Financial Planning – Welcome to

Grab the Benefits of the Market!!! Invest in Mutual Funds!

The sudden hit of Sensex beyond the milestone index of 60,000 has become the buzzing matter among Indian investors. The consistency in growth and return in several stocks, bonds and mutual funds has increased the probability of a less volatile and stable market in which the investors can believe. After the trauma of the 2nd wave of COVID 19 in India, the market is gaining its strength. So, it is high time to grab the benefits of the market through investing in several schemes of mutual funds.

We know very well that mutual fund investments are subject to market risk. When the market provides a consistent return, so many investors refrain from investments from the fear that the market might fall again. On the other hand, there are prospective investors who choose a bull market to invest in because a bull market ensures that the condition of the economy is favourable and the market has more potential to rise.

The Sensex index hit 61,305.95 today (14 October 2021) at the end of the week. It crossed the historical index of 60,000 for the first time on 24 September 2021, less than a month ago. In the meantime, it has fallen for a few days but it came back once again and is on rising till the date. The present scenario proves that the Indian market has regained its stability. The small and medium cap companies (as per the present market capitalisation) are rising almost simultaneously with the large-cap companies.

Mutual Fund is the most reliable way when you think of flexibility and high return simultaneously. Despite the volatile market during the COVID 19 phase in 2020 and 2021, most of the funds proved themselves capable enough to fight in any hard situation. Even there have been few funds that we’re able to secure more than 50% annual return. So, one thing is very clear, mutual funds were able to scatter the risk factor when the market was volatile. Because the mutual fund portfolio follows diversification so that the investors get a standard return even when there is a bear market.

So, it is quite clear that mutual funds are able to bring you high returns in the bull market. The market is able to provide you with a post-positive return in this condition. Market’s staying with the historical index of 60,000 for a longer period assures you the probability of handsome return in the coming period of time. To be able to catch the benefits of the market, we may consider the following while investing:

Invest in mutual funds rather than stocks. When you have a chance to lose capital for a specific stock, mutual funds comparatively lower the risk factors through diversification.
Invest for the long term. at least for a three years’ locking period for a desirable return.
Though most investors invest in equity mutual funds, it is better to keep 20-30% of your investments in other funds like focussed funds, hybrid funds, or debt funds.
Determine your risk appetite and investment horizon wisely before choosing any fund.
Read fund related documents carefully before you proceed with investments.

You can grab the benefits of the market when you invest sensibly and wisely. To determine the level of benefit you can get from the present market a sincere study on the market condition of the present and the past is essential. You may consult an AMFI registered mutual fund distributor for more information.

Sensex at 60!!! Expectations and Reality from the Investors.

Sensex

The festive season is knocking on the door and Indian investors are already in a festive mood because the Sensex has reached maturity at 60 at the end of September 2021. The sudden capital gain before the festivals of Durga Puja and Diwali is bringing smiles to millions of India’s prospective investors. Sensex hit the benchmark of 60,000 in a surprising move from 50,000 in a span of less than a year. The investors of Mutual Funds, shares, stocks and bonds have gained a lump sum of money in such a move of Indian Sensex. Investors are perplexed right now regarding the facts whether they should wait and watch the market before the next move. Or the market will be stable to offer you a consistent return in the coming days as well.

The second wave of COVID 19 hit India so badly and the market had been greatly affected during this time. In February 2021, Sensex hit the 50,000 benchmarks that showed a ray of hope to the investors. But the market appeared to be volatile during this period of economic crisis throughout the nation. During April and May, the index was between 47,000 to 50,000. From, the end of August, the market became stable again and the index crossed the historical point of 60,000 on September 24, 2021. In the meantime, the index faced slight ups and downs and crossed the benchmark index of 60,000 once again on October 8, 2021. This proves that the market is coming out of volatility as the Indian economy starts to resume progress after the traumatic phase of the COVID 19 pandemic.

To determine if this moment is perfect for investments or not, we need to determine the basic difference between a bull market and a bear market. For clarification, a bull market happens during the time when the market is on rising for the increasing values of stocks, securities, and bonds. The bear market occurs when the market’s capital gain starts deteriorating. There is a traditional belief among the investors that a bear market is favourable for high returns whereas the bull market is a time to watch and wait. This concept is somehow true for the investors who want to invest for a long time horizon.

A bear market can be helpful for capital gain if we take some factors under consideration and strictly abide by those. When the market falls and we become hopeless seeing the degradation of our financial portfolio. But it can be the perfect time for investments because we get the stock and securities at a discounted price. It is not a wise decision to catch the bottom because we need to focus on a long term investment. Rather it is wise to fix our investment horizon and invest when the market starts to fall. A bear market might be risky too for the investors especially for the short term, investors because the market becomes volatile and we can never predict when the reverse journey is going to happen.

When investors gain capital from the bull market, they mostly think of liquidation of their savings. At the same time, investors wait for the fall again. So many investors prefer to invest in a bull market because of thinking of the post-positive return from the market. Otherwise, the bull market indicates that the market is stable and you have more chance of capital gain in future. So, a bull market is appropriate for both short and long term investors. The Sensex reaching the benchmark index of 60,000 might be a ray of hope for the investors because the market appears to be less volatile with the probability of maximum return. Hence, you can think of investments now if you can fix your investment horizons properly. If you want to gain profit from the market out of your investments in mutual funds, you can contact an AMFI registered mutual fund distributor.

Equity PMS: A Tailor-Made Portfolio Management System

Equity PMS

Why Equity PMS?

Most of the investors are aware of the Mutual Fund investments and at the same time, they are unaware of Equity PMS, a more customisable way of creating an investment portfolio. Financial investment is not a child’s game but a matter of sincere education and continuous research. There are so many plans and funds across the market which promise you to give a very good return by its face value. But if you do not study sincerely all the terms and conditions before investing, you are prone to a great loss that might be unbearable. So, you need to be cautious and think about the risk factors clearly before making any decision. Equity Portfolio Management System is a way to organize your investments according to their risk factors and returns. If you can know the ultimate risk and the probable return of your investments, you can deal with your investments and set your financial goal better.

Equity Portfolio Management System is monitored and managed by professionals in the fields of financial investments to help you to manage your wealth and investments. These dedicated portfolio management professionals provide you with the right guidelines to invest in different equities, debts, and funds in the contemporary markets so that you can be conscious of the risk factors and returns over the course of time. The specialized management team guides you to choose specialized investment strategies to invest in the right funds. As you give the management powers to your investments to the portfolio management professionals, they invest in different large, medium, and small capitals to reduce and scatter the risk factors and ensure the best possible return out of the market situation. You have more freedom over the investments when you are investing through equity PMS because, unlike mutual fund investment, you bear risks of your investments here.

Different types of Equity Portfolio Management System

Equity Portfolio Management System has different types on the basis of tenure and risk factors. A large-cap oriented equity PMS has a moderate risk factor and moderate return history. It has a 12-15% average return history when invested in a tenure of 3-5 years. A multi-cap-oriented equity PMS has a high risk and high return history; it has provided a 15-18% return in the time horizon of 5-7 years. A mid and small-cap equity PMS is run over a period of 7-10 years. This type of equity PMS is the most attractive investment scheme for those who can take a high risk to get a probability of maximum return out of their investment. This type of equity PMS has more than 18% return history in the last few years.

Though Equity PMS has ensured many investors high returns in the last few years, it is not always suitable for medium or low budget investors. As per the records of the companies which operate Equity PMS across India, the investors here invest a big amount not less than 25 lakh per year. Hence, unlike Mutual Funds, Equity PMS can hardly attract the middle class and lower-middle-class customers in their financial schemes. When mutual funds offer so many flexible options to choose investments in so many ways as per the financial capabilities of the customers. But if you want freedom in financial investments and if you want to organize your investments in several categories according to their risk factors and return possibilities, Equity PMS is a good option for you.

You can call equity PMS the tailor-made portfolio management system that helps you to organize your investments as per your needs and investment goals. This is more specific than mutual funds and a more customized way of investment especially for you. A dedicated team of professional portfolio management systems does research and analysis for you before you opt for any scheme in the market. Hence, equity portfolio management system might help you to get the best return by reducing the risk factors of your hard-earned investments. You can consult an AMFI registered mutual fund distributor for your tailor-made portfolio management system.

Top 5 Equity and Debt Mutual Funds in the Present Market

Top 5 Equity and Debt Mutual Funds

Equity mutual funds are very popular to the present days’ investors for the flexibility of the schemes, funds’ liquidity, high return possibilities and so many other reasons. On the other hand, debt mutual funds are trusted by the investors for the security and consistency in return. Determining the top 5 equity and debt mutual funds in the present market condition depends on several factors. Only a short term return does not evaluate the quality of a mutual fund to be on the top. Otherwise, the top 5 equity funds can not be compared with the top 5 debt funds because the return and risk factors of both the funds are completely different. You need to determine what are the top 5 funds according to your investment goal, and risk appetite. If you want to diversify your investment portfolio, you may have a glance at all the funds that top the lists.

We have prepared separate lists of the top 5 equity funds and debt funds according to their category so that you can easily find the best one for you. For choosing the top five funds in the lists, we have considered few factors like CRISIL ranks (only 4 & 5 rated funds are chosen), AuM, consistency of their return in the last five years, etc. Investors are always encouraged to invest in different types of funds according to their investment goals, risk appetite for maintaining a diversified investment portfolio.

Top 5 Equity Mutual Funds

Sl. No	Equity funds	CRISIL Rank	AuM (Cr)	1 year return	3 years’ return	5 years’ return
1	Mirae Asset Emerging Bluechip Fund – Direct-(Large & Mid Cap Fund)	5	20,615.27	68.02%	25.41%	22.77%
2	Quant Active Fund – Direct Plan – Growth (Multi Cap Fund)	5	1050.80	82.64%	30.82%	24.78%
3	Canara Robeco Bluechip Equity Fund – Direct Plan – Growth (Large Cap Fund)	5	4,271.67	54.08%	61.68%	18.90%
4	Quant Tax Plan – Direct Plan – Growth (ELSS)	5	368.44	89.62%	32.54%	25.13%
5	SBI Focused Equity Fund – Regular Plan – (Focused Fund)	4	19,429.10	63.27%	21.42%	18.97%

Top 5 Debt Mutual Funds

Sl. No	Debt funds	CRISIL Rank	AuM	1 year return	3 years’ return	5 years’ return
1	Aditya Birla Sun Life Banking & PSU Debt Fund – Regular Plan – Growth (Banking and PSU Fund)	4	18,124.91	5.91%	8.98%	7.76%
2	Sundaram Banking & PSU Debt Fund – INSTITUTIONAL – Growth (Banking and PSU Fund)	4	998.30	3.79%	7.79%	6.85%
3	Nippon India Corporate Bond Fund – Direct Plan – Growth (Corporate Bond Fund)	5	3,861.90	7.19%	8.30%	7.85%
4	DSP Strategic Bond Fund – Direct Plan – Growth (Dynamic Bond Fund)	5	709.09	5.57%	10.51%	7.67%
5	Edelweiss Government Securities Fund – Regular Plan – (Gilt Fund)	5	99.03	8.50%	11.89%	8.93%

Disclaimer: These lists of top five mutual funds are based on research in several factors like the CRISIL score, Asset Under Management (AuM), 1-5 years’ consistent returns and growths etc. For the convenience of the new investors, the lists of the top five have been prepared in several segments. This will help inexperienced investors to find out reliable mutual funds according to their own investment goals and risk appetite. However, this representation is on the basis of subjective findings, the lists of top five mutual funds in several segments might differ in several contexts. During the ti e of COVID 19, Market appears to be volatile in some cases, but the investors need to keep their patience for the desired outcome. You may consult an AMFI registered mutual fund distributor for experts’ advice and guidance.

*Information as of 17 September 2021

*Source of data: moneycontrol.com

Equity Mutual Funds: A New Horizon for the Indian Investors

What is Equity Mutual Fund?

Mutual Fund investments have opened up new horizons for middle-class investors in India. Among different types of emerging Mutual Funds, Equity Fund is the most popular because of its high probable returns and flexibility. Many investors invest in Mutual Funds without knowing that they are investing in equity funds. So, proper knowledge about equity funds is highly necessary for those who want to invest wisely for attaining a specific financial goal in their life. Here is a short analysis of the Equity funds, their nature, characteristics, return prospects, risk factors and durability.

An equity mutual fund primarily invests in select stocks in the market. A mutual fund creates a portfolio for the investors arranging stocks on the basis of their market value. The mutual fund clarifies the percentage of holding of stocks of different companies in their respective documents. A Mutual Fund can be classified as an equity Mutual Fund if it invests more than 60% of its total assets in the equities or shares of different companies. The Net Asset Value (NAV) of a specific equity mutual fund depends on the daily market condition.

The fund manager of an equity mutual fund creates a portfolio choosing the equity shares of different types of companies like IT, healthcare, logistics, real-estates etc. The following factors prevail for what equity mutual funds have become so popular in the Indian market over the course of time.

Scattering Risk Factors

Equity Mutual Fund scatters the risk factor through diversification of the funds. The expert fund manager creates a portfolio that includes stocks of companies of different sectors and market capitalisation. Most of the equity funds are a perfect mixture of all types of funds like IT, healthcare, real-estates etc. Few are focussed equity funds that invest only in a specific type of company. Some of them invest according to market capitalisation; there are popular Large Cap funds, Small cap Funds, Mixed funds etc.

Flexibility and Liquidity

Equity mutual funds are flexible in nature because it provides you with the options to select the nature of fund as per your investment horizons. You can invest in funds according to the market capitalisation. You may choose comparatively consistent Large Cap Funds or the high potential Small and medium cap funds. You can invest a lump sum amount as low as Rs 5000 as well as in a systematic investment plan (SIP) with a minimum monthly amount of Rs 500.

Tax Payers’ Heaven

It would not be wrong if we term equity mutual funds as tax patterns’ heaven. The Equity Linked Savings Scheme (ELSS) funds provide you with the option to save tax under the section of 80C of Indian Income Tax. You can get a tax benefit of Rs 1.5 lakh investment in this scheme in a financial year. Almost all the leading Asset Management Companies (AMC) in India provide you with multiple options of ELSS mutual funds. You can save and save tax under these schemes simultaneously. ELSS funds have proven records of better returns than other tax-saving funds under the 80C section. So, the new-generation taxpayers are highly interested in these funds.

There are several other factors in equity mutual funds like lower expense ratio, lower exit load, higher return, online investment and verification etc that have made equity fund investors’ friendly. But it is highly advisable that you read all the documents carefully before you choose any mutual fund investment. You may consult an AMFI Registered Mutual Fund distributor for expert advice and guideline.

Top 10 Mutual Funds in 2021

Which are the Top 10 Mutual Funds in 2021? This is a trending question among the investors who are thinking over the prospects of Mutual Fund investment in Pandemic and Post-Pandemic India. The second wave of the COVID 19 Pandemic has caused heavy damage to the economy. This has direct and indirect impacts on investment markets. Despite the shortcomings, so many Mutual Funds have been consistent in their returns during this time.

When a new investor decides to invest in the mutual fund industry, the first thing they mostly do is to search for the top 10 or top five mutual funds. The fact is that it is not easy to get the top mutual funds in one go; the search results provided by Google or Bing mostly provide you with the readymade list prepared by the websites mostly sponsored by several AMCs. There are few other shortcomings too. The search results hardly show you diversified schemes and you may not be able to find the scheme that you need. For instance, you are opting for mutual fund investment because you want to invest due to return and tax savings. But the result is only showing the equity-linked mutual funds or debt funds. So, the top ten results might not be as diversified as you are asking for. One more problem is that the search result might show you only the return of a mutual fund on a very short term basis. To evaluate a fund’s consistency, you need to track the return of the fund for at least 5-10 years (at least 5 years for the younger funds).

We have made a list of the top ten mutual funds following diversification so that you can find out the suitable fund according to your needs. The return of these mutual funds have been tracked for the last five years and they have shown consistency during this investment horizon. These schemes are offered by renowned AMCs in the market and all the schemes are able to secure the CRISIL ranks between 4-5.

Sl Number

Mutual Fund Schemes

AuM (Cr)

YTD

1 year’s return

3 years’ return

5 years’ return

Mirae Asset Emerging Bluechip Fund-Growth (
Large & Mid Cap Fund) – *****

19,567.86

23.55%

Axis Bluechip Fund (Large Cap Fund) – ****

29,160.60

22.35%

50.97%

18.96%

Edelweiss Banking and PSU Debt Fund – Direct Plan-Growth -*****

5.78%

10.68%

8.86%

Nippon India Corporate Bond Fund – Direct Plan – Growth (Corporate Bond Fund)

*****

3,213.02

3.92%

6.99%

8.23%

7.88%

IDFC Hybrid Equity Fund – Direct plan – Growth (Aggressive Hybrid Fund)

****

560.85

28.56%

49.67%

–

DSP Equity & Bond Fund – Direct Plan – (Aggressive Hybrid Fund) ****

7,233.14

46.19%

16.68%

14.86%

Canara Robeco Equity Tax Saver – Direct Plan – Growth (ELSS/Tax Saver) *****

2,469.50

33.02%

63.72%

20.94%

SBI Contra Fund – Direct Plan – Growth (Contra Fund) *****

2,704.36

77.31%

14.79%

Kotak Small Cap Fund – Direct Plan-Growth (Small Cap Fund) *****

58.61%

102.54%

27.77%

IDFC Sterling Value Fund – Direct Plan – Growth (Value Fund) *****

50.55%

86.15%

17.23%

Disclaimer: The list of these top 10 mutual funds is based on research that surveyed all existing schemes in the market. Few things have been taken as parameters for evaluation like Asset Under Management (AuM), CRISIL rank, growth of returns, volatility, risk factors etc. Only those funds have been chosen that have shown consistency in returns and did not face loss in the last 1 to 5 years’ returns. All types of funds have been chosen in the list so that the investors can get a clear cut idea to make a diversified investment portfolio. However, this representation of data is subjective and the choice of top ten mutual funds may vary from person to person. For genuine advice for investments, consult an AMFI registered Mutual Fund distributor.

*Data as of 4 September 2021

*Source of Statistics: Money Control

Best Performing Mutual Funds in the Present Market

Best Performing Mutual Funds

Mutual funds being the buzzing words in the investment market, everyone seeks to find the best performing mutual funds. But the concept of the best performing mutual funds does not depend on a single factor; an investor needs to verify a few essential things to determine which mutual fund is performing well in the market. Apart from verifying the percentage of return in the last few years, a company’s profile, number of schemes, and its Net Asset Value (NAV) are equally important. The following things become determining factors for assessing best performing mutual funds in the market.

CRISIL Rank: CRISIL rank is globally recognized for evaluating a mutual fund’s performance in all segments. CRISIL rank depends on the factors like scope of return, nature of the portfolio, volatility, quality of assets, risk factors, liquidity analysis, etc. After analyzing all such factors over a period of three to ten years. Rating is given between 1-5, the more a company is rated, the more a company is supposed to be worthy of investment. The top 10% of companies that perform well in all segments are rated 5; whereas the 10% from the bottom line are rated 1. Some of the 5 & 4 rated top-performing funds* in the present mutual fund market are Mirae Asset Emerging Bluechip Fund – Growth (5 star), Aditya Birla Sun Life Tax Relief 96 – Regular Plan – Growth ELSS (4 star), ICICI Prudential Focused Equity Fund – Retail – Growth (4 star), Edelweiss Large and Mid Cap Fund – Regular Plan – Growth (4 star), Kotak Equity Opportunities Fund – Growth (4 star), IDFC Large Cap – Regular Plan – Growth (4 star), DSP Midcap Fund – Regular Plan – Growth (4 star), Sundaram Rural and Consumption Fund – Growth Sectoral/Thematic (5 star), SBI Infrastructure Fund – Growth (4 star), etc.

Net Asset Value (NAV): Net Asset value is a parameter that an investor must check before investing in a mutual fund. Total assets controlled by an Asset Management Company is known to be Asset Under Management (AuM). NAV is determined by subtracting the price of total assets minus the total liabilities and then divided by the number of units. The NAV, as well as AuM of an AMC, gives an idea about the present market value of the fund. For instance, the total Asset Under Management of Mirae Asset Emerging Bluechip Fund – Growth (as of 27 August 2021) is 19,567.86 and it says that it is a large fund to invest in.

Return: Return is the most important thing for investment and it is the only factor that we seek. Mutual fund returns are subject to market risk, but a sincere investigation about a scheme and its past performance help to overcome the risk. Only seeing the immediate return is not a good idea. An investor should see the return of a mutual fund over the weeks, months, and years to see how consistent the fund is. Mutual funds providing consistent moderate returns are more trustworthy than mutual funds having big ups and downs. The diversity of a fund scatters the risk factor and provides a comparatively consistent return over the period. A mutual fund investing in equity or debt is prone to more risk than a mutual fund that combines equity and debts in its fund.

This guidance will help the new and existing investors who want to ensure the best return out of mutual fund investments. Return in the Mutual Fund during this COVID 19 situation might be volatile. But the investors are advised not to lose hope because India is bravely fighting back with the situation. Otherwise, you can gain when you invest online in any fund during this situation if you follow a few strategies. For real-time guidelines and for getting a platform to invest in best performing mutual funds in the present market, you may consult with an AMFI registered mutual fund distributor.

*source: moneycontrol.com

Investments during the COVID 19

Investments during the COVID 19: Is it the right time?

COVID 19 pandemic has hit the world economy to an extent. Since March 2020, lockdown in most of the parts of the world has made a great impact on the economy for various reasons. The large, medium and small scale industries which are based on productions have continued to face hurdles due to lack of manpower, proper logistic facilities, improper supply of raw materials and so on. Amidst this crisis, the market value of so many companies have fallen to an extent and a few are struggling continuously. The market has become more volatile than before. So, people have become perplexed regarding investments during the COVID 19. It has become a common question among investors if this is the proper time for investing or not.

A report in the Hindustan Times shows that the 2nd wave of COVID 19 in India has caused more than 1 crore unemployment. The report says that the income of almost 97% of families has declined. The continuous recession has also made a strong impact on the overall scenario of investments in India. A major portion of Indian investors belongs to the middle class and lower-middle-class families. They invest in mutual funds and stocks for various reasons like family security, dream fulfilment, children’s future and education, etc. When they have continued to receive a cut of their income, it has really become hard for them to think of investment. So, the investment market is also facing a crisis resulting in the fall of the market for so many companies.

Now coming to the major point, YES this might be a good time for the prospective investors. When the market falls, the share value of most of the funds decreases. Hence if you invest right now, you have a high chance to gain in future. We hope that we would overcome the situation very soon and India would be able to fight the pandemic bravely. Most of the states have started unlocking the services of everything. The production has resumed, all the industries are gradually opening for the workers. The Indian government has been running the vaccination drive among the mass population rapidly and the active case is declining throughout the country. Hopefully the normalcy is going to be restored very soon.

The COVID 19 pandemic has provided us with the opportunity to work from home. Many of us are having plenty of time to go through sincere research of the market condition. This might help us to know the market better than before. We might search for alternative ways of investing now. Even amidst this COVID 19 situation, the market of few focussed mutual funds has proven to be stable and less volatile. If we have a glance at the focused equity mutual funds based on healthcare, logistics and technology, we can explore that they have recorded a proven rise since the advent of COVID 19 in 2020. So, a sincere investigation of the market is necessary before investing this time.

The investors who have already invested in several lockin funds like tax saving ELSS funds should keep their patience. They might be in the depression of the volatile nature of the market. They have to wait and watch to get the desired outcome or profit. As you might need liquid cash anytime for the treatment of family members, you should keep a handsome amount of liquid cash before investing in long term funds. If you have a regular flow of cash, you may invest without being much concerned. You may invest in an equity fund without a locking period that deducts very less percentage of expense ratio and exit load. This will help you to encash your investment when you feel emergency. For better advice for your investment strategies, you might consult an AMFI registered mutual fund distributor.

Best Mutual Funds to Invest

When mutual funds have opened up a new horizon for the next-gen investors, we often become perplexed about which are the best mutual funds to invest in in the market. The answer is simple, it depends on your financial goal. The definition of “best mutual fund” is a relative matter and it varies from person to person. Mutual funds offer you the most customized way of investments according to your portfolio and financial goal. The following matters define the best mutual funds for an investor.

Reliability

An Asset Management Company (AMC) pulls money from so many investors and their fund managers decide where to invest that capital for a better return. In this way, mutual fund investments go on through several AMCs across the country. The profile of an AMC is a big factor for making it reliable to investors. AMCs are in most cases connected to reputed banks, financial organizations, insurances, and big corporates. The position of their stocks in the market, history of returns over the past few years, and the flexibility of their schemes are the things that make a mutual fund reliable for investors. You may check if your target fund is SEBI authorised mutual fund or not.

Nature of investments

Duration of investments: Why and how long do you want to invest? Ask yourself, and then find out the scheme suitable for you. If you want to invest for a limited time, choose debt funds that will provide you with a secured income in duration from one day to more than seven years. If you want to invest for a moderate return over a few years, you may invest in large-cap funds of a mutual fund. If you are interested in investing in stocks for a higher return, invest in equity funds. If you want to invest a small amount monthly for a longer period (3-5 years), you may choose an SIP of a mutual fund. If you want to save tax, go for ELSS schemes of mutual funds.

Past records

A sincere study on the past record of all existing schemes of mutual funds in the present market is essential before you invest in a scheme of mutual funds. Suppose, you want to invest in a SIP under the ELSS scheme for multiple purposes, systematic investment, tax benefits, and return. The first thing you need to do is to study the percentage of annual return/loss of all the schemes of all Asset Management Companies (AMCs) in the present scenario. You will get a clear cut idea about the way of management of different AMCs. The company, which has been able to provide better returns at an average over the last 3-5 years, are suitable for your investments. You can choose the specific scheme offered by that AMC for your investment for a better outcome.

Risk factors

Investments should be made in mutual funds as per your risk appetite. If you want to invest in a comparatively safe zone, you can think of debt funds in mutual funds for a shorter term and also a secured return. Otherwise, you can invest in large-cap funds in mutual funds for 2-4 years because, in such funds, your money is invested for the top 100 stocks in the present market. If your risk appetite is moderate, you can go for mid-cap funds in mutual funds. If you possess a high-risk appetite, you should think of small-cap funds. Such funds are the most volatile, you may face comparatively bigger losses. But, in terms of return, small-cap funds can give you the best return in the market.

This year has seen the most volatile market not only in India but also across the globe since March 2020. After COVID 19 pandemic hit the global financial market, investors in stocks, debts, equities and other funds have become suspicious about the outcome of their investments. But, we hope that the market will soon be suitable for the investors as soon as we come out of this situation. Investors are suggested not to lose hope, they can think of plans for longer terms for their desired outcome. You may consult an AMFI registered mutual fund distributor for knowing the best mutual fund for you according to your portfolio.

A perfect Financial Planning for your better future

Financial planning is the most important key to ensure a hassle-free future. Financial planning involves a systematic approach to link the present financial situation to future goals. This is hardly possible to achieve all our future goals without proper financial planning.

Step by step direction of Financial Planning

Determine your asset: To set up perfect financial planning, you need to determine your present asset. Your financial status should match with the investment schemes. For instance, if you have the ability to invest more than 50 lakh per year, you can manage your investments through Equity Portfolio Management System or equity PMS. If you have the ability to invest 2-5 lakhs per year or less than that, mutual funds might be the best option for you. At first, you need to find out the present values of your home, income from different sources, your car, jewellery, money in the savings accounts, investments, insurance policies, retirement benefits, provident fund, etc. The next step is to determine your total outstanding that may include the existing loan amount and your debts in credit cards. You can determine your present asset in this formula:

Present Asset = Present value of your assets – Present outstandings

Calculate your present expenses: This is the most important thing to set your financial planning. You have to keep a track record of the flow of all your expenses. You may maintain a diary to keep records of each and every expense. Otherwise, you can sum it up through your bank and credit card statements. There are festive seasons and months having birthdays of your dear ones. Hence, you can not maintain the same flow of your financial expense every month in the same way. The best way is to calculate the expenses of the last twelve months, add at least 10% in the next year thinking of inflation, and then divide it by twelve.

Restructure your future expenses: Based on the previous year’s balance sheet, you may make a plan for the next year. You have to determine your priorities and it is the most vital thing to set a financial goal. Suppose, you had spent a lot on entertainment in the last year and you need to pay extra money for your child’s education in the upcoming year. Then you can reduce your expenses from things which are not essential for life. We can not cut our expenses for food, house rent, policy premium, education, and health. Hence, we need to set up our priority so that we can manage our expenses with our income keeping a portion intact for investment. Investment is necessary for multiple reasons in our life. They are:

To manage the expenses in your life for a longer run
To ensure a better education for children
To meet our dream of apartment, car, and foreign tour
To manage the moments of crisis in our life
To live an easeful life after retirement
To gain financial freedom
To manage our investment goal
To save tax

To meet all these requirements in our life, perfect financial planning is highly necessary. It would help you to utilize your surplus money judiciously even after ensuring an uncompromised lifestyle.

Thinking of perfect planning

Now on the basis of your present financial position, you may invest your money in the following schemes:

Mutual Fund Investment: Mutual fund investment is one of the popular schemes nowadays due to its flexible investment plans and higher return. There are multiple schemes of multiple durations in mutual funds like debt funds, ELSS or tax savings funds, equity funds, hybrid funds, etc. Investors need to know their investment goals and risk appetite before choosing the schemes of mutual funds. Investors can invest a lump sum amount at a time or they can opt for an easy monthly plan through a Systematic Investment Plan (SIP) in a mutual fund scheme. Currently, there are more than 51 SEBI authorized mutual funds working in the Indian market, but you need to read all the schemes before investing because the return of a mutual fund is subject to market risk. If you want to overcome the risk of the market, we have to think of longer-term investments in mutual funds. You can contact an AMFI registered mutual fund distributor for investments and experts’ advice.

Public Provident Fund: Public Provident Fund (commonly known as PPF) is very popular among middle-class professionals who want a secured return to meet their goals. But it has no risk and similarly less prospect of return in comparison to the mutual funds. One more reason for choosing PPF for investment is its tax benefit under section 80C of income tax.

Risk management plans: Risk management plans include general insurance, life insurance, term insurance, health insurance that would cover our expenses during times of crisis. Without a proper risk management plan, we may lose all our investments during a crisis in our life. Be sure that you are not taking risk management plans as your primary financial goal, just take those for an emergency. Many of those (like life insurance) have low returns, most of those (like term insurance, medical insurance, and general insurance) have no cash return at all except their benefits during the emergency. So, it is better to have proper risk management plans to cover up our crises.

Tax management plans: Tax management plans include life insurance, health insurance, PPF, and ELSS schemes of mutual funds that would help us in multifaceted ways. These plans would cover our risk, would give some monetary benefits, and would save our annual tax.

So, it is very urgent to follow proper financial planning to make the best use of our hard-earned money. Nowadays, managing investments has become so easy because an investor can invest online in almost all the schemes mentioned here. A financial planning agency may properly instruct you to manage your financial matters for meeting your long-cherished dream.

Contact

What we do

Disclaimers

ARN-85173

Calculators: SIP Calculator | Education Calculator | Marriage Calculator | Retirement Calculator | Lumpsum Calculator

PMS: Why PMS | Expert Talks

KYC: Do your KYC