What is Mutual Fund?
A mutual fund is an investment vehicle made up of a pool of money collected from many investors
for the purpose of investing in securities such as stocks, bonds, money market instruments and
other assets. Mutual funds are operated by PROFESSIONAL money managers,
who allocate the fund's investments and attempt to produce capital gains and / or income for
the fund's investors. A mutual funds portfolio is structured and maintained to match the investment
objectives stated in its prospectus
Equity Mutual Fund ?
A mutual fund is that predominantly invests in stocks of listed companies is an equity
mutual fund. These funds can be volatile in the short run but can have a considerable upside
potential over a long period Equity mutual funds can be segmented according to the size of
the stocks they invest in ( Large cap / mid cap / small cap ) or concentration of investments
in a particular sector ( Like banking / pharma / IT / FMCG etc ) or choice of stocks based
on a specific them ( Like Infrastructure growth / International opportunities / Rural growth etc).
Debt Mutual Funds ?
A mutual fund is that predominantly invest in fixed income based instruments like
Government securities, bonds, corporate deposits, commercial papers, call money
etc are debt mutual funds. These are considered fairly safe with little risk to capital,
but income from these funds can depend on factors like interest rate cycle , liquidity
position in the economy, central banks monetary policy etc.Debt mutual funds
can be segmented on the basis of the nature of underlying securities they hold Income funds
( Medium to long term bonds / CPs / CDs/GSec), Short term funds
( Short term bonds / Call money ) and Liquid funds ( Cash / Call Money ).
Gold Funds ?
A mutual fund that primarily invest in gold bullion on gold mining companies
are Gold funds. Their price movements will more or less reflect the price movement
of gold in the market.
What is SIP?
SIP stands for Systematic Investment Plan, and It's a way to invest a fixed
amount regularly in mutual fund schemes. It is similar to a Recurring Deposit (RD)
in a bank. In SIP, an Investor selects a period (1 Year 3 Years or Even perpetuity),
intervals (Weekly, Monthly, Quarterly etc.) and amount.
The amount will auto - debit from the investor's bank account after every interval
for a selected period. As retail investors participation has been increasing in
mutual funds, SIP is also gaining popularity amongst them. But still,
most of the retail investors are still unaware / unclear about
Systematic Investment Plan (SIP)
Rupee-Cost Averaging
With volatile markets, most investors remain skeptical about the best time to invest and try to 'time' their entry into the market. Rupee-cost averaging allows you to opt out of the guessing game. Since you are a regular investor, your money fetches more units when the price is low and lesser when the price is high. During volatile periods, it may allow you to achieve a lower average cost per unit.
Power of Compounding
Albert Einstein once said, "Compound interest is the eighth wonder of the world. He who understands it, earns it... while he who doesn't, pays it." The rule for compounding is simple - the sooner you start investing, the more time your money has to grow.
Example:
If you started investing Rs. 10,000 a month on your 40th birthday, in 20 years time you would have put aside Rs. 24 lakhs. If that investment grew by an average of 7% a year, it would be worth Rs. 52.4 lakhs when you reach 60.
However, if you started investing 10 years earlier, your Rs. 10,000 each month would add up to Rs. 36 lakh over 30 years. Assuming the same average annual growth of 7%, you would have Rs. 1.22 Cr on your 60th birthday - more than double the amount you would have received if you had started 10 years later.
Other Benefits of Systematic Investment Plans:
Disciplined Saving -
Discipline is the key to successful investments. When you invest through SIP, you commit yourself to save regularly. Every investment is a step towards attaining your financial objectives.
- Flexibility - While it is advisable to continue SIP investments with a long-term perspective, there is no compulsion. Investors can discontinue the plan at any time. One can also increase/decrease the amount being invested.
- Long-Term Gains - Due to rupee-cost averaging and the power of compounding, SIPs have the potential to deliver attractive returns over a long investment horizon.
- Convenience - SIP is a hassle-free mode of investment. You can issue a standing instruction to your bank to facilitate auto-debits from your bank account.
SIPs have proved to be an ideal mode of investment for investors who do not have the resources to pursue active investments.
Delay in starting your SIP cost you a lot:
Suppose you start investing in a diversified equity mutual fund through an SIP at age of…
35
40
Your monthly investment…
Rs. 5000
Rs. 5000
You stop investing at the age of…
60
60
Your total investments would be…
Rs. 15 lakhs
Rs. 12 lakhs
Assuming compounded annualized returns @ 15%, your savings could grow to…
Rs.1,37,82,803.88
Rs. 66,35,367.20
A delay of just 5 years in starting your SIP can lead to a wealth difference of over Rs. 71 lakhs. Hence, one must start investing early in life.
other assets. Mutual funds are operated by PROFESSIONAL money managers,
who allocate the fund's investments and attempt to produce capital gains and / or income for
the fund's investors. A mutual funds portfolio is structured and maintained to match the investment
objectives stated in its prospectus
A mutual fund is that predominantly invests in stocks of listed companies is an equity
mutual fund. These funds can be volatile in the short run but can have a considerable upside
potential over a long period Equity mutual funds can be segmented according to the size of
the stocks they invest in ( Large cap / mid cap / small cap ) or concentration of investments
in a particular sector ( Like banking / pharma / IT / FMCG etc ) or choice of stocks based
on a specific them ( Like Infrastructure growth / International opportunities / Rural growth etc).
mutual fund. These funds can be volatile in the short run but can have a considerable upside
potential over a long period Equity mutual funds can be segmented according to the size of
the stocks they invest in ( Large cap / mid cap / small cap ) or concentration of investments
in a particular sector ( Like banking / pharma / IT / FMCG etc ) or choice of stocks based
on a specific them ( Like Infrastructure growth / International opportunities / Rural growth etc).
Debt Mutual Funds ?
A mutual fund is that predominantly invest in fixed income based instruments like
Government securities, bonds, corporate deposits, commercial papers, call money
etc are debt mutual funds. These are considered fairly safe with little risk to capital,
but income from these funds can depend on factors like interest rate cycle , liquidity
position in the economy, central banks monetary policy etc.Debt mutual funds
can be segmented on the basis of the nature of underlying securities they hold Income funds
( Medium to long term bonds / CPs / CDs/GSec), Short term funds
( Short term bonds / Call money ) and Liquid funds ( Cash / Call Money ).
Government securities, bonds, corporate deposits, commercial papers, call money
etc are debt mutual funds. These are considered fairly safe with little risk to capital,
but income from these funds can depend on factors like interest rate cycle , liquidity
position in the economy, central banks monetary policy etc.Debt mutual funds
can be segmented on the basis of the nature of underlying securities they hold Income funds
( Medium to long term bonds / CPs / CDs/GSec), Short term funds
( Short term bonds / Call money ) and Liquid funds ( Cash / Call Money ).
Gold Funds ?
A mutual fund that primarily invest in gold bullion on gold mining companies
are Gold funds. Their price movements will more or less reflect the price movement
of gold in the market.
are Gold funds. Their price movements will more or less reflect the price movement
of gold in the market.
SIP stands for Systematic Investment Plan, and It's a way to invest a fixed
amount regularly in mutual fund schemes. It is similar to a Recurring Deposit (RD)
in a bank. In SIP, an Investor selects a period (1 Year 3 Years or Even perpetuity),
intervals (Weekly, Monthly, Quarterly etc.) and amount.
The amount will auto - debit from the investor's bank account after every interval
for a selected period. As retail investors participation has been increasing in
mutual funds, SIP is also gaining popularity amongst them. But still,
most of the retail investors are still unaware / unclear about
Systematic Investment Plan (SIP)
Rupee-Cost Averaging
With volatile markets, most investors remain skeptical about the best time to invest and try to 'time' their entry into the market. Rupee-cost averaging allows you to opt out of the guessing game. Since you are a regular investor, your money fetches more units when the price is low and lesser when the price is high. During volatile periods, it may allow you to achieve a lower average cost per unit.
Power of Compounding
Albert Einstein once said, "Compound interest is the eighth wonder of the world. He who understands it, earns it... while he who doesn't, pays it." The rule for compounding is simple - the sooner you start investing, the more time your money has to grow.
Example:
If you started investing Rs. 10,000 a month on your 40th birthday, in 20 years time you would have put aside Rs. 24 lakhs. If that investment grew by an average of 7% a year, it would be worth Rs. 52.4 lakhs when you reach 60.
However, if you started investing 10 years earlier, your Rs. 10,000 each month would add up to Rs. 36 lakh over 30 years. Assuming the same average annual growth of 7%, you would have Rs. 1.22 Cr on your 60th birthday - more than double the amount you would have received if you had started 10 years later.
Other Benefits of Systematic Investment Plans:
Disciplined Saving -
Discipline is the key to successful investments. When you invest through SIP, you commit yourself to save regularly. Every investment is a step towards attaining your financial objectives.
- Flexibility - While it is advisable to continue SIP investments with a long-term perspective, there is no compulsion. Investors can discontinue the plan at any time. One can also increase/decrease the amount being invested.
- Long-Term Gains - Due to rupee-cost averaging and the power of compounding, SIPs have the potential to deliver attractive returns over a long investment horizon.
- Convenience - SIP is a hassle-free mode of investment. You can issue a standing instruction to your bank to facilitate auto-debits from your bank account.
SIPs have proved to be an ideal mode of investment for investors who do not have the resources to pursue active investments.
Delay in starting your SIP cost you a lot:
| ||
Suppose you start investing in a diversified equity mutual fund through an SIP at age of…
|
35
|
40
|
Your monthly investment…
|
Rs. 5000
|
Rs. 5000
|
You stop investing at the age of…
|
60
|
60
|
Your total investments would be…
|
Rs. 15 lakhs
|
Rs. 12 lakhs
|
Assuming compounded annualized returns @ 15%, your savings could grow to…
|
Rs.1,37,82,803.88
|
Rs. 66,35,367.20
|
A delay of just 5 years in starting your SIP can lead to a wealth difference of over Rs. 71 lakhs. Hence, one must start investing early in life.
| ||
Do you want interest for sleeping money ?
Aditya
Birla Sun Life Retirement Fund
We
are offering four investment plans under this scheme.
a) 30's Plan : Investment predominantly in equity, equity
related Securities as well as debt, money market instruments.
b) 40's Plan: Investment 65-80% into Equity & 20-35%
debt (Aggressive Hybrid)
D) 50's plus Plan - Will allocate 100% of its investments
to debt & money market instruments.
NFO Opens: 19th Feb 2019
An open ended scheme with minimum investment of Rs.1000
and in multiple of Rs.1 thereafter.
Compulsory lock in option 5years or 60 years (whichever
is earlier)
(SIP, CSIP, STP, SWP, Switching intra-scheme, Trigger
Available)
IMP NOTE
Planning your retirement corpous with ABSL
RETIREMENT FUND. Calculate your retirement corpous by entering the following
link.
We are Associated with :
How to build an emergency corpus with mutual funds
Financial planners believe investors should keep aside 3-6 months expenses as an emergency fund. This corpus can be built using mutual funds
What is an emergency or contingency fund meant for?
There are many occasions when you need money immediately. Take, for example, hospitalisation or urgent travel requirements. We would need cash immediately to attend to such situations. According to financial planners, it's better to keep some money aside to meet such needs.
What is the benefit of having emergency funds ready?
If an emergency arises, one would have to take a loan or borrow from family or friends. An emergency kitty prevents you from breaking your long-term investments, such as equity mutual funds, which are made to meet long-term goals. Being prepared with an emergency fund not only gives you confidence to tackle unexpected financial expenses without worries, but also inculcates a saving habit and stops you from reckless spending.
How big should an emergency fund be and how can you build one?
While the size of your emergency fund varies depending on your lifestyle, monthly costs, income, and dependents, the rule of thumb is to put away enough money to take care of at least three to six months of expenses. Financial planners say debt mutual funds are the best way to build this corpus. Investors can build this slowly or over a period of time. They can use either the systematic investment plan route or the lumpsum route. Investment can be made in liquid funds or ultra short-term mutual funds. These funds enjoy easy liquidity. In case of an emergency or when one needs money, investors can redeem them within 1-2 working days.
What return do you get in a liquid or ultra short-term fund?
Rather than keeping your money idle in savings account where you earn 3.5 per cent, investments in liquid and ultra short-term funds offer you higher returns. As per data from Value Research, over the past year, the liquid funds category has given an average return of 6.8 per cent, while the ultra short-term funds category has given 6.42 per cent.
CHECK YOUR KYC : Click Here