[graaja]

Originally Posted by SoumenD

Am invested in this since last 8 months. Selected it seeing the historical growth but as my luck goes annualized returns currently stand at 1.06%

8 months is a relatively short period to judge the returns from a MF. This will also have to do with the big correction that happened in the market a few months back. You can get a better picture if you stay invested a little longer and compare it with similar funds.

Originally Posted by SoumenD

Question to experts: HDFC balanced fund is getting converted to Hybrid fund. Is it advisable to continue with it? As of now there's a window wherein if we want, we can exit without any exit-load. I am invested in it since around 10 months and the returns are okay-ish at 7.xx % currently. Not too much of a market guy so hoping for some suggestions?

I don't think you need to worry about this. A hybrid fund is also almost like a balanced fund and will have similar risk profile. See below article on the two funds that are being merged to form the hybrid fund, and the excerpt from the article.

https://economictimes.indiatimes.com...w/63925730.cms

Mutual fund advisors say investors in HDFC Balanced Fund need not worry about the change, but Premier Multi-cap investors should re-look at their investment. “For the multicap investors, it is a clear fundamental attribute change. So, they should go through their portfolio again. You can’t replace a multicap scheme with a balanced fund. But for the HDFC Balanced fund investors, there is no need to worry,” says Vishal Dhawan, CFP, Plan Ahead Wealth Advisors.

So, I would just continue with the investment. You could also compare the portfolio of the existing balanced fund and the new hybrid fund to see if there is a very big change in percentage of holdings in equity. If there is a big change, then you can consider changing to a different fund.

[strawhat]

Originally Posted by DigitalOne

Low NAV and high performance is a contradiction. If two hypothetical funds A and B started at the same time, the better performing fund would have a higher NAV.

So low or high NAV is not a good barometer to judge.

When I said low NAV, I actually meant lower NAV. Lower than Reliance or Birla Sun Life Small/Midcap funds.

Talking of performance, it is rated a top performing fund on moneycontrol. Not all funds that have low NAV are non-performing ones. You can buy more units for the same price.

[DigitalOne]

Originally Posted by strawhat

Talking of performance, it is rated a top performing fund on moneycontrol. Not all funds that have low NAV are non-performing ones. You can buy more units for the same price.

It might be a top performer or non-performer, but as I said NAV is not a barometer to judge that. The rate of increase/decrease of NAV is the indicator for performance, not absolute NAV.

Read more here

"Buying more units" is a fallacy. It doesn't lead to more returns.

[graaja]

Originally Posted by strawhat

When I said low NAV, I actually meant lower NAV. Lower than Reliance or Birla Sun Life Small/Midcap funds.

Talking of performance, it is rated a top performing fund on moneycontrol. Not all funds that have low NAV are non-performing ones. You can buy more units for the same price.

Actually, the absolute value of the NAV or the number of units held does not matter with Mutual funds. What matters is the % returns the fund gives.

Let's say you bought 20 units of a Fund A at an NAV of 500 INR, and 1000 units of Fund B at an NAV of 10 INR.

If after a year, Fund A has a growth of 15% and Fund B has a growth of 10%, the NAVs would be 575 INR and 11 INR respectively. And you would be holding 11500 INR in Fund A and 11000 INR in Fund B.

So, the % growth is what matters, not the absolute NAV.

[roby_dk]

Originally Posted by graaja

Actually, the absolute value of the NAV or the number of units held does not matter with Mutual funds. What matters is the % returns the fund gives.

Let's say you bought 20 units of a Fund A at an NAV of 500 INR, and 1000 units of Fund B at an NAV of 10 INR.

If after a year, Fund A has a growth of 15% and Fund B has a growth of 10%, the NAVs would be 575 INR and 11 INR respectively. And you would be holding 11500 INR in Fund A and 11000 INR in Fund B.

So, the % growth is what matters, not the absolute NAV.

Graaja thanks for clarifying this. It seems I got the answer to one of my question asked earlier in this thread. I invested as a newbie in elss mutual fund 2 years back but was wondering how to calculate my return amount after staying invested for several years.

My question was straight how will I get to know how much wealth I have accumulated from my funds. Is it quite simple calculation which will be reflected in my monthly statements(eCAS) or there is some other formula. I was confused with the term power of compounding mostly associated with long term mutual funds. I thought compound interest value is calculated separately which I will come to know only when I will withdraw after years. From above post basically the NAV value will increase over a time and that is the return percentage we usually see in money control.

I started sip of 30k in Axis long term direct growth and 10k in Reliance Tax saver direct growth plan both in ELSS category. Again a newbie question I usually see that there are other categories where return is usually high like Large cap and Mid/small cap in money control mobile application. I am interested in them and want to know how to buy these funds? Pros n cons vs ELSS as I invested in them quite comfortably.

BTW I have a hdfc demat account opened for my wife last year but didn't do any transaction.

[aadya]

Originally Posted by roby_dk

I started sip of 30k in Axis long term direct growth and 10k in Reliance Tax saver direct growth plan both in ELSS category. Again a newbie question I usually see that there are other categories where return is usually high like Large cap and Mid/small cap in money control mobile application. I am interested in them and want to know how to buy these funds? Pros n cons vs ELSS as I invested in them quite comfortably.

Hi Iam not an expert but a fellow investor with 15 years of MF investments behind me. ELSS are specially designed equity funds(investing in share market) meant to be a TAX saving instrument. It has a lock-in period of 3 years. Since these are locked in there are some set rules which prevent too much churning by the fund managers and hence the returns usually are moderate.

Some of the other funds with mid and small cap exposure has aggressive outlook and would give higher returns at the cost of exposure to higher risk. Index funds are supposed to be very good funds, for the beginner investor. requiring less management by both the investor and the fund manager. The funds management costs are very low and returns are acceptable for the risk taken. Even today I feel I would be better off invested in an index fund rather than spending huge effort and time in deciding other types of funds.

[DigitalOne]

Originally Posted by aadya

ELSS are specially designed equity funds(investing in share market) meant to be a TAX saving instrument. It has a lock-in period of 3 years. Since these are locked in there are some set rules which prevent too much churning by the fund managers and hence the returns usually are moderate.

Index funds are supposed to be very good funds, for the beginner investor. requiring less management by both the investor and the fund manager. The funds management costs are very low and returns are acceptable for the risk taken. Even today I feel I would be better off invested in an index fund rather than spending huge effort and time in deciding other types of funds.

Another reason, in my opinion, why ELSS underperform is that fund managment is given to junior fund managers. This is not the case with every fund house but yes, it is an usual case. The fund sizes are too small to attract big star fund managers.

Index funds are good for all investors. But the problem is almost all index funds are based on the Sensex or Nifty 50. So you get only large cap exposure. It is better to substitute most large-scale funds with index funds. Keep actively managed funds for mid/small cap.

[graaja]

Originally Posted by roby_dk

...
My question was straight how will I get to know how much wealth I have accumulated from my funds. Is it quite simple calculation which will be reflected in my monthly statements(eCAS) or there is some other formula.

...

I started sip of 30k in Axis long term direct growth and 10k in Reliance Tax saver direct growth plan both in ELSS category. Again a newbie question I usually see that there are other categories where return is usually high like Large cap and Mid/small cap in money control mobile application. I am interested in them and want to know how to buy these funds? Pros n cons vs ELSS as I invested in them quite comfortably.

BTW I have a hdfc demat account opened for my wife last year but didn't do any transaction.

In case of SIPs, it is very difficult to calculate the annualized returns as each installment of the SIP will have it's own growth percentage. Best is to check the fund statement that should provide you with the average annualized returns.

I would not invest in ELSS funds in the form of SIP. ELSS funds have a 3 year lock in period and I believe each installment of your SIP will be released only after years in a pipeline. So for SIPs, invest in regular open ended funds. Large cap funds usually have lower risk and lower returns and small cap funds will have the highest risk and highest returns. Depending on your risk appetite, you can split your investments into these categories.

Also for investing in mutual funds, you do not require a demat account. You could just close it and save the unnecessary annual charges that the bank would deduct.

[DigitalOne]

Originally Posted by graaja

I would not invest in ELSS funds in the form of SIP. ELSS funds have a 3 year lock in period and I believe each installment of your SIP will be released only after years in a pipeline.

One of the major objectives of an SIP is to avoid market-timing. Thus even for ELSS, you should opt for SIP. Just plan your total ELSS investments in April; Divide by 10; start an SIP from April to Jan next year. Most of companies take IT investment proofs in Jan/Feb. So you can submit your ELSS investment easily. Keep the SIP date in first week of the month, so your Jan/Feb imvestment gets counted.

This is a better strategy than doing lumpsum in a panic mode in Jan/Feb.

3 years down the line after your lock-in for each investments is over, you can also do a SWP from April; so you can recycle the same amount.

[graaja]

Originally Posted by DigitalOne

One of the major objectives of an SIP is to avoid market-timing. Thus even for ELSS, you should opt for SIP. Just plan your total ELSS investments in April; Divide by 10; start an SIP from April to Jan next year. Most of companies take IT investment proofs in Jan/Feb. So you can submit your ELSS investment easily. Keep the SIP date in first week of the month, so your Jan/Feb imvestment gets counted.

This is a better strategy than doing lumpsum in a panic mode in Jan/Feb.

3 years down the line after your lock-in for each investments is over, you can also do a SWP from April; so you can recycle the same amount.

I did not mean about timing the market. My point was the lock-in on each SIP resulting in lower flexibility in withdrawal. In a open ended fund, if you wanted to withdraw all the amount for an emergency, you could do it subject to only exit load. In ELSS it is not possible.

In fact I don’t use ELSS at all - SIP or lump sum, for tax saving.

[JMaruru]

Originally Posted by JMaruru

But for Auto-SIP deduction they ask us to get 'PayEezz mandate' done. I thought opening the account would suffice for SIP, but you need this PayEezz mandate setup for SIP deduction from the bank. I was NEVER told about it when i went to open MFU account at Karvy.

Could anyone here advise me on how to go about getting this 'PayEezz Mandate' for SIP investments at MFU. I thought getting the online access would allow me to go ahead with SIP, but came to know PayEezz is must for bank authorization.

The helpline is NOT much of help! I would like to escalate this higher up the chain. If there are any higher management contacts, please do provide!

[aadya]

Originally Posted by JMaruru

The helpline is NOT much of help! I would like to escalate this higher up the chain. If there are any higher management contacts, please do provide!

https://www.mfuindia.com/PayEezzForms

Visit this link, the instructions are simple and clear. I got it done, for myself and 3 members in my family, through this. It was a breeze. There was no need to escalate. Ping me if there are any specific issues.

[Latheesh]

Originally Posted by graaja

Reliance Smallcap fund is a good fund to consider. Last I know, they closed lumpsum investments and are open only to SIP.

Originally Posted by strawhat

In addition you might also want to look at L&T Emerging Businesses Fund (Direct Plan).

Thanks @graaja and @strawhat. I will check these two and start SIP (small amount) as I have SIP in following funds already (all suggested by bhpians :-) )
ICICI Fucussed Blue Chip
Mirae Asset emerging blue chip
Franklin India Smaller companies
ICICI Dynamic Plan

[JMaruru]

Why is NOT the direct plan type listed in MFUOnline? I am looking for MOS Multicap 35 Direct Growth, and I could NOT find it listed anywhere in MFUOnline.

Am I missing anything out here. Please advise!

[sgiitk]

A word of warning. Franklin Templeton delete a fund entry as soon as it is encashed. And FT stuff has to be retrieved only by the banker.