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DSP Equity Savings Fund

DSP Equity Savings Fund

One of the largest AMCs in India, DSP has been helping investors make sound investment decisions responsibly and unemotionally for over 25 years. DSP is backed by the DSP Group, an almost 160-year-old Indian financial giant. The family behind DSP has been very influential in the growth and professionalization of capital markets and the money management business in India over the last one-and-a-half centuries  Let us talk about the flagship product – DSP Equity Savings Fund.  DSP Equity Savings Fund  Investment objective The investment objective of the Scheme is to generate income through investments in fixed-income securities and using arbitrage and other derivative Strategies. The Scheme also intends to generate long-term capital appreciation by investing a portion of the Scheme's assets in equity and equity-related instruments.  Investment process   DSP Equity Savings Fund invests in equity, arbitrage as well as debt instruments to aim to deliver relatively more predictable return outcomes. The equity portion provides the 'boost', the debt portion tries to 'shield' the portfolio from corrections & arbitrage helps take advantage of tactical profit-booking opportunities.  Portfolio composition  The portfolio's major exposure of more than 65% in large-cap followed by 10% in mid-cap. The top 5 sectors hold nearly 31% of the portfolio, with major exposure to the Banks and Power. Note: Data as of 31st Dec 2022. The bar graph shows the top 5 sector weightage of the fund’s portfolio. Source: dspim.com  Top 5 Holdings  Name Sector Weightage % Housing Development & Finance Corporation Ltd. Finance Institution 5.59 ICICI Bank Ltd. Bank 3.89 Axis Bank Ltd. Bank 3.40 Powergrid Infrastructure Investment Trust Investment Trust 3.03 India Grid Trust Investment Trust 2.60 Note: Data as of 31st Dec 2022. Source: dspim.com  Performance over 6 years If you would have invested 10,000 at the inception of the fund, it would be now valued at Rs. 16,682. This fund has outperformed the benchmark in all time horizons. Note: Performance of the fund since launch. Inception date – March 28th, 2016. Source: Morningstar  The DSP Equity Savings Fund has given consistent returns and has outperformed the benchmark over the period of more than 6 years by generating a CAGR (Compounded Annual Growth Rate) of 7.86%  Invest Now Fund managers  Abhishek Singh - Total work experience of 14 years. He joined DSP Investment Managers in January 2021 as Assistant Vice President in the Equity Team Abhishek has worked with Kotak Mahindra Group and Edelweiss in the past.  Kedar Karnik – Total work experience of 17 years. Kedar joined DSP Investment Managers from Axis Asset Management.  Jay Kothari - Vice President & Product Strategist -Jay has been with DSP Investment Managers since May 2005, and has been with the Investment function since January 2011. Jay joined the firm as a member of the Sales team (Banking) in May 2005.  Who should invest in DSP Equity Savings Fund?  Investors  Who value smooth equity investment journeys with relatively more predictable outcomes.  Accept that equity investing means exposure to risk and recognize market falls as good opportunities to invest even more.  Why invest in DSP Equity Savings Fund?  This is a relatively lower-risk equity-oriented investment strategy compared to diversified or thematic equity funds.  Offers potentially better risk-adjusted returns compared to debt investments.  Time horizon  One should look at investing and holding the investment for more than 1-3 years.  Investment through Systematic Investment Plan (SIP) may help in tackling the volatility of the broader equity market.  Conclusion  DSP Equity Savings Fund offers the potential to earn relatively better risk-adjusted returns compared to other debt instruments. It aims to deliver smoother, less fluctuating investment journeys. One can invest in this using a Systematic Withdrawal plan (SWP) as this fund has debt exposure to help your portfolio with a regular income.  DisclaimerThis is not recommendation advice. All information in this blog is for educational purposes only.
DSP India T.I.G.E.R fund

DSP India T.I.G.E.R fund

One of the largest AMCs in India, DSP has been helping investors make sound investment decisions responsibly and unemotionally for over 25 years. DSP is backed by the DSP Group, an almost 160-year-old Indian financial giant. The family behind DSP has been very influential in the growth and professionalization of capital markets and the money management business in India over the last one and a half centuries.  Let us talk about the flagship product – DSP India T.I.G.E.R Fund About DSP India T.I.G.E.R Fund  Investment objective The primary investment objective of DSP India T.I.G.E.R Fund is to seek to generate capital appreciation, from a portfolio that is substantially constituted of equity securities and equity-related securities of corporates, which could benefit from structural changes brought about by continuing liberalization in economic policies by the Government and/or from continuing investments in infrastructure, both by the public and private sector.  Investment process   The DSP India T.I.G.E.R Fund seeks to reduce concentration risk by owning a higher number of good quality stocks and following an approach to own a basket of stocks in industrial products, building materials, and construction. It identifies and invests in those stocks which have visibility for the next 3-5 years and have lower cyclicality, and a higher ability to grow even in low industrial growth.   Portfolio composition  The equity exposure is similar throughout the market caps, the highest being in the small cap at 37%, followed by the large-cap at 32%. The sectoral major exposure is to Construction and Industrial Products. The top 5 sectors hold nearly 60% of the portfolio. Note: Data as of 31st Dec 2022. The bar graph shows the top 5 sector weightage of the fund’s portfolio. Source: dspim.com  Top 5 holdings for DSP India T.I.G.E.R Fund  Name Sector Weightage % Larsen & Toubro Ltd. Conglomerate 4.27 Siemens Ltd. Conglomerate 3.60 Kalpataru Power Transmission Ltd. Power Transmission 3.25 Rhi Magnesita India Limited Refractory Manufacturers 3.16 Power Grid Corporation of India Limited Power Transmission  Note: Data as of 31st Dec 2022. Source: dspim.com  Performance over 18 years for DSP India T.I.G.E.R Fund  If you would have invested 10,000 at the inception of the fund, it would be now valued at Rs. 1.63 lakhs. This fund has outperformed the benchmark in all time horizons. Note: Performance of the fund since launch; Inception Date – Jun 11, 2004. Source: Morningstar The DSP India T.I.G.E.R Fund has given consistent returns and has outperformed the benchmark over the period of 18 years by generating a CAGR (Compounded Annual Growth Rate) of 16.23%.  Fund managers  Rohit Singhania - He joined DSP Investment Managers in September 2005, as Portfolio Analyst for the firm's Portfolio Management Services (PMS) division.   Charanjit Singh - Total work experience of 16 years. He joined DSP Investment Managers in September 2018 as Assistant Vice President of the Equity Team.   Jay Kothari - Vice President & Product Strategist -Jay has been with DSP Investment Managers since May 2005, and has been with the Investment function since January 2011. Jay joined the firm in May 2005.   Who should invest in DSP India T.I.G.E.R Fund?  Are an experienced investor with a well-set core portfolio & know what you're doing.  Investors who have the patience and sectoral understanding to 'extract value' from changing sector cycles.  Why invest in DSP India T.I.G.E.R Fund?  This fund offers the potential to grow your wealth & 'earn big' returns if this theme does well (a high-risk, high-return strategy).  Can help you beat the impact of rising prices over the long term.  Time Horizon  One should look at investing for a minimum of 10 years or more.  Investment through Systematic Investment Plan (SIP) may help in tackling the volatility of the broader equity market.  Conclusion  DSP India T.I.G.E.R Fund considers businesses in this space with higher growth potential available at reasonable valuations, as compared with peers or with its own valuation history. It is one of the oldest funds of DSP with 17+ years of track record. It is a good thematic fund that is directly related to the development of an economy due to infrastructural development.  DisclaimerThis is not recommendation advice. All information in this blog is for educational purposes only. 
DSP Focus Fund

DSP Focus Fund

One of the largest AMCs in India, DSP has been helping investors make sound investment decisions responsibly and unemotionally for over 25 years. DSP is backed by the DSP Group, an almost 160-year-old Indian financial giant. The family behind DSP has been very influential in the growth and professionalization of capital markets and the money management business in India over the last one-and-a-half centuries  Let us talk about the flagship product – DSP Focus Fund.  About DSP Focus Fund  Investment objective The primary investment objective of the Scheme is to generate long-term capital growth from a portfolio of equity and equity-related securities including equity derivatives. The portfolio will consist of multi-cap companies by market capitalization. The Scheme will hold equity and equity-related securities including equity derivatives, of up to 30 companies. The Scheme may also invest in debt and money market securities, for defensive considerations and/or for managing liquidity requirements.  Investment process   DSP Focus Fund invests in a focused portfolio of up to 30 stocks of large, mid, or small-sized companies. Its portfolio construction is based on macro factors, with a focus on companies with higher growth prospects and attractive valuations.  Portfolio composition  The portfolio's major exposure of more than 59% in large-cap followed by 10% in mid-cap. The top 5 sectors hold nearly 57% of the portfolio, with major exposure to the IT-Software and Finance. Note: Data as of 31st Dec 2022. The bar graph shows the top 5 sector weightage of the fund’s portfolio. Source: dspim.com Top 5 holdings for DSP Focus Fund  Name Sector Weightage % ICICI Bank Ltd. Bank 9.87 Bajaj Finance Ltd. Finance 7.77 Infosys Ltd. Information Technology 6.22 Cipla Ltd. Pharmaceuticals 5.52 Eicher Motors Ltd. Automotive 4.75 Note: Data as of 31st Dec 2022. Source: dspim.com  Performance over 12 years  If you would have invested 10,000 at the inception of fund, it would be now valued at Rs. 31,775. This fund has outperformed the benchmark in all time horizons. Note: Performance of the fund since launch. Inception date – June 10th 2010. Source: Morningstar  The fund has given consistent returns and has outperformed the benchmark over the period of more than 12 years with generating a CAGR (Compounded Annual Growth Rate) of 12.25%  Fund managers  Vinit Sambre - He is the Head of Equities at DSP Investment Managers (DSPIM). Vinit joined DSPIM in July 2007, as Portfolio Analyst for the firm's Portfolio Management Services (PMS) division.  Jay Kothari - Vice President & Product Strategist -Jay has been with DSP Investment Managers since May 2005, and has been with the Investment function since January 2011. Jay joined the firm as a member of the Sales team (Banking) in May 2005.  Who should invest in DSP Focus Fund?  Investors  Who accept that equity investing means exposure to risk and have the patience & mental resilience to remain invested for a decade or more.  Who value 'concentration' and can digest higher risk.  Why to invest in DSP Focus Fund?  Offers the potential to grow your wealth by investing in a relatively concentrated portfolio of quality companies with strong growth prospects available at good valuations.  Can help you beat the impact of rising prices over the long-term.  Time horizon  One should look at investing and holding the investment for more than 10 years.  Investment through Systematic Investment Plan (SIP) may help in tackling the volatility of broader equity market.  Conclusion  DSP Focus Fund offers a focused or rather a concentrated portfolio across large, mid and small cap companies. With focus, the risk is always higher. However, there is more research as the number of funds are lower compared to other categories of mutual funds, therefore, only stocks that are fundamentally strong and have a strong business are invested in. This fund may experience high short-term fluctuations; hence it is good for long-term investment purpose.  DisclaimerThis is not recommendation advice. All information in this blog is for educational purposes only. 
How to invest in mutual funds for an infant child?

How to invest in mutual funds for an infant child?

An average parent spends roughly 60-70 Lakhs for raising a child in his initial 20-22 years since birth. This is one of the considerable expenses you, as a parent, will encounter before your retirement. Besides retirement, a significant financing event is raising a child with a good education.   The cost of this expense - food, clothing, electronics, education, etc. has been on the rise, and average inflation across categories is 6-15% per year.   Let us see how the share of expenses changes as a child grows from an infant to an adult.  Category 0-4 years 5-8 years 9-12 years 13-16 years 17-21 years Total Education 20% 44% 48% 52% 74% 59% Healthcare 16% 7% 6% 6% 2% 5% Food 12% 7% 7% 6% 2% 5% Clothing 15% 10% 9% 8% 2% 6% Others 37% 32% 30% 28% 20% 25% Amount Spent Rs 5-7 Lakhs Rs 6-8 Lakhs Rs 8-10 Lakhs Rs 10-12 Lakhs Rs 34-36 Lakhs Rs 66-68 Lakhs Source: EduFund Research Team As you can see in the table above, an infant needs attention, good healthy food, and medical care in the initial years. Thus, the expenses are on the higher side. As the child grows, the expenses of clothing and education start to come in, whereas health care starts to taper down. Gradually the clothing expenses also start getting optimized as the usability of clothing increases with age. As the child enters high school (or the secondary class, which is class 8 onwards) and then moves to college for professional courses and higher education, the expenses start to skyrocket.   While these expenses are alarming, what is more, alarming is the under-preparedness for such inevitable life expenses. Also, it is implicit to note that the expenses will only go north with inflation in categories rising. One should accept that inflation is real and not imaginary.   So, how should you tackle these expenses?  Well, the only answer is Saving by Investing. When we say saving by investing, it is crucial that you have a Systematic, Disciplined, and Rationalized approach to investing. How to plan?   An individual must plan all the bigger child's expenses, as shown in the table above. But you can only do justice with some goals simultaneously, given other expenses that an individual will have at the start of the career. Thus, to tackle this, one must take a rational approach in prioritizing the expenses and categorizing them into short-term, medium-term, and long-term goals.   Short-term goals – In this you have goals that need high capital protection and may arise anytime during one year. For example - some emergency corpus for child's medical care.  Medium-term goals – For the medium term, you have all goals that have over three years to achieve. For example - when planning for school fees of an infant, a parent has a medium-term plan for play school fees and fees for a K-12 school.  Long-term goals where you have time by your side, and you could take high risks. This will be school fees for standard 8-12 (assuming you are planning when the child is an infant, undergrad college fees, and post-grad fees. How do you plan for these goals?  Once you categorize the expenses as per priority and time horizon, have a dedicated plan for each of these baskets.  How could you achieve it?  Let us see the example of the emergency corpus of Rs 1 Lakh for the child's medical treatment.   Emergency funds for a child should have a feature of high safety and high liquidity. Thus, you must invest your savings in a safer fund with high liquidity to achieve this goal. Debt funds are the best option for such short-term goals as they are significantly less volatile. Let us now see the example of medium-term and long-term goals.  For medium to long-term goals, using a goal-based approach for your child's education helps you stay ahead of the curve. Let us see the example of higher education.   Apart from fees, there are expenses like accommodation, food, clothes, transport, etc. The fees portion only consists of almost 40-50% of the total expenses during the course duration, and the balance is spent on other items.  Cost of higher education. Source: EduFund Research Team  Once you have the total cost of education (in current value), find out the expense that you will incur in the future. For example – if your child is just born, you have good 18 years when the child will be ready for college. Note: Inflation considered at 10% on today’s cost of Rs 25 Lakhs Source: EduFund Research  How can you achieve it?  So, for your child’s education, you need to accumulate Rs 1 cr after 18 years. To achieve this goal, you should consider doing a Step-up SIP with a yearly step-up of 5% (in-line with your yearly salary increment).  Compounding benefits will help you accumulate corpus even with a smaller monthly contribution.   For a longer horizon, such as higher education cost, the ideal way to invest is to start with high-risk funds, utilize the maximum period to accumulate wealth, and eventually move to the capital protection and capital preservation phase as you reach the goal.   Stages to goal-based investing  Accumulation Phase: During this phase, the risk appetite is high; thus, you have high equity allocation, and that too in mid/small space, sectoral, or thematic.  Capital Protection Phase: In this phase, the capital/wealth shift from high risk to average by including debt. You also move from risky equity to stable and large equity names.  Capital Preservation Phase: At this stage, the wealth accumulated needs to be preserved so that you can pay for your goals. In this phase, debt occupies the whole portfolio Investment period  Phase Investment Period RiskCAGR Wealth Creation01- 10 YearsHigh 14 -16% 11 - 13 YearsAbove AverageCapital Protection 14 – 15 Years Average11-13% Capital Preservation17th Year Below Average 8-10% 18th Year Low Source: EduFund Research Team  Source: EduFund Research  With the above goal-based approach, a nominal SIP of Rs 11,729 with a 5% yearly Step-up could help you reach your goal. The entire journey takes care of rebalancing, capital growth, protection, and preservation by moving from high-risk equity to hybrid to low-risk debt fund as the time comes closer to the event date.   Conclusion  Define your short-term and long-term goals, and start saving & investing as early as possible. The strategy for both types of goals will be different. But having goal-based investing will make your life easier. 
Investment plans for a boy child

Investment plans for a boy child

Contrary to the usual belief that parents of the girl child are more worried about keeping their future safe, parents of boys are equally concerned about their boy’s future. They would also like to find the best investment plan for a boy child to make their future secure and rewarding.  Education inflation is high at 11% - 12%, and it is impossible to finance your children’s education without a solid backing.  A strong financial corpus will come in handy when the boy child wants to pursue higher education either in India or an overseas university. The accrued amount can also be used for setting up a business if he is interested.  It is not easy to find the best investment plan for a boy child as there are too many options available in the market. This will create confusion and can also lead to indecision or wrong choice.  In this blog, we will list some of the best child investment plans for your boy child to give more clarity. Best investment plans for a boy child 1. Aditya Birla Sun Life Vision Star Child Plan Birla Sun Life Insurance has introduced Aditya Birla Sun Life Vision Star Child Plan as a money-back plan with a terminal and reversionary bonus. It is a child education plan where you will start receiving predetermined payouts after the 5th premium-paying term is over. In case the life insured dies during the policy term, the nominee becomes eligible for the predetermined death benefit.   2. Bajaj Allianz Young Child Assurance Plan Bajaj Allianz Young Child Assurance Plan is one of the best investment plans for boy children as it has a clause of Accidental Permanent Total Disability Benefit.  It is a traditional child plan that offers insurance protection and savings to save for a boy child’s milestones in growing years.  The child plan from Bajaj Allianz has term options of 10, 15, and 20 years with a choice of quarterly, monthly, half-yearly, and yearly premium payments.  3. HDFC SL YoungStar Super Premium Child Plan As the name suggests, HDFC SL YoungStar Super Premium Child Plan is a child investment plan from HDFC with life insurance coverage and flexible twin benefit payment options, namely Save-n-Gain Benefit Option and Save Benefit Option.  The unit-linked life insurance plan can be customized to suit the boy child’s future needs with four types of funds: Blue Chip Fund, Income Fund, Balanced Fund, and Opportunities Fund.  In case of the death of the policyholder, the future premiums are paid by the company, and the sum assured is paid on maturity to the beneficiary as per the terms of the plan.  4. ICICI Pru Smart Kid’s Regular Plan ICICI Pru Smart Kid’s Regular Plan is an endowment premium plan with education benefits from ICICI Bank and Prudential Private Limited Company. The additional twin benefits of choosing this plan are income benefit rider and disability benefit rider.  The traditional child plan offers two maturity benefit options. In the first option, the benefit is received at predefined educational milestones or installments of 2, 5, and 7 years and in the second option, a part of the assured sum is paid every year in the last five years of the insurance policy.  5. Kotak HeadStart Child Assure Plan Kotak Head Start Child Assure Plan from Kotak Mahindra is one of the best investment plans for boy children with dual benefits of wealth creation and protection.  The unit-linked child education plan offers the policyholder the option of half-yearly and yearly premiums. It also allows you to partially withdraw a predetermined sum after every five years.  6. LIC New Children’s Money Back Plan LIC New Children’s Money Back Plan from LIC Corporation is both an insurance and investment plan that will secure the financial needs of the child when he turns 25 years.  It is a participating non-linked money-back plan that makes it eligible for a bonus based on the performance of LIC. This plan can be bought by parents or grandparents of a child aged between 0 – 12 years only.  An interesting fact about the child plan is that the risk cover is on the life of the child during the policy term and not the policyholder.  Conclusion The world has become a challenging place where a high inflation rate has led to higher expenses and little savings. This is the time to be aware of your surroundings and put greater focus on savings. Find the best investment plan for a boy child so that, as parents, you can create a financial corpus that would be a blessing for the boy child in later years.  Take the help of the experts on the Edufund App to create a personalized financial plan for your boy that will secure his future to a great extent. Consult an expert advisor to get the right plan TALK TO AN EXPERT
ICICI Prudential FMCG Fund

ICICI Prudential FMCG Fund

ICICI is a leading Asset Management Company (AMC) in the country focused on bridging the gap between savings and investments and creating long-term for investors through a range of simple and relevant investment solutions.   Let us talk about the flagship product – ICICI Prudential FMCG Fund About ICICI Prudential FMCG Fund   Investment objective To generate long-term capital appreciation through investments made primarily in equity & equity-related securities forming part of the FMCG sector. However, there is no assurance or guarantee that the investment objective of the Scheme would be achieved.  Investment process   The ICICI Prudential FMCG Fund invests prominently in FMCG stocks as FMCG is purchased frequently and in regular intervals and the FMCG market in India is large given that it has the 2nd largest population in the world. It chooses stocks that have very high growth potential. The Scheme may invest in derivatives such as Futures & Options for the purpose of hedging and portfolio balancing.  Portfolio composition  The portfolio holds the major exposure in large-cap stocks at 74% and sectorally major exposure is to Diversified FMCG which accounts for almost 38% of the portfolio. The top 5 sectors hold nearly 76% of the portfolio. Note: Data as of 31st Dec 2022. Source: ICICI Pru AMC  Top 5 holdings for ICICI Prudential FMCG Fund   Name Sector Weightage % ITC Ltd. Indian Hotel Chain 20.29 Hindustan Unilever Ltd. Consumer Goods Company 18.17 Nestle India Ltd. Food & Beverage Company 6.69 Britannia Industries Ltd. Food Industry 5.65 Dabur India Ltd. Consumer goods company 5.41 Note: Data as of 31st Dec 2022. Source: ICICI Pru AMC  Performance over 23 years for ICICI Prudential FMCG Fund   If you would have invested Rs. 10000 lakhs at the inception of the fund, it would be now valued at Rs. 3.73 lakhs.  Note: Performance of the fund since launch; Inception Date – Jul 09, 1998, till Dec 09, 2022. Source: Morningstar.  The fund has given consistent returns and has outperformed the benchmark over the period of 23 years by generating a CAGR (Compounded Annual Growth Rate) of 16.59%.  INVEST NOW Fund manager  Priyanka Khandelwal – Comes with a total experience of 11 years. She has been with ICICI Prudential since October 2014. She joined ICICI Pru in Strategic Planning and Analysis.  Who should invest?  Investors looking for  Long-term wealth creation.  An equity fund that primarily invests in a select group of companies in the FMCG sector.  Why invest?  ICICI is a renowned name in the finance industry with a proven track record  FMCG is a booming sector in India and all over the world as the demand for the FMCG sector never goes down.  Horizon  One should look at investing for a minimum of 7 years or more  A systematic investment Plan (SIP) is an ideal way to take exposure as it helps tackle market volatility  Conclusion  The ICICI Prudential FMCG Fund has delivered consistent returns over 23 years with a proven track record and has delivered 16.59% CAGR consistently. Thus, suitable for investors who want sectoral exposure in their portfolio and FMCG is a better-performing theme compared to others. DisclaimerThis is not recommendation advice. All information in this blog is for educational purposes only. 
ICICI Prudential Infrastructure Fund

ICICI Prudential Infrastructure Fund

ICICI is a leading Asset Management Company (AMC) in the country focused on bridging the gap between savings and investments and creating long-term for investors through a range of simple and relevant investment solutions.   Let us talk about the flagship product – ICICI Prudential Infrastructure Fund  About ICICI Prudential Infrastructure Fund  Investment objective To generate capital appreciation and income distribution to unit holders by investing predominantly in equity/equity-related securities of the companies belonging to the infrastructure theme. However, there can be no assurance or guarantee that the investment objective of the Scheme would be achieved  Investment process   The scheme seeks to optimize the risk-adjusted return by a mix of top-down macro and bottom-up micro research to pick up stocks providing long-term potential. The fund manager would adopt a counter-cyclical approach to investing by remaining underweight in those sectors to which the larger market holds an elevated exposure.  Portfolio composition  The portfolio holds the major exposure in large-cap stocks at 61% and sectorally major exposure is to construction which accounts for almost 19% of the portfolio. The top 5 sectors hold nearly 60% of the portfolio. Note: Data as of 31st Dec 2022. Source: ICICI Pru AMC  Top 5 Holdings for ICICI Prudential Infrastructure Fund Name Sector Weightage % NTPC Ltd. Energy Conglomerate 9.22 Larsen & Toubro Ltd. Indian Conglomerate 8.74 Bharti Airtel Ltd. Telecom Services 6.78 Oil & Natural Gas Corporation Ltd. Indian oil & Gas Company 5.57 HDFC Bank Ltd. Bank 5.21 Note: Data as of 31st Dec 2022. Source: ICICI Pru AMC  Performance over 17 years for ICICI Prudential Infrastructure Fund  If you would have invested Rs. 10,000 lakhs at the inception of the fund, it would be now valued at Rs. 1 lakh. Note: Performance of the fund since launch; Inception Date – August 31, 2005. Source: Morningstar  The fund has given consistent returns and has outperformed the benchmark over the period of 17 years by generating a CAGR (Compounded Annual Growth Rate) of 14.24%.  Fund manager  Ihab Dalwai: Mr. Dalwai is a Chartered Accountant. He is associated with ICICI Prudential AMC since April 2011.  Who should invest?  Investors looking for  Long-term wealth creation.  An open-ended equity scheme aims for growth by primarily investing in companies belonging to infrastructure and allied sectors.  Why invest?  ICICI is a renowned name in the finance industry with a proven track record  Diversified exposure across market cap thereby offers less concentration risk in terms of market capitalization.  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 ICICI Prudential Infrastructure Fund has delivered consistent returns over 17 years with a proven track record and has delivered a 14.24% CAGR consistently. Thus, suitable for investors who want sectoral exposure in their portfolio with diversification across market caps to optimize the overall portfolio volatility.  DisclaimerThis is not recommendation advice. All information in this blog is for educational purposes only. 
How education inflation can hurt a child's future?

How education inflation can hurt a child's future?

Inflation has been a buzzword globally since Covid19 pandemic was over. Almost every country has been witnessing high inflation, and some are seeing skyrocketing inflation in a few decades.   The rise in the price of cars, electronics, food, and fuel only reminds us how household goods and consumption items are becoming costlier. While discussing the fuel price has been all the rage, there are some items where inflation has been hovering around for quite some time and that too consistently.   This is nothing but Education. Unfortunately, this area needs to be spoken about more, as people are aloof about how it is not only making a hole in your pocket but also denting your aspiration.  Education inflation is the silent killer and is for real. But why is it so critical?  Because it can demolish the dreams of a brighter future when taken lightly. Here's an example that proves this powerful statement - Despite the pandemic, IITs increased their fees in 2021-22 from INR 90K to INR 200K. This is over 100%.   So, a financially unprepared parent will face the heat of the situation with their child for admission!   Why is education inflation scary?  Below is the list of different segments and inflation over the last ten years. Source: MOSPI, EduFund Research  The data highlights the reality that the rise in education costs has surpassed all other necessities and consumables in the last decade. This rise is partial because the government is looking to reduce funding grants. Additionally, there has been growth in living standards and services offered by the Educational Institutes and thus the premium.   In addition to headline educational expenses, many hidden costs hurt a parent. For instance, exam registration fees saw an approximate 6.7% hike last year. Additionally, transportation and student accommodation costs contribute significantly to the overall increase in education costs. And finally, food costs are another major contributor that needs to be highlighted while planning for higher Education.   Increasing tuition fees in India   College tuition fees in India have seen an enormous rise over the years. Here is some data on total course fees for specific courses that help paint a clearer picture of how fast the tuition fees have risen over the years.  Source: EduFund Research  The figures are staggering, and one of the main reasons students drop out of college midway. According to recent data, approximately 39% of students aged 20-24 drop out of college to help their family increase their household income. Therefore, it is becoming increasingly apparent that there is a need for proper education planning in India, as many parents need to be aware of the rising tuition fee and how to tackle it.   Education costs abroad on the rise  If you want to send your child abroad, the cost will be higher, and you must be prepared to shell out much more to pay.  But why?  Because, in addition to inflation or price hike, currency depreciation also hurts you.  So, even if the college abroad doesn't increase the fees, you will pay higher Indian Rupee terms because of the depreciating Rupee. And, if the colleges increase fees (which they have done every year), the cost increases further in Indian Rupees. Cost of Education in Indian Rupee when fees don't increase      Jan-22 Jan-23 Change (%) Fees USD 79,540 79,540 0% USD | INR Rs 74.51 82.74 11% Fees Rs Lakhs 59.3 65.8 11% Note: The Fees are considered for Princeton University (Undergraduate Admission). The Fees is for 2022-23 and include - Tuition: $57,410, Housing: $10,960, Food: $7,670, and Estimated Miscellaneous Expenses: $3,500.Source: https://admission.princeton.edu/   Fees in the United States increased to nearly 5x from what it was in 1985. The scenario is similar for destinations like the UK, Canada, and Australia.   Despite the pandemic, some universities abroad announced increasing the tuition fee for this academic year (2022-2023). The University of Pennsylvania announced a 2.9% increase in tuition fees, while Arizona State University announced that tuition fees would increase by 5% for international students. The international students at all three campuses of the University of Illinois are likely to see a 1.5 to 2.5% hike in their tuition fees.  How are you planning for your life's most considerable expense before retirement?  Unfortunately, the depth of the issue only hits you once you are close to paying for your child's college, which is one or two years before. And suddenly, you are left with only two choices- compromising on the quality of Education or opting for loans with a high-interest rate which eventually increases your overall cost of Education (after including the interest component on loan). Both decisions will have a significant impact on your child's future.   But you can avoid it. How?  You can avoid financial stress by saving early for your child's college. The sooner you begin investing in your child's education expenses, the more time you give your savings to grow. Here is an example of how you could create an education fund for your child by investing early:   Unit 5 yrs. 10 yrs. 15 yrs. SIP Rs/month 10,000 10,000 10,000 Annual Returns % Per Annum 15 15 15 Total Outflow Rs 6,00,000 12,00,000 18,00,000 Accumulated Amount Rs 8,96,817 27,86,573 67,68,631 Note: The returns here are hypothetical and do not guarantee performance. Source: EduFund Research Find the right investment tool that suits your educational goal and start investing to achieve the goal. If you are overwhelmed with the available options, seek a financial expert to help you with your education investments.  
DSP Government Securities Fund

DSP Government Securities Fund

One of the largest AMCs in India, DSP has been helping investors make sound investment decisions responsibly and unemotionally for over 25 years. DSP is backed by the DSP Group, an almost 160-year-old Indian financial giant. The family behind DSP has been very influential in the growth and professionalization of capital markets and the money management business in India over the last one-and-a-half centuries  Let us talk about the flagship product – DSP Government Securities Fund.  DSP Government Securities Fund  Investment objective The primary objective of the Scheme is to generate income through investment in Central Government Securities of various maturities.  Investment process   DSP Government Securities Fund invests 100% in sovereign debt (the highest quality debt securities available in the Indian market, considered to be safe havens even during periods of economic turmoil as they carry little risk of default.  Portfolio composition  The portfolio's major exposure of more than 78% in Sovereign bonds which are supposed to be the safest debt instruments. The rest is maintained in cash.  Note: Data as of 31st Dec 2022. The pie chart shows the credit rating profile of the fund’s portfolio holdings. The bar graph shows the Instrument Break-up of the fund’s portfolio. Source: dspim.com Top 5 holdings in DSP Government Securities Fund Name Weightage % 7.38% GOI 2027 48.52 TREPS / Reverse Repo Investments / Corporate Debt Repo 27.30 7.42% GOI FRB 2033 11.01 364 DAYS T-BILL 2023 6.01 Cash & cash equivalents 1.15 Note: Data as of 31st Dec 2022. Source: dspim.com Performance over 23 years  If you would have invested 10,000 at the inception of the DSP Government Securities Fund, it would be now valued at Rs. 78,289. This fund has outperformed the benchmark in all time horizons.  Note: Performance of the fund since launch. Inception date – September 30th, 1999. Source: Morningstar  The DSP Government Securities Fund has given consistent returns and has outperformed the benchmark over the period of more than 23 years by generating a CAGR (Compounded Annual Growth Rate) of 9.25%  Invest Now Fund managers  Vikram Chopra - Total work experience of 14 years. He joined DSP Investment Managers from L&T Investment Management. He has also previously worked with Fidelity, IDBI Bank, and Axis Bank Ltd.  Laukik Bagwe - Total work experience of 11 years. He joined the firm in November 2007 as a Fixed Income Dealer.  Who should invest in DSP Government Securities Fund?  Investors  Who prefer the stability of the debt market but are okay to expose themselves to interest rate risk.  Who wants to invest in debt funds but understands that the returns are stable and not as high as equity funds?  Why invest in DSP Government Securities Fund?  This is a quality debt fund since the entire portfolio is made of government-backed securities.  Earn potentially better returns than bank FDs.  Time Horizon  One should look at investing and holding the investment for more than 3 years.  Investment through SIP (Systematic Investment Plan) or Lumpsum should both be okay as the NAV of the fund does not fluctuate much.  Conclusion  This scheme offers stabilized returns with lower risk and volatility. Best suitable for people with either a short investment horizon or with low-risk appetite. This scheme has generated returns that have beaten inflation and have performed much better than Fixed Deposits. DisclaimerThis is not recommendation advice. All information in this blog is for educational purposes only. 
Best way to invest $1000 for a Child

Best way to invest $1000 for a Child

There are numerous options available for adults if they are looking for the best way to invest $1000 for a child. Every parent wishes to give a comfortable, secure, and stable life to his child, and what better way than investing on his behalf from an early age?  Investments are what drive your savings because of the compounding factor. $1000 is a good amount for investment hence you can take the help of endless opportunities to create a sizable nest egg from it. Identify your financial goals and how much time you have in hand before investing. As a rule, when the timeline is short the risk involved is also less and so are the returns. Conversely, longer timelines mean higher risk and greater growth.  Investing $1000 early will help the small amount to grow into a significant corpus. Assuming that the expected average long-term return is 10% then the $1000 will result in a nearly $490,370 portfolio by the time a child will need the money in his retirement age. Take the help of the investment calculator at the Edufund App to know how much amount you can expect for your child with a $1000 investment. Best opportunities to invest $1000 for a child Custodial account A custodial account can be opened by an adult on behalf of a child at an investment firm or a bank. The child is the beneficiary of the account which is handled by the legal adult who opens and operates the account until the child achieves maturity and comes of legal age.  The funds that grow through the custodial account can be used for any purpose by the child when he becomes the legal holder.  You can open a custodial account with Edufund App, an investment platform to secure your child’s financial future with a sum of $1000. Funds can then be invested in a diversified portfolio of assets to achieve the best returns. Different types of assets for a $1000 investment through a custodial account. 1. ETFs and index funds Index funds structured as ETFs and mutual funds help to invest in several companies at once. Index funds with low fees are the best options when the investment is through the custodial account.  For investors who are fond of taking risks to gain higher returns one of the best investment options available with $1000 is the direct equity fund. Growth stocks often yield very high profits than average equity but they have to be invested for a longer period hence choose growth equity funds for your child. 2. Individual stocks If you are not interested in the overall stock market invest $1000 in individual stock that has shown consistent returns over the years. 3. Savings bonds Saving bonds are traditional monetary gifts considered safe investments for a child. The volatility of the stock market does not have any impact on it so people looking for safe and secure investments find the savings bond lucrative options. Purchase savings bonds from private companies, utilities, and municipalities. Other investment opportunities 1. Bank fixed deposits Fixed Deposits can be a good investment opportunity for a child if you are looking for a low-risk safe and secured one-time option. Most banks offer special FD schemes for children without the option of premature withdrawal. 2. Insurance policies Choose children-specific insurance policies with life cover and death benefits. The adult who is the policyholder has to pay a sum, for instance, $1000 once and at maturity the total amount which has been compounded over the years is returned as a lump sum.  3. One-time child investment plans Invest $1000 in one-time child investment plans as early as possible so that you can get back a lump sum amount after a pre-decided period. One-time child investment plans are considered beneficial as they are safe and secured investments.  There are several options open for you that will offer better returns along with death benefits. If you are unable to decide on a specific investment plan then take the help of Edufund App and its partner banks to purchase a child investment plan that will give the best possible returns.  Conclusion A newborn child has several years before the need to access the funds will arise so it is prudent for parents to think about the best way to invest $1000 for a child and secure his future to some extent.  Take the help of the EduFund App and create a financial plan where as parents you can make investments for the child in your name. Just sign up for an account, select a portfolio from several options like US funds, mutual stocks, gold, ETFs, etc. and start your investment with $1000. Consult an expert advisor to get the right plan TALK TO AN EXPERT
Pros and Cons of using abroad education loans to finance studies

Pros and Cons of using abroad education loans to finance studies

The expense of attending your dream university is already high due to the rising cost of education. Recent research found that the price of contemporary education is rising quickly, on average, by 12 – 18% annually. Given this, obtaining an education loan for your child's future is unquestionably the finest choice without sacrificing the caliber of their education. This blog will discuss the pros and cons of using education loans abroad to finance your studies. Pros of using education loans abroad to finance studies The following are the benefits of study abroad education loans:  1. Tax benefits on education loans  One of the most significant benefits of an education loan taken out for courses in India and abroad is the tax benefit. Spending less money and giving your kids a brighter future is a fantastic method. This is one factor that favors student loans over self-financing for educational expenses. Section 80E of the Income Tax Act of India allows applicants for education loans to deduct interest paid on loans, decreasing the interest rate. The deductions allowed by this section may be made for eight consecutive years, starting with the year the loan is taken out and continuing until the loan's interest is entirely returned, whichever comes first. It should be emphasized that these deductions only apply to loans obtained from financial institutions that have been gazetted. Any Indian citizen may deduct the interest paid on any school loans they have taken out for themselves, their spouses, their children, or any other children over whom they have legal custody. It should be emphasized that Section 80E tax deductions do not apply to student loans obtained from friends and family. 2. Upto 100% expense coverage During their higher education abroad, students frequently incur additional costs in addition to the tuition fee. One-time registration fees, library dues, lab and equipment fees, housing costs, and other personal expenses are a few of these costs. Most students have access to full education loans, which also give them money to live healthily while studying abroad. This frees parents and students from worrying about money, and fast tuition payment to the university or institution ensures that a student's study term will go without any problems. 3. Education loans will help you build your credit score Yes! Students and recent graduates may improve their credit ratings by wisely using student loans. Student loans may be the only opportunity to establish their credit history because many college students need other payments or debts attached to their identities. Throughout the remainder of your life, having a decent to an exceptional credit score will be helpful when you apply for jobs, credit cards, apartments, and even purchase a house. But to take advantage of these fantastic advantages, you must use student loans properly.  https://www.youtube.com/watch?v=4gTQkdePOWM&feature=youtu.be&ab_channel=EduFund Cons of using education loans abroad to finance studies The following are the few disadvantages of study abroad education loans:  1. You have to start your career with debt You will begin your adult life in debt if you rely on student loans to pay for your education. Yes, having a college degree may enable you to earn more overall than someone with merely a high school graduation. However, depending on how much you borrow, it might be difficult for the first few years after college, particularly if, like millions of other college graduates, you need help finding a job that compensates enough to cover your expenditures.  2. Defaulting on your education loans can tank your credit score Missing payments, defaulting on student loans, and taking on more debt than you can afford to repay after graduation can all have a major negative effect on your credit score or co-borrower's credit score. The worst case scenario is defaulting since it indicates that you could not repay the loan you received from a lender. 3. Education loans might not cover all your expenses Most federal student loans have yearly borrowing caps, and some private lenders could also. You might still need to hunt for additional sources of income to finish your degree, depending on the cost of tuition, fees, materials, lodging and board, and other expenditures. How to choose the right education loan for higher education?  Research and thorough comparison are necessary while selecting the best education loan for higher education. Before choosing an education loan, compare several institutions' interest rates and repayment options. You may also get in touch with an expert. They can assist you in negotiating a lower interest rate and organizing your repayment plan to help you save money. Before taking out an education loan, ascertain how much money you require to fund your higher education. Our College Cost Calculator will help you determine how much additional money you'll need to live comfortably in your college city by providing information on the tuition and living costs there. And make sure you've done your research, decided which course of action is best for you or your child, and then finalized a sound education strategy to create a bright future! Consult an expert advisor to get the right plan TALK TO AN EXPERT
UTI Banking & Financial Services Fund

UTI Banking & Financial Services Fund

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 Banking & Financial Services Fund.  About the UTI Banking & Financial services fund  The investment objective of UTI Banking & Financial services fund  The objective of UTI Banking & Financial Services Fund is to generate long-term capital appreciation by investing predominantly in equity and equity-related securities of companies/institutions engaged in banking and financial services activities.  Investment Process of UTI Banking & Financial services fund  This fund has a bottom-up approach to stock picking. It looks for companies that are having sustainable growth models and are well-capitalized. It focuses on well-managed companies with a balance between compounders and turnaround opportunities.  Portfolio composition of UTI Banking & Financial services fund  The portfolio holds the major exposure in large-cap stocks at 89%. The major sectoral exposure is to financial services and banking companies, which comprise around 96% of the portfolio as this is a sectoral fund. Note: Data as of 31st Dec 2022. Source: UTIMF  Top 5 Holdings of UTI Banking & Financial services fund  Name Sector Weightage % HDFC Bank Ltd. Financial Services 19.25 ICICI Bank Ltd. Financial Services 17.7 Axis Bank Ltd. Financial Services 9.74 State Bank of India Financial Services 9.25 HDFC Ltd Financial Services 6.42 Note: Data as of 31st Dec 2022. Source: UTIMF  Performance over 19 years  If you would have invested Rs. 10,000 at the inception of the fund, it would be now valued at Rs. 1.28 lakhs. Note Performance of the fund since launch; Inception date - 07th April 2004. Source: Morningstar The fund has given consistent returns and has outperformed the benchmark over the period of 19 years by generating a CAGR (Compounded Annual Growth Rate) of 14.59%.  Fund manager  Amit Premchandani: is Senior Vice President & Fund Manager - Equity. He holds PGDM from IIM Indore and CFA charter from CFA Institute, USA. He has completed CA from ICAI. He graduated with a Bachelor of Commerce in 2001 from Heramba Chandra College, Kolkata. Amit joined UTI AMC in 2009 as Senior Research Analyst  Preethi R S: is an Associate Vice President and research analyst in the domestic Equity Division of UTI Asset Management Company Ltd. She tracks the non-banking finance and automobile-ancillary sectors.  Who should invest in UTI Banking & Financial Services Fund?  Investors looking for a portfolio investing in companies engaged in banking and financial services activities.  Investors are willing to have a tactical allocation to their overall equity portfolio.  Why Invest in UTI Banking & Financial Services Fund?  The Fund predominantly invests in stocks of companies engaged in the banking, insurance, and financial services-related activities of the Indian economy.  The Fund endeavors to invest across the existing and evolving sub-sectors in the space.  Time Horizon  One should look at investing for a minimum of 5 years or more.  Investment through Systematic Investment Plan (SIP) may help in tackling the volatility of the broader equity market.  Conclusion  The UTI Value Opportunities Fund is one of the oldest funds with a proven track record of 19 years and has delivered 14.59% CAGR consistently. Thus, it is best for investors looking for a tactical allocation with a sectoral concentration in banking and financial services. 
Investing for the unborn child

Investing for the unborn child

Investing for the unborn child is not a luxury but a necessity because you need to be prepared for the additional expenses that will occur as soon as your child is born. Investing for an unborn child is quite different from investing for newborn babies or minor kids because an unborn child does not legally exist before their birth; hence how can you invest something in their name? Although unborn children cannot own bank accounts or properties until they arrive in this world, there are provisions in place for parents interested in saving and investing in the child’s welfare. Why is it necessary to invest in the unborn child?  Children are a bundle of joy that spreads happiness around them even if they are in their mother’s womb and are yet to take their first breath. In these turbulent times, when inflation is at its peak, and the cost of living is also very high, it is normal for parents to be concerned about the future of their children.   Parents need to discuss beforehand how many children they want and also, most importantly, how many children they can afford to have in this expensive environment. Other important queries that need to be addressed before planning a family are the costs involved in raising their child, the contribution of each parent, and how they will deal with all the additional expenses successfully.  Children need care and pampering, and it is not only about the love you shower on the unborn child or the baby when it is born but the various related expenses that you have to incur on the materialistic things like food, clothes, and medicines, etc. and education when they join Montessori or play schools or a preschool and so on.  Thus, planning and investing for the unborn child from the word go will help to meet the related expenses and eventually result in a better future. Investment schemes for an unborn child 1. Opening a savings account Bank accounts cannot be opened for an unborn child as they are not legally present, but either/both mother and father can do so in their name. Several banks in India give parents the option to open an account in the name of the father or mother and add the name of the child after birth or later on when the child gets older.  This account acts as a joint account where the adult parent is the account holder who operates in the name of their minor child, who is the secondary account holder.  Parents can encourage their friends and relatives to provide cash gifts instead of typical gifts for the baby during special occasions like the baby shower or the baby registry. The total amount can be later deposited in the account of the child.  This way, all the cash gifts the baby receives in the later years can also be deposited in that account so that it grows and creates a good sum that can be used for either education or any other important buy.  2. Custodial accounts Parents can set up custodial accounts for the baby under the UTMA account. The funds are controlled by the parent or the operator of the custodial account, and all the related decisions are theirs. The funds in the UTMA custodial accounts are invested for growth purposes and are generally used for big expenditures like the child’s education. Initial gains in the UTMA account are tax-free, and the subsequent gains are taxable up to a certain limit.  The UGMA account is also a tax-efficient custodial investment account that enables adults to hold assets for their children until they are of age. As soon as a UGMA account is set up, the adult has to appoint a child beneficiary who becomes the legal owner of every asset invested from that time onwards. The financial decisions are made by the account’s custodian, who is responsible for managing the account on behalf of the child until they come of age and can handle the account themselves. 3. Trust Funds Trust funds can be opened for future generations and are considered an excellent investment for the coming babies. Trust funds prove beneficial while planning for future expenses like tuition fees for college or overseas higher education.  Conclusion Parents are often worried about the financial future of their kids because living life to the fullest is an expensive business. Planning and investing in the unborn child helps to create a nest egg that will keep on growing and bearing fruits year after year.  Take the help of investment experts on the Edufund App to know more about the investment opportunities for your unborn child so that once they are born, they can experience a better life. Consult an expert advisor to get the right plan TALK TO AN EXPERT
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