[blorebuddy]

Originally Posted by shipnil

Need some advice. I had maintained few funds in the Arbitrage category due to their equity fund treatment and returns closer to liquid funds. But after the LTCG on equity MFs, I am thinking of liquidating these before 31 March as most of them have completed 365 days. As far as my understanding of the rule is, there would be no tax liability on these if I do the transactions before 31 March 2018, irrespective of the capital gain amount.

What I am not sure of is where to park these? Before the LTCG rule, I had few STPs which were transferring amount from arbitrage to balanced. If I put all of the redeemed amount in balanced, it will be one single bit investment into a balanced fund. I am not too fond of this approach. I wanted to have better returns while slowly moving the funds into other equity schemes. Any suggestions?

I do not think you need to redeem because of LTCG. With this proposed LTCG, 31 Jan NAV will be considered as purchase price if this is higher than your purchase price. If this is lower then your purchase price will be considered to calculate LTCG. So there is no need to sell now to avoid the LTCG.

I think Arbitrage funds are considered to be tax efficient. Dividend option has 10% is the dividend distribution tax for equity schemes.

So I would suggest you to continue your current investment in Arbitrage and then invest in to equity funds. Alternate option is move them to liquid or short term debt funds. There is no need though if you ask me.

[Saanil]

Hi Guys,

I am not sure if this has been discussed here but what is the opinion of people on buying ETF's? We are planning to start doing SIP's and are contemplating which funds to use. One of my colleagues suggested buying ETF's as they have lower expense ratios. We have a ICICI Direct account - is it possible to buy ETF's from there?

The objective here is to invest money with the lowest amount of expenses - we do not mind tracking the NIFTY. Any options apart from ETFs?

[Kulin_Shah]

Originally Posted by swiftnfurious

Just realized Zerodha has the Direct funds. Since I have a trading account, am going to use it to buy the funds. Looking at the past performances in Money Control, for ELSS, I'll go for these funds via SIP.

1. IDFC Tax Advantage
2. Motilal Most Focused Long term fund
3. Principal Tax Savings
4. BOI AXA Tax Advantage

I have been investing in ELSS for many years now. I have 6 favourites:

1. Aditys Birla Sun Life
2. DSP Black Rock
3. Frankline Templeton
4. HDFC
5. Reliance
6. UTI

I select based on CRISIL rankings. I also compare performance over a long period of time, AUMs, Company financials, company credentials. etc.

I believe if it is a small company it will have higher attrition of fund managers. New guys will come, learn, and scoot to a better place and my investment will suffer in the process.

I have experience in MFs for 20 years.

Originally Posted by swiftnfurious

Yep. Have been investing in ELSS since 2005. I use this as a primary investment for tax savings. For the last 2-3 years, I was on DSP Black Rock & Axis long term fund, but these are no where near the above 4 in performance in the last 3 years or so and hence planning to invest into these starting April.

Haven't finalized the SIP across these yet, but think 5K each into top 2 & 2.5K each into last two.

Just curious - do we have any lock in period for VPF?

My one tranche in DSP ELSS just matured. They gave me 66% return on my investment. Aditya Birla Sun Life gave 71%. I feel one must never de-invest from DSPBR.

Originally Posted by swiftnfurious

Yep. Have been investing in ELSS since 2005. I use this as a primary investment for tax savings. For the last 2-3 years, I was on DSP Black Rock & Axis long term fund, but these are no where near the above 4 in performance in the last 3 years or so and hence planning to invest into these starting April.

Haven't finalized the SIP across these yet, but think 5K each into top 2 & 2.5K each into last two.

Just curious - do we have any lock in period for VPF?

There is a lock-in period of 5 years before which if the money is withdrawn from the VPF the tax savings on the contribution earned from it, needs to be paid. While Equity linked saving schemes has a lock-in period of 3 years.

Originally Posted by SoumenD

I just started investing in MFs(through SIP) around a year back.

Performance looked good till a day before budget but since the budget day they have gone downhill and I notice most of the funds are in red now.I know for good returns one has to be patient and I will be waiting for another year atleast.

But out of curiosity, is this the case across all funds? I am currently invested in L&T emerging business fund, SBI cluechip regular plan & HDFC balanced fund direct plan. All growth options.

I guess it is nothing to do with budget. It is just the global trends. The fact is that you have entered the MF when the markets had almost peaked. And hence there may not be any upside remaining. The markets are completely overheated and on the verge of a major correction.

Please read this article in Business Standard

http://www.business-standard.com/art...1100765_1.html

I am considering switching all my unlocked MF investments on to Liquid funds for a short while till the storm passes.

[Saanil]

Originally Posted by Kulin_Shah

I have been investing in ELSS for many years now. I have 6 favourites:


I am considering switching all my unlocked MF investments on to Liquid funds for a short while till the storm passes.

Anything you would suggest for SIP purpose? Aim is to invest for the long term and invest surplus funds. We are not worried about lock-in etc. We have one active SIP in SBI Blue Chip.

[pankaj_sachdeva]

Needed some advise:

I have been investing in mutual funds from last 8 years via SIP. HDFC Top 200 was the first fund that I invested in and the Annualized Rate of Return stands at 13.88%. The fund is now downgraded to 3 stars.

I am planning to stop investing in HDFC Top 200, withdraw the invested amount and invest as Lump sump to Motilal Oswal Multicap 35 and subsequently start SIP in Multicap 35.

Would this be a wise move? Would this move at this point, also help in LTCG implications?

Thanks in advance

[saildrive]

Was watching an interview on one of the business channels where one of the speaker mentioned about FMP plans and how Tax deduction doesn't impact the value at the time of maturity.

He also compared the same how LTCG Tax will play a big role going forward when it comes to Mutual Fund investment.

I have about 10L which I withdrew on maturity from MF houses in Feb this year. However am not sure where I should invest the same to get decent returns. I am 44 now. Would like some sound advice on the same.

A bit confused whether it should be FMP / FD / MF (SIP mode)..

[blorebuddy]

Originally Posted by pankaj_sachdeva

I am planning to stop investing in HDFC Top 200, withdraw the invested amount and invest as Lump sump to Motilal Oswal Multicap 35 and subsequently start SIP in Multicap 35.

Would this be a wise move? Would this move at this point, also help in LTCG implications?

Thanks in advance

I agree. If you want to switch funds, this is appropriate. You are also planning to start SIP so you are going to continue to invest if the market is going down.
However you need not to do this for LTCG perspective. There is no impact because of "Grand Fathering" of LTCG

Originally Posted by saildrive

I have about 10L which I withdrew on maturity from MF houses in Feb this year. However am not sure where I should invest the same to get decent returns. I am 44 now. Would like some sound advice on the same.

A bit confused whether it should be FMP / FD / MF (SIP mode)..

I can only comment on this part. If your investment horizon is 7-10 years then MF through SIP is the best to get inflation beating returns. Assuming you are not planning to retire before this period (7-10 years)

[Kulin_Shah]

Originally Posted by Saanil

Anything you would suggest for SIP purpose? Aim is to invest for the long term and invest surplus funds. We are not worried about lock-in etc. We have one active SIP in SBI Blue Chip.

You can consider various options:
ELSS + Diversified + Balanced + Debt distributed.

Have you considered NPS? 5K per month investment in NSC can also be considered on roll over basis after every 5 years.

Originally Posted by pankaj_sachdeva

Needed some advise:

I have been investing in mutual funds from last 8 years via SIP. HDFC Top 200 was the first fund that I invested in and the Annualized Rate of Return stands at 13.88%. The fund is now downgraded to 3 stars.

I am planning to stop investing in HDFC Top 200, withdraw the invested amount and invest as Lump sump to Motilal Oswal Multicap 35 and subsequently start SIP in Multicap 35.

Would this be a wise move? Would this move at this point, also help in LTCG implications?

Thanks in advance

Coming out of HDFC to enter Motilal?! Interesting. You can consider switching to another scheme in HDFC itself.

[pankaj_sachdeva]

Originally Posted by Kulin_Shah

Coming out of HDFC to enter Motilal?! Interesting. You can consider switching to another scheme in HDFC itself.

I was thinking to move the investment to a Multi cap fund and Motilal has exposure to around 30% of the same holdings as HDFC Top 200. Would you recommend Aditya Birla Sun Life Top 100 Fund or Frontline equity ?

Originally Posted by blorebuddy

I agree. If you want to switch funds, this is appropriate. You are also planning to start SIP so you are going to continue to invest if the market is going down.
However you need not to do this for LTCG perspective. There is no impact because of "Grand Fathering" of LTCG

Thank you for the response. All my investments in MF are through SIPs and I intend to keep them that way. Would you think, the fund house choice is appropriate for the switch (From a Large cap to Multi cap)

[Kulin_Shah]

Originally Posted by pankaj_sachdeva

I was thinking to move the investment to a Multi cap fund and Motilal has exposure to around 30% of the same holdings as HDFC Top 200. Would you recommend Aditya Birla Sun Life Top 100 Fund or Frontline equity ?



Thank you for the response. All my investments in MF are through SIPs and I intend to keep them that way. Would you think, the fund house choice is appropriate for the switch (From a Large cap to Multi cap)

Aditya Birla Sun Life Top 100 Fund would definitely be better. Trusted MF house for 20 years. They just gave me 71% absolute returns on my one tranche.

[blorebuddy]

Originally Posted by pankaj_sachdeva

Thank you for the response. All my investments in MF are through SIPs and I intend to keep them that way. Would you think, the fund house choice is appropriate for the switch (From a Large cap to Multi cap)

The general advise is to invest in the Large caps considering the current market condition. However considering your overall portfolio on large caps, you can decide to balance the mix.

Only concern on MOs M35 is it is relatively new fund and have not seen a crash like 2008. Have this in your evaluation before investing.

Originally Posted by Kulin_Shah

Aditya Birla Sun Life Top 100 Fund would definitely be better. Trusted MF house for 20 years. They just gave me 71% absolute returns on my one tranche.

I agree this would be a better choice considering the tried and tested fund across market cycles over long duration

[Gansan]

Will it be possible to park retirement funds in MF to beat bank interest rates? Without risking the capital?

[Kulin_Shah]

Originally Posted by Gansan

Will it be possible to park retirement funds in MF to beat bank interest rates? Without risking the capital?

This is a difficult one. One may tend to take risk in the equity market for earning higher profits. But it is a very high risk especially with retirement money. Normally people say one can invest a percentage equal to 100 minus your age in equity. In your case it would be 43%. Having learned from my father I generally stick to half of that. That means 21%. That too in more balance funds with debt component as high as 70%. Actually following is what the NPS website suggests which is even more conservative.

https://npscra.nsdl.co.in/download/p...Preference.pdf

So you can park a bit in MF with more debt component. But if you are looking at beating the bank interest, then you have a lot of options: LIC Annuity with option F, NSC on five year roll over basis, KVP, RBI 8% Bonds, post office MIS with interest accruing to RD, and after 3 years you will also have an option of SCSS.

I hope this helps.

[JediKnight]

Originally Posted by Kulin_Shah

This is a difficult one. One may tend to take risk in the equity market for earning higher profits. But it is a very high risk especially with retirement money. Normally people say one can invest a percentage equal to 100 minus your age in equity. In your case it would be 43%. Having learned from my father I generally stick to half of that. That means 21%. That too in more balance funds with debt component as high as 70%. Actually following is what the NPS website suggests which is even more conservative.

https://npscra.nsdl.co.in/download/p...Preference.pdf

So you can park a bit in MF with more debt component. But if you are looking at beating the bank interest, then you have a lot of options: LIC Annuity with option F, NSC on five year roll over basis, KVP, RBI 8% Bonds, post office MIS with interest accruing to RD, and after 3 years you will also have an option of SCSS.

I hope this helps.

Can you explain how LIC option F beats bank FD ? Also how the taxation on NSC five year roll over works.

[Kulin_Shah]

Originally Posted by JediKnight

Can you explain how LIC option F beats bank FD ? Also how the taxation on NSC five year roll over works.

Interest on National Savings Certificate (NSC) is liable to tax as per the Income Tax Slabs of the Individual. However, no TDS is deducted on such interest but such interest shall be reflected in the Income Tax Return of the Individual.

Although this Interest on National Savings Certificate is taxable, this Interest is not paid to the account holder but is reinvested in NSC. As this Interest is re-invested in National Savings Certificate which is a specified instrument u/s 80C, a taxpayer can claim this amount of interest as a tax deduction under Section 80C.

So, the taxpayer will first have to show this interest earned as an income and then claim this as a deduction under Section 80C. The total maximum deduction that can be claimed u/s 80C is Rs.1,50,000 only.

Originally Posted by JediKnight

Can you explain how LIC option F beats bank FD ? Also how the taxation on NSC five year roll over works.

I have a LIC annuity which is giving 7.07% interest annually.