Mutual Fund SIP Top Up Online

MF SIP Top Up Online

As your monthly income grows, so should your savings. With this facility, you can increase your existing monthly SIP contributions. This can be done on a half-yearly and yearly basis. And you can top up with a minimum of Rs.500 per installment or multiples of Rs.500 as per your convenience.

ELSS SIP after three years – What happens?

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Equity Linked Savings Schemes (ELSSs) or tax saving mutual fund schemes come with a mandatory lock-in period of three years. The lock-in period is applicable to every Systematic Investment Plan (SIP) instalment in the ELSS. You can redeem a SIP investment only after it completes the lock-in period of three years.

10 best Tax Saver Funds for 2017

Invest Tax-Saver Funds Online

Here are the top performing equity linked savings schemes, or tax-saving funds. Below are the filters used to arrive at them.

  1. Top performers: 5-year annualized returns
  2. Category: Equity Linked Savings Scheme (ELSS)
  3. Schemes: Open ended
  4. Growth plans (dividend plans excluded)
  5. Regular plans (direct plans excluded)

Axis Long Term Equity: 19.70%

This fund made its mark in 2010 and 2011. It topped the chart in 2010 with a return of 30% and fell the lowest the very next year when the market tanked. Not only is it consistently a top quartile performer, it is often the best in its category (2010, 2011, 2013).

BNP Paribas Long Term Equity: 16.49%

From 2007 to 2010, the fund consistently underperformed the category average. Anand Shah joined the AMC in 2011 and the change was immediately evident. Since then the fund has delivered above average returns and is now quite a contender in the category.

Reliance Tax Saver (ELSS) Fund: 16.03%

You can expect volatility from this fund but it rewards investors who stay in for the long haul. Its 3-, 5-, and 10-year returns have not disappointed. Volatile performer but does deliver eventually. Currently, a little over half the portfolio is in mid, small and micro caps.

Franklin India Taxshield: 15.15%

This fund delivers by not losing ground when the market tanks. If one looks at the returns over the past decade, it has been known to underperform the category average in good markets. On the flip side, it has fallen much below the category average during bear phases. But, by and large, it is a steady performer. Its below-average performance is never abysmal and it manages to hold its own in a market carnage.

Religare Invesco Tax Plan: 14.97%

This one won’t deliver an astounding return, but it is definitely stable and dependable. Over the past 9 calendar years, it underperformed the category average just once, that too by just 0.64%.

Birla Sun Life Tax Plan: 14.50%

This fund has a longer history than its sibling mentioned above, but underperformed the category average in its first four years (2007, 2008, 2009, 2010). Since then the fund has improved its performance and did well last year. The fund has a higher cash allocation than the above one but market cap allocations are similar and so are the top holdings in the portfolios.

Birla Sun Life Tax Relief 96: 14.06%

After a searing performance in 2009, the fund faltered the next two years. Since then it has been a fairly consistent performer.

DSP BlackRock Tax Saver: 13.97%

The fund tends to fall more than the category average during down markets (2008, 2011), but otherwise beats the average. However, last year Apoorva Shah, who was responsible for the fund’s performance, relinquished fund management responsibility.

ICICI Prudential Long Term Equity: 13.93%

Sporadically, the fund puts up some excellent numbers as it did in 2009 (a return of 112%) and 2012 (37.63%). At other times, it also manages to do fairly well. This multi-cap offering is fairly stable and delivers.

IDFC Tax Advantage: 13.78%

In its track record of 7 years, the fund has periods where it underperforms the category average, that too by a noticeable margin. The fund shot to prominence in 2013 when it was the third best performer in the category. Unfortunately, the very next year it underperformed the category average by 8%. Thus far, the fund has not been consistent but delivers over the long term.

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Birla Sun Life Advantage Fund Dividend

Invest Birla Sun Life Advantage Fund Online


a dividend has been declared by the trustees of Birla sun Life Mutual Fund in Birla Sun Life Advantage Fund (An Open Ended Growth Scheme), with the record date of 26th August, 2016 and in this regard, the details are mentioned below:

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Mutual Fund investments are subject to market risks,
read all scheme related documents carefully.

Invest Rs 1,50,000 and Save Tax up to Rs 46,350 under Section 80C. Get Great Returns by Investing in Best Performing ELSS Funds. Save Tax Get Rich

Top 10 Tax Saver Mutual Funds for 2017 – 2018

Best 10 ELSS Mutual Funds to Invest in India for 2017

1. DSP BlackRock Tax Saver Fund

2. Tata India Tax Savings Fund

3. Birla Sun Life Tax Relief 96

4. ICICI Prudential Long Term Equity Fund

5. Invesco India Tax Plan

6. Franklin India TaxShield

7. Reliance Tax Saver (ELSS) Fund

8. BNP Paribas Long Term Equity Fund

9. Axis Tax Saver Fund

10. Sundaram Diversified Equity Fund

Invest in Best Performing 2017 Tax Saver Mutual Funds Online

Invest Best Tax Saver Mutual Funds Online

Download Top Tax Saver Mutual Funds Application Forms

For further information contact SaveTaxGetRich on 94 8300 8300

OR

You can write to us at

Invest [at] SaveTaxGetRich [dot] Com

OR

Call us on 94 8300 8300

Sundaram Select Mid Cap Fund

Know your Fund – Sundaram Select Mid Cap: Investors who have registered an SIP in Sundaram Select MidCap since inception (July 2002) have seen their investments grow @27.0% per annum. Please find below an illustration on the wealth you would have created had you started a monthly SIP in Sundaram Select MidCap Fund since its inception.

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Invest Rs 1,50,000 and Save Tax up to Rs 46,350 under Section 80C. Get Great Returns by Investing in Best Performing ELSS Funds. Save Tax Get Rich

Top 10 Tax Saver Mutual Funds for 2017 – 2018

Best 10 ELSS Mutual Funds to Invest in India for 2017

1. DSP BlackRock Tax Saver Fund

2. Tata India Tax Savings Fund

3. Birla Sun Life Tax Relief 96

4. ICICI Prudential Long Term Equity Fund

5. Invesco India Tax Plan

6. Franklin India TaxShield

7. Reliance Tax Saver (ELSS) Fund

8. BNP Paribas Long Term Equity Fund

9. Axis Tax Saver Fund

10. Sundaram Diversified Equity Fund

Invest in Best Performing 2017 Tax Saver Mutual Funds Online

Invest Best Tax Saver Mutual Funds Online

Download Top Tax Saver Mutual Funds Application Forms

For further information contact SaveTaxGetRich on 94 8300 8300

OR

You can write to us at

Invest [at] SaveTaxGetRich [dot] Com

OR

Call us on 94 8300 8300

Mutual Funds vs Fixed Deposits

When it comes to saving money, people often opt for fixed deposits (FD), considering them to be risk-free. The security of having money in the bank is apparently a significant factor and with FDs, it is highly unlikely that you will lose your money. However, with other factors at play, notably inflation and taxes, do FDs provide more bang for your buck?

Let us take a closer look at this phenomenon. You invest Rs. 10,000 in an FD for five years at an interest rate of 7.5% compounded every quarter (Most Indian banks offer 7-7.5%). After five years, the maturity value is 14,499 rupees. However, with an inflation rate of 5.8%, the purchasing power of 10,000 rupees has fallen. The interest on FDs are also taxable, the more one invests in FDs, the more tax one has to pay (on the returns). However, FDs give fixed rate of interest, and mutual fund schemes do not guarantee returns. With rising inflation, a fixed interest rate can seriously undermine the value of long-term investments.

In the case of Mutual Funds (MF), the scenario is a wee bit different. Although MFs are affected by market volatility and do have a level of risk depending on the portfolio, they seem like better options. During positive market conditions; MFs have the potential to earn high returns whereas FD rates are unaffected. Concerning risk; equity mutual funds carry high market risk, and debt mutual funds carry lower market risk than equity. Thus, an investor can design his portfolio based on his risk appetite, or even diversify to manage risks better. Besides, MFs are managed by professional fund managers, who do their best not only to protect investments but also to grow it.

Meanwhile, as the name suggests, FDs have a fixed period and have little liquidity till the tenure of the deposit ends. If you withdraw money from your FD prematurely, most banks will impose a penalty on the final amount.

In the case of MFs, most of them offer high liquidity on the condition that the minimum holding period has passed and subject to lock-in period as applicable. If the investment is withdrawn within a short duration (under a year), an exit load may be charged. Some MF schemes allow withdrawals at any given point of time, without any exit load or extra charges.

A crucial factor to be considered before choosing between FDs and MFs should be the tax status. When it comes to FDs, the tax levied is at the maximum rate depending on your current tax slab, irrespective of the tenure of the fixed deposit. On the other hand, the tax status of MFs depends on its category. Equity funds held for long term (more than a year) are not taxable. Short term equity funds are taxable at 15%. Long-term debt fund gains are taxable at 20% with indexation, and 10% without indexation and short-term capital gains are taxable according to investor’s tax slab. Hence, we can say that MFs are tax friendly compared to FDs. Especially gains on long-term equity funds, which are not taxable at all.

In the end, the decision to invest between an FD and an MF is based on the risk capacity and the horizon of the individual. When the economy is booming, MFs can give great returns, and when the markets are volatile, they can provide a secure platform that can help grow your money in the days to come.

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MF SIPs are better when you invest over Stock Market Cycles

Invest SIPs Online

Stock Market returns do not have linear movement

During bull markets, almost all stocks – the good, the not-so-good and the downright rubbish – tend to move up. Everyone seems to be elated because the value of their portfolios are moving up with leaps and bounds. So, you really won’t know how resilient your portfolio is until there is a strong down turn. When selling becomes relentless – like it was 2 months back almost all stocks tend to lose ground. And so the cycle repeats. A bull market is followed by a bear market, which is followed by another bull market and then again a bear market. Many a times the retail investor goes out with a loss since he / she may have entered at a previous high and then blames the market. Is there no respite from this cycle? The answer is: No, because it is the inherent nature of markets. So what should investors do?

Markets have been choppy over last 2 years – A live example:

Indian stock markets started its bull run when the NDA Government won the general elections in May 2014. There was a sense of euphoria around the new government’s reformist agenda, as investors started pumping money in the markets with a hope of turnaround. Valuations were at an all time high for major mid and small cap companies. However soon in midst of 2015, global and local factors played a spoil sport and Indian stock markets – Nifty corrected. In fact Nifty 50 touched 21 month low in Feb 2016. Again over last 2 months since the Budget was announced, markets have bounced back more than 12%.

This volatility has cause yet again many investors to enter markets at high points due to euphoria around the markets and sell stocks at losses due to fear around falling markets. Meanwhile people who have preferred the SIP route for investing tend to avoid the market volatility due to the concept of rupee cost of averaging. They follow a disciplined approach towards investing a fixed some periodically into mutual fund units in order to fulfil a financial goal.

(S)ystematic (I)nvestment (P)lan

Systematic Investment Plan or SIP, offer a simple and disciplined way to accumulate wealth over long term. Mutual Fund SIPs work pretty much like bank recurring deposits, except they generate superior risk adjusted returns compared to recurring deposits. It brings in a disciplined approach to invest regularly and can be started witha minimum of Rs.1000 per month. SIPs are perfect for people who wish to generate long term wealth without investing too much time, money and efforts into it.

Advantages of SIP Route:

Need to time the market become irrelevant, since frequent investments ensure entry in the market at both high and low levels. Thus making it favourable in volatile markets

Averages the cost of investment – which means when the markets are down one gets more mutual fund units and when markets are up one gets better returns

Professional management of funds and diversification at a very low amount, thus eliminating the need for monitoring the funds on a daily basis

Below a snapshot of the performance of some of our key schemes as on 30th April 2016

Fund Name 1 Year 3 Years 5 Years 7 years 10 Years
Birla Sun Life Frontline Equity Fund 0.58 12.96 15.35 13.75 14.08
Birla Sun Life Top 100 Fund -0.19 13.26 15.54 14.08 13.19
Birla Sun Life 95 Fund 3.85 15.33 15.68 14.13 14.24
Birla Sun Life Equity Fund 3.53 17.88 18.24 14.84 13.44
Birla Sun Life Mid Cap Fund 0.06 22.36 20.25 16.65 15.78
Birla Sun Life Dividend Yield Plus Fund -7.11 9.41 10.52 10.59 12.65
Birla Sun Life India GenNext Fund 2.41 17.35 18.85 17.95 16.58
Birla Sun Life MNC Fund -1.98 27.41 26.01 23.92 21.93
Indices 1 Year 3 Years 5 Years 7 years 10 Years
Nifty 50 Index -2.99 5.55 8.46 7.86 8.29
S&P BSE 200 Index -2.33 7.88 9.93 8.72 8.92
Nifty 500 Index -2.10 8.70 10.49 9.06 9.02
Nifty MNC Index -8.41 11.72 13.99 13.24 13.00
Nifty Free Float Midcap 100 Index 2.82 17.95 15.83 12.97 12.36

Mutual Funds have been instrumental in protecting downside and improving upside by selecting the good from the not so good and the downright rubbish. On top of this, SIPs in mutual fund have delivered better than Market performance over various periods. It is a safer way of investing for conservative equity investors through up and down market cycles. So, dear investor, you really have two choices. You either learn by being disciplined and well planned or you will learn by losing money.

The ball is in your court.

Permanent Portfolio

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A permanent portfolio allocates 25% each to equity, debt, gold and cash. Our 15-year study shows that it delivers returns comparable with equities and is best suited for passive investors.

It is generally accepted that asset allocation should be based on several factors–investor’s age, risk appetite, risk taking ability, time period and importance of goals. It is difficult for retail investors to arrive at the correct asset allocation without professional help, because they have to take into account all these factors. While a 25 year old who gets financial support from family can have an aggressive asset allocation, another who has to support his family has to be conservative. There are also experts who suggest that you need to change your asset allocations based on broader market valuations­ increase equity allocation when market valuations are down and reduce it when valuations go up. Since markets, Indian market in particular, are highly volatile, it becomes difficult for investors to change their asset allocations on a regular basis.

To solve the problem of retail investors not keen on seeking expert guidance to manage their portfolio, investment analyst Harry Browne, in his book Fail Safe Investing, came up with the idea of a `permanent portfolio’. A permanent portfolio comprises equities, debt, cash and gold. While portfolio diversification is common knowledge, what differentiates a permanent portfolio is its simplicity. Instead of deciding how much to invest into each of these four asset classes, a permanent portfolio invests equal sums, 25% each, in all of these.

A permanent portfolio comprises the mentioned asset classes because they be have differently during market cycles. So, while some may outperform in a particular cycle, others may under perform. The diversification thus tends to offset volatility in portfolio returns. For example, equities will gain during an economic boom and crash during a recession. Similarly, long-term debt will generate decent returns during recession and will generate fabulous capital gains when rates start falling. Cash or liquid funds will generate reasonable returns across time period, but may generate better return during periods of tight monetary policy and also when short-term rates move up. While gold offers protection against inflation in the developed markets, it acts as a protection against currency depreciation in the developing economies such as India.

Brown’s book, which came out in 1999, has generated substantial investor interest and several studies in the Western markets have concluded that a permanent portfolio may be enough for most retail investors. But, will the concept work in Indian markets? Experts are not very gung-ho about it. Equal weight to all asset classes reduces weight-to-growth assets like equities. From the asset allocation perspective, 25% equity allocation will work only for conservative investors. Gold allocation shouldn’t be more than 10%, and that too for long-term portfolios.

Even as experts have been critical of the idea, we decided to do some empirical research to test the permanent portfolio’s value in Indian markets.

Back testing

In our study, the Sensex was used as a proxy to represent equities. Dividend yield was not considered as investors opting for mutual funds incur expense ratio which nullifies the small dividend yield. Long term gilt funds were used as proxy for long term debt. We selected the top three schemes, which have been in operation for at least 15 years, in terms of their assets under management. The gilt portfolio return was arrived at by assuming that the investor has put an equal sum in all three gilt funds. We selected liquid funds and calculated the returns for the liquid portfolio in a similar way. However, all three liquid funds have moved in tandem and generated almost the same returns. The next step was to use a proxy for gold. Gold funds and gold bonds are the best alternatives for this, but neither have a 15-year track record. While there is a small expense ratio for gold funds and actual return will be less than gold price gain, gold bonds generate a small interest and actual return will be more than the gold price gain. So, we have considered absolute gold prices for this study–no reduction for expenses or addition for interest income.

Our back testing confirmed most theoretical assumptions. Long-term gilt funds, for instance, countered the impact of massive equity correction phase of 2008-09.For example, ICICI Pru Long Term Gilt Fund (G) generated a return of 23.36% during the 2008-9, when the Sensex generated a negative return of 37.94%.

Similarly, gold too saw a massive rally and generated a return of 24.58% during the same period. Traditional Indian investors still swear by gold as a long-term asset and they have a valid reason to do so. Gold has seen a compound annual growth rate (CAGR) of 13.66% in the last 15 years, only slightly lower than the Sensex return of 13.97%. More importantly, this comparable gold return came at a significantly low volatility–gold’s standard deviation was only 16.62 compared with 24.35 of the Sensex. However, gold may not generate this kind of return in the coming years. This is because the rally in international market is almost over, and gold’s future return will be more linked to rupee depreciation.

Permanent portfolio types

The permanent portfolio can be of two types. In the first one, you invest fixed pro portions, 25% each in the four asset classes, and stay invested in them for a very long time. You can also make use of SIPs for such an investment. In the second case, you re-balance the portfolio on a regular basis. When should one do the re-balancing? Annual re-balancing is enough for most portfolios, but if the investor wants to be aggressive, he can go for a six month re-balancing. While annual re-balancing is the norm, you can also re-balance every three years, if the investment horizon is very long (say, 30 years.

For this study, we have calculated the return and risk for both types of portfolios. For the re-balanced permanent portfolio, we have gone for annual rebalancing–on the last trading day of every financial year.A rebalanced portfolio has generated better returns: a CAGR of 12.08% compared to non-rebalanced portfolio with a CAGR of 11.48%. Additionally, a rebalanced portfolio also drastically reduced volatility in returns. For instance, the annualised standard deviation of rebalanced portfolio was only 7.48, compared to 9.54 for the non rebalanced portfolio.

Annually balanced permanent portfolio has done well during the last 15 years, so it should serve the needs of most retail investors. Its CAGR of 12.08% may be slightly lower than that of the Sensex’s CAGR of 13.97%. However, a permanent portfolio will be the winner if you consider the risk-adjusted returns of both. This is because at 7.48, the standard deviation of a permanent portfolio is very low compared with that of the Sensex–24.35.

Finally, while the option of a permanent portfolio provides ease of investing, you cannot be reckless. Investors need to pay attention to the choice of product under each asset class, else rebalancing will become difficult. For example, investing into illiquid stocks or equity funds with withdrawal restrictions–ELSS, child plans, etc.–can make the rebalancing impossible. Similarly, on the debt side, one needs to avoid products such as EPF, PPF, etc. that come with restrictive clauses.

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Investment Needs Hierarchy

All investments are not equally important. You need to fulfil the basic investment needs first before moving on to the others

We know how investing is different from just saving. If we put our saved money somewhere where it will grow, then that’s investing. However, there are a number of possibilities available when we want to invest, and it isn’t possible to make sensible choices without having a way to classify things.

However, let’s not jump into classifying investments right away. Before we do that, we need to classify our need for making an investment. Investments can be made for a huge variety of needs. You could be saving for emergency medical funds which are usually required at a moment’s notice. Or you could be saving for your retirement which is a few decades away, or anything in between.

At Value Research, we have created a useful framework for thinking about these investment needs. We divide investment needs into four levels. Each level is more fundamental than the ones that come after it. You should satisfy the need at each level before going on to the next one.

Those who know a bit about psychology may recognise this system as being based on the ‘Hierarchy of Needs’, a concept proposed by psychologist Abraham Maslow. Maslow’s hierarchy dealt with basic human needs like food, shelter, etc. Basically, human beings deal with their higher needs after the simpler ones are satisfied.

So here’s Value Research’s Hierarchy of Investing Needs:

LEVEL 1: Basic contingency funds
This is the money that you may need to handle a personal emergency. It should be available instantly, partly as physical cash and partly as funds that can be immediately be withdrawn from a bank. Online banking and ATMs make it relatively simple to get this organised.

LEVEL 2: Term Insurance
Calculate a realistic amount which allows your dependents to finance at least short and medium-term life goals if you were to drop dead or be struck with a debilitating injury or disease. You should have an adequate term insurance before you think of any savings.

LEVEL 3: Savings for foreseeable short-term goals
This is the money needed for expenses that you plan to make within the next two to three years. Almost all of this should be in minimal risk, deposit-type savings avenues.

LEVEL 4: Savings for long-term foreseeable goals
Same as level 3, except the planned expenses are more than three to five years away. This level should be invested in equity and equity backed investments like equity mutual funds.

One could think of many levels beyond this and really, the details matter much less than the concept. Depending on one’s circumstances, any of the levels may have to be modified. For example, you may have enough income-producing assets to make insurance relatively less important.

However, this doesn’t decide how much to invest in each need. This system aims at preventing you from going to higher level unless the lower one is fulfilled. If you haven’t put emergency cash in a savings account, then don’t buy term insurance. If you don’t have term insurance yet, then don’t start putting away money for your daughter’s college education, and so on.

Invest Rs 1,50,000 and Save Tax up to Rs 46,350 under Section 80C. Get Great Returns by Investing in Best Performing ELSS Funds. Save Tax Get Rich

Top 10 Tax Saver Mutual Funds for 2017 – 2018

Best 10 ELSS Mutual Funds to Invest in India for 2017

1. DSP BlackRock Tax Saver Fund

2. Tata India Tax Savings Fund

3. Birla Sun Life Tax Relief 96

4. ICICI Prudential Long Term Equity Fund

5. Invesco India Tax Plan

6. Franklin India TaxShield

7. Reliance Tax Saver (ELSS) Fund

8. BNP Paribas Long Term Equity Fund

9. Axis Tax Saver Fund

10. Sundaram Diversified Equity Fund

Invest in Best Performing 2017 Tax Saver Mutual Funds Online

Invest Best Tax Saver Mutual Funds Online

Download Top Tax Saver Mutual Funds Application Forms

For further information contact SaveTaxGetRich on 94 8300 8300

OR

You can write to us at

Invest [at] SaveTaxGetRich [dot] Com

OR

Call us on 94 8300 8300