Top Mutual Fund Plans for Every Goal.
Top Mutual Fund Plans for Every Goal.
Types of Mutual Funds
Equity Funds
Invest in shares of companies to generate long-term growth. Suitable for investors with a higher risk appetite.
Hybrid Funds
Combine equity and debt to balance growth and stability. Best for investors seeking moderate risk and return.
Debt Funds
Invest in fixed-income instruments like bonds and treasury bills. Ideal for steady income with lower risk.
Index Funds
Track market indices like Nifty 50 or Sensex. A cost-effective option with passive investment strategy.
Ways to Invest in Mutual Funds
Systematic Investment Plan (SIP)
A Systematic Investment Plan (SIP) is a popular investment strategy in mutual funds that allows investors to invest a fixed amount of money at regular intervals, such as monthly or quarterly, instead of making lump sum investments.
Systematic Investment Plan (SIP)
A Systematic Investment Plan (SIP) is a popular investment strategy in mutual funds that allows investors to invest a fixed amount of money at regular intervals, such as monthly or quarterly, instead of making lump sum investments.
Benefits of SIP
Rupee Cost Averaging
By investing a fixed amount regularly, SIP helps reduce the impact of market volatility, as you buy more units when prices are low and fewer units when prices are high.
Disciplined Investing
SIPs promote consistent investing habits, helping you invest regularly without worrying about market timing or sudden fluctuations, encouraging long-term wealth creation.
Power of Compounding
SIPs harness the power of compounding, potentially generating significant returns over the long term as your earnings generate additional earnings.
How SIP Works
Choose a Mutual Fund
Select a mutual fund that aligns with your investment goals and risk tolerance.
Set Up a SIP
Decide on the investment amount, frequency (monthly, quarterly) and duration.
Automatic Deductions
The predetermined amount is automatically deducted from your bank account at regular intervals.
Units Allocated
The deducted amount is used to purchase units of the chosen mutual fund at the current market price.
Key Considerations For SIP
Investment Amount
Choose an amount that fits comfortably within your budget and aligns with your financial goals.
Frequency
Decide whether monthly, quarterly or another suitable interval works best for your personal cash flow.
Duration
Determine how long you want to continue your SIP based on your investment horizon and goals.
Review and Adjust
Periodically review SIP performance and adjust as needed to stay aligned with your objectives.
Systematic Withdrawal Plan (SWP)
A Systematic Withdrawal Plan (SWP) is a feature offered by mutual funds that enables investors to withdraw a fixed amount of money at regular intervals from their mutual fund investments, providing a steady stream of income.
Systematic Withdrawal Plan (SWP)
A Systematic Withdrawal Plan (SWP) is a feature offered by mutual funds that enables investors to withdraw a fixed amount of money at regular intervals from their mutual fund investments, providing a steady stream of income.
Benefits of SWP
Regular Income
SWP provides a consistent flow of income, ideal for meeting recurring expenses or financial needs.
Flexibility
Investors can customize the amount and frequency of withdrawals according to their specific requirements.
Tax Efficiency
It's more tax-efficient than lump sum withdrawals, as you withdraw only what’s needed potentially reducing tax liability.
How SWP Works
Invest in Mutual Fund
First, invest in a mutual fund that offers the SWP facility for regular income.
Set Up a SWP
Specify the withdrawal amount, frequency and duration that suits your needs.
Automatic Withdrawals
The predetermined amount is automatically withdrawn from your mutual fund investment at the specified intervals.
Continued Growth
The remaining investment continues to stay invested in the market, potentially generating returns over time.
Key Considerations For SWP
Withdrawal Amount
Set a withdrawal amount that meets your income needs without depleting your investment too quickly.
Frequency
Choose a withdrawal frequency (monthly, quarterly) that matches your income requirements.
Duration
Determine how long you want the SWP to continue based on your financial needs and investment horizon.
Tax Implications
Understand the capital gains tax and other tax considerations associated with your regular withdrawals.
Systematic Transfer Plans (STPs)
Systematic Transfer Plan (STP) is a disciplined investment strategy that allows investors to transfer a fixed amount from one mutual fund scheme to another within the same fund house at regular intervals. Typically, it helps investors move funds from low-risk schemes (like debt funds) to higher-risk schemes (like equity funds) gradually, aiming to balance risk and returns over time.
Types of STP
Fixed STP
Transfers a pre-determined fixed amount periodically from one scheme to another.
Flexible STP
Allows variable transfer amounts based on market conditions or investor discretion.
Capital Appreciation STP
Transfers only the gains (appreciated capital) from the source fund to the target fund.
Systematic Transfer Plans (STP)
Systematic Transfer Plan (STP) is a disciplined investment strategy that allows investors to transfer a fixed amount from one mutual fund scheme to another within the same fund house at regular intervals. Typically, it helps investors move funds from low-risk schemes (like debt funds) to higher-risk schemes (like equity funds) gradually, aiming to balance risk and returns over time.
Systematic Transfer Plans (STP)
Systematic Transfer Plan (STP) is a disciplined investment strategy that allows investors to transfer a fixed amount from one mutual fund scheme to another within the same fund house at regular intervals. Typically, it helps investors move funds from low-risk schemes (like debt funds) to higher-risk schemes (like equity funds) gradually, aiming to balance risk and returns over time.
Types of STP
Fixed STP
Transfers a pre-determined fixed amount periodically from one scheme to another.
Flexible STP
Allows variable transfer amounts based on market conditions or investor discretion.
Capital Appreciation STP
Transfers only the gains (appreciated capital) from the source fund to the target fund.
Benefits of STP
Rupee Cost Averaging
Buys more units at low prices and fewer at high, reducing average cost.
Gradual Market Entry
Avoids lump sum exposure during market highs through phased investment.
Better Cash Flow Management
Keeps surplus funds invested while gradually entering higher-growth options.
How STP Works
Initial Investment
Invest a lump sum amount in a source scheme, usually a low-risk debt fund.
Scheme Selection
Choose a target scheme, typically a higher-risk equity fund, for gradual transfers.
Schedule Transfers
Decide the frequency (monthly, quarterly, etc.) and fixed amount to be transferred.
Automated Transfers
At each interval, the amount is automatically transferred to the target scheme at prevailing NAV.
Key Considerations For STP
Fund House Restriction
Both source and target funds must belong to the same AMC within the selected mutual fund house.
Minimum Investment & Transfer Amounts
Check the minimum lump sum and STP installment size as defined by the fund house.
Exit Load & Taxation
STP transactions may incur exit loads and capital gains taxes depending on the holding period and fund type.
Market Timing Isn’t Eliminated
While STP reduces timing risk, it doesn’t eliminate market fluctuations entirely.
New Fund Offer (NFO)
A New Fund Offer (NFO) is the launch of a new mutual fund scheme by an asset management company. It allows investors to subscribe to the fund during a limited period, typically at an initial price of Rs. 10 per unit.
Types of NFO
Open-Ended Funds
These funds allow investors to enter or exit at any time after the NFO period ends, offering higher liquidity.
Close-Ended Funds
These funds have a fixed tenure, and investors can only exit through stock exchanges or when the fund matures.
New Fund Offer (NFO)
A New Fund Offer (NFO) is the launch of a new mutual fund scheme by an asset management company. It allows investors to subscribe to the fund during a limited period, typically at an initial price of Rs. 10 per unit.
New Fund Offer (NFO)
Types of NFO
Open-Ended Funds
These funds allow investors to enter or exit at any time after the NFO period ends, offering higher liquidity.
Close-Ended Funds
These funds have a fixed tenure, and investors can only exit through stock exchanges or when the fund matures.
Benefits of NFO
Fresh Investment Avenues
NFOs introduce new investment opportunities and portfolio diversification options.
Potential for Higher Returns
Early investment in a promising fund could potentially yield better returns as the fund grows.
Innovative Themes
Many NFOs come with unique concepts or investment styles not available in current offerings.
Key Considerations For NFO
Research Thoroughly
Evaluate the fund's objective, risk profile, and the fund manager's track record before investing.
Minimum Investment
Check the minimum subscription amount, which can vary but may start from Rs. 100 or Rs. 500.
Investment Options
Verify if lump sum investments are allowed in the NFO and when SIP starts post-launch.
Compare with Existing Funds
Compare the NFO with established funds in the same category to assess potential advantages.
Benefits of Mutual Funds
Benefits of
Mutual Funds
Diversification
Mutual funds unite investors' money, diversifying portfolios to minimize individual stock or bond risks making investing safer and smarter.
Professional Management
Skilled managers lead mutual funds researching and deciding investments for investors making investing easy and effective.
Liquidity
Investors enjoy liquidity and flexibility by trading mutual fund shares daily at the current NAV, making investing convenient.
Accessibility
Mutual funds offer small investors access to diverse investment opportunities and asset classes simplifying wealth-building.
Cost Efficiency
Mutual funds benefit from economies of scale, allowing investors to access professional management and diversified portfolios at a lower cost compared to individual securities.
Diversification
Mutual funds unite investors' money, diversifying portfolios to minimize individual stock or bond risks making investing safer and smarter.
Professional Management
Skilled managers lead mutual funds researching and deciding investments for investors making investing easy and effective.
Liquidity
Investors enjoy liquidity and flexibility by trading mutual fund shares daily at the current NAV, making investing convenient.
Accessibility
Mutual funds offer small investors access to diverse investment opportunities and asset classes simplifying wealth-building.
Cost Efficiency
Mutual funds benefit from economies of scale, allowing investors to access professional management and diversified portfolios at a lower cost compared to individual securities.
Investment Success Factors
Investment Objective
Asset Allocation
Risk Tolerance
Tax Implications
Fund Performance
Professional Advice
Investment Objective
Asset Allocation
Risk Tolerance
Tax Implications
Fund Performance
Professional Advice
Investment Objective
Asset Allocation
Tax Implications
Risk Tolerance
Fund Performance
Professional Advice
Tax Guide for Investors
Equity Mutual Funds
- Long-Term Capital Gains (LTCG): If held for more than 1 year, gains exceeding ₹1.25 lakh are taxed at 12.5%
- Short-Term Capital Gains (STCG): If held for 1 year or less, gains are taxed at 20%.
Debt Mutual Funds (including international funds)
All gains, regardless of holding period are now treated as Short-Term Capital Gains and taxed as per the investor's income tax slab rate.
Hybrid Mutual Funds
- Taxation depends on the equity component: If the equity component is 65% or more, taxation is similar to equity funds. Otherwise, taxation is similar to debt funds.
Other Key Tax Considerations
- Dividend Income: Dividend income from mutual funds is taxable in the hands of Investor.
- Tax Deduction at Source (TDS): TDS is applicable on dividend and other income from mutual funds.
Mutual Funds Partners
