[krish_veera]

Hi Guys,

Quick question. I am newbie investor, just started going thru articles on investing in mutual funds, selecting appropriate funds based on different criterion.

I was checking the returns of SBI Small and Midcap. I noticed the percentage is different across two websites, valueresearchonline and fundsindia.

Is this possible? What would be the logic behind this difference?

Below is the screenshot of these funds.

Thanks,
Veera

[sgiitk]

@krish_veera;

Statistics can be highly misleading. The Top Fund list you have put up has many Arbitrage Funds simply because the have the same tax treatment as Equity but that is about all. With a declining market then are the best performing, but are likely to have similar returns when the markets start rising. Most of us treat them as a good option in preference to Fixed Deposits. After the 2014 burget they have been classified with Equity for taxation.

You have truly diversified funds - conservative, broad based, and most stable over long terms.
The SME funds invest in small and midcap companies, potentially more rewarding, with a higher risk factor as well. You need very dynamic management here. Remember almost all the big companies started life as SMEs. While we know the ones who made it big, we forget those (far more numerous) which fell by the wayside.

For a newbie start with some decent old established diversified funds from old fund houses like DSPBR, FT, HDFC, ICICI-Pru, L&T (formerly Fudelity) and then take up from there.

I would definitely not advise Arbitrage Funds to a newbie.

[nowwhat?]

Originally Posted by krish_veera

I was checking the returns of SBI Small and Midcap. I noticed the percentage is different across two websites, valueresearchonline and fundsindia.

Maybe they take NAVs of different dates. NAV for SBI Small and Midcap -- Regular Plan was 29.58 on 6/4/2015 and 32.1 on 6/4/2016, the return therefore works out to around 8.53%. VR is therefore correct, but bear in mind that VR has taken 1 year from 6/4/2015. Even if one takes 7/4/2015 to 6/4/2016, the return works out to 8.04% which is still not near the 7.54% quoted by FundsIndia.

Since I invest only in Direct Plans, I have no way of knowing what FundsIndia is up to and I have been unable to access the page you showed in your screenshot. Perhaps you should post your query to FundsIndia if you are their customer.

Bear in mind that sales of SBI Small and Midcap have been temporarily suspended at the moment. Also as @sgiitk cautions, your results are misleading as it includes arbitrage and international funds, both of which do not make any sense if one is a newbie investor.

PS: SBI Small and Midcap -- Direct Plan shows a 1-year return of 10.19% on VR which amply illustrates why DIY investors should always take the effort to invest in Direct Plans.

[OHCVtec]

Which is the cheapest way to invest in mutual funds. I usually invest via ICICIdirect, however for I feel that the service charge etc is too high. For Eg I bought 1000/- worth units of few funds and was charged almost 114 for each of the funds. Thanks for your inputs.

[pradkumar]

Hi,

You can buy them online and track them using a consolidated account statement service such as https://www.karvymfs.com/platformservice/

As long as you have a single registered email ID, tracking becomes easy.

Look up the fund house you want to buy and check their online options.

In ICICI direct, you would be paying Rs. 30 or 1.5% for each SIP transaction, whichever is lower.

http://content.icicidirect.com/mffaq.asp

Regards,

Pradeep

Originally Posted by OHCVtec

Which is the cheapest way to invest in mutual funds. I usually invest via ICICIdirect, however for I feel that the service charge etc is too high. For Eg I bought 1000/- worth units of few funds and was charged almost 114 for each of the funds. Thanks for your inputs.

[iamswift]

Originally Posted by OHCVtec

Which is the cheapest way to invest in mutual funds. I usually invest via ICICIdirect, however for I feel that the service charge etc is too high. For Eg I bought 1000/- worth units of few funds and was charged almost 114 for each of the funds. Thanks for your inputs.

You can try using the https://www.mfuindia.com/Investors
This is online platform which is jointly created by few of the fund houses where you can do all transactions online.

No charges for using the service and you directly invest in the fund without intermediately thereby you save on commissions too.

Here are the list of funds who owns up this platform and you can invest on:
https://www.mfuindia.com/ParticipatingAMCs

[murillo]

I have a question as I have not done this before.

If I invest through an online brokerage such as My Universe or Funds India, and thus have a folio number in a fund house -

Now, if I create an online account through the fund house's online portal and buy in direct scheme using my existing folio number, will those units reflect under the online broker account? Or will it be held separately with the fund house, although same folio number? If yes, it means that I will have two views in two accounts although they both have same folio number - is my understanding right?

[alexgv]

Originally Posted by murillo

I have a question as I have not done this before.

If I invest through an online brokerage such as My Universe or Funds India, and thus have a folio number in a fund house -

Now, if I create an online account through the fund house's online portal and buy in direct scheme using my existing folio number, will those units reflect under the online broker account? Or will it be held separately with the fund house, although same folio number? If yes, it means that I will have two views in two accounts although they both have same folio number - is my understanding right?

I have been there. My experience with ICICI Prudential was that all the schemes are shown in same online account against the given folio. For a folio you will have one view.

[nowwhat?]

Originally Posted by murillo

Now, if I create an online account through the fund house's online portal and buy in direct scheme using my existing folio number, will those units reflect under the online broker account? Or will it be held separately with the fund house, although same folio number? If yes, it means that I will have two views in two accounts although they both have same folio number - is my understanding right?

Not sure I fully understand your question. Many of us started investing before the advent of Direct Plans when we would often go through a distributor, but now we have switched to Direct Plans completely. Once you have a folio and online login and password, you can buy Direct Plans and it will reflect on your existing folio. I still have the same folio despite going through multiple distributors and now as a DIY investor.

[vnabhi]

Pardon this noob question. I have taken VR in mid-December 2015, and am eligible to withdraw my entire PF by this month end. If i don't, i'll have to wait till October 2017 when I'll be aged 58.

I have no need for the money now. Should I continue to stay invested and earn an interest of 8.9%, or is it advisable to withdraw the money and invest in some kind of debt fund or arbitrage fund?

Thanks in advance.

[nowwhat?]

Originally Posted by vnabhi

I have no need for the money now. Should I continue to stay invested and earn an interest of 8.9%, or is it advisable to withdraw the money and invest in some kind of debt fund or arbitrage fund?

This is a question only you can answer. It all depends on your plans and goals. If you don't have need for money (no children's education, no children's marriage, own house, etc.), you could probably wait. Why invest in a debt fund when you get quasi-assured returns from EPF that too at good (mostly above-market, considering it is tax-free) interest rates which you cannot usually get from a debt fund?

Also why take the risk of arbitrage funds at this age? I would stay put in EPF, only matter of concern for me would be the incumbent government's passion for putting people on annuity. One thing I would add is that life expectancy has gone up, so you have to think of you and/or your spouse living up to the age of 80 which is a long way to go.

I withdrew my EPF and put it all in Equity MFs, but then I am in my 40s. Wouldn't suggest you do anything remotely similar.

[sgiitk]

A recent survey shows that Balanced Equity oriented funds have performed better than Equity funds. No surprising since the market has been static / correcting while debt and money market have done well. So the balanced funds can be expected to do better. In fact with a declining trend in interest rates, they may do even better. However, long term in normal circumstances Equity is king - so I think!

[vnabhi]

Originally Posted by nowwhat?

Also why take the risk of arbitrage funds at this age? I would stay put in EPF, only matter of concern for me would be the incumbent government's passion for putting people on annuity. One thing I would add is that life expectancy has gone up, so you have to think of you and/or your spouse living up to the age of 80 which is a long way to go.
.

Thanks for your suggestion. Matches with what i was feeling too. Only point i could not understand was the line highlighted in bold. Do i stand to lose anything if i continue to stay with EPF?

[shipnil]

Originally Posted by vnabhi

I have no need for the money now. Should I continue to stay invested and earn an interest of 8.9%, or is it advisable to withdraw the money and invest in some kind of debt fund or arbitrage fund?

Stay in the PF. Best of the debt funds give you 8.5% to 11% returns per annum and to get benefit of Long Term Capital Gains, you need to stay invested for 3 years which will be till April 2019. In case of Arbitrage funds, the best funds are giving 8.5% per annum only. So what difference would it make if you earn 8.5% in a arbitrage fund or 8.9% in PF?

[nowwhat?]

Originally Posted by vnabhi

Only point i could not understand was the line highlighted in bold.

What I was alluding to was the fiasco in the recent budget where they were trying to steer subscribers into investing 60% of their EPF corpus in an annuity. Hopefully that beast won't rear its head any time soon.

One point I forgot to add is that debt funds can sometimes give negative returns, which may be a big no-no for someone in retirement.

Having said that, I read this article today Age Has No Relevance In Your Financial Planning and while it doesn't apply to you, it still makes for good reading.