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How to choose the best mutual fund scheme?

How to choose the best mutual fund scheme?

Mutual funds are ideal investment options for both risk-aggressive and risk-averse investors as they help to achieve investment goals easily and effectively. Choosing the best mutual fund scheme irrespective of the various alternatives is a challenge in itself.  Both beginners and seasoned investors must take precautions while investing because of the immense risk involved. You do not want to throw away your hard-earned money on just a hearsay scheme or a fund that offers average returns, especially when you have a scope of earning higher returns at less risk. https://www.youtube.com/watch?v=uYlrsx9_yog 10 steps to Choose the Best Mutual Fund Scheme Step 1: Identify Investment Goals   Identify your investment goals by answering related questions like is the objective current income or long-term capital gain? Is the money for short-term like education expenses of children or future expenses like the retirement fund that is very far away? Identifying the investment goals helps to choose the mutual fund scheme that will fulfill the financial aspiration of the investor effectively. Step 2: Determine Risk Tolerance How much return are you expecting on your investment matters as it helps to determine whether the investor is a moderate or high-risk taker? Risk tolerance refers to the risk that the investor is willing to take with his investments.  It is now compulsory for all mutual fund houses to show the risk associated with the invested amount. Step 3: Look at the Time Horizon The time horizon is the period for which the investor desires to invest his money in a mutual fund scheme. It can be short or long term ranging from one day to even more than five years.  There are different fund categories meant for different time horizons and it is better to choose the best mutual fund scheme that will be able to meet your specific time horizons. Step 4: Focus on the Fund Type - Growth or Dividend Choose the fund type which is the best option to meet your specific needs. The growth option is best for long-term needs as it can handle higher volatility and risk factors. These funds also have greater potential for higher returns.  Dividend funds are short-term investment goals. They provide interest regularly and are considered stable investments with moderate returns. Step 5: Look at the Fees and Loads Some mutual funds charge a sales fee at either the time of purchase or sale of the investment known as a load. The purpose of the load is to cover the associated administrative charges and discourage turnover. Mutual fund houses levy various charges which are paid by the investors, who must know about them in detail before choosing the mutual fund scheme for themselves.  Step 6: Consider the Assets Under Active or Passive Management Determine the type of assets you want in your portfolio and then choose the mutual fund scheme accordingly.  Actively managed funds levy higher fees and try to outperform the benchmark index whereas passively managed funds levy lower fees and try to track the performance of a benchmark index. Step 7: Evaluate Managers and Past Results Conduct research about the fund's history by asking yourself whether the fund has suffered more volatility than other major funds and whether the fund manager was able to deliver the expected results.  Reviewing the fund’s prospectus gives a fair idea of its future and helps to choose the best fund. Step 8: Size of the Fund Although the size of the fund does not stop it from meeting the investment goals investors should keep it manageable for better handling. Step 9: Do not be Dependent Only on the History Although the fund history is an indicator of future performance it cannot guarantee high returns. Take related things into consideration like comparison with the benchmark index, fund types, fees, risk factors, etc. before making a viable choice about the mutual fund scheme you want to invest in. Step 10: Select What Matters Investors must focus on things that matter for instance expense ratios, investment strategy, risk factors fees, and a chance of future success. It is important to take the help of reputed platforms and understand the best ways of choosing the right mutual fund scheme for yourself.  The EduFund App along with the SIP calculator makes the process of choosing the mutual fund scheme an easy experience. Customer-friendly saving/ investment experts provide customized solutions, top-class security enables secured transactions, and a scientific fund tracker screens various financial scenarios to recommend the best out of the 4000+ mutual funds associated with the platform. Every investor wants to choose the best mutual fund scheme but they must consider their individual preferences, investment objective, risk appetite, and the fundamental features of the scheme before making a final decision. https://www.youtube.com/shorts/6dthLxZnOH8 FAQs What are the key factors to consider when choosing a mutual fund scheme? Key factors include investment goals, risk tolerance, time horizon, fund type (growth or dividend), fees, assets management style, fund manager's track record, fund size, and various other critical parameters. How can one determine their risk tolerance? Risk tolerance is determined by the investor's willingness to accept risk for potentially higher returns. It can be assessed by evaluating how much volatility or fluctuation in investment value one is comfortable with. What is the significance of the time horizon in selecting a mutual fund scheme? The time horizon indicates how long you plan to keep your money invested. It's crucial because different fund categories are suitable for different time frames, and choosing the right one aligns with your financial goals. What are the fees and loads associated with mutual funds? Mutual funds may charge sales fees, known as loads, at the time of purchase or sale. Investors should also be aware of other fees like expense ratios, which cover administrative costs, and impact overall returns. Why is it important to consider a fund manager's past results? Evaluating a fund manager's track record provides insight into their ability to deliver expected results and manage the fund effectively. Past performance is one of the factors investors consider when making investment decisions. TALK TO AN EXPERT
Top Boarding Schools in Switzerland for International Students | Fees Listed

Top Boarding Schools in Switzerland for International Students | Fees Listed

Switzerland is known for its excellent education system. It is home to the most expensive school, The incredible Institut Le Rosey, also known as the "School of Kings". The estimated fee for this school is CHF 1,25,000 (1.17 crore in INR). Let's look at some of the most popular and expensive boarding schools in Switzerland for international students! Most Expensive Boarding Schools in Switzerland Leysin American School: Nestled in the breathtaking Swiss Alps, Leysin American School offers a transformative learning experience amidst stunning natural beauty. With a diverse student body and a commitment to innovation, LAS provides a dynamic environment for academic and personal growth. Estimated fees: CHF 120,000 per year. Institut auf dem Rosenberg: Situated in the picturesque town of St. Gallen, Institut auf dem Rosenberg is renowned for its personalized approach to education and emphasis on holistic development. From world-class facilities to a global network of alumni, Rosenberg offers an unparalleled educational experience. Estimated base fees: CHF 93,000 per year, and individual fees are charged separately. This varies based on the student and starts at CHF 50,000 per year. Aiglon College: Perched on a mountainside overlooking Lake Geneva, Aiglon College offers a rigorous academic program combined with outdoor adventure and experiential learning. With a focus on character development and leadership, Aiglon prepares students to excel in a rapidly changing world. Estimated fees start at CHF 85,000 per year. TASIS Switzerland: Located in the picturesque village of Montagnola, TASIS Switzerland offers a unique blend of American-style education and European culture. With a diverse student body representing over 60 nationalities, TASIS provides a multicultural learning environment that fosters global citizenship. Estimated fees: CHF 100,500 per year for boarding children in middle and high school. Day scholars, it ranges between CHF 28,000 to CHF 53,000. Institut Le Rosey: Situated on a sprawling estate overlooking Lake Geneva, Institut Le Rosey is synonymous with luxury and excellence. With a history dating back over a century, Le Rosey offers a world-class education combined with a rich cultural experience. Estimated fees: CHF 1,25,000 per year. Brillantmont International School: Located in the heart of Lausanne, Brillantmont International School combines academic rigor with a supportive and nurturing environment. With small class sizes and personalized attention, Brillantmont offers a tailored educational experience that empowers students to reach their full potential. Estimated fees: CHF 90,500 for 8th and 9th grade, CHF 96,500 for 10th grade and CHF 103,500 for 11th, 12th and 13th graders. Benefits of Boarding Schools! Why you need to invest for your child's education? In today's fast-paced and competitive world, investing in your child's education is more important than ever. With the rising cost of living and limited financial resources, it's essential to plan ahead and secure your child's future. EduFund understands the challenges parents face and is dedicated to helping families achieve financial security through smart investments like mutual funds. By partnering with EduFund, parents can create a solid foundation for their children's education and ensure they have access to the best opportunities the world has to offer. Together, we can unlock a brighter future for the next generation. Invest Now
UTI Floater Fund | Add to your child's education fund!

UTI Floater Fund | Add to your child's education fund!

Know all about UTI Floater Fund and the UTI Asset Management Company. UTI is one of the pioneers of the Indian Mutual Fund Industry. With an AUM of more than Rs 2.66 Lakh crore, the AMC is among the most trusted names in the mutual fund space. The UTI Mutual Fund offers products across asset classes.   Let us discuss the flagship product – UTI Floater Fund.  About UTI Floater Fund  Investment Objective – The investment objective of the scheme is to generate reasonable returns and reduce interest rate risk by investing in a portfolio comprising predominantly of floating rate instruments and fixed rate instruments swapped for floating rate returns.  Investment Process The scheme uses a systematic approach to debt investing, the “GIMS”, which is as follows:  Gate:  Encompasses issuer onboarding through rigorous analysis and research process  Aims to build the investment universe in line with investment policies  Investments:  Comprehensive fund strategy framework  Incorporates Fund Strategy and Style, Risk management Framework and Potential Risk Class Matrix  Risk Limits are central to strategy  Monitoring & Surveillance:  Monitoring and review of the investment universe, Market Data Analytics, Early Warning Signal (EWS) parameters, Use of external sources for added surveillance, Automation for increased efficiency  Portfolio Composition  The portfolio comprises 93.03% allocation in debt, and the remaining 6.69% is held in cash and cash equivalents.      Note: Data as of 30th November, 2023.  Source: Value Research  Top 5 Holdings for UTI Floater Fund   Name Instrument Weightage % National Housing Bank Debenture 7.79 Debenture 8.80 Canara Bank CD Certificate of Deposit 8.65 Reserve Bank of India T-Bills 182-D 29/02/2024 Treasury Bills 6.92 Small Industries Devp. Bank of India Ltd CP Commercial Paper 6.87 Kotak Mahindra Bank Ltd CD Certificate of Deposit 6.62  Note: Data as of 30th November, 2023.  Source: Value Research  Performance Since Inception  Period UTI Floater Fund CRISIL Low Duration Debt Index (%) CRISIL 10 Years Gilt Index (%) 1 Year 6.70 7.50 6.77 3 Years  4.45 5.43 2.93 5 Years 5.85 6.57 5.96 Since Inception 5.87 6.65 6.30  Note: Data as of 30th November,2023  Source: utimf.com  Fund Manager  Mr.Sudhir Agarwal is the Fund Manager and Executive Vice President & Fund Manager-Fixed Income at UTI AMC Ltd. He joined UTI AMC in 2009 after four years of experience. He is a CFA Charter holder from CFA Institute, USA, and holds a post-graduate Diploma in Management and a master’s in commerce. He is a Fund Manager managing various debt schemes.  Why Invest in UTI Floater Fund?  The scheme aims to generate accrual income by investing in high-quality debt and money market instruments, which are hedged using OIS swaps.  The scheme is positioned to capture yield movement in the 6 to 12-month segment.  The scheme maintains a moderate duration to reduce interest rate volatility.  Who Should Invest in UTI Floater Fund?  This fund is suitable for Investors  Who are seeking for reasonable income and liquidity over the near to short term.  Who are looking to diversify their fixed-income portfolio.  Ideal Time to Stay Invested   Ideal for investment with a time horizon of 6 to 12 months.  Conclusion  UTI Floater fund is an open-ended debt scheme predominantly investing in floating rate instruments. The portfolio of this fund is High-Quality accrual oriented and is positioned to capture yield movement in the short term. Thus, investors who want to park their money for a short period with low to moderate risk metrics can consider this fund for investment.  Disclaimer: This is not recommendation advice. All information in this blog is for educational purposes only.  Create a goal for your child's future
Difference between investing at 25 vs 35 years: Benefits of Investing Early! 

Difference between investing at 25 vs 35 years: Benefits of Investing Early! 

Ever wondered why advisors recommend early investing? Why it is more beneficial to start investing at 25 vs 35 years? Let's find out the benefits of early investing and why you should start today! Ah, the investing world. It's a world where market crashes call out your name and compound interest whispers sweet nothings, a place of late-night fears and possible fortunes. But there's no one-size-fits-all approach to navigating this world.  In general, investment is about more than just making money; it's also about safeguarding your future, accomplishing your objectives, and building financial security. Your quality of life and peace of mind may be greatly enhanced by it, even though there is some danger and continuing education is needed. Investing is essential for many reasons, impacting your financial future and overall well-being. There’s no age bar for investing at what age you should start investing, but the earlier you start, the better return you will get. Let’s understand investing with two different ages just to get a clear idea.  Your decisions at 25 will (and should) look vastly different from those at 35. So, let's grab a metaphorical cup of coffee and dive into the exciting differences between investing at 25 and 35.  Risk Tolerance:   At 25, You have less of a financial cushion, but you're flexible and young. So you have more time on hand, and hence, you have a bigger risk appetite. It's affordable for you to try new things, make errors, and grow from them skillfully.  But by the time you're 35, obligations start to pile up like driftwood down the riverside. The presence of children, mortgages, or elderly parents influences your risk tolerance. You're creating a nest egg for others who rely on you. This necessitates taking a more cautious approach and putting your capital protection first while aiming for respectable returns.  Investment Goals:  Your aspirations at 25 are as diverse as a kaleidoscope. Perhaps your savings are going toward that new gadget, a dream vacation, or a down payment on your first house. It is advisable to be flexible here to modify your investment plan as your goals change.  The goalposts change at 35. Your finances should take that into account as retirement becomes a tangible goal. You must begin planning and assembling a portfolio that will last you many years after your retirement.  Time Horizon:  Consider your investment horizon as a water body. When you're 25, retiring seems like an infinite stretch of ocean before you. You can now afford to take on greater risk while keeping a part of your portfolio for long-term investments. Time is on your side, and that's most precious, isn’t it?  The water starts to flow more quickly at 35. Retirement is drawing near, and still, you have a long way to go; the situation now calls for a more sensible strategy. You need resources and knowledge that support growth in addition to stability, a stable boat that can handle both calm seas and rough rapids.  Power of compounding:  Here, let us understand the power of compounding and the benefits of early investing with a comparison of two different investors with different age groups.  Age 25 years 35 years Standard Target Age 55 years 55 years Monthly SIP Amount ₹10,000 ₹10,000 SIP period 30 years 20 years Expected Return Rate 12% 12% Invested Amount 36,00,000 24,00,000 Wealth Gained 3,16,99,000 75,91,000  Total wealth 3,52,99,000 (Approx) 99,91,000 (Approx)  This comparison shows how important it is to start investing early as the difference in the investment period is just ten years, and the difference in total wealth due to that is more than 2,50,00,000.  Over a more extended period, the corpus upon retirement increases significantly, even with a smaller monthly SIP. The analogy also highlights how crucial it is to modify your investing approach following changes in your age and level of risk tolerance.   Conclusion Overall, investment is about more than just making money; it's also about safeguarding your future, accomplishing your objectives, and building financial security. Your quality of life and peace of mind may be significantly enhanced by it, even though there is some danger, like future unpredictability.  Remember that investing is a process rather than a destination. Begin modestly - make consistent investments, and, if necessary, seek professional advice. You can create a better and more secure tomorrow by managing your money now. 
Debt Mutual Funds Vs FD. Which is better?

Debt Mutual Funds Vs FD. Which is better?

There is an ongoing debate on the topic of debt mutual funds vs FD to determine which is the better savings option. The normal mentality of a common person has been to invest in FDs as it is convenient and safe with fixed returns, but with time the thought process has shifted in favor of debt mutual funds as they offer good returns compared to FDs.  Let us discuss the topic in detail depending on different parameters to understand the best possible option from the investor’s viewpoint. https://www.youtube.com/watch?v=v4gmR-U_vHA Differences between debt mutual funds vs FD 1. Capital protection In terms of capital protection FDs have an advantage over debt mutual funds. According to the RBI directive, a bank depositor has a protection cover of a maximum of 5 lakh for both principal and interest in case the bank fails. If the depositor has FDs in different banks, then the protection cover will apply to all the banks separately.  Debt funds do not include capital protection as the investors are faced with credit risk and interest rate risk.  2. Safest Instruments FDs are the safest instruments for investible surplus as they are protected by RBI guidelines. In contrast, debt mutual funds are subjected to market risk as the underlying securities are exposed to market fluctuations and capital erosion.  3. Interest rates and returns The interest rates of FDs remain fixed until their maturity date, irrespective of any changes in the rate over that period. The expected return of the investment thus remains the same as before. Suppose an investor has opened an FD for two years at 6% per annum, then the rate will remain fixed throughout the whole tenure even if the bank has increased or decreased the rate in the interim period, and they will be paid the same amount of money which was calculated at the start of the investment.  In the case of debt mutual funds, the returns depend on interest income and capital gains from the underlying securities.  4. Rate of returns  In the case of debt mutual funds vs FDs, the estimated rate of returns for debt mutual funds is generally 7% - 9% and for FDs is an estimated 5% to 8%. Although FDs have a fixed return and debt, mutual funds do not come with assured returns.  5. Short-term holding period The average rate of return of FDs is considered better than that of debt funds in the short haul as the former manages to outperform the latter.  6. Long-term holding period When the holding period is long-term, then it is better to invest in debt mutual funds than FDs. Even if the interest rates do not fall within that period, the corporate bond funds would easily beat the FDs in the same period.  7. Inflation-adjusted returns In debt mutual funds vs FDs, the FDs usually have low inflation-adjusted returns, whereas the debt mutual funds show potential for high inflation-adjusted returns.  8. Dividend option There is no dividend option on FDs, whereas the answer is yes for debt mutual funds.  9. Taxation The taxation on debt mutual funds is lower than the fixed deposits. Despite the TDS deductions by the bank, the interest income from FDs is included in annual income and taxed according to a person’s tax slab.  In debt funds, the returns on investment within 3 years are treated as short-term capital gains. It is included in annual income and taxed according to the individual’s tax slab. The returns on investments after three years are treated as long-term capital gains and are taxed at 20% with indexation benefits.  10. Premature withdrawal In debt mutual funds, premature withdrawal is allowed with exit load/no load, whereas in FDs, it is allowed with a penalty.  Banks generally levy a penalty of 1% on premature withdrawal of FDs, and the amount is deducted from the effective rate of interest. In debt funds, except for the fixed maturity plan, which restricts redemption, all the other funds are allowed withdrawal by paying a minimum amount of exit load.  11. Cost of investment The banks do not charge a fee for opening or maintaining an FD account. On the other hand, mutual fund houses charge multiple fees like commissions, management fees, legal fees, etc., for operating the debt funds.  https://www.youtube.com/watch?v=7hXeSyWLiZ4 Conclusion If you want to know who is the winner in debt mutual funds vs FDs, then both have advantages and disadvantages. FDs have the upper hand in terms of capital protection, safe investments, income certainty, and investment cost compared to debt mutual funds. In comparison, debt mutual funds are better options in terms of premature withdrawal, dividend options, long-term investments, taxation, and rate of return. Consult an expert advisor to get the right plan TALK TO AN EXPERT
Why do you need a financial advisor for financial planning?

Why do you need a financial advisor for financial planning?

If you have asked yourself how to find a financial advisor for financial planning then you are on the right path! Managing your finances is tough; there are taxes to consider, investments to make, and assets to maintain. And, a financial advisor can help you plan a sustainable financial map for your future and unique goals.   Investing and maximizing the value of your wealth is the ultimate goal. Every individual must take care of his or her finances to have a safe and comfortable retirement. Financial advisors can help you with a retirement plan and on how to achieve financial goals like buying a house, or car, financing your child’s education, and the best asset classes to invest in. Things to know before finding financial advisor for financial planning https://www.youtube.com/watch?v=uYlrsx9_yog&t=1s Services offered by advisors and planners  According to a survey conducted by the National Association of Financial Planners, it has been estimated that only 30% of investors have a paid financial advisor. Moreover, 57% of the total number of people prefer managing their own money. Also, 95% of people who have opted for financial advisors believe that it was a good decision to invest in them.   While evaluating a financial advisor, make sure that you got through the kinds of services and plans that they offer. It will be extremely helpful to manage all of your finances and financial habits about it. Reasons to seek financial advice  A financial advisor can help you manage your money better. For example, perhaps you just received a considerable sum of money from a relative who died or a windfall from the state lottery. Financial advisors can help you manage this money, and suggest some tax-saving investments to secure your funds and grow your wealth.   Financial advisors can help you meet different goals. For example, if you are blessed with a baby and you want to ensure that his or her future is completely secured, you would want to start saving and investing for him or her. Whether it’s buying a bigger house for your child or building an education corpus, financial advisors can create a feasible plan to help you meet those needs.   The approach to investing at or during retirement is different from that of a young worker. As you near retirement, your risk tolerance level will change, and your investing style should change as well. Discuss what you want to do in your retirement, where you want to settle, and the future costs of living with your advisor Additional read: Importance of an optimistic mindset in mutual funds investments Investment management  Financial planners or advisors are those people who help individuals and businesses to create a proper investment plan that helps them meet their agenda and goals. For example, if you are looking for help in creating a savings plan for yourself, preparing investment strategies for your portfolio, paying off debts, and so on, a financial advisor could be of great help. You can go for reputed or startup firms with professionals who have the proper knowledge and understanding of finance. These firms have individuals and teams who can be extremely helpful.  Additional read: Investment strategies in a volatile market Understand the compensation of financial advisors  There are multiple ways that financial advisors can choose to charge for their services. Financial advisors focus on the most objective and unbiased thing which is their fee. To hire a financial advisor who suits your needs, you should be knowing all the ways through which you can pay the financial advisor.   There are broadly two ways of compensation which are fee-only and non-fee only. As we can understand from the term, the fee-only advisor sticks to charging a fee for their work whereas the non-fee advisors go for other kickbacks and incentives for their services.   Financial advisors can help you understand your goals better and align your expenses to achieve them. Consult an expert advisor to get the right plan TALK TO AN EXPERT
Can you track the performance of mutual funds?

Can you track the performance of mutual funds?

Mutual funds are one of the most preferred avenues for multiplying investments over the years. Hence it is important to track the performance of mutual funds for that you must understand the necessary risk elements associated with it. Mutual fund houses release the performance sheet of the funds every month. Investors should track performance by multiplying the fund units with the current NAV and adding the received dividends. Comparing this amount with initial projections helps to identify whether the ongoing mutual fund is in alignment with the set financial goals or not.  Investing in a mutual fund scheme is not the end game as it will not ensure the achievement of your investment goals. Investors must track performance and review regularly to determine whether that specific scheme can meet their investment needs adequately. Track the performances of mutual funds Different parameters and tools to track the performance of mutual fund schemes include- 1. Mutual fund ratios Mutual fund ratios like standard deviation, Sharpe ratio, alpha, beta, and concentration ratio are primary tools to assess, analyze, and track the performance of mutual funds. The numerical figures help to identify and compare vital information in simple terms so that the investors can understand the overall scheme. For example, a positive alpha means that the scheme is profitable as it has surpassed the benchmark index. Similarly, a higher Sharpe ratio signifies the potential for higher returns and encourages investors to opt for the scheme. Start Investing in Mutual Funds 2. Fund fact sheet A fund fact sheet is published by the AMC every month to show the growth of the investments. Keeping track of this report card helps investors to know how the money is allotted in different schemes, the size of the investment, and overall fund performance in terms of standard deviation, beta, CAGR, and Sharpe ratio.  The fund fact sheet lists all the schemes in an easy-to-read manner and compares the mutual funds in the same category. Investors can know about the fund’s performance and turnover compared to other schemes.  3. Historical returns One of the simplest ways to track performance is by comparing and checking the historical returns for at least 5 – 15 years. These act as viable scorecards and allow investors to check the returns over a specific period.  Investors must treat historical returns as performance indicators to look for consistency and solid fundamentals in the schemes.  A regular spike in returns shows that it is the right mutual fund for investing and a one-time occurrence acts as a red flag and urges investors to stay away from it.  How to Start Investing in Mutual Funds? Read More 4. Portfolio composition Tracking mutual funds through portfolio composition helps to check the portfolio holdings. It also helps to verify whether the stocks included in the portfolio can generate higher returns and comply with the risk profile that the investor had foreseen at the time of investing.  Portfolio composition is used to understand whether the scheme is made of quality assets and whether it can handle short-term market volatility.  https://www.youtube.com/watch?v=uYlrsx9_yog&pp=ygUHZWR1ZnVuZA%3D%3D 5. Expense ratio The expense ratio is the overall expenses incurred in the mutual fund schemes charged to the investor. It minimizes the NAV and thus has a direct impact on the returns.  A lower expense ratio means higher returns because of minimum commission or intermediary fees. Using this tracker helps to choose the funds that will give the highest possible returns.  5. Peer factor One of the simplest ways to track the performance of your mutual fund is by comparing it against peer performance.  Investors must compare the scheme in the same category to get accurate results, for example, compare a blue-chip fund like Axis Blue Chip Fund with SBI Blue Chip Fund to know which one is showing better results.   6. Benchmark performance Keep track of the investment by comparing it with the benchmark performance. Investors can know whether the fund is showing a good performance by outperforming the benchmark index or if it is a below-par investment. A higher benchmark index means lower returns and vice-versa. When a mutual fund generates more returns than the benchmark index then it is the right fund for investing.  7. Risk-adjusted returns Track performance by comparing two funds with similar returns. The risk-adjusted returns help to identify and choose the fund with less risk option. Investors should be aware that funds with low risk than the benchmark will yield low returns and more risk will generate higher returns.  8. Rolling returns Checking the average of rolling returns helps to maintain the consistency of the mutual funds. It tracks the fund’s behavior in terms of volatility, loss proportion, and outperformance.  When the rolling returns are higher than the benchmark, it means that the investment will yield better results.  9. Online portfolio trackers Online portfolio trackers help to track and monitor mutual fund investments in a hassle-free way. The online platforms provide an updated value of all the investor’s funds.  A perfect example is EduFund’s scientific fund tracker which helps to track and monitor more than one lakh data points and 400+ financial situations. The RIA-registered app uses 128-SSL security for tracking transactions in a safe environment.  Advantages of tracking the performance of mutual funds Both new and seasoned investors should track the performance of mutual fund schemes for the following reasons- The mutual fund industry assures good returns but every scheme will not give high returns. Tracking performance and comparing the different schemes help to identify and choose the best scheme with consistent returns. Tracking performance regularly helps to stay in the loop and determine whether the funds are giving the expected returns. Investors can either add more units, stay invested, or switch to profitable funds based on the performance of the fund. Understanding key investment Metrics for Mutual Funds When considering mutual funds for your child's education, it's important to assess various metrics that provide insights into the fund's performance, risk, and suitability. Here are key factors to consider:  1. Alpha: Alpha measures a fund's performance relative to its benchmark after accounting for market risk. A positive alpha indicates the fund has outperformed the benchmark, potentially adding value to your investment.  2. Beta: Beta quantifies a fund's sensitivity to market movements. A beta of 1 suggests the fund moves in line with the market, while a beta greater than 1 indicates higher volatility and less than 1 suggests lower volatility.  3. Expense Ratio: The expense ratio represents the annual fee charged by the fund to manage your investment. Lower expense ratios are generally preferable as they impact your returns over time.  4. Do a Comparison of Similar Funds: Comparing similar funds helps you identify top performers within the same category. Analyze factors such as historical returns, risk measures, and fund manager track records.  5. Rolling Returns: Rolling returns provide insights into a fund's consistency over different time periods. Look for funds with consistently positive rolling returns, indicating sustained performance.  6. Sharpe Ratio: The Sharpe ratio assesses a fund's risk-adjusted returns. Higher Sharpe ratios imply better returns for the level of risk taken. Consider funds with higher Sharpe ratios within their category.  7. Consider Market and Economic Cycles: Understand that markets and economies go through cycles. Choose funds that have shown resilience across different cycles. Funds that perform well in various market conditions might provide better stability for long-term goals.  8. Risk Tolerance: Evaluate your risk tolerance. For long-term goals like funding education, you might accept a slightly higher risk for potentially higher returns. However, ensure the risk aligns with your comfort level.  9. Investment Horizon: The time until your child's education is a crucial factor. Longer horizons can accommodate more volatility, allowing for potential recovery from market downturns.  10. Diversification: Consider funds that offer diversification across sectors and asset classes. Diversification can help mitigate risk and enhance the potential for stable returns.  11. Past Performance vs. Future Outlook: While past performance provides insights, remember that it's not a guarantee of future success. Analyze a fund's strategy, manager's approach, and economic trends.  12. Professional Advice: Consult a financial advisor who can assess your financial situation, goals, and risk appetite. They can recommend suitable funds and help tailor a portfolio to your child's education needs.  Incorporating metrics into investment decisions When selecting mutual funds for your child's education, utilize these metrics collectively. Prioritize funds with favorable alphas, lower expense ratios, and consistent rolling returns. Balance risk and reward by considering beta and Sharpe ratios. Conduct thorough research perform due diligence, and consult a financial advisor to make informed decisions that align with your child's education goals. Remember that investments carry inherent risks, and diversification is essential for managing these risks effectively.  Conclusion Investors can use the above-mentioned tools to track the performance of their mutual fund schemes. Due diligence helps to measure the profitability of the fund, conduct informed decisions, and keep hard-earned money safe. TALK TO AN EXPERT
Supercharge Your Wealth: Dominate with SIP Mutual Funds

Supercharge Your Wealth: Dominate with SIP Mutual Funds

Mutual funds have given exceptional performance over the period. Some investors just look for the returns irrespective of the risk and other parameters. So, here we have shortlisted the top-performing best SIP mutual funds with returns as a filter. https://www.youtube.com/watch?v=uYlrsx9_yog What is a SIP? SIP or the Systematic Investment Plan refers to the investment tool associated with various mutual funds. SIP allows investors to invest money periodically for a long period.  Start Investing in Mutual Funds https://www.youtube.com/watch?v=0ETi60GetP8 Ignite Prosperity: Unleash the Power of SIP Mutual Funds S.No.Fund Name3-Yr Annualized Performance1Quant Small Cap Fund Growth Option Direct Plan44.30 %2PGIM India Mid-cap Opportunities Fund Direct Plan-Growth39.28 %3Canara Robeco Small Cap Fund Direct-Growth38.83 %4Bank of India Small Cap Fund Direct-Growth38.82 %5Quant Tax Plan Direct Option Growth Plan36.88 %6Quant Infrastructure Fund Growth Option Direct Plan36.47 %7Quant Mid Cap Fund-Growth Option Direct Plan35.89 %8Kotak Small Cap Fund Direct-Growth35.37 %9Quant Active Fund Growth Option Direct Plan33.28 %10Quant Flexi Cap Fund Direct Plan Growth Option32.25 %Note: Data as of July 25, 2022Source: Morningstar 1. Quant small cap fund direct plan-growth Fund analysis: The fund has delivered an exceptionally good performance. The fund is investing predominantly in small-cap companies. The fund is rated 5-star by Morningstar. The risk grade is high, and the returns grade is high. The fund follows a blended style of investing. The risk is spread across companies with the top 10 holdings consisting of 38.96%. The fund has a high risk (measured by standard deviation) than the category average. ProsConsA top performer in its category. Fund captured the market well when it was rising.Volatility is very high. https://www.youtube.com/watch?v=BIRf2Dm1wB8 2. PGIM India mid-cap opportunities fund direct plan-growth Fund analysis: The fund has outperformed the category and the benchmark with good margins. The fund is investing predominantly in mid-cap companies. The fund is rated 5-star by Morningstar. The risk grade is above average, and the returns grade is high. The fund follows a growth style of investing. The risk is spread across companies with the top 10 holdings consisting of 35.25%. The fund has a high risk (measured by standard deviation) than the category average. ProsConsA top performer in its category. The fund captured the market well when it was rising and falling, better than the category average.The minimum monthly SIP amount is Rs 1000/- thus marginal investors may not be able to take exposure Calculate Investment Using SIP Calculator 3. Canara Robeco small cap fund direct-growth Fund analysis: The fund has outperformed the benchmark over different horizons. The risk grade is average and the returns grade is high. The fund has a well-diversified portfolio invested across market capitalization. The top 10 holdings consist of a total of 22.88%. The fund is rated 5-star by Morningstar. The fund holds a good risk-to-reward ratio. The fund has low risk (measured in standard deviation) than the category average. ProsConsFund captured the market well when it was rising. The fund captured the market well when it was falling.Less exposure to small-cap stocks. 4. Bank of India small cap fund direct growth Fund analysis: The fund is rated 5-star by Morningstar. The risk grade is below average, and the returns grade is high. The fund has a beta of 0.84 indicating that the movement of the fund is less relative to the market movement. The fund follows a growth style of investing. The fund has a low risk (measured by standard deviation) than the category average. ProsConsMy risk grade is below average. Well-diversified portfolio.The fund has a high expense ratio. 5. Quant tax plan direct option growth plan Fund analysis: The fund’s objective is to generate capital appreciation by investing predominantly in a well-diversified portfolio of equity shares with growth potential. The risk grade is high and the return grade is high. The fund has a beta of 0.99 which means that the fund movement is very much relative to the market movement. The fund has a high risk (measured by standard deviation) than the category average. ProsConsWell-diversified portfolio.Tax benefit.Highly volatile. 6. Quant infrastructure fund growth option direct plan Fund analysis: The fund’s objective is to seek to generate capital appreciation & provide long-term growth opportunities by investing in a portfolio of infrastructure-focused companies. The risk and return grade of the fund is high. The fund follows a blended style of investing, indicating the fund has both value and growth stocks. The fund has invested majorly in large-cap companies. The fund has outperformed the category average with good margins. ProsConsFund has outperformed the category average over 1-Yr, 3-Yr & 5-Yr trailing returns. Fund has outperformed the category average when the market was falling.Low Assets Under Management. 7. Quant mid-cap fund-growth option direct plan Fund analysis: The fund’s objective is to seek to generate capital appreciation & provide long-term growth opportunities by investing in a portfolio of mid-cap companies. The risk grade is below average, and the returns grade is high. The fund has a beta of 0.85 indicating that the movement of the fund is less relative to the market movement. The fund has a concentrated portfolio of 34 stocks, investing in both value & growth stocks. The fund has low risk (measured by standard deviation) than the category average. ProsConsA consistent top performer in its category. The fund captured the market well when it was rising and falling, better than the category average.Concentrated portfolio of 34 stocks. 8. Kotak small cap fund direct growth Fund analysis: The fund has outperformed the category average in terms of trailing returns over different horizons. The risk grade is above average and the returns grade is above average. The fund has a beta of 0.95 indicating that the movement of the fund is quite closely relative to the movement of the market. The fund has a well-diversified portfolio of growth stocks consisting of 72 companies spread over different sectors and market-cap companies. The fund has a high risk (measured in standard deviation) than the category average. ProsConsThe fund has a favorable expense ratio. Fund captured the market well when it was falling.Too much diversification may hamper the returns. 9. Quant active fund growth option direct plan Fund analysis: The fund’s primary objective is to generate capital appreciation & provide long-term growth opportunities by investing in a portfolio of large-cap, mid-cap, and small-cap companies. The risk grade is above average and the returns grade is high. The fund is rated 5-star by Morningstar. The fund has invested 59.45% in large-cap, 28.07% in mid-cap, and 12.48% in small-cap companies. The fund has outperformed the category average over 1-yr, 3-yr & 5-yr trailing returns. ProsConsThe fund has a risk grade of above average, whereas the returns grade is high. Consistent performance over the period.Fund has underperformed the category average over 5-Yr trailing returns. Source: pexels 10. Quant Flexi cap fund direct plan growth option Fund analysis: The fund’s objective is to seek to generate capital appreciation & provide long-term growth opportunities by investing in a portfolio of consumption-driven companies. The risk grade is above average high. The fund has outperformed the category average and the benchmark with good margins over the long-term period. The fund has limited holdings of 36 stocks but is well-diversified across sectors. ProsConsAttractive risk-to-reward ratio. The fund captured the market well when it was rising & falling, better than the category average.Exit load of 1.00%, if units redeem within 1 year. Benefits of SIP investments Compounding: SIPs are based on the compounding theory and prove more advantageous at the end of a specific period. The interest rates are calculated and added based on compound interest which brings forth a better investment return than simple interest.  Discipline: SIPs help parents become disciplined and regular investors who are fully involved in their child’s future. Systematic and easy to manage: In this era, where everyone is so busy, SIPs are very easy to handle. Investors are allotted units every month based on the NAV at the time of their SIP. The amount is automatically deducted from the account of the investor. Flexibility: SIP helps to gain control of the finances as it is possible to start or stop a SIP anytime. Higher returns: It helps investors to earn greater returns compared to other investment opportunities like fixed deposits. Small investments: It is possible to start a SIP investment with as low as INR 100 per month, hence anyone willing to invest in their child’s future can do so easily.  Tax benefits: Some SIPs like ELSS funds have tax benefits, hence it is doubly advantageous for investors to invest in such schemes. The abundance of options: Numerous asset management houses offer SIP options to meet even the minimum criteria of an investor. Best deals: The most important benefit of a SIP for regular investors is that they can buy mutual fund units at different prices. The average investment premium is much lower compared to other investments. How to get higher returns from SIP mutual funds? To get higher returns from SIP mutual funds, you need the help of an expert or a financial advisor. They can help you invest right, manage the funds properly and conduct market research to help you maximize your returns. Here is a helpful way to get higher returns from your SIP mutual funds: Research the funds that are performing well for a longer time and shortlist the names which show good potential. It is important to start investing in SIP as early as possible as it will give you a longer window to save more. Create a rough layout financial goal, for example, the time horizon, the amount needed, and your risk profile. Invest in mutual funds that have a diversified portfolio to reduce the risk of losing money all at once. Take the help of experts in the EduFund App to make wiser and safer investment decisions.  Consider the additional expenses and costs associated with the funds like expense ratio (the cost charged by the AMC to manage your funds). Tax-saving benefits are attached to several mutual fund schemes that can help parents to save a considerable amount through tax exemptions. How to start a SIP investment on the EduFund App? Step 1: Download and Sign up with EduFund Go online with SIP investments with EduFund. Download the application and sign up with personal details. The whole signup process takes just 3 seconds.  Step 2: Identify your goals for your child’s future  The application provides a gamut of options for your child’s education. Evaluate the goal. Whether you wish to: Save for school fees Save for higher education in India or overseas Step 3: Calculate the total cost with a FREE calculator After identifying the goals, calculate the total costs of higher education for undergraduate or postgraduate studies. You could calculate basing National or International academic education expectations. Select the specialization and the country you are seeking higher education. Step 4: Get your investment map and invest Soon after filing the details, you will get how much you could get after investing for the respective number of years. You will get a number of SIP suggestions that you could compare with yours. You could increase or decrease the sum to invest monthly as per financials. We provide an overview of your savings transitioning into returns until you get the investment sum. You could go for a lump sum payment if you are an entrepreneur with unstable finances. Place the order as a secured investment through UPI or other methods. You could start with just ₹100 in Edufund SIP investments. Step 5: Track, revisit and reset goals anytime Once you set up a SIP plan, you can edit goals according to the revised economic situation. Edufund captures the sensitivity that comes with finances. Revisit the plan and modify it as per goals and finances. You will get a new investment plan with new goals. Plan your savings accordingly. Factors to Take into Account Before Choosing the Best Mutual Funds for SIP 2023 Investing Systematic Investment Plan (SIP) is a popular way to invest in mutual funds by making regular, fixed investments over time. Selecting the right mutual funds for your SIP investments requires careful consideration of various factors. Here are key points to evaluate before making your investment decisions in 2023:  1. Investment Goals and Horizon: Identify your investment goals—whether it's wealth creation, retirement planning, or funding-specific goals. Determine your investment horizon, as different funds suit short, medium, or long-term goals.  2. Risk Tolerance: Assess your risk tolerance before investing. Different funds carry varying levels of risk. Choose funds aligned with your risk appetite to avoid discomfort during market fluctuations.  3. Fund Performance: Analyze the historical performance of mutual funds. Look for consistent returns over multiple market cycles rather than just short-term outperformance.  4. Fund Category: Understand the different mutual fund categories such as equity, debt, hybrid, and thematic funds. Choose categories that match your risk profile and investment goals.  5. Fund Manager Expertise: The fund manager's experience and track record play a crucial role. Research the manager's history and style to ensure their approach aligns with your investment philosophy.  6. Expense Ratio: Lower expense ratios are preferable as they directly impact your returns. Compare expense ratios among similar funds to choose cost-efficient options.  7. Fund Assets and AUM: A fund's size can influence its performance and liquidity. While larger funds might offer stability, smaller ones can be more agile in taking advantage of market opportunities.  8. Consistency of Returns: Look for funds that consistently deliver steady returns over time, even if they are not the highest performers in the short term.  9. Portfolio Holdings: Examine the fund's portfolio holdings to understand its asset allocation, sector exposure, and quality of securities. Diversification is key to managing risk.  10. SIP Period and Amount: Determine the SIP period and the amount you can comfortably invest regularly. Consistency in SIP investments is more important than the amount invested.  11. Exit Load and Lock-in Period: Check for any exit loads or lock-in periods associated with the mutual funds. These can impact your ability to withdraw funds when needed.  12. Market Conditions and Economic Outlook: Consider the current market conditions and economic outlook while selecting funds. Different sectors perform differently in various market cycles.  13. Tax Implications: Understand the tax implications of the funds you're considering. Different funds have different tax treatments for gains.  14. Regulatory and Corporate Governance: Research the fund house's reputation, regulatory compliance, and corporate governance practices to ensure a trustworthy investment.  15. Diversification: Diversify your SIP investments across different fund categories and asset classes to mitigate risks and capture potential opportunities.  Conclusion: If one selects the right mutual fund then it can fetch you good returns over the period, but the selection criteria should not be based on the returns only. One should consider other factors like risk, expense ratio, etc. FAQs Which is best for mutual fund SIP? Quant Small Cap Fund Growth Option Direct PlanPGIM India Mid-cap Opportunities Fund Direct Plan-GrowthCanara Robeco Small Cap Fund Direct-GrowthBank of India Small Cap Fund Direct-GrowthQuant Tax Plan Direct Option Growth PlanQuant Infrastructure Fund Growth Option Direct PlanQuant Mid Cap Fund-Growth Option Direct PlanKotak Small Cap Fund Direct-GrowthQuant Active Fund Growth Option Direct PlanQuant Flexi Cap Fund Direct Plan Growth Option What is SIP mutual fund? A Systematic Investment Plan (SIP) is an investment tool in mutual funds at regular intervals. The investor can decide the amount, and date of investment and choose to stop or pause. Is SIP better than FD? A SIP is likely to get you better returns than an FD. FD is an investment product while SIP is an investment tool - a way to invest rather than a product itself. You can start a SIP in mutual funds, direct stocks, or ETFs that have historically beaten inflation and FD rates in India. What is the difference between a SIP and a mutual fund? Mutual Fund is an investment product while SIP is an investment tool - a way to invest rather than a product itself. TALK TO AN EXPERT Disclaimer:This is not recommendation advice, use it for educational purposes only. Mutual Fund investments are subject to market risks, read all scheme-related documents carefully. The NAVs of the schemes may go up or down depending upon the factors and forces affecting the securities market including the fluctuations in the interest rates. The past performance of the mutual funds is not necessarily indicative of the future performance of the schemes.
Quantum India ESG Equity Fund

Quantum India ESG Equity Fund

Incorporated in the midst of the Global Financial Crisis, Quantum Mutual Fund has been in existence for approximately two decades now. The AMC offers a variety of mutual fund schemes, including equity funds, debt funds, and hybrid funds. Quantum Mutual Fund is known for its focus on active management and its commitment to providing investors with high-quality investment products. Quantum India ESG Fund Investment Objective The investment objective of the scheme is to achieve long-term capital appreciation by investing in shares of companies that meet Quantum’s Environment, Social, and Governance (ESG) criteria.  Investment Process  The Quantum India ESG Equity Fund invests in companies that are focused on conserving the environment, positively impacting communities that they operate in, and conducting business ethically.  These sustainable businesses are not only environmentally and socially responsible but also make great sense as investments as you look to build wealth over the long term.  The fund invests after comprehensive research on Environmental, Social, and Governance or ESG factors following the risk and liquidity controls on investing.    Portfolio Composition The portfolio is biased towards large-cap stocks, with 78% of the funds allocated to large-cap stocks, the remaining 19% and 3% to mid-cap and small-cap stocks respectively. Note: Data as of 31st July 2023. Source: Quantum Mutual Fund, Value Research Top 5 Holdings for Quantum India ESG Equity Fund Name Weightage % HDFC Bank Limited 8.21 TVS Motor Company Limited 4.35 Tata Communications Ltd 4.13 Tata Consultancy Services Ltd 3.95 The Indian Hotels Company Ltd 3.59 Note: Data as of 31st July 2023. Source: Quantum Mutual Fund Performance for Quantum India ESG Equity Fund   NIFTY100 ESG TRI S&P BSE Sensex TRI Period Scheme (₹) Benchmark Additional Benchmark Since Inception  17.24%  15.81%  15.65%  3 Years  22.52%  20.82%  22.38%  1 Year 15.69%  13.53%  20.70%  Note: Returns in % as of 31st, July 2023. Source: Quantum Mutual Fund  Since its inception, the fund has generated a CAGR (Compounded Annual Growth Rate) of 17.24%. Invest in Fund Fund Manager  The scheme is co-managed by Mr. Chirag Mehta & Ms. Sneha Joshi.  Mr. Chirag Mehta has more than 19 years of experience and has been managing this fund since July 2019.  Ms. Sneha Joshi has more than 9 years of experience and has been managing this fund since July 2019.  Who Should Invest in Quantum India ESG Equity Fund?  The fund is suitable for investors who are seeking.   Long-term capital appreciation.  An investment opportunity that invests in shares of companies that meet Quantum's Environment, Social, Governance (ESG) criteria.  Why Invest in this Fund? The fund offers a solution for investing in businesses where sustainable practices drive long-term performance.  It invests after comprehensive research on Environmental, Social, and Governance or ESG factors.  It provides exposure to good quality sustainable companies with low volatility and downside risk.  It is a well-diversified portfolio that follows a disciplined investment process.  It follows risk and liquidity controls on investing.  Time Horizon One should look at investing for at least five years or even more.  Investment through Systematic Investment Plan (SIP) may help in tackling the volatility of the broader equity market.  Conclusion Quantum India ESG Equity Fund is an open-ended fund that allows investors to invest in equities following the ESG theme. The fund has outperformed its benchmark consistently. However, the fund was launched approximately 3 years ago, so it will be important to monitor how the fund performs in the upcoming future. Hence, investors who believe in the ESG theme of investing can consider this fund with a long-term time horizon. DisclaimerThis is not recommendation advice. All information in this blog is for educational purposes only. 
Quantum Long-Term Equity Value Fund

Quantum Long-Term Equity Value Fund

Incorporated in the midst of the Global Financial Crisis, Quantum Mutual Fund has been in existence for approximately two decades now. The AMC offers a variety of mutual fund schemes, including equity funds, debt funds, and hybrid funds. Quantum Mutual Fund is known for its focus on active management and its commitment to providing investors with high-quality investment products.  In this blog, we will explore its flagship product – Quantum Long Term Equity Value Fund. Quantum Long-Term Equity Value Fund Investment Objective The primary investment objective of the scheme is to achieve long-term capital appreciation by investing primarily in shares of companies that will typically be included in the S&P BSE 200 Index and are in a position to benefit from the anticipated growth and development of the Indian economy and its markets.  Investment Process  The scheme follows a bottom-up approach for stock selection with disciplined research and investment process.  The scheme follows the thought process of investing in high-conviction stocks with long-term time horizons and hence has a lower portfolio turnover ratio.    Portfolio Composition The portfolio is biased towards large-cap stocks, with 86.49% of the funds allocated to large-cap stocks and the remaining 13.51% to mid-cap stocks. Significant sectoral exposure is to Financials, which accounts for more than one-third of the portfolio. The top five sectors hold more than 82% of the portfolio.  Data as of 31st July 2023Source: Value Research  Top 5 Holdings for Quantum Long-Term Equity Value Fund Name Weightage % HDFC Bank Limited 9.62 ICICI Bank Limited 6.80 Infosys Limited 4.78 State Bank of India Limited 4.73 Eicher Motors Limited 4.34 Note: Data as of 31st July 2023. Source: Value Research  Performance for Quantum Long-Term Equity Value Fund Particulars 1 Year 3 Year 5 Year 7 Year 10 Years Quantum Long Term Equity Value Fund 16.78 23.68 11.13 10.96 14.60 S&P BSE 100 TRI 13.08 22.20 12.76 13.94 15.21 Equity: Value Oriented 22.04 28.41 14.25 14.68 19.06 Note: Returns in % as of 10th August 2023. Source: Value Research  Since its inception, the fund has generated a CAGR (Compounded Annual Growth Rate) of 13.56%. Talk to an expert Fund Manager The scheme is co-managed by Mr. George Thomas & Mr. Christy Mathai.  Mr. George Thomas has more than six years of experience and has been managing this fund with effect from 01st April 2022.  Mr. Christy Mathai has approximately seven years of experience and has been managing this fund with effect from 23rd November 2022.  Who Should Invest in Quantum Long-Term Equity Value Fund?  The fund is suitable for investors who are seeking   Long-term capital appreciation.  An investment opportunity that invests primarily in equity and equity-related securities of companies in the S&P BSE 200 index.  Why Invest in this Fund? The fund uses the bottom-up approach for stock selection to minimize risk.  It follows disciplined research and investment process.  It has a low portfolio turnover.  It holds cash when stocks are overvalued and does not expose itself to derivatives.  It has one of the lowest expense ratios in the industry.  Time Horizon One should look at investing for at least five years or even more.  Investment through Systematic Investment Plan (SIP) may help in tackling the volatility of the broader equity market.  Conclusion: The Quantum Long-Term Equity Value Fund is an open-ended fund that allows investors to invest in undervalued equities. Although it has underperformed its benchmark over the long term, the fund has shown outperformance in the recent past. Thus, it will be important to monitor how the fund performs in the upcoming future. DisclaimerThis is not recommendation advice. All information in this blog is for educational purposes only.
Boost Your Financial Liquidity: Dive into the Top 6 Liquid Mutual Funds

Boost Your Financial Liquidity: Dive into the Top 6 Liquid Mutual Funds

As per SEBI regulations, a liquid fund is one that invests in debt and money market instruments with a maturity of up to 91 days only, such as Certificate of Deposits, Treasury Bills (T-bills), Commercial Paper (CP), etc. The aim of these funds is to provide capital preservation/safety along with reasonable returns. Advantages: High Liquidity: The main aim of such funds is to provide liquidity for their investors. So, investors can redeem their units at any time. Low Exit Loads: These funds have exit loads of less than 7 days. So, you can redeem your funds after 7 days without any penalties. Indexation Benefit: Long-term taxation will be calculated based on inflation. Only returns over inflation will be taxable. Better Returns: Investors can enjoy better returns than their regular savings bank account by investing in these funds. Top 5 liquid mutual funds S.No.Fund Name3-Yr Annualized Performance1Quant Liquid Plan Growth Option Direct Plan5.01 %2IDBI Liquid Fund Direct-Growth4.27 %3Mahindra Manulife Liquid Fund Direct Plan-Growth4.23 %4Edelweiss Liquid Fund Direct-Growth4.23 %5Franklin India Liquid Super Institutional Plan Fund Direct-Growth4.22 %Note: Data as of July 25, 2022Source: Morningstar 1. Quant Liquid Plan Fund analysis: The fund is the top-performing fund in its category. The fund has a low-risk profile. The fund has outperformed the category and the benchmark. The fund has invested in high-quality bonds i.e., AAA-rated. The fund can be used to park your emergency funds. ProsConsHigh liquidity. Invested in AAA quality bonds.High expense ratio.Note: CRISIL Liquid Fund BI Index Start Investing 2. IDBI Liquid Fund Fund analysis: The investment objective of the Scheme will be to provide investors with a high level of liquidity along with regular income for their investment. The Scheme will endeavor to achieve this objective through an allocation of the investment corpus in a low-risk portfolio of money market and debt instruments with a maturity of up to 91 days. The fund has outperformed the category over the period. The fund has invested 100% in AAA-rated bonds. The fund is a good alternative to fixed deposits (F.D.) ProsConsLow Expense Ratio.Attractive risk-to-reward ratio.Fund has underperformed the benchmark over 5-Yr trailing returns.Note: CRISIL Liquid Fund BI Index Start Investing 3. Mahindra Manulife Liquid Fund Fund analysis: The Scheme seeks to deliver reasonable market-related returns with lower risk and higher liquidity through a portfolio of money market and debt instruments. The fund has outperformed the category average over different trailing periods. The fund holds high-quality debt and money market instruments. ProsConsFund has outperformed the category average over different trailing periods. Low expense ratio.Fund has underperformed the benchmark over 5-Yr trailing returns.Note: CRISIL Liquid Fund BI Index Start Investing 4. Edelweiss Liquid Fund Fund analysis: The fund’s objective is to provide reasonable returns, commensurate with low risk while providing a high level of liquidity, through a portfolio of money market and debt securities. The fund has invested 100% in debt and money market instruments that have the highest rating i.e., AAA-rated bonds. The fund has delivered consistently better returns than the category average. ProsConsHigh liquidity. Invested in AAA quality bonds.Fund has underperformed the benchmark over 3-Yr & 5-Yr trailing returns.Note: CRISIL Liquid Fund BI Index Start Investing 5. Franklin India Liquid Fund Fund analysis: The fund’s objective is to provide current income along with high liquidity. The fund has relatively high volatility. The fund is a good alternative to bank accounts along with high liquidity. The fund has invested in AAA-rated bonds and money market securities. ProsConsInvested in AAA quality bonds. High liquidity.Relatively high volatility.Note: CRISIL Liquid Fund BI Index Start Investing Features of Liquid Mutual Funds Liquid mutual funds are a type of mutual fund that primarily invests in short-term, highly liquid money market instruments such as government securities, certificates of deposit, commercial paper, and treasury bills. They are designed to provide investors with a safe and convenient avenue to park surplus funds for the short term. Here are some key features:  Liquidity: Liquid funds offer high liquidity, allowing investors to redeem their units quickly with minimal impact on the net asset value (NAV).  Low Risk: These funds invest in low-risk securities, making them relatively safer compared to other mutual fund categories. However, they may not offer high returns.  Low Investment Minimums: Many liquid funds have low investment minimums, making them accessible for both individual and institutional investors.  Steady Returns: While liquid funds aim to generate steady returns, the focus is on capital preservation and liquidity rather than aggressive growth.  Taxability: The gains from liquid mutual funds are subject to taxation based on the investor's holding period. If the investment is held for up to three years, the gains are treated as short-term capital gains and taxed at the investor's applicable income tax rate. If held for more than three years, they are considered long-term capital gains and taxed at a flat rate with indexation benefits. Who are these Funds suited for? Corporates: Businesses often use liquid funds to manage short-term cash surpluses efficiently, earning a return on excess funds.  Individuals: Liquid funds are suitable for individuals who want a safe alternative to traditional savings accounts and are willing to compromise slightly higher returns for greater liquidity.  Emergency Funds: They can serve as a part of an individual's emergency fund, providing quick access to funds without the risk associated with other investments.  Major Advantages Safety and Liquidity: Liquid funds offer a balance between safety and liquidity, making them an excellent choice for short-term goals and funds you may need at short notice.  Better Returns Than Savings Accounts: While liquid funds might not offer the same interest as savings accounts, they generally provide better returns due to their investments in higher-yielding money market instruments.  No Exit Load: Most liquid funds have no exit load, allowing investors to redeem their units without incurring any additional charges.  Tax Efficiency: The tax treatment for gains from liquid funds can be more favorable than other fixed-income investments, especially for investors in higher tax brackets.  Professional Management: Liquid funds are managed by professional fund managers who have expertise in managing short-term investments, enhancing the chances of achieving consistent returns.  Conclusion: Liquid funds are a good alternative to bank accounts. Investors can also park their emergency funds in these mutual funds because of their high liquidity. This results in better returns than a regular savings bank account as the exit load is maximum for 7 days only. Talk To An Expert FAQs Which mutual fund scheme is highly liquid? Liquid mutual funds are highly liquid as they primarily invest in short-term money market instruments. They offer quick and easy redemptions with minimal impact on the fund's net asset value (NAV). Which is the safest liquid fund? Liquid funds, by nature, aim for safety and stability. Funds from reputable asset management companies like HDFC Liquid Fund, ICICI Prudential Liquid Fund, and SBI Liquid Fund are generally considered safe due to their investments in high-quality, short-term instruments. However, no investment is entirely risk-free, so research and diversification are still important. What liquid fund is best? Determining the best liquid fund depends on your specific financial goals, risk tolerance, and investment horizon. Some reputable options included ICICI Prudential Liquid Fund, Aditya Birla Sun Life Liquid Fund, and Nippon India Liquid Fund. However, it's crucial to research the latest performance, expense ratios, and other factors, and consider consulting a financial advisor before making a decision. Disclaimer:This is not recommendation advice, use it for educational purposes only. Mutual Fund investments are subject to market risks, read all scheme-related documents carefully. The NAVs of the schemes may go up or down depending upon the factors and forces affecting the securities market including the fluctuations in the interest rates. The past performance of the mutual funds is not necessarily indicative of the future performance of the schemes
Best 5 divided paying mutual funds. You never knew!

Best 5 divided paying mutual funds. You never knew!

Best dividend-paying mutual funds are one of the types of mutual funds in India that invest in equity and equity-related instruments that can yield a high dividend to its shareholders. These companies have strong fundamentals as they are profit-making companies. Only profit-making companies can distribute dividends to their shareholders. Having said that the primary intention of these companies is to provide regular income and capital appreciation to their investors. As per SEBI (Securities and Exchange Board of India) norms, a dividend yield fund invests at least 65% of its portfolio in dividend-yielding instruments. Features of Dividend-Paying Mutual Funds  Dividend-paying mutual funds offer several features that make them distinct from other types of funds:  1. Income Generation: These funds focus on stocks or securities of companies known for consistent dividend payments, aiming to provide a steady income stream to investors.  2. Diversification: Dividend-paying mutual funds typically invest in a diversified portfolio of dividend-yielding stocks, reducing the risk associated with relying on the performance of a single company. 3. Reinvestment Options: Investors can opt for dividend reinvestment plans (DRIPs), where the dividends received are automatically reinvested to purchase additional fund shares, potentially compounding returns over time.  Start Investing in Mutual Funds Taxability  Dividend income from mutual funds can have tax implications:  1. Taxation of Dividends: Dividend income received from mutual funds is generally taxable as per the investor's income tax slab. However, dividends from equity-oriented funds might be tax-free up to a certain limit due to the Dividend Distribution Tax (DDT) paid by the fund.  2. Dividend Distribution Tax (DDT): Prior to Budget 2020, mutual funds were subject to DDT before distributing dividends. Now, investors are liable to pay tax on the dividend income received as per their tax slab.  Who are these funds suited for?  Dividend-paying mutual funds can be suitable for:  Income-Oriented Investors: Individuals seeking regular income from their investments, such as retirees or those looking for a supplementary income source.  Conservative Investors: Those who prefer a lower-risk investment option with potentially stable returns, as dividend stocks tend to be established companies.  Major Advantages of Dividend-Paying Mutual Funds Steady Income: Dividend-paying funds can offer a reliable income stream, making them appealing to investors who rely on investment income.  Potential for Growth: Some dividend-paying companies might also experience capital appreciation, providing growth potential alongside regular income.  Diversification: By investing in a range of dividend stocks, these funds offer diversification benefits, spreading risk across various industries and sectors.  Compounding Effect: Dividend reinvestment can harness the power of compounding, where dividends are reinvested to potentially generate higher returns over time.  Advantages of the best dividend-paying mutual funds These funds have the potential to regular income through dividends. These funds invest majorly in strong companies having strong fundamentals. These funds provide equity exposure with lower risk. 5 High Dividend Mutual Funds S.No.Fund Name3-Yr Annualized Performance1Templeton India Equity Income Fund Direct Payout of Inc Dist cum Cap Wdrl22.43 %2IDBI Dividend Yield Fund Direct Payout of Income Distribution cum Cap Wdrl18.83 %3Sundaram Dividend Yield Fund – Direct Plan Half Yearly Payout of Income Dis cum Cap Wdrl18.59 %4Aditya Birla Sun Life Dividend Yield Fund Direct Plan Payout Inc Dist cum Cap Wdrl17.44 %5ICICI Prudential Dividend Yield Equity Fund Direct Payout Inc Dist cum Cap Wdrl17.30 %Note: Data as of July 26, 2022Source: Morningstar 1. Franklin Mutual Fund The scheme seeks to provide a combination of regular income and long-term capital appreciation by investing primarily in stocks that have a current or potentially attractive dividend yield, by using a value strategy. The fund has outperformed the category average over different tailing period returns. The fund has invested majorly in large-cap companies (81.41%) followed by mid-cap (17.77%) and small-cap companies (0.82%). ProsConsAttractive risk-to-reward ratio. The fund outperformed the category average when the market was falling & rising.High volatility than the category average. Invest Now 2. IDBI Mutual Fund Fund analysis: The fund’s aim is to provide capital appreciation and/or dividend distribution by investing predominantly in dividend-yielding equity and equity-related instruments. The fund has a beta of 0.78 indicating that the fund performance is less relative to the market. The fund follows a blended style of investing which means that the fund has invested in both value and growth stocks. The fund has outperformed the category average marginally. ProsConsLess volatile than the category average. Fund has outperformed the category average when the market was falling.Fund has underperformed the category average when the market was rising. Invest Now 3. Sundaram Mutual Fund Fund analysis: The fund has given consistent performance over the long-term period. The fund has a well-diversified portfolio, spread across sectors except for real estate. The fund has invested across market capitalization companies i.e., large-cap (84.79%), mid-cap (13.42%), and small-cap (1.79%) companies. The fund has also invested some portion in the debt category also. ProsConsFund has outperformed the category average when the market was falling. Well-diversified portfolio.High expense ratio. Invest Now 4. Aditya Birla Mutual Fund Fund analysis: The fund has a beta of 0.91 indicating that the fund’s performance is closely related to the performance of the market. The fund has invested across market capitalization, but the major investments are in large-cap (60.07%) followed by mid-cap (26.37%) and small-cap (13.55%) companies. The fund has a high risk (measured by standard deviation) than the category average. ProsConsWell-diversified portfolio. Fund has outperformed the category average when the market was rising.High expense ratio. Invest Now 5. ICICI Prudential Mutual Fund Fund analysis: The fund’s objective is to provide medium to long-term capital gains and/or dividend distribution by predominantly investing in a well-diversified portfolio of equity and equity-related instruments of dividend-yielding companies. The fund has given reasonably good performance over the period. The fund follows a blended style of investing, which means that the fund has invested in both value and growth stocks, and has invested across market capitalization companies. The fund has a higher risk (measured by standard deviation) than the category average. ProsConsLow expense ratio. Fund has outperformed the category average when the market was rising.The fund underperformed the category average when the market was falling. Invest Now Conclusion: Investors looking for regular income and capital appreciation from the stock market should consider such funds as part of their portfolios. FAQs Which mutual fund gives monthly dividends?  Ans. Sundaram Dividend mutual funds – Direct Plan-Growth - NAV: INR 91.29 Expense Ratio: 2% AUM: INR 321.27 Cr  Aditya Birla Sun Life Dividend Yield Fund – Direct Plan-Growth - NAV: INR 280.57 Expense Ratio: 1.85% AUM: INR 810.28 Cr  Which 5 mutual fund is best? Ans. Tata Digital India Fund Direct-Growth   ICICI Prudential Technology Direct Plan-Growth  Quant Small Cap Fund Direct Plan-Growth  SBI Technology Opportunities Fund Direct-Growth  Aditya Birla Sun Life Digital India Fund Direct-Growth  Which dividend yield fund is best?  Ans. Templeton India Equity Income Fund, ICICI Prudential Dividend Yield Equity Fund, IDBI Dividend Yield Fund.  What are the 5 highest dividend-paying stocks? Ans. V.F. Corporation (VFC), Devon Energy (DVN), Dow Inc. (DOW), International Business Machines (IBM), and Verizon Communications (VZ).  Which mutual fund gives the highest dividend?  Ans. It's important to note that mutual fund returns can vary over time. Funds that focus on high dividends might sacrifice growth potential. Some funds known for higher dividends include Vanguard Dividend Appreciation Index Fund, Fidelity Equity Income Fund, and T. Rowe Price Dividend Growth Fund. Research and professional advice are recommended before investing.   Which top 5 companies give dividends?  The top dividend-paying companies included Apple Inc., Microsoft Corporation, Johnson & Johnson, JPMorgan Chase & Co., and Procter & Gamble.    What are the highest-yielding monthly dividend funds?   Some of the highest-yielding monthly dividend funds included Global X SuperDividend ETF, AGFiQ U.S. Market Neutral Anti-Beta Fund, and PIMCO Monthly Income Fund. However, yield and performance can change, so ensure you research and verify the status before making any investment decisions.  Disclaimer:This is not recommendation advice, use it for educational purposes only. Mutual Fund investments are subject to market risks, read all scheme-related documents carefully. The NAVs of the schemes may go up or down depending upon the factors and forces affecting the securities market including fluctuations in the interest rates. The past performance of the mutual funds is not necessarily indicative of the future performance of the schemes
Mastering CAGR in Mutual Funds: Your Path to Financial Growth

Mastering CAGR in Mutual Funds: Your Path to Financial Growth

In the previous article, we discussed NFO in mutual funds. In this article, we will discuss CAGR in mutual funds CAGR or Compound Annual Growth Rate refers to the mean annual growth of any investment over a period usually longer than a year. It is an accurate way to calculate and determine the return for investment portfolios, and individual assets that may rise or fall in value with time.  Investment consultants who boast about their market knowledge and funds advertising their returns use the phrase CAGR. What is CAGR?  The compound annual growth rate, or CAGR, measures your investments' yearly compounding rate. Let's spend some time considering the word compounding. Imagine you put Rs 1,000 into stock and received a 10% return. In the first year, the stock price will have increased by Rs. 100. Now that we are in the second year, the price has risen by 10% once again.  Will the cost increase by Rs 1,200 after two years? The answer is no. After a year, your initial investment of Rs. 1,000 has increased to Rs. 1,100. At this point, a 10% growth of Rs. 1,100 increases the investment's worth to Rs. 1,210 after two years. The fundamental idea behind CAGR, or compound annual growth rate, is compounding. https://youtube.com/shorts/HMvmvNppjtk?feature=share How does the compound annual growth rate work?  Several restrictions are associated with calculating the mean or arithmetic average of results. Because it offers a rate of return that is smoothed, CAGR aids in overcoming them. It may be used to compare the success of various assets over time and provides a reasonable prediction of the yields from an investment when compounded yearly.  Most of the time, when we evaluate the success of our assets, we are just interested in the total return. However, we frequently fail to consider the temporal worth of money. CAGR differs in this manner. In actuality, CAGR prefers taking the time value of money. CAGR calculator and mutual funds  Mutual fund investors can benefit significantly from the CAGR calculator. This can help you find out how good-performing your fund is for helping you take the required investment decisions. Uses of a CAGR in Mutual fund  Compare returns between different funds and benchmarks  The CAGR calculator may also be used to contrast the returns you receive from one fund with those of other funds of a similar type. This might help you understand the mutual fund's performance compared to its competitors. For further clarity, you may also evaluate against the benchmark indexes.  How should investors interpret the compound annual growth rate over a period of time?  As we previously mentioned, CAGR displays the average annual rate of return on your assets. CAGR accurately gauges an investment's growth (or decline) over time. A typical rule of thumb is that stocks generally favor firms with CAGR growth over 4-5-year intervals.  Profits are expected to be reinvested after each year of the time horizon for calculating CAGR. The CAGR is illustrative and inaccurate. This is so that people understand that when you state something like "CAGR has risen 15% over five years," it does not always indicate that it did so continuously over the five years. It may have fluctuated between positive, flat, and even negative growth during this time. Tax Saver Mutual Funds Read More Advantages of CAGR  It enables investors to evaluate the returns in various situations. For instance, you may model different CAGR scenarios to see how much your original investment would increase over time. It helps with financial planning.  It is simple to use and comprehend. Only the beginning value, the end transaction, and the preferred investment time must be entered. You may simplify the calculation using Internet calculators, excel spreadsheets, or scientific calculators.  Absolute returns over a longer time horizon may be deceptive. In these situations, the CAGR can assist you in comparing with other comparable instruments to see whether you outperform the market. For instance, if you previously bought units of an equity fund and their value has since grown, you can efficiently utilize the CAGR to evaluate the average yearly gains you have achieved.  When comparing CAGR to the cost of funds, it is essential to remember that CAGR is a return on the capital metric. For instance, to make a spread, you would need to look at an investment with a CAGR return of above 12% of your cost of funds was 9%.  Small Cap Mutual Funds Read More CAGR and mutual fund returns While investing in mutual funds, you need to know if it’s worthy of an investment. You need to measure the performance of a mutual fund over a period of time. Mutual fund fact sheets usually give you growth rates across various time horizons of a fund, which makes it difficult to understand the performance of a fund based on multiple rates. If you knew how it grew gradually over a specific period of time, it would get easier. CAGR does that, and it gives the investor the single annual growth of a fund. CAGR is one of the effective ways to calculate fund performance.   Limitations of CAGR CAGR doesn’t take into account the volatility of investment since it gives you a smoothed rate of return over a period of time. CAGR calculations will be accurate only if you don’t withdraw your initial investment and reinvest the returns you gained out of an investment. In case you withdraw or add funds to the investment, the calculation may not be accurate. CAGR can also be used to compare funds that have similar investment periods. CAGR is usually used to calculate returns for extended periods, and it may not help in calculating the rate of returns over small investment tenure.     Points to remember about CAGR The compound Annual Growth Rate assumes compounded growth, which basically means any returns you gain on the investment are reinvested. If you had invested Rs. 200 and earned a return of Rs. 30 after one year of investment, your gain of Rs. 30 gets reinvested. If you plan to use CAGR for two different investments, you need to make sure to keep the same time period for both investments because CAGR offers a rate of return over a specific time period. You may not be able to know the risks involved in the investment and the volatility of an investment with the help of CAGR.   FAQs What is a good CAGR for mutual funds?   An ideal compound annual growth rate can be between 8% and 12% for a long-term investment.   What does a 10% CAGR mean?   CAGR is the average rate at which a fund moves from one value to another within a specific period. Imagine you put Rs 1,000 into stock and received a 10% return. In the first year, the stock price will have increased by Rs. 100. Now that we are in the second year, the price has risen by 10% once again.    Will the cost increase by Rs 1,200 after two years? The answer is no. After a year, your initial investment of Rs. 1,000 has increased to Rs. 1,100.   At this point, a 10% growth of Rs. 1,100 increases the investment’s worth to Rs. 1,210 after two years. The fundamental idea behind CAGR, or compound annual growth rate, is compounding.      Is a CAGR of 5% good?   For large-cap companies, the compound annual growth rate of 5 – 12% is considered good.   What does 5-year CAGR mean?   CAGR, or Compound Annual Growth Rate, refers to the mean annual growth of any investment over a period usually longer than a year. It is an accurate way to calculate and determine the return for investment portfolios and individual assets that may rise or fall in value with time.  CAGR is a beneficial formula for estimating an investment's growth rate. It can help enhance the returns on the assets or evaluate historical profits as well. How much CAGR is considered good?  A good CAGR for mutual funds depends on the investor's financial goals and risk tolerance. Generally, a CAGR of 12-15% is considered good for equity mutual funds, while a CAGR of 8-10% is considered good for debt mutual funds. It is important to note that these figures are not guaranteed and can vary depending on market conditions and the specific mutual fund in question. Investors should consider their investment objectives, time horizon, and risk appetite when evaluating the potential returns of mutual funds.  How is CAGR calculated in mutual funds?  CAGR, or Compound Annual Growth Rate, is a measure of the annualized rate of return of an investment over a specific period of time. In mutual funds, CAGR is calculated using the formula: [(Ending value/Beginning value)^(1/number of years)] - 1. The beginning value is the value of the investment at the start of the period being measured, while the ending value is the value of the investment at the end of the period. The number of years is the length of the investment period. By using this formula, investors can assess the average annual growth rate of their mutual fund investment.  How can I use CAGR to compare mutual funds?  CAGR can be a useful tool for comparing the returns of different mutual funds over the same investment period. By calculating the CAGR for each fund, investors can get a sense of the average annual growth rate and compare the performance of different funds. However, it is important to compare funds with similar investment objectives and risk profiles. For example, comparing the CAGR of an equity mutual fund with a bond mutual fund may not provide meaningful insights due to the different risk-return characteristics of these asset classes. Additionally, CAGR should not be the only factor considered when selecting a mutual fund, as past performance does not guarantee future results. Investors should also consider other factors such as fund expenses, investment strategy, and the expertise of the fund manager.  What are the limitations of using CAGR to evaluate mutual funds?  While CAGR is a useful metric for evaluating the performance of mutual funds, it does have certain limitations. One limitation is that CAGR assumes a steady rate of growth over the investment period and ignores volatility. In reality, mutual fund returns can fluctuate significantly from year to year. Additionally, CAGR does not account for when an investor adds or withdraws funds from the portfolio over the period being measured. This can impact the overall return and may not be accurately reflected by the CAGR. Lastly, CAGR may not be representative of the fund's performance if the investment period is short. It is important for investors to consider other factors such as risk-adjusted returns, expense ratios, and fund manager track record when evaluating mutual funds.  TALK TO AN EXPERT
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