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Ways to set short-term and long-term goals?

Ways to set short-term and long-term goals?

Setting both long-term and short-term goals may seem like a waste of time to you. However, creating goals is crucial to the process of planning a career. Lack of planning can result in a chaotic future. Let's explore how to set short and long-term goals in more detail. What are short-term goals? Any objective that may be completed in less than two years is regarded as a short-term aim. Although this is a helpful generalization, it is ultimately somewhat arbitrary to decide where to divide goals into short-term and long-term categories. There are no appreciable differences between a goal completed in one and a half years and one completed in two years and a month. For your child's educational needs, a laptop or a phone can be a short-term objective. To save up for the expense and easily reach your objective, you can choose the appropriate finances and a time frame. You expect to complete this short-term objective in the next one to two years. To start a short-term goal for your child's educational aspirations, click here. What are long-term goals? However, anything that takes more than five years is seen as a long-term objective. Long-term goals can be things like saving for retirement and paying off a mortgage. However, using the terms "short-term" and "long-term" alone isn't always enough. Some individuals advise adding medium-term goals as well. Usually, it takes two to five years to accomplish these goals. The two temporal periods work well together while appearing to contradict one another. Short-term goals are shaped by long-term objectives. A long-term objective might be for your child to attend their ideal college. A long time horizon is typically necessary for long-term goals. The best course of action is to start saving for your child's college 10-15 years in advance. This offers you enough time to grow your money and make the necessary adjustments over the years to have the appropriate sum by the time your child leaves for college. How to set short and long-term goals Your perseverance will be the most important factor in your success, but it will be much harder to achieve your goals if you don't set them up properly. Your long-term and short-term objectives must satisfy the following requirements: 1. Write down your Goals An unstated objective is nothing more than a wish. Humans have a tendency to fantasize and believe in impossible things. In order to achieve our goals, we must take decisive action. You must put your long-term objectives in writing. Your aim will enter the physical world as a result of this one action. Your chances of success increase significantly just by doing this. It is a reminder now, after all. A prompt to set out and achieve that objective. 2. Your goals must be measurable  Have a deadline for completing your goals and a method to determine whether you have done so. You may even divide them into more manageable checkpoints you can gauge along the road. 3. Be realistic Your long-term objectives must line up with your aptitudes and competencies. If you can't sing or play an instrument, saying, "I want to win a Grammy Award", might not be the best objective for you. Consider your abilities as you create goals, keeping in mind your level of experience. 4. Take baby steps over time to achieve your goals  A deadline for your objective is not required, but it may help you keep on track to accomplish it. Divide a long-term goal into smaller objectives. Baby steps are preferable to a single, enormous leap. 5. Pair each goal with an action Consider enrolling in a book writing seminar or practicing writing one chapter every week for a month if your objective is to write a book. 6. Be flexible If you run into roadblocks that endanger your development, don't give up. Change your objectives properly, instead. Let's imagine you must continue working to support yourself, preventing you from enrolling in college full-time. You can enroll in part-time classes and complete your bachelor's degree in six or eight years, even if it might not be practical to do so in four years. Being flexible also involves having the ability to let go of objectives that no longer serve you and focus your efforts on achieving new ones. The most crucial element is constancy. You have to make your unique road map to success by setting long-term goals and then dividing them into smaller goals that are simple to achieve. Consult an expert advisor to get the right plan TALK TO AN EXPERT
UTI Long-Term equity

UTI Long-Term equity

UTI is one of the pioneers of the Indian Mutual Fund Industry. With over Rs 2.4 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 – UTI Long-Term Equity Fund.  About UTI Long-Term Equity Fund  Investment Objective The primary objective of the scheme is to invest predominantly in equity and equity-related securities of companies across the market capitalization spectrum. Securities shall also include fully/partly convertible debentures/bonds.  Investment Process  The UTI Long Term Equity Fund carries a top-down approach for sector selection and a bottom-up for stock selection. It follows a blended style of investing with a preference for companies with consistent cash flow generation, healthy balance sheets,s and reasonable valuations.  Portfolio Composition  The portfolio holds the major exposure in large-cap stocks at 76% and sectoral major exposure is to financial services which account for roughly one-third of the portfolio. The top 5 sectors hold nearly 75% of the portfolio.  Note: Data as of 30th Sep 2022. Source: UTIMF  Top 5 holdings Name Sector Weightage % ICICI Bank Financial Services 8.53 HDFC Bank Financial Services 7.58 Infosys Information Technology 6.35 Axis Bank Ltd. Financial Services 4.58 Bharti Airtel Ltd. Telecommunications 3.73 Note: Data as of 30th Sep 2022. Source: UTIMF   Performance over 22 years  If you would have invested 10,000 at the time of inception of the UTI Long Term Equity Fund, it would be now valued at Rs 2.22 Lakhs whereas the benchmark (Nifty 500 TRI) would have fetched you Rs 1.89 Lakhs. Note: Performance of the fund since launch; Inception Date – Dec 15, 1999 Source: utimf.com   The UTI Long Term Equity Fund has given consistent returns and has outperformed the benchmark over the period of 22 years generating a CAGR (Compounded Annual Growth Rate) of 14.65%.  Fund Manager  The fund is ably managed by Vishal Chopda. Vishal Chopda is the Vice President and Fund Manager in the domestic Equity Division of UTI Asset Management Company Ltd. Vishal joined UTI AMC in January 2011. After joining UTI, he has worked for the past 7 years in the Department of Fund Management as Research Analyst. He has previously worked with CARE Ratings (Credit Analysis and Research Ltd). He is a CFA Charter holder from The CFA Institute, USA, and also holds a PGDM from Management Development Institute, Gurgaon. He has completed his B.E. from Mumbai University.  Who should Invest in UTI Long-Term Equity Fund?  Investors looking for  Equity Linked Savings Scheme (ELSS) that aims to generate long-term capital appreciation by primarily investing in equity and related securities.  a long-term wealth creation vehicle investment horizon. Why Invest in UTI Long-Term Equity Fund?  Provides tax deduction up to the limits specified u/s 80C of the Income Tax Act, 1961.  The fund attempts to invest in businesses having healthy return ratios, cash flows, and sound management, with an aim to provide superior risk-adjusted return  Horizon  One should look at investing for a minimum of 5 years or more  Lumpsum is a better way to invest in ELSS to avoid a prolonged lock-in period on your SIP investments.  Conclusion  The UTI Long Term Equity Fund is the oldest fund with a proven track record of 22 years and has delivered 14.65% CAGR consistently. Thus, suitable for even first-time equity investors who want to earn better risk-adjusted returns and avail of tax exemptions at the same time.  DisclaimerThis is not recommendation advice. All information in this blog is for educational purposes only. 
SWP in mutual fund

SWP in mutual fund

Similar to how one might set up a systematic mutual fund investment plan, one can create a systematic withdrawal plan to get a stream of regular income from investments on a specific date each month. In this blog, let’s talk about SWP in mutual funds. What is SWP (systematic withdrawal plan) Bank fixed deposits or postal deposits are frequently the default choice for investors who want a consistent cash flow from their assets. Investors are now concerned about their future needs for income due to the falling interest rates on these programs. SWP, a mutual fund product, provides a remedy for this. SWP, or systematic withdrawal plan, is a mutual fund investing strategy that enables investors to take fixed distributions from their mutual fund investments at predetermined intervals, such as monthly, quarterly, or yearly. The AMC will credit the amount of the withdrawal to the investors' bank accounts on the day of the month, quarter, or year they specify. The SWP Plan redeems mutual fund scheme units at the specified frequency to produce this cash flow. As long as there are still available units in the plan, investors may continue with SWP. Benefits of SWP The following are the top benefits of SWP:  Flexibility: A SWP plan gives the investor the freedom to select the amount, frequency, and date in accordance with his or her needs. The investor may also stop the SWP at any moment, make additional investments, or withdraw money in excess of the fixed SWP withdrawals. Regular Income: SWP in mutual funds makes investing easier for investors by generating a consistent income from their holdings. For people who want constant cash flow to cover ongoing expenses, this becomes very beneficial and convenient. Capital appreciation: SWP in mutual funds makes investing easier for investors by generating a consistent income from their holdings. For people who want constant cash flow to cover ongoing expenses, this becomes very beneficial and convenient. No TDS: There is no TDS on the SWP amount for domestic individual investors. Tax efficiency through SWP When units are redeemed to get the SWP amount, the gains from the selling of the units are subject to capital gain (if the redemption NAV is higher than the purchase NAV). Depending on the factors listed below, a capital gain may be defined as short-term or long-term: Equity-Oriented Funds: These are considered short-term gains if redeemed within a year of the investment date and are subject to a 15% tax. Gains realized more than a year after the date of investment are considered long-term gains and are exempt from tax up to Rs 1 lakh every financial year. Only 10% of long-term capital gains over Rs 1 lakh are subject to tax. Non-Equity Funds: If redeemed within 36 months (treated as a short-term capital gain) from the date of investment, the gains are added to the investor’s income and taxed at the rate applicable to him/her. Gains made beyond three years are considered long-term and are subject to 20% taxation after indexation benefits. For domestic individual investors, there is no TDS on capital gains in mutual funds, unlike traditional savings (such as FDs and postal investments). In addition to TDS, interest income from FDs and the majority of post office modest savings plans are taxed at the investor's individual income tax rate. Since the AMC deducts TDS at a rate of 10% from the declared income, SWP in mutual funds is preferable to dividends in mutual funds. Additionally, investors must pay taxes on the dividends they receive. How can you withdraw from SWP?   In mutual funds, SWP enables investors to personalize their withdrawal schedules. A specific sum can be paid to a person every month, every six months, every three months, or every year. With an appreciation withdrawal, you can only take out the amount that has increased in value while leaving the rest invested to grow. Why is SWP a good investment? You can withdraw money from an SWP plan in accordance with your needs. An SWP might help with cash requirements if your plan calls for funding in stages. With an SWP plan, you can withdraw money in accordance with your demands. You can facilitate cash requirements with an SWP if your aim demands funding in stages. With regular withdrawals, an SWP can assist in preserving the value of your investment, particularly when the market is erratic. SWP plans are a tool that investors can use to plan their retirement income. It enables people to routinely get a fixed income on a set day to cover their cash needs. It may take some time to fully understand your alternatives when picking an SWP.  As a result, we advise you to weigh all of your options before making a purchase. The majority of mutual funds will let you create a schedule for withdrawals that you may follow FAQ What is SWP in mutual funds? SWP, a mutual fund product, provides a remedy for this SWP, or systematic withdrawal plan, is a mutual fund investing strategy that enables investors to take fixed distributions from their mutual fund investments at predetermined intervals, such as monthly, quarterly, or yearly. Is SWP better than FD? The benefit of investing in SWP in mutual funds is that you pay fewer taxes and you have more flexibility to change withdrawals. Can I stop SWP anytime? Yes, SWP investors can choose the amount they like. date of withdrawal, and amount. You can also stop and withdraw the money as well. Is SWP income taxable? SWP redemption is taxable. Consult an expert advisor to get the right plan TALK TO AN EXPERT
PPF vs Mutual fund. Which is better?

PPF vs Mutual fund. Which is better?

Investing is no longer associated with wealth. To protect one's future it has become essential. In this blog, let's compare Public Provident Funds (PPF) and mutual funds to see which is a better option for you. What are public provident funds(PPF)? The Public Provident Fund, popularly abbreviated as PPF is used as a tax-free savings vehicle to save aside a portion of one’s annual income for the future. PPF investors may get tax-free interest income on their capital if the amount was received on maturity. PPF is a risk-averse person's saving tool that is supported by the government. What are Mutual funds? Mutual funds, a popular method of investing, pool client money to purchase a range of securities, such as stocks, bonds, and money market instruments.  Mutual funds are governed by the Securities Exchange and Board of India (SEBI). Through mutual funds, investors have access to professional fund management. The fund management staff carefully considers the fund's objective before making any investing decisions. Assets like bank savings accounts and fixed deposits perform better than more traditional ones, thanks to skillful management. Equity and debt mutual funds are the two main types of mutual funds. Equity mutual funds' primary investments are equity and equity-related goods. The many forms of equity funds include large-cap, mid-cap, small-cap, multi-cap, sectoral or thematic, tax-saving, etc.  Conversely, debt mutual funds make investments in corporate bonds, government securities, and other financial goods. There are many different types of debt mutual funds, including liquid funds, dynamic bond funds, and short- and ultra-short-term funds, among others. Mutual Funds Vs PPF (Public Provident Funds). PPFs and mutual funds, each have their own set of perks and drawbacks. Therefore, it is a good idea to take into account their distinctions before choosing one at random. ParametersMutual FundsPublic Provident Funds (PPF)Investment run byFunding institutions or asset management firmsBy The Government of IndiaRequirementsTo achieve short- or long-term objectivesTo amass a retirement fundReturn on investmentsThe performance of the underlying assets affects the returnsAnnual returns calculations are madeTax benefitsThe sort of mutual fund investment and the length of the investment are what define itUp to INR 1.5 lakh of PPF investments are tax-free under Section 80C of the Income Tax ActMaturity PeriodNo fixed tenure15 years, which may be extended in 5-year chunks.LiquidityA high degree of liquidityLow degree of liquidityRisk/safetyRiskier than PPFsPPF is a risk-free investmentLock-in periodNo concrete lock-in period15 yearsDiversificationYesFixedPremature withdrawalThere are certain mutual funds that have a lock-in period; in these instances, SIP payments can be stopped, but withdrawals are not allowed prior to the maturity date.Only after the end of six fiscal years is a partial withdrawal permitted. PPF vs Mutual fund - Which is better for you? The decision between a PPF and a mutual fund relies on the objectives or aims of the investor. The latter operates more like a savings plan whereas, the first is a market-linked program.  While PPF delivers predictable returns and is most suitable for investors who are risk-averse. Conversely, mutual fund companies invest in a variety of securities, including government bonds, debt, and shares. As a result, it offers the potential for bigger profits, but because it is market-linked, the risk is also higher. FAQs Is PPF still a wise choice for investments? One of the most popular long-term and tax-saving programs for depositors is the PPF program since it offers a variety of benefits. If a person can make consistent investments for 15 to 25 years, compound interest might help them amass a sizeable wealth of about Rs 1 crore. The PPF interest rate is modified every three months. Which is preferable, PPF or SIP? SIP and PPF are both long-term investing strategies. They vary, nevertheless, in terms of maturity and lock-in time. A PPF has a tenor of 15 years and a 7-year lock-in period, whereas SIPs can be stopped and redeemed at any time. You can then take out a portion of the money after that. Which investment is good for a child's future? It is a great idea to start investing in equity mutual funds when your child is still young and you have at least 15 to 20 years before retirement. This makes it possible for you to resist shocks like volatility and stock market crashes. When developing investment plans, each person has their own way of thinking and attitude. While some people want larger profits, others want financial security. It's critical to assess your financial status before making any form of investment, including those in mutual funds or Public Provident Funds (PPF). Consult an expert advisor to get the right plan TALK TO AN EXPERT
Difference between short-term and long-term goals.

Difference between short-term and long-term goals.

A crucial first step to achieving financial security is to set short-term, mid-term, and long-term financial objectives. But what do these goals stand for? What are the differences between short-term and long-term goals? Keep reading to find the answer. What are short-term goals? Anything that can be accomplished in less than two years is considered to be a short-term goal. Although this is a useful generalization, where to draw the line between short-term and long-term objectives is ultimately fairly arbitrary. A goal accomplished in one and a half years and one accomplished in two years and a month have no discernible differences.For instance, a short-term goal for your child’s education needs can be a laptop or a phone. You can select the best funds and a time horizon to save up for the cost and accomplish your goal easily. This is a short-term goal which means you plan to accomplish it in the next 1 or 2 years. Click here to start a short-term goal for your child’s education dreams. What are long-term goals? In contrast, anything that takes more than five years is considered a long-term goal. Long-term objectives include things like paying off a mortgage and saving for retirement. The terms "short term" and "long term," nevertheless, aren't always sufficient. Some people favor including medium-term objectives as well. These objectives usually take two to five years to complete. Despite their apparent opposition, the two temporal periods complement one another. Long-term goals shape your short-term goals. For instance, a long-term goal can be your child’s dream college. Long-term goals generally require a long-term horizon. If you are planning to save for your child’s college then starting 10-15 years in advance is the right way to go. This gives you enough time to save up and make the right corrections over the years to get the right amount by the time they go off to college. Use the college cost calculator on the EduFund App and start saving for your child’s long-term goals! Key short-term goals Your more pressing expenses are those for short-term aims. These are the things you'll often spend money on within a few months or years, though timing varies. The following are some top key short-term goals: 1. Establish a Budget By reading through your bank statements and bills from the previous few months and classifying each item with a spreadsheet or on paper, you may make a budget the old-fashioned way. You can decide better where you want your money to go in the future when you can see how you are spending your money and are directed by that information. You can try to find methods to eat out less frequently or save money by following certain practices etc. 2. Build an emergency fund The cornerstone of creating financial goals is an emergency reserve. If something unforeseen occurs, it's what keeps the rest of your strategy from falling apart. Without an emergency fund, one unforeseen expenditure, such as a busted water heater, medical expenses, auto repairs, or a job loss, might cause all of your other objectives to fall through the cracks. Your emergency fund has to be sufficient to pay for three to six months' worth of costs. You may wish to save even more if you are paid on commission or have a fluctuating income. Make a budget and, if necessary, cut spending so that you can afford to set aside some of your money. 3. Open a life insurance policy By purchasing life insurance, you guarantee that your loved ones will be compensated in the event that you die away and are unable to support them. A cash lump amount is often used for this, serving as a safety net to replace your income. Life insurance coverage is crucial for defending yourself and others who depend on you, much like an emergency fund. Even though nobody likes to consider the worst-case scenarios, anything may happen tomorrow. Key long-term goals It can take years or perhaps decades to accomplish these aims. Long-term objectives often require more resources and ongoing care than short-term objectives. The following are some top key long-term goals: 1. Consider your dreams Long-term objectives might also include objectives like purchasing a primary residence or, eventually, a vacation property. Maybe you already own a home and want to give it a considerable upgrade, or maybe you want to start saving for a bigger house. Other examples of long-term objectives include saving for college for your kids or grandkids, or even for when you do have kids. Once you've chosen one or more of these objectives, start estimating how much money you'll need to put aside to make progress toward achieving them. 2. Plan for retirement Retirement savings goals are among the most long-term-oriented in terms of planning. Finding out how much money you need and how close you are to that objective is the first step in this process. Then, you may reach your destination through a variety of retirement plans, which is a perfect illustration of how long-term goals ultimately need to be divided into more manageable goals. How to prioritize your goals? You'll probably need to strike a balance between a number of short-term and long-term ambitions. Plan your objectives around your regular spending, putting necessities like food and shelter first. Contributing to emergency and retirement accounts is a top priority; after paying off debt, do so. After that, you may choose how to divide the remaining funds between your demands and other savings objectives. The most essential thing is to stay consistent. Don't be upset with yourself if you have to withdraw money out of your emergency fund one month because you have an unanticipated auto repair or medical cost; that's why the fund is there. Just get back on track as soon as possible.
What is AUM in mutual funds? All you need to know

What is AUM in mutual funds? All you need to know

What is AUM in mutual funds? What does it stand for or how is it calculate? Let's answer what does it mean when investors talk about AUM in mutual funds! The aggregate market value of the investments held by a mutual fund is known as its Assets Under Management (AUM). On behalf of the investors, the fund manager handles these assets and makes all investment-related decisions. AUM is a measure of a fund house's size and performance. The assets managed by a fund can be easily compared with other similar funds' performance over time.  The returns a mutual fund receives are also factored into the AUM value. This can be used to purchase securities, hold them as specified by the investing mandate, or distribute dividends to investors.  Things to consider in AUM before investing?  Investors in mutual funds frequently evaluate the fund's AUM and are impressed if it is on the higher side. People assume that a fund must be good if so many investors have previously contributed to it. However, there are a lot of reasons why this number shouldn't matter when selecting a fund.  Some of the most crucial elements to consider are the expense ratio, the fund manager's reputation, and compliance with the investing mandate. Let's examine the significance of AUM in relation to various fund types.  1. Large-cap funds  Let's examine an example of how AUM affects large-cap mutual funds. Two large-cap equities funds are HDFC Top 200 and Mirae Asset India Opportunities. The former's AUM is Rs.14,655 crore compared to the latter’s just Rs.4,738 crore. Most investors may choose to invest in HDFC Top 200 for this reason. However, the Mirae has historically earned higher returns over various periods.  2. Small-cap funds  Small-cap funds typically limit the inflow of cash after a specific threshold. A well-known case of this is the DSP BlackRock Micro Cap Fund. This typically happens when a mutual fund's assets exceed a certain threshold. When the market fluctuates, the fund might not be able to quickly trade its shares if it becomes a major stakeholder in a company. Due to this, small-cap funds frequently stay away from lump-sum investments and instead opt for SIPs.  3. Debt funds  If you’re considering investing in debt funds, AUM is an important factor to consider. The fixed fund costs might be split among more investors in a debt fund with higher capital. This can lower the cost per individual and hence boost fund returns. Additionally, more assets under management assist the fund organization in securing fair interest rates from debt issuers.  4. Equity funds  Here, stability in returns and commitment to the investing mandate by the fund company is more important than AUM. By stability, we mean surpassing the benchmark during both the highs and lows of the market. As a result, rather than popularity or size, an equity fund depends on the asset manager's ability to produce strong returns consistently.  How to calculate AUM in mutual funds?  Fund houses use different techniques to determine assets under management. When a fund continuously generates positive returns, its total investment value will increase. Growth in AUM might result from the attraction of new assets and investors due to strong performance.  Similarly, assets may drop if the market value or investment performance declines. The same applies to sudden fund closures and share redemptions by investors. Capital that has been invested in the firm's goods is included in its assets under management, which also includes the stock of the company's executives.  Formula to calculate AUM: "AUM = Net Asset Value (NAV) * Total number of units.”  AUM's impact on the expense ratio or fee  Every fund house charges a fee called a management fee that is based on the size of the fund. Investors are charged based on the number of units they own at a single cost for the entire fund. The fees are unaffected by the performance of the fund. It just pays for administrative costs and establishes the asset manager's pay for his work. The annual costs to run a mutual fund are measured by the total expense ratio (TER). According to SEBI, the AUM must always be more than the TER.  source: pixabay High AUM's effects on mutual funds  AUM growth can occasionally hurt an equity fund's performance. However, there is hardly any data to suggest that a bigger AUM either helps or hurts the fund's performance. The fund manager is the one who should seize market opportunities and buy or sell a stock at the appropriate moment. Larger assets under management have frequently made it more difficult for the manager to make rapid judgments regarding investments. Before investing, evaluate the fund's performance in relation to the benchmark and its rivals. Higher AUM means the manager needs to be on point and well-experienced. Check the experience of the manager in handling high assets before investing in such funds.   AUM and market fluctuations  Market movements have a significant impact on the assets managed. The assets of the fund will increase when it generates returns and decrease when it suffers losses. This impacts the mutual fund fee as well. Lower expenses typically equate to lower value. For instance, imagine that a mutual fund that has produced 10% returns has received a total investment of Rs. 10,000 from 100 investors. If so, Rs. 11,000 would be the fund's AUM. After all, businesses determine the worth of their assets under management using a variety of techniques.  AUM is a great way to evaluate a fund's popularity and performance. However, it should not influence your decision to invest in that fund. Should you consider AUM before investing? AUM is an essential factor that helps you in shortlisting the funds. The higher the AUM, the more stable the fund could be. Often you will see Analysts mentioning AUM > Rs 1000 crore is a good benchmark as it defines the fund's stability.  Also, the expense incurred to manage the fund gets spread, and the expense ratio reduces with rising AUM. Let us see the impact of AUM on equity funds and debt funds -  1. Equity funds In equity funds, consistency and sustenance of returns are more critical than AUM. Thus, the investment process and philosophy should be given more importance.  2. Debt funds In debt funds where the investment is in different fixed-income instruments, it is critical to consider AUM. While benefits such as expense ratio and reputation are one thing, the essential thing in debt funds is getting reasonable rates with debt issuers. With higher AUM, the fund manager tends to get better rates which add to the performance. Also, higher AUM in debt funds for retail investors adds to the fund's stability. Impact of high AUM in mutual funds While a high AUM is good for the stability of the fund but huge AUM often impacts your performance. For example - in the case of Large Cap Equity funds, if a fund reaches are very high AUM, the performance is likely to get impacted as the universe of stocks in which the money can be deployed is minimal and beyond a point outperforming the benchmark in large-cap space (where information inefficiency is negligible) is often tricky.  Thus, while AUM is necessary for the stability of a fund, it is not the only and single most critical factor on which the decision to buy or sell a fund should be dependent. FAQs What is a good AUM in mutual fund? AUM is a measure of a fund house's size and performance. AUM size only matters in certain funds. What is AUM vs NAV? NAV refers to the prices of shares in a fund while AUM refers to the value of assets managed by the advisor. How is AUM calculated? Here is the formula to calculate AUM: "AUM = Net Asset Value (NAV) * Total number of units.”  Consult an expert advisor to get the right plan for you TALK TO AN EXPERT
UTI Mastershare Unit Scheme

UTI Mastershare Unit Scheme

UTI Asset Management Company (AMC) UTI is one of the pioneers of the Indian Mutual Fund Industry. With over Rs 2.4 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 its flagship product – UTI Master share Unit Scheme  About Fund  1. Investment objective The fund seeks to generate long-term capital appreciation for investors by investing in equity and related securities of large-cap companies. It is India’s first equity-oriented fund launched in October 1986.   2. Investment process   The Fund takes a top-down view of the sector and then takes a bottom-up approach to select the stocks within the sectors. The fund is a well-diversified portfolio and avoids sector as well as stock concentration.  3. Portfolio Composition  The portfolio holds the major exposure in large-cap stocks at 87% and sectorally major exposure is towards financial services which account for roughly one-third of the portfolio. The top 5 sectors hold nearly 63% of the portfolio.   Note: Data as of 30th Sep 2022. Source: UTIMF  Top 5 Holdings  Name Sector Weightage % ICICI Bank Financial Services 9.52 Infosys Information Technology 7.12 HDFC Financial Services 6.12 Bharti Airtel Telecom 4.52 Reliance Oil and Gas 3.93 Note: Data as of 30th Sep 2022. Source: UTIMF  Fund performance over 35 years  If you would have invested 10 lakhs at the inception of the fund, it would be now valued at Rs 18.20 crore whereas the benchmark (S&P BSE 100) would have fetched you Rs 11.88 Crore.  Note: Performance of the fund since launch; Inception Date – October 15, 1986. Source: utimf.com  The fund has given consistent returns and has outperformed the benchmark over the period of 35 years by generating a CAGR (Compounded Annual Growth Rate) of 15.56%.  Now, let’s look at the fall of the fund during market corrections. Source: utimf.com The above table explains that the fund has seen less fall/correction compared to the market correction. While corrections are painful for the short-term investor, at the same time, it is an opportunity to make higher returns for the long-term investors.  Fund manager  The fund is managed by Swati Kulkarni and Karthikraj Lakshmanan. Swati has over 36 years of experience and has been managing the fund since December 2006. Karthikraj has over 17 years of experience and is a new entrant in this fund management.  Who should invest in UTI Mastershare unit scheme?  Investors looking to  Own large-cap businesses with sound management, steady cash flow, and earnings growth  Build core equity portfolio for long-term wealth creation with steady growth  Why invest in the UTI Mastershare unit scheme?  India’s first equity-oriented fund with a proven track record of over 35 years and over Rs 10,000 crore in Assets Under Management currently.  Strong stock selection approach with a diversified portfolio reducing concentration risk  Horizon  One should look at investing for a minimum of 5 years or more  A systematic investment Plan (SIP) is an ideal way to take exposure as it helps tackle market volatility  Conclusion  The fund is the oldest fund with a proven track record of 35 years and has delivered 15.56% CAGR consistently. Thus, suitable for even first-time equity investors who are looking to take a little higher risk DisclaimerThis is not recommendation advice. All information in this blog is for educational purposes only.
UTI Flexicap Fund

UTI Flexicap Fund

UTI Asset Management Company (AMC) UTI is one of the pioneers of the Indian Mutual Fund Industry. With over Rs 2.4 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 its flagship product – UTI Flexicap Fund.   About Fund  1. Investment Objective The fund seeks to generate long-term capital appreciation by investing predominantly in equity and related securities of companies in a flexible manner across the market capitalization spectrum.  2. Investment Process   The Fund follows a bottom-up stock selection method with well-defined metrics of free cash flows, capital efficiency, and ability to compound earnings. The fund has a well-diversified portfolio and avoids sector as well as stock concentration.  3. Portfolio Composition  The portfolio holds the major exposure in large-cap stocks at 77% and sectorally major exposure is to financial services that account for roughly one-fourth of the portfolio. The top 5 sectors hold nearly 70% of the portfolio.   Note: Data as of 30th Sep 2022. Source: UTIMF Top 5 holdings Name Sector Weightage % Bajaj Finance Financial Services 6.06 ICICI Bank Financial Services 5.59 HDFC Bank Financial Services 4.26 Infosys Information Technology 4.09 Kotak Mahindra Bank Financial Services 3.92 Note: Data as of 30th Sep 2022. Source: UTIMF  Fund performance over 30 years If you would have invested 10,000 at the inception of the fund, it would be now valued at Rs 3.64 lakhs whereas the benchmark (Nifty 500 TRI) would have fetched you Rs 2.91 Lakhs.  Note: Performance of the fund since launch; Inception Date – May 18, 1992 Source: utimf.com  The fund has given consistent returns and has outperformed the benchmark over the period of 30 years by generating a CAGR (Compounded Annual Growth Rate) of 12.56%. Fund Manager  The fund is managed by Ajay Tyagi. Mr. Tyagi has over 20 years of experience and has been managing the fund since January 2016. Mr. Ajay Tyagi, CFA is a Senior Executive Vice President and Head – Equity at UTI AMC. In addition to managing a few domestic mutual fund schemes, he is also an investment advisor to a few India-dedicated offshore funds. He is a CFA Charter holder from The CFA Institute, USA, and also holds a Master’s degree in Finance from Delhi University.   Who should Invest?  Investors looking to  Build their core equity portfolio by investing in quality businesses across all sizes  Invest in a fund with a disciplined approach to portfolio construction.  Why invest?  The fund shall comprise high-quality businesses that have the ability to show strong growth for a long period of time  Quality companies perform across the market cycle.  Horizon  One should look at investing for a minimum of 5 years or more.  A systematic investment Plan (SIP) is an ideal way to take exposure as it helps tackle market volatility  Conclusion  The fund is the oldest fund with a proven track record of 30 years and has delivered 12.56% CAGR consistently. Thus, suitable for even first-time equity investors who have a moderately high-risk appetite and can remain invested for a long period.  DisclaimerThis is not recommendation advice. All information in this blog is for educational purposes only
Is there the best date of month for SIP investment

Is there the best date of month for SIP investment

Mutual fund companies offer flexibility to invest in their schemes through SIP (Systematic Investment Plan). While some choose the date of SIP based on their salary credit, others may try to time the market by selecting specific dates based on different factors one may choose to invest at the end of the end because of the high volatility and F&O expiry of the month-end contract. So, is there a best date for SIP investment? In this blog, we’ll see whether the date of SIP will make a huge difference or not. Read on!! We have analyzed the data of the past ten years, from Jan’11 to Sep’22, of BSE Sensex based on daily returns to understand it in a better way. Note: When there is a holiday, the date of the previous/next working day has been considered.Source: BSE, EduFund Research Team The above calculation shows that there is hardly a marginal difference in returns based on the period under observation. So, there is no strong relationship between the SIP date you choose and the returns. Any date will work if you are investing through SIP. Experts suggest that one should never try to time the market; instead, remain invested with discipline over a longer period to get the most benefit of compounding. SIPs are designed to deal with the volatility in the market. SIP helps your investments to average out the cost of buying, which is called rupee cost averaging. This helps investors to buy mutual fund units at lower prices and higher, which averages out the cost of buying the units. What is Compounding? Compounding works as a multiplier in your investment. You not only get the returns on the invested amount but also get the returns that keep getting added back to your invested amount. In short, earning returns on principal & returns as well. The best thing about compounding is that at one point your amount of returns will be more than your invested amount. What is the rupee-averaging cost? In this concept, a fixed amount is invested at regular intervals. This allows you to buy more units of a mutual fund when prices are low and fewer units when prices are high. Over the period, this averages out the cost of buying. Timing the market is challenging. The market goes through different phases, and you never know when the market is going to rise or fall. So, disciplined investing will help you to accumulate wealth over the period. When we try to time the market, we invest with emotions which can lead to wrong decisions. SIP helps to ignore all these factors and helps to invest regularly. Conclusion SIP can do wonders with your investments if you do discipline and regular investing over a longer period without thinking of the date, by Just following the normal process. Consult an expert advisor to get the right plan TALK TO AN EXPERT
Low expense ratio mutual funds in India

Low expense ratio mutual funds in India

When choosing a mutual fund, you need to consider factors like risk, performance, fund portfolio, and expense ratio. The Total Expense Ratio, or TER, is one of the most important factors to know about before investing in a mutual fund. Let's see why you need to study it, what are expense ratios, and the best mutual funds with low expense ratios for you to consider.   What is the Expense ratio?  Mutual Funds incur certain operating and expenses for managing funds like – sales & advertising expenses, transaction costs, investment management fees, registrar fees, etc. The expense ratio includes all such expenses incurred by the Mutual funds. It is adjusted to the fund's Net Asset Value (NAV). It is adjusted daily and is a cost to the investor.   How does the Expense ratio make a difference?  Let's consider the actual difference expense ratios can have in the wealth created.  Here, we have taken two types of PGIM India Midcap Opportunities Fund – regular and direct. The time period taken is ten years.    Scheme SIP Annualized Returns Expense ratio Final corpus (Rs.) Direct 10,000 21.01% 0.40% 1,26,35,714 Regular 10,000 18.96% 1.95% 1,01,62,185  By investing in a regular fund, you incur an expense ratio of 1.95% compared to 0.40% in the direct mode. This expense ratio has cost the investor an additional Rs. 24,73,529. This means that by investing in a regular fund, you lose almost 24 lakh rupees! The gap increases significantly when this is compounded for larger SIP values and for longer time horizons.  With lower expense ratios, the wealth creation in a portfolio increases to a great extent. Mutual Funds with a low expense ratio Scheme name Category Expense Ratio Returns (3yrs) Mirae Asset Tax Saver Fund  ELSS 0.50% 19.91% PGIM India Mid Cap Opportunities Fund Mid Cap 0.40% 38.48% UTI Nifty 50 Index Fund Index  0.20% 14.57% Canara Robeco Small Cap Fund Small Cap 0.39% 39.01% HDFC Index Nifty 50 Fund Index 0.40% 13.80% *Disclaimer – This is not a direct recommendation How to reduce the Expense ratio of your funds?  Choose a fund with a low expense ratio in respective asset classes. But at the same time, remember not to compromise on the return aspect of the fund because if the fund has low-risk adjusted returns, then having a low expense ratio will not benefit your portfolio.  Adopting a passive approach to investing significantly reduces the expense ratio. For example, instead of investing in a blue chip or a large-cap mutual fund, you can choose a Nifty 50 Index Fund, which comprises the same large-cap companies' stock but has a lower expense ratio than the former.  Last but not least, always choose Direct Funds instead of Regular ones. This way, you don't have to pay an additional commission to distributors.  Should expense ratio be a deciding factor when choosing your mutual funds?  Definitely not! The major factors you should consider while choosing a mutual fund are the risk-adjusted returns, the performance, the portfolio composition, the standard deviation, the fund managers' performance and experience, and whether or not it fits your investment objective. The expense ratio should only be one of the above factors to compare two or more mutual funds in the same category offering similar returns but not a deciding factor.  For instance, funds may generate better returns than the category average but with a slightly higher expense ratio. You may consider the power of compounding with the returns generated in such cases.  Conclusion  Never choose a fund solely based on the expense ratio. Always perform a detailed fundamental analysis to ensure you choose the right fund for you and your portfolio. This will make your investment journey smooth. If you find it challenging to choose a mutual fund that's right for you, take the help of an investment advisor who will guide you through the entire process.  Consult an expert advisor to get the right plan TALK TO AN EXPERT
Complete guide: Top 5 Mutual funds for child higher education

Complete guide: Top 5 Mutual funds for child higher education

Children's fund programs are a form of mutual fund with specific goals related to children. They can also be termed plans to solve the rising cost of children's education and other necessary expenses. The best mutual fund for a child's education usually invests in equity and debt-related securities.  However, investors can also choose between higher debt and higher equity investments according to their individual preferences and risk appetite. Children's funds come with a minimum 5-year lock-in period and can be extended until the child becomes an adult. These are long-term investment options, and holding investments even during market fluctuations ensures higher returns than liquidating funds during a market downturn. What is a children's gift mutual fund? Child gift funds are mutual fund plans that provide financial benefits to your children for things like wedding expenses, future school fees, etc. This leads to long-term capital growth and is classified as Hybrid Fund or Balanced Mutual Fund. Gift funds invest in equity and debt asset classes. Fixed income securities are the type of debt instrument, while stocks are the type of equity. Purpose of the children's fund The primary purpose of the children’s fund is to provide financial support for the child’s future if they want to pursue higher studies abroad or in India. A mutual fund ensures that parents do not compromise on their child’s growth due to a lack of funds. A child plan fund is a better option compared to an education loan. With them, you can get the maximum and guaranteed return on the money you invest. Parents can opt for a minimum of five years or more extended lock-in period for the funds until their child turns 18. And if an investor is considering liquidating a child plan mutual fund before the minimum lock-in period of five years, then the fund can charge a penalty of up to 4%. Who should invest in a children’s fund? A child plan fund is ideal for those looking for a long-term investment primarily to save for child-related expenses. Even those who do not want to get involved in schemes with huge risks and want good returns can invest in children's mutual funds. Most mutual funds with a child plan are customizable, which offers additional relief to investors. When a child crosses the age of 18, authorization can be given through the KYC process from the financial institution. Additional read: Dollar to rupee investing Best mutual funds for child education 1. SBI Magnum Children’s Benefit Fund  The fund is an Aggressive Hybrid Mutual Fund Plan. It is a mid-sized fund in its category, with assets under management (AUM) of Rs 151 crore as on June 30, 2021. The fund has an expense ratio is 0.82%, which is comparable to the expense ratio charged by most other Aggressive Hybrid funds. 2. UTI CCF Investment Plan The fund has a market cap of Rs 504.40 crore. The UTI CCF investment plan is benchmarked against the flagship CRISIL Balanced Fund - Aggressive Index as well as NIFTY 50 - TRI and NIFTY 500. 3. HDFC Children's Gift Fund This is a mid-cap fund in its category with assets under management (AUM) of ₹ 4,667 crores. The fund's expense ratio is 1.04%. The fund now has a 67.10% equity allocation and a 19.07% debt allocation. 4. Axis Children Gift Fund - No Lock-in This is a children's fund focused on Axis mutual fund solutions. It has a market cap of Rs 607.91 crore. Nifty 50 (TRI) index is used as the primary index, and NIFTY 50 Hybrid Composite Debt 65:35. 5. LIC MF Children Fund  The fund has an expense ratio of 1.89%, which is higher than the category average of balanced hybrid funds. The fund currently holds an equity allocation of 88.16% and a debt exposure of 10.87%. The returns of LIC MF Direct-Growth Fund Children's Gift Fund for the last year were 33.91%. Why should you consider child education mutual funds?  Choose an investment option that can beat inflation over a long-term period. Always consider investing your money as per your risk appetite to build a fund for your child's college education. If you want to save money for your child's higher education and you have a longer horizon to save, then equity mutual funds are a good choice. Investing in mutual funds over time provides much better returns than any other type of savings. Returns are better if the time horizon is longer. Conclusion Irrespective of the fund you choose, there is no alternative to starting early. In addition to several advantages, the long-term horizon enables maximum returns from equity mutual funds while mitigating the risks of market volatility. Additionally, consider increasing the SIP amount yearly for a healthy corpus to fund your child's education. Note: All funds mentioned in the article are Direct mutual funds Consult an expert advisor to get the right plan TALK TO AN EXPERT
What are Educases?

What are Educases?

Educases are a bucket of mutual funds, which allows an investor to buy a bucket of mutual funds, which are predefined combinations of funds based on the calculated risk and returns parameters. Why Educases are needed? There are more than 4,500 mutual funds we have in the industry. But which fund will suit which type of investor based on the risk could be a difficult task. So, here in EduFund, we have a bucket of mutual funds for every investor, known as Educases. Strategy behind Educases A team of EduFund experts sits together and decides what will be the parameters of risk and returns to meet the objective. Parameters like standard deviation, alpha, share ratio, returns, etc. Then, a report is run over 4,500 mutual funds to extract the top mutual funds based on different risks.  What if the fund is new? In that case, if the fund is active/passive, then we wait for some quarters to check its performance compared to the benchmark & its peers; and the fund's expense ratio. That's not all; we also look for other parameters. And then, the past data of these educases are back-tested to check the volatility in returns and how the portfolio has performed under different market conditions. We try to ensure that the portfolio should face less volatility than the market and should remain in sync with the risk and returns parameter. These educases are rebalanced to make the best fit for the risk. In the end, a monthly review is done on these educases. For example, suppose the equity market is corrected by more than 15%. In that case, we try to ensure that your equity portfolio in the aggressive risk category should not be corrected by that much. Advantages Risk-oriented – These educases are designed to meet the investor's risk profile. For example, if you are young and you are planning for the long-term, then there is an aggressive risk educase is for you.  On-going monitoring – These educases are monitored on a regular basis so that it meets the risk and returns profile of the investor. Auto rebalancing – These educases are auto-rebalanced. Suppose the risk of one fund in educase is increased by 15%, then the allocation of the educases having that fund will be rebalanced accordingly. Well-diversified – Educases contain multiple mutual funds in one particular basket. So, having a well-diversified portfolio is one of the best quality of educases. No cost – These educases are free for every investor to invest in. EduFund does not charge anything for these educases. So, you don't need to pay a single penny to invest in this educases. How can you invest? Download the EduFund app, fill in the basic details, and then the app will calculate your risk profile and the suggested amount for your desired target. Then, you can go ahead and explore the funds or go to the section on Educases. There you can see the suggested educates with the past performance of these cases including its holdings of mutual funds as per your risk profile. Conclusion If you are looking for a diversified mutual fund investment as per your risk profile, then Educase is the right choice for you. FAQs What are Educases? ducases are a bucket of mutual funds, which allows an investor to buy a bucket of mutual funds, which are predefined combinations of funds based on the calculated risk and returns parameters. It is designed by EduFund experts to help parents save and invest for their child's education based on their risk appetite as well as the age of their child. There is an Educase for parents whose children are in 3rd grade as well as 12th grade. What are the advantages of investing in Educases? Advantages Risk-oriented – These educases are designed to meet the investor’s risk profile. For example, if you are young and you are planning for the long-term, then there is an aggressive risk educase is for you. On-going monitoring – These educases are monitored on a regular basis so that it meets the risk and returns profile of the investor. Auto rebalancing – These educases are auto-rebalanced. Suppose the risk of one fund in educase is increased by 15%, then the allocation of the educases having that fund will be rebalanced accordingly. Well-diversified – Educases contain multiple mutual funds in one particular basket. So, having a well-diversified portfolio is one of the best quality of educases. No cost – These educates are free for every investor to invest in. EduFund does not charge anything for these educases. So, you don’t need to pay a single penny to invest in this educases. How can you invest in education? Download the EduFund App and start investing in Educases for your child's higher education. Let experts guide you towards a financially secure future!
4 W’s of Balanced Advantage Funds

4 W’s of Balanced Advantage Funds

What is a Balanced Advantage Fund? A balanced advantage fund is a fund that can invest 0-100% in the equity market or 0-100% in the debt market dynamically as per the prevailing market condition. For example - If a fund manager finds that the price of the equity market has gone up, he will tilt the portfolio more toward the debt market. Likewise, if the equity market trades at a discount, then the fund manager can tilt/shift the portfolio toward the equity market.  The valuation is the internal process of the fund. Based on valuation, the fund manager can take the call. This way, the fund manager can take the opportunity and change the asset allocation. The fund manager can go aggressive in the equity market or can also decide to play conservatively to reduce the portfolio's volatility. The aim is to minimize the portfolio's downside risk and maximize the returns.  Who should invest? Investors who are looking for long-term wealth creation. Investors who are not comfortable with the market volatility. Investors who do not want to face high volatility and looking for equity-like returns. Investors who are unsure which type of fund they should invest in, whether in the equity or debt-oriented fund. Risk-averse equity investors with an investment horizon of more than three years. Additional read: Financial mistakes to avoid Why should you invest? A balanced advantage fund is a dynamically rebalancing fund between two asset classes, i.e. equity and debt. It has the complete flexibility of rebalancing from 0-100% in both asset classes. It provides you with better risk-adjusted returns. It manages the equity market volatility and provides stability in the portfolio by diversifying the portfolio into the debt market. It offers you equity-like returns, which help your portfolio to grow at a much faster rate than debt funds and also helps you to beat inflation. Minimizes the downside risk and provides scope for growth by investing in the equity market. When should you invest? When the volatility in the equity market increases you do not want to have such high exposure to the prevailing volatility. When you want equity-like returns but do not want to face high liquidity. First-time mutual fund investor looking for long-term wealth creation. Conclusion Try to allocate some portion of your portfolio towards a balanced advantage fund if you want to reduce the portfolio's volatility. A balanced advantage fund is like a season fund. FAQs What is a Balanced Advantage Fund? A Balanced Advantage Fund can dynamically invest 0-100% in either the equity or debt market, depending on market conditions. Who should consider investing in Balanced Advantage Funds? Investors seeking long-term wealth creation, those uncomfortable with market volatility, and those unsure about equity or debt-oriented funds can benefit. Why invest in Balanced Advantage Funds? These funds offer flexible asset allocation, better risk-adjusted returns, and stability by diversifying into the debt market. They provide equity-like returns, growth potential, and risk mitigation. When is the ideal time to invest in Balanced Advantage Funds? Consider these funds when equity market volatility increases, and you want equity-like returns without excessive risk. What is the aim of Balanced Advantage Funds? The aim is to minimize portfolio downside risk, maximize returns, and adapt to market conditions, providing both stability and growth.
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