task, given the rising cost of education. In our previous generation, our parents depended on FDs, gold, and PPFs to fund our education, but the returns from these asset classes would not be sufficient to beat the current educational inflation. Investment in equity would be the best route for grabbing the maximum returns over every penny. However, investing in direct equity requires detailed analysis and research coupled with the volatility of the asset class. Consult an expert advisor to get the right plan TALK TO AN EXPERT
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