Mutual Funds

Currently, mutual funds have 2.89 crore SIP accounts through which investors regularly invest in Indian mutual fund schemes. (Photo: iStock)
Currently, mutual funds have 2.89 crore SIP accounts through which investors regularly invest in Indian mutual fund schemes. (Photo: iStock)

Mutual fund investment via SIP rises 3.2% to 8,246 crore in October

  • The total SIP contribution in the first 7-month of the current financial year rose to 57,607 crore as compared with 52,472 crore in Apr-Oct 2018
  • SIP contribution in Oct stood at 8,246 crore, which was 3.2% higher than the 7,985 crore clocked in the same month last year

Active funds have historically outperformed passive funds in India
Equity mutual funds received  ₹6,020 crore last month
Use past performance data along with risk and portfolio data to make investment decisions (Photo: iStock)
Use past performance data along with risk and portfolio data to make investment decisions (Photo: iStock)

How to decode mutual fund returns

  • Know what to look for and what to discount while assessing the past performance of a mutual fund
  • In the absence of rolling return data, look at calendar year performances and trailing returns

Typically, mutual fund schemes diversify across stocks and sectors (Photo: iStock)
Sebi’s communication to the finance ministry follows multiple representations from asset management firms (Photo: Mint)
After touching fresh highs, the Sensex had gained 3.78% in October, its best monthly performance this financial year (AP file)
Equity mutual funds received  ₹6,020 crore last month: AMFI
Sebi also directed mutual fund houses to follow 'waterfall' approach for the valuation of money market and debt securities (Photo: Reuters)
Sebi also directed mutual fund houses to follow 'waterfall' approach for the valuation of money market and debt securities (Photo: Reuters)

Sebi asks MFs to report any changes in terms of investments to rating agencies

  • Sebi has asked mutual fund houses to inform credit rating agencies immediately about any changes in terms of investments, along-with reasons for such changes
  • Earlier, fund houses were required to inform the same to valuation agencies only

Having a cover equal to eight to 10 times the annual income doesn’t mean that you buy multiple term plans
Having a cover equal to eight to 10 times the annual income doesn’t mean that you buy multiple term plans

The problem of plenty in your financial portfolio

  • Don’t overdose on unwarranted MFs, FDs, bank accounts and insurance policies
  • Over-diversification in mutual fund schemes could make it difficult to keep a tab on performance

Photo: iStock
Photo: iStock
Photo: iStock
The schemes in this list may not be the same as the ones that top the return league tables for the past year since these do not take into account parameters of risk and other features (Photo: iStock)
The schemes in this list may not be the same as the ones that top the return league tables for the past year since these do not take into account parameters of risk and other features (Photo: iStock)

Mint50: Hand-picked mutual funds to build your portfolio

Mint50, a curated basket of investment-worthy funds, is the result of an exhaustive exercise that blends in various parameters with the aim of getting you the best combination of risk and returns

(Photo: Reuters)
A manager buys and sells scrips regularly, sometimes every day, to generate a return (Photo: iStock)
A manager buys and sells scrips regularly, sometimes every day, to generate a return (Photo: iStock)

Is your mutual fund buying or selling stocks too much?

  • If the portfolio turnover is greater than 100%, that typically means that the manager has churned the portfolio once over, completely
  • A high turnover is not necessarily bad, but a consistently high turnover is not desirable unless the inherent strategy of the scheme calls for a high churn

Factors like the fund house reputation and fund manager experience must feature in the selection process (Photo: iStock)
Factors like the fund house reputation and fund manager experience must feature in the selection process (Photo: iStock)

Does past performance matter in selecting mutual funds?

  • Studies show past performance is not a sufficient condition when selecting a fund
  • Evaluate the portfolio construction and management to understand the risks in the scheme

Photo: iStock
Many mutual fund companies are also looking at index funds and global funds. (iStockphoto)
India Ratings also noted the risk in acceleration of bank loan payments by Vodafone Idea and a delay in asset monetization