Mutual Funds and ETFs on r/IndiaInvestments Wiki

What is the best mutual fund app for investments?

Mon, 01 Jan 0001 00:00:00 +0000

What is the best mutual fund app for investments?

Intro 💫

In India, presently there are many Mutual Fund platforms available, for free. Being spoilt for choice, it can get overwhelming to decide which one’s best for you.

To begin with, this choice is not as important as you’d like to think. For most apps, if you use one and don’t like it, it’s pretty straightforward to be able to move to another platform. It’s a reversible decision.

Why should I invest in Direct Plans instead of Regular Plans?

Mon, 01 Jan 0001 00:00:00 +0000

Why should I invest in Direct Plans instead of Regular Plans?

A mutual fund is not free from costs. An asset management company (AMC) is a for-profit entity who aim to make some profit from their venture. They also have to pay their security analysts, operations teams, pay brokerage fees for market participation, and record keeping fees to registrars like CAMS and KFintech, formerly known as Karvy.

A regular plan of a mutual fund has one more additional expense — distributor commission.

What’s the best mutual fund I can invest in?

Mon, 01 Jan 0001 00:00:00 +0000

What’s the best mutual fund I can invest in?

If you google top mutual funds, you’d find plenty of communities or online publications tossing you some names of well performing funds.

No one can predict how markets would perform in near future (short term), or over long periods of time. And when we say no one, we really mean no one at all.

Amsterdam is the oldest stock exchange, founded in the 1460s. London stock exchange is one of the oldest, founded in 1801, with nearly ~220 years of history. US markets have been around for ~200+ years, since the early 1800s (NYSE was established in 1817). Indian markets are relatively young, been around for only a little over 40 years, in any meaningful way. BSE was founded in 1870s, but it’s hard to find reliable data since before Sensex was created in 1979. Some even suggest to ignore data from before NSE was created in 1994, which gives us ~25 years worth of market data to analyse.

Which date(s) is/are best for SIP in a month?

Mon, 01 Jan 0001 00:00:00 +0000

Which date(s) is/are best for SIP in a month?

There’s no such thing.

It’s rare for markets to move up / down so much in a single month, that a single SIP instalment being on a different date would make a sizeable difference in your long term corpus.

If you start investing today via SIP, and analyse 10 years later, you’d find that, say for example, 23rd of the month was the best day to invest for your funds. That’s something you can know only if you know the NAV history of next 10 years, which no one does.

I’ve to invest in ELSS for 80C tax saving. Which fund(s) should I pick?

Mon, 01 Jan 0001 00:00:00 +0000

I’ve to invest in ELSS for 80C tax saving. Which fund(s) should I pick?

When it comes to ELSS, present categorization gives the fund managers wide berth in picking stock from Nifty 500 universe of stocks. They can pick any stock from top 500 stocks listed in NSE / BSE - this is different from funds that are categorized as large-cap, mid-cap, small-cap, or multi-cap funds. Only flexi-cap category of equity funds is similar.

Should I get a Demat Account to buy units in Mutual Funds?

Mon, 01 Jan 0001 00:00:00 +0000

Should I get a Demat Account to buy units in Mutual Funds?

Intro💫

No! You don’t need demat account / trading account, to invest in mutual funds.

Mutual funds are sold by AMC (Asset Management Companies) directly to you. RTA (Registrar and Transfer Agent) of the relevant AMC processes the transaction, and keeps records of your units purchase or selling.

It’s already stored electronically, with legal ownership that it belongs to you.

Lumpsum investment vs SIP/DCA

Mon, 01 Jan 0001 00:00:00 +0000

Lumpsum investment vs SIP/DCA

This is quite confusing to many people, since the finance world touts SIP (Dollar Cost Averaging in foreign terms) as the best way to invest.

Definitions

SIP (Systematic Investment Plan)

One invests a fixed amount of money at a regular interval (daily / weekly / monthly / quarterly). In short, it is transfer of money from cash to a particular asset (mutual fund / direct equity called the DIY-SIP or other such names).

Why are Index Funds in India not as cheap as Vanguard's Index Funds and ETFs?

Mon, 01 Jan 0001 00:00:00 +0000

Why are Index Funds in India not as cheap as Vanguard’s Index Funds and ETFs?

Before we begin, Total Expense Ratio (TER) is the amount that investors pay to AMCs for the operative and administrative expenses of managing a mutual fund. If a mutual fund has total assets under management (AUM) of ₹10,000 crores and an expense ratio of 1%, it charges ₹100 crores as expenses in an year.

The difference between regular plans and direct plans of mutual funds is explained in the article linked below. In short, regular plans have an additional cost of distributor commission. This doesn’t go to the AMC.