Equitipz » Mutual Funds

Buy and Sell Mutual Funds Via mobile

Amandeep Singh — Sun, 31 Jan 2010 11:59:05 +0000

All the fund houses recently are betting big in technology to reach out to real investors to attain their attention. So, after internet, it’s now the turn of mobile phones. UTI Mutual Fund (MF) is planning to launch a mobile transaction platform in the coming months. “The UTI MF will be the first fund house in the country to offer mobile phones transaction platform” said Jaideep Bhattacharya, chief marketing officer of the UTI MF.

The fund house is planning on the fact that India has over 500 million mobile subscribers and the market for mobiles is still expanding at a great pace. Hence, there is a large market that can be captured via this medium (Mobile Phones).

To avail the service, you will need to register yourself with the UTI MF website online. This new platform will give you an option to buy, sell, and switch through your mobile itself. The system will be based on wireless technology. At present, based on this system only, UTI MF is offering a mobile-based knowledge platform where investors can get all information about the UTI MF schemes and the market.

This is a very valuable and yet another initiative from a fund house to reach out to the investors after the entry load ban was introduced, UTI hopes to widen its customer base as well as make it more convenient for the people like us to invest in MFs through this latest initiative.

What is your view over this initiative from UTI. Do you think it is of any good to you as a retail investor? Please share your views in the form below.

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Mutual Funds :: Advantages of Investing

Amandeep Singh — Thu, 06 Aug 2009 07:34:00 +0000

As an investor, you would like to get maximum returns on your investments, but you may not have the time to continuously study the stock market to keep track of them. You need a lot of time and knowledge to decide what to buy or when to sell. A lot of people take a chance and speculate, some get lucky, most donot. This is where mutual funds come in. Mutual funds offer you the following advantages:

Professional management. Qualified professionals manage your money, but they are not alone. They have a research team that continuously analyses the performance and prospects of companies. They also select suitable investments to achieve the objectives of the scheme. It is a continuous process that takes time and expertise which will add value to your investment. Fund managers are in a better position to manage your investments and get higher returns.

Diversification. The cliche, “don’t put all your eggs in one basket” really applies to the concept of intelligent investing. Diversification lowers your risk of loss by spreading your money across various industries and geographic regions. It is a rare occasion when all stocks decline at the same time and in the same proportion. Sector funds spread your investment across only one industry so they are less diversified and therefore generally more volatile.

More choice. Mutual funds offer a variety of schemes that will suit your needs over a lifetime. When you enter a new stage in your life, all you need to do is sit down with your financial advisor who will help you to rearrange your portfolio to suit your altered lifestyle.

Affordability. As a small investor, you may find that it is not possible to buy shares of larger corporations. Mutual funds generally buy and sell securities in large volumes which allow investors to benefit from lower trading costs. The smallest investor can get started on mutual funds because of the minimal investment requirements. You can invest with a minimum of Rs.500 in a Systematic Investment Plan on a regular basis.

Tax benefits. Investments held by investors for a period of 12 months or more qualify for capital gains and will be taxed accordingly (10% of the amount by which the investment appreciated, or 20% after factoring in the benefit of cost indexation, whichever is lower). These investments also get the benefit of indexation.

Liquidity. With open-end funds, you can redeem all or part of your investment any time you wish and receive the current value of the shares. Funds are more liquid than most investments in shares, deposits and bonds. Moreover, the process is standardized, making it quick and efficient so that you can get your cash in hand as soon as possible.

Rupee-cost averaging. With rupee-cost averaging, you invest a specific rupee amount at regular intervals regardless of the investment’s unit price. As a result, your money buys more units when the price is low and fewer units when the price is high, which can mean a lower average cost per unit over time. Rupee-cost averaging allows you to discipline yourself by investing every month or quarter rather than making sporadic investments.

The Transparency. The performance of a mutual fund is reviewed by various publications and rating agencies, making it easy for investors to compare fund to another. As a unit holder, you are provided with regular updates, for example daily NAVs, as well as information on the fund’s holdings and the fund manager’s strategy.

Regulations. All mutual funds are required to register with SEBI (Securities Exchange Board of India). They are obliged to follow strict regulations designed to protect investors. All operations are also regularly monitored by the SEBI.

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Risk Factors related to Mutual Funds

Amandeep Singh — Sun, 14 Jun 2009 12:01:00 +0000

All mutual funds are required to disclose, in their offer documents, the Risk Factors that are faced by the fund and therefore by the investors. Risk factors may be standard or scheme specific. Standard risk factors are market driven and common to all schemes.

While a regular investor will be conversant with standard risk factors, their disclosure is of particular relevance to the novice investor. Scheme specific risk factors have a direct bearing on the investor’s choice and therefore need to be carefully evaluated by the investor. Disclosure of risk factors must include the following:

Scheme specific risk factors: Arising from the scheme’s investment objective/strategy and proposed asset allocation.

Standard risk factors:

·Investments are subject to market risks such as absence of liquidity in markets or fluctuations in market prices beyond the control of the managers, resulting in investment objectives of the scheme not being achieved.
NAV can move up or down on the basis of capital market movements.

·Past performance of the sponsor/AMC/mutual fund is not indicative of the future performance of the scheme. Name of the scheme does not indicate its quality or prospects.

Risks associated with the use of derivative instruments, if the fund plans to use such instruments as permitted by SEBI.

Arising from non diversification, if any:

· Specific risk factors associated with investing in closed end schemes. For assured returns schemes, if assurance is up to the maturity of the scheme, it must be stated that this is on the basis of guarantee given by the sponsors/trustees/AMC. If assurance is for a specific period, it must be stated that there is no guarantee for sustaining the assured return for the remaining duration of the scheme.

If the AMC has no previous experience in managing a fund, a disclosure to that effect must be made.

Extension to: How to Make money by Investing in a Mutual Fund?

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How to Make money by Investing in a Mutual Fund?

Amandeep Singh — Sat, 13 Jun 2009 09:53:00 +0000

This article lays down the basics of Mutual Fund Investing:

1. This is a pertinent question asked every now and then that which is the safest method to invest in mutual fund to make money and prior to that one must understand the basics of mutual fund.

2. A mutual fund is a tool by virtue of which it accumulates money from the investors and invests on their behalf in stocks and bonds etc; however same is undertaken with the help of professionals who are paid for the same.

3. One should choose and invest in a mutual fund as per an individual risk profile and thus one has to first of all analyse the fact that how much one is ready to take risk in life. If one is young one can afford to take more risk and thus can invest more in equity oriented funds and should move towards debt oriented funds as one grows old. A safe yardstick is to find the percentage for investment in equity by reducing the age from a figure of 100 to get the required percentage for investment in equity.

4. One must undertake the research and risk assessment before purchasing any mutual fund as past performance is no guarantee for future performance. However if one is not aware of anything about the investment or stock market than the investment through mutual fund is the best bet to avoid losing money.

Also Read: How to make money in the stock market?

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