I need to know the concept of MFs...

[=CrAzYG33K=]

1. When/How do you buy an MF ?
Is it just like stocks ?
Like we can buy it as an IPO / after it is released in mkt (for mkt prices - Intraday) .. Are there differentiations in MFs also ?
If so any MFs open now - (to buy at issue price ?? (not at mkt price) )

2. I'm lookin' at a Tax Saving MF option ...
How different is it from the normal one?

3. Growth option MFs vs. Dividend option MFs...
Care to explain??

[Suro]

Originally Posted by =CrAzYG33K=

1. When/How do you buy an MF ?
Is it just like stocks ?
Like we can buy it as an IPO / after it is released in mkt (for mkt prices - Intraday) .. Are there differentiations in MFs also ?
If so any MFs open now - (to buy at issue price ?? (not at mkt price) )

2. I'm lookin' at a Tax Saving MF option ...
How different is it from the normal one?

3. Growth option MFs vs. Dividend option MFs...
Care to explain??

Please visit the following sites to find answer to your queries in detail:

1. http://www.moneycontrol.com/easymf/learn/ >> some articles that answers your questions directly.
2. http://www.valueresearchonline.com/ >> most comprehensive site on Indian MFs

Some brief points:

1. An equity oriented MF is more like stocks, surely a wide basket of stocks. The stock selection is usually driven by the category e.g. diversified, small cap, mid cap, banking, infrastructure etc. Above sites contain the portfolio information about all the funds in the market, you can see for yourself.
You can buy into a fund either during NFO period or later for an open ended scheme. Don't be fooled by the Rs 10 NFO price. You always buy at market price and Rs 10 NAV is not cheaper than Rs 100 NAV. My opinion is to look at the past record of a fund before investing, hence go for an ongoing fund. There is considerable differentiation in the performance across MFs.
So far you can buy sell at the fund NAV declared daily for most funds. Intraday trading in MFs not possible currently, except for the ETFs (Exchange Traded Funds).
Most brokers allow you to invest in MFs online without any paperwork. I think the ICICIDirect.com covers almost all the funds.

2. For tax saving option you might have to go for ELSS, which will have a 3 year lock-in. Again, the above sites will have detailed information.

3. Growth option vs Dividend option is driven by your preferences and tax considerations. For an equity oriented fund, growth will be a better option if you hold for more than 1 year, as the proceeds thereafter will be tax free. Dividend is also tax free in your hands, however the fund must pay Dividend distribution tax, which reduces your corpus. Some people also go for dividend reinvestment option.

I suggest you get all the info from the above sites and then ask specific questions.

Hope this helps.

Regards,
- SD

[=CrAzYG33K=]

Originally Posted by Suro

Please visit the following sites to find answer to your queries in detail:

1. http://www.moneycontrol.com/easymf/learn/ >> some articles that answers your questions directly.
2. http://www.valueresearchonline.com/ >> most comprehensive site on Indian MFs

Some brief points:

1. An equity oriented MF is more like stocks, surely a wide basket of stocks. The stock selection is usually driven by the category e.g. diversified, small cap, mid cap, banking, infrastructure etc. Above sites contain the portfolio information about all the funds in the market, you can see for yourself.
You can buy into a fund either during NFO period or later for an open ended scheme. Don't be fooled by the Rs 10 NFO price. You always buy at market price and Rs 10 NAV is not cheaper than Rs 100 NAV. My opinion is to look at the past record of a fund before investing, hence go for an ongoing fund. There is considerable differentiation in the performance across MFs.
So far you can buy sell at the fund NAV declared daily for most funds. Intraday trading in MFs not possible currently, except for the ETFs (Exchange Traded Funds).
Most brokers allow you to invest in MFs online without any paperwork. I think the ICICIDirect.com covers almost all the funds.

2. For tax saving option you might have to go for ELSS, which will have a 3 year lock-in. Again, the above sites will have detailed information.

3. Growth option vs Dividend option is driven by your preferences and tax considerations. For an equity oriented fund, growth will be a better option if you hold for more than 1 year, as the proceeds thereafter will be tax free. Dividend is also tax free in your hands, however the fund must pay Dividend distribution tax, which reduces your corpus. Some people also go for dividend reinvestment option.

I suggest you get all the info from the above sites and then ask specific questions.

Hope this helps.

Regards,
- SD

Thanks a lot man..
Atleast got to know some fundaes!