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Hi Experts , I also I have the same query . looks like Zerodha also opened a platform now for direct investing https://coin.zerodha.com/

Currently I am struck with ICICI direct . Any idea to avoid losses during switch to direct funds .

As others mentioned, growth plans work best. Mutual fund dividends have always been smoke and mirror tricks. Under some older tax treatments, dividend plans may have been better. But now they are tax inefficient.



All these platforms let you invest in regular and direct plans. But why would you use them for regular plans? Regular plans have distributors and your distributor should help with the investment process. Make them earn their commissions! That said Cams and Karvy can deal only with the respective AMCs that they are RTAs for. MFU is more common and covers most AMCs, and definitely all the big AMCs.



Another rule for mutual funds - stay away from holding them in demat form. It does not make sense at all. As for switching from regular to direct plans, there are many ways to do this. Here is a summary from by blog post. https://srinivesh.in/blog/switching-...-mind-the-tax/



Tax efficient ways to switch from regular to direct

• If your funds are doing better than the value as of Jan 31, 2018, do enough switches to use up the 1 lac per year allowance.
• If your funds are near the Jan 31 values (or even slightly below) you can switch them out in one go.
• If your funds are well below the Jan 31 values, you may want to switch them and carry forward the capital losses, or adjust them against other capital gains.
• If your corpus is quite large, say greater than 30 lacs, you may want to do the switch in one year so that you don’t miss out on the additional returns from direct funds. The trade-off will depend on three factors
  • Your current corpus in regular plans
  • Your capital gains as of Jan 31, 2108
  • Your funds’ difference in returns between regular plans and direct plans

Switching from regular plans to direct plans is a very important and beneficial step for investors. Just ensure that you do it in a tax-efficient way.

Mod Note: Please avoid using external editors. Use the forum editor itself for formatting. Thanks!

Sorry, I mean "direct" when I wrote "Regular". I will go with MFU.

Why stay away from mutual funds in demat form?

You can refer to following article https://www.moneycontrol.com/news/bu...t-1025026.html to get a perspective on this topic.

Hi,

I foresee a requirement 5 years down the line to renovate my home. My objective to accumulate around 10L. I can only make weekly/monthly installments, so FD is out of the way. RD remains my only reliable go-to option. But before I zero on it, I would like to explore Debt MF's or similar kind. Please advise me on this.

Quick background: I am a MF investor for about 3 years now. Initially started off with ELSS funds and eventually spread wings towards other equity funds. I have a portfolio of around dozen funds from several AMC's. I own large, multi and small cap funds. Of course over the period of last one year most of them have run into losses. So, in general, I am a little skeptical of investing this amount on them. My risk appetite isn't very high with regards to this investment.

The estate planning and advisory bits don't make any sense. And Zerodha Coin offers direct plans with zero transaction charges.

To get to 10L in 5 years, you need to invest Rs. 14,000 per month. I would recommend investing Rs. 5,000 per month each in these 3 funds:

HDFC Overnight Fund
Aditya Birla Sun Life Banking & PSU Debt Fund
SBI Magnum Gilt Fund

Your money in the above portfolio will be safer than investing in a bank FD. Overnight fund is equivalent to keeping money in savings account, but you earn 6 to 7% per annum. Investing in banking & PSU funds is equivalent to investing in 3 year bank FDs - expect around 8% per annum. Investing in Gilt funds is equivalent to investing in long duration RBI bonds. Expect between 8% to 10% per annum, but this primarily depends on how smart the fund manager is.

Net net, this portfolio should offer 8% per annum helping you reach your 10L goal.

Hi,

I have some surplus funds and wanted to seek advice from experts here about my investment options. I have some thoughts about the economy and I will highlight them here so that people can assess my risk taking ability and give me appropriate advice. So here are my thoughts:

1) Indian equity markets are close to peak. There are not enough positive catalysts to take the market higher.

2) Even globally, growth is unlikely to surprise positively. US economy might be strong now but it is tough to keep growing from a large base.

3) Even if the US/China trade disputes are resolved, I do not think it will be a material positive for equity markets.

4) In India, the results of the general election are unlikely to influence the time horizon for my investments i.e. I am not employing my surplus funds to gamble on the outcome of the elections.

5) Volume growth across FMCG, Auto companies are near cyclical high. Consumption in urban areas is getting saturated. I think the lack of volume growth might drag down equity markets.

In short, I think we are at the peak of the cycle there is higher probability of going downwards as I do not see any positive catalysts for taking us higher. Given this outlook, I am thinking of putting money into fixed income while my equity oriented SIPs continue. Here are my reasons:

1) If the outlook on equity market worsens, people will first shift into debt markets. This initial inflow of money should fetch better returns from debt markets as compared to equity markets

2) If economic cycle slows down, the RBI might decrease rates in order to support the economy. As far as my understanding goes, decreasing rates should be good for debt prices.

In a way, I am trying to become defensive now rather than aggressively betting on already high equity markets. Given this outlook, can some suggest me some good fixed income products to invest?

Fixed deposits at banks are giving returns of around 7.2% on a pretax basis. If my gut feel about the economy turns into reality, even liquid funds might return 8-10% (correct me if I am wrong here). I am satisfied with 10% returns but I think if I can stretch it to 12% with any other fixed income instrument, I should go for it. Can people suggest any fixed income instruments which I can consider?

It is tough to make predictions like that. Rather than invest in fixed income based on certain theories, make investment in fixed income a regular affair. If you have Rs. 20,000 per month as SIP in equity MFs, invest Rs. 20,000 per month in debt MFs too.

Better idea -> maintain 50:50 weightage between equity MFs and fixed income based on current portfolio value. That way, you get to exercise your brain cells too.

- Let' say you have Rs. 10 Lakhs in equity MFs (current value, not invested amount) and Rs. 9 Lakhs in fixed income (savings account + FD + debt MFs + PPF + money back insurance etc)
- Since equity to fixed income ratio is skewed towards equity, invest in debt MFs only - till fixed income portfolio value reaches the equity portfolio value.
- Let's say there is minor crash this year, and your equity portfolio value drops to Rs. 8 Lakhs (down 20%). Now, your equity portoflio value is lower than debt portfolio value
- Stop your debt investments and pour money into equity MFs till equity:debt ratio reaches 50:50

This way, you will "train yourself" to invest in stocks during bear markets or market corrections. Doing this with discipline can give above average returns, despite having 50% in fixed income.

All,

I would like to start an SIP (ELSS for tax benefits) for about 5000rs per month. I have zero knowledge on MF, SIP, ELSS etc.,
Can someone point me in the direction where I can understand this, dos and don'ts, how to choose etc.,?

TIA

You can start off with the following

https://www.valueresearchonline.com/..._medium=vro.in

https://www.amfiindia.com/investor-c...tual-fund.html

There are a number of blogs online in addition which should help you get started. Once you have the basics then you should decide what variant of the product works for you. Its best not to start with a variant (ELSS) in mind even before you understand the product (MF)

Go through this thread as well, its fairly educative

How does joint accounts work on MFUtility? Do you create 2 CANs for 2 holders separately? How do you combine them into a joint account?

Dear carboy,
I haven't opened a joint account, hence don't know about how to do that. Sorry that I couldn't be of help.

Regards,
The Rationalist.

Great piece of advice. Should we consider PF amount also in the debt portfolio?

Yes, Employee Provident fund balance too is a part of your fixed income portfolio. Maintain an Excel sheet, check your "debt to equity" ratio once a month and then decide where to invest. Typical volatility (either up or down) of an equity portfolio is around 4% per month on an average.