e-NACH has been a recent entrant into the mutual fund investment process, in a bid to make the entire investment process digital and paperless. This article aims to discuss the NACH mandate and the registration process in detail.
National Pension Scheme (NPS) was launched by the Government of India to create a social security mechanism for all Indians. NPS seeks to fill the gap with regards to creating a retirement corpus, wherein the subscribers cannot generally withdraw before retirement. Further, a part of the accumulated corpus at the time of the retirement must be mandatorily invested to buy an annuity to ensure regular income post-retirement.
ELSS (Equity Linked Savings Scheme) funds are among the most popular mutual categories amongst the retail investors for investing in open-ended equity funds, as reflected by the number of investor folios. As of 30th June 2020, ELSS funds are present in 1.24 crore investor folios out the total 6.73 crore investor folios in equity-oriented schemes. The aggregate Assets Under Management (AUM) of Rs. 90,024 crores are in the ELSS category funds. Source: Association of Mutual Funds in India – AMFI
Back in my school days I used to mug up reams and reams of chemical formulas, not knowing if I would ever use them in the future. In the investing world those esoteric formulas, now seem rather meaningless. However, one concept that is still stuck in my head is that of an Isotope which I likely encountered in Class IX or X. The concept of ‘elements’ is the very foundation of Chemistry. An Isotope of an element is a similar atom with same number of protons but different neutrons.
Mutual funds have emerged as a preferred investment option among retail investors due to the benefits of professional fund management and ease of investing. As a new investor, many people have this question in mind - how do mutual funds work? What do Asset Management Companies (AMCs) do with the small investments that individuals provide?
Systematic Investment Plans (SIPs) are increasingly becoming the preferred route for investing in mutual funds, as is evident from the consistent SIP inflows. Indian Mutual Funds currently have about 5.93 crore (59.3 million) SIP accounts through which investors regularly invest in Indian Mutual Fund schemes.
Source: Association of Mutual Funds in India – AMFI
When it comes to investing in equity markets, investors tend to prefer investing through mutual funds. Investors can invest in a wide range of mutual fund schemes, suiting their investment horizon, and risk appetite. One such investment option is the Exchange Traded Funds which is populary know as ETFs. Equity ETFs tracks an underlying equity index and the main difference between traditional mutual fund schemes and ETF is, ETFs can be traded on the stock exchange.
Behavioural finance is a branch of behavioural economics, which proposes that various psychological biases influence the behaviour of people towards their financial and investment decisions. People tend to behave differently to even similar news and events, and thus, behavioural investing takes into cognizance the influence of biases in the investment decisions.
OWhen chalking out a prudent financial roadmap, one may have several goals. It is always desirable to divide such financial goals into short-term and long-term. Long-term goals may include retirement planning, children's education, marriage, etc. Short-term goals may consist of maintaining an emergency fund, house renovation in the next six months, family vacation, vehicle purchase, etc. While equities are considered for long-term financial purposes, choosing the right investment option for short-term financial goals may be tricky for some investors.
Public Provident Fund (PPF) has traditionally been one of the preferred investment options to save taxes, as it provides fixed returns through interest income and aims to cater to long-term investment needs. Hence, it suited the preferences of conservative investors looking for assured returns. However, with the evolution of financial markets, increasing awareness of financial planning, and the availability of newer options, investors are exploring choices beyond PPF.
