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Hello Nazim,

Can you point me to some articles which give advanced explanation of different types of debt funds and their returns in various scenarios?

Sundaram MF has one of the best customer care, IMO. :thumbs up Yesterday, my daughter presented a redemption request with a change in bank account. Just a few minutes back, I received a message in my mobile - she had given my mobile number for contact purpose - stating that the proceeds are being credited today to her bank account by RTGS. Not only that. A customer care staff called me, conveyed the same details and assured that the proceeds would be credited to her account today itself. clap:

Your experience with Sundaram is quite refreshing and outside the norm. Usually all mutual funds these days take T+3 days, so once in a while when I need funds such as a couple of weeks ago, I redeemed on a Tuesday and prayed the funds would come in by Friday as we had to give a cheque on that day. From my previous experience, redemption on Wednesday results in funds arriving only the next Monday as they treat Saturday as a holiday. This has been my experience with DSP Black Rock, ICICI, IDFC and Quantum.

This has to do with the new US FATCA reporting rules in which any mutual fund abroad has to report on investments made by any US citizen. Reporting responsibilities under FATCA are onerous and its single purpose it to eliminate tax havens, but the law itself is akin to using a sledgehammer to kill an ant.

Earlier a few mutual funds such as IDFC did not have any presence in the US so they escaped the law, but now almost all of them do and their assets could be attached for contravention of FATCA. So no mutual fund will accept applications from US persons (any one who is a tax citizen of the US).

If you had accounts prior to becoming a US individual, you can continue operating those but the onus of reporting that in your tax returns falls on you. Moreover the act itself is illegal.

Even though I am not an NRI, the only way I have found to avoid this piquant situation is to invest in India-specific mutual funds in the US. That route is 100% legal, but choices are few and the funds are not that well known.

The other options depending on how much cash you have is either through an Indian shell company or via Mauritius of which I have not received a definitive word about the former.

True to their word, the redemption proceeds got credited to her account by yesterday forenoon. I always rank MF based on their customer care and speed of redemption and death-claim settlement. Performance comes next, IMO. I stay away from MF, whose registrars are Karvy! :D

Hello,

Help requested please.

I hold UTI NIFTY INDEX FUND and L&T Floating Rate Fund via ICICIDirect.

I have not redeemed any units in last three years.

So I do not know the time ICICIDirect take to credit the proceeds in your account after you place the redemption order.

Now I may need to redeem some units to meet an expected expenditure.

What time-frame should I expect?

Will it be different for Equity or Debt funds?

Can any ICICIDirect customer pl throw some light?

I usually get the fund credited to my SB accounts within 2 working days from the redemption time. If they delay (only a few occasions so far), they send a message in my "personal message box" on the site, alerting about the issue.

-BJ

Interestingly when I redeemed recently from Quantum, they sent me a mail intimating me that as per SEBI rules, they have up to 10 business days to send me the money. :Shockked:

Redemption of mutual funds (unlike stocks & ETF) depend entirely on the AMC and not on your broker. ICICIDirect therefore has nothing to do with this.

Your L&T Floating Rate fund being a debt fund should have come in the next day. Index fund may take up to 3 business days, also known as T+3. All this is assuming you have set up your bank account with the AMC for NEFT.

Call the AMC (L&T, UTI) if you want the money sooner, though I doubt UTI will bother since it is a PSU.

Gurus,
Need help. Need to invest some money for short term (or may be long term). Actually, both wifey and me were keeping some money in the savings account as part of equity for purchase of a new flat but that decision has been postponed for sometime due to lack of quality options. Will not need money atleast in the next six months but could be anytime after that. How to invest this wisely and safely? Any good debt funds where yields would be better than FDs? Also, any other option to invest this apart from debt funds?
Please advise.
Thanks

Wish I could help you, but fact is I don't have a clue about debt funds and I wish someone could explain to me how they work.

More importantly, you should know that I have lost money on debt funds which is something that never happens with an FD.

There are a couple of ways to play the debt fund game. Let me try and make it as simple as possible.

1. Hold to maturity - This is the case when you invest in funds like an FMP, or even some of the open ended debt funds, which invest in paper with a fixed maturity. In this case, any changes in Gsec will not change the final value of the fund at the end of the investment period. These are more like FD's, but now since tax rules to debt funds have changed they are not much in vogue any more. The only funds you will generally find in this category now are 3 year close ended FMP's.

2. Duration calls - Here we are investing in long ended debt funds with the hope of the interest rate falling. (This is what we in the financial world are quite bullish about for the next one year). So basically we try to invest in Income or Gilt funds with a very high modified durations (Wont get into the technicalities of that here). This is the call most HNI's are taking right now. Keep in mind that again tax is short term for less than 3 years of holding, so you will have to plan accordingly,

3. Credit calls - Here we hold funds, where the underlying paper has a good chance of being upgraded. Its not something that we suggest for retail investors and we rather pick up the bond or paper directly from the market.

Keeping the above in mind:

1. Short term - Liquid funds or arbitrage funds
2. Mid term and Long term - Long end income funds or gilt funds

In case you dont want to take the fund route, your best option to play out the interest rate scenario would be to invest in the tax free bonds which were sold earlier this year. Keep in mind that the yields have fallen a lot since their debut and even the 20 year bonds are retailing at around 7.0-7.2% yield.

In case you have any more questions, please let me know, but please tag me, as I am not online on tbhp a lot.

As a disclaimer, I am in this business for the last 13 years now.

Here is a snapshot of the point-to-point returns of all equity mutual funds from Jan 01, 2005 to Dec 22, 2014 as per value research:

https://www.valueresearchonline.com/...ate=2014-12-22

I have taken returns from 2005 since I wanted to factor in returns in 2007, which was probably the most hostile year for stock markets in the recent past.

And if you take the 01 Jan, 2007 to Dec 31, 2008 returns, this is what separates the men from the boys:

https://www.valueresearchonline.com/...ate=2008-12-31

A financial adviser in a major MNC bank tells me that he has sold his stocks are switched 100% to MFs. He has analysed and found that MFs gave him better returns.

Need explanation on what is the difference for an individual investor like me, who may want to park some money in either of these funds for a period of 1 to 3 years (indicative) timeframe.

Franklin India Government Securities Fund - Composite Plan - Direct Plan
Franklin India Government Securities Fund - Long Term Plan - Direct Plan

What is the difference between composite plan & long term plan here?
What does it imply to an investor like me?

Thanks

Doesn't this depend on the stocks he picks and MF he picks?