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This classification tree will help you understand the different types of mutual funds

There are hundreds of mutual funds in India. If you were to try and understand each one individually before deciding which is suitable to invest in, it would be an impossible task. However, the task is made easier if you could divide the funds into categories and sub-categories according to their investment characteristics. Then you can first analyse which category meets your needs.

But who is to create the categories? On what basis are they created? How are funds placed in the categories? That's where a specialist mutual funds research and analysis service like Value Research comes in. The purpose of any fund classification system should be to help the investor match his own returns expectations and risk-taking ability with the type of fund that he is going to invest in.

The first thing to understand about fund classification is that it is almost entirely about dividing the entire risk-return continuum into bands of roughly equal return and risk expectations. This makes the real task, that of identifying funds that are likely to generate higher returns at lower risk, easier.

At the broadest level, funds are classified according to the ratio of equity and debt investments in their portfolios. There are pure equity funds, debt funds and hybrids that have both. Their relative return vs risk levels are obvious. Within this first level of classification, the primary way of classifying equity funds is by the size of the companies they invest in. There are funds that focus mostly on large companies or medium-sized or small companies and there are those that keep their assets distributed among all these in some ratio. There are other axes along which equity funds can be classified, for example, which sector or industry they would invest in.

In the accompanying infographic, this classification is depicted as a tree. The root of the tree is all mutual funds. The first level of branches is the basic asset types. These are equity and debt (fixed income). There's also an others category in which we have placed gold funds since it doesn't fall in any of the other categories. Equity and fixed income funds are further sub-divided into smaller categories based on other characteristics.

And if you go by how fund companies describe their funds, you will end up with a large number of funds that appear to be unique or near-unique. You may feel there aren't too many other funds like them. However, this apparent uniqueness is a marketing imperative. It is something that has been invented by fund companies in order to appear different and not have to be compared with too many other funds from other fund companies.

However, an investor's interest is best served by keeping things simple. There are a few long-term investment needs that cannot be met by investing in a balance of funds that are mostly large-cap equity along with a little bit of mid-caps.

The best thing about having a good classification system for funds is to realise that making a choice is actually quite simple and a vast majority of funds can simply be ignored.

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Axis Multicap Fund

Axis Mutual Fund to launch its multicap fund

The NFO of the scheme will open for subscription on October 30 and close on November 13.

Axis Mutual Fund has announced the launch of Axis Multicap Fund, an open-ended equity scheme that would invest in a diversified portfolio of stocks across the market-cap spectrum.

In a press release, the fund house says that the fund will focus on looking for high conviction ideas that have the potential of generating sustainable growth in the medium to long term.

The fund house further states, "Within the overall investment process, Axis Multicap Fund distinguishes itself by aiming to identify companies that are at their inflection points – in the midst of circumstances that have the potential to substantially improve the growth trajectory of the company. This can happen for various reasons like market share gain due to competitive advantage, industry consolidation, sunrise industry, improved management focus & capital allocation and regulatory & policy changes."

Speaking about the fund, Chandresh Kumar Nigam, MD & CEO, Axis MF said, "The fund would offer a diversified portfolio that can cater to all equity investors – whether first time or sophisticated. Over long term, it has been seen that multicap funds tend to outperform large caps over a market cycle while having a comparable risk profile. From an investor's perspective, being consistently good rather than occasionally great has the potential to create long term wealth. We believe that this fund is suitable for all class of investors to help them participate in wealth creation and compounding potential of equity over the long term."

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TAX PLANNING STRATEGIES

 In simple terms, tax planning is the rightful approach to reduce income tax liabilities by attaining maximum benefits of various exemptions, deductions, rebates and reliefs provided by the government under the Act. This allows a taxpayer to plan his/her finances in an optimised and tax-efficient manner, so as to minimise the cash outflow and maximise the return. A person's filing status; timing of income, purchases and expenditures; claiming deductions; and selection of investments and retirement plans are the common tools for effective tax planning.

Features

• Increases your take home salary
• More income available to invest
• Creates a corpus, using the tax saving investment tools.

The primary objectives of tax planning are as follows:

• Reduction of tax liability: A taxpayer can retain the maximum part of his/her earnings by claiming the deductions under sections 80C to 80U and availing exemptions and other credits admissible under the Act.
• Minimisation of litigation: With the taxpayer trying to pay the least tax and tax administrator attempting to extract the maximum, the two are always at war. Effective tax planning under the provisions of law saves the taxpayer from the hardships caused by undesired litigation.
• Productive investments: Under the taxation laws, a taxpayer can avail various avenues for productive investments of the earnings that grant a substantial or even total relief from taxation.
• Economic stability: Smooth tax flow from taxpayer to tax administrator results in economic stability by means of productive investments made by the taxpayer and harnessing resources for national projects.
• Growth of economy: Saving taxes through legally sanctioned devices fosters the growth of both citizens and the nation as a whole.

Equity Linked Saving Scheme (ELSS), Public Provident Fund (PPF), education loan, health insurance, life insurance, pension plans and capital gains bonds are some of the common tax saving investment avenues for a taxpayer.

Invest Rs 1,50,000 and Save Tax up to Rs 46,350 under Section 80C. Get Great Returns by Investing in Best Performing ELSS Funds. Save Tax Get Rich

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Insurable Risk

 

What is Insurable risk

A risk is insurable if it's out of your control, financially measurable and random in nature.

It is important that its occurrence is random because if you can predict its occurrence, it ceases to be risk and becomes more of a certainty.

Take life insurance. It covers your dependants financially upon your death. Early death is a risk that is random in nature, but as you grow older its probability increases.

So, buying life cover at 30 is easy, at 50 you would have to pay higher premiums, and at 80, you won't be insured.

The risk also needs to be financially measurable. When you buy a life insurance policy, you need to choose a sum assured. This is the amount the insurer pays to your beneficiary on your death.

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FRANKLIN INDIA TAXSHIELD

FRANKLIN INDIA TAXSHIELD fund has an impressive longterm track record but, of late, its performance has dipped. The fund's stewardship has changed and so has its approach. It is not being run with any market-cap bias but it remains heavily invested in large-cap stocks.

The conservative large-cap focus--a stance carried forward from previous years--is partly the reason for the fund's under performance in recent years, compared to more aggressive peers. The fund still maintains heavy exposure in its top picks, with financials forming a bulk of its larger positions.

FRANKLIN INDIA TAXSHIELD has historically had a superior risk-reward profile in its category, but this has been partly eroded with the slip in its returns. However, the new team has proven capabilities to execute the strategy, and is likely to yield results in few years.

Invest Rs 1,50,000 and Save Tax up to Rs 46,350 under Section 80C. Get Great Returns by Investing in Best Tax Saver ELSS Funds. Save Tax Get Rich

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Paperwork for your child

It is of utmost importance for parents to ensure that a baby's identity documents are in place. There are some basic documents that one should obtain by the time the baby completes her first birthday. These are mandatory documents required at the time of school admission, opening of a bank account, investments in the name of the child or taking the child overseas on a holiday.

Birth certificate

This is a mandatory document that must be obtained within 21 days of the child's birth.It records the name, gender, parents' name, address, date of birth and place of birth of the child. Application must be made in the prescribed format with the municipal corporation or panchayat of the place of birth. Birth records and certificate issued by hospital must be attached with fees.

Aadhaar card

Aadhaar is an essential document for school admission. There is a simplified procedure without biometrics for children below five years. The child's Aadhaar card is linked to the parent's Aadhaar card.Photograph of the child is captured along with biometric verification of the parents.Original birth certificate will have to be carried at the time of registration.

Passport

This is a very important document that acts as proof of citizenship, identity and address. Application can be filled online at http:www.passportindia.gov.in. Online appointments can be taken and documents prescribed on the website can be carried at the time of appointment.

Family health policy

It is a good idea to include the new child in the family floater health policy.Insurance companies typically prescribe an age after which the child can be included in the policy. Copy of birth certificate along with prescribed form and additional premium can be submitted to the insurance company.

It is advisable to apply for more than one original birth certificate by paying additional charges.

Once the child turns 15, biometrics need to be captured for Aadhaar records.

Invest Rs 1,50,000 and Save Tax up to Rs 46,350 under Section 80C. Get Great Returns by Investing in Best Performing ELSS Funds. Save Tax Get Rich

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Aadhaar sufficient for insurance KYC

If you plan to use Aadhaar-based e-KYC when buying insurance, here are some details that you should keep in mind

The Insurance Regulatory and Development Authority of India (Irdai) has said that Aadhaar-based electronic-know your customer (e-KYC) process would be sufficient for the purpose of customer verification. This has come as a part of clarification issued by the insurance regulator on Aadhaar-based e-KYC for insurance companies. It also stated that Aadhaar-based e-KYC can be conducted only with the consent of the customer.

If you plan to use Aadhaar based e-KYC when buying insurance, here are some details that you should keep in mind.

KYC for insurance
For life insurance products, regulatory guidelines mandate that insurers conduct KYC before the sale of the policy in case of direct sales. If the sale is through other channels, such as online, KYC is to be completed within 15 days of the sale of the policy. These practices put the onus on the insurance companies to ensure that these products are not used for money laundering.

For non-life insurance products like motor and health covers, the anti-money laundering guidelines of the insurance regulator mandate insurers to do the KYC at the time of claims. Apart from this, KYC will apply only when the claim settlement is over Rs1 lakh.

The Unique Identification Authority of India (UIDAI) has specific regulations called Aadhaar (Authentication) Regulations, 2016, which explain the ways in which an individual's details can be verified from the Aadhaar database. One such method is verification through a one-time password, which is sent to the individual's registered mobile number. The entity requesting the authentication needs to get the OTP from the consumer and enter in the system to take the process forward. This means the authentication will not take place if the consumer does not share her OTP. This restricts unauthorised access to your demographic information.

Another method is through biometric authentication. In this the consumer has to provide biometric 'proof', say, finger print, at the respective device. The Aadhaar database gives access to the requesting entity only if the biometric matches the information available against the particular Aadhaar number in the database. This too helps prevent unauthorised access to information.

The insurance regulator has also stated that Aadhaar e-KYC can only be conducted with the consumer's permission.

Aadhaar E-KYC for insurance
While Aadhaar-based KYC authentication was allowed, the insurance regulator has now said that this alone will be sufficient to complete the process.

This means that you do not need additional documents as proof for details such as identity, date of birth or address, if you provide Aadhaar. However, if the photograph in your Aadhaar is not clear, or there is a mismatch (for example, in photo, or name), the insurer can ask for additional documents. So, if you plan to use the e-KYC Aadhaar method, ensure that the details in your Aadhaar database are correct and updated, and that the photograph is clear.

A smooth onboarding process can help further expand the use of insurance.

Invest Rs 1,50,000 and Save Tax up to Rs 46,350 under Section 80C. Get Great Returns by Investing in Best Performing ELSS Funds. Save Tax Get Rich

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Invesco India Tax Plan - Top Tax Saver Fund for 2017 - 2018

Invest Invesco India Tax Plan SIPs Online

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LIC Jeevan Utkarsh

Invest Rs 1,50,000 and Save Tax up to Rs 46,350 under Section 80C. Get Great Returns by Investing in Best Performing ELSS Funds. Save Tax Get Rich

Top 10 Tax Saver Mutual Funds for 2017 - 2018

Best 10 ELSS Mutual Funds to Invest in India for 2017

1. DSP BlackRock Tax Saver Fund

2. Tata India Tax Savings Fund 

3. Birla Sun Life Tax Relief 96

4. Sundaram Diversified Equity Fund

5. ICICI Prudential Long Term Equity Fund

6. Invesco India Tax Plan

7. Franklin India TaxShield 

8. Reliance Tax Saver (ELSS) Fund

9. BNP Paribas Long Term Equity Fund

10. Axis Tax Saver Fund

Invest in Best Performing 2017 Tax Saver Mutual Funds Online

Invest Best Tax Saver Mutual Funds Online

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DSP BlackRock Balanced Fund Details

    DSP BlackRock Fund Online 

DSPBR Balanced Fund below the following;

1.       Investment Illustration since inception of this scheme, 27th May 1999.

2.       Portfolio as on 30^th September 2017.

 

1. Scheme information

Inception date	27th May 1999
AUM	5922 crores
Equity	72.96%
Debt	27.04%
Average maturity	3.75 years
Modified duration	2.91 years
Fund Managers
Equity	Atul Bhole
Fixed Income	Vikram Chopra, Pankaj Sharma
Exit load	< 12 months- 1%:
	> 12months - Nil

 

 2.  Equity composition (percentage allocation)

Large Cap	Mid Cap	Small Cap	Micro Cap
48.4%	12.2%	6.6%	5.8%

 

3.Dividend history & dividend yield

Date	NAV	Dividend	Div yield
28-Sep-17	25.01	0.21	0.84%
28-Aug-17	25.55	0.21	0.82%
28-Jul-17	25.79	0.21	0.81%
28-Jun-17	24.99	0.21	0.85%
26-May-17	25.67	0.21	0.83%
28-Apr-17	25.61	0.21	0.82%
28-Mar-17	24.66	0.21	0.83%
28-Feb-17	24.21	0.21	0.85%
27-Jan-17	24.50	0.20	0.82%
28-Dec-16	22.71	0.21	0.92%
28-Nov-16	23.65	0.21	0.90%
28-Oct-16	25.40	0.23	0.92%
28-Sep-16	25.46	0.25	1.00%
26-Aug-16	24.85	0.25	1.00%
28-Jul-16	24.49	0.24	0.98%
28-Jun-16	23.31	0.23	1.00%
27-May-16	23.20	0.23	0.98%
28-Apr-16	22.84	0.23	1.00%
28-Mar-16	22.19	0.22	1.01%
26-Feb-16	20.94	0.21	1.02%
22-Jan-16	22.91	0.75	3.27%

 

4. Performance of the fund

Performance as on 30th September	1 Month	3 Months	6 Months	1 Year	2 Years	3 Years	5 Years	8 Years	10 Years	YTD	Since Inception
DSP BlackRock Balanced Fund - Growth	(1.52%)	2.63%	6.17%	11.06%	13.91%	13.81%	15.22%	12.13%	11.16%	17.86%	15.43%
CRISIL Balanced Fund - Aggressive Index	(1.41%)	2.48%	6.03%	11.87%	10.75%	8.63%	10.90%	8.80%	7.94%	14.60%	12.54%

*inception date 27^th May 1999

DSP BlackRock Balanced Fund: Product Labelling:
This Open Ended Balanced Scheme is suitable for investors
who are seeking*: Capital growth and income over a long term investment horizon; Investment primarily in equity/ equity related
securities, with balance exposure in money market and debt securities

Invest Rs 1,50,000 and Save Tax up to Rs 46,350 under Section 80C. Get Great Returns by Investing in Best Tax Saver ELSS Funds. Save Tax Get Rich

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