What are International Funds

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Ask any finance professional ‘should investors diversify their investments?’ The answer will be a resounding yes. Diversification is a key risk mitigation strategy. Generally, we view diversification as investing in unrelated asset classes. However, diversification also means spreading your risk across geographies.

Usually individuals invest all their savings in their home country. This exposes investors to country risk. That is any negative economic or political event in the country affects their investment returns. A way to shield your clients against country risk is to invest internationally.

Investing directly in foreign markets requires expertise and is subject to investment limits. However, investors planning to diversify internationally can do so via the mutual fund route.

Let us understand the pros and cons of investing in foreign funds.

Advantages:

  • Risk mitigation – Helps in providing portfolio diversification
  • Broader investment basket – Your clients can gain exposure to strong international businesses which are not listed in India
  • No limit – RBI has imposed certain restrictions on direct foreign investments. However, there are no such restrictions on investments made through foreign funds. As per RBI guidelines, the annual overseas investment ceiling for individuals is US $250,000 (approx. 1.7 crore).
  • Planning for foreign education – Children of many clients dream of studying in a foreign university. Being well aware of the foreign education costs many parents save for their children’s education. However, these savings do not adequately reflect the impact of currency on investments. To elaborate assume the year is 2008, your clients calculate that they need to save 50 thousand dollars that is 21 lakhs for their son’s education over a period of 10 years. USD/INR was around 42 in 2008. Come 2018 Rupee has depreciated to 68 that is a change of 61%. Now the same amount 50 thousand USD translates to 34 lakh Rupees. This huge increase will turn the client’s financial calculations on its head. Instead if the client would have invested in a foreign fund investing in US markets then the currency movement would have no impact on the client’s financial plan.

Disadvantages:

  • Increased global risk – The client portfolio is exposed to country specific risks of all economies in which the international fund invests
  • Currency risk – This is the main risk while investing internationally. Any movement in Rupee compared to the currency of underlying investment influences scheme performance. An appreciating Rupee negatively affects the returns while a depreciating Rupee boosts returns.
  • Tax inefficiency – For tax purposes, they are treated as debt funds. Earlier when long term capital gains tax (LTCG) for equities was nil foreign funds were at a significant disadvantage. However, this disparity has reduced post budget as the Government has reintroduced long-term capital gains (LTCG) tax on equity investments.

Now, profits (above one lakh) from equity investments where the holding period is more than a year are taxed at 10%. While, long-term investments in foreign funds (holding period greater than three years) are taxed at 20% with indexation benefit.

SIPs are Best Investments as Stock Market s are move up and down. Volatile is your best friend in making Money and creating enormous Wealth, If you have patience and long term Investing orientation. Invest in Best SIP Mutual Funds and get good returns over a period of time. Know which are the Top SIP Funds to Invest Save Tax Get Rich – Best ELSS Funds

For more information on Top SIP Mutual Funds contact Save Tax Get Rich on 94 8300 8300

OR

You can write to us at

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Edelweiss Large cap Fund

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Edelweiss Large cap

1/3 year return: 15.6 /10.14%

Top 10 holdings (%): 37

LOOKING FOR companies with secular growth stories coupled with sharp portfolio management relative to the benchmark has helped the fund manager deliver superior results over the last one year. The fund also scores by having the lowest expense ratio in the large cap fund category. Decent exposure to stocks like Reliance, HDFC Bank, HDFC, TCS, Infosys, which accounted for a chunk of the Niftys return in the last one year, has helped the has helped the fund beat its benchmark over the last one year.

SIPs are Best Investments as Stock Market s are move up and down. Volatile is your best friend in making Money and creating enormous Wealth, If you have patience and long term Investing orientation. Invest in Best SIP Mutual Funds and get good returns over a period of time. Know which are the Top SIP Funds to Invest Save Tax Get Rich – Best ELSS Funds

For more information on Top SIP Mutual Funds contact Save Tax Get Rich on 94 8300 8300

OR

You can write to us at

Invest [at] SaveTaxGetRich [dot] Com

Debt Mutual Funds are not Risk Free

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When it comes to debt investments there seems to be an acute aversion to any sort of volatility among investors. But that need not be the case. In the current market bond yields have seen movements of as much as 100 basis points within a month. There are chances that many investors may want to redeem their debt funds fearing fall in their returns. But what may happen is that investors may miss out on potentially improved returns at portfolio level due to lack of adequate planning.

Today mutual funds offer a number of different types of debt funds that cater to the investment requirement across the segment. As a thumb rule, the longer the investment horizon, the better is one’s ability to withstand intermediate volatility and, thereby, enhance expected return.

Understanding price-yield movement

A basic fundamental of bond investing that yield and price are inversely related may not be commonly understood. Therefore it is important that investors take efforts to educate themselves to understand the product before taking the investment decision.

A simple way of understanding debt funds is to think of them simply as passing through the interest and capital gain income that they receive from the bonds they invest in, after deducting expenses and fees. There are a couple of further complexities to this.

One, unlike fixed deposits, mutual funds invest in bonds that are tradable. Two, in the debt market, prices of different bonds can rise or fall, just like they do on stock markets. Debt market focuses on various parameters such as global market development, interest rate cycles, inflation and credit pick-up. Bond prices are affected by the interest rate cycles and policy stance of central banks.

Don’t panic if yields move up

Some investors withdraw untimely from debt funds because fear of loss is irrationally higher; the perception that the debt market does not witness volatility leads to panic when there is an upward movement in yields, adversely impacting returns during that period.

In current scenario no economy can sustain being standalone, therefore development in one part of the world is naturally going to affect the linked economy. Like in every other asset class, investors need to show patience in this asset also. An investor with long-term horizon should remain invested to benefit the most from the interest rate cycle.

Choose the right kind of fund

An investor should build his/her debt portfolio keeping in mind the time horizon and risk profile and invest in fund strategy matching their investment need.

Debt funds can broadly be categorised in the following three groups:

(1) For short-term investment-Liquid Fund/Low Duration Funds

(2) For medium term investment, defined as 18 months to three years – Short Term fund/Credit Risk Funds

(3) For long-term investment horizon of over three years – Bond Funds

Generally speaking, risk matrix in debt funds is measured on two major counts. Firstly, the average maturity of the fund’s investments and secondly the average credit profile of the fund. Higher the average maturity, the more volatile and risky is a fund considered and similarly, the lower the rating profile of a fund’s investment, the more risky is it considered.

Longer maturity risk is normally due to fluctuation in bond prices and is considered recoverable over long periods. Credit risk is typically binary in nature, where if the investee company defaults in repayments on due date, the subsequent recovery is generally unlikely.

Kinds of debt funds

Liquid Funds, typically invest in papers of maturity up to 91 days. Investors with very short- term horizon should consider such funds, especially for creating an emergency fund corpus (which should be ideally three to six months income).

Low-duration fund can have average Macaulay duration of six to 12 months. If investor has investment horizon matching the above, this category may suit them. Short-duration funds typically have maturity between one and three years. Credit risk funds generally invest in lower rated papers to capture higher carry yields. Such funds may suit medium term investors.

Bond funds typically can invest in long-term papers. Due to higher average maturity, typically, returns are very volatile and highly sensitive to change in interest rates. However, past experience suggests that over interest rate cycles, these funds in the long term have provided good returns. Hence, a long term investor should consider such funds.

Another way of managing the interest rate volatility is through Dynamic Bond Funds, which can increase or reduce their duration based on the interest rate outlook.

DEMYSTIFYING DEBT FUNDS

  • There are debt funds to match varying investment horizons
  • Debt funds can also suffer losses like equity funds
  • Key is to have patience and wait out the volatility

SIPs are Best Investments as Stock Market s are move up and down. Volatile is your best friend in making Money and creating enormous Wealth, If you have patience and long term Investing orientation. Invest in Best SIP Mutual Funds and get good returns over a period of time. Know which are the Top SIP Funds to Invest Save Tax Get Rich – Best ELSS Funds

For more information on Top SIP Mutual Funds contact Save Tax Get Rich on 94 8300 8300

OR

You can write to us at

Invest [at] SaveTaxGetRich [dot] Com

Axis Focused 25 Fund

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Axis Focused 25

3 year return: 16.58% Fund Manager: Jinesh Gopani

Top 10 holdings (%): 56.2 Top 3 holdings: Kotak Mahindra Bank, HDFC Bank, TCS

THREE FACTORS have worked in favour of Axis Focused 25. One, the scheme’s fund manager Jinesh Gopani has focussed on core secular growth stories. In this, he focussed on companies which have high credit rating (AAA). These companies have been naturally blue-chip which to a large extent ensured high growth given their leadership position in respective sectors. Two, he generated alpha by focussing on Initial Public Offerings (IPOs) and some listed companies which have a unique story to tell in a given sector in comparison with their peers. Lastly, he focused on cyclical theme wherein companies embarked on capex cycle. Key companies which have enhanced the scheme’s performance are Bajaj Finance, Endurance Technologies, Bandhan Bank, Gruh Finance and Kotak Mahindra Bank.

SIPs are Best Investments as Stock Market s are move up and down. Volatile is your best friend in making Money and creating enormous Wealth, If you have patience and long term Investing orientation. Invest in Best SIP Mutual Funds and get good returns over a period of time. Know which are the Top SIP Funds to Invest Save Tax Get Rich – Best ELSS Funds

For more information on Top SIP Mutual Funds contact Save Tax Get Rich on 94 8300 8300

OR

You can write to us at

Invest [at] SaveTaxGetRich [dot] Com

Invesco Large Cap Fund

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Invesco Large Cap Fund

Fund manager: Amit Ganatra

The scheme largely focuses on business leaders across sectors. This gives it a large-cap bias. Ganatra selects companies based on their competitive advantage. For manufacturing companies, he focuses on return on capital employed or Return on Equity. For banks, it is net interest margin and for commodity companies it is about cost leadership. Keeping these factors in mind, Ganatra have created a portfolio of well-placed large—sized companies which have delivered compounded annual growth rate of more than 15% in the past 10 to 15 years. Since there has been high interest in large-sized companies in the year-to-date period, the scheme has benefited immensely from it. Companies such as HDFC Bank, TCS, Infosys, and Reliance Industries have boosted the scheme’s performance between the two peaks of the Nifty.

SIPs are Best Investments as Stock Market s are move up and down. Volatile is your best friend in making Money and creating enormous Wealth, If you have patience and long term Investing orientation. Invest in Best SIP Mutual Funds and get good returns over a period of time. Know which are the Top SIP Funds to Invest Save Tax Get Rich – Best ELSS Funds

For more information on Top SIP Mutual Funds contact Save Tax Get Rich on 94 8300 8300

OR

You can write to us at

Invest [at] SaveTaxGetRich [dot] Com

Big Mistakes Mutual Fund Investors Make

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Mutual Funds have gained huge popularity in recent years as evident from the fact that between 1st April 2016 and 31st March 2018, 2.32 crore folios have been added by mutual funds. The Assets under Management (AUM) of the industry increased from Rs 14,21,952 crore to Rs 21,36,036 crore during this period. That is a growth of 50% in two years, no mean achievement!

A number of steps taken by the regulator, SEBI as well as by the industry body AMFI and by the various Asset Management Companies and the distributor community have played a great role in the growth of the industry. One can safely say we have reached a point where most people with investible surplus have started considering mutual funds as a serious investment option. In this context, it is important to keep in mind some of the common mistakes that investors make while investing in mutual funds.

It is All About Equity:

Many people have the mistaken belief that mutual funds are all about equity. The fact is that there are a number of debt schemes that can offer superior risk adjusted returns over short and medium term. In fact, if one is investing for a period of say, one year, it might make sense to invest in a short term fund or a liquid fund. The average returns from liquid funds over a one-year period could be superior to what most other fixed income instruments give. In fact, for those who wish to invest the money for less than three years, a fixed income fund might be a very good choice.

Timing the Market:

Many investors have the tendency to wait for the ‘right’ time to invest in the market. This is a futile wait. As far as equity mutual funds are concerned, the right time to invest is when you have the money and the right time to sell is when you need the money or when you have achieved your goals. Equity investment is for long term investors i.e. people who can wait for five years or more. During that period, most equity funds are likely to give reasonably good returns. If you wait for the right time, you are very likely to miss out some good opportunities.

Hunt for the Best Performing Fund:

Investors and even many distributors, often base their selection of funds on past performance. The fact is that funds that performed well in the past need not perform well in future. For example, an equity fund which has given the best performance for a one year period may not give the best performance over a five year period. Conversely, a fund which is ranked first over a 10 year period may be ranked last over a one year period. Nobody can predict correctly which funds would give the best returns in future. The important thing is to have faith in the market and stay invested. Your advisor would be able to recommend a good fund from a fund house that follows a robust and disciplined investment process.

Trying to Do It Yourself:

With the advent of Direct Plans, many investors have started choosing the funds on their own. On the face of it, direct plans are cheaper because they have a lower expense ratio than regular plans. While this may work well for experienced and knowledgeable investors, vast majority of retail investors would benefit significantly by taking the help of a good advisor. It is important that every investor makes investments keeping mind his/her financial goals, risk profile, expected cash flows etc. Selection of a scheme has to be done on the basis of a proper financial plan. The choice of a wrong scheme can lead to a bad experience for the investor and may even keep her away from mutual funds for a long time. A good advisor can make a huge difference to your fortunes!

Knee-jerk Reactions to Market Movements:

Many investors tend to invest in mutual funds, especially in equity schemes, when the market is on a bull run. Similarly, they also tend to redeem their investments when there is a fall in the market. Both are harmful. As mentioned earlier, investments should be made on the basis of a well thought financial plan and it is important that one sticks to the plan. Ups and downs in the market are common and one makes money by staying invested for the long term. ‘Time in the market’ is certainly more important than ‘timing’ the market.

SIPs are Best Investments as Stock Market s are move up and down. Volatile is your best friend in making Money and creating enormous Wealth, If you have patience and long term Investing orientation. Invest in Best SIP Mutual Funds and get good returns over a period of time. Know which are the Top SIP Funds to Invest Save Tax Get Rich – Best ELSS Funds

For more information on Top SIP Mutual Funds contact Save Tax Get Rich on 94 8300 8300

OR

You can write to us at

Invest [at] SaveTaxGetRich [dot] Com

Canara Robeco Bluechip Equity Fund

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Canara Robeco Bluechip Equity

Fund Manager: Shridatta Bhandwaldar

As a fund house, Canara Robeco focuses that capture compounding stories which have visibility, sustainability, and longevity of earnings. In this, Bhanwaldar focussed largely on stories which fall under consumption theme. Due to this, the scheme’s portfolio had companies which are well-established, have strong competitive advantages in their respective sectors and entry barriers in those sectors will be high. Selecting companies based on these parameters has paid off and upped the scheme’s performance. Companies such as Maruti Suzuki, Bajaj Finance, Kotak Mahindra Bank, Britannia and L&T have enhance the scheme’s performance. Also Bhanwaldar stayed away from sectors which were draw-downs. He stayed away from sectors such as metals, telecom and PSU banks.

SIPs are Best Investments as Stock Market s are move up and down. Volatile is your best friend in making Money and creating enormous Wealth, If you have patience and long term Investing orientation. Invest in Best SIP Mutual Funds and get good returns over a period of time. Know which are the Top SIP Funds to Invest Save Tax Get Rich – Best ELSS Funds

For more information on Top SIP Mutual Funds contact Save Tax Get Rich on 94 8300 8300

OR

You can write to us at

Invest [at] SaveTaxGetRich [dot] Com

Franklin India High Growth Companies Fund

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Franklin India High Growth Companies Fund is now Franklin India Focus Fund

Franklin India High Growth Companies Fund seeks to achieve capital appreciation through investments in Indian companies/sectors with high growth rates or potential. It will focus on companies offering the best trade-off between growth, risk and valuation. The fund managers will follow an active investment strategy and will be focusing on rapid growth companies which will be selected based on growth, measures such as Enterprise value, growth rate, price/earnings/growth, forward price/sales, and discounted EPS.

Franklin India High Growth Companies Fund with a distinct mandate of finding companies that are likely to deliver higher earnings growth than the market, this fund has stayed put at a five-star rating for the last three years.

Franklin India High Growth Companies Fund earnings focus tilts the portfolio towards sectors and stocks that are on the cusp of a turnaround. Despite its name, the fund is quite valuation conscious and doesn’t overpay for growth. The qualitative factors it screens for are sustainability of the business model, quality of management and governance, and fair treatment of minority shareholders.

Market-cap allocations are managed dynamically based on market conditions. This fund usually has a higher allocation to mid-cap stocks relative to its peers but has seen its large-cap weights creep up in the last one year. In recent times, about 65 per cent of the portfolio has been invested in large caps, 30 per cent in mid caps and the rest in small caps.

Franklin India High Growth Companies Fund has beaten its benchmark every year since launch from 2008. It has managed a sizeable margin of outperformance over three and five years, with the excess returns at 4-9 percentage points against the index and about 1-6 percentage points against the category. The fund has been quite an aggressive outperformer in bull phases such as 2009, 2012 or 2014. But having flagged off in the severe bear market of 2008, it marginally trailed the category that year and in 2011 as well. It is yet to be tested in a severe bear market.

A value-conscious fund that has spotted trend reversals in sectors ahead of the market.

SIPs are when Stock Market is high volatile. Invest in Best Mutual Fund SIPs and get good returns over a period of time. Know Top SIP Funds to Invest Save Tax Get Rich

For further information on Top SIP Mutual Funds contact Save Tax Get Rich on 94 8300 8300

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Axis Bluechip Fund

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Axis Bluechip Fund

Fund Manager:

Shreyash Devalkar

After a lacklustre performance for several years, Axis Bluechip is back in the reckoning in the past one year. There are a few reasons why the scheme has done well. First, the scheme’s fund manager Shreyash Devalkar who joined the scheme in November 2016 focused on quality and growth companies which was in sync with the flavour of the markets. Factors he kept in mind in selecting companies have been high Return on Equity, revenue and margin growth and penetration in market. Three sectors met these criteria. These are financials especially retail-focused banks, auto and auto-ancillaries and consumption. Besides, unlike his peer schemes, Devalkar reduced the scheme’s exposure to midcap to 6% and enhanced to large-sized companies to over 90%. Hence, in the past one year when mid-sized companies fell, Axis Bluechip’s returns did not fall as much as its peers.

SIPs are Best Investments as Stock Market s are move up and down. Volatile is your best friend in making Money and creating enormous Wealth, If you have patience and long term Investing orientation. Invest in Best SIP Mutual Funds and get good returns over a period of time. Know which are the Top SIP Funds to Invest Save Tax Get Rich – Best ELSS Funds

For more information on Top SIP Mutual Funds contact Save Tax Get Rich on 94 8300 8300

OR

You can write to us at

Invest [at] SaveTaxGetRich [dot] Com

How to Get Rich with Mutual Funds during Stock Market Volatility

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Should investors invest in Mutual Funds at this point in time?

Equity investors should not get panicky during high market volatility and market corrections. It is a normal phenomenon, which usually happens at regular intervals. Such corrections in structural bull markets are good as it helps in removing the froth from the stock market. Also, these volatile situations create an opportunity to buy a number of stocks at a cheaper price. Those who are invested in equity mutual funds should remain invested for a long term.

What sort of funds should you get into? Should you be aggressive and get into mid-caps or should you stick to the safety of large-caps?

Investors in the current market scenario can consider equity investments whether it can be a large-cap or a mid-cap that aims to generate income by investing in blue-chip companies or emerging companies to get higher returns. But, you should ideally go for capital appreciation through moderate exposure to equity, that is through balanced equity funds option during certain market conditions. While constructing a portfolio, one should invest 40% in large-cap funds, 30% in multi-cap funds and roughly about 20% in mid-cap/small-cap funds even if there is an uncertainty in the market.

Tips for investors who want to invest in mid-cap and small-cap…

Always choose to have a diversified portfolio in the mid-cap segment. This reduces the market risk to an extent. Assuming, if a mid-cap portfolio has 50 to 60 number of emerging company’s stocks then in such case, not all stocks will fall during volatility or correction phase. If 30 stocks witness a fall then the other 30 may rise too. However, this can only happen if you are routing your money through equity mutual funds.

SIPs are Best Investments as Stock Market s are move up and down. Volatile is your best friend in making Money and creating enormous Wealth, If you have patience and long term Investing orientation. Invest in Best SIP Mutual Funds and get good returns over a period of time. Know which are the Top SIP Funds to Invest Save Tax Get Rich – Best ELSS Funds

For more information on Top SIP Mutual Funds contact Save Tax Get Rich on 94 8300 8300

OR

You can write to us at

Invest [at] SaveTaxGetRich [dot] Com