PLAN YOUR INVESTMENTS IN  MUTUAL FUNDSÂ
                   AND MANAGE PROFITABLY
INDIAN MUTUAL FUNDS NEWS
 GOOD  NEWS FOR INVESTORS  IN FRANKLIN TEMPLETON MUTUAL FUNDS  WOUND UP SCHEMESÂ
Dated 18.06 .2020 :  M/S Franklin Templeton Mutual funds has received Interest payment from Vodafone Idea Ltd for 8.25% Vodafone Idea Ltd 10-JUL-20 (ISIN INE713G08046) on June 12, 2020. This amount  of Rs 102.71 crores so received will be distributed to the investors of following six defunct funds  in proportion to their holdings in the plans of the segregated portfolio.
1.  Franklin India Low Duration Fund (No. of Segregated Portfolios – 2)
2. Franklin India Ultra Short Bond Fund (No. of Segregated Portfolios – 1)
3. Franklin India Short Term Income Plan (No. of Segregated Portfolios – 3)
4.Franklin India Credit Risk Fund (No. of Segregated Portfolios – 3)
5. Franklin India Dynamic Accrual Fund (No. of Segregated Portfolios – 3)
6. Franklin India Income Opportunities Fund (No. of Segregated Portfolios - 2)  Â
The payout shall be processed by FT by extinguishing proportionate units in the plans of the segregated portfolio of respective schemes. After the payment, the number of units outstanding in the investor account under said segregated portfolio of the scheme would fall to the extent of payout and statutory levy (if applicable). .The payout shall be subject to compliance with applicable regulations and tax deducted at source i.e. TDS, as applicable .Â
​Though  percentage of payment against the investment may be small , the interest payment received from Vodafone Idea  is  against written down value of nil .Â
To read FT note , CLICK HEREÂ
Dated 18.06 .2020 :  M/S Franklin Templeton Mutual funds has received Interest payment from Vodafone Idea Ltd for 8.25% Vodafone Idea Ltd 10-JUL-20 (ISIN INE713G08046) on June 12, 2020. This amount  of Rs 102.71 crores so received will be distributed to the investors of following six defunct funds  in proportion to their holdings in the plans of the segregated portfolio.
1.  Franklin India Low Duration Fund (No. of Segregated Portfolios – 2)
2. Franklin India Ultra Short Bond Fund (No. of Segregated Portfolios – 1)
3. Franklin India Short Term Income Plan (No. of Segregated Portfolios – 3)
4.Franklin India Credit Risk Fund (No. of Segregated Portfolios – 3)
5. Franklin India Dynamic Accrual Fund (No. of Segregated Portfolios – 3)
6. Franklin India Income Opportunities Fund (No. of Segregated Portfolios - 2)  Â
The payout shall be processed by FT by extinguishing proportionate units in the plans of the segregated portfolio of respective schemes. After the payment, the number of units outstanding in the investor account under said segregated portfolio of the scheme would fall to the extent of payout and statutory levy (if applicable). .The payout shall be subject to compliance with applicable regulations and tax deducted at source i.e. TDS, as applicable .Â
​Though  percentage of payment against the investment may be small , the interest payment received from Vodafone Idea  is  against written down value of nil .Â
To read FT note , CLICK HEREÂ
 FRANKLIN TEMPLETON MUTUAL FUNDS  WINDS UP SOME SCHEMES PREMATURELYÂ
Dated 24.04 .2020 :  Leading Mutual Fund M/S Franklin Templeton Mutual funds has decided to wind up  the following Mutual Fund schemes  prematurely :Â
1.  Franklin India Low Duration Fund (No. of Segregated Portfolios – 2)
2. Franklin India Ultra Short Bond Fund (No. of Segregated Portfolios – 1)
3. Franklin India Short Term Income Plan (No. of Segregated Portfolios – 3)
4.Franklin India Credit Risk Fund (No. of Segregated Portfolios – 3)
5. Franklin India Dynamic Accrual Fund (No. of Segregated Portfolios – 3)
6. Franklin India Income Opportunities Fund (No. of Segregated Portfolios - 2) Â
The reason for the  early winding up of the scheme as given by the Fund managers is Â
"  There is   sustained fall in liquidity in some segments of the corporate bonds market on account of the Covid-19 crisis and the resultant lock-down of the Indian economy . At the same time, mutual funds, especially in the fixed income segment, are facing continuous and heightened redemptions. "Â
With the announcement , investors in the above funds have to wait for the fund house to sell the assets and pay them back  . It is not certain how much time the fund house may need to complete the process .Â
​
The terminated funds are in the nature  of Debt funds   and market is afraid that other MFs may follow suit .  Any panic selling by the investors may lead to  collapse of mutual funds and investors may return to bank deposits which are considered safer .Â
​
For the notice of the FT Mutual Fund , CLICK HERE  To visit website of FT Mutual Fund  , CLICK HEREÂ
Dated 24.04 .2020 :  Leading Mutual Fund M/S Franklin Templeton Mutual funds has decided to wind up  the following Mutual Fund schemes  prematurely :Â
1.  Franklin India Low Duration Fund (No. of Segregated Portfolios – 2)
2. Franklin India Ultra Short Bond Fund (No. of Segregated Portfolios – 1)
3. Franklin India Short Term Income Plan (No. of Segregated Portfolios – 3)
4.Franklin India Credit Risk Fund (No. of Segregated Portfolios – 3)
5. Franklin India Dynamic Accrual Fund (No. of Segregated Portfolios – 3)
6. Franklin India Income Opportunities Fund (No. of Segregated Portfolios - 2) Â
The reason for the  early winding up of the scheme as given by the Fund managers is Â
"  There is   sustained fall in liquidity in some segments of the corporate bonds market on account of the Covid-19 crisis and the resultant lock-down of the Indian economy . At the same time, mutual funds, especially in the fixed income segment, are facing continuous and heightened redemptions. "Â
With the announcement , investors in the above funds have to wait for the fund house to sell the assets and pay them back  . It is not certain how much time the fund house may need to complete the process .Â
​
The terminated funds are in the nature  of Debt funds   and market is afraid that other MFs may follow suit .  Any panic selling by the investors may lead to  collapse of mutual funds and investors may return to bank deposits which are considered safer .Â
​
For the notice of the FT Mutual Fund , CLICK HERE  To visit website of FT Mutual Fund  , CLICK HEREÂ
TDSÂ Â AT 10 % WILL BE DEDUCTED WHILE PAYING DIVIDENDSÂ BY MUTUAL FUNDSÂ
Dated 06.02.2020 : While presenting union budget for FY 2020-21 , Finance Minister Ms Nirmala Sitharaman  had announced abolition of Dividend Distribution Tax at the hands of company / Mutual Funds and proposed to tax the individual  holders of shares / mutual funds  . The dividend Incomw will be added to the individual's income and accordingly taxed .Â
Now Income Tax department has clarified that the companies / mutual funds would be recovering 10 % of the dividends paid  as TDS if the dividend paid by them is more than Rs 5,000 in the financial year . Further it is clarified that any gain made by the investor while redemption which is accrued as Capital gain will be not be liable for TDS . Â
 For CBDT Press Release dated 04.02.2020 , CLICK HEREÂ
Dated 06.02.2020 : While presenting union budget for FY 2020-21 , Finance Minister Ms Nirmala Sitharaman  had announced abolition of Dividend Distribution Tax at the hands of company / Mutual Funds and proposed to tax the individual  holders of shares / mutual funds  . The dividend Incomw will be added to the individual's income and accordingly taxed .Â
Now Income Tax department has clarified that the companies / mutual funds would be recovering 10 % of the dividends paid  as TDS if the dividend paid by them is more than Rs 5,000 in the financial year . Further it is clarified that any gain made by the investor while redemption which is accrued as Capital gain will be not be liable for TDS . Â
 For CBDT Press Release dated 04.02.2020 , CLICK HEREÂ
Mutual Fund meaning
MUTUAL FUNDS
. A Mutual Fund is a type of professionally managed Investment fund that pools money from many investors to purchase securities. A mutual fund is an open-end professionally managed investment fund that pools money from many investors to purchase securities.​ Small investors who do not have capacity / knowledge to invest in many securities , to diversify their portfolio , can invest in Mutual fundsÂ
Mutual Fund Investment
MUTUAL FUNDS INVESTINGÂ - BASICSÂ TO KNOW HOW TO MAKE MEANINGFUL INVESTMENTÂ
  1 . Mutual Fund investing can be done in small quantities  and one get diversification of the investment made .Â
2.  Mutual Funds are governed by  Securities and Exchange Board of India ( SEBI ) .
 3.  Under Mutual Fund plan ,  Asset Management Company ( AMC )  pools monies from  varies investors  and invest such funds in to such  assets as already  announced by them before collecting  money . They manage such assets  and charge a fee for managing them .Â
4.  AMC  collects  such investment by issuing  offer document called NFO ( New Fund Offer )  indicating the goals of the funds , nature of the fund and the period  of investment .Â
5. The interested investors can invest by buying units of  such mutual funds at the announced price .
6. Collected funds would be invested in various  types of assets indicated in the original offer  for which AMC s will have professional managers .Â
7. The investment  would be managed  regularly  by the funds managers of AMC  and its  value would be announced on daily basis and it is called Net Asset Value ( NAV ) . Â
8 . Such units  can be sold back by the investors to AMC  any time  at the rate of  prevailing  NAV  in case of open ended schemes  .  In closed ended scheme ,  units can be sold through stock exchanges  at the prevailing market priceÂ
9. New investors can join the Fund by buying the units at the prevailing  NAV  in open ended scheme . In closed  ended schemes , units can be bought at the market price through stock exchanges . Â
10. Mutual funds  with dividend option would be distributing profit  to the holders by way of dividends at regular  intervals . other mutual funds will add  such profit to the value of the funds .Â
Advantges of MUTUAL FUNDS  for  a retail investor .
1.  Many retail investors do not have knowledge of the stock market  and hence beneficial to hand over the funds to professional manager instead of  investing in unknown territory .  Further such investors may not have time to  actively participate in the market  and hence better to invest in mutual funds  managed by professionals.Â
2. Normally mutual funds  invest in various assets and hence investment is diversified .Â
3. The mutual funds  can be sold  any time and hence  liquid .Â
4. The investment in Mutual funds carry Tax  benefits .Â
5. Small amounts can be invested in  mutual funds. Hence we will have a diversified portfolio even for a  small investment which would be difficult in direct market participation .Â
2. Normally mutual funds  invest in various assets and hence investment is diversified .Â
3. The mutual funds  can be sold  any time and hence  liquid .Â
4. The investment in Mutual funds carry Tax  benefits .Â
5. Small amounts can be invested in  mutual funds. Hence we will have a diversified portfolio even for a  small investment which would be difficult in direct market participation .Â
Risks in a Mutual Fund InvestmentÂ
1. Investors are the mute spectators  once units are purchased . The  performance of the fund depends on the efficiency  of the funds manager .Â
2. Risks of the mutual funds are pretty same as the asset invested and hence carry same risk  weightage .Â
3. Investment also carries professional charges of AMC and investor has to bear the charges irrespective  of the efficiency of the manager . Â
2. Risks of the mutual funds are pretty same as the asset invested and hence carry same risk  weightage .Â
3. Investment also carries professional charges of AMC and investor has to bear the charges irrespective  of the efficiency of the manager . Â
Types of Mutual FundsÂ
By structure :Â
Open Ended schemes : An Open-ended Fund is one that is available by the  issuers  continuously and do not have a fixed maturity. Investors can conveniently buy and sell units at Net Asset Value (NAV) related prices.
Closed Ended schemes :  A Close-ended Fund has a  maturity period  fixed at the time of issue .  The fund is open for subscription at the initial offer  period only .  Subsequently  Investors  they can buy or sell the units of the scheme on the Stock Exchanges, if they are listed. The market price at the stock exchange could vary from the scheme's NAV on account of demand and supply situation, unit holders' expectations and other market factors.
Open Ended schemes : An Open-ended Fund is one that is available by the  issuers  continuously and do not have a fixed maturity. Investors can conveniently buy and sell units at Net Asset Value (NAV) related prices.
Closed Ended schemes :  A Close-ended Fund has a  maturity period  fixed at the time of issue .  The fund is open for subscription at the initial offer  period only .  Subsequently  Investors  they can buy or sell the units of the scheme on the Stock Exchanges, if they are listed. The market price at the stock exchange could vary from the scheme's NAV on account of demand and supply situation, unit holders' expectations and other market factors.
By Objective :Â
Growth Funds
The aim of Growth Funds is to provide capital appreciation over the medium to long term. Such schemes normally invest a majority of their corpus in equities.Â
Income Funds
The aim of Income Funds is to provide regular and steady income to investors. Such funds generally invest  in Debt securities like  bonds , & Debentures . Â
Balanced Funds
The aim of Balanced Funds is to provide both growth and regular income. Such schemes periodically distribute a part of their earning and invest both in equities and fixed income securities in the proportion indicated in their offer documents. T
Money market Funds
The aim of Money Market Funds is to provide easy liquidity, preservation of capital and moderate income. These schemes generally invest in safer short-term instruments such as Treasury Bills, Certificates of Deposit, Commercial Paper and Inter-Bank Call Money.Â
Growth Funds
The aim of Growth Funds is to provide capital appreciation over the medium to long term. Such schemes normally invest a majority of their corpus in equities.Â
Income Funds
The aim of Income Funds is to provide regular and steady income to investors. Such funds generally invest  in Debt securities like  bonds , & Debentures . Â
Balanced Funds
The aim of Balanced Funds is to provide both growth and regular income. Such schemes periodically distribute a part of their earning and invest both in equities and fixed income securities in the proportion indicated in their offer documents. T
Money market Funds
The aim of Money Market Funds is to provide easy liquidity, preservation of capital and moderate income. These schemes generally invest in safer short-term instruments such as Treasury Bills, Certificates of Deposit, Commercial Paper and Inter-Bank Call Money.Â
New Updated ArticleÂ
      Â
 TAX PLANNING FOR FY 2022-23 ( AY 2023-24 )Â
Comprehensive  Article on Income tax changes in Rules, Rates , Slabs , Rebates  and EstimationÂ
CLICK HERE TO READÂ
​
      Â
 TAX PLANNING FOR FY 2022-23 ( AY 2023-24 )Â
Comprehensive  Article on Income tax changes in Rules, Rates , Slabs , Rebates  and EstimationÂ
CLICK HERE TO READÂ
​
INDIAN MUTUAL FUNDS
Mutual Fund issuers are  to be  the members of   Association of  Mutual Funds in India ( AMFI ). One can go to the site of association  AMFI  (www.amfiindia.com) and find details of  the Issuing Company. Click HERE for  the list  of mutual fund companies  who operate in India  and to go to their websites ..Â
TOP MUTUAL FUNDS IN INDIA
MUTUAL FUND RATINGSÂ
There are large number of mutual funds available for investment in India . They are issued by many companies with diverse portfolio . It will be difficult for a new investor to select among those which will suit his needs . Even on the face if MFs look good by their goals , strategies and investment models , it is difficult to know how it has translated in to actual investment and the efficiency of the funds manager to harness the benefits . Hence to assist investors , many rating agencies  like CRISIL , Value Research , ICRA rank  individual funds with regard to past performance in comparison with peer funds .    However it must be noted that past performance is no guarantee for future . Further for new funds , investor has to go only with stated objectives and past performance of the funds manger in managing earlier funds .  Â
While Rating various  mutual funds ,  Rating agencies broadly classify the  mutual funds in to various categories    and rate them within their categories .  CRISIL , one of the leading credit rating agencies of India has  categorised the mutual funds  as below  and rated  them . You  can reach the ratings of  CRISIL  by clicking on the category  name .Â
While Rating various  mutual funds ,  Rating agencies broadly classify the  mutual funds in to various categories    and rate them within their categories .  CRISIL , one of the leading credit rating agencies of India has  categorised the mutual funds  as below  and rated  them . You  can reach the ratings of  CRISIL  by clicking on the category  name .Â
- Large Cap-oriented Equity funds
- Diversified Equity funds
- Small and Mid-cap Equity funds
- Thematic - Infrastructure funds
- Consistent Performers - Equity funds
- Equity Linked Savings Scheme (ELSS)
- Index funds
- Balanced funds
- Consistent Performers - Balanced funds
- Monthly Income Plan - Aggressive
- Long Term Gilt funds
- Long Term Income funds
- Consistent Performers - Debt funds
- Short Term Income Funds
- Credit Opportunities Funds
- Ultra Short-term Debt funds
- Liquid funds
 Click Here   to Read       PLAN N CREATE YOUR OWN  CAPITAL PROTECTED HYBRID FUND      IN EASY WAYSÂ
Tips on  Mutual Funds InvestmentÂ
1. Mutual Fund Investment is a good option for an small investor who has no time to devote time to continuously  monitor  his investment and who has no knowledge of the intricacies of stock market .Â
2. Carefully study the past performance  of  AMC  before investing . Be aware that past performance is no guarantee for future prospects . Efficiency of MF manager is an important factor  in generating revenue for the fund.Â
3. Risk of a  MF is same as the risk of  asset class it has invested . Further they also carry management charges of AMC  which will be taken out from the fund irrespective of  profitability . If  AMC fund managers take  bad decisions ,  risks of the mutual funds may be compounded and it may turn out worse than direct investment .  Hence study the objective and class of  funds it has invested and the track record of the manager before investment .Â
4.  Mutual funds normally buy various  assets and hence diversified . But remember  that  funds carry all the risks of  class of investment . If equity market is not performing well , chances are rare for the good performance of  MFs  based on equities .Â
 5.Timing of purchase is also equally important . If you are unable to gauze the direction of market , better go for a SIP  ( Systematic Investment Plan )  wherein you would be investing at regular investment  and hence cost averages out .Â
6. Invest in different classes of MFS Â which will help you in further divesification .Â
7. Ultimately  getting out of the  funds invested is a tricky issue . If your goal is achieved , it is better to get out .Â
2. Carefully study the past performance  of  AMC  before investing . Be aware that past performance is no guarantee for future prospects . Efficiency of MF manager is an important factor  in generating revenue for the fund.Â
3. Risk of a  MF is same as the risk of  asset class it has invested . Further they also carry management charges of AMC  which will be taken out from the fund irrespective of  profitability . If  AMC fund managers take  bad decisions ,  risks of the mutual funds may be compounded and it may turn out worse than direct investment .  Hence study the objective and class of  funds it has invested and the track record of the manager before investment .Â
4.  Mutual funds normally buy various  assets and hence diversified . But remember  that  funds carry all the risks of  class of investment . If equity market is not performing well , chances are rare for the good performance of  MFs  based on equities .Â
 5.Timing of purchase is also equally important . If you are unable to gauze the direction of market , better go for a SIP  ( Systematic Investment Plan )  wherein you would be investing at regular investment  and hence cost averages out .Â
6. Invest in different classes of MFS Â which will help you in further divesification .Â
7. Ultimately  getting out of the  funds invested is a tricky issue . If your goal is achieved , it is better to get out .Â
Where to Buy  MUTUAL FUNDSÂ
AMC websites
Most fund companies offer their products to investors through their websites .  If you are  a first time investor, you  need to  approach the fund house or collection centres  to submit the application form. You first download the scheme form from the respective website, fill in your details and submit the same along with the initial cheque, photocopy of PAN card and KYC letter. Once you are assigned a folio number along with the PIN, all subsequent transactions in the folio can be done online using your bank account.  However you need to have separate account for each AMC .Â
Broker platfolio
You can also buy mutual funds through your broker account for stocks ,  if the broker offers such a facility.   The units  purchased will be credited directly to your demat account.
Independent portals
There are also independent web portals—FundsIndia and Fundsupermart—that cater to mutual fund investors, allowing you to buy and sell online at no extra cost.Â
Most fund companies offer their products to investors through their websites .  If you are  a first time investor, you  need to  approach the fund house or collection centres  to submit the application form. You first download the scheme form from the respective website, fill in your details and submit the same along with the initial cheque, photocopy of PAN card and KYC letter. Once you are assigned a folio number along with the PIN, all subsequent transactions in the folio can be done online using your bank account.  However you need to have separate account for each AMC .Â
Broker platfolio
You can also buy mutual funds through your broker account for stocks ,  if the broker offers such a facility.   The units  purchased will be credited directly to your demat account.
Independent portals
There are also independent web portals—FundsIndia and Fundsupermart—that cater to mutual fund investors, allowing you to buy and sell online at no extra cost.Â
DOCUMENTS REQUIRED FOR BUYING MFÂ
1. Application form  for opening accountÂ
2. KYC form  duly filled .Â
3. Copy of PAN CardÂ
4. Blank cheque
2. KYC form  duly filled .Â
3. Copy of PAN CardÂ
4. Blank cheque
TWO VIEWS ON MUTUAL FUNDSÂ
We have found two opposite views on investing  in Mutual Funds . You can go through both of them & decideÂ
We have found two opposite views on investing  in Mutual Funds . You can go through both of them & decideÂ
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WHAT IS ELSS SCHEME ?
​Subscription to certain  notified securities/notified deposits schemes  are eligible instruments under  section  80C for claiming deductions from  taxable income . One such popular investment is  tax saving mutual funds or Equity Linked Savings Scheme (ELSS).  In this  equity diversified fund , investors enjoy the benefits of capital appreciation as well as tax benefits. With  recent positive movements in equity market , more interest is being generated in the public on the scheme .Â
ELSS is basically an equity based diversified Mutual Fund with a lock in period of 3 years .  It has got same risk and reward function of any other  equity based mutual fund  .  While under national saving certificate , funds are locked in a period of 6 years ,  ELSS  has lock in period of 3 years only .  One who is willing to take  market risk , ELSS is a good option as  investment  is tax free under 80C   as also all the returns . Some ELSS funds have been reported  giving good tax free returns over  a long period of time . One has to carefully study the past performance  of the fund  as well as fund manager's performance before investing .  As returns or principal is not  guaranteed and  classified as high risk investment ,  Risk averse  persons  may avoid such investment . Â
Persons interested  in investing in ELSS  may  understand Mutual Funds and go to the websites of  Mutual fund IssuersÂ
ELSS is basically an equity based diversified Mutual Fund with a lock in period of 3 years .  It has got same risk and reward function of any other  equity based mutual fund  .  While under national saving certificate , funds are locked in a period of 6 years ,  ELSS  has lock in period of 3 years only .  One who is willing to take  market risk , ELSS is a good option as  investment  is tax free under 80C   as also all the returns . Some ELSS funds have been reported  giving good tax free returns over  a long period of time . One has to carefully study the past performance  of the fund  as well as fund manager's performance before investing .  As returns or principal is not  guaranteed and  classified as high risk investment ,  Risk averse  persons  may avoid such investment . Â
Persons interested  in investing in ELSS  may  understand Mutual Funds and go to the websites of  Mutual fund IssuersÂ