Negative Mutual Fund Returns is today's harsh reality. In past, i always cautioned my readers that it's a myth that Mutual Fund Returns cannot be negative. A market meltdown does not spare even the best managed mutual funds. I was quite disheartened to see some of the best names delivering negative returns on a y-o-y basis. The three months and six months Mutual Fund Returns are negative for almost all the mutual fund schemes. When i wrote a post, Why you should not invest in SIP? i received some sharp reactions in my mailbox. Mutual Funds are projected as safest bet to invest in equity market ... Read More
5 Myths about Mutual Fund Investment
Mutual Fund Investment is best suited for passive investors. As Indian investors are risk averse therefore Mutual Fund Investment is doing well in India. The mutual funds inflow is quite strong in last 18 months. Mutual Fund Investment does not require active monitoring as the fund manager selects the stocks for investment. Within a particular category, Returns may vary up to 50%. In my post, 7 Steps to Select Right Mutual Fund, i highlighted how to select right funds. A common investor finds very difficult to understand all the jargon's related to Mutual Fund Investment. I agree that Mutual ... Read More
Mutual Fund Riskometer – Old Wine New Bottle
The new Riskometer for Mutual Funds is an old wine in new bottle. SEBI (Securities and Exchange Board of India) will replace the existing colour coding system for mutual funds with new riskometer. The new product labelling system will be implemented from 1st July, 2015. If any fund house would like to implement the new riskometer before 1st July, 2015 then they are free to do so. Riskometer will be applicable for both old and new mutual fund schemes. Existing Colour Coding System Mutual fund investors must be familiar with the following colour coding picture It basically shows the ... Read More
Avoid Direct Plan of Mutual Fund
Direct Plan of Mutual Fund is creating lot of buzz in Personal Finance space. In last one month or so, i have gone through atleast dozen posts on Direct Plan of Mutual Funds. The advantage of Media coverage is that it create buzz. Investors are seriously considering Direct Plan of Mutual funds which currently contribute less than 10% of total investments (Industry Estimate). Currently this channel is utilized by Institutional investors or HNI's and that too in debt category. Contrary to the fact that expense ratio of debt category is very low compared to equity. In my post on 7 Steps to Select ... Read More
Beware of Hidden ULIP Charges
ULIP Charges and Greed are synonyms for each other. ULIP (Unit Linked Plan) is a perfect case study of How Greed Kills. Greed is always both ways i.e. Banks/Insurance Provider's greed to sell more and Greed of investor for higher returns. ULIP was launched in 1971 but all the mess in ULIP started after private life insurers entered in 2000. ULIP misselling became so rampant that IRDA (Insurance Regulatory and Development Authority) had to step in. IRDA came up with regulations for ULIP to control ULIP charges in September 2010. I still remember that for few ULIP products, large portion of ... Read More