Friday, June 15, 2018

Does experience of Fund manager matter before selecting which Mutual fund to invest in?

A mutual fund is a professionally managed investment fund that pools money from many investors to purchase securities and that’s why it becomes essential to check the credentials and past performance of a fund manager.

While many investors’ often get impressed seeing more number of schemes managed by the fund manager (of a respective fund house); this is rather worrisome since it reflects the pressure on the fund manager while managing investors’ hard earned money. It may so happen that he may simply replicate the portfolio, and in the bargain defeat the unique mandate of each scheme managed by him. In our view, ideally, a fund manager should not be managing more than 5 schemes; as such a “funds-to-fund manager ratio” can help in bringing in efficiency while managing your hard earned money.
Also one should not merely invest in a respective mutual fund scheme of a fund house, just because it is managed by a star fund manager. Many mutual fund distributors / agents / relationship managers may persuade you to invest in mutual fund scheme managed by a star fund manager; but then you need to ask relevant questions on track record of performance of all the mutual fund schemes managed by the star fund manager (which your mutual fund distributor / agent / relationship manager has high regards), where you need to check the following:
  • Returns of the respective mutual fund schemes
  • Risk that investors are exposed to (as revealed by the Standard Deviation)
  • Risk- adjusted returns achieved by the fund (as revealed by the Sharpe Ratio)
  • Portfolio churning (as revealed by the Portfolio Turnover Ratio)
Moreover, as a litmus test you also need to ascertain how the respective mutual fund schemes managed by the star fund manager has sailed during various market cycles (i.e. during bullish and bearish cycle)

To know more about which other factors needs to be considered before investing in any mutual fund CLICK HERE

Friday, June 1, 2018

Balance your funds by investing in balanced funds

Balanced funds or hybrid funds are a mix of equity and debt mutual funds. They keep their investment in the ratio of 60-40 where 60% of the amount is invested in stocks, and the balance 40% is invested debt instruments. Balanced funds maintain their formula of income generation and capital appreciation

Balance funds have their advantage and disadvantages:

The pros: The investor gets diversification in a single docket of mutual funds without the hassle of analysing and selecting each and every equity and debt fund.

Balanced funds are suitable for persons who are willing to invest a smaller portion of their income monthly.

A balanced fund allows the investor to make systematic withdrawals while maintaining suitable asset allocation.

The cons: They are not entirely risk-free, many investors are of the view that less volatility means risk-free. That is not the case; balanced funds also have their share of risks..

While holding only a specific class of funds, the investor can relocate some of the funds into other mutual funds as diversification for tax planning or wealth creation. However, in balanced funds, it is not possible as the same mutual fund owns both types of the asset class.

Choosing a balanced fund that suits the investor’s long-term goals is very important. When assessing the equity part, the investor should look for factors like the fund house, fund manager, asset value, constancy of portfolio, diversification, risk taken by the fund, asset size, and the historical returns. When assessing the debt funds, they should pay attention to the asset quality, fund manager’s qualification and sensitivity of the fund to rate changes.

Balanced funds are custom-made for new investors and those looking for relative stability for their savings. Hence balanced fund provides a good investment option wherein investing in one particular fund you can have exposure to equity as well debt market.

To know more about balanced fund and to invest smartly CLICK HERE

Tuesday, May 29, 2018

Now that I am earning I can finally spend! Why should I care about investing at this point

 So, you finally have a job. You no longer need to ask your family for pocket money.Now, you have a job. You have discretionary income.  It’s liberating, exhilarating. Finally, you’ve arrived! It’s that beautiful phase, where you are wondering how to spend your earnings. An EMI plan on a car might be nice, that new smart phone or those beautiful shoes…

But hold on before you get too far…let’s give your new found financial freedom some thought. Let’s account for:
  1. These carefree days may not last more than a few years
  2. You get older – your earnings increase as do your expenses. A house, a car, school fees…
  3. Your parents’ get older – you may need to help them financially.
  4. You will retire – how will you maintain your life style?
And now, let’s rewind back to today. Where were we? Yes, you were a carefree and young individual. But after reading this article, you will be carefree, young and wise individual.

There’s no rule that says you can’t spend when you have the disposable income. But the wise one squirrels away a small percentage of salary without fail every single month.  That leads us to the next important question – should you just kept that money aside, as in “save” or should you “invest” that money?

Just as drops of water make an ocean, small but regular investments can go a long way in building wealth over a period of time.You may have to choose from various investment options available if liquidity concerns you

SIP is a method of investing a fixed sum, regularly, in a mutual fund scheme. SIP allows an investor to buy units regularly on a specific date of the month. This will help in building wealth in the long term. Due to the principle of cost averaging, more number of units are bought in a falling market and fewer units in a rising  market. SIPs allow you to take part in the stock market, without trying to time it, also bringing discipline to your investments.

It’s the key to investing success. Regular investment makes you disciplined in your savings and also leads to wealth accumulation. Systematic investing is a time-tested discipline that makes it easy to invest automatically. Investing regularly in small amounts can often lead to better results than investing in a lump sum.INVEST NOW 

If you have any query on mutual funds, do ask us on +91 9920922639 CLICK HERE

Friday, May 25, 2018

Why investors should continue investing in SIPs even in a bear market

A standard pitch from investment experts and mutual fund managers is – invest through systematic investment plans (SIPs) in diversified equity funds to create a retirement corpus. The popularity of SIPs or Systematic Investment Plans has gone up in the last couple of years. The recent fall in the equity markets has seen some investors getting negative returns on the SIPs. This raises the question as to whether SIP should be discontinued during bear phases of the markets.
The philosophy behind starting a SIP with an equity scheme is to go on investing regardless of the market conditions. Investors should not stop it in downturns, but should keep the SIP running for a longer period. Otherwise, they will lose out on the chance to make money in the long term. Here’s why:
  • Rupee cost averaging: The concept of rupee cost averaging lies in averaging out the cost at which you buy units of a mutual fund. The equity markets have always been volatile reflecting the ups and downs of the economy.Rupee cost averaging is an approach in which you invest a fixed amount of money at regular intervals. This in turn ensures that you buy more shares of an investment when prices are low and less when they are high.. However, this mechanism doesn’t guarantee a profit or eliminate risk, and it won’t protect you from a loss if you sell shares at a market low. Before adopting this strategy, you should consider your ability to continue investing through periods of low price levels.
  • Power of compounding: .Compounding means that the money you make off an investment can be reinvested to make even more money than your initial investment.. Essentially, compounding is the process of earning income on your principal investment plus the income earned – the income also starts to earn as the same is reinvested.
In conclusion, investors shouldn’t worry about stopping SIPs when the market is declining. In fact, that is the period when an investor can accumulate more units at a cheaper cost and then benefit from the eventual up move in the markets. SIPs are done by investors to meet long-term goals and should be done for at least 5-10 years. They should not be worried about near-term volatilities or small negative returns in the near-term. Corrections are the best time to accumulate maximum numbers of units for the future. In fact investors can use this opportunity to increase SIP amount by using a top-up facility provided by the fund house.Invest NOW

If you have any query on Systematic Investment plan in mutual funds, do ask us on +91 9920922639 Click here

Wednesday, May 16, 2018


One of the most important factors to consider while drawing a financial plan is fixing the time period, especially if you are a beginner. The thumb rule is, the earlier you start, the greater the chance of achieving your financial goals. Having the advantage to grow your investments over time, and putting your investments to work for you, will help you live the life you ultimately want to.
It is time tested that if one starts investing early, the percentage of building the corpus for one’s desired future financial goals is higher as compared to those who start very late in their life.
Investing according to financial goals.
Identify and prioritise goals:
The first step in goal based investing is identifying and prioritising goals by segregating them into needs and wants – needs are essentials and hence get precedence over wants, which are desires and aspirations. Once decided, align your needs/wants to the time horizon.​
Explore the systematic method of investing in mutual funds
​​Investors can also benefit from the systematic plans offered by the mutual funds. For instance, a systematic-investment plan (SIP) is used for wealth accumulation. A systematic-transfer plan (STP) helps in transferring wealth from one asset to another, in safeguarding the portfolio against volatility, and in adapting to the changing risk appetite with age and increase in responsibilities. Lastly, a systematic-withdrawal plan (SWP) is useful in deriving a regular income from the created wealth created.​​​​
Power of Compounding
Young investors have an advantage in investing since the longer you stay in the market, the less risky your investment becomes and the more corpus you can generate over a period of time. This happens because of the compounding effect and the rupee cost averaging benefit you get over a long term.
Once you are done with prioritizing your financial goals of life, quantify them, that how much amount you may need to achieve those goals and based on that choose mutual fund schemes. So give wings to your dreams and start investing in something each month to achieve your goals without any burden of heavy debt on your shoulder.
Investing at any age isn’t easy, but waiting to invest for when it’s convenient isn’t the best approach (because it’s never going to be easy). Don’t fall into the I-need-a-lump-sum-of-cash-to-start-investing trap start small, with whatever you can afford to invest today because it’s most likely going to be worth more tomorrow.
Keep in mind, the market goes up and down, much like our emotions, and that means sometimes your investments will fail. Still, in the long term, investing early and giving your investments time to mature will help you come out ahead.
Finally, you don’t have to be an expert to invest. Find yourself a traditional advisor like us who will do the legwork and guide you in the right direction. 
Invest NOW – Click here

Wednesday, May 9, 2018

ELSS: Invest to save tax and wait for the Returns

Birla Sun Life Tax Relief 96 – Growth Weekly Chart

Birla Sun Life Tax Relief 96 is an open ended Equity Linked Saving Scheme (ELSS) with 99.09% exposure to equity.
Portfolio Analysis: The fund aims to generate returns by investing in complete equity with maximum exposure to Automotive and Banking/Finance sector.

Top Stock Holdings

Sector Allocation

Returns as on 8th May, 2018

Risk Profile: This fund is considered as “Risky Fund” due to complete exposure to equity instruments, it’s suitable for investors who are looking for Tax benefits.

Taxation Perspective: Birla Sun Life Tax Relief 96 is ELSS fund is where investor is eligible for tax exemptions up to 150,000 INR under section (u/s) 80C of the Indian Income Tax Act, 1961 if they stay invested for three years or more. ELSS Funds are also eligible for Long Term Capital Gains which will be treated tax free as the holding will be more than one year. The Dividend earned from ELSS funds is also treated as tax free.

Technical Perspective: Post the completion of wave 1 at the highs of 24 levels and prices formed running complex correction pattern in wave 2 which completed at the lows of 22 levels. Now wave 3 is ongoing which the strongest segment of an impulsive move. Now the outlook for this fund will continue to be positive, any pullback towards the blue support line should be utilized as buying opportunity for the targets of 35 levels.

Investment Rationale: Birla Sun Life Tax Relief 96 fund has shown some outperformance in sync with the Indian Equity Markets. Currently it is in the beat of its trend so one should dive in this fund through SIP or lump sum investments.

Invest NOW in Birla Sun Life Tax Relief 96 Fund online – Click here

Thursday, May 3, 2018

How to create Investment portfolio using Mutual Funds?

I believe innovation is the key to success even in Financial and Investment domain. I thoroughly believe in application of Elliott wave that can be extended to NAV of Mutual funds as well. It provides vital information on maturity of the trend and one can accordingly make investment decision.

Following is UTI equity fund research shown on 7th December 2016 in our Mutual fund research report by Waves Strategy Advisors

UTI Equity Fund Growth Weekly Chart (shown on 7th December 2016)

UTI Equity Fund: Happened

Technical Perspective – Anticipated on 7th December 2016

The Weekly Chart for UTI Equity Fund Growth shows that post retracing 38.2% of the previous up move prices bounced sharply and now it has managed to take out the previous peak high which suggests that probably a complex correction pattern is in formation and currently wave y of the same is ongoing. Once wave y completes its course the corrective leg in the form of wave 2 will end and then the bull trend should resume in this fund. Move above 114 will suggest about the completion of the same.

Happened: The NAV of the fund increased drastically and moved exactly as expected. This simply shows how one can use Elliott wave to predict the path ahead even on Mutual Funds!

Invest NOW in UTI Equity Fund Equities Fund online – Click here

We can help you in creating your portfolio of Mutual Funds. I think it is best to diversify and not only park money in stocks alone. By diversifying it across different Mutual Funds one can create a sustainable financial model with prudent mixture of both stocks portfolio and MFs. Invest in Mutual funds through us and we can assist in providing multibagger research from our research associate – Waves Strategy Advisors to create a holistic portfolio. Invest here