• info@niveshcapital.com
  • 9619889777

Mutual Funds

Mutual Fund

Past returns are a good starting point, though they are not the only thing investors should look at. We focus on long-term returns and performance consistency

Picking the right mutual fund is tough. There are close to 2,000 mutual fund schemes in the market, and growing. WE makes it easy for you. We curate mutual fund schemes based on qualitative and quantitative parameters. Past returns are a good starting point, though they are not the only thing investors should look at. We focus on long-term returns and performance consistency, in rising as well as falling markets. We speak to fund managers to understanding their strategies, consistency in following the investment mandate and how ‘true to label’ schemes really are.

Investing in mutual funds has become the new rage among investors. There are countless new funds that are launched on a regular basis. A variety of funds, each focusing on short and long- term period are easily available. There are plentiful funds obtainable in the market that can find a perfect match to suit your risk.
A mutual fund is an investment, which is operated by an investment company that raises money from shareholders and invests it in stocks, bonds, options, commodities, or money market securities. These funds offer investors the advantages of diversification and professional management.
A mutual fund is a group of stocks, bonds and other investments that are owned by a large number of investors and managed by a professional investment company. The investor buys the units of a particular fund and becomes a part of the mutual fund and participates in the loss and profits.
As a rule, Investors should read the mutual fund prospectus clearly before investing. The reason being, the prospectus clearly defines a fund’s investment objective, the investment style of the manager and the types of securities in which the fund will invest.
How does a Mutual Fund work?
When you invest in a mutual fund, you become the shareholder of the selected mutual fund. The fund manger takes the entire pool of money from all of the fund’s investors and invests it in a carefully selected range of investments based on specific goals and procedures that are outlined in the fund’s prospectus.
The fund’s value keeps fluctuating from day to day. The NAVs of the funds don’t remain constant. The value of a fund’s units i.e. NAVs are updated on a daily basis and are available on the AMC’s website.
Many factors like change in interest rates, economic trends influence the performance of a mutual fund. When you purchase units in a mutual fund, you agree to pay certain fees and expenses in the form of entry and exit load.

7 common types of mutual funds

These funds invest in short-term fixed income securities such as government bonds, treasury bills, bankers’ acceptances, commercial paper and certificates of deposit. They are generally a safer investment, but with a lower potential return then other types of mutual funds.
These funds buy investments that pay a fixed rate of return like government bonds, investment-grade corporate bonds and high-yield corporate bonds. They aim to have money coming into the fund on a regular basis, mostly through interest that the fund earns. High-yield corporate bond funds are generally riskier than funds that hold government and investment-grade bonds.
These funds invest in stocks. These funds aim to grow faster than money market or fixed income funds, so there is usually a higher risk that you could lose money. You can choose from different types of equity funds including those that specialize in growth stocks (which don’t usually pay dividends), income funds (which hold stocks that pay large dividends), value stocks, large-cap stocks, mid-cap stocks, small-cap stocks, or combinations of these.
These funds invest in a mix of equities and fixed income securities. They try to balance the aim of achieving higher returns against the risk of losing money. Most of these funds follow a formula to split money among the different types of investments. They tend to have more risk than fixed income funds, but less risk than pure equity funds. Aggressive funds hold more equities and fewer bonds, while conservative funds hold fewer equities relative to bonds.
These funds aim to track the performance of a specific index such as the S&P NIFTY50 Index. The value of the mutual fund will go up or down as the index goes up or down. Index funds typically have lower costs than actively managed mutual funds because the portfolio manager doesn’t have to do as much research or make as many investment decisions.
These funds focus on specialized mandates such as real estate, commodities or socially responsible investing. For example, a socially responsible fund may invest in companies that support environmental stewardship, human rights and diversity,and may avoid companies involved in alcohol, tobacco, gambling, weapons and the military.
These funds invest in other funds. Similar to balanced funds, they try to make asset allocation and diversification easier for the investor.The MER for fund-of-funds tend to be higher than stand-alone mutual funds.

Diversify by investment style

Portfolio managers may have different investment philosophies or use different styles of investing to meet the investment objectives of a fund. Choosing funds with different investment styles allows you to diversify beyond the type of investment. It can be another way to reduce investment risk.
4 common approaches to investing
1. Top-down approach – looks at the big economic picture, and then finds industries or countries that look like they are going to do well. Then invest in specific companies within the chosen industry or country.
2. Bottom-up approach – focuses on selecting specific companies that are doing well, no matter what the prospects are for their industry or the economy.
3. A combination of top- down and bottom-up approaches – A portfolio manager managing a global portfolio can decide which countries to favour based on a top-down analysis but build the portfolio of stocks within each country based on a bottom-up analysis.
4. Technical analysis – attempts to forecast the direction of investment prices by studying past market data.
Can NRIs invest in Mutual Funds in India?
Investments by NRIs in Mutual Funds can be made on a repatriable or on a non-repatriable basis, as preferred by the investor
1.Repatriable Basis: To invest on a repatriable basis, you must have an NRE or FCNR Bank Account in India. The Reserve Bank of India (RBI) has granted a general permission to Mutual Funds to offer mutual fund schemes on repatriation basis, subject to the following conditions:
• The mutual fund should comply with the terms and conditions stipulated by SEBI.
• The amount representing investment should be received by inward remittance through normal banking channels, or by debit to an NRE / FCNR account of the non-resident investor.
• The net amount representing the dividend / interest and maturity proceeds of units may be remitted through normal banking channels or credited to NRE / FCNR account of the investor, as desired by him subject to payment of applicable tax.
2.Non-Repatriable Basis: The Reserve Bank of India (RBI) has granted a general permission to Mutual Funds to offer mutual fund schemes on non-repatriation basis, subject to the following conditions:
• Funds for investment should be provided by debit to NRO account of the NRI investor. Alternatively, funds may be invested by inward remittance or by debit to NRE / FCNR Account.
• The current income in the form of dividends is allowed to be repatriated.
No permission of Reserve Bank either by the Mutual Fund or the NRI investor is necessary.

Just as drops of water make an ocean, small but regular investments can go a long way in building wealth over a period of time SIP is a method of investing a fixed sum, regularly, in a mutual fund scheme. SIP allows an investor to buy units regularly on a specific date of the month. This will help in building wealth in the long term.
Benefits of a SIP

The compounding factor: make your money work for you by generating earnings which are further reinvested to generate their own earnings. The compounding process ensures that both the capital gains and interest earned from an investment, earn interest, as time passes.
Rupee cost averaging: trump the maxim “buy low, sell high” by automatically adjusting quantity bought against price, in order to average the cost of acquisition over time. Investing a fixed amount in the markets, at regular intervals helps lower the average cost of investment, as one buys more quantity when the price falls, and less quantity when the price rises.
Market timing becomes redundant: invest wisely across market cycles, reducing the impact of volatility. Since investments are made at fixed regular intervals, timing the market for appropriate entry levels becomes less important.
Disciplined approach:inculcates discipline in the investment process, as the investor is committed to invest a fixed amount of money, at periodic intervals.
Let the experts work for you: SIP as an investment vehicle provides you with the opportunity to invest in mutual funds which are professionally managed by capable investment managers who are committed to manage your money with skill and expertise.
Dreams can only be achieved if you work towards them. Even building wealth is no different. Albert Einstein called compound interest "the greatest mathematical discovery of all time". In simple words, compounding refers to generating interest from previous earnings. The Power of Compounding Calculator helps you understand how much you will earn if you invest a fixed lump sum amount of money and let it compound for a fixed duration, period of time and at a given annual rate of return. Find out how much your savings can grow with the power of compounding by using our easy and simplified compound interest calculator.

Albert Einstein called compounding the eighth wonder of the world

If you’re unsure of what you’re saving for, but you still want to make your money grow, we’ve got just the answer for you.
We’ll make sure your investments deliver the most optimal returns in line with your age and risk tolerance.
We’ll help you come up with the right investment amount and guide you to invest regularly.
By signing up for Folio service, you will have:
• Secure, protected access to the status of your portfolio
• Updated fund NAVs every day, so that you can gauge the impact of recent market movements on the current value of your holdings
• View into dividend income earned on a fund and compare it with other income-earning funds you have invested in. You can see the total return on your portfolio and compare it with the amount invested
• The ability to review the details of every transaction done in a scheme
• The facility to download a scanned copy of the application form for your records