Starting a Mutual Fund investment


chiro3110

Member
Disciple
Hi,
I’m actually wanting to start investing in a mutual fund... (SIP I guess?). Can anyone help me with a quick crash course on it? Something in lines of the following... (thanks a ton if you add something more!)

1. Can I start it up online? If yes, your recommendation of the financial institution?

2. How are the payments made? Is it monthly deducted from my account or up to me how much I want to contribute ?

3. What about withdrawing? Is there any vesting period that doesn’t allow withdrawal?

4. I hear a lot people creating a portfolio.. like put some money in Low Risk low yield, High Risk High Yield.. etc. How do I go about that? Or is it automatically done by the fund manager managing that fund ?

Sorry if some of the questions doesn’t make any sense... as mentioned I’m very ignorant to mutual funds.

Thanks in advance!
 

belictony

Member
Disciple
Hi,
I’m actually wanting to start investing in a mutual fund... (SIP I guess?). Can anyone help me with a quick crash course on it? Something in lines of the following... (thanks a ton if you add something more!)

1. Can I start it up online? If yes, your recommendation of the financial institution?

2. How are the payments made? Is it monthly deducted from my account or up to me how much I want to contribute ?

3. What about withdrawing? Is there any vesting period that doesn’t allow withdrawal?

4. I hear a lot people creating a portfolio.. like put some money in Low Risk low yield, High Risk High Yield.. etc. How do I go about that? Or is it automatically done by the fund manager managing that fund ?

Sorry if some of the questions doesn’t make any sense... as mentioned I’m very ignorant to mutual funds.

Thanks in advance!
You can start up online. For ease of use and investing, Groww app can be used.

payments will be deducted monthly from your account on a certain date

tax saving funds have lock in period of 3 years and withdrawal won’t be possible within 3 years.

you still need to research on which mutual fund to invest. A mutual fund would have debt and equity component.While debt guarantees a return, equity doesn’t. High yielding MFs invest in risky stocks as risk and return goes hand in hand.. so first determine the period for which you want to invest and when you plan to withdraw (1 year or 2 years or even 10 years).. select the MFs according to your comfort on risk (high yielding funds invest in risky Stocks)

Happy Investing!!!
 

letmein

Well-Known Member
Adept
1) Yes. There are 3 ways:
  • Register on the AMC site (eg. HDFC, Kotak, UTI) and transact in the fund you want to invest. Drawback is that you need to create multiple accounts if you want to invest in multiple AMCs.
  • Register on MFUtlilities site and invest. MFUtilities is run by AMFI, bascially a body of all mutual funds in India. Drawback is that the site is rather user-unfriendly and archaic.
  • Register on a direct funds platform like Kuvera, Groww, PayTM money etc. I recommend this because the UI and UX is better. I personally use Kuvera, have heard good things about Groww and PayTM as well.
Do note that you need to be KYC registered. I believe PayTM did your KYC online previously.

2) You can make a SIP or a lumpsum investment. SIP is deducted from your account automatically. You can specify the frequency, eg. weekly/ fortnightly/ monthly.
Lumpsum is nothing but a manual SIP. You will need to select the fund and amount you want to invest. The advantage of SIP is that you can set it and forget it.

3) Tax saving ELSS funds have a lock-in period of 3 years. Some retirement funds have a lock-in period of 5 years. These details would be clearly mentioned in the fund before you invest.
However, some funds have an additional 'exit load'. Basically, if you withdraw any money before a specified period (can vary from 7 days to 1 year), they will charge an amount (say 1%) on the withdrawal. Again, these details would be clearly mentioned in the fund before you invest.

4) This is a more complex question. I suggest you read up on investing concepts before you create a portfolio.
In short, the portfolio should be tailored to your goals and risk appetite.

Equity = high risk, potentially high returns
Debt = low-moderate risk, potentially low-moderate returns

For instance, if you have 5 lakhs but you know that you need the money in 2 years (eg. for wedding or for buying a car) you should not invest in equity. Investing in debt mutual funds which are low risk (or even keeping the money in a bank FD) would be better.

An ideal portfolio will be a mixture of several assets, this can be equity (domestic and international), debt, cash, gold, real estate and even crypto.
 

skoka123

Well-Known Member
Adept
I suggest that you first analyze your risk appetite and milestone goals (depends on your age and horizon of investment and milestones such as Buying a house, Wedding, Children education, Their wedding, retirement planning etc...). No offence to the members but TE is not the place to ask for advice (Birds of the same feather flock together). You need to look for advice from experts. I suggest you spend time on reading / viewing concepts of investments.

See: https://www.youtube.com/results?search_query=c+a+rachana+ranade+mutual+fund. Her videos are dumbed down enough for us to understand. Some of them could be paid videos but then once you get an idea you can search for more free content on Youtube or you might even find it worth paying.

Good luck.
 

chiro3110

Member
Disciple
Happy Investing!!!
Thank you for your head up.. will keep them in mind..

See: https://www.youtube.com/results?search_query=c+a+rachana+ranade+mutual+fund. Her videos are dumbed down enough for us to understand. Some of them could be paid videos but then once you get an idea you can search for more free content on Youtube or you might even find it worth paying.
@skoka123 Thanks for the recommendation, I will watch her videos before finalizing.



1) Yes. There are 3 ways:
Do note that you need to be KYC registered. I believe PayTM did your KYC online previously.

2) You can make a SIP or a lumpsum investment. SIP is deducted from your account automatically. You can specify the frequency, eg. weekly/ fortnightly/ monthly.
Lumpsum is nothing but a manual SIP. You will need to select the fund and amount you want to invest. The advantage of SIP is that you can set it and forget it.

3) Tax saving ELSS funds have a lock-in period of 3 years. Some retirement funds have a lock-in period of 5 years. These details would be clearly mentioned in the fund before you invest. However, some funds have an additional 'exit load'. Basically, if you withdraw any money before a specified period (can vary from 7 days to 1 year), they will charge an amount (say 1%) on the withdrawal. Again, these details would be clearly mentioned in the fund before you invest.

4) This is a more complex question. I suggest you read up on investing concepts before you create a portfolio.
In short, the portfolio should be tailored to your goals and risk appetite.

Equity = high risk, potentially high returns
Debt = low-moderate risk, potentially low-moderate returns

For instance, if you have 5 lakhs but you know that you need the money in 2 years (eg. for wedding or for buying a car) you should not invest in equity. Investing in debt mutual funds which are low risk (or even keeping the money in a bank FD) would be better.

An ideal portfolio will be a mixture of several assets, this can be equity (domestic and international), debt, cash, gold, real estate and even crypto.

@letmein Thank you so much for such a nice and detailed approach.

1. I was seeing Kuvera, seems alright, gives a list of funds and their performance where I could invest. Sure, remembering, the Equity and Debt difference. As you mentioned you use Kuvera, have you till date face any issues ? What about the safety, say incase they go out of business, so is my money gone then? I'm actually not at all comfortable with PayTM with any of it. (kind of comes like jack of all trades, and I try to refrain from it. even PayTM wallet no, prefer BHIM over it actually)

2. Regarding the SIP/Lumpsum, thanks for the clarification. The thing is with Corona and my job profile not allowing work from home, it gets a bit challenging. So as per your thought, when I get paid, probably just make lumpsum. So can I make lumpsum deposit on the same fund several times ?

3. This lock in period varies from fund to fund or the is like Kuvera has some directive regrading this?

I think with your inputs and some of the videos mentioned earlier, should be able to make a sound decision.

Thanks again!
 

letmein

Well-Known Member
Adept
Thank you for your head up.. will keep them in mind..
@skoka123 Thanks for the recommendation, I will watch her videos before finalizing.
@letmein Thank you so much for such a nice and detailed approach.
1. I was seeing Kuvera, seems alright, gives a list of funds and their performance where I could invest. Sure, remembering, the Equity and Debt difference. As you mentioned you use Kuvera, have you till date face any issues ? What about the safety, say incase they go out of business, so is my money gone then? I'm actually not at all comfortable with PayTM with any of it. (kind of comes like jack of all trades, and I try to refrain from it. even PayTM wallet no, prefer BHIM over it actually)
2. Regarding the SIP/Lumpsum, thanks for the clarification. The thing is with Corona and my job profile not allowing work from home, it gets a bit challenging. So as per your thought, when I get paid, probably just make lumpsum. So can I make lumpsum deposit on the same fund several times ?
3. This lock in period varies from fund to fund or the is like Kuvera has some directive regrading this?
I think with your inputs and some of the videos mentioned earlier, should be able to make a sound decision.
Thanks again!

Only once had I faced an issue wherein I had paid the amount, but the transaction had not reflected in my portfolio. I had written to Kuveram and the had rectified it. I think the major advantage of such portals (and I not suggesting only the one I am using) is that they will reach out to your AMC on your behalf.

What about the safety, say incase they go out of business, so is my money gone then?

I will not give you a 100% guarantee, but it is 99.99999% unlikely. Kuvera/ Groww/ PayTM are the middleman. Even if they go out of business, you can still log onto your AMCs site (eg. Kotak, HDFC, UTI etc.) and check or redeem your investment. Every time you invest, or redeem your moolah you SHOULD revive a confirmation from the AMC, apart from Kuvera/ Groww/ PayTM. Also, every month, you will reeive an account statement from NSDL or CSDL..
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Thank you for your head up.. will keep them in mind..

2. Regarding the SIP/Lumpsum, thanks for the clarification. The thing is with Corona and my job profile not allowing work from home, it gets a bit challenging. So as per your thought, when I get paid, probably just make lumpsum. So can I make lumpsum deposit on the same fund several times ?

3. This lock in period varies from fund to fund or the is like Kuvera has some directive regrading this?

I think with your inputs and some of the videos mentioned earlier, should be able to make a sound decision.

Thanks again!

2. So can I make lumpsum deposit on the same fund several times ?
Yes

3. This lock in period varies from fund to fund or the is like Kuvera has some directive regrading this?
The fund you are investing in should mention this very clearly. Again, this has nothing to do with Groww/ Kuvera/ PayTM etc. Y
 
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chiro3110

Member
Disciple
The fund you are investing in should mention this very clearly. Again, this has nothing to do with Groww/ Kuvera/ PayTM etc. Y

Thanks a lot for your answers. I finally went ahead with Kuvera, got the KYC done and started with a small lumpsum.
The interface and ease looks good and easy. Will keep learning and hopefully investing more..
 

vindal

Member
Recruit
Hi,
I’m actually wanting to start investing in a mutual fund... (SIP I guess?). Can anyone help me with a quick crash course on it? Something in lines of the following... (thanks a ton if you add something more!)

1. Can I start it up online? If yes, your recommendation of the financial institution?

2. How are the payments made? Is it monthly deducted from my account or up to me how much I want to contribute ?

3. What about withdrawing? Is there any vesting period that doesn’t allow withdrawal?

4. I hear a lot people creating a portfolio.. like put some money in Low Risk low yield, High Risk High Yield.. etc. How do I go about that? Or is it automatically done by the fund manager managing that fund ?

Sorry if some of the questions doesn’t make any sense... as mentioned I’m very ignorant to mutual funds.

Thanks in advance!

(Although this is not related to any question of yours)
For some good matrial, you can visit Zerodha Varsity. It will help you in understanding some topics involved with investing quite nicely.
After that you can use tradingview to keep an eye on the stocks which are present in the fund's portfolio.
 

6pack

Well-Known Member
ex-Mod
Groww shows different higher nav (₹10 more) than even amc and cams. Programming error I guess. Makes me double think about having an account on it. Didn't complete my profile there and maybe I'll just delete my account. Even importing investment from my google mail account failed for some reason. Their search is not that good. Does not show all available mutual funds. I think they are spending lots of money on just advertising on Play Store and YouTube.

Where can we see latest today's nav for a mutual fund? Both the amc and cams are showing nav of 7th October instead of today - 8th October.
 

skoka123

Well-Known Member
Adept
Groww shows different higher nav (₹10 more) than even amc and cams. Programming error I guess. Makes me double think about having an account on it. Didn't complete my profile there and maybe I'll just delete my account. Even importing investment from my google mail account failed for some reason. Their search is not that good. Does not show all available mutual funds. I think they are spending lots of money on just advertising on Play Store and YouTube.

Where can we see latest today's nav for a mutual fund? Both the amc and cams are showing nav of 7th October instead of today - 8th October.
Today's NAV comes at the end of the day. The NAV is calculated based on the closing price of all the stocks and debts held in the portfolio as of the end of the day. You could look up the NAV on AMFI website.
Download Complete NAV Report in Text Format
 

6pack

Well-Known Member
ex-Mod
Today's NAV comes at the end of the day. The NAV is calculated based on the closing price of all the stocks and debts held in the portfolio as of the end of the day. You could look up the NAV on AMFI website.
Download Complete NAV Report in Text Format

hell. I remember one of my colleagues at office downloading this every day and opening it in excel and doing some stuff on it. i didn't work in mf back office but saw people doing stuff there.
 

6pack

Well-Known Member
ex-Mod
ICICI Prudential Equity & Debt Fund (Growth)


On ICICI site its 126.36 Even CAMS app shows 126.36
 
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letmein

Well-Known Member
Adept
ICICI Prudential Equity & Debt Fund (Growth)


On ICICI site its 126.36 Even CAMS app shows 126.36

Select "Direct Plan - Growth" from the drop down and the NAV will be the one shown in Groww. The 126.36 is for the regular plan.
 

6pack

Well-Known Member
ex-Mod
In the ICICI app and cams app both show 126.36 for my account after logging in.

Edit: I got it. I'm a bit dumb. I thought I had invested in the direct plan. Saw my folio and it was regular plan. Why so much difference? Does ICICI prudential pocket the rest as fees?
 

letmein

Well-Known Member
Adept
Then you have invested in the Regular plan. Groww (and other platforms like Kuvera or PayTM) offer only direct plans to invest in.
 
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letmein

Well-Known Member
Adept
In the ICICI app and cams app both show 126.36 for my account after logging in.

Edit: I got it. I'm a bit dumb. I thought I had invested in the direct plan. Saw my folio and it was regular plan. Why so much difference? Does ICICI prudential pocket the rest as fees?

Regular plans always have higher expense ratios (basically the TER %) than direct plans, and hence the NAV of a regular plan is always lower. The higher expenses are paid out as commissions to agents/ distributors. It is highly recommended to switch to direct plans.
 

skoka123

Well-Known Member
Adept
In the ICICI app and cams app both show 126.36 for my account after logging in.

Edit: I got it. I'm a bit dumb. I thought I had invested in the direct plan. Saw my folio and it was regular plan. Why so much difference? Does ICICI prudential pocket the rest as fees?
I haven't been investing MFs for almost 10 years now so I may be missing some facts, but here's the thing. A Regular MF will give you dividend at the end of qtr/year. You should treat it like interest from your Saving bank account. A Growth fund reinvests the profits into the same fund. Invariably the growth funds will have a higher NAV than regular funds.

I stand corrected: Please see the post below from @letmein .
 
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letmein

Well-Known Member
Adept
A Regular MF will give you dividend at the end of qtr/year.

That is incorrect. I think you are mixing 'regular vs direct' with 'growth vs dividend'.

Even direct MFs have option of dividend payout. For instance for the ICICI fund 6pack mentioned, there are 5 regular plans (4 of which have dividend payout options) and 5 direct plans (which also have 4 have dividend payout options).

Choosing dividend payout or growth is up to you (though I believe that the general consensus is that growth plans are better). But in all cases direct plans are better than regular plans

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skoka123

Well-Known Member
Adept
That is incorrect. I think you are mixing 'regular vs direct' with 'growth vs dividend'.

Even direct MFs have option of dividend payout. For instance for the ICICI fund 6pack mentioned, there are 5 regular plans (4 of which have dividend payout options) and 5 direct plans (which also have 4 have dividend payout options).

Choosing dividend payout or growth is up to you (though I believe that the general consensus is that growth plans are better). But in all cases direct plans are better than regular plans

View attachment 91664
Correct!!! My bad. These regular vs direct must be new development. Until few years ago the only way to buy directly was through the AMC website. In the good old days Dividend payout MFs were the ones regularly preferred over the Growth (Type A and B in US).
 

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