Mutual Funds: Expenses Ratio and Credit Risk

AMCs  are  permitted to charge  expenses  upto a  maximum of  2.25% in case of Equity funds and 2% in case of Debt funds. But some AMCs were charging higher expenses.SEBI had instructed the AMCs to reduce the expenses ratio effective from 1st April 2019 and the AMCs have reduced the expenses .The expenses of some of the  schemes in   case  of both   Regular plans  and Direct Plans effective 5th April 2019 are as follows.AS may be observed the difference between regular and Direct Plans are commission paid to the Distributors (Banks and Individual agents)

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Women should participate in Family Finance!

The role of women in the society is changing. The number of educated girls are increasing and they are coming out with flying colors in the competitive examinations. They are now career oriented and venturing into areas which were once upon a time were dominated by males. It has provided them with opportunity for financial independence. It is high time women participate in Family’s financial decisions for the following reasons; (1)   More life to live- In old age; women largely depend financially on their spouses. But, with life expectancy of women being higher than men, it is advisable to put in place […]

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Direct vs Regular Plans.

Investors are becoming more aware of Mutual Fund Direct Plans. Investment into Mutual Funds (MFs) can be done in two ways:- Regular Plans whereby a certain ‘expense ratio’ is charged by the mutual fund company ( ie, the AMC – Asset Management Company), as a percentage of the value of your fund, which includes the fee of the AMC as also some fee of the Adviser who is managing your portfolio. Thus, it is a bundled option. The fee of the Advisor is directly credited by the AMC to the Advisor after it has been charged to you. So, the expenses charged […]

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Investors cautioned by SEBI to seek investment advice only from RIAs

The market regulator SEBI has urged investors to deal only with SEBI Registered Investment Advisers(RIAs)  to avail investment advisory services. In fact, the market regulator has urged people to look at the list of SEBI RIAs on its website before availing investment advisory services. Further, SEBI has advised investors to pay advisory fees through banking channels such as NEFT, IMPS or cheque and maintain the duly signed receipt with details of payments. As on May 2018, the total number of SEBI RIAs was 918 throughout the country. Of them, over half of them are individuals. Do’s while dealing with Investment […]

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New Categorisation in Mutual Funds!

SEBI has directed all the Fund houses(AMCs) to recategorise all their schemes into 36 categories from 30th June 2018 ; Equity(10),Debt (16),Hybrid(6),Solutions(2) and others(2). As a consequence, the names and strategies of many schemes have undergone changes. It is quite challenging for the investor to assess and select the schemes based on historical returns and ratings. Retail investors who have invested earlier based on historical parameters will, all of a sudden, find that some good schemes selected by them are no more doing well. It will be advisable to seek the help of a professional and preferably, a SEBI investment […]

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Diversify your Investments

More than 80% of investments of Individuals are in real estate and around 10% in Gold and Silver. The remaining are in financial assets i.e Bank Deposits, Insurance and Mutual Funds etc. Currently the appreciation in real estate prices has stagnated and so also in gold. So physical assets no more  provide better return than the financial assets.In financial assets the equity as an asset class has outperformed  other financial assets. The reduction in the interest rate of Bank Deposits has caused a lot of concern for retired people. Approach by Individual Investors An individual investor should look at the […]

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