If a fund performs exceptionally well with highest returns in a category, more and more money from investors flows into the fund, and then a time comes when the fund manager is not able to generate the same return as he/she was generating when the fund size was small. The fund eventually drops down from … Read more
SIP is a way to invest in mutual funds wherein a certain amount of money is invested at a regular interval. The frequency of investment could be daily, weekly, monthly or quarterly. Mostly, investors opt for monthly investment. Lumpsum is investing the money at one go wherein there is no prior interval or frequency defined … Read more
Direct plan in mutual funds are the investments wherein there is no intermediary involved in between investor and AMC. So, there is no charge that goes to the intermediary. Regular plan involves intermediary. There are charges of the intermediary, and so the returns to the investor is lower as compared to direct plan. To understand … Read more
Investments in equity mutual funds are done for long term, but what is the duration of perfomance that should be considered for selection of mutual fund? Typically, the answer would be if investment is done for long term, the duration for analyzing fund performance for selection should be long. This is correct in a way. … Read more
CAGR – It calculates the annualized returns on investment. It is suitable to be used when one time lumpsum investment and one time redemption is done in a mutual fund scheme. For example – An investor invests ₹ 1 lakh in a mutual fund scheme and redeems ₹ 2 lakhs at the end of 5 … Read more
In the recent data of active and passive mutual funds in small and midcap categories, most of the actively managed funds are unable to beat passive funds in 3 or 5 years horizon. Let’s check on this with data: In the Midcap Category, considering the SIP returns: In a 5 year period, only 7 out … Read more
If the redemption of mutual fund units are done within an year of investment, 20% tax gets applied on the profit or gain. The gain here is termed as STCG or Short Term Capital Gain. If the redemption of mutual fund units are done after one year of investment, 12.5% tax gets applied on the … Read more
Portfolio turnover ratio indicates the frequency of changes in a fund. It is usually calculated for last one year. Calculation is done as below: If a fund has sold ₹ 5000 crores stocks and bought ₹ 4000 crores stocks, and has average AUM of ₹ 8000 crores in last one year, lower value of sold … Read more
AUM or Asset Under Management is the total money pooled for investment. Though having more money for investment shows the confidence of investors in a mutual fund, money beyond a certain limit might be difficult to manage, as fund manager might find it difficult to have the same opportunitities as he/she had when the AUM … Read more
It’s an interesting topic to discuss on how many mutual funds one should have in his/her portfolio. While some experts believe having 4 to 5 funds are enough. Some say 10 to 15, and few even say that it is ok to have 20 to 25 mutual funds in portfolio. All the experts have their … Read more
