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Old 17th July 2014, 16:12   #571
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Default Re: The Mutual Funds Thread

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Originally Posted by dre@ms View Post
...Please suggest where all I can invest to get more returns.
Some of the mutual funds do give very good returns. You can check the rating of the mutual funds. One thing you need to remember is that NOT to sit idle after investing.

You will get the BEST return if you move your funds the right way by "switching" as and when required. So you will still need to track the market if you invest into mutual funds.
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Old 17th July 2014, 16:23   #572
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Default Re: The Mutual Funds Thread

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Originally Posted by dre@ms View Post
I am turning 35 by next month. I have no investments till now apart from my 2 LIC Life Insurance policies for which I am paying Rs. 5500 p.m
I have a kid who has started his Nursery this year and wifey is a homemaker. I am now in a desperate situation of plan for my family and safeguard them. I am already a member of FundsIndia. Please suggest where all I can invest to get more returns.
Rs. 5500 per month is a lot of money. I assume this is not term insurance (and so this is some "investment + insurance" package.)

If that is the case, please re-evaluate the product and compare with pure-term insurance. For a non-smoker without disease, at 35, the term insurance of 1 cr is around Rs. 13000.

You could save Rs 66000 - Rs 13000 ~ Rs. 50000 and invest elsewhere.
For any money that you don't need for minimum 3 years, go ahead and invest in equity based MF (small and mid-cap if you are OK with increased risk).

If you are interested in savings for the kid, then create a bank account for him/her (minor) with you as guardian and add that as an 'investor' in FundsIndia.
Then use that account to make investments in your kid's name.
Do no pull out the money before kid is an adult, else clubbing provisions will apply. After kid is an adult, your child will be legally owning that money and all tax implications will be his (and very likely that at the age of 18, there would not be any taxable income, effectively making all income tax free, irrespective of the way equity is treated by income tax guys after 15 years)



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Originally Posted by amit View Post
Government has increased long term capital gains tax on mutual funds to 20% from 10%. I understand it's for debt funds only, am I right? What is the whole implication of this increased tax rate on mutual funds and how do we avoid this higher tax incidence? (If it can be avoided)
Please read post 564 above to get expert perspective. I am not saying you will get all answers, but they do have some recommendations.
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Old 17th July 2014, 16:34   #573
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Smile Re: The Mutual Funds Thread

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Originally Posted by dre@ms View Post
Please suggest where all I can invest to get more returns.
Everybody wants the same dont they?

You are shooting in the dark if you say you want to invest and dont have any measurable goals. Sit down and take time to list the goals and the corpus needed to achieve it. Based on that you need to start allocating money on monthly basis depending on your risk appetite. There are host of websites which can give you the breakup needed for allocation.

Once done, then you can post in this thread for suggestions regarding mutual funds.
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Old 17th July 2014, 16:36   #574
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Default Re: The Mutual Funds Thread

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Well, if that logic is correct, then they should spare the retail investors like me.

I have invested in international equity funds, which are considered as debt funds from taxation point-of-view.
This is because of SEBI's/government's strange way of classifying funds as either equity-oriented or non-equity oriented, with everything else apart from domestic equity funds (including international equity) as the latter.

With time, I suppose this should change. But for now, you have a problem.

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Originally Posted by amit View Post
Government has increased long term capital gains tax on mutual funds to 20% from 10%. I understand it's for debt funds only, am I right? What is the whole implication of this increased tax rate on mutual funds and how do we avoid this higher tax incidence? (If it can be avoided)
It's applicable to all funds not classified equity-oriented. The only way to pay lower tax is to hold on to such funds for over three years, after which one will likely pay little to no tax, since the LTCG structure is 20 percent with indexation benefits.

(For indexation benefits, inflation for the three years will be deducted, and the tax will be applicable on the rest of the gains. That is, if your funds make 24 percent returns over three years, and inflation is 21 percent for those three years (7 percent each year), you will pay 20 percent tax on 3 percent gains (24 - 21 percent): 0.6 percent.)
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Old 18th July 2014, 08:08   #575
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Default Re: The Mutual Funds Thread

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Originally Posted by swiftnfurious View Post
Some of the mutual funds do give very good returns. You can check the rating of the mutual funds. One thing you need to remember is that NOT to sit idle after investing.

You will get the BEST return if you move your funds the right way by "switching" as and when required. So you will still need to track the market if you invest into mutual funds.
Its all greek and latin to me bud. Can you be much more elaborate and precise and suggest.

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Originally Posted by S_U_N View Post
Rs. 5500 per month is a lot of money. I assume this is not term insurance (and so this is some "investment + insurance" package.)

If that is the case, please re-evaluate the product and compare with pure-term insurance. For a non-smoker without disease, at 35, the term insurance of 1 cr is around Rs. 13000.

You could save Rs 66000 - Rs 13000 ~ Rs. 50000 and invest elsewhere.
For any money that you don't need for minimum 3 years, go ahead and invest in equity based MF (small and mid-cap if you are OK with increased risk).

If you are interested in savings for the kid, then create a bank account for him/her (minor) with you as guardian and add that as an 'investor' in FundsIndia.
Then use that account to make investments in your kid's name.
Do no pull out the money before kid is an adult, else clubbing provisions will apply. After kid is an adult, your child will be legally owning that money and all tax implications will be his (and very likely that at the age of 18, there would not be any taxable income, effectively making all income tax free, irrespective of the way equity is treated by income tax guys after 15 years)
Yes bud. That's a lot of money and which in turn saves me from tax. It is some jeevan anand or saaral. 2 Policies. From one of the policy I get 90k every 5 years. I am not sure how to break it and split as you suggested.

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Originally Posted by ghodlur View Post
Everybody wants the same dont they?

You are shooting in the dark if you say you want to invest and dont have any measurable goals. Sit down and take time to list the goals and the corpus needed to achieve it. Based on that you need to start allocating money on monthly basis depending on your risk appetite. There are host of websites which can give you the breakup needed for allocation.

Once done, then you can post in this thread for suggestions regarding mutual funds.
Did go through Policy bazaar and Asked terry. It suggested me some term insurances and I am yet to evaluate them.
My goals would be,
Sufficient bank balance (10 months salary, atleast)
Kids education
Buy house (40-50 lac)

I am not looking for tax benefits, because till date I am getting paid by the IT Department. So my intention is to save for the present and future.
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Old 18th July 2014, 10:30   #576
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Default Re: The Mutual Funds Thread

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Originally Posted by dre@ms View Post
Its all greek and latin to me bud. Can you be much more elaborate and precise and suggest...
Ok! Each mutual fund will have a rating based on it's past performance. I believe you can get all the rating details from money control website. Since you are NOT looking for tax savings, you can pick one based on the ratings.

Once you take a look at some good funds, please revert with your options and someone sure will help you. I have NOT been following the funds as much as I was stuck to HDFC Taxsaver (tax benefits). Just now, I diverted 95% of my funds to HDFC Midcap opportunities fund (4 * rating) based on recommendation from my relationship manager. They preferred this fund as I was switching from HDFC Tax saver (to another HDFC mutual fund) and this would incur NO additional loads (exit & entry) which is a service charge kind of thing.

Since you are new to this, you may pick a 5* rated fund. Midcap (companies with certain turn over - NOT too big in size, NOT too small either), is where the buzz is currently and is expected to grow at a very good pace.

Since mutual funds (internally by fund managers) invest into stock market,
the variation in mutual fund prices are directly proportional to the market performace too; that means - when the market is going up, your fund value also grows and when market crashes, the MF prices go down too.

Last edited by swiftnfurious : 18th July 2014 at 10:32.
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Old 18th July 2014, 12:42   #577
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Default Re: The Mutual Funds Thread

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Originally Posted by swiftnfurious View Post
Ok! Each mutual fund will have a rating based on it's past performance. I believe you can get all the rating details from money control website. Since you are NOT looking for tax savings, you can pick one based on the ratings.

Once you take a look at some good funds, please revert with your options and someone sure will help you.

Since you are new to this, you may pick a 5* rated fund. Midcap (companies with certain turn over - NOT too big in size, NOT too small either), is where the buzz is currently and is expected to grow at a very good pace.
Went through guide of Moneycontrol and it suggested to go for Diversified Equity for a beginner. And as suggested by you, I have also picked up a fund from small and mid cap. Is this ok for a beginning.
1. ICICI Prudential Exports and Other Services Fund (G)
2. SBI Magnum Midcap Fund (G)
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Old 18th July 2014, 13:00   #578
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Default Re: The Mutual Funds Thread

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Originally Posted by dre@ms View Post
Went through guide of Moneycontrol and it suggested to go for Diversified Equity for a beginner. And as suggested by you, I have also picked up a fund from small and mid cap. Is this ok for a beginning.
1. ICICI Prudential Exports and Other Services Fund (G)
2. SBI Magnum Midcap Fund (G)
I would wait for experts to approve from those; but I think you can NOT go wrong with SBI Magnum. This is being discussed on the last two pages IIRC. Please run thru the last 5 pages too.
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Old 18th July 2014, 13:40   #579
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Default Re: The Mutual Funds Thread

@dre@ms: For my kid, I invested from October 2012 - September 2013 via SIP in the following:
  • DSPBR Top 100 Equity Fund-Reg(G)
  • Franklin India Bluechip Fund(G)
  • HDFC Equity Fund(G)
  • HDFC Top 200 Fund(G)
  • ICICI Pru Focused BlueChip Eq Fund-Reg(G)
  • IDFC Premier Equity Fund-Reg(G)

Some of these funds (such as the ones from HDFC and DSP) were performing very poorly until 6 months ago.
Right now, the market is up and wherever you invest, you will get good returns in the short term.

Right now, this portfolio has given me 30% annual return with 42% gain (all of this is notional since I am not booking any profit)

This year, I started SIP for my kid in the following.
  • Franklin India Smaller Cos Fund(G) (gained 26% from Feb to July)
  • Reliance Pharma Fund(G) (gained 9.25% from Feb to July)
It does not matter if you are a new-comer or not. If you have long term requirements, then put in small, mid and large cap funds, or a combination of these, purely based on your risk appetite.

My favourite fund house is Franklin and Franklin India Smaller Cos Fund(G) is a rock solid performer (for now)

Last edited by S_U_N : 18th July 2014 at 13:41.
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Old 18th July 2014, 13:46   #580
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Default Re: The Mutual Funds Thread

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Originally Posted by dre@ms View Post
Went through guide of Moneycontrol and it suggested to go for Diversified Equity for a beginner. And as suggested by you, I have also picked up a fund from small and mid cap. Is this ok for a beginning.
1. ICICI Prudential Exports and Other Services Fund (G)
2. SBI Magnum Midcap Fund (G)
You haven't mentioned your investment horizon and whether you plan to investment through lump-sum or via SIPs (the latter being more preferable).

If you're looking to invest for anywhere less than five years, don't look at equity funds at all. While my own suggestion would be: equity funds should be invested into for seven-years plus.

SBI Magnum Midcap is a very good fund while you can safely rule out the other one (looks like a thematic fund as well as no track record).

But better, start off with a large-cap or go-anywhere fund. Pick up a few from Franklin India Bluechip, HDFC Equity/Top 200, UTI Equity/Dividend Yield, Birla Sun Life Front Line Equity, ICICI Prudential Focused Bluechip Equity and DSP BlackRock Opportunities. All of these have established track records and are backed by sound investment process/talented fund managers.

Among smaller fund houses (though these funds are not any less than their bigger peers), look at Quantum Long Term Equity, Parag Parikh's fund or Mirae Asset's large-cap fund.

If I had to pick two, I would select HDFC Top 200 and Quantum LTE.
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Old 19th July 2014, 00:38   #581
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Hi everybody
Watching a rerun of Business tonight on ETNOW tv channel saw this bit of news about debt funds taxation.We will have to wait until there is an official clarification.
They may revert to 10% with certain conditions.
http://economictimes.indiatimes.com/...w/38606875.cms

Need help in choosing tax savings funds for my daughter.My first picks were HDFC and Canara Robeco . Would now like to avoid HDFC and recently C.Robeco has not been performing well.
On 17/6/2013 I bought Axis tax saving fund.In absolute terms it has given a return of(as on 14/6/2014) 49.70% and annualised 50.37. So that would be my first choice. Any other? At 25641 sensex is it the right time? No SIP only lumpsum.
Thanks a lot.
Regards
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Old 19th July 2014, 04:56   #582
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Just had a quick glance at Axis's tax saving fund. Robust performance till now (though I'm not clear about what investment philosophy it follows). But I would be cautious about the relatively short time it has been in existence (a highly one-dimension investment process could be tested under a severe downturn).

Also, look at DSP Taxsaver and Franklin Taxshield.
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Old 19th July 2014, 07:39   #583
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Default Re: The Mutual Funds Thread

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Originally Posted by dre@ms View Post
Went through guide of Moneycontrol and it suggested to go for Diversified Equity for a beginner. And as suggested by you, I have also picked up a fund from small and mid cap. Is this ok for a beginning.
1. ICICI Prudential Exports and Other Services Fund (G)
2. SBI Magnum Midcap Fund (G)
In my opinion, as you are new to equity stuffs, start investing in a hybrid fund. I think Moneycontrol might have suggested the same. You can go with HDFC Balanced Fund or ICICI Balanced Fund. You may start investing Rs.2000 in one of this fund. Once you are habitual with the ups and downs of stock market, start investing in a large cap fund from another fund house. As your earning increases, increase the savings as well. Add a large and mid cap fund and a small cap fund later. Overall a mix of 5-6 good funds will be sufficient for you.

Make sure that you have sufficient insurance coverage. If you have some savings kept in the bank, park them in a good liquid fund.

If you are investing in a mutual fund, go to fund house's website/office directly and do the investment. It will give you a slightly better return.

If you need more inputs, please share your doubts here.

Both the funds you have chosen may be good funds but may not fit to your requirement.

Last edited by MaxTorque : 19th July 2014 at 07:48.
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Old 19th July 2014, 12:21   #584
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Originally Posted by nazimk24 View Post
Just had a quick glance at Axis's tax saving fund. Robust performance till now (though I'm not clear about what investment philosophy it follows). But I would be cautious about the relatively short time it has been in existence (a highly one-dimension investment process could be tested under a severe downturn).

Also, look at DSP Taxsaver and Franklin Taxshield.
I presume you mean Axis Long term equity fund which is a ELSS fund. However, Reliance Tax saver is also a very good 4* ELSS fund and better returns than Axis Long term Equity
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Old 19th July 2014, 13:45   #585
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Originally Posted by swiftnfurious View Post
I would wait for experts to approve from those; but I think you can NOT go wrong with SBI Magnum. This is being discussed on the last two pages IIRC. Please run thru the last 5 pages too.
Ok, will check it out.

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Originally Posted by S_U_N View Post
It does not matter if you are a new-comer or not. If you have long term requirements, then put in small, mid and large cap funds, or a combination of these, purely based on your risk appetite.
My requirement is long term, but also to tackle unexpected expenses.

Quote:
Originally Posted by nazimk24 View Post
You haven't mentioned your investment horizon and whether you plan to investment through lump-sum or via SIPs (the latter being more preferable).

If you're looking to invest for anywhere less than five years, don't look at equity funds at all. While my own suggestion would be: equity funds should be invested into for seven-years plus.
Now what is this SIP and if investing less than 5 years, what do you suggest.

Quote:
Originally Posted by MaxTorque View Post
In my opinion, as you are new to equity stuffs, start investing in a hybrid fund. I think Moneycontrol might have suggested the same. You can go with HDFC Balanced Fund or ICICI Balanced Fund. You may start investing Rs.2000 in one of this fund. Once you are habitual with the ups and downs of stock market, start investing in a large cap fund from another fund house. As your earning increases, increase the savings as well. Add a large and mid cap fund and a small cap fund later. Overall a mix of 5-6 good funds will be sufficient for you.

Make sure that you have sufficient insurance coverage. If you have some savings kept in the bank, park them in a good liquid fund.

If you are investing in a mutual fund, go to fund house's website/office directly and do the investment. It will give you a slightly better return.

If you need more inputs, please share your doubts here.

Both the funds you have chosen may be good funds but may not fit to your requirement.
Point taken. Will look out for some Hybrid fund. Sorry for the noob question, but this investment of 2000 is per month or one time.
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