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Mutual Funds
Mutual fund NFOs— Why investing in NFOs are not a good idea
Sometimes AMCs introduce new funds because there is a need in the market for a specific type of fund, other times it may be because they wish to round out or expand their product offering. Any reason could be to blame. Therefore, just because a fund is created doesn't guarantee that investing in that fund category is a good idea at that particular time.
Suppose you have to choose NFOs between SBI and a new startup X. SBI is better choice with good track history as the new firm despite having a good quarter can disappoint you in YoY return. However, the new fund can give you a pocket friendly buying option.
For a new fund, the marketing team has a brand building and awareness cost, which is indirectly charged on investors via the cost of app, web platforms.
NFOs are not as same as IPOs — maximum investors think NFOs are as same as IPO, which is not! That's why investors have no option of benefits during demand and supply game of stock market.
It can be important to take them into consideration if you are receiving a discount during the NFO. Close ended NFO funds are also good option.
SIP is not always a win-win situation— Marketing buzz vs Reality
A systematic investment plan is not a simple investment plan!
Is it really good, or are you under a marketing hoax? Before making a plan to invest, it's good to know the disadvantages of mutual funds' darling product.
If you're ready to fill your mug with drop-by-drop water, then SIP is a fantastic option. It is also known for sluggish growth. If you can afford a long-term investment, avoid SIP's quarter or yearly performance. It can exceed the actual return with a compounded bumpy ride for a 10-year term.
Investors are locked with a fixed amount of investment; you can't change it after investment, whether the market is bullish or bearish. You can't hold or withdraw your investment decision to cope with your financial condition. However, there is a hack; you can withdraw money from your auto-debited account. Your bank can slap a minor fine for payment failure.
People without a fixed cash flow can get hiccups.
You must have sound knowledge about the financial product SIP so that the exit route is clear to you with all of its terms and conditions. Sometimes Fixed deposits get good returns yearly than SIP. Outstanding research provides good returns.
Step towards financial freedom
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Why does Value Research have two different ratings for the same mutual fund?
https://www.valueresearchonline.com/stories/51589/why-does-value-research-have-two-different-ratings-for-the-same-mutual-fund
Step towards financial freedom
#personalfinance #investments
https://www.rediff.com/getahead/report/why-multi-cap-funds-are-best-bet/20220930.htm
Why Multi-Cap Funds Are Best Bet
www.rediff.com
SEBI Registered Investment Advisor, Fee-only Planner
Wealth creation is a long-term phenomenon.
Stick to your asset allocation for the long term.
Don't get panic about the short-term volatility in equity markets.
Stick to our SIPs.
#personalfinance #financialliteracy #wealthmanagement
Why Nomination is Important?
Mutual Fund nomination refers to appointing a person to take charge of your fund investments after your death. Appointing a nominee ensures that after your death, your Mutual Fund holdings will be transferred to your nominee. This process of transfer of Mutual Fund units of a deceased investor to a nominee is also known as the transmission of units.
But bear in mind that a company or body corporate, partnership firm, Hindu Undivided Family (HUF), society, or a non-religious or non-charitable trust cannot be appointed as nominees. However, it is advised only to appoint a trustworthy person as your mutual fund nominee.
You can add up to 3 nominees in one mutual fund folio and specify the percentage share that each nominee will receive in the event of your death. If you do not specify the percentage share, your Mutual Fund units will be equally distributed among all the nominees mentioned in the nomination form.
What Are The Benefits Of Adding A Nominee?
1) It offers a smooth settlement process.
2) It reduces family feuds.
3) Removes hassles of producing a will.
What Happens If You Do Not Have A Nominee?
It is important to appoint a nominee to ensure that your investments are passed on to the right person. However, as life gets busy, many of us forget to nominate a person. Sometimes, we may procrastinate updating the nominee. Other times, the appointed nominee may pass away unexpectedly and you might wonder how to claim Mutual Fund units after the death of the investor. In such circumstances, your legal heir can claim your assets.
Mutual fund nomination just like a will document is an essential part of estate and succession planning. Hence, it should not be ignored. If you have invested in mutual funds or plan to do so in the future, make sure to add nominees.