How much you should save.

At least 20% of your income should go towards savings. Meanwhile, another 50% (maximum) should go towards necessities, while 30% goes towards discretionary items. This is called the 50/30/20 rule of thumb, and it's popular quick-and-easy advice.

Warren Buffett Says...

"Someone's sitting in the shade today because someone planted a tree a long time ago"

The lesson here is to be a forward thinker when it comes to personal finance, whether you're talking about investing, saving, or spending. When you're deciding whether to put some more money aside for emergencies, think of a financial emergency actually happening and how much easier your life will be if you have enough money set aside.

Similarly, few people get rich quick by investing, and most people who try end up going broke. The most certain path to wealth (and the one Buffett took) is to build your portfolio one step at a time, and keep your focus on the long run.

1.52 crore SIP accounts do you have one

The mutual funds have currently about 1.52 crore SIP accounts through which investors are regularly investing in every month in various mutual fund schemes.

Yes it is a investment methodology in which investor invest a fixed amount in regular interval of time as once in a month instead of investing a lump sum or at once. Minimum investment amount of 500 rupees.

As per AMFI about 8.23 Lacs SIP accounts are adding in each month on an average during FY 2017-2018 with an average SIP amount of rupees 3250.00 rupees.

• Total collection of money through SIP accounts during April 17 To July 17 is 18544.00 crores
• During FY 16-17 total amount of 43921 crore was collected through SIP.

All the above figure are showing how is it gaining the popularity in investing options available now days.

Have you started it - if not start today.

TOP 15 Mutual Fund Houses as per AAUM For the Quarter of April-June 2017

Asset Under Management (AUM) refers to the total market value of investments managed by a Mutual fund Money management firm Porfolio Manager or other financial services company.

AUM generally changes according to the flow of money in to or out of a perticular fund or company. It also fluctuates based on changes in the value of a fund or company's underlying investment.

AAUM - Average Asset Under Management



Source:-

 

What is NAV and how is it calculated ?

The Net Asset Value (NAV) of a mutual fund or an exchange-traded fund (ETF) on a specific date or time is the price at which units of mutual fund are bought or sold. It is the market value of the fund after deducting all liabilities, then divided by total no of units.

i. e. : NAV = (Total fund value – All Liabilities)/ Total no of units

In the context of mutual funds, NAV per share is computed once per day based on the closing market prices of the securities in the fund’s portfolio. All of the buy and sell orders for mutual funds are processed at the NAV of the trade date. However, investors must wait until the following day to get the trade price. Mutual funds pay out virtually all of their income and capital gains. As a result, changes in NAV are not the best gauge of mutual fund performance, which is best measured by annual total return.

As ETFs and closed-end funds trade like stocks, their shares trade at market value, which can be a dollar value above (trading at a premium) or below (trading at a discount) NAV. ETFs have their NAV calculated daily at the close of the market for reporting purposes, but they also calculate intra-day NAV multiple times per minute in real time.

Subscribe to My Smart Investment "MUTUAL FUND" by Email

What is Mutual Fund ?

A mutual fund is a pool of money collected from number of investors having a common investment objective is managed by a team or fund manager

The Money is used to invest in various shares in equity market as well as in Govt Bond, or money market instruments. The gain generated from the collective investment is distributed proportionately among the investor after deducting permissible expenses and levees by “calculating net asset value” or NAV.

Mutual fund is constituted as trust. Therefore they are governed by the Indian trust act 1882. This trust is created by one or more sponsors who are the main person behind this Mutual Fund business. Every trust has its beneficiaries and in mutual fund case the investors are the real beneficiary who invests in different schemes of mutual fund.

Subscribe to My Smart Investment "MUTUAL FUND" by Email

What is NFO (New Fund Offer)

A mutual fund NFO or New Fund Offer is when a new mutual fund is launched by a fund house and is offered to the public before it opens up to daily transactions. allowing the firm to raise capital for purchasing securities and investing the initial capital in different investment instrument as per the investment strategy of the fund mentioned in offer document.

Before purchasing the NFO its better to go through the offer document  and understand the investment strategy of the new fund. Then it may be studied and compare to your Investment objectives. If it matches to your objective then can be purchased.

There are largely two types of mutual funds – actively managed funds, and passively managed funds, and in most cases any new fund that’s launched has a fund similar to it already available in the market.
In such a situation, it makes more sense to buy into a fund that’s already available, has assets under management, and some track record to go by.

Conclusion

As various funds are available in market from different AMCs may have comparably same investment strategy, So, you should buy a few mutual funds with limited overlap so that it really gives you the benefit of diversification. With that in mind, evaluate each NFO carefully to see whether it’s worthy of your portfolio or not.

Subscribe to My Smart Investment "MUTUAL FUND" by Email

Different Types of Mutual Fund in India (Part-4)

Some other types of funds or terms we usually used at the time of Investment are as follows.

1. Large Cap Funds

2. Mid Cap Funds

3. Small Cap Funds

Large Cap Funds

Large cap funds are a type of equity where funds are invested in a large portion with companies of large market capitalization. These are essentially large companies with large businesses and big teams. Large cap stocks are commonly referred as blue chip stocks. Large cap funds are considered to be safe, have good returns and are less volatile to the market fluctuations compared to other equity funds (mid and small cap funds).

Mid Cap Funds

Mid-cap funds invest in mid-sized companies. Stocks held in mid-cap funds are the companies that are still developing. These are mid-size corporates that lie between large and small cap stocks. When an investor invests in mid caps for a long term, they prefer those companies that they think will be tomorrow’s runway successes. Also, the more the investors in mid-cap stocks, the more it tends to grow in size. Since the price of large caps has increased, big investors like mutual funds and Foreign Institutional Investors (FIIS) are increasingly investing in mid-caps.

Small Cap Funds

Small cap funds take the exposure at the lowest end of the market capitalization. Small cap companies include the startups or firms that are in their early stage of development with small revenues. Many successful small cap firms have eventually grown into large cap companies. Since, small cap stocks give high growth potential, companies in their early stage of development, have great scope of higher developments.

Difference between Large, Mid and Small Cap Funds

Investments: Large cap invests in those companies that have the potential of showing year on year steady growth with high profits. Mid-cap funds invest in mid-sized companies. Investors who invest in mid-cap usually prefer those companies that are future’s runaway success. Whereas, small cap companies are generally younger companies or startups that have a lot of scopes to grow.

Market Capitalization: Large cap companies have a market capitalization of more than INR 1000 crore, while mid caps could be companies with a market cap of INR 500 Cr to INR 1000 Cr, and a market cap of the small cap could be less than INR 500 Cr.

Companies: Infosys, Unilever, Reliance Industries, Birla, etc., are a few well-known large cap companies in India. Some of the most emerging, i.e. mid-cap companies in India are Bata India Ltd, City Union Bank, PC Jeweller Ltd, etc. And some of the well-known small-cap companies in India are Indiabulls, Indian Overseas Bank, Just Dial, etc.

Risks: Mid cap and small cap funds are more volatile than large-cap funds. Large cap mutual funds tend to outperform both mid and small cap funds during the bull market.

Read More......(Click Below Links)

Different Types of Mutual Fund in India (Part-1)Different Types of Mutual Fund in India (Part-2)Different Types of Mutual Fund in India (Part-3)

Subscribe to My Smart Investment "MUTUAL FUND" by Email

Different Types of Mutual Fund in India (Part-3)

Again Equity fund basically known as Stock fund can be categorized as discussed bellow. 

1. Diversified Equity Fund

2. ELSS/Tax Savings Fund

3. Index Funds

4. Sectorial Funds

1. Diversified Equity Fund

Equity funds which are not specially Large cap or Small and Mid Cap oriented funds and will not include sector funds in other words it invests in companies regardless of size and sector. Its diversified the investment across the stock market in bid of maximize the return. 

2. ELSS/Tax Saving Funds

As the name ELSS (Equity Linked Savings Scheme) or tax Saving Funds are basically facilitate the investor to get tax benefits on their investment. This is an equity diversified fund and investors enjoy both the benefits of capital appreciation, as well as tax benefits under section 80-C of income tax act.

This type of mutual fund have a lock in period of 3 Years from the date of investment. Investor can exit ELSS after selling it after 3 Years.

3. Index Funds

An Index fund is a type of mutual fund with having a portfolio to match or follow the component of a market Index. Index fund is a passive form of fund management that has been successful in outperforming most actively managed mutual funds. Basically it gives a return as nearer return of the tracked Index.

4. Sectorial Fund

 Sector Fund is a stock mutual fund, Exchange-traded or closed-end fund that invests solely in businesses that operate in a particular industry or a sector of the economy. Because the holdings of this type of fund are in the sae industries, there is an inherent lack of diversification associated with these funds.

Previous Sections You can follow.

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

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

Continued.....

Subscribe to My Smart Investment "MUTUAL FUND" by Email