[abhi162]

Hello everyone, it's perfect time when this thread was bumped up. I wanted to know from fellow investors on the new tax regime on debt funds and if that has changed their view on investing in debt instruments?

I had been gradually reducing my allocation to equity as the markets ran up and even otherwise was keeping a 60:30:10 (equity:debt:gold) but that was till this tax whammy came. All the hard work in taking bets on duration vis a vis interest rate risk seems to be undone. In anticipation of interest rate cuts had been going heavy on 10 yr (const maturity) funds and it was showing results too in form of near double digit xirr. In fact had convinced my dad also for that instead of FD. But now somehow I feel it's better to just stick to FD with risk reward really not justified in taking bets on duration or interest rate risks. Hence I am planning to just switch to asset allocation funds for myself till equity markets cool down or crash and forget about debt funds. And for my father just let him relax with FDs. Do people agree to it or am I just being pessimistic about our honorable finance minister's whims and fancies.

[maverickgenius]

Originally Posted by abhi162

All the hard work in taking bets on duration vis a vis interest rate risk seems to be undone. In anticipation of interest rate cuts had been going heavy on 10 yr (const maturity) funds and it was showing results too in form of near double digit xirr. In fact had convinced my dad also for that instead of FD. But now somehow I feel it's better to just stick to FD with risk reward really not justified in taking bets on duration or interest rate risks.

May I know your thought process and analysis behind moving to FDs vs debt funds? I continue to hold GILT and long duration debt funds, and I'm also considering investing fresh capital. Won't they give better returns when the RBI eventually cuts rates (likely in 1H CY25)?

[rkgi10]

Originally Posted by abhi162

Hello everyone, it's perfect time when this thread was bumped up. I wanted to know from fellow investors on the new tax regime on debt funds and if that has changed their view on investing in debt instruments?

I had been gradually reducing my allocation to equity as the markets ran up and even otherwise was keeping a 60:30:10 (equity:debt:gold) but that was till this tax whammy came. All the hard work in taking bets on duration vis a vis interest rate risk seems to be undone. In anticipation of interest rate cuts had been going heavy on 10 yr (const maturity) funds and it was showing results too in form of near double digit xirr. In fact had convinced my dad also for that instead of FD. But now somehow I feel it's better to just stick to FD with risk reward really not justified in taking bets on duration or interest rate risks. Hence I am planning to just switch to asset allocation funds for myself till equity markets cool down or crash and forget about debt funds. And for my father just let him relax with FDs. Do people agree to it or am I just being pessimistic about our honorable finance minister's whims and fancies.

I agree with you. The taxation changes have made debt component via debt funds or trying to take bets on the interest rate cycle less efficient. It makes sense now to just keep fd as debt, and equity allocation via asset allocation funds or other equity mutual funds.

[iamgyan]

Originally Posted by TPunchKZA

Hello All,

Need Suggestion for Investment! - Lumpsum / Index Funds

Putting my mouth where my money is, you can consider investing via Scripbox. Check out the site/app. It's pretty self explanatory. I've been investing via them for 10years now and have nothing to complain. I don't actively manage stuff but they've been doing pretty well so far. To be clear, i have no affiliation with them and am just a happy user.

Their "Principle protection and growth" plan should work for you.

[vinit.merchant]

Hello experts,

Need some guidance.

I have been rethinking on the health insurance bit.
As of now I pay close to 35k for a 10L + 20L coverage. I still have time to reach the senior citizen age bracket but I do not trust the insurance guys anymore + the cost will become quite exponential as age progresses.
Hence I intend to start a health savings plan of my own and would like to put in some amount every month till I retire (keeping the current plan running). I want to do this so that I do not have to rely on the whims and fancies of the Insurance service providers when the time comes where I really need healthcare services.

I am open to suggestions and can even go for an equity oriented fund, but I am inclined towards a Hybrid or Debt fund to start an SIP. We are looking at a horizon of maybe another 7-10 years
Looking for suggestions on some good schemes.

PS:
- Just realised - a Debt oriented fund will attract 12.5% LTCG only on the gains portion, whereas an insurance premium attracts 18% GST on entire premium. Another reason to go for self savings to support future health costs.
- Having a sizeable own corpus + an affordable topup sounds like a good plan.

[TPunchKZA]

Originally Posted by VWAllstar

If you go through the previous posts, you will know why Debt Funds are better than FDs. Considering you are in your 20s, I suggest you take help of a good financial planner and chart your goals.

With just few details, it is difficult for anyone to suggest investment ideas.

If you looking to convert your current FDs, you may do so to SGBs whenever they are made available by RBI. Or go for simple debt funds or liquid funds which give marginally better profits over FDs. It is simpler from Tax calculations as well.

If I was your age and had this wiseness of investments, then I would do some percentage of SIP in Small Cap Funds and be invested for really long.

Thanks for the suggestion!

My main agenda for investment is for 2 reason

1. Long-term planning, for about 20+ years ahead.
2. Short-term planning for about 1 year so that, I can go on a solo backpacking trip outside the country or within the country with my saving expense .


Generally, my FD serves the purpose of short-term planning. I plan for the trip well in advance and once FD is mature, I use the amount for trips.

I am actually looking for a good Lumpsum Scheme as an alternative for FD so that I can make use of the FD system for the yearly payment of the LIC policy which I took last year (considering that it is only a long-term investment which I have)

Accordingly looking to start one more SIP for future plan.

Not keen on shares / Stocks, as I don't really check my investment every now and then and want to play safe.

I prefer auto payments and let the game happen while I watch.

[vijaykr]

So you're mentioning two recurring short term goals
1) travel - FD is fine for this purpose. You can also look at arbitrage funds, but if you are planning your trips in advance, then dates are known. So no point in trying to time market etc. with MFs

2) LIC premium - here too the FDs are good enough. Unless this is a term plan you are paying for, I would suggest thinking about surrendering the policy itself. The returns from endowment policy and ULIPs is not great and those premium amounts can be better directed towards MF or other investments that have opportunity for higher returns

For longer term requirements, recommend starting with index fund initally so you also get used to the market up and downs, volatility etc. And since you mention that you don't want to actively monitor and change, index funds are best suited for it

[zyksstar]

Originally Posted by Naetik30

Hi All


I always wanted to compare how my portfolio compares against say the Nifty50 or the NiftyNext50 etc. But didnt find any specific portal that did this.

I recently came across the Portfolio Analyser tool on ICICIDirect portal (thanks to my RM).

I have been using it quite regularly and find it extremely useful to analyze MF portfolio performance, especially if you have a basket of funds.

The tool shows performance of individual funds, and the overall portfolio against benchmarks like NIFTY 50.

The tool uses the NSDL CAS statement as input.

Steps to use the tool -
On ICICI Direct web portal > Portfolio tab > Portfolio Analyzer > Add Portfolio> Upload the statement (Note this will pick all your investments, not just MF)
After uploading> Select the Portfolio from the drop down (top left)> Select Equity MF in the drop down (middle right). Toggle the button to MF Equity Performance in the next section.

Here you get a tabular view of all MF holdings with performance benchmarks, and portfolio summary towards the end.

NB - not affiliated to ICICIDirect or any MF AMC. Sharing this info so others can benefit.

[sreerknair]

Originally Posted by TPunchKZA

Generally, my FD serves the purpose of short-term planning. I plan for the trip well in advance and once FD is mature, I use the amount for trips.

I am actually looking for a good Lumpsum Scheme as an alternative for FD so that I can make use of the FD system for the yearly payment of the LIC policy which I took last year (considering that it is only a long-term investment which I have)

I suggest you consult a fee only financial planner. LIC is the biggest financial scam running in India, and most of the young chaps of my generation fell for it. I am surprised your generation too is falling for it.

Below are some suggestions from my experience -

1. Do not combine life insurance and wealth creation in a single product (this is what LIC is). Returns are abysmal, and the life insurance cover is inadequate.

2. Unless I can claim Tax exemption on the interest earned in FDs (either my total income is tax exempt, or I invest in my parent's name, who are tax exempt) FDs are not good as an investment avenue for a young working professional. Its value depreciates if I consider inflation.

3. A more secure and high yielding long term debt investment is EPF / VPF. Now that employee contribution above 2.5L in taxed, up till 2.5L it is still a good investment avenue.

4. Spend what is remaining after saving, not other way around. And think twice on big ticket items, such as buying a car. Buy what I need, and not what I want.

5. More savings in the initial 10 to 15 years of my working years will make substantial improvement in financial stability and appetite for risk taking (especially in career)

6. It is best to have moderate to high equity exposure in the initial 10 to 15 years of my working years. Unless my monthly salary is very high (to the tune of 5X to 6X my current monthly expenses), it is very hard to create reasonable wealth just using debt instruments (unless I am a real estate guru)

7. If I am financially disciplined, healthy, and with a stable family, then my savings grow exponentially in the last 8 to 10 years of my working career. Many become rich in this period.

8. Ovarian Lottery is real. And if I am born to rich parents - None of the above is applicable, and my financial life is easier provided I don't destroy it, and I am in good terms with my parents .

[MightyHorse1188]

Originally Posted by TPunchKZA

Hello All,

Need Suggestion for Investment! - Lumpsum / Index Funds

Background :

I am currently Working in the IT profession, 5 YOE and earning a decent amount.

I have been reading this thread for quite a while now and got some good information too.

I have been maintaining 2 bank accounts that include 1 salary account and the other personal account. Every month I transfer X amount from my salary amount to my in savings amount. As soon as my savings account hits 6 digit figure I immediately opt for FD.

My current investment Includes
1. Nippon India multi-cap fund SIP.
2. I Already have 2 FDs worth the starting 6-digit number.

Suggestion needed for

1. 1 Lumpsum scheme. ( Also planning for index funds)
2. 1 new SIP scheme.
3. Good banks that offer great FD interest.

PS - I'm a newbie and still in my mid-20s, so kindly consider the same.

Thanks and Regards
Tanvesh !

Originally Posted by TPunchKZA

Thanks for the suggestion!

My main agenda for investment is for 2 reason

1. Long-term planning, for about 20+ years ahead.
2. Short-term planning for about 1 year so that, I can go on a solo backpacking trip outside the country or within the country with my saving expense .


Generally, my FD serves the purpose of short-term planning. I plan for the trip well in advance and once FD is mature, I use the amount for trips.

I am actually looking for a good Lumpsum Scheme as an alternative for FD so that I can make use of the FD system for the yearly payment of the LIC policy which I took last year (considering that it is only a long-term investment which I have)

Accordingly looking to start one more SIP for future plan.

Not keen on shares / Stocks, as I don't really check my investment every now and then and want to play safe.

I prefer auto payments and let the game happen while I watch.

Lumpsum + SIP Suggestion

Suggesting funds specifically for SIP or Lumpsum wouldn't be appropriate if you ask me.Also I was unable to correctly understand what you meant by a lumpsum scheme as an alternative for FD.

Well if you have a significant corpus lying in your savings account, that you don't require in the near future, then generally you would deploy that capital as a lumpsum into your allocated funds. However there is an alternative to that called STP (where your money will be first invested in a liquid fund and systematically deployed into the target mutual funds in a similar manner as SIP) which you can also consider. That is advised because you wouldn't intend to time the market and risk a possibility of investing when the fund has peaked and then just see it go down. Think of an analogy similar to not putting all the eggs in one basket, the idea is not to put all the eggs into the basket at the same time, instead one by one , hence people consider SIP/STP options to average out their cost across all market cycles.

However, in your case if you have some extra funds lying and intend to continue an SIP, just plan a portfolio and invest a lumpsum initially and continue with an SIP on the same.No point having different funds for lumpsum/SIP.

Funds you could explore

As mentioned by others here you could consult a SEBI registered financial advisor/planner for that, and they would offer you regular plans(higher expense ratio that includes their hidden commission and charges to cover the expenses taken on their behalf to research good funds) and not direct plans. The difference in expense ratio might seem like its ~1% or slightly less, but that is on the entire value of your investment for the entire period, which means loosing out significant returns. I had calculated this difference for an investment made in a good & very popular equity flexicap fund, for the last 5 years, where if one had invested in the direct plan instead of Regular their portfolio value was ~14% higher!

So, if you prefer the DIY approach like most of us youngsters, there are websites like "Value research", "Morningstar" etc that offer various screeners for funds and different info/metrics on historical performance including fund recommendations, and should be helpful especially if you buy their premium subscription plans.Then once you have decided which funds to invest in, just buy the direct scheme from the fund house website or platforms like Zerodha coin.

Index funds/passive are generally advised since they have lower expense ratios and they just follow an index like Nifty50, etc compared to actively managed fund where you rely on a fund manager's expertise or proprietary strategies to build a portfolio intending to beat the market indices(Alpha), so that comes at a higher cost.However in various market cycles actively managed funds struggle to beat the market.

Since you are starting to invest early and have the benefit of time, you could take higher risks so could consider a mix of both active and passive funds, or just stick to your risk preference.

While you look for index funds, look for "Smart Beta Funds" they have historically given better returns than Nifty 50 index, majority of the time for much lesser volatility.

Again, fairly long explanation here like most of my other posts, but I can't make it any shorter without conveying the necessary information.

FD Suggestions

Arbitrage funds were suggested as an alternative for FD, I would only second that if you are in the highest tax slab of Income tax (30% slab rate) for significantly higher post tax returns. For everyone else you can only consider it but wouldn't be ideal.

Arbitrage funds returns before tax is very similar to FD but they fluctuate and you wouldn't know what is the return you will realise at the time of investing.Historically they have ranged from ~6.5% to 8% levels, also these returns widely vary across different funds available. Since It is an equity oriented fund ,they are taxed as capital gains at the rate of 12.5% for more than 1 year and 20% otherwise. So if your default income tax slab rate is 10,15 or 20 %,then FD could possibly be a better choice since your post tax returns are better and you know the ROI while investing.

Now coming to FDs, generally the well established banks with strong balance sheets don't offer very high FD rate, if the higher FD rate is all you're looking looking at, then new banks or underdogs like IDFC first bank, Bandhan Bank, etc offer rates close to 7.5% for 1 year.

Since you are intending to save up for travel/similar with a horizon less than 1 year, FD is good enough in my opinion. Alternatively there are Debt funds like liquid funds, which needs some research from your end.

Hope this helps.

Cheers!

PS- You mentioned about an LIC policy you have purchased.I don't want to comment about that product without knowing about it or your background for buying it.However in general, there are unsolicited proposals from banks and other agents called money back policies or ULIP(market linked investment with term insurance), which IMO is not superior enough for a young person, given the option of Equity mutual funds available out there to create long term wealth.

[rajivr1612]

Hi team,
I received an SMS from HDFC MF that my SIP purchase for this month has been reversed due to 119/ER68 A/C Blocked/Frozen. What action is required from my side?

[Naetik30]

Originally Posted by rajivr1612

Hi team,
I received an SMS from HDFC MF that my SIP purchase for this month has been reversed due to 119/ER68 A/C Blocked/Frozen. What action is required from my side?

Looks like the source bank account used for the SIP is frozen. Please check with your bank.

[rajivr1612]

Originally Posted by Naetik30

Looks like the source bank account used for the SIP is frozen. Please check with your bank.

I can see the amount is debited from account and not credited back. I will check with bank. Thanks.

[VWAllstar]

Is there a methodology or script or ready data available to know the below:

1. Highest count of Stocks in one particular type of Mutual Fund
Ex: Fine Organic Industries Ltd. being bought by most Small Cap Funds

2. Highest percentage of a particular stock in one particular type of Mutual Fund
Ex: Equitas Small Finance Bank has been bought by many MFs with allocation of more than 3%

[SmartCat]

Originally Posted by VWAllstar

Is there a methodology or script or ready data available to know the below: 1. Highest count of Stocks in one particular type of Mutual Fund. Highest percentage of a particular stock in one particular type of Mutual Fund

Bookmark 'who owns what' page:
https://www.valueresearchonline.com/.../who-owns-what