Different Types of Mutual Fund in India (Part-2)

In Previous section Different Types of Mutual Fund in India (Part-1) we know about the Open-Ended, Closed-Ended and Interval Funds.

By Investment Objective it can be classified as more four categories.

1. Equity Fund

An equity fund generally invests in equity market that means in stocks. The fund can be again managed actively known Active Fund or may be passive management in case of Passive Funds witch follows one of any equity market index is also known as Index fund. It invests at a minimum of 65% of fund value in equity market, it may be increase to 100%.

2. Debt Fund

Debt mutual fund generally invests in mix of debt or fixed income securities such as treasury bills Government Securities Corporate Bonds money market instruments and other Debt securities of different time horizons. Generally Debt securities have a fixed Maturity date & pay a fixed rate of interest. They are further classified on the basis of the maturity of the debt that they hold. Note that Debt is less volatile but also returns less. Equities are more volatile in the short term, but also return more over the long term.

3. Balanced or Hybrid Fund

Hybrid fund is a category of mutual fund whose portfolio is a mix of equity (Stocks) and Debt (Bonds). The proportionality of equity and debt may vary over time or remain fixed.

the volatility is low in compare to equity fund as a part of fund is invested in Debt category.

4. Money Market Fund. 

Money Market fund is an Open-Ended Mutua Fund offers a potentialy rewarding parking facility for short-term Idea Cash. Its provides the flexibility of withdrawing cash as and when required, and proves to be an investment through its earnings, while it is parked in the fund. As this type of fund can be used as a bank S/B account which relatively gives a increased return.

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 Different Types of Mutual Fund in India (Part-1)

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Understand CIBIL (Credit Bureau)

TransUnion CIBIL Limited is India’s first Credit Information Company, also commonly referred as a Credit Bureau. We collect and maintain records of individuals’ and non-individuals’ (commercial entities) payments pertaining to loans and credit cards. These records are submitted to us by banks and other lenders on a monthly basis; using this information a Credit Information Report (CIR) and Credit Score is developed, enabling lenders to evaluate and approve loan applications. A Credit Bureau is licensed by the RBI and governed by the Credit Information Companies (Regulation) Act of 2005.

Based on this credit history, a 'CreditScore' is generated. The CIBIL Score is a 3-digit number ranging from 300-900.The score is derived using the credit history found in the CIR (Credit Information Report). A CIR is an individual's credit payment history across loan types and credit institutions over a period of time.The closer your score is to 900, the stronger your credit profile. A CreditScore plays a critical role in the loan and credit card approval process

Why is it Important ?

The CIBIL Score plays a critical role in the loan application process. After an applicant fills out the application form and hands it over to the lender, the lender first checks the credit score and credit report of the applicant. If the credit score is low, the lender may not even consider the application further and reject it at that point. If the credit score is high, the lender will look into the application and consider other details to determine if the applicant is credit-worthy. The credit score works as a first impression for the lender, the higher the score, the better are your chances of the loan being reviewed and approved. The decision to lend is solely dependent on the lender and CIBIL does not in any manner decide if the loan/credit card should be sanctioned or not.

What major factors affect my credit score?

 To Know more Click hear

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Different Types of Mutual Fund in India (Part-1)

1. Open Ended Fund
In this type of fund the units are buy and sell in continuous basis. A investor could make a entry with his investment at any time or level and may exit too even if after the period of NFO (New Fund Offer). The units are bought and sold at the NAV (Net Asset Value) declared by the fund. The number of outstanding units goes up or down every time the fund house sells or repurchases the existing units. This is the reason that the unit capital of an open-ended mutual fund keeps varying.

2. Close Ended Fund

The unit capital of closed ended fund is fixed and they sell a specific number of units. like in open ended fund investors cannot buy the units of a closed ended fund after it's NFO period is over, this means that new investors can not enter nor can existing investors to exit the term of the scheme ends, however to provide a platform for investors to exit before the term the fund house list their closed ended schemes on a stock exchange.

3. Interval Funds

Its a partly open-ended and partly closed-ended fund. The units may be traded on the stock exchange or may be open for sale or redemption during pre-determined intervals at NAV-related prices. Fixed maturity plans, or, FMPs are examples of these types of schemes.


Continues........

Different Types of Mutual Fund in India (Part-2)

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​Interest rates of different banks. As on 22/08/2017

As on 22/08/2017

​Interest rates of different banks in different slabs of time.

If we will calculate it with current inflection then we get nothing over the time period.Now is the solution to search for alternative option of investment which could beat inflection.

Why Mutual Fund ?

Mutual funds generally buy and sell securities in large volumes which allow investors to benefit from lower trading costs. The smallest investor can get started on mutual funds because of the minimal investment requirements. You can invest with a minimum of Rs.500 in a Systematic Investment Plan on a regular basis.

Earning Spending and Saving is a financial cycle for every one on every month. Every one knows how significant the role of savings in our life cycle. for some of following future needs or you can say the future goals. every one to face in their life cycle for which every one saves his hard earned money in different instruments are available now days.

1. A Home  2. A vehicle 3. Marriage 4. Children’s Education etc…..

Without proper planning it couldn’t be possible to handle these things. Ultimately our aim is to save money and to get a handsome return within a stipulated time frame. We are having in hand many investment options available but we should select a option which will give us higher return by comparing the risk factor.

Mutual fund gives us a tremendous balance between return and risk as per investors profile or choice. Some of reasons to invest in Mutual Fund is as under.

1. Higher returns – As Full/Part of it is market linked.
2. Managed by professionals – A team of professionals are managed the fund
3. Disciplined investing – A small amount can be invested every month
4. High Liquidity – Money is ready when you need
5. The fund as your choice – You can chose as your investment Objectives
6. Diversification – Invested in Different sector or Different Instruments
7. Convenience – The whole process is offered online by industries