Investment Lesson

In the current market construct, there are some questions often on top of mind for fixed income investors:

Since the last RBI policy meet, global growth-inflation dynamics have changed drastically with increased risks of a synchronized global slowdown due to tight financial conditions & weak consumer sentiment. The US economy registered two consecutive quarters of negative growth. Global commodity prices have fallen meaningfully with Bloomberg commodity & agriculture spot index dropping by 11.3% & 18%, respectively in INR terms since June 8th, the last RBI policy (Source: Bloomberg).

We have often heard this phrase in relation to sports, especially when top-notch players seem to be going through a rough patch. Many of us may recall how the same was said about former cricketer Sachin Tendulkar when he was going through a similar phase. It was only after he scored his 100 th century that his critics accepted that ‘class is permanent’.

Mutual funds provide the benefit of diversification to investors by creating a basket of portfolio securities. A Fund of Funds (FoF) goes a step ahead to invest in other mutual fund schemes instead of directly investing in equity, debt securities, etc.

Taxation of Fund of Funds

As a productive investing channel, mutual funds have recently gained a lot of appeal. They have emerged as a preferred investment option amongst retail investors because of the convenience of investing and professional fund management. One may choose from different types of mutual funds in India that are broadly classified into five major categories. The investment goal will determine the best type of mutual fund to pick for your needs.

Continue reading below to learn more about various Mutual Fund types and their examples.

On 15th August 2021, India will celebrate its 75th Independence Day. Millions of freedom fighters lost their lives in this endeavour of unshackling India from British rule. As the country prepares to celebrate this milestone, it could also be an excellent opportunity for us to focus on independence on a more personal level, especially for matters related to our financial life. 

Starting your own business may call for some initial seed capital apart from your time and focus on the venture. When one plans to start a business, it is always helpful to have some accumulated savings.

Flexible Investment Horizon

When it comes to money management, it is always vital for the investors to know the expenses associated with their investments, as such costs and charges directly eat into their returns. Some of the expenses may be unavoidable for the investors, like fund management expenses, etc., for it adds value to the mutual fund scheme. However, investors may avoid one such charge if they diligently plan for their investment redemption, i.e., exit load.

What is Exit Load?

Mutual funds are investment products that create a portfolio of securities from the money invested by different investors. The investment decisions are made by professional fund managers and a team of research analysts. As compensation for the fund management services, mutual funds charge certain expenses to the scheme through Total Expense Ratio (TER) towards fund management fee, selling and distribution costs, investor awareness expenses, etc.