Mutual Fund Basics

A step-by-step guide on how to calculate what you might need in the case of an emergency.

5 Steps to Build an Emergency Fund

Knowing more  about  your mutual fund product

Few years ago, manufacturers of ready‐to‐eat Indian food were baffled with the poor response to their range of convenience foods.  Beyond young single people, the market refused to expand to families. Their research showed that families were looking at saving time spent in the kitchen.  What was going wrong?  Another research was commissioned, which showed that the woman of the household preferred to add her ‘touch’ however little it may be, before serving the meal.

Find out about the role that taxes play in investments.

Tax Issues regarding Mutual Fund

When investors consider an investment option, they worry simultaneously about several things. Is this investment tax‐efficient? Does it reduce or increase my tax liability? Does this investment grow in value? Does it provide a regular return like dividend or interest?  If they choose an investment that provides regular income, like a bond or a deposit, they get no appreciation in the value invested.

Mutual funds may not only bring in better risk-adjusted returns but may also cut costs.

Why bring in someone to do something for you when you can do it yourself – asks common sense. If you can buy and sell shares, bonds and gold, then why invest in mutual funds? Are there any benefits of investing in mutual funds? Do they pose a good investment strategy? Let’s look at the advantages of investing in mutual funds:

What is a Lump sum investment?

An investor can invest in mutual funds in a lump sum or through Systematic Investment Plans (SIPs). While SIP involves making regular investments into mutual funds, lumpsum investing refers to investing a large amount in a single transaction. Each of the investing modes has its pros and cons. The investors must choose a specific investment mode based on their financial goals, availability of investible funds, and risk appetite.

It’s been 5 years since Raj married his childhood love Maya. A gradual increase in expenses has been a concern for Maya, even after her conscious efforts of not falling prey to unnecessary expenses. But Raj doesn't give a heed to Maya’s worry and almost every Sunday morning there is a light tension in the air when they discuss about the weekly expenses. 

Numerical examples explaining the methodology of calculating the subscription price of units:

1. Sale Price - Ongoing price

Ongoing price for subscription (purchase)/switch-in (from other Schemes/plans of the mutual fund) by investors.

Purchase Price = Applicable NAV (for respective plan and option of the scheme)

Example: An investor invests Rs. 10,000/- and the current NAV is Rs. 10/- then the purchase price will be Rs. 10/- and the investor receives 10,000/10 = 1000 units.