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Liquid funds: There is no paradigm shift
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ELSS versus ULIPs: Which is the better tax saving option?
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Concerned about your SIP returns? Here’s what you need to know
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Should you invest in the new mutual funds categories introduced by SEBI?
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How to take advantage of rising short term interest rates
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How MF ratings are changing after SEBI's fund reclassification
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Use SWP for tax-efficient regular income from mutual funds
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How does debt fund’s maturity roll-down help manage market risk
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How you can help your parents sort their investments systematically
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4 important tips to make the most of close-ended mutual funds
Transcript
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What kind of fund one should invest now?
Hemant Rustagi | CEO,Wiseinvest AdvisorsOct 11, 2017 10:00
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Mehrab Irani | General Manager, Tata Investment Corporation
Oct 11, 2017 11:00
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Should you bet on mid cap funds now?
Jitendra Solanki | Jitendra Solanki,CFP & Founder, JS Financial AdvisorsOct 11, 2017 12:00
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Investing in Mutual Funds in volatile markets
Jiju Vidyadharan | Director- Funds & Fixed Income, CRISILOct 11, 2017 14:00
Faq
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What if a fund changes its strategy.
A fund that alters its investment objective or approach might no longer fit your strategy. -
How is NAV calculated?
The value of all the securities in mutual funds portfolio is calculated daily. From this, all expenses are deducted and the resultant value divided by the number of units in the fund is the funds NAV or its Net Asset Value. -
Should you evaluate past performance, and look for consistency?
Although past performance is no guarantee for the future, it is a useful way of assessing how well or badly a fund has performed in comparison to its stated objectives and peer group. A good way to do this would be to identify the five best performing funds (within your selected investment objectives) over various periods, say 3 months, 6 months, one year, two years and three years. Shortlist funds that appear in the top 5 in each of these time horizons as they would have thus demonstrated their ability to be not only good but also, consistent performers. You can engage in such research through moneycontrol's Find-A-Fund query module. -
How to select a mutual fund?
What's strategy got to do with selecting a mutual fund? Shouldn't you just go and invest in the best performing fund? The answer is no. Mutual fund investing requires as much strategic input as any other investment option. But the advantage is that the strategy here is a natural extension of your asset allocation plan (use our Asset Allocator to understand what your optimum asset allocation plan should be, based on your personal risk profile). moneycontrol recommends the following process: -
If mutual fund scheme is wound up, what happens to money invested?
In case of winding up of a scheme, the mutual funds pay a sum based on prevailing NAV after adjustment of expenses. Unitholders are entitled to receive a report on winding up from the mutual funds which gives all necessary details. -
Ideally how many different schemes should one invest in?
Don't just zero in on one mutual fund (to avoid the risk of being overly dependent on any one fund). Pick two, preferably three mutual funds that would match you investment objective in each asset allocation category and spread your investment. We recommend a 60:40 split if you have shortlisted 2 funds and a 40:30:30 split if you have short-listed 3 funds for investment. -
How to invest in a scheme of a mutual fund?
Mutual funds normally come out with an advertisement in newspapers publishing the date of launch of the new schemes. Investors can also contact the agents and distributors of mutual funds who are spread all over the country for necessary information and application forms. Forms can be deposited with mutual funds through the agents and distributors who provide such services. Now a days, the post offices and banks also distribute the units of mutual funds. However, the investors may please note that the mutual funds schemes being marketed by banks and post offices should not be taken as their own schemes and no assurance of returns is given by them. The only role of banks and post offices is to help in distribution of mutual funds schemes to the investors.
Investors should not be carried away by commission/gifts given by agents/distributors for investing in a particular scheme. On the other hand they must consider the track record of the mutual fund and should take objective decisions. -
Can an investor appoint a nominee for his investment in units of a mutual fund?
Yes. The nomination can be made by individuals applying for / holding units on their own behalf singly or jointly. Non-individuals including society, trust, body corporate, partnership firm, Karta of Hindu Undivided Family, holder of Power of Attorney cannot nominate. -
What are close-ended mutual fund schemes?
Close-ended mutual fund Schemes have a stipulated maturity period wherein the investor can invest directly in the scheme at the time of the initial issue and thereafter units of the scheme can be bought or sold on the stock exchanges where the scheme is listed. The market price at the stock exchange could vary from the schemes NAV on account of demand and supply situation, unit holders expectations and other market factors. Usually a characteristic of close-ended schemes is that they are generally traded at a discount to NAV; but closer to maturity, the discount narrows. -
Mutual funds provide risk diversification?
Diversification of a portfolio is amongst the primary tenets of portfolio structuring (see The Need to Diversify). And a necessary one to reduce the level of risk assumed by the portfolio holder. Most of us are not necessarily well qualified to apply the theories of portfolio structuring to our holdings and hence would be better off leaving that to a professional. Mutual funds represent one such option.
mutual funds glossary
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Acid Test Ratio
It is the ratio indicated by dividing a company\'s current assets by current liabilities. It reflects the financial strength of a company and hence called Acid test ratio. -
Alpha
Alpha measures the difference between a fund\'s actual returns and its expected performance, given its level of risk (as measured by beta). A positive alpha figure indicates the fund has performed better than its beta would predict. In contrast, a negative alpha indicates a fund has underperformed, given the expectations established by the fund\'s beta. Some investors see alpha as a measurement of the value added or subtracted by a fund\'s manager. There are limitations to alpha\'s ability to accurately depict a manager\'s added or subtracted value. In some cases, a negative alpha can result from the expenses that are present in the fund figures but are not present in the figures of the comparison index. Alpha is dependent on the accuracy of beta: If the investor accepts beta as a conclusive definition of risk, a positive alpha would be a conclusive indicator of good fund performance. Of course, the value of beta is dependent on another statistic, known as R-squared. -
Annual Fund Operating Expenses
The expenses incurred, during a particular year, by Asset Management Company for managing the funds. -
Asset Allocation
The process of diversifying the investments in different kinds of assets such as stocks, bonds, real estate, cash in order to optimize risk. -
Asset Allocation Fund
A fund that spreads its portfolio among a wide variety of investments, including domestic and foreign stocks and bonds, government securities, gold bullion and real estate stocks. Some of these funds keep the proportions allocated between different sectors relatively constant, while others alter the mix as market conditions change. -
Asset Management Company (AMC)
A Company registered with SEBI, which takes investment/divestment decisions for the mutual fund, and manages the assets of the mutual fund. -
Automatic Investment Plan
A plan offered by most mutual funds where a small fixed amount is automatically deducted monthly from an investor\'s bank account and invested in the mutual fund of their choice. -
Automatic Reinvestment
An investment option for mutual fund unit holders in which the proceeds from either the fund\'s dividends or capital gains, or both, are automatically used to buy more units of the funds.