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-   -   The Mutual Funds Thread (https://www.team-bhp.com/forum/shifting-gears/105873-mutual-funds-thread-291.html)

RBI cap is on investment amount (in USD) and not on present market value. The re-opening was due to redemptions which freed up some allocation within the RBI cap.

Either ways, its open for fresh investments. That was the point.

They stopped again w.e.f. 10th March 2023.

Correct for lumpsum not for SIPs. SIPs are still allowed. I just did some lumpsum last week and was planning to do more this week. :disappointed

My IDFC MFs got updated as Bandhan MFs. Apart from name and logo, rest remains same for the time being. Any thoughts from the experts here? Is it time to move away?

The takeover has been in the process for some time. Bandhan group has mentioned that they would keep the team as is, and so far that has been the case. If you see changes in the team, you may need to consider the change; else there is no need to act now.

I would add a finer point here. Most Indian ETFs have a mutual fund version. So when we talk about MO N100, we can talk about the ETF first - it directly holds the N100 stocks, and has shown a large tracking error. Almost every other N100 fund from India, including Kotak, use US-based ETFs. This can be more efficient. Since there are many N100 funds in India, MO would come last in the list due to this reason.

The FoF term is used for many situations.

A new proposal in the finance bill - regarding debt funds.

https://www.cnbctv18.com/personal-fi...l-16251041.htm

I came across this on Twitter. Can someone please help me understand the impact by naming any of the popular funds in this category?

Considering inflation and taxation you'll be hardly left with any gains in debt funds now, in fact you might mostly incur losses on debt funds (considering inflation).

This is ridiculous to say the least - both the proposal itself and the manner in which it was brought as an amendment at the last moment and passed without discussion. If it was brought up in the main budget, by now it could have been deliberated (in and outside the house) before passing.

FDs / bank accounts with higher interest rates would be preferred to Debt / Liquid funds. Only difference is you pay tax on accrued interest on FD and pay tax only on withdrawal in debt funds.

Hello BHPians,

I am in a dilemma, and what I don't have is TIME.

I want to invest 96k ASAP (before 1st April) on behalf of my wife so as to save on tax.
She has already invested 36k in ELSS and 20k for a medical insurance (for her parents) in this FY.

Now, I don't know if I should put all of this 96k in her PPF or should I diversify in lets say 70:30 ratio between PPF:ELSS?

-TIA,
NA

Investing large amount in one go in Equity / Equity MF is not a great idea. Equity investment should be spread over time. So for now I'd think a good share in PPF.

But later, when you are not under time pressure, decide it basis your asset allocation. Treat PPF like a Govt security (factor in safety + EEE benefit etc) and decide % allocation for it. You can always re-balance it over time (i.e. if you think your PPF is becoming larger than you'd like it to be, next year put less in PPF and more in ELSS etc.).

36K ELSS comes under 80C and parental insurance comes under 80D.

Please check any other 80C options already availed like employee contributions towards PF etc.

Putting big amount into equity may not be advisable, so you may split and see some debt options like 5 year FD since the interest rates are high nowadays.

Looks like International funds also come under same ambit now as debt funds. So for those as well you pay tax as per slab.

I was investing in international funds for diversification and $ cost advantage. But with indexation gone, wonder if it makes any more sense now to continue with this?

Having said that, now I wonder what stops the government from extending the same love to Equity MFs as well? Matter of time before they totally remove LTCG altogether. :disappointed

I would give a longish reply. Before the finance bill, there were two kinds of mutual funds when it came to taxes.

1. Equity funds that have 65% or more in Indian equity. These (like direct equity) had more favourable capital gains taxes than other capital assets.
2. All other funds - though we use debt funds informally, this includes gold, multi-assets and international equity

The finance bill has split 2 into two further categories

2a) This pretty much has all the funds - Funds that have <35% in Indian equity
2b) Funds that have between 35% and 65% in Indian equity

2b is still taxed like other capital assets. 2a would be taxed in a brand new category of capital assets - capital gains are always included in your income and there is no concept of long term.

For an earlier question, 98% of non-equity funds in India would fall under 2a. The handful of conservative hybrid funds, and some multi-asset funds would fall under 2b.

It is possible that some AMCs would tweak some of their funds to make them part of 2b - but this scope is limited.

The change makes international funds pretty much unsuitable. Debt funds still have some advantages - though not so major - over FDs. One very key advantage is this: In a FD spanning financial years, the interest for each FY is taxed in that FY. While in a debt fund, it would be taxed only when you withdraw.