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In the previous article, we discussed what are mutual funds. & Taxation in mutual funds. In this article, we will discuss how to track mutual funds. Making mutual fund investments is just the first step. Once the investment has been made, periodically tracking it becomes equally crucial.   Most of us seek advice and do our due diligence before choosing our mutual fund investments. However, once things are done, we typically forget about them until a need arises.  Nearly everything, including your car and health, requires routine maintenance; the same is true for your mutual fund investments.   While you might not need to regularly monitor your portfolio, it is always a good idea to keep yourself informed of its growth and changes.   A fund fact sheet will help you to monitor your mutual fund investment easily. It is a progress report for your investments, similar to a report card.   What is a Fund fact sheet?   A fund fact sheet is a document that lists every scheme that the AMC or mutual fund managers. It is presented in an easy-to-read manner and is issued monthly by the fund house. It contains the following information:   Performance of the schemes: It gives the performance information in terms of beta, Sharpe ratio, standard deviation, and the compound annual growth rate or CAGR of the fund.   The fund factsheet also outlines how your investments have been distributed among different securities.  Size and investment information for each scheme that the mutual fund managers.   Reviewing the fact sheet, which is easily accessible on the mutual fund website, is a great way to keep track of your mutual fund holdings.  What are mutual funds? Read More How to track mutual funds' performance?   The mutual fund websites list their net asset value (NAV). The mutual fund company's chosen index, which is a benchmark for its performance, is available for comparison.   To know how your fund performs, you should also compare it with other funds in the same category. The performance of a mutual fund scheme cannot be assessed in isolation.   Some specialized websites track the performance of mutual funds in addition to the fund fact sheets of the schemes. Over a monthly, quarterly, or half-yearly time frame, you can monitor how your scheme is doing compared to its counterpart in the same category.   It is always good to keep an eye out for the main characteristics and adjustments listed below that could impact the funds' performance.   It is advisable to monitor the portfolio's turnover and changes in management.  While it is typical for management to change over time, a frequent change in the fund manager may be a red flag. A change in fund manager frequently results in a shift in investment style.   To ensure the investment goal is intact in such a situation, it becomes equally necessary to monitor the changes in your portfolio.    Also, the concern should be raised if your mutual fund portfolio consistently experiences high churn or turnover. High returns do not always equate to increased churn.   On the contrary, it can cause more significant damage as rising transaction costs eat into your returns. In other circumstances, more churn may also indicate a short-term concentration.   A short-term emphasis may produce more enormous profits in the near term, but in the long run, it may leave your portfolio weak and exposed to unnecessary risks.   When looking for the warning signs mentioned above, it is advisable to give any mutual fund scheme at least six months. It might be too soon to assess the scheme's performance following any adjustment after a month or a quarter.   Don't let your fund's short-term performance outriggers affect you; give it time to establish itself and achieve the investment goal.   It is good practice to keep track of your mutual fund investments on a timely basis, though not very frequently.  FAQs How to track mutual funds' performance? One way to track your investment is through the mutual fund websites list their net asset value (NAV). The mutual fund company's chosen index, which is a benchmark for its performance, is available for comparison.   To know how your fund performs, you should also compare it with other funds in the same category. The performance of a mutual fund scheme cannot be assessed in isolation. What is a fund fact sheet? A fund fact sheet is a document that lists every scheme that the AMC or mutual fund managers. It is presented in an easy-to-read manner and is issued monthly by the fund house. Who can track your mutual fund investments? It is possible to track your mutual fund investment by yourself. You can also have a financial advisor, or mutual fund portfolio tracker track your investment growth. Consult an expert advisor to get the right plan for you TALK TO AN EXPERT

Saving for your child's education is a long-term goal. A perfect balance between risk and return is important. Why mutual funds are ideal to fund your child's education because they satisfy both these requirements. A mutual fund managed by specialists and experts is a fantastic choice. Parents can either invest in the children's plans provided by fund houses or build a mutual fund portfolio, especially to pay for their children's education. Inflation in education-related expenses is bound to increase faster than average inflation.   Parents must look at investing options that will produce respectable returns over time and help them achieve their financial objectives because the expense of education is increasing by more than 20% annually.   In this regard, mutual funds rank among the most practical ways to build wealth for this purpose over the long term.   Choosing an investment product for your child's education can be challenging to fund your schooling. Your parents might have used bank fixed deposits, PPF, and actual gold.   To overcome inflation and generate the anticipated profits, you must make student decisions given the escalating cost of schooling. Long-term wealth creation is, usually, best accomplished with equity investments. They demand, nonetheless, particular knowledge.   Additionally, due to their volatility, you would prefer to invest in shares through mutual funds. Investing in mutual funds is the underlying stocks and securities that are professionally overseen by fund managers who have experience choosing them and are well-diversified.  The advantages listed below make mutual funds an excellent choice for saving your child's educational needs.   Source: pixabay 1. Diversification A mutual fund invests a pool of funds in a portfolio of numerous stocks and securities from different industries. Mutual funds can also invest in several assets, including bonds, cash, and commodities like gold.   By providing greater exposure to other equities and asset classes, this diversification lowers the risk of investing in a single stock or industry and enables better potential rewards.  2. Professionally managed The fact that mutual funds have a professional watch over them is a significant benefit. Professional managers use their extensive knowledge and experience to distribute assets wisely to minimize risk and maximize rewards for your money.   How to track mutual funds investment? Read More 3. Transparent Another critical advantage of mutual funds is the level of information provided to you. As an investor, you can track every investment and where the money goes.   The whole portfolio and investment strategy are disclosed, and a daily online update of the mutual fund's net asset value is given,  4. Allow small investments You can use mutual fund systematic investment plans to make frequent small investments to help you reach your long-term objective of funding your child's education.   With a SIP, you can invest a small sum, such as Rs 500 each month, and let the long-term growth of your money be fueled by the power of compounding and rupee cost averaging.  FAQs Is mutual fund good for child education? Yes, mutual funds are the best way to fund your child's education. They help you grow your child's education fund enough to beat inflation and keep up with the rising cost of education as well. Mutual funds are the best tool out there to help parents grow their child's savings steadily. Which type of mutual fund is best for child education? There are many mutual funds designed for a child's education that you can explore. The best way to start is to consult an expert, calculate the future cost of education for your child, build a financial goal, and then start investing based on the amount you need to save. You can do this for FREE using the EduFund App. Why you should invest in your child's future? By investing in your child's future, you can secure it for life. Education is the key to success, education fund helps beat inflation because it invests in equity-based funds that can potentially beat inflation, and provide good returns that help you keep up with the rising cost of education. Quality education is pricy and to compete with these costs you require more than simple savings, you require diversified investments. Consult an expert advisor to get the right plan for you. TALK TO AN EXPERT

So, why do we need to know the difference between exchange-traded funds and mutual funds in the very first place? ETFs are very similar to Mutual Funds, but they are not mutual funds. It's just a matter of grasping the differences between the two.   We at EduFund believe that understanding where each of the instruments makes the most sense, and the investor just doesn't blindly follow the crowd and the trend.  At the very outset, let's know why they are so similar before diving into their differences. Exchange-traded funds and Mutual Funds represent a basket of professionally managed securities, such as stocks, bonds, currencies, commodities, real estate, etc.   These securities can either be thematic or also depend upon the type of mutual fund or the ETF you choose. Both offer various investment options and are managed by professional portfolio managers.   Thus, saving our time and energy in research.  The ETFs and Mutual funds are highly diversified because of the basket of securities. Thus, they are less risky than investing in individual securities like stocks, bonds, commodities, currencies, etc.   How does this help reduce risk? Imagine if you are holding stock that is performing poorly, and thus your return will also be poor; perhaps you may lose money too.   However, suppose you have an ETF or a mutual fund. In that case, this poor performance of that stock may be overdone by the good or average performance of other stocks and assets, which will give you a better return than holding a single asset otherwise.  The most important difference between ETFs and Mutual funds is that an ETF is tradeable on the stock exchange, i.e., its trading is just like a simple stock on the National Stock Exchange (NSE) or the Bombay Stock Exchange (BSE) if it's traded in Indian markets or it will be listed on the New York Stock Exchange or the Nasdaq if it's to be tradeable in the United States of America.   On the other hand, Mutual Funds’ listings are not done on the stock markets; they must be purchased manually from the fund either through your financial advisor or through online brokers.  The ETFs are easily translatable, i.e., they can be sold or purchased at any point in the day, just like a stock. However, for mutual funds, this happens only once during the day after the market has closed.   This buying or selling of mutual funds is through the mutual fund company based upon the investor's instructions - this delay can be very costly if the market fluctuations are very dynamic.   While easy and anytime trading of ETFs sounds cool, not all ETFs are as tradable. This leads to illiquidity concerns.  Source: Pixabay Generally, an investor purchases the mutual fund at the price of its NAV, but on the other hand, ETFs are bought at the prevailing market price, which is typically near the NAV but not the same.   Hence, most mutual funds allow automated transactions but ETFs do not because of price volatility.  Generally, ETFs have a lower expense ratio as compared the mutual funds. The expense ratio is the fee you pay the manager for managing your securities.   The reason is quite simple when a mutual fund is traded, it leaves a long paper trail, and thus the exchange of hands for this paperwork is more - translating to higher costs for the fund manager, which are imposed upon the investor.   On the contrary, ETFs are traded directly by the investor and thus naturally explain the lower charges.  Based on management, most ETFs are passively managed, whereas there are quite a few mutual funds that are actively managed, but some are passively managed.  What is better?  Well, neither of the two is perfect! You can achieve diversity using any of the two options based on your goals. Naturally, a portfolio balanced by combining both offers greater variety and lower risk.   Notably, there is no reason this must be a tightrope walk situation. Both Mutual Funds and ETFs can live together in a portfolio happily. FAQs Which is better - Mutual Funds or ETFs? Well, neither of the two is perfect! You can achieve diversity using any of the two options based on your goals. Naturally, a portfolio balanced by combining both offers greater variety and lower risk.   What is an ETF? An ETF stands for exchange-traded fund (ETF). One single ETF is a basket of securities that can be bought and sold like mutual funds through a brokerage firm. ETFs track a specific index such as S&P, sector, commodity, or other assets. Much like stocks, ETFs can be traded on the market. What is a Mutual Fund? A mutual fund is a financial trust that collects funds from investors and invests them into different instruments like stocks, bonds, and other money market instruments. How to invest in a Mutual Fund via the EduFund App? Step 1: Log in to the EduFund website or the EduFund app.   Step 2: Complete your KYC and move ahead to create your investment account.   Step 3: Choose the option of mutual fund investments.   Step 4: Analyse your risk profile on the app by answering your household income and expense, the number of dependents you have, the highest level of maturity you have in terms of investments, your period of investment, and similar questions.  Step 5: After answering the above questions, you will know what type of investor you are and the degree of risk you might be willing to take.   The EduFund website or the EduFund app will suggest some mutual funds you might want to invest in, with a recommended SIP value.  Step 6: Choose the fund and start investing. Consult an expert advisor to get the right plan for you TALK TO AN EXPERT

In the previous article, we discussed the types of ETFs. In this article, we will discuss how much exposure ETFs provide. Exchange-traded funds are a lot like millennials: Born in the early 1990s, it didn't become relevant until after the recession of 2007 - 09, but it's been a force to be reckoned with ever since.   ETFs in the United States had $530 billion in assets in 2008. Today, that figure is estimated to be around $4.37 trillion.  Most investors today choose ETFs to tap into the underlying advantage of diversification that comes with it. Some investors also choose ETFs to access certain asset classes or investment patterns.   For instance, investors who want to preserve their capital will try to invest in bond ETFs and investors who want exposure to blockchain will invest in blockchain-exposed ETFs.   As a result, investors must understand what an ETF owns and how it came to own the securities in its portfolio. There are 63 different broad-based US large-cap ETFs to choose from.   Investors may feel they are all the same because they all draw from the same universe of 300 or 500 if you consider the S&P 500 a large-cap index of US-listed stocks, but this is a risky assumption.  ETFs can have various strategies of exposure to specific underlying indices.   Equally weighted ETFs   Equal-weighted indexes are precisely what they sound like. Regardless of how big or small a firm is, every stock in the index has the same weight.  As a result, even Apple will have the same weight as the tiniest business in the S&P 500. The Invesco S&P 500 Equal Weight ETF (RSP) is the most widely traded equal-weight ETF.  Let's take an example and construct an equal-weighted ETF  StockReturn (in %)Equal weightContribution Equal Weight (return*equal weight)A4100.4B3100.3C7100.7D4100.4E12101.2F3100.3G1100.1H15101.5I-510-0.5J2100.2TOTAL 10015.4% Thus, the return of our hypothetical ETF is 15.4%  Market weighted ETFs  Like many other stock indices, the S&P 500 is a market capitalization-weighted index. By multiplying the share price by the total number of outstanding shares, the market capitalization of each stock is determined.  The index's weightings will be dependent on the companies with the most significant market capitalizations or values.  While the S&P 500 index comprises several companies, the MWI (market value-weighted index) sector weight is calculated by adding the individual weights of the companies that will make up that sector.  Let's take an example and construct a market-weighted ETF  StockReturn (in %)Market weightContribution Equal Weight (return*equal weight)A4100.4B3200.6C750.35D4150.75E1250.6F350.15G1100.1H15101.5I-510-0.5J2100.2TOTAL 1004.15% Thus, the market-weighted ETF return is 4.15%.   Volatility weighted ETF  Volatility weighting, in particular, does not use low volatility as a selection criterion.   It's a weighting strategy that helps an index diversify by addressing the concentration in cap-weighted indices when a few stocks dominate the index's performance and risk profile.   The objective is to use a company's stock price volatility over the last few trading days to inversely weigh shares. Based on that metric, the least volatile equities are weighted more while the most volatile stocks remain in the portfolio with a lesser weight.  Financial Goals for Millennial Parents Read More Fundamentally weighted ETF  The components of a fundamentally weighted ETF get their rankings according to their fundamentals rather than their market capitalization.   As a result, the ETF only invests in equities that have the prediction to show increased growth.  This ensures that the organizations with the best results in their core business operations receive the most weight, rather than those whose market value has increased.   A constant upward trend in the top line is one of the essential components of a company's long-term growth.  Thus, being cautious about exposure and not going by the name blindly will help select ETFs for the portfolio. FAQs What is the risk exposure of ETF? Most investors today choose ETFs to tap into the underlying advantage of diversification that comes with it. Some investors also choose ETFs to access certain asset classes or investment patterns. For instance, investors who want to preserve their capital will try to invest in bond ETFs, and investors who want exposure to blockchain will invest in blockchain-exposed ETFs. As a result, investors must understand what an ETF owns and how it came to own the securities in its portfolio. Is ETF safer than stocks? Since ETFs are diversified, which means they hold a basket of stocks or other securities, they carry less risk compared to stocks. But ETFs can be bought and traded like stocks. Do ETFs try to beat the market? Most ETFs and index funds try to replicate an index of stocks or other assets. They try to imitate the index and try to match its returns. Does ETF really work? ETFs are generally considered low-risk investments. They are low-cost and offer diversification because they hold a basket of stocks or other securities. Consult an expert advisor to get the right plan for you TALK TO AN EXPERT

So far, 2021 has been kind to investors, with significant market indices finishing the year in the green zone. The S&P 500 and Dow Jones Industrial Averages have risen roughly 27% and 10%, respectively.   From the beginning of the year to 6 months, the Nasdaq Composite surged 22%, whereas the Russell 2000 went up about 14%.  Due to soaring inflation, fatal variations spawning new waves of the COVID-19 epidemic, and supply-chain bottlenecks resulting from pandemic-related restrictions, markets remained unpredictable in 2021.   The Federal Reserve's continued assistance, on the other hand, aided the economy's recovery from the pandemic-induced downturn. The Omicron variant fears have died, and a new conflict between Russia and Ukraine has risen out of the blue.   According to etf.com, investors will rotate to some of the more than 200 thematic ETFs offered by more than a dozen asset managers, which cover a wide range of long-term trends like blockchain, cannabis, cleantech, healthcare innovation, mobile payments, and resource scarcity.   By 2022, thematic ETFs, which are actively managed, will account for 10% of equities net inflows.  There are a few sectors to watch out for in 2022 if an investor wants to invest in ETFs.   Consumers have been fighting growing inflation and COVID-19 variation worries for a long time. Consumers are optimistic about the quick circulation of the coronavirus vaccine and the recovery of the U.S. economy from pandemic-related slumps.   The retail sector was bustling with potential because of high levels of consumer expenditure and rising employment conditions. Thus, the retail industry is sure to boom, and therefore the retail ETFs.  Given the strong trends, investors may consider investing in the retail ETFs below to take advantage of the sales surge. SPDR S&P Retail ETF XRT, Amplify Online Retail ETF IBUY, VanEck Retail ETF (RTH), and ProShares Online Retail ETF (ONLN).  Source: Pixabay Another key sector is the Energy sector. Investors are keeping a careful eye on the energy sector, which is showing signs of revival as world consumption and growth of the economy return to pre-pandemic levels.   Introducing a coronavirus vaccination is slowing the global spread of the coronavirus outbreak. cyclical industries are looking up thanks to the opening of world economies and rising demand.  Invesco Dynamic Energy Exploration & Production ETF PXE, Vanguard Energy ETF VDE, Fidelity MSCI Energy Index ETF (FENY), The Energy Select Sector SPDR Fund (XLE), and iShares U.S. Energy ETF are some of the options available to investors (IYE).  The semiconductor industry has been attracting investors' attention for a long time due to its promising future. WFH and internet-based learning trends fueled demand for processors among Computer manufacturers and data-center operators, thanks to the coronavirus.   Huge public cloud providers are investing in Hybrid cloud because of its growing importance among businesses. This development will most likely benefit data-center chip manufacturers.  Investors should evaluate the iShares Semiconductor ETF SOXX, VanEck Semiconductor ETF SMH, First Trust Nasdaq Semiconductor ETF (FTXL), Invesco Dynamic Semiconductors ETF (PSI), and SPDR S&P Semiconductor ETF (XSD) in light of current market conditions.  Bank ETFs are another set of thematic ETFs that should be considered. The Federal Reserve's decision to reduce its monthly bond purchases could help expand the market. The move to tighter monetary policy will raise yields, which will benefit the financial sector - because higher interest rates will assist banking institutions, insurance firms, discount brokerage houses, and asset managers in making more money. The yield curve (the differential between long- and short-interest rates) might become narrow, which will help banks' net interest margins. As a result, the steeper slope of the yield curve and a minor increase in loan demand are expected to boost the net interest margin, accounting for a significant portion of bank profits.   Invesco KBW Bank ETF KBWB, SPDR S&P Regional Banking ETF KRE, iShares U.S. Regional Banks ETF (IAT), and SPDR S&P Bank ETF (KBE) are some ETFs to be looked out for.  In 2022, the renewable energy sector has the potential to continue to grow. Government regulations that promote renewable energy, significant renewable investment, lowering total costs of generating renewable electricity, and increased usage of electric vehicles (E.V.) may all contribute to space's momentum in 2022.  iShares Global Clean Energy ETF, Invesco Solar ETF, First Trust NASDAQ Clean Edge Green Energy ETF, ALPS Clean Energy ETF, and Invesco Global Clean Energy ETF are some of the ETFs to be examined.  These sectors should be kept in mind while investing in ETFs.  FAQ Is ETF a good investment?   ETFs are generally considered low-risk investments. They are low-cost and offer diversification because they hold a basket of stocks or other securities.     Which is safer ETFs or stocks?   Since ETFs are diversified, which means they hold a basket of stocks or other securities, they carry less risk compared to stocks. But ETFs can be bought and traded like stocks.      Should beginners invest in ETFs?   ETFs are easily traded on the stock market, and they invest in stocks and different other assets. One thing to remember is that most of the ETFs are passively managed. It is wise to talk to saving experts before investing in ETFs for beginners.   Is it risky to buy ETF?   Most investors today choose ETFs to tap into the underlying advantage of diversification that comes with it. Some investors also choose ETFs to access certain asset classes or investment patterns.     For instance, investors who want to preserve their capital will try to invest in bond ETFs, and investors who want exposure to blockchain will invest in blockchain-exposed ETFs.     As a result, investors must understand what an ETF owns and how it came to own the securities in its portfolio.     Since ETFs are diversified, which means they hold a basket of stocks or other securities, they carry less risk compared to stocks.   Consult an expert advisor to get the right plan for you TALK TO AN EXPERT

One of the largest AMCs in India, DSP has been helping investors make sound investment decisions responsibly and unemotionally for over 25 years. DSP is backed by the DSP Group, an almost 160-year-old Indian financial giant.  The family behind DSP has been very influential in the growth and professionalization of capital markets and the money management business in India over the last one-and-a-half centuries.  DSP Regular Savings Fund  Investment objective The primary investment objective of the scheme is to seek to generate income, consistent with prudent risk, from a portfolio substantially constituted of quality debt securities.  Investment Process  For equities, the fund uses a bottom-up approach with a large-cap bias focusing on sectors and industries with double-digit growth.  For debt securities, the fund focuses on short-tenure corporate bonds, with a modified duration between 2.5 to 3.5 years and rated AA or above, to minimize both interest rate and credit risk.   Portfolio Composition  The portfolio had a significant allocation to debt and a relatively lower equity allocation, where 75.08% of the funds were invested in debt securities, and 24.92% were in the form of equity investments.  Note: Data as of 30th Apr. 2023. Source: DSP MF DSP World Mining Fund Read More Top 5 Equity Holdings  Name Weightage % HDFC 3.83 ICICI Bank 2.98 Axis Bank 1.93 ITC 1.16 Cipla 1.11 Note: Data as of 30th Apr. 2023.    Source: DSP MF  Performance  If you had invested 10,000 at the fund's inception, it would now be valued at Rs 22,304.   Note: Data as of 30th Apr. 2023. Source: DSP MF The fund was launched on 1st Jan. 2013, and it has generated a CAGR of 8.08% since inception, which is a good return in the conservative hybrid category as the investors' risk appetite is low.  Fund Manager at DSP Regular Savings Fund Abhishek Singh has been managing this fund since May 2021. Abhishek has a total work experience of 14 years. He joined DSP Mutual Fund in September 2018 as Assistant Vice President of the equity team. His prior experience includes working in Motilal Oswal, Idfc Securities, BNP Paribas, B&K Securities, and Edelweiss Financial Services.  He has an MBA in finance and holds a Bachelor's in Electronics Engineering.  Vikram Chopra has been managing this fund since July 2016. Vikram joined DSP Mutual Funds from L&T Investment Management and brings over 14 years of investment experience with him. He has also worked with Fidelity, IDBI Bank, and Axis Bank Ltd.   Jay Kothari has been managing this fund since December 2020. Jay Kothari, Vice President & Product Strategist -Jay has been with DSP Investment Managers since May 2005 and has been with the Investment function since January 2011. Before joining DSPIM, Jay worked for Standard Chartered Bank for a year in the Priority Banking division. Jay completed his Bachelor of Management Studies (Finance & International Finance) from Mumbai University and an MBA in Finance from Mumbai University.  Who should invest in DSP Small Cap Fund?  Consider this fund if you  Are looking to generate a steady potential income rather than chasing high returns.  Want the smoother investment journey associated with debt investing but with a possibly higher return than debt?  Are conservative and don’t like to take too much risk.  Why invest in this Fund?  Offers the potential to earn a steady income from a primarily debt-oriented portfolio with a little 'boost' of equity.  Earn potentially higher returns than investing in pure debt funds.  Potential capital preservation during falling markets due to the more significant debt allocation.  Suitable for conservative investors.  Investors can use it for doing STP into Equity Funds.  Time Horizon  One should look at investing for at least five years or even more.  Investment through Systematic Investment Plan (SIP) may help in tackling the volatility of the broader equity market.  Conclusion  The DSP Regular Savings Fund is a good option for conservative investors not chasing high returns. It provides a better option over traditional debt investing with higher returns due to little exposure to equities. Investors can consider this fund for parking funds and then do STP to equity fund to average the cost of equity investments DisclaimerThis is not recommendation advice. All information in this blog is for educational purposes only. 

One of the largest AMCs in India, DSP has been helping investors make sound investment decisions responsibly and unemotionally for over 25 years. DSP is backed by the DSP Group, an almost 160-year-old Indian financial giant.  The family behind DSP has been very influential in the growth and professionalization of capital markets and the money management business in India over the last one-and-a-half centuries. DSP Nifty 50 Index Fund  Investment objective The primary investment objective is to invest in companies that are constituents of the NIFTY 50 Index (the underlying index) in the same proportion as in the index and seeks to generate returns that are commensurate (before fees and expenses) with the performance of the underlying index, subject to tracking error.  Investment Process   The fund replicates the Nifty 50 TR Index, i.e., invests in the same stocks and proportion as in the Nifty 50 TRI.    The portfolio is rebalanced semi-annually to adjust for any stock additions or subtractions to the index.  Portfolio Composition  Since the fund replicates Nifty 50 TRI, all the stocks invested are large-cap stocks. Hence, the fund allows investors to invest in India's top 50 companies.  Note: Data as of 30th April 2023. Source: DSP MF Top 5 Holdings  Name Weightage % Reliance Industries Limited 10.29 HDFC Bank Limited 9.25 ICICI Bank Limited 8.05 HDFC Limited 6.32 Infosys Limited 5.62 Note: 30th April 2023. Source: DSP MF Performance over the years   If you had invested 10,000 at the fund's inception, it would now be valued at Rs 17,086. Note: Data as of 28th April 2023. Source: DSP MF Since its inception, the fund has generated a CAGR (Compounded Annual Growth Rate) of 13.66%.  DSP Tax Saver Fund Read More Fund Manager at DSP Nifty 50 Index Fund Anil Ghelani has been managing this fund since July 2019 as a Co-Fund Manager. Anil has been working with DSP Group since 2003 and is Head of Passive Investments & Products. Previously, he was the Business Head & Chief Investment Officer at DSP Pension Fund Managers. Before that, he led the Risk and Quantitative Analysis team at DSP Mutual Fund, responsible for monitoring portfolio risk and buy-side credit research on companies across various sectors.  Diipesh Shah has been managing this fund since November 2020 as a Co-Fund Manager. Diipesh has a total work experience of Over 20 years. He has been working with DSP since September 2019 as a Dealer for ETF and Passive Investments. Now he is also the Fund Manager of various schemes of DSP Mutual Fund. Diipesh has worked with JM Financial Institutional Broking Limited, Centrum Broking Limited, IDFC Securities Limited, and Kotak Securities Limited as Institutional Equity Sales Trading.  Who should invest in DSP Nifty 50 Index Fund?  This fund is suitable for   A first-timer or a relatively new equity market investor.  An investor who values low-cost, passive investing.  Investors have the patience & mental resilience to remain invested for a decade or more.  Investors who do not chase funds that have the highest outperformance.  Why invest in this Fund?  It offers an affordable way to invest in the top 50 Indian companies at a relatively low cost compared to other actively managed large-cap funds.   In an era where large-cap funds are underperforming benchmarks, index funds can be a good option for exposure to large-cap equities.    Time Horizon  One should look at investing for at least ten years or even more.  Investment through Systematic Investment Plan (SIP) may help in tackling the volatility of the broader equity market.  Conclusion  The DSP Nifty 50 Index Fund provides a good option for passive investing in large-cap equities. It is better to consider index funds for large-cap investing since there is a very low probability of alpha generation in the large-cap space. Investors seeking capital appreciation through large-cap exposure can consider this fund with a time horizon of ten years or more.  DisclaimerThis is not a recommendation advice. All information provided in this blog is for educational purposes only.

In the previous article, we discussed how to finance your child's education post-pandemic. In this article, we will discuss why you need to look beyond traditional investment options for your child’s education. Investment is an age-old concept. People have been investing for many years in various asset classes. Traditional investments like Fixed Deposits, government bonds, gold, silver, etc. continue to be cherished areas of investment. However, the world of finance is evolving rapidly.  People are becoming adaptable to diversity in their portfolios.  Today, personal finance is a valued concept amongst people of all age groups. The awareness about investing is increasing. The youth especially is very enthusiastic about the diversification in the world of finances. People are switching to Modern Investment options like Debt Funds, Equity Funds, Hedge Funds, etc.  But, the concept of personal finance changes dramatically if you are a parent. As a parent, your portfolio demands a strategic redesign, to accommodate your child’s requirements. To ensure that your child receives the best academic exposure, you need to plan your investment journey in advance. Both traditional and modern investments come with their own set of merits and demerits. The catch is to attain an ideal mix of both, that minimizes the risk and maximizes the return.  6 reasons to go beyond the traditional investments Wealth Generation When you are planning for your child’s education, you can not ignore education inflation. Traditional investments like fixed deposits offer a very low rate of return. They might keep your money safe, but they make little to no contribution to your wealth generation.  To meet your child’s education needs, you need to look beyond these investments. There is no dearth of investment opportunities in the market today. Based on your risk appetite, you can consider investing in equity funds, debt funds, bonds, etc. These investment options will allow you to grow your money substantially. Moreover,  playing long-term reaps the most out of compounding. Just remember, making money will not help you generate wealth, managing your money will. Diversifying your portfolio helps! Risk Mitigation Going beyond traditional investment can help you mitigate the risk of uncertainty. You can not anticipate what will happen with the economy tomorrow. Neither can you foresee its impact on your assets,  Can you?  But, you can always plan for the uncertainties and make room for damage control. Distributing your money into various asset classes instead of one would help mitigate the risk of uncertainty.  Inflation adjustment Inflation is a real threat to your investments, especially the traditional ones like fixed deposits. If you are someone hoping to see your money double over the period through fixed deposits, it is time for a reality check! Fixed deposits offer a very low rate of return somewhere between 7-8%. Whereas, the Inflation rate in India is recorded at 4-6% in recent years. Hence, the true inflation-adjusted return that you receive by the end can go as low as 1-2%. Now, just imagine the implications when inflation goes higher than the rate of return.  This is why it is important to have investments that can beat inflation. Modern investments like debt funds, equity funds, and hedge funds are potent to beat inflation.  Source: Pexels Diversification  If you stash all your money into one asset class, you are missing out on some wonderful opportunities. Investments come with a low-risk low-return rule. Investing only in risk-free traditional investments, unfortunately, can not suffice to fund your child’s education. Therefore, for a  higher return, you need to make room for some risk. Modern investments like Mutual Funds allow you earn good returns as per your risk appetite. Strategic diversification enables you to maximize the return of your portfolio. Professional Portfolio Management Equity is a risky but rewarding asset in the long run.  But, if you are a beginner not yet friendly with equity stocks, Mutual funds are the best way to begin. Here, you have a professional portfolio manager, who invests your money into stocks. They are skilled people well-versed with the knowledge of the stock market, taking care of your risk appetite throughout. This way, you avail the benefits of equity without risking your money in the dark spots.  Liquidity Traditional investment options like Fixed Deposits have a lock-in period. Also, the investments in these options call out a lump sum amount. So, when you put your money in an FD, you cannot withdraw your money except at a cost.  As far as your child’s education is concerned, you can not predict when and how the fund requirement arises. So, it is wiser to have some relatively liquid assets like Mutual funds in your portfolio.  Traditional Investments have been favored by Indian households for a reason. These investments offer security and assured returns With the soaring inflation, these assets are likely to fall short and force you to rely on education loans to fund your child’s education dreams. To ensure your savings are enough, looking beyond traditional investments and storing your wealth in different asset classes can help in the long run FAQs What are traditional investments in the Indian scenario? Traditional Investments are investments that offer security and assured returns. Some examples of this are land, property, fixed deposits, recurring deposits, gold, and other precious stones. What are some investment options to grow your wealth? In order to grow your wealth, you should explore equity-based investments like Mutual Funds, Stocks, and ETFs. These have the potential to beat inflation and preserve the value of your money in the long run. Why should Indians look beyond traditional investments? While traditional investments have worked in the past and are secure investments, they don't offer returns big enough to help you achieve goals like wealth creation or help you with financial goals like buying a house, sending your child abroad, and more. Consult an expert advisor to get the right plan for you TALK TO AN EXPERT

Why invest early? - is a question that plagues most young adults. Many research and polls demonstrate that the sooner you invest, the better off you are. The best time to invest is during or after college when you are in your early 20s.   Investing early in life teaches you financial independence and discipline. Early investment explains the proper distinction between investing and saving.   Never consider your age to be a barrier to investing. You are never too young to do so. You will have more money in your pocket in the future if you invest a tiny bit of money from today onwards.   Investing early is advantageous because you can plan your investments and give them enough time to grow into a corpus that can meet your financial goals.   If you are a young investor looking for inspiration or wondering if it is a good idea to start investing early, here are some of the best reasons.   Reasons to start investing early 1. Save more Starting early, you will acquire the habit of saving more when you start investing at a young age. The more you invest now, the more you will receive in the future.   As a result of that cognitive process, you tend to save more by reducing unnecessary expenses on your part and investing the money you save.   2. More recovery time If you invest early, even if you lose money, you will have more time to recover your losses.   An investor who begins investing later in life, on the other hand, has less time to recuperate for his losses. As a result, if you invest earlier, money has more time to rise in value.   3. Time value of money Compounding gains arise from early investments. Money has a temporal value that increases with time. Regular savings started at a young age can pay off handsomely when it comes time to retire.   Furthermore, early investing allows you to enter the world of finance sooner. With time, your money will increase in value. You can buy items that others may not be able to afford at that age because of early investments - putting you ahead of those who would instead invest later in life.   Source: Pexels 4. Polished risk-taking ability Young investors are more capable of taking risks than older investors. Adult investors, on the whole, are conservative and desire stability.   Therefore, they reject high-risk investing opportunities. The more the risk, the greater the gain; as the old saying goes, with a tremendous risk-taking attitude, the likelihood of making substantial returns at an early age increases.   5. Not becoming a debtor Investments made young can be pretty beneficial. Whenever you need money, you will have it in surplus. You will never need to borrow money or become someone's debtor if you have enough money invested with you.   When you have money parked in the correct investment channels at the right age, you can lend it to others; that is, you can instead become a creditor.   6. Solid corpus for achieving the big dream Early-age investments enhance the probability of reaching financial stability at a very young age.   If you start your saving and investing journey at the age of 20, you will have a perfect corpus by the age of 40 to 50, and you will also have a better idea of how your investments worked out.   Post that, you will have a corpus big enough that you will be able to take care of that dream house of yours or have a good retirement life. With technology at a younger age, you invest in avenues that can give high returns.   Investment in self-research will give you confidence and help you make many bold decisions in life. So, the earlier you start, the easier it is to build wealth.  The example below shows how beneficial it is to embark on your investing journey early in life.  Example:   Ram invested Rs 2,000 per year in balanced mutual funds between the ages of 24 and 30; he earned a 12 percent after-tax return, and he continued to make 12 percent per year until he retired at age 65.   Shyam also invested Rs 2,000 per year and earned the same return, but he waited until he was 30 to start and continued to invest Rs 2,000 per year until he retired at age 65.   It is difficult to imagine at the end of the age of 65; both would end up having 10 Lakhs. But Ram had to invest only Rs 12,000 (i.e., Rs 2,000 for six years), while Shyam had to invest Rs 72,000 (Rs 2,000 for 36 years) or six times the amount that Ram invested to delay his investment by six years.   If you expect an annualized return of 18% on your investments, it means that after four years, your money will double, your investment will multiply four times in the next four years, and so on.   This shows how compounding has a significant positive impact in the later stages of the investing cycle. As a result, you must keep your money invested for longer so that the force of compounding can help you become wealthy.   There is a significant difference between investing from the age of 18 and starting to invest at the age of 28. The gap of 10 years between these two starting points will have a tremendous impact on the wealth corpus you will have at the end of your investment period.   The more you can compound interest on your investment, the faster investment will accumulate and the better off you will be when you retire and start enjoying your savings. So early investments in your career will help you build a secure future.  FAQs Why is it beneficial to start saving and investing early on in life? Save more More recovery time Time value of money Polished risk-taking ability Not becoming a debtor Solid corpus for achieving the big dream Why is it important to invest early on? It is important to invest early on because it is the best way to meet your financial goals on time. Investing early gives you benefits like the ability to stay invested for a long time, mitigate risk over a period of time, and even expand your investments as you grow old. Is 25 too old to start investing? No, it is not too old to start investing. You can start investing in different equities classes whenever you have the money and financial expertise to start. Consult an expert advisor to get the right plan for you TALK TO AN EXPERT

ETF investment strategy is new to India. In fact, the first successful ETF was introduced in 1993 in the United States to monitor the Standard & Poor's 500 Index (S&P 500), and it is still one of the most popular ETFs today. In India, the first ETF to track the Nifty 50 Index came to the market in 2001. ETFs are a low-cost, low-risk way to invest.  Since it tracks a specific index, such as the NIFTY 100 or S&P 500, and is passively managed. An exchange-traded fund (ETF) is similar to an index mutual fund.   However, today's market has a large number of actively managed ETFs. ETFs, unlike index funds, are marketable securities that may be bought, sold, and traded at an exchange throughout the day, just like any other corporate stock.  Benefits of investing in ETFs ETFs offer liquidity as they are tradable securities on the exchange;  ETFs are very cost-efficient compared to their mutual fund counterparts due to their structure and functioning; ETFs offer unparalleled flexibility due to traceability advantages;  ETFs offer diversification to the portfolio;  ETFs are single transaction securities; when an investor buys a mutual fund, he or she buys a basket of equities made up of small shares spread across various assets. When ETFs are bought in a single transaction, it is akin to owning a tiny portfolio it is beneficial to investors who are keeping track of their performance;  Unlike some mutual funds, ETFs do not have lock-in periods.  ETFs are tax-efficient  Passive management helps get transparent returns akin to the underlying index.   Source: Pixabay Four ETF investment methods 1. Cost-per-dollar Averaging  You acquire assets worth a specific amount of money regularly, regardless of how the asset's price changes. Even if it's a modest amount, if you're new to US investing, you should strive to save a regular amount in an ETF or a set of ETFs every month.   This aids in the development of saving discipline. The goal is to spend time in the market rather than trying to time it.  For instance, using DCA, a $200,000 investment in shares can be made over eight weeks by investing $25,000 each week in the same manner. The trades for lump-sum investing and the DCA approach are in the table below:   DCA @ $25000 per weekLumpsumWeekShare priceNo shares purchasedShare priceNo shares purchased185294852353286291  383301  481309  582305  678321  780313  882305  Total shares purchased 2437 2353Average share price82 85  The entire amount invested is $200,000, with 2,353 shares purchased as a lump-sum transaction. On the other hand, the DCA strategy purchases 2,437 shares, a differential of 84 shares worth $6,888 at the $82 average share price.   As a result, DCA can raise the number of shares purchased when the market is down and decrease the number of shares purchased when the market is up.  2. Asset Allocation  Simply put, you should not invest all your money in a single asset group. Instead, you spread it over various asset classes, such as equities, bonds, and commodities.   ETFs can assist a novice in putting together a basic portfolio allocation. The asset allocation you make should be based on your risk tolerance. When you're in your twenties, for example, stock ETFs may make up the bulk of your portfolio as you have more time on your hands.   You might choose to implement a less aggressive policy as you age and your goals change by increasing the proportion of your assets in bond ETFs.  3. Sector Strategy  ETFs are a great method to gain access to a sector that otherwise would be hard to enter. For example, the ARK Autonomous Technology & Robotics ETF can help you gain exposure to the technology and robotics sectors.   You can also invest in the ALPS Clean Energy ETF if you wish to invest in the clean energy sector. It also allows you to perform a sector rotation, in which you can earn gains from one ETF and switch to another based on economic cycles – this is especially useful in cyclical businesses.  4. Global Diversification  ETFs also allow you to diversify your portfolio regionally and in global markets other than the United States. The Invesco China Technology ETF, for example, tracks the performance of the FTSE China Incl Index.   Tencent Holdings Limited and Baidu Inc. are the firms represented in this 25% Technology Capped Index.   The iShares MSCI Japan ETF monitors the performance of an index of Japanese stocks, with Toyota Motor Corporation and Sony Group Corporation among its holdings. Investing in the United States and other countries allows you to build a global portfolio.  ETFs are a solid long-term investment alternative because they have a lesser expense ratio than active funds. Hence going with them makes the most sense. FAQs What are the benefits of investing in ETFs? Here are the benefits of investing in ETFs - ETFs offer liquidity as they are tradable securities on the exchange;  ETFs are very cost-efficient compared to their mutual fund counterparts due to their structure and functioning; ETFs offer unparalleled flexibility due to traceability advantages;  ETFs offer diversification to the portfolio; What is an ETF? An ETF stands for exchange-traded fund (ETF). One single ETF is a basket of securities that can be bought and sold like mutual funds through a brokerage firm. ETFs track a specific index such as S&P, sector, commodity, or other assets. Much like stocks, ETFs can be traded on the market. How can you invest in ETFs from India? You can invest in ETFs in India via the EduFund App. You can download the App and set up a US account to start investing. Consult an expert advisor to get the right plan for you TALK TO AN EXPERT

In the previous article, we discussed saving for your child's education abroad. In this article, we will discuss 3 financial goals for millennial parents. The vast majority of parents in today's society are millennials. As a result, they are influencing parenting in the future. Parents of the new generation are overcoming obstacles by viewing their wants and goals from a new perspective.   Most needs and goals must be transformed into financial goals to be funded. If the financial goals are met within the allotted time frame, these needs will be met.  Young parenthood is never simple. Our generation, the millennials, must navigate a world that is fundamentally different from the one our parents experienced.   Housing costs are out of reach, interest rates are high, and job security is nonexistent. So let's look at three financial objectives that every millennial parent should prioritize. Source: pixabay Financial Goals for Millennial Parents 1. Emergencies It is crucial to set up money for emergencies. Millennial parents should think about setting up money for unplanned expenses. For unforeseeable occurrences, parents need to set up an emergency fund.  Such circumstances make it difficult to manage one's money effectively. Unexpected events could include anything from an accident to a catastrophe. There may be several circumstances, particularly when a child is involved when parents will incur unanticipated costs.   The potential economic impact of such unexpected costs is uncertain and unpredictable. Because it provides a safety net for unforeseen financial events, a well-framed financial plan is shockproof.   An intentional and systematic approach is necessary for financial planning. Financial objectives need to be specified in terms of their time horizon for investments and the sum of money needed to achieve them.   2. Education The majority of parents believe that the biggest expense is the expense of the education of their children. You do not want to provide your child with the best education possible, but that comes at a cost.   The annual cost of college and university is rising at an unprecedented rate. You will understand how crucial it is to save when you take a short look at the cost of sending your child to study abroad.   When attempting to achieve a long-term objective like schooling - investing regularly, regardless of the amount, in securities that tend to outperform inflation is crucial.   If parents take a proactive stance and make systematic investments from a young age, they can protect their child's future. Therefore, financial planning is key to achieving a goal as important as paying for a child's education.   3. Retirement Financial freedom is the ultimate objective. The most fulfilling long-term objective for anyone is saving money for their retirement. When you are young, retirement seems far away, but you'd be shocked at how much money you'd need to put up to live comfortably once your children have flown the coop.   Saving for retirement is essential because most of us won't receive a pension as our parents did. Planning for your retirement wisely is the best gift you can give your family.  Most people think they would have to scale back on their pre-retirement lifestyle once they enter the retirement phase. However, the expenses can stay the same with the right savings plan and well-prepared retirement budget.   Although managing finances as a parent may initially appear difficult, things get simpler with time. Just be sure to prepare ahead and conduct thorough research. FAQs Can you name one of the top 3 financial goals for Millennials? The top 3 financial goals for every millennial parent are building an education fund for their children, having a robust retirement plan, and finally having an emergency fund for unfortunate times and emergencies. What do millennial parents value? Millennial parents value quality education for their children above all material things. Quality education is the gateway to better and bigger opportunities. The only way to secure these opportunities is to prepare for them in advance. For example, creating an education corpus for your child's college or encouraging your child to take the right steps towards their desired career path with extra classes or internships. Are education costs too high for millennial parents? Yes, the education costs are higher than ever before. Most millennial parents struggle to provide their children with academic opportunities due to high costs and high competition. To ensure no parent struggles with education costs, the best route is to start investing early on for your child's future. Consult an expert advisor to get the right plan for you TALK TO AN EXPERT

In the previous article, we discussed emerging market ETFs. In this article, we will talk about financial planning for contingencies A contingency is the possibility of future adverse events such as a recession, natural disaster, fraudulent conduct, terrorist attack, or an epidemic.   COVID-19 is the perfect example of a contingency. Businesses were devastated by the coronavirus pandemic in 2020. Some let go of employees, some required many employees to work from home while others struggled to cope with the changing economic sphere. To counter contingencies, businesses and investors must adopt some extra safety precautions. Although you can plan for the contingencies, the form and breadth of such unfavorable events are rarely known ahead of time.   Companies and investors prepare for various scenarios by analyzing risks and putting preventive measures in place.   A well-thought-out contingency plan reduces the amount of money you might lose because of an unexpected adverse event.  What is a contingency plan?   A contingency plan or a contingency fund covers your day-to-day expenses in the event of a financial emergency, such as a job loss, medical expense, or any other unpleasant condition or occurrence that results in a temporary financial loss.   Let us take an example of what a contingency fund should look like. Say X needs Rs 50,000 to meet his monthly expenses. His household expenses are Rs 15,000, his child’s tuition fee is Rs 5000, his loan EMI is Rs 20,000, and some personal expenses at Rs 5000, which add up to a total of ₹50,000.   In this scenario, X would be good to set aside some money as a contingency reserve for his necessary monthly expenses. He needs to invest that money in a reasonably liquid product because it is held for an emergency.   How can he figure out how much money he needs to set aside as a rainy-day fund? As a rule of thumb, it should be enough to cover at least six months of his necessary monthly needs. To be on the safer side, this can be done for a year.   To establish his contingency, fund X can save rupees 25,000 a month for a year. He can also invest this money in a Flexi deposit or a liquid mutual fund rather than leaving it in a savings account.   Liquid funds offer better returns than bank savings and have no entry or exit loads.    Knowing that you have a contingency fund will assure you that you can keep your investments and financial planning on track, even if your regular cash flow stops or decreases momentarily. Source: Pixabay How to make financial planning for contingencies?   The steps involved in formulating a contingency plan are to analyze what risks you might face in the future. It could be a job loss, a shift of a job, or anything of that sort.   And by that, you need to create a contingency fund. Then, creating a fund will require you to cut your expenses for a few months.   For example, if you want to save 3 Lac rupees as a contingency fund. You must cut some of your monthly expenses and transfer them to a different account as a part of the contingency fund.   These are the two basic steps that need to be considered to fulfill this requirement. FAQs What is an example of a financial contingency plan? A contingency is the possibility of future adverse events such as a recession, natural disaster, fraudulent conduct, terrorist attack, or an epidemic. COVID-19 is the perfect example of a contingency. Businesses were devastated by the coronavirus pandemic in 2020. Some let go of employees; some required many employees to work from home, while others struggled to cope with the changing economic sphere. How do you create a contingency budget? The steps involved in formulating a contingency plan are to analyze what risks you might face in the future. It could be a job loss, a shift of a job, or anything of that sort. And by that, you need to create a contingency fund. Then, creating a fund will require you to cut your expenses for a few months. For example, if you want to save 3 Lac rupees as a contingency fund. You must cut some of your monthly expenses and transfer them to a different account as a part of the contingency fund. These are the two basic steps that need to be considered to fulfill this requirement. What is the main purpose of a contingency plan? Contingency plans are essential to help individuals during difficult times. A case of job loss, pandemic, or economic recession can hurt you if you don’t have a contingency plan. What is contingency planning in financial planning? A contingency plan or a contingency fund covers your day-to-day expenses in the event of a financial emergency, such as a job loss, medical expense, or any other unpleasant condition or occurrence that results in a temporary financial loss. TALK TO AN EXPERT

Let us start from the very basics and understand what mutual funds are. After that, we'll discuss how to invest in them and discuss the advantages and disadvantages of investing in mutual funds.   What is a Mutual Fund?  A mutual fund is a financial trust that collects funds from investors and invests them into different instruments like stocks, bonds, and other money market instruments.   Fund managers manage mutual funds – they make investment decisions on behalf of the people who have trusted them with their money.   Mutual Funds are of different types, like equity mutual funds, debt mutual funds, and hybrid mutual funds depending upon the investment proportion in debt and equity.   These different types of mutual funds vary in their risk and return potential. Mutual Funds are one of the most popular investment options today.   Invest in Mutual Funds Advantages of Investing in Mutual Funds 1. Advanced portfolio management When you purchase a mutual fund, you must pay a small fee as a part of your expense ratio. That fee is used to engage professional portfolio managers to buy and sell stocks, bonds, and other securities on your behalf – it is a tiny fee for professional assistance in managing your investment portfolio, which goes a long way in creating market-beating turns.   2. Liquidity An advantage of investing in mutual funds is the ability to redeem the units when you require them. Mutual funds, unlike fixed deposits, allow for flexible withdrawals.   However, issues such as pre-exit penalty and exit load must be taken into account before deciding to exit your position in a mutual fund.   3. Convenience and fair pricing Mutual funds are simple to purchase and comprehend. They usually have modest minimum investment values and are only traded once a day at the closing net asset value thus removing day-to-day price fluctuations and different arbitrage opportunities used by day traders.   4. Diversification An investment's Maybe. The value may or may not decrease or increase in tandem. When one investment's value rises, another's value may fall. As a result, the risk that the portfolio's overall performance would be erratic is low.  Diversification lowers the risk of putting together a portfolio, lowering the risks for investors. As mutual funds consist of a variety of assets, the interests of investors are protected even if there is a downfall in the value of other securities so purchased.   How to track the performance of mutual funds? Read More 5. Accessibility A big reason for the popularity of mutual funds is the easy accessibility from anywhere in the world.   An Asset Management Company (AMC) offers the funds and distributes them through different channels like brokerage firms, registrars, the AMCs themselves, online mutual fund investment platforms, and agents and banks.   This factor allows mutual funds to be available and easily accessible universally. Also, mutual funds are easy to buy and track performance and one-click investments.   6. Low lock-in period Tax-saving mutual funds have the most down-locking periods of only three years, which is lower when compared to the maximum of five years for other tax-saving options like FDs, ULIPs, and PPFs. Also, you will have the opportunity to stay invested even after completing the lock-in period.   Fits every financial goal: The best aspect of a mutual fund is that you can invest with as little as ₹500, and there is no upper limit for an investor.  Before investing in mutual funds, examining their income, expenses, risk-taking abilities, and specific investment goals is essential.   As a result, anyone from any walk of life is free to invest in mutual funds regardless of income.   7. Good tax-saving options Mutual funds are one of the best ways to save on taxes. Under section 80C of the Income Tax Act, equity-linked saving scheme (ELSS) mutual funds are eligible for a tax exemption of up to 1.5 lacs per year.   In India, all other mutual funds are taxable according to the type of investment and the fund's duration. For example, equity mutual funds and debt mutual funds are taxable at different rates.   Tax-saving mutual funds have the potential to out for performing other tax-saving products such as PPF, NPS, and tax-saving FDs in terms of returns.  Disadvantages of investing in mutual fund Mutual funds do not promise set returns, so you should always be prepared for the unexpected such as a drop in the value of your mutual fund. In other words, mutual funds are subject to a wide range of price changes.   Fund managers oversee all forms of mutual funds. A team of analysts may assist the fund's management in various circumstances. As a result, you have no influence over your money as an investor.   Your fund manager makes all significant decisions regarding your fund on your behalf. However, you can look into certain vital factors, including disclosure requirements, corpus, and overall investment strategy.   Diversification is a significant advantage of mutual funds. However, the problem arises when there is over-diversification.   Over-diversification can raise funds' running costs necessitate increased due diligence, and dilute the relative benefits of diversification.   A mutual fund's value may fluctuate as market conditions change. In addition, there are fees associated with professional mutual fund management which are not present when purchasing stocks or securities directly from the market.   When buying a mutual fund, investors must pay an entry load. When investors wish to exit from a mutual fund, providers charge an exit fee.  The performance of a mutual fund does not give investors enough information about the degree of risk that the fund faces.  As a result, it is just one of the metrics used to assess the company's performance, but it is far from being comprehensive.  How to invest in a Mutual Fund via the Edufund App?  Step 1: Log in to the Edufund website or the Edufund app.   Step 2: Complete your KYC and move ahead to create your investment account.   Step 3: Choose the option of mutual fund investments.   Step 4: Analyse your risk profile on the app by answering your household income and expense, the number of dependents you have, the highest level of maturity you have in terms of investments, your period of investment, and similar questions.  Step 5: After answering the above questions, you will know what type of investor you are and the degree of risk you might be willing to take.   The Edufund website or the Edufund app will suggest some mutual funds you might want to invest in, with a recommended SIP value.  Step 6: Choose the fund and start investing. FAQs What is a Mutual Fund? A mutual fund is a financial trust that collects funds from investors and invests them into different instruments like stocks, bonds, and other money market instruments. How to invest in a Mutual Fund via the Edufund App? Step 1: Log in to the Edufund website or the Edufund app.   Step 2: Complete your KYC and move ahead to create your investment account.   Step 3: Choose the option of mutual fund investments.   Step 4: Analyse your risk profile on the app by answering your household income and expense, the number of dependents you have, the highest level of maturity you have in terms of investments, your period of investment, and similar questions.  Step 5: After answering the above questions, you will know what type of investor you are and the degree of risk you might be willing to take.   The Edufund website or the Edufund app will suggest some mutual funds you might want to invest in, with a recommended SIP value.  Step 6: Choose the fund and start investing. What are the different types of mutual funds? The different types of mutual funds are Debt, Equity, and Hybrid Funds. There are many more divisions within mutual funds that investors should check before investing their money. TALK TO AN EXPERT