eKYC for Mutual Funds

eKYC in MFs



The Securities and Exchange Board of India (Sebi) has issued guidelines under The Prevention of Money Laundering Act, 2002 (PMLA) which requires investors to be KYC (Know Your Customer) compliant before investing in mutual funds. Completing KYC for investors was a major hurdle for distributors to get investors on board. To solve this problem, Sebi has launched eKYC in mutual funds.

What is eKYC in MFs?

eKYC is a paper less Aadhaar based process for fulfilling KYC requirement to start investing in mutual funds (MFs).

This has been implemented after Sebi recently allowed Aadhaar based KYC to be used for MF investments, for the convenience of investors. Karvy and CAMS on have facilitated eKYC for investors in MFs.

How does eKYC work and what are the benefits?

The regular KYC process re quires submission of KYC form with investor signature and additional documents for ID and address proof. IPV and sighting the original documents needs to be completed by a competent person. eKYC completely eliminates paper work and IPV to complete the KYC process. CAMS Karvy as a KYC User Agency (KUA) is approved by UIDAI to accept investor’s Aadhaar number and complete KYC verification with one time password (OTP).

What does an investor need to get this process initiated?

Investor can visit the website of CAMS or Karvy . He needs Aadhaar number, PAN number and personal details such as mobile number and email-id. Mobile number is mandatory . He can authenticate himself by receiving OTP on mobile number.

What is the maximum amount of transaction one can make through OTP-based eKYC?

Sebi, the regulatory body, has provided guidance to restrict investments to `50,000 per annum per MF for OTP-based eKYC.However, in case of more investment, the investor needs to do IPV or biometric-based authentication. That can be done through a distributor, or at any office of CAMS / Karvy

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

TATA LARGE CAP Fund

TATA LARGE CAP Fund Online

This funds runs a pure large-cap mandate compared to many peers in its category that have a sizeable mid-cap exposure. It is focused on growth-oriented, quality businesses that are high on capital efficiency with high return ratios. Though a large-cap offering, it is not a closet index fund and the fund manager is comfortable placing large bets outside its benchmark. He also backs his high conviction bets with large active positions to drive out performance. Its pure large-cap tilt and quality consciousness prevents it from capturing market upside as well as some of its peers but ensures that the fund does much better during bad times. Investors looking for a dependable pure large-cap play should consider this fund.

11_07_2016_125_005_003.jpg
Invest Rs 1,50,000 and Save Tax upto Rs 46,350 under Section 80C. Get Great Returns by Investing in Best Performing ELSS Funds

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. Invesco India Tax Plan

3. Tata India Tax Savings Fund

4. ICICI Prudential Long Term Equity Fund

5. Birla Sun Life Tax Relief 96

6. Franklin India TaxShield

7. Reliance Tax Saver (ELSS) Fund

8. BNP Paribas Long Term Equity Fund

9. Axis Tax Saver Fund

10. Birla Sun Life Tax Plan

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

Invest Tata Short Term Bond Fund Online

Tata Short Term Bond Fund Online
The fund seeks modest return with high liquidity from a portfolio of debt and money market instruments.

This fund has been a middle-of-the-road performer in the short-term category, with a CAGR of 9 and 9.2 per cent on the regular option over three and five years, 20 to 30 basis points ahead of the category.

The fund follows a conservative strategy by keeping its average portfolio maturity within the one- to three-year range at most times. It also plays it quite safe on credit quality, with G-secs or AAA bonds dominating the portfolio. As of April 2016, the fund had as much as 88 per cent of its portfolio parked in G-secs (19 per cent), AAA bonds (55 per cent) and top-rated commercial paper (14 per cent). The portfolio mix shows that the fund owns very short-term corporate debt, with a couple of long-dated G-secs to take advantage of rate falls. The strategy makes it a good fund for investors looking for returns with low volatility.

There is a substantial differential in the expense ratio between the direct and regular plans of this fund, with the direct plan charging a very modest 0.25 per cent against the regular plan’s 1.08 per cent.

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 S.M.I.L.E (Small and Medium Indian Leading Equities)

To achieve your financial goals, you have made the right decision of staying invested in Sundaram S.M.I.L.E which has returned 19.1% p.a. since inception (February 2005) and has consistently beaten its benchmark over time

Benefits of staying invested for the long term : Making an investment for the long term can be rewarding since the impact of near term market volatility fades over time. Investing over a longer period helps promote savings and enables you to achieve financial goals like preparing for Retirement, saving for your Child’s College Education or Marriage, apart from creating wealth to meet one’s growing needs.

An illustration of how an investment of Rs.10,000/- in Sundaram S.M.I.L.E since inception (February 2005) has helped build wealth over time.

SMILE_LUMPSUM_DEC2016.bmp

SMILE_PAGE_REV8.jpg

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

KOTAK TAX SAVER Fund

Invest KOTAK TAX SAVER Online

This fund has been a decent performer through the years, without really standing out in its category. It manages to beat its benchmark consistently, but at times struggles to keep up with many of its peers. It tilts towards bluechips and largecaps compared to peers.

While its top picks are benchmark heavyweights, the fund does not mirror the index and its portfolio is reasonably diversified. While the fund tends to perform better than many peers during a market uptick, it has not been able to cushion the downside as well. Conservative investors may opt for this fund, but those seeking higher returns should go for more aggressive and proven options in this segment.

15_08_2016_125_005_003.jpg

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

Fund of Funds and Tax

Taxation for fund of funds (FoF) is similar to that of debt mutual funds. The redemption will qualify for long-term capital gains tax if your units are held for three years (36 months) or more. The long-term capital gains tax will be 20 per cent with the inflation indexation benefit.

If your investments are redeemed before three years (36 months), the short-term gains will be taxed as per your applicable Income Tax slab.

Mutual Fund Costs

Invest Mutual Fund Online

Keep in mind these five points about mutual fund costs before you invest in a fund

Fund returns are net of all costs

When comparing mutual funds with other investments like ULIPs, note that the NAV-based returns of mutual funds are net of all expenses. In fact, the expense ratio is the only item of cost allowed to be (apart from the optional exit load) charged by the fund. What you see in the MF NAV is thus what you will get, both at the time of purchase and redemption. Now, ULIPs charge fund management fees to the NAV just like MFs, but they also levy a battery of other costs such as mortality charges for the insurance cover, premium allocation charges, which do not reflect in the NAV but are usually deducted from your investment before you are allotted units. When you redeem, ULIPs also levy surrender charges on top of the NAV. So if you’re comparing a MF with an ULIP, don’t just go by NAV returns alone.

Costs are levied on asset value
Comparing commissions or costs across MFs, ULIPs, bonds and other products? Well, check if the charge is on your initial investment or on the final asset value. It makes a big difference. A distributor commission of 1 per cent on your principal is a very different proposition from a commission of 1 per cent on your asset value. The latter will take a bigger bite out of your wealth, as it includes both your principal and your accumulated returns.

Expense ratio is a moving target
You may decide to buy a fund based on the expense ratio in its latest fact sheet. But while doing so, be aware that the ratio is not cast in stone. The fund is free to peg its expense ratio sharply up or down over time. On the debt side, schemes have even been known to kick off with a very reasonable looking expense ratio, only to hike it the very next year. Nor do fund houses have to take your permission to change their expense structure, as it isn’t a ‘fundamental attribute’ of the scheme. All this means that you don’t just have to keep an eye on fund costs when you invest. You also need to check back on costs every time you review your portfolio.

The B15 factor
If you thought your fund’s expense ratio is just a function of its size and SEBI‘s slab structure, you’re ignoring the B15 factor. In 2012, SEBI allowed funds to charge upto 0.30 per cent more in annual expense ratios, if they managed to source 30 per cent of new inflows or 15 per cent of existing assets from cities beyond the top 15 (known as B15 cities). Schemes which source lower flows also get to charge extra, on a proportionate basis. With B15 flows gaining traction in the last two years, B15 charges have helped fund houses pad up their expense ratios quite a bit. And it is the B15 factor which results in schemes sporting expense ratios that are not the standard 2.50 or 2.25 per cent, but much higher fractional numbers.

Smart beta ETFs are here
Active funds in India are expensive when compared to their Western peers, but ETFs aren’t. While active large-cap funds sported an average expense ratio of 2.33 per cent in June 2016, index funds and ETFs averaged only 0.55 per cent for the same period. Yes, there are 1 per cent plus funds (open end index funds) in the category, but you also have ETFs from HDFC, Invesco, Reliance R*Shares and Edelweiss charging a modest 0.05 to 0.10 per cent a year to passively track indices. With the bourses rolling out ‘Smart’ indices (playing on Quality, Value, Dividend Opportunities and so on) that use quantitative filters to select stocks, fund houses have also begun to launch ETFs that mimic these indices. These offer a low-cost yet smarter alternative to plain Jane Nifty and Sensex tracking ETFs.

ELSS Funds for different Risk Profile

Match your Goals Risk Profile With ELSS Investment





DIFFERENT TRACKS Unlike funds with a clearly defined investment universe — large-cap, mid-cap or multi-cap – Tax Saving Schemes do not specify investment focus

If you are looking for an equity Linked Savings Scheme (ELSS) to pare your tax burden, the plethora of options may confuse you. Many investors simply opt for ELSS funds, also called tax saving schemes with the best return over a certain time period. However, this may not yield the best results. There are several types of ELSS funds and it requires a nuanced approach to pick the right one.

DIFFERENT RISK PROFILES

Unlike funds with a clearly defined investment universe — large-cap, midcap or even multi-cap schemes in the ELSS category do not specify their investment focus. While these schemes have the flexibility to invest anywhere, most tend to follow a defined template.

For instance, some funds take a distinct large-cap tilt with a limited exposure to mid or small-cap stocks. Others prefer a higher exposure to the small-cap basket, with a modest large cap exposure, mostly intended to ensure liquidity in the portfolio. Some maintain a balanced portfolio, while a few adopt a more fluid approach, changing the portfolio mix according to market circumstances.

This difference in investment focus is evident in the portfolio of ELSS schemes. While the median portfolio market capitalisation (average market cap of a company a fund invests in) for ELSS funds is around Rs 36,000 crore, there are schemes with average portfolio market cap as high as `87,500 crore and as low as `13,000 crore, highlighting the disparity in the portfolio construction across ELSS funds.

A differentiated approach to portfolio construction means that the risk profile of ELSS funds varies substantially across schemes. Fund selection, therefore, is critical. The choice of fund should ideally be based on your risk profile, and not purely on a fund’s return profile.

Investors should identify the nature of underlying exposure of the ELSS funds to ensure that the scheme objectives are in line with their own requirements.

If you are looking for an aggressive tilt and higher alpha or excess returns and can stomach volatility, then a scheme with a clear mid-cap bias would suit you better. Funds like Reliance Tax Saver, Sundaram Tax Saver and IDBI Equity Advantage come under this category .

For those who prefer stability over alpha, funds with a conservative, large-cap orientation would be a better fit. Franklin India Taxshield, DHFL Pramerica Tax Savings and Edelweiss Tax Advantage comprise such funds. Schemes like Axis Long Term Equity, Birla Sun Life Tax Plan, ICICI Prudential Long Term Equity, among others, have a more balanced portfolio.

Identifying the investing focus can also help you zero in on an ELSS fund that best complements your equity fund portfolio. If your existing portfolio is heavy on large-cap funds, you may opt for a tax-saving fund that focuses on mid-caps. Investors need to assess the risk-adjusted performance of funds in this category. It is critical that investors understand the risk involved owing to the portfolio mix. Mid-caps can fetch far higher returns but can witness a sharp fall during a correction. Also, keep an eye on the expense ratio while selecting the fund. A high expense will eat into your returns over time.

Already INVESTED IN ELSS Funds? What Next

For existing investors, this may be a good time to review their investment and see if the fund merits a place in your portfolio.

Some investors have the habit of opting for a different ELSS fund every year. This is far from ideal. Since you would also be holding a few traditional diversified equity funds, having more ELSS funds will lead to an overlap in your portfolio.

Try to limit your ELSS investments to one or two schemes. A financial adviser would be best placed to guide you towards the right ELSS fund, after considering your existing investments and risk profile. Don’t be in a hurry to redeem your investment after the mandatory three-year lock-in period. Experts suggest staying with the fund for as long as one can.

Also, tax saving should not be the sole criterion for picking an ELSS fund. These funds are also suited for wealth creation over a long term and patient investors can reap rewards by staying invested for a reasonable period.

06_02_2017_018_022_014.jpg

Invest ELSS Funds Online

Save for Retirement

The basics numbers of saving, investment and life expectancy have changed and we all need to save more for old age

If you want your savings to be worth more, then you should invest more. It sounds like a joke, but it isn’t. Over the last few months, while analysing savers’ long-term projections and answering their questions, it’s become increasingly clear that most people do not save enough. This is not unique to India–financial advisors around the world have started talking about it. In the developed world, this is driven by the realisation that interest rates and the resulting income from fixed-income products could possibly stay at negligible levels for many more years, perhaps a decade or more.

In India, there are a range of reasons why savers need to save more, and interest rates are only one of them. Nominally, in terms of the number that your bank has written on your fixed deposit certificate, interest rates in India are quite high. However, anyone who understands even a little bit about savings and investments knows that this is an illusion and real interest rates over and above inflation are a fairly small one to two per cent. But even that’s an illusion. People’s personal inflation rates, especially as they retire and get older, are generally much higher than the official one.

What’s more, interest rates will likely head down. Raghuram Rajan is the rare RBI boss who was explicitly committed to maintaining a certain real rate of return. In the future, under a governor who is more accommodating to the low-interest cheerleaders, savers will probably have a harder time earning anything at all after adjusting for inflation.

What makes this worse is taxation on interest income. Even if you are in the 10% tax bracket, post-tax real returns from interest on deposits is barely neutral. In the higher tax brackets, it’s clearly negative. That’s the reality of interest income that few realise. None of this is going to change anytime soon and some of it is going to actually get worse. If, like most Indians, you are a believer in deposits, then you’ll just have to put in that much more to get out the same value.

However, that’s not the end of the story. What’s making this worse is longer life spans. In India, life expectancy at the age of 60 is now 17.8 years. As recently as 1990, this was 14.8 years. That large a change in the average means that some people–specially those with access to better nutrition and healthcare are living a lot longer. We can see this around us. It’s very likely that this trend will continue. The flipside is that your retirement kitty may have to last 25 or 30 years. To do this, your savings will have to earn better returns–which, as we’ve seen–is likely to be a challenge. Even if they can–perhaps for investors who have a reasonable equity allocation–there is no alternative to saving more.

Most people just save whatever they can, or they save some arbitrary number driven by tax saving needs. Instead, we’ll have to start projecting future needs and projecting backwards from there to see how much we need to save. The best thing to do is to be pessimistic in these calculations–assume that needs will be higher and returns lower.

This is for those who manage their own savings. For the millions who depend on statutory schemes like PF, the government should tweak the system to lead to higher savings and returns. In the last budget, there was an attempt to reform EPF that had to be rolled back in the teeth of protests. However, an increase in the EPF contribution or some other fundamental tweak is needed to ensure that those dependent upon it can cope with the changes that are taking place.

Longer lifespans and lower returns are a lethal combination for being comfortably off. All of us will have to recognize the threat and act sooner rather than later to manage it.