4 tips on investing in mutual funds

Investments are the best way to increase your wealth. Rather than keeping your funds in savings accounts, you should use the money to earn more money. Mutual fund investments are the best option when you are looking to do the same. However, even though mutual funds involve lower risk than other investments, you still need to be aware of certain tips while investing. Here is a look at a simple guide for investing in mutual funds.

Figure out your goals

Before investing, you need to determine how much you want to invest and how long you should stay invested. You need to remember that mutual funds investment offers more flexibility than other options. If you want to invest for a longer duration, you should consider ELSS schemes, as they will assist you to save on taxes.

However, if you are investing for a shorter duration, try to pick an option that offers greater liquidity and returns than your savings account would. Keep in mind that you should try and keep the risk as low as possible.

NAV does not matter

NAV is a part of mutual funds. However, what is NAV? NAV stands for Net Asset Value. It refers to the price of a scheme’s asset, excluding the liabilities per unit. It is the price at which you buy a unit of a particular scheme and the value at which you would sell. Contrary to popular belief, the NAV does not affect how a particular scheme will perform. Therefore, do not waste time considering the NAV of a scheme and, instead, look at the return percentage for a better idea of the scheme’s future performance.

Diversify your investments

One of the best things about investments in mutual funds is that they offer a wide range of options to investors. For instance, if you are looking for huge returns in a short duration, a decent mid cap or small cap scheme could be best suited for you. However, if you are trying to keep the risks low, debt funds or liquid schemes are worth looking into. The returns from these funds will be lower but are likely to be more consistent.

Keep monitoring your investments

Most mutual funds investors fail to keep an eye on the market. However, to ensure success and growth of your investment portfolio, you need to be vigilant about the changes in the market and your investments. You will be able to perceive which funds have performed well and which have not. This will allow you to make an informed decision regarding your next move. If you have an investment in a poorly performing scheme, you can reallocate the invested funds in a scheme that is performing better.

Keep these pointers in mind while investing in mutual funds, which will limit your losses and ensure sizable earnings from investments.

10 Services Offered By Investment Apps in India

If you are into investment, you cannot do without an investment app. Knowing the market inside out is the only way you can make the most of your investment. A finance app keeps you constantly updated of the changes that are taking place in the market. They curate the best investments that are suitable for your financial goal and risk profile.

If you are looking to simplify how you start and track your investments, then try an investment app. Here is a list of things an investment app can do for you –

A finance app will keep you up to date with the latest developments in the market. Besides staying abreast with financial news, it also eliminates the need to research stock market information.
If you are a beginner, an investment app can be your best friend. It guides you through the intricacies of the market. Some investment apps can also help you learn more about the market through tutorials.
You can set up your risk profile on the app. This allows it to sort through various investment schemes and suggest the schemes that suit your needs and risk tolerance the best.
Get real-time notifications on the fluctuations of your stocks and changes in Net Asset Value (NAV).
Through a finance app, you can easily complete your Know Your Customer (KYC) formalities. It is done either through your PAN number or through Aadhaar Card.
You can monitor and manage all your investments on a single platform. Making decisions regarding your investments are more convenient as you can view all the details on your dashboard.
Most finance apps have in-house experts who keep a track of your portfolio and provide advice. Such advice can help you secure higher returns.
A finance appis generally free.
You can sign up for a SIP through your investment app and organise your investments. You can use the SIP calculator available on your app to decide the SIP sum and its frequency.
An investment app eliminates the need for paperwork and secures your portfolio with several secsssurity measures from hacking and malware threats.

The app practically becomes a one-stop shop that takes care of all your financial needs. They are especially helpful if you are a beginner and do not have a substantial initial capital. Even big banks are associating with the top investment apps to encourage more people to jump on the investment bandwagon. So, avail the benefits free of cost and make the most of your investment.

What is money market mutual funds It is types and benefits

If you are looking for a short-term investment tool with a diverse portfolio, money market mutual funds are the way to go. They are best for people with idle cash in their savings account. You can use the money to accrue higher returns compared to a savings account. Read on to know more about money market mutual funds.

What is Money Market Fund?

Money market mutual funds is a short-term investment with high credit ratings. These open-end debt type mutual funds have an average maturity of a year. These funds invest in high-quality liquid instruments like commercial papers and treasury bills. Money market mutual funds are therefore among the best forms of mutual funds investment.

Types of Money Market Mutual Funds

They are broadly classified as-

Institutional Money Market Mutual Funds- They includes large sums that the government, large businesses, and institutional investors hold.
Institutional Money Market Mutual Funds- They includes treasury bills, short-term debts, tax-free bonds etc. that can temporarily store money.
Certificate of Deposit- Selected banks offer these for a fixed period. They are like fixed deposits. However, unlike fixed deposits, under no circumstances can you withdraw before the expiry.
Commercial Paper- Companies with a high credit rating issue them. They are unsecured instruments that are issued at discounts. You sell them at face value and earn the difference. They are also famous as promissory notes.
Treasury Bills- The Government of India issues them for a year after which they reach maturity. They are considered to be very safe. The rate of return is low.
Repurchase Agreements- It is a sales and purchase agreement under which the Reserve Bank of India lends money to commercial banks.

Benefits of Money Market Mutual Funds

You can withdraw without incurring penalties.
The redemption process is straightforward. You can redeem either online or through your phone.
The process of setting a money market fund is natural. It is done using a Know Your Customer- compliant bank account.
They are considered equivalent to cash.
Money market funds are an extremely safe form of investment.
They are a great form of investment regarding liquidity.
The returns are higher than that from a savings account.

Now that you know precisely what is money market funds, you may have guessed that they work best for shorter terms ranging from 3 months to 12 months. For longer terms, money market funds may not be a wise option. If however, you are looking to reap investment benefits from the extra cash in your saving account without losing liquidity, this is the perfect investment for you.

Exchange-traded funds: all you need to know!

A mutual fund is an investment tool where you invest your money in a professionally managed fund to get good returns. These funds are either actively managed or passively managed. Passive management of investments include funds that mimic a market index. Exchange traded funds are among the best forms of passively managed funds. They offer you access to the market at low costs and help you build your investment portfolio.

What is ETF?

ETF or exchange-traded funds pool money of several investors to buy securities.
An investment manager keeps track of who owns what and everyone’s stake in the investment.
You can buy securities like stocks, bonds, currencies, commodities, and other assets.
Your profits and returns are in proportion to your investment.
Unlike mutual funds, exchange traded funds are on sale throughout the day. You can buy or sell ETFs from a brokerage account as many times as you want in a day.
Large ETFs have lower fees and a higher average rating volume. This makes them a more sought after option.

Buying an ETF

For buying or selling exchange-traded funds, you need a trading account with a broker and a demat account to hold the units. Your account should be KYC-compliant.
Before buying exchange-traded funds, you must evaluate your options.
Consider the investment objectives, risks, and charges. The fund’s performance history, expense ratio, and duration of existence must also be considered.
Another critical consideration is taxes. Depending on the structure of the ETF and the investment, the tax will vary.

Advantages of ETF

Exchange traded funds allow you to sell short, place stop-loss or limit orders, and even buy on margin.
Most ETFs track an index, which makes it easier for the investor to understand his funds. Also, it makes the investment more transparent.
ETFs cost less than actively managed mutual funds.
There is no minimum investment for ETFs. For short-term investments, there are no redemption fees either.
Investing in ETFs is a great way to diversify your portfolio.

Disadvantages of ETF

It must be purchased through a broker, which means you have to pay a brokerage fee.
The commission paid to the broker may significantly reduce your net return.
Intraday change in pricing can distort the objectives and long-term goals of the investment.
You have to consider your taxes, which may be significantly affected by investing in ETFs.

Exchange traded funds are still a new concept in India. Most people are yet to know what is ETF. However, they are expected to grow and offer attractive choices regarding diverse assets and for different styles of investments. Therefore, investing in ETFs can help you realise your financial goals more quickly and safe mannerly.

Equity mutual funds definition, types, and benefits

A mutual fund is among the safest ways of increasing your wealth and saving for your retirement. They are of two kinds- debt and equity. While a debt fund is a low-risk option, its returns are consistent but low. Equity, on the other hand, generates higher returns with medium risks. If you are considering investing in medium risk options to increase your wealth, an equity fund is an answer to your worries. Read on to find out more on equity fund meaning, risks, and returns.

What is Equity Fund?

An equity fund is a by-product of mutual fund that invests primarily in stocks. You can manage it either actively or passively. They can be further put into categories based on the size of the companies in which the funds invest in, the size of holdings, your portfolio, as well as location. The frequency of buying and selling equity stocks affects your expense ratio. Lower the expense ratio, higher is the return.

Investing in equity funds are advisable for investors who are ready to invest for at least 5 years. If you are not thoroughly aware of the workings of the market, it is better to invest in large-cap equity funds that invest in stocks of blue chip companies. These funds are better to get a stable income from. If on the other hand, you are well versed, go for diversifying your portfolio to maximise returns. With equity funds, you can also avail tax savings under Section 80C of Income Tax Act.

Types of Equity Funds –

The various classifications of equity funds include-

Based on Sectors

They include equity funds of stocks belonging to a particular sector such as pharmaceutical or Fast Moving Consumer Goods. These are risky investments as there is no diversification and leads to losses if your sector of investment is suffering loss.

Based on Market Capitalisation

Large Cap Equity Funds- These include stocks of blue chip companies that are consistently doing well. They are safe investment options that guarantee consistent returns.

Mid Cap Equity Funds- The stocks of medium-sized companies come under this category. You can expect fluctuating returns from such stocks.

Small Cap Equity Funds- Smaller companies that are more prone to market volatility make up this category. Investing in these equity funds is risky.

Based on Investment Style

Active Investment Style – In this style of investment, your fund manager regularly updates your portfolio to suit the market.

Passive Investment- In this investment style, your investment follows an index. Your portfolio composition imitates the composition of the index.

Benefits of Equity Mutual Funds

Low cost
Convenient Investment
Liquidity
Diversification of Your Portfolio
Systematic Investment
Flexibility

Most people fear to invest in stocks due to the lack of knowledge of the same. They are generally confused about what is equity fund. In short, an equity fund is a vehicle of large capital gain even if you do not possess much knowledge of investment. Only a little research into the financials of a fund and you are good to go.

Small cap or large-cap mutual funds which one to invest in

Investing in mutual funds are among the popular investment options that offer substantial returns. A little research into the financials of companies in a fund’s portfolio can go a long way to help you increase your wealth. A mutual fund is a very vast topic that has several categories. Based on the market capitalisation of the companies in a fund’s portfolio, mutual funds may be classified as large-cap mutual funds, mid-cap mutual funds and small-cap mutual funds. Both large cap and small cap funds have their own set of attractions. If you are wondering which to invest in, this article is for you.

Large Cap Mutual Funds

Companies whose stocks value Rs. 10,000 crore or more make up the large-cap mutual funds. These stocks have a reputation of being the strong players in the market.
Since only the well-established companies constitute a large-cap mutual fund portfolio, they are a safer bet than upcoming companies
Their business models are tried and tested to earn returns. Investing in large-cap mutual funds ensures regular dividends and therefore is a secure form of investment.
Long-term investments in large-cap mutual funds are best for wealth accumulation.
Returns are lower compared to small-cap mutual funds.
They are not suitable if you are looking to outperform the market.
Large-cap mutual funds yield better returns if you buy and hold the stocks. Therefore, passive management of the fund is better suited for this type of mutual funds.

Small Cap Mutual Funds

Small-cap mutual funds comprise of companies whose stock cost less than Rs. 2,000 crore.
Small companies have a promising business model and higher growth potential, which can yield high returns.
Investments in this type of mutual funds allow aggressive financial growth of the investors.
Small-cap mutual funds perform best for medium to long-term investments.
These stocks are highly volatile and fluctuate drastically
These stocks are therefore suitable for investors who want to outperform the market and have a high appetite for risks.

Investing in mutual funds should depend on your appetite for risks and financial expectations from the investment. To sum it up, small-cap mutual funds promise higher returns than large-cap funds. However, with great gains, you can expect greater risks. So, if you are looking for a source of regular income without the additional headache of risks, large-cap mutual funds should be your choice. If you have an appetite for risks and want to do better than the market, you should invest in small-cap mutual funds.

7 best SIP apps in India

A Systematic Investment Plan or SIP is the best way to invest in equity mutual funds and enjoy the fruits of good returns over a long period. A SIP (systematic investment plan) is a method of investing in mutual funds where you make multiple periodic smaller payments instead of a lump sum. Currently, there are many SIP apps in the market that facilitate investments in mutual funds. A SIP app allows you to keep tabs on your account and make regular payments to a fund of your choosing. If you are looking to invest in mutual funds online, here is a list of the top SIP apps.

MyCams App

A single platform allows you to access several mutual funds.
Purchase, sell and switch between mutual fund schemes through this SIP app.
Invest lump sum in mutual funds.
Track mutual funds in saved under ‘My Watchlist’.
Allows eKYC using Aadhaar Card
Allows investment through SIPs

HDFC MF Mobile App from HDFC Mutual Funds

Access your mutual fund portfolio.
View the Net Asset Value (NAV) of your portfolio.
Invest, sell and switch between mutual funds offered by HDFC Mutual Funds Scheme.
Limited to investors of HDFC Mutual Funds Scheme

IPRUTouch App

It is available for ICICI Prudential Mutual Fund distributors as well as investors.
Check capital gains in your account.
Sell and invest in mutual funds units online.
Allows investment through SIP, SWT and STP routes
Limited to ICICI Prudential Mutual Fund Scheme

GoMF App

You get a Common Account Number.
You can invest in or redeem mutual funds.
Investments can be made through SIP, SWT and STP routes
View and transact unit holdings online.

Angel Bee App by Angel Broking Limited

Easy access to all your mutual investments
Instant download and set-up that takes around a minute to complete
The app uses artificial intelligence to predict market patterns and recommend the best investments for you.
In-built financial planner to help you track your financial goals
Online KYC verification

FinGo App

Gives you information and helps you post queries on Sun Life Mutual Funds schemes.
Allows you to view real-time statements of your account
Invest in mutual funds online through this app.
Get updates on dividends and NAV.

InvesTap Mutual Fund App

Helps you plan your investment according to your financial goals.
Inbuilt SIP calculator helps you predict your SIP returns.
Browse through various schemes and track them.
Sell and invest in mutual fund online through this app.
Uses PAN to initiate investments.
Real-time NAV updates and investment tips.

A good SIP app should help you manage your investments with the efficiency of a professional. It will also give you updates about the various offers that you can avail and help you make important financial decisions with regards to your investment. Therefore, choosing the correct SIP app plays a crucial role in your achieving your financial goals. So select wisely and make the best of your investment.

6 kinds of calculators that make financial planning easy

For most people planning finances seem like a daunting task. A number of factors need to be kept in mind and too many variables to adjust for. However, not getting your finances sorted can leave you unprepared to meet major milestones in life like children’s higher education, marriage, buying that dream house etc. Proper financial planning helps us to save for the future while meeting present-day goals. If the prospect of financial planning has you in knots, worry not for the internet is here. With tools like an mutual fund investment app and a goal planning calculator, you can do all the planning within minutes. Here is a list of the best.

Future Goal Value Calculator

This may be any goal such as a world tour or children’s higher education. You need to save for these, keeping in mind the rate of inflation. Without proper financial planning, meeting such goals can be extremely difficult. Therefore, you need to start saving early with a clear idea of your existing and future finances. The best future goal calculators available are-

Child Education Expense Calculator- Ensure your child’s bright future with a clear idea of how much you need to save every month.

Marriage Expense Calculator- That dream wedding can come as a financial shock if you have not planned for it ahead of time.

Future Value Calculator- You may be saving for a big trip or any other goal that requires saving ahead of time. It is best to find how much your money will be worth some years down the line to avoid any unpleasant surprises.

Retirement Planning Calculator

With this goal planning calculator find out the amount you need to save to accomplish your retirement goals. It requires data like the number of years left until retirement, your current expenses, life expectancy, inflation, etc. This calculator simplifies a lengthy but essential calculation and saves you time besides giving you a realistic peek into the future.

Investment Value Calculator

Find out how much your investment will be worth on maturity with this calculator. Depending on the type of investments you have, there are different calculators.

Mutual Fund Calculator/ SIP Value Calculator- It helps you to strategically plan your mutual fund investments to meet your financial goal.

EPF Calculator-Get a clear idea of how much your Employee’s Provident Fund would yield on retirement.

Fixed Deposit Corpus-Calculate the money you will receive on maturity of your fixed deposit. You can also find out how much you need to invest to get the desired value on maturity.

NPS Calculator- Find out what you can expect to save for your retirement under the National Pension Scheme.

Life Insurance Cover Calculator

Deciding on an appropriate coverage for life insurance that covers you now and provides protection for the future is essential. You certainly do not want to be under covered during health emergencies. However, getting more coverage than you need makes you pay a large sum on premiums. To determine the appropriate coverage you must consider factors such as your age, assets, income, obligations, and dependants. With the Human Life Value Calculator, get an accurate idea in a matter of minutes.

Tax Calculator

If you need a financial calculator that aids you with your taxes, you can find it online free. Get an accurate estimation of taxes you need to pay by providing the necessary details of your finances.

Loan EMI Calculator

Without a clear knowledge of the Equated Monthly Interest you have to pay, you are vulnerable to defaults and financial strains. Before taking a loan, it is always wise to determine the tenure over which you will be able to pay your EMIs without straining your budget. With a few basic facts about your loan, let this EMI calculator decide the EMI tenure that best suits your finances.

With adequate and timely planning, you can make sure to live all your dreams without having to worry about money. These financial planning tools save you from financial traps and help you organises your finances to save for the future. The best part is they are accurate, quick and free!