Category Archive : Mutual Fund Concepts

Why Mutual Funds & Not Direct Stocks?

We get this question very frequently that why do we suggest to invest in Mutual Funds when we can easily buy few good stocks ourselves or imitate any good fund manager’s portfolio and save the Mutual Fund costs.

Answer is just one word – Time.

If you have enough time to do stock research and to know which are ‘good’ stocks, when to buy and when to sell them, if you have time then yes, you can go for direct stocks.

If you don’t have time, then Mutual Funds are best because then there is a team which is full time doing this for you. You just have to find the right team once and they will keep making money for you.

And then there are few other benefits as well –

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Why Mutual Funds & not Direct stocks?

10 Most Important Factors to Analyse while selecting a Fund !

10 Most important factors to analyse while selecting a fund :

  1. AUM
  2. Alpha
  3. Portfolio PE Ratio
  4. Beta
  5. Consistency
  6. Sharpe Ratio
  7. Exit Load
  8. Fund Manager
  9. Expense Ratio
  10. Standard Deviation
13 Mar 2018 - 10 Most Imp Factors

Sebi clarifies norms for new mutual fund classification !!!

Confusion over classification of stocks is over now.

SEBI clarifies norms for new mutual fund classification.

Classification is as follows:

Market Cap Classification by SEBI
Mutual Fund Classification Norms by SEBI

Top 100 : Large Cap Stocks

101 to 250 : Mid Cap Stocks

250+ : Small Cap Stocks

Which Balanced Mutual Fund to Invest in?

Balanced Funds Meaning – Why to Invest

Now a days, Fixed Deposit interest rates are going down so does not seem to be an attractive investment option. So, investors are looking for other alternatives. They are looking at Balanced Funds as an alternatives.

Balanced funds, which are often called hybrid funds, own both stocks and bonds. They earn the “balanced” moniker by keeping the balance between the two asset classes pretty steady, usually placing about 60% of their assets in stocks and 40% in bonds.

They should keep in mind following points before investing in Balanced Funds.

 1. Equity Allocation : Balanced Funds invest more than 65% in equity Asset Class. Equity comes with volatile nature. In shorter duration, you can see your portfolio in red.

2. Investment Horizon : Your investment horizon should be more than 3 to 5 years.

3. Taxation : According to current taxation rules, Balanced funds are taxed like equity funds. So upto 1 year Short Term Capital Gains tax of 15% on Capital Gains. Post 1 year, there is no tax applicable.

 4. Debt Allocation: Upto 35% allocation to debt asset class. No taxation on this allocation. It is like tax free fixed income investment post 1 year of holding.

 5. Dividends: Monthly Dividends are available.

Please go through following video to get a complete idea about Balanced Funds.

Following are few Balanced Fund Examples:

1. ICICI Prudential Balanced Fund
2. HDFC Balanced Fund
3. HDFC Prudence Fund
4. Aditya Birla Sun Life Balanced 95 Fund


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