Choosing Direct Plan of L&T Emerging Businesses Fund Can be Fatal

The mutual fund awareness campaign in India has been doing a tremendous job as the inflows in the equity mutual fund has been increasing at a great pace in recent months. AMFI launched the “Mutual Fund Sahi Hai” campaign to inform the mass about the benefits of mutual funds. But in many of the banners and advertisements, AMFI can be observed promoting direct plans over regular ones. No doubt direct plans will give you more benefits but for those making an investment for the first time that too in an aggressive scheme like L&T Emerging Businesses Fund, the direct plan can be hazardous. If you do not believe it, your thoughts might change at the end of this write-up.

What are Direct and Regular Plans?

Before moving any further it is important to clear the myths and confusion regarding direct and regular plans. Direct plans of mutual fund allow investors to invest on their own without the help or assistance of any external source. The investor needs to do all the formalities on himself and select the mutual fund scheme, tenure, amount everything on his own. On the other hand, if money is invested through an advisor or distributor after recommendation and suggestion, it is invested in the regular plan where a majority of the formalities are done by the registered mutual fund provider. Direct plans are advantageous in terms of returns by a slight margin as the expense ratio or the amount charged by AMCs is lower for direct plans compared to regular plans. The expense ratio generally differs by 1-1.5%.

Is it a Smart Move to Choose Direct Plans?

Direct plans certainly are a better choice to invest in mutual funds provided that you are well aware of every little aspect of mutual funds. To gain better returns from mutual funds through direct plans, you need to know which segment or category will be most suitable to achieve your objective. What would be more beneficial according to the trends in the market and what can be the probable outcome in the future. Apart from that, you should also keep an eye on your holdings to see if the portfolio needs any revamping on a regular basis. If you can guess everything on your yourself than choosing direct plans over regular ones is definitely a smart choice as investors can gain nearly 1% more returns on the invested amount. However, if you are blindly going for the 1% return without proper knowledge about investing in mutual funds, you might be putting your hard-earned wealth and your financial objective at a greater risk.

Read the article to know why choosing direct plans over regular plans of L&T Emerging Businesses Fund can be dangerous.

L&T Emerging Businesses Fund - Regular vs Direct

L&T Emerging Businesses Fund is a high-risk fund which might have provided better gains in the past but investing in the fund without prior knowledge about the scheme would be a mistake. Direct plans of high-risk funds should be avoided by those who lack basic knowledge about mutual funds. L&T Emerging Businesses Fund is a small-cap fund that invests in stocks of emerging businesses which are prone to frequent fluctuations. The fund has a high standard deviation and is ideal only for long term goals of more than 7 years. A trusted advisor can let you know whether the fund is ideal for you or not. The market conditions are also responsible for the performance of the scheme as for some rolling tenures, it has provided more than 70% returns in a year while the worst performance for a year is below 19% in negative. If you plan to invest in such volatile scheme without basic knowledge you may have to face fatal consequences.

Direct plans are better than regular plans only if you are well aware of every aspect of mutual funds. It is just like taking medicines on your own and taking prescriptions from a doctor. If you can select the most optimum medicines for yourself, you don’t have to pay to the doctor. But we don’t do that because we don’t want to take a risk with our health. So why do we take unnecessary risk in finances? Is it not important? However, paying a very little proportion to experts for rigorous efforts of research and analysis for your betterment is not a bad idea at all.

July 16, 2019
by MySIPonline
Mutual Fund Investment

Can Investing in HDFC Mutual Fund Help Me Achieve My Goals?

The mutual fund industry is one of the fastest growing industries in the world. Every year, billions of dollars are poured into this industry across the globe. In India, there are more than 2500 active schemes available in a wide range to accustom the needs of different investors. However, identifying the best funds from the plethora of options available is a real challenge. Most people do not know which schemes they should buy, which ultimately leads to poor investment decisions.

To avoid any weak points, it is always recommended to go with established names such as HDFC Mutual Fund. This fund house is a household name in India, and has hundreds of options to offer to its clients. Let’s see what all does the fund house hold in its womb to offer.

The Preface

HDFC Mutual Fund is one of the largest fund houses in India. It was founded in 1999, and has since served more than 100, 000 clients. It is committed towards providing unmatched investment solutions to the investors, laced with high performance features. The parent organisation of the fund house is Housing Development Finance Corporation, better known as HDFC, and is headquartered in Mumbai.

The Investment Philosophy

  1. Profit for the Investors
    Creating value and achieving capital appreciation is the primary objective of HDFC MF. The AMC works for the betterment of the investor community, by identifying the best sources of wealth creation and applying the invested capital for long-term. The target areas are selected on the basis of a tight scrutiny, where the likely profitability is analysed and only then an investment is initiated.
  2. Research & Analysis
    The market is an ever-changing place. And to ensure that the investments plough maximum yield, constant change is imperative. HDFC Mutual Funds has its own research and development team which is constantly working on designing advanced products accustomed to the market changes. There is a constant monitoring of the schemes by the fund managers, who are vested with the task of taking corrective actions, whenever required, and keep the schemes functional under all market conditions.
  3. Controlled Risk Exposure
    For an investment to be fruitful, it is essential that it is not exposed to unusually high degrees of risks. If the risk factor is not properly handled, your investments can get hurt and the wealth creation process will be put on hold. To avoid such a scenario, the fund managers of HDFC Mutual Funds in India constantly modify the internal construction of the portfolio, so that the funds never succumb to the high risks and keep reaping high returns from the market.

The Types of Products Available

The population of mutual fund investors is very diverse. Investors can be aggressive and conservative, which makes it even more important to release schemes in a diverse range. In order to cater to the discrete needs of the investors, HDFC Mutual Fund provides schemes in a very diverse range. Let’s take a look at the variety of options available at this fund house: -

  1. Equity – These funds are the favourite choice of aggressive investors. They are known for their aggressive persona and the quality of reaping high returns from the market. A top-performing equity fund can give out results as high as 35%, and thus, accelerate the wealth creation process.
  2. Debt – For those who do not like aggressive investing, debt funds are the perfect choice. They are more mature than equity funds and carry a lower risk quotient. The underlying portfolio is usually built with short-term, low risk debt options that are perfect for short to medium range investments.
  3. Hybrid Funds – If you can’t really figure out which kind of investor you are, then hybrid funds shall be your first choice. These funds are a blend of equity and debt instruments, which makes the investment both aggressive and defensive at the same time. There will be good earnings from these funds, without heavy exposure to risks.

Thus, the above write-up makes it clear that investing in HDFC Mutual Fund is a perfect way to make goal-oriented investments. Sink in yourself a bit and find out which kind of funds will suit you. Happy investing!

Read this article to get a first-hand information on HDFC MF.

July 12, 2019
by MySIPonline

Can Sundaram Rural and Consumption Fund Save You From Getting Poor?

India is developing at a superfast rate, and is ranked among the fastest growing economies in the world. In terms of wealth, it stands at the number 6 spot, with an estimated wealth of nearly $8,500 billion dollars. But in spite of all these glinting facts about our country, we are still considered among the poorest living beings on earth.

While there could be many factors contributing to this defaming statement, a large section of society living in poor, rural conditions can be cited as the main culprit.
Investing in Sundaram Rural and Consumption Fund is a small step that you could take for the betterment of your own living, as well the living standard of the country at large. The fund is designed specifically for the purpose of uplifting the poorer sections of the society, by acting as a direct medium between the rural companies and the people capable of funding them.

Learn how investing in Sundaram Rural and Consumption Fund (G) can help the economic conditions of an individual as well as the nation.

The Economic Condition of India

While being the sixth wealthiest country in the world might seem very appealing, it is actually not a very charming reality. The U.S. is the wealthiest country in the world, with a total wealth of a whopping ₹63,000 billion which is nearly 8 times the current net worth of India. But, it shall be noted that the U.S. has a population of nearly 320 million, which means that there is a wealth of $197 dollars (approx.) per person. On the contrary, India has a wealth of merely $62 billion out of which, majority are government reserves. This is a major setback for our economy, as the wealth appears huge only in totality and not in terms of per person.

Launching Sundaram Rural and Consumption Fund

The launch of Sundaram Rural and Consumption Fund in March, 2006 played a pivotal role in strengthening the country’s economy. As of today, nearly 70% of the population lives in rural or semi-urban areas. Here, the average income per person is alarmingly low, which is acting as a crippling agent in between the country’s growth. The mission of Sundaram Rural and Consumption Fund (G) is to fill this hole in the economy, by encouraging more industrialisation in the rural areas. After the release of the fund, many investors showed high interest in investing their money for a long period, which in turn propelled the operations of the rural industries. This has also paved new paths of wealth creation for the investors, as they can achieve their goals in a disciplined way through sector based investments.

The Investment and their Outcomes

Generally, people are reluctant to spend a large sum of money at once. This makes it even more difficult for the companies to source capital, which in turn greatly affects their growth operations. Hence, to fix this problem SIP investments were introduced that provide an opportunity to make relaxed investments. Here are some of the major benefits that you can achieve through SIPs: -

  1. Easy Investment – pay just ₹250 a month to buy a stake in Sundaram Rural and Consumption Fund. Since the NAV of the Fund is running at ₹41.2077 (as recorded on 2nd July 2019), you can buy a big chunk in this fund at a reasonable price.
  2. Rupee Cost Averaging – Since you are buying the units at different prices, you have a window to streamline the overall cost of investment. Hence, you can get more units at a cheaper price in comparison to a lump sum investment.

If you choose to invest in Sundaram Rural and Consumption Fund – Regular Plan (G), then you can unlock high rewards for yourself. The performance of the fund in the last five years was staggering, as it yielded 13.61% on an average. This was far better than what the benchmark and the peers earned, whose average yield stood at 10.55% and 11.70%, respectively. Hence, by choosing this fund for your portfolio, you can catapult your wealth creation process and achieve all your financial aspirations. So, don’t waste time thinking any further! Plan an investment today!

July 11, 2019
by MySIPonline
Mutual Fund Investment

HDFC Balanced Advantage Fund – The Secret Ingredient of a Healthy Plan

The pathology report is regarded as the mirror of a person’s health. With the help of this report, a person can literally have an in-depth scan of his internal organs and find out the problems, if any. Similarly, the mutual fund portfolio acts as a pathological report for a person’s financial plan. If studied closely, the portfolio can reveal the strengths and weakness of the plan, thus helping to take corrective measures, if required.

To create a strong portfolio that works in your favour, you need to add funds such as HDFC Balanced Advantage Fund to it. It is a powerful combination of growth and wealth creation that can take your investment game plan to a whole new level.

Let’s learn some intriguing facts about this fund, which are penned down in this article.

A Preface to HDFC Balanced Advantage Fund

HDFC Balanced Advantage Fund – Regular Plan (G), erstwhile HDFC Prudence Fund, is basically a hybrid equity fund that is primarily engaged in wealth building and capital appreciation. It is a giant fund with an estimated net worth of ₹42, 592 crore (as on 31st May 2019), which took over HDFC Growth Fund – one of the top-performing schemes of HDFC Mutual Fund. Owning such a huge asset base has crowned the fund as one of the wealthiest, most powerful fund in the Indian investing regime. Thus, an investment here will surely open doors for rapid wealth creation for the investors.

The Investment Philosophy

Although there are many factors that govern the success of a mutual fund, but the investment philosophy is paramount. This involves the section of stocks, the industries to which they belong, and also the timely curation of the portfolio to align it with the latest market advancements. Hence, in order to be sure that the fund that you have selected possesses all these merits, it’s important to give a close study to the portfolio.
HDFC Balanced Advantage Fund – Regular Plan (G) follows a unique style of investing. It has a dynamic portfolio assorted with different kinds of stocks, which makes it an even more fertile option for wealth building. Let’s check out the current portfolio standings of the fund: -

  1. There are both equity and debt instruments present in the portfolio. While the former adds energy to it, the latter takes care of the risk cover from the market volatility.
  2. The portfolio is equity-oriented, since 83.03% of the assets are in equity and related instruments.
  3. For the sake of diversification, investment has been made in multiple industries which includes big players of the market, such as Financial & Banking sector, Energy sector, Technology sector, Construction sector, and Chemicals sector.
  4. The portfolio is confined within 67 stocks, which range from small to large cap stocks. The top 10 holding – which includes companies like State Bank of India, ICICI Bank, Infosys, Larsen & Toubro, and Reliance Industries – hold 54.06% of the assets of the fund.
  5. The companies mentioned above have P/E ratios in a wide range that stretches from 8.86 times to a whopping 142.10 times. However, thanks to the fine fund management team of HDFC Balanced Advantage Fund, the average P/E ratio of the fund is kept at a low level of 15.74 times.

The Impact of the Portfolio on the Performance

Like the way our diet greatly impacts our body, the portfolio of a fund impacts its performance. Since HDFC Balanced Advantage Fund (G) carries a diverse portfolio in its belly, the resulting numbers are quite appealing. In the last five years, the fund’s performance stood at an average of 10.21%, whereas the average since inception was noted at 18.61%. This is a phenomenal streak of performance, which testifies that this fund will perfectly sit in a high performing portfolio geared towards high wealth building and steady income generation.

Hence, if you are aspiring to create a mutual fund plan for your future goals, then you must add HDFC Balanced Advantage Fund in your plan. Its dynamic portfolio will help you to reach at your desired goals in an efficient manner.

Read out the essentials of HDFC Balanced Advantage Fund (Growth) which are described in this article.

July 10, 2019
by MySIPonline

How TATA Retirement Savings Fund can Secure Your Post-Work Life?

This article discusses some major highlights about TATA Retirement Savings Fund. Investors can opt for this fund and start saving good money to be used in their retirement period.

Everybody wants to live a comfortable life. People literally burn their youngest, prettiest years to build wealth for their future. But not many people think about the life that follows after they might quit working. We are talking about the retirement period. Yes, people do a lot of hard work, but that suffices only till their hands are working. So, what should they do to make their retirement period more comfortable?

There are many “schemes” out there that claim to make your post-work life a charmer. But beware that there is nothing as good as TATA Retirement Savings Fund. This plan is specially tailored for the purpose of fulfilling the retirement goals, and help people to live a comfortable life even when they are not actively working.

A Brief Insight into the Fund

TATA Retirement Savings Fund – Regular Plan (G) is an open-ended, equity mutual fund. It belongs to the aggressive hybrid category, which means that the underlying portfolio comprises of both the equity and the debt instruments. This fund has been specially designed to let people save for their retirement period and achieve their long term goals. Started in 2011, it is one of the best options available to cater to the retirement needs of an investor.

The Salient Features

The Pricing

Before investing in a fund, it is important to have a basic idea about the cost of investment. This will help you to set a budget and proceed accordingly with your investments. A unit of TATA Retirement Savings Fund (G) was selling at ₹30.2218 on 1st July 2019. This value was achieved after the fund witnessed and escalation of 0.53% in the value of its net assets. Since, this price sits in an affordable range, you should proceed with an investment at the earliest.

The Wealth

Having a huge asset base is a boon for not only the fund but also for the investors. If a fund dwells a big asset pool, then the chances for further expansion multiply. TATA Retirement Savings Fund (Growth) dwells a decent AUM of ₹1,101 crore, which was last noted on 31st May 2019. With an increased number of investors wanting to save for their future, an investment in the fund has increased massively in the last 3 years. Hence, it is expected that the asset size of the fund will increase by manifold in the coming years.

The Fund Management

The fund management is a key attraction of TATA Retirement Savings Fund. The fund managers recruited by the fund hold good experience in asset allocation and portfolio management. This provides a sense of trust that the investors’ money will not be misused and will be placed in promising ventures.

The Advantages

High Yield

When you are planning to save for your retirement, you’d obviously want a decent regular income till maturity. And, by investing in TATA Retirement Savings Fund (Growth), you can achieve a regular pay. The past performance of the fund was superb, which testifies that an investment in this fund is going to be very profitable. The past five year yield was averaged at 14.08%, while the returns earned by the fund since inception have a rough average of 15.51%.

Disciplined Investing

One of the main things to remember while making value based investment is to give proper time to your funds to grow. Many people make the mistake of redeeming their funds at an early stage, which not only hurts their investment value but also sabotages the chance of a higher income. Under TATA Retirement Savings Fund (G), you will be required to make investments for at least a period of 5 years. This is because any redemption made within this period can attract exit load of 1%, which will shrink the value of your investments.

These were some of the major highlights of TATA Retirement Savings Fund (Growth). This fund is highly recommended for those who are looking forward to secure their retirement and live comfortably in their post-work life.

July 9, 2019
by MySIPonline
MySIPonline Blog

New Managers Appointed for Reliance Vision Fund; Can We Expect a Comeback?

Read the article to know whether Reliance Vision Fund can make a comeback or not along with valid reasons.

Reliance Vision Fund is one of the oldest schemes of Reliance Mutual Fund which has a glorious past of providing phenomenal returns to the investors. The historic top performing large and mid fund has been facing controversies in the last few years and questions have been raised upon the management staff due to lower returns. After giving enough opportunity to fund manager Mr Ashwani Kumar for rectifying the performance stats, the AMC decided to appoint new managers for the scheme in May 2019. The decision has been welcomed by the investors and experts and improvements in the performance can already be witnessed.

Why Reliance Vision Fund was Unable to Perform Well?

Reliance Vision Fund follows the mandate of large and mid-cap mutual fund and the ex fund manager Mr Ashwani Kumar included aggressive mid-cap stocks in the portfolio. A blend of growth and value investment style was followed and the growth-oriented stocks were targeted at attractive valuations. The mid-cap stocks have failed to deliver the expected gains in the last few years and the large-cap stocks selected by the manager were unable to balance the returns of Reliance Vision Fund. The fund has an impressive history of delivering exponential returns, but the trailing returns for the last 1, 3, 5, and 10 years are below the category average and benchmark. The ratings of the fund have been dropped to 1 star by every rating agency and investors have been avoiding the scheme for the last few years. Many investors have deserted away from the scheme to switch to a better performing fund while a few are still invested in hope of a comeback.

Expectations From New Managers

After giving enough opportunities to ameliorate the performance stats, Reliance Mutual Fund decided to change the manager in May 2019. Mr Ashwani Kumar has been replaced by the duo of Ms Meenakshi Dawar and Mr Sanjay Doshi. Reliance Mutual Fund, as well as investors of Reliance Vision Fund, have high hopes from the newly appointed managers. However it is not easy to mitigate the beaten down returns of long term but within 2 months after appointment, the rankings of the returns can already be seen to improve. It may be too early to judge the performance of newly appointed fund managers but the stats have been improvising due to change in the investment style and strategy. If things go similarly for the next 1-2 years, we can expect the fund to regain the ratings it had in the past.

Both the fund managers are highly talented and have impressive records for asset management. Ms Meenakshi Dawar is a B.Tech from IGIT New Delhi and PGDM from IIM Ahmedabad. She was previously associated with IDFC Mutual Fund and is highly experienced in handling equity investments. Mr Sanjay Doshi has more than 11 years of experience in the capital market and worked with various financial firms. He is ACA, MBA, and CFA.

What did They Change the Investment Strategy?

After getting appointed, the fund managers increased the proportion of holdings in large-cap stocks as the current market conditions have been favouring the market leaders. In terms of sectoral allocation, holdings in the financial and technology sectors have been reduced while the construction and engineering companies have witnessed an increase in the holdings. Bharat Electronics and Reliance Industries are the new entrants in the portfolio due to strong growth potential.

Can We Expect a Comeback?

The fund managers are highly experienced and the portfolios managed by them previously have delivered impressive returns. They make better calls according to the market trends and investment objective and in the near future, investors can expect correction as the returns have been gaining momentum in the last 2 months. The long term deprived performance cannot be rectified in the short term but for the new investors, this can be the right time to start an investment as the fund is getting back on track.

Whenever the stock selection range is wide, the strategies and abilities of the fund manager play a vital role in shaping the outcome from the scheme. As Reliance Vision Fund can have any stock in the portfolio from the top 250 stocks traded on Indian stock exchange, the stock selection strategy of the fund manager is majorly responsible for performance. The strategies of Mr Ashwani Kumar were not helping out the investors but the new fund managers can bring Reliance Vision Fund back on the top performers' chart in the Indian mutual fund industry.

July 6, 2019
by MySIPonline
MySIPonline Blog
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