MeraFunds

Mutual funds are becoming very popular investment vehicle in India. India MF asset under management (“AUM”) has increased from  Rs 3.26 lakh crore as of Dec 2007 to Rs 21.27 lakh crore of Dec 2017. MF AUM has grown 6.5 times or at a CAGR of 20.6% over the last ten years . Indian MF consists of 41 Mutual fund house and have in total of  1,904 schemes as of Dec 2017 . Mutual fund classification helps us to understand the suitability. Mutual fund classification 1.         Based on asset class a.         Equity Funds —Equity funds invests in Equity securities. Equity funds can be further classified into large cap funds, Mid cap funds, small cap funds, Multicap funds, sector funds, thematic funds.  Equity funds have potential to generate a long-term return of 12-20% (depending on the nature of the fund) , however these funds are more volatile and hence suitable for  aggressive investor as we...

Mutual fund’s Systematic Investment plan (“ SIP ”) enables you to build a portfolio over longer time horizon with small investments at regular intervals reducing the risk of market volatility. An individual should save around 30% of the monthly income to secure financial future. This 30% should be used to pay towards debt repayment (if any) and towards  SIP .  SIP  is Similar to that of Bank’s recurring deposit, However offer more flexibility and potentially higher return. Key Benefits of  SIP 1.         Timing the market is not necessary – Sensex returned 27.9% for CY 2017 and up +2.5% (YTD for the first 15 days of CY 2018). Indian Equity markets of late have been on a roll. Many investors have been skeptical about Government reforms initiative be it GST, demonetization, Bank recapitalization and Others have been  skeptical on valuation and are waiting for a correction.  Indian Broad markets (Nifty & Sensex)...