MF Investment

[Smart_trade]

Sir,
To do sip does one need to buy mf units every month/ on pre defined dates or can we decide in which month/ date i want to invest and leave some months depend on market. I hope my question is clear

Yes,in SIP one has to buy units every month on a predefined date such as 1 st/7th/15th....etc.These days we have weekly and quarterly SIPs also.The fund house buys those units on the particular day for us once we give SIP mandate.

But if you want to buy selectively, you buy on that day when the market has fallen...for example I buy whenever the market is down...that is my SIP .As we are in front of the terminal the whole day so why should we do SIP on a particular date on the calendar ,that particular day the market may be up ,so for us any crash in the market is SIP day.

ST

 

[msa5678]

But then one has to register with so many different fund houses ? Suppose one wants to invest Rs. 10000 in one fund each of Reliance, Bajaj, Sundaram, Birla Sun Life and GS, then one would need to register with each of those, even if buying directly from the bank ?

Is there any one stop shop for MF with no transaction overheads ?

Does one need a demat account for buying MF ?

Zerodha's COIN platform is good for MF transactions. Almost all the MF's in one place. Only drawback is DEMAT account is compulsory for COIN subscription. Also there is monthly subscription charges of 60 rs. plus nominal dp charges also applicable. Overall I find this service quite helpful. Particularly the Portfolio section which shows your holdings.

Sent from my SM-G610F using Tapatalk

 

[ankur07090]

Anyone please guide about Direct Dividend vs Direct Growth plan in MF.

 

[Smart_trade]

Anyone please guide about Direct Dividend vs Direct Growth plan in MF.

Dividend payment option is the plan in which the investor receives dividend.But while paying dividend the fund has to pay dividend distribution tax to Govt and then pay the dividend.

In growth option no dividend is paid but the NAV goes up .So after 1 year we redeem some units which will give us the amount of dividend which the investor under dividend payment option has got,we achieve the objective of getting regular income without paying any taxes as after holding period of 1 year in equity funds,the gain becomes a long term capital gains and is free from taxes.

There is a third option of dividend reinvestment....this is worst tax efficient option.In this,the fund pays dividend distribution tax and then the dividend amount instead of paying to the investor gets reinvested in the fund again....makes no sense going for this option.

So the best is growth option in my view.

Smart_trade

 

[ankur07090]

ST Sir,

Do we need to take any action when market is falling as here we are focused on very long term investment or we should simply buy in every correction without worrying about the down movement.

 

[Smart_trade]

ST Sir,

Do we need to take any action when market is falling as here we are focused on very long term investment or we should simply buy in every correction without worrying about the down movement.

These are long term investments so we don't sell and buy at every turn of the markets.But if our analysis proves that the market has gone too much ahead of its fundamentals or if the growth in the market is over,then we would like to sell all equity investments and park the funds in debt or liquid funds and re invest when the market comes down....

There has to be some stoploss...it could be 15- 25 % value erosion in the fund and we should exit from the same to protect our remaining capital.

Smart_trade

 

[timepass]

These are long term investments so we don't sell and buy at every turn of the markets.But if our analysis proves that the market has gone too much ahead of its fundamentals or if the growth in the market is over,then we would like to sell all equity investments and park the funds in debt or liquid funds and re invest when the market comes down....

There has to be some stoploss...it could be 15- 25 % value erosion in the fund and we should exit from the same to protect our remaining capital.

Smart_trade

What exactly are debt funds ??? How does it work and protect the capital ?? What kind of payouts ?

Liquid funds - I am aware that their face value remains more or less constant but the dividend is paid out basically in number of units (??daily). That the payout may be in fraction of 1. That it can be bought and sold in fraction of a unit too.

If possible please name some good debt/liquid funds.

 

[Smart_trade]

Debt Mutual Funds invest in treasury bills, government securities, Certificate of Deposits (CDs), Commercial Papers (CPs), bonds, money market instruments and many more. The credit quality of these underlying instruments are measured in terms of ratings. The debt funds One should hold them for 3 years to get the benefit of long term capital gains....on debt funds long term capital gains tax is @ 20 % after taking into account indexation.

The debt funds though much safer than equity funds,they are not zero risk....it's return fluctuates as per the RBI interest rates policy....in reducing interest rates, the return goes up and in upwards interest rates regime,the return goes down...they give a rate of return of 7-9 % but are more tax efficient than Bank FDs and RDs.There are ways of paying much lower taxes than taxes on FD interest....but will write about it some other time.

Good Debt funds are HDFC High interest fund,Birla Sunlife floating rate fund.


Liquid fund is a type mutual fund that invests money in Bank Certificate of Deposits, Bank Fixed Deposits, Treasury Bills, Bill Rediscounting, Commercial Paper, Collateralised Borrowing & Lending Obligation and other debt securities with maturities up to 91 days...liquid funds don't have entry and exit load and they calculate their NAV on all 365 days including Sat/Sundays and holidays...

Liquid funds are much safer but they give 6-8 % pa returns. One can enter and exit from liquid funds any time....many corporates park their funds in liquid on weekends.

Good liquid funds are ICICI Prudential Liquid fund,HDFC Liquid fund,Reliance Liquid fund.

Smart_trade

 

[biggles]

have recently signed up with FUNDSINDIA. You are on mutual fund platform with no brokerage charges. About all mutual funds are available on the site. Once you have completed the KYC you can buy and sell any MF in your account.
And no charges....I may be wrong so you can check it out and update if there are any trips, trapdoors or hidden expenses.

But then one has to register with so many different fund houses ? Suppose one wants to invest Rs. 10000 in one fund each of Reliance, Bajaj, Sundaram, Birla Sun Life and GS, then one would need to register with each of those, even if buying directly from the bank ?

Is there any one stop shop for MF with no transaction overheads ?

Does one need a demat account for buying MF ?

 

[timepass]

One doesn't hear much about GS Liquidbees. Used to be a hot recommended item some years ago.