Mutual Funds as a form of investment instrument has gained prominence in recent times.

This can be attested by both, the number of new investors as well as the ballooning AUM.

Considering mutual funds is still at a novice stage, it is only natural for investors to be still at a learning stage.

Mistakes therefore should not come across as an aberration, listed below are some very common mistakes that investors commit.

 

In today’s rapidly changing economic landscape, retirement planning has become indispensable. It involves the strategic allocation of funds towards building a financial cushion for the future.

 

The essence of retirement planning goes beyond mere financial security; it encompasses the vision of a life unburdened by financial constraints and marked by independence and divinity.

 

As you embark on this journey, the timing of your investment plays a pivotal role.

 

Starting early allows for the maximization of benefits through the owner of compounding, laying a solid foundation for a secure and fulfilling retirement.

 

One of the biggest advantages of investing in Mutual Funds as opposed to other sources of savings and investments is the liquidity it offers.

To add to that, these days redemption can be executed online too.

So in order to check how long it would take for the redemption amount to be deposited in your registered bank account, SEBI had mandated all the fund houses to make their mid and small cap funds to undergo mutual fund stress tests.

 

Investors are today bombarded with information left, right and centre.

This overflow of information is at an unprecedented level today due to how easily information can be disseminated these days.

Point to consider here is that information does not necessarily imply that it is true, a lie is easier to spread but the truth is sustainable.

Information and knowledge are not the same, the former may be right or wrong but the latter is mostly right.

Humans are more glued to their screens than ever and therefore it is easier than before to accumulate views, in the process of gathering such views we often overlook the simple yet very important point that such views are more general in nature than personal.

There is a very good reason why they say the Person in ‘Personal Finance’ is more important than the Finance.

The New Year is here and with that is the arrival of several New Year resolutions which usually revolve around health and personal growth, maybe it’s time we add healthy financial practices to the list too.

 

The world is becoming even more geo-politically volatile which has in turn resulted in rising living costs, job uncertainty and the ever increasing need to have a safety net.

 

Let’s look at some healthy and safety practices you should ideally adhere to from this year onwards.

Equity investing as a term evokes mixed emotions, mostly sliding on the side of greed and misinformation.

This can be further ascertained by the contribution of retail investors to the equity markets that is still in single digits.

A major roadblock to a scenario of higher retail participation more than anything is simple misinformation, far too many folks are either consumed by fear or are in it for the wrong reasons.

Imagine getting upset at the officials for arranging a football game at a football stadium when you were all decked up to watch a game of cricket , sounds silly doesn’t it?

In a similar vein volatility in equity investing should not deter you, rather one should embrace it like a feature of it, in a manner similar to a drinks break in a game of cricket.

Audience cheering from the outside does not win a game, the participants do and so the only way to have any possibility of winning is by participating in the game.

 

A Systematic Investment Plan (SIP) is a popular and affordable method via which you can invest in mutual funds.

Minor but periodic addition to your mutual fund portfolio can leave you in awe without much effort from your side.

This approach is also a worthy option in case you wish to commence your SIP journey small and gradually increase your amount.

Any increase in salary should be accompanied with an increase in your SIP.

 

Whenever the equity markets hit a new high, it brings along with it a unique set of challenges for investors.

Often many of these challenges are self-inflicted and easily avoidable, humans are anything but simple though.

Investors tend to grapple with fearing a market crash to pondering over an exit with the intent to re-enter the markets at an imaginary low.

Such scenarios have their origin in the belief that making money in the market means buying low and selling high, a very easy method to spot a trader in the garb of an investor.

If you are a long term investor but at the same time if your opinion and beliefs can be swayed easily by market movements then maybe you are not one but how does one wake up someone pretending to be asleep but not asleep?

Equity Investing is simple but not easy, the inability to discern between the two and the urge to reinvent the wheel often leads one in a soup.

 

Most, if not all of us must have been under financial stress at some point in our lives.

As much as financial stress may seem like an insurmountable task, the devil is in the details.

It is how you manage and control what you can and how you react to things that are beyond your control that plays a deciding hand in elevating or alleviating your financial stress levels.

 

Life is not linear and finances are no different, stability is one thing we try to pursue and achieve in all aspects of our life including money management.

Money management is about managing what you can manage and trying to minimize the losses arising from something that is beyond your control.

This could be anything from recession to a bank collapse to something personal like a job loss, business failure, health crisis, etc.

As much as the aforementioned crises could be attributed to being out of control, working on having your savings and investments well sorted to minimizing losses arising out of such crisis is still within our control.

 

Quant Mutual Fund is coming out with a NFO in the form of Quant Business Cycle Fund.

Quant Business Cycle Fund would be an open ended fund with no restriction to any caps or sectors and looking for opportunities in businesses and sectors going through a cyclical change. 

The fund would be open for subscription from May 12, 2023 to May 25, 2023.

The new financial year along with it brings new rules too.

As an investor it is your duty to be updated with any new rules since these can and do affect your finances directly or indirectly.

Being updated with new rules if any from time to time helps you better understand if you need to take any action with how you manage your finances and if you do then what should these actions should be.

 

The government has passed amendments to the Finance Bill, 2023.

One of them was scrapping the long-term capital gains (LTCG) tax benefit from debt mutual funds.

Gains from debt mutual funds investing less than 35% in domestic equity would be taxed as short term capital gains tax and will be added to the income tax slab.

The indexation benefit has also been withdrawn.

Therefore they would be treated in the same manner as bank fixed deposits.

The new rule will come into effect from 1^st April 2023.

The new set of rules would be applicable to various debt, international and gold mutual fund schemes.

 

Mirae Mutual Fund is coming out with a NFO in the form of Mirae Flexi cap Fund.

Mirae Flexi cap Fund would be a flexi cap fund with no restriction to any caps.

The fund would be open for subscription from February 03, 2023 to February 17, 2023.

 

When you invest in mutual funds, you consider various points like expected returns, goals, time horizon, etc. but unfortunately most investors do not take into consideration tax implication of their mutual funds.

It is important to do so since they affect the overall returns and other decisions like the structure of your portfolio and the timing of your exit.

 

HSBC Mutual Fund is coming out with a NFO in the form of HSBC Multi cap Fund.

HSBC Multi cap Fund would be a multi cap fund with minimum allocation requirement to large, mid and small caps.

The fund would be open for subscription from January 10, 2023 to January 24, 2023.

As we are in a new year, it is only natural to have new goals to improve your life.

This could be anything from eating healthy, reading more to even self- care.

It does not harm to consider your financial health too while you are at it.

After all there is no better time to review your financial health than at the beginning of a new year.

 

Whiteoak Capital Mutual Fund is coming out with a NFO in the form of Whiteoak Capital Balanced Advantage Fund.

Whiteoak Capital Balanced Advantage Fund as the name suggests, would be a Balanced Advantage fund.

The fund would be open for subscription from January 20, 2023 to February 03, 2023.

 

NFO details for Whiteoak Capital Balanced Advantage Fund

Scheme Opens	20/01/2023
Scheme Closes	03/02/2023
Fund Manager	Mr. Ramesh Mantri Ms. Trupti Agrawal Mr. Piyush Baranwal
Benchmark	Crisil Hybrid 50+50- Moderate Index
Minimum Investment	500
Fund Category	Dynamic Asset Allocation
Exit Load	1% if units are redeemed/switched out within 1 month from date of allotment. Nil thereafter

 

Whiteoak Capital Balanced Advantage Fund would be a dynamic asset allocation or balanced fund.

 

Additional reading: Click Here to read our complete report on ESG mutual funds

Whiteoak Capital Balanced Advantage Fund Investment Objectives

The investment objective of the fund is to generate capital appreciation by dynamically allocating its assets between equity and specified debt securities.

There is no guarantee that the investment objectives of the scheme would be achieved.

 

 

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Whiteoak Capital Balanced Advantage Fund Allocation

The asset allocation for the fund would be something like this

Asset Class	Minimum %	Maximum %
Equity and Equity Related instruments	0	100
Debt & Money Market Securities	0	100

 

The above figures are only indicative and not fixed, the fund managers have the liberty to move across the asset classes depending upon prevailing market conditions as long as they remain within the mandate permitted.

 

 

What is a balanced advantage fund? 

A dynamic asset allocation fund is more popularly known as a balanced advantage fund.

A balanced advantage fund is a type of hybrid fund.

It invests in debt, equity and arbitrage positions although the allocation is not fixed and can also sit on cash if the fund manager desires so.

Unlike other hybrid funds like multi asset, aggressive and conservative, a dynamic asset allocation or a balanced fund does not have a fixed mandate to follow.

The fund manager can move across different asset classes based on the prevailing market conditions.

The importance of a balanced fund is more felt during a bearish market phase since it can cut down its equity portion and at the same time make periodic equity purchases in the dip.

This is unlike other pure equity funds who at all times have to maintain their mandate irrespective of the market situation.

 

Additional reading: Click Here to read about mutual fund mistakes you should avoid making

 

 

This fund is suitable for investors seeking:

Capital appreciation while generating income over medium to long term.

Investments in a dynamically managed portfolio of equity and equity related instruments and debt and money market instruments.

A nfo means a new fund from a mutual fund house which was not available earlier.

With growing acceptance of mutual funds as a form of investment, mutual fund houses periodically introduce new fund offers so as to complete their basket of investments available for investors.

A NFO is usually what results in the beginning of a mutual fund scheme.

Other reasons being merger of schemes within the same fund house or merger or acquisition of two or more fund houses, these are rare instances though.

 

NFO meaning

A nfo or a new fund offer is a method by which a mutual fund scheme raises the initial investment into the fund.

The new fund offer is available for purchase for a limited number of days only.

After which it becomes unavailable for fresh purchase or redemption for a couple of days.

Once this time duration is complete, the nfo no more remains a nfo and is treated like any other open ended mutual fund scheme.

In which you can invest and redeem as and when you please, considering it is an open ended fund and you comply with the necessary exit load calculations.

 

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Should you invest in a nfo?

You can consider it if:

The new fund offer is a category of fund that is not existent in your mutual fund portfolio.

If it is going to be a part of your satellite portfolio.

If it adds a unique touch to your mutual fund portfolio.

If you understand the functioning, objectives and risks attached with the new fund offer.

The nfo mutual fund is aligned with your risk profile.

 

You should avoid it if:

The new fund offer is not going to add anything of unique significance to your mutual fund portfolio.

If the nfo is going to be a part of your core portfolio.

If the only reason you are investing is due to FOMO (Fear of missing out).

If you do not understand the investment style and risks attached with the nfo.

The nfo mutual fund is not aligned with your risk profile.

 

 

 

Should you invest in Whiteoak Capital Balanced Advantage fund?

Since this is a balanced advantage fund, there is enough scope for the fund manager to move across asset classes.

Every fund manager in the dynamic asset allocation category has the freedom to manage the fund as per her liking therefore there is no one method and comparison.

It is better to allow the fund progress for some months before even considering it, so you can have a better understanding of the fund and then arrive at a conclusion whether the functioning of the fund is aligned with your objectives or not.

 

Unlike equity funds, a balanced advantage fund has less restrictions and more flexibility meaning every fund manager will manage it in a manner that she feels fit.

With a balanced advantage fund, how it does in a bull market is of less importance compared to how it performs in a bear market and that is how its nav should also be judged.

If high returns is all you focus on then a balanced advantage fund should not take your time and money.

 

 

For portfolio enquiries, email us with your doubts at info@themutualfundguide.com

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Money in the right hand is an asset, in the wrong a liability.

You can tell a lot about a person by not how much he makes but by how he manages what he makes.

Money is not the most important thing in your life, neither is it any less important than your health and relationships.

If you do not respect your money, do not expect it to reward you.

Money gives you options when you feel like you had none, this is both a blessing as well as a curse depending on you.

 

Baroda BNP Mutual Fund is coming out with a NFO in the form of Baroda BNP Paribas Multi Asset Fund.

Baroda BNP Paribas Multi Asset Fund would be an open ended multi asset allocation scheme investing in Equity, Debt & Gold ETF.

The fund would be open for subscription from November 28, 2022 to December 12, 2022.