Mutual Funds are the best tools for long term wealth creation. Investors in Mutual funds get the twin benefits of diversification and also management of their funds through professionals.
SEBI introduced reforms in the mutual fund sector in 2013. Thanks to these reforms, Direct Mutual Fund schemes are gaining popularity not only with just corporate or high net worth individuals but also with the retail investors.
What are Direct Mutual Fund Schemes?
Although the Asset Management Companies (AMC) allowed this much before the year 2011, direct investment in mutual funds has become famous only recently. Direct mutual funds plans are those where AMC / mutual fund Houses do not charge distributor expenses / trail fees / transaction charges. ‘Direct’ means no intermediaries.
Direct mutual fund schemes have lower Expense Ratio than that of Regular plans. This is the main reason why the NAV of a direct plan will be higher than the NAV of a regular plan of the same scheme.
Direct Mutual Fund Plan Vs Regular Mutual Fund Plan
Let us now understand the differences between Regular and Direct Plans in Mutual Funds with an example;
In the above example, we can observe that HDFC Balanced fund has four options, 2 regular schemes and 2 direct schemes. Kindly note that ‘D’ means ‘Dividend Plan’ and it does not mean ‘Direct Plan’. (G stands for Growth option.)
- Expense Ratio : The Direct plans have lower expense ratio than Regular plans. The expense ratio of HDFC Balanced fund – Regular plan is 2.07% (as on Mar 2015) . Whereas, the expense ratio of HDFC Balanced fund – Direct Plan is 1.20%.
- NAV : The Net Asset Values of Regular and Direct plans of the same scheme differ. The NAV of Direct Plan will be higher than the NAV of a Regular plan. The NAV of HDFC Balanced fund – Regular plan is Rs 109.85 whereas the NAV of HDFC Balanced fund – Direct Plan is Rs 111.97.
- Returns : The difference in returns generated by a Regular plan and a Direct plan of a scheme is expected to range between 0.50 and 1 percent. This difference will compound year on year. The last two year CAGR (Compounded Annual Growth Rate) of HDFC Balanced fund – Direct fund (monthly SIP) is 22%. Whereas, HDFC Balanced fund – Regular plan has given return of around 20.97% during the same period.
In the case of both regular and direct mutual funds, the investment objective, asset allocation pattern, risk factors and the investment mix are same. A scheme’s portfolio will be the same for both, Regular plan and Direct Plan.
How to invest in Direct Mutual Fund Plans?
- You can buy Direct plans online by visiting respective mutual fund house websites. For example, below screenshot has been taken from Reliance Mutual Fund’s website. When you are making an online investment, you can find two options ie ‘direct’ and ‘through distributor’. Select ‘Direct’ if you would like to invest in Direct plan of a scheme.
- You can also invest in direct mutual fund schemes through MF Utility.
- If you are investing in MFs offline (physically) then you just need to mention or tick the option ‘Direct plan’ in Mutual Fund Investment form. After this, even if the agent or the distributor of the scheme puts his/her ARN code, they will not get any commissions from the investment.
- If you do not find ‘Direct plan’ option in application form, you can mention ‘DIRECT’ in the ARN column. Even if the agent code is missing in the ARN column, it will become a direct plan by default.(ARN means AMFI Registration Number. ARN is the unique code which is used to identify the MF agent / advisor.)
(KYC compliance is mandatory to invest in mutual funds. If your PAN is not KYC compliant, you may get eKYC done now. eKYC is a new online facility offered by some of the AMCs.)
How to switch from regular to direct mutual fund plans? (for existing MF investors)
If you are an existing investor of a regular mutual fund scheme, and would like to convert your mutual fund from regular to direct plans, then you have to opt for a ‘Switch’.
In order to convert an existing regular fund to a direct fund, you need to submit ‘switch request’ to the concerned Asset Management Company (fund house). Based on your written switch request, the units under Regular plan will then be converted as Direct plan units.
For example : You can download and submit forms like ICICI MF’s Regular to Direct Switch Form & HDFC MF’s Regular to Direct Switch Form format.
Regular to Direct – Switch – Exit Loads & Tax Implications
If you are switching from Regular scheme to Direct scheme, this is considered as normal redemption (exit) only. Such transfer shall be considered as a Redemption (from regular plan) and a fresh investment (into direct plan). So ‘Exit Loads’ (if any) will be applicable. However if you have invested in Regular fund without mentioning any distributor code then ‘exit load’ is not applicable.
Since the ‘switch’ is considered as normal redemption request (exit), you have to be aware of the tax implications. Based on whether the capital gains are short term or long-term, respective taxation rules are applicable. Kindly read my article on MF capital gains taxation rules for more information.
Also, TDS is applicable on the ‘switch requests’ submitted by NRIs.
Important points & my Opinion on Direct Mutual Funds
Below are some of the important points on Direct Mutual Funds;
- Kindly note that all types of mutual funds can be switched except Exchange Traded Funds.
- For ELSS or any mutual fund schemes that have a lock-in period, you are eligible to move to Direct Plans once units complete their lock-in period. Your investments into direct plans will have a fresh lock-in of 3 years.
- Kindly note that investing through ‘ICICI Direct’ or any online distribution platform does not mean you are investing in Direct plans of mutual funds.
- Note that buying from a Bank, such as HDFC Bank, means you are using a distributor. Even if you buy an HDFC Mutual Fund, HDFC Bank acts as a distributor. The only way to buy “Direct” is to have “Direct” in the fund scheme name. If the scheme doesn’t say “Direct” in your statement report, you are paying commissions.
- Difference in Investment returns generated between Regular and Direct plans is the highest in Equity oriented Schemes. In debt funds, the expense ratio of the regular plans is not too high hence the difference in returns is lower.
- Direct plans of equity funds are not rated / ranked by the Rating agencies as they have not completed three years.
- Fund houses like HDFC, ICICI Prudential, Reliance, Birla Sun Life and Franklin Templeton have over 20% of equity assets in direct plans coming from retail investors.
The investment return generated by a Direct mutual fund scheme can be say 1% higher than the returns offered by a Regular plan. Even a difference of this 1 percentage point can balloon into a huge gap due to compounding in the long term.
For example : If you invest Rs 1 Lac in a Regular plan which generates say 14% return in 15 years, the accumulation amount can be Rs 7.13 Lakh. The same Rs 1 Lac if you choose to invest in a Direct plan which generates say 15% return in 15 years, the accumulation amount can be Rs 8.13 Lakh. This extra 1 percent difference in the return can create a big impact in the final accumulated value over a long period.
If you invest in Direct mutual fund plans through multiple fund house websites, tracking your MF portfolio can be a bit challenging task. In this scenario, you can create dummy portfolio on web portals like Economic times or moneycontrol.com and can track your portfolio online. One more option is to invest in Direct plans offered by various fund houses through common platform like Mutual Fund Utility.
Though Direct Mutual Fund plans give higher returns, they are meant for investors who know which funds to buy. If you are not comfortable or do not have the expertise to identify good funds as per your financial goals, it is better to take the services of a Mutual Fund agent. You may also consider taking the help of a fee-only Financial planner to buy direct plans.
In the race to get higher returns, it could be disastrous if you invest in a wrong Direct mutual fund product and make 10% lower returns than its fund category. Instead you can invest in a suitable Regular plan through an advisor who can guide you. A Direct Plan will work well if you have the required knowledge and infrastructure.
(You may read my article : ‘Best & Top Equity Mutual Funds‘.)
I believe if you are making fresh mutual fund investments or creating new SIPs, you can surely consider investing in Direct mutual funds provided you know which funds to buy. While the process may look little complicated in the initial stages, it should be easy while investing in subsequent schemes.
For the existing investments, be aware of the exit loads, tax implications and applicability of lock-in period (if any) before you switch from Regular plans to Direct mutual fund plans.
Do you invest in Direct plans of Mutual funds? Kindly share your views and comments.
Continue reading : ‘Mutual Fund Direct Plans Vs Regular Plans | Comparison of Returns & Analysis‘
(Image courtesy of Stuart Miles at FreeDigitalPhotos.net) (References : Moneycontrol, Valueresearchonline & Economic Times.)
Why Dividends in Direct plans & Regular Plans of MF Schemes can be different? Do regular Plans pay more dividend?
Switching to Direct Mutual Funds From Regular MFs? Keep in mind these handy tips!
MF Utility – Online platform for Mutual Fund Investments
[…] Direct Mutual Fund Plans : Details & Benefits […]
Hi Sreekanth,
I have SIP for Tata Hybrid Equity Fund – Regular plan – Growth.
I have been investing in it through SIP for last 3 years. But the returns are not good at all. Please suggest where should I switch by stopping the SIP in this plan
Regards
Mandar
Dear Mandar,
You may switch to other better performing balanced (Hybrid) fund like HDFC Hybrid equity fund.
Kindly read :
* Why your Best Mutual Fund Schemes may not remain as ‘the best’? | Categorization & Rationalization of MFs
* Best Mutual Funds 2018-19 | Top Equity Funds post SEBI’s Reclassification
Hi, I am first time investor. Interested in tax saving MF direct plans. Can I use MyCAMS app? Will they charge me for this service.
Or any other alternatives
Dear Amar,
You can opt for MyCAMS. MyCams allows you to invest in both – Regular & Direct Plans. So choose based on your preference.
You may also check out MF industry sponsored platform MFUTILITY as well.
Hi i have invested in following MF since 2017 through a distributor
ICICI PRUDENTIAL BALANCED FUND – GROWTH
SBI BLUE CHIP FUND-REGULAR PLAN GROWTH
DSP BLACKROCK MIDCAP FUND – REGULAR PLAN – GROWTH
HDFC TOP 200 FUND – GROWTH OPTION
Now i want to invest DIRECTLY, what are the issues involved and how to go about it.
Thanks
Dear Rajeev ..
Kindly read :
Switching to Direct Mutual Funds From Regular MFs? Keep in mind these handy tips!
Why your Best Mutual Fund Schemes may not remain as ‘the best’? | Categorization & Rationalization of MFs
Hi Sreekanth,
I am a first time investor and want to start the SIP for SBI blue chip direct plan through MyCams .
1)Does myCams platform allows to invest in SIP for this fund ? Because when I selected this fund this asked me to invest Rs 5000 which is the minimum investment. This is because it is MF and not SIP. Can you guide me how to start SIP through myCams.
Dear Raj,
Yes, you can invest in this fund through myCams.
The minimum first investment for this fund is Rs 5,000 (as per fund house) and then you can set up SIP (make additional investments) with a minimum amount of Rs 1,000.
An Excellent Article Indeed…
Learned a lot…..Thanks
Thanks Sreekanth for this information.
Dear Sree
I want your help here. I have two questions.
I already have a portfolio which is mix of regular and direct NAV with lumpsum investments. However I have four SIPs in direct NAV. All of these were purchased in the offline mode. I was maintain the portfolio in a excel file but that was tedious process. I have registered on the CAMS website and now I get statement once a month which is generally incorrect. If I book profits they show it as complete redemption. So I can’t rely on their statement anymore. I want to maintain an online portfolio where I can manage the existing investments in DIRECT nav and add more in DIRECT nav.
2. Can you suggest any names. I am told scripbox, investza, fundsindia etc but I don’t their reliability as a distributor. Plus since I have spent some time in the field I am actually not looking for advise, but only the platform to buy and sell. Platforms like ICICI Direct offer great services but only to buy regular mutual funds.
Waiting for your reply
Robin
Dear Robin,
Have you checked MF Utility platform?
Hello Sreekanth,
Thanks for your wonderful post. It has confirmed my understanding that Direct Plans for MF are better than Regular Plans and it is worth switching to direct plans if you are knowledgeable enough to select your funds.
I still have some queries and I would be happy if you can clarify them.
I have a 3 in 1 online trading account with ICICI Direct. I have invested in 5-6 SIPs in different AMCs @Rs.1K/SIP/month for the last 2 years.
Now, if I want to switch over to direct plans with AMCs directly, can I use the same Demat a/c that I had with ICICI Direct ? Or should I open a new Demat a/c ?
Also, will I be able to do all the transactions and see my portfolio online 24/7 with Portals such as MF Utility etc.?
Thanks & Regards
Prabhu
Dear Prabhu,
Having Demat account is not mandatory. However, you may use same Demat account.
As per MFU, it is possible to track all your funds.
You may read their FAQs..
Dear Srikanth,
Could you please help me sort out the following scenario.
I have recently invested in 5 Mutual funds SIP, via my distributor/broker, 1000 INR per month for each fund in the SIP, and all 5 are regular plans. I later heard about the direct plan and got to read your article. Now that I have these 5 SIPs running, is it possible to switch from these regular plans for all SIPs to direct plan/schemes ? I have done a bit of research myself, and here is what I have got:
1. I reached out to my distributor and told them I need to switch to direct plan, they said minimum investment for direct plan is 2 lakhs, and also SIPs don’t have direct plans. I am not very sure if this is correct, may be you can help.
2. I reached out to the respective AMCs of the 5 funds which I have invested for help, since I was unable to register in their Websites for statements. The response from AMCs was that the mutual funds may be held in demat mode that could be the reason. Upon further enquiry and checking cdsl statements, I realized all my SIPs are in demat form. And when I asked my distributor to convert this to physical form, they said its not possible, the only way out is to stop all the SIPs and start again. Is that true ?
Appreciate your opinion here, I hope your expertise can help me decide whether I can convert my existing 5 SIPs to direct plans, which is the goal here.
Dear Anoob,
1 – Sorry to say that your distributor is absolutely incorrect !
2 – you can switch from a regular plan to a direct plan. It is entirely up to you to decide whether you want to inform the mutual fund advisor. However, be sure to opt choose the direct option while making the switch online. If you are doing it offline, your application form should clearly state ‘direct’ after the name of the scheme and also in the place of ARN code. Though many mutual fund houses have stopped levying exit load on switching to direct plan from the regular plan of the same scheme, you should check whether your fund house also follows the same policy. You should also consider whether the switching will invite any capital gains taxes as switching is considered a redemption from the existing plan and a new purchase in the new plan. You should consider these two aspects before taking a final call.
One more option is, to discontinue existing SIPs and start investing in same funds but Direct plans through Fund house websites or through online platforms like MF Utility.
Thank you very much for your prompt response.
Just FYI, I called up these AMCs in the meantime and enquired about switching these 5 SIPs to direct plan, but they said since the MF units are allocated in demat form, I need to first rematerialize them, stop the SIPs and start in direct plan again.
The only question I have is whether it is worth it to terminate these 5 SIPs, rematerialize them and start the direct plan of these 5 SIPs separately, considering the SIP processing fees have already paid off. Appreciate if you could just provide your thoughts here. I know in the long run, there is a huge margin that i may lose but I am also thinking about convenience here.
Dear Anoob,
Instead as suggested, you may just stop future SIPs in these regular plans and just hold on to the current units.
Set up new SIPs in the same schemes but Direct plans and continue your investments.
Hi Sreekanth,
First of all, thanks a lot for creating such a nice blog for new investors like me.
I’m planning to start a Mutual Fund Investment in SIP mode for atleast 10 years duration. Now I have few questions:
1. You have mentioned about CAMS and one other online platform for direct investment. Which one is more convenient for new investors and is there any transaction fee or agent fee involved?
2. Like I mentioned I want to invest for long term: Is it a good to have 40% is mid-small cap fund & 60% in large cap/blue chip fund? Is it a good idea? If not please suggest a better one or if its good please suggest few funds in those categories.
Thanks, Sunil.
Dear sunil,
1 – MF Utility platform is industry sponsored one and no fees/charges are applicable for using this one. Other platforms may levy certain subscription charges based on the value added features they provide.
2 – For long-term, you may allocate more monies to Midcap and diversified cap funds.
Kindly read :
What are Large cap / mid cap funds?
Best Equity funds
How to pick right mutual fund scheme?
Dear Sir,
May I buy mutual funds in direct mode from CAMS office? If yes, is there any additional charge I have to pay to the CAMS? Please guide.
Thank you.
Dear Chatterjee .. Yes, you can buy Direct plans from them, no additional fee is involved.
Kindly note that you need to check ‘Direct’ option in application form.
Thank you Sir, for your reply.
Hello,
I have been investing via FundsIndia in Quantum LT Equity Fund-Direct (G). Now according to new requirements distributors cannot invest in Direct plans, hence I have been asked to switch to Regular, and they automatically started a regular plan for me from my SIP in April.
What should I do with my existing direct MF which I am investing since last 4 years?
I want to continue in direct plan, can I go to quantum MF and continue investing in the same folio as a SIP?
Or should I switch and move all my money from Direct to regular plan in FundsIndia. Will I loose money in this, as I think this will be like a new investment, and I would end up buying new NAVs for the regular plan, from my direct money? Please advise.
Dear Abhi,
Yes, you can visit Quantum amc website and can make SIP under the same Folio number.
There is no need to switch from Direct to Regular.
Hi Sree,
Thanks for wonderful post on Direct Funds over Distributors.
I already start investing with Scripbox, however I want to invest my future SIPs in direct mutual funds.
1. Can I stop the existing distributor SIP and start fresh SIP in direct fund? I can leave my money in existing SIPs for longer time as I don’t need immediately.
2. Can I stop my current SIP and exit after 5 years as these are Equity schemes?
Regards,
Vasu
Dear Vasu,
1 – Yes, you may do so.
2 – Yes, you are allowed to do so..
Read : MF Utility online platform for direct mutual fund schemes..
“I believe if you are making fresh mutual fund investments or creating new SIPs, you can surely consider investing in Direct mutual funds provided you know which funds to buy. ” – Can you elaborate? What do you mean by which funds to buy?
Dear Srejith ..The funds that meet your requirements, the ones which you believe that are suitable as per your financial goals, investment objectives & time-frame..
Hi,
I am looking at a investment of 20,000 in mutual funds. I constantly go through your articles and have certain funds in my mind picked from your article on best MF for 2017. Can you suggest me a portfolio which has a mix of ELSS (tax saving) & other funds. My risk appetite is low. . I want to go for direct plans. Will that be fine..??
Dear NJ,
You may go through below articles,
Best Equity funds.
Best ELSS funds.
My MF portfolio.
How to select right mutual fund scheme?
Hi Sree,
Last year 30th of March, I read your blog and invested in Axis Long Term Equity Fund – Direct Plan (G) on the same day. Now it is really performing good. But again for the current financial year FY16-17, I forget to do SIP and I have only 10 more days left to invest. My goal is to invest 1.3 lakhs in ELSS as I don’t have any other investments under 80C. I am ready to take the highly risk funds. But I am confused with several blogs and websites and habituated to read only your blogs. Please suggest me some safe & good returning ELSS funds for a lock in period of 3 or 5 years.
Dear Vikram,
You may consider Franklin tax shield fund and suggest you to remain invested for at least 5 year period.
Suggested article: How to select right mutual fund scheme?
Form next FY 2017-18, kindly set up SIP from April 2017 itself and do not wait till last month of the FY.
Thank you so much for your quick reply Sree. Also along with Franklin tax shield fund, may I consider ‘DSP BlackRock Tax Saver Fund – Direct Plan (G)’ to invest today?
Your articles are really helpful and it is highly appreciated.
Sree,
I was about to do some lump sum investment in Franklin today and came to know that couldn’t perform it as I am paying tax in U.S. So could you please suggest me any other good tax saving fund under direct investment option. Thank you.
Dear Vikram ..Kindly read my latest article @ Best Tax saving ELSS mutual funds..
Dear Sree,
Thank you for your reply. As usual, you are rocking and the article was helpful.
Thank you dear Vikram.
Kindly share the articles with your friends and keep visiting ReLakhs 🙂
Hello Sreekanth, I’m Planning to start Below SIPs direct plans from Next month. please suggest me whether below portfolio is fine to go ahead with direct plans for 15 to 20 years . My Goal is to build 50lakhs by next 10 yrs and 1 crore by next 15 years.
SIP Details as below(Monthly Basis)
ELSS
Axis Long term equity fund Direct Growth : 2000/-
Large Cap
SBI Blue Chip Fund Direct Growth : 3000/-
Mid Cap
Franklin India Prima fund Direct Growth : 3000/-
Small Cap
Franklin India Smaller companies fund Direct Growth : 2000/-
Diversified
ICICI Prudential value discovery fund Direct Growth : 3000/-
Balanced fund
HDFC Balanced Fund Direct Growth(Equity based Balanced Fund) : 3000/-
Debt Fund
Birla Sun Life Short term fund Direct Growth : 5000
Dear Raj,
You may go ahead with your selection.
If you are considering an ELSS fund for tax saving, you may consider Birla Tax plan.
I want to invest lumpsum amount of 50000 in ELSS Mutual fund before 15 March 2017. Can you make my folio?
Dear Sriraman..Kindly read: Best Equity funds 2017.
Invezta is another player in direct mutual funds but does not require CAN registration. Invezta allows you to invest into Direct mutual funds in its platform. You don’t need to go through the pain of creating new account and new folio for each of the AMCs you are investing in. It’s recommendation engine and robo advisor is helpful for the novices. They charge no fees for investments upto 50,000 INR. After that you can choose one of their 79 INR per month plan or 109 INR per month plan based on your requirement.
If you use this Coupon Code “55C648 ” during signing up, your free investment amount will be increased by 25,000 INR to 75,000 INR.
The referral program of Invezta allows you to get 3 years of the platform free for every 1 friend you refer as a new investor.
This websites is a new breed in Indian investing that will attract many new investors.
Invezta is a direct mutual fund online investing portal. Free till Rs. 50,000/- investments. The below code helps you to get Rs. 75,000/- investment limit. If you are a beginner you can use the service as there are no opening charges, excellent interface besides “Direct” mutual fund investments.
Coupon Code: 55C648
Apply the above code while you register to get the investment limit of Rs. 75,000/- plus all features for free of cost.
Honest Disclaimer: I received the above code when I registered. I get Rs. 25,000/- additional limit every time an investment is made through the code above. You will also receive a similar code upon registering and making first investment.
Hi Sreekanth,
I have some MFs in my icicidirect a/c. Can I transfer all the them to direct plans and have them monitored through MFU? If so, let me know the procedure.
Regards,
Seenu.
Dear Srinivasa,
Yes, you can link them based on your PAN number on MFU.
You have to get CAN with MFU..
Hi Sreekanth,
I am a british citizen having OCI card which gives me permanent NRI status, i have rs. 1 cr to invest in me NRE a/c in axis bank.
should i invest in FD or go for MFs, I would like to go direct, would i be able to? with my resident status.
Please advice.
Many Thanks in advance.
Raj
Dear Rajinder,
You can consider applying for NRE MFU account for investing in Direct funds through MF Utility online platform.
May I know your financial goals, time frame and investment objectives??
Thanks Sreekanth,
I don’t have any specific goals, this money is surplus, i only intend to maximize returns in long term (10 – 15 years)
Regards
Also, someone suggested PMS over MFs, whats your opinion?
Kind Regards
Dear Rajinder,
Suggest you to go through below articles:
Best Equity funds for long-term goals.
How to pick right mutual fund schemes?
Many Thanks !
Dear Suresh,
First of all I would like to thank you for providing very useful information on mutual fund.
I need your help on my query. I have decided to shift my SIP’s from regular to direct, in this regard, please advise on below:
1. While switching to Direct , will the number of units i have accrued through Regular SIP remain the same in Direct ?
2. Which is better among A & B A) Switching to Direct B) Stopping the Regular SIP’s, leaving them as it is and starting new SIP’s under Direct for the stopped SIP’s
Thank you.
Henry
Dear Sreekanth Reddy,
Sorry for the error ! My above query is addressed to you
Dear Henry,
1 – Mostly No, coz the NAV is different.
2 – Switch from Regular to Direct are considered as normal redemption, so capital gain taxes can be applicable (if any). So, kindly check that and you may decide.
Thank you so much for your time and advise !
Hi I am NRI based in Sydney, Australia. I am planning to invest in Mutal funds and have below queries if you can help me with –
1. Which is the best and cheapest online method for me to invest in “Direct funds”.
2. My risk profile is “High”, I understand the market risks well and my investment Horizon is long term (5 to 10 years) . Which are the right funds for me to pick?
Dear Sandeep,
1 – You may consider MF Utility platform.
2 – Kindly read : Best Equity funds list.
Hi,
Till Nov-2016 i was investing in MF via ICICI Direct. From dec-2016 onward i am investing using direct mode.
Recently i received NSDL Consolidated account statement in which i could see my holdings in direct fund also mentioned.
Isn’t the investment in direct fund supposed to be with AMC (something like statement only) or do i still need demat for direct fund too? Please clarify.
Dear Vivek,
Whether direct plan or regular plan, demat account is not compulsory.
As this is a consolidated statement, the funds which are administered by NSDL are given in the statement based on your PAN number.
Thanks Sreekanth.
If i close my demat account, will i be still getting NSDL consolidated statement with direct plans?
Dear Vivek..You can use mail back facility offered by CAMS/Karvy to get consolidated statement.
Hi,
Thanks for your informative service that you have rendered, I have some investments in old mutual funds of UTI, initially these were of dividend options, subsequently I have switched over to dividend re-investment option. My question is had I switched over to growth option without going for dividend re-investment option, would it have been more beneficial in terms of return
Dear Hari,
In case of Equity funds and for time-frame of more than 1 year, generally Growth option makes sense and can be beneficial.
Kindly go through this article…
Hi Sreekanth,
I’m new to invest into the mutual fund,for the tax saving in this month I’m planning to invest one lakh at once into Franklin India Tax shield to declare in the tax.So could you please guide me am I thinking right way?
And will there be any Nav value downwards due to denomination effect.
It will be a great helpful for your reply.
Dear Amarnath,
If you are investing for long-term, kindly do not worry too much about one-time events like Demonetization. It can be a good factor for long-term investments.
Hi,
Just wanted to ask 1 small thing. Is there a way by which I can choose to buy direct MF plans across AMCs? I mean do i need to register on each AMC separately in whose scheme I want to buy or is there a common platform from where I can buy direct plans of any AMC?
Dear Abhay,
You may consider MF Utility platform..
Hi Sreekanth
Is it possible to stop regular plan SIP & start new SIP in same fund with Direct plan & redeem regular plan SIP amount once your SIP comes under long term capital gain (LTCG) ?
instead of paying short term capital gain, exit load & switching formality ?
Dear Sanket,
Yes, Switch is possible!
But it is treated as normal redemption, so taxes on Capital gains (if any) will be applicable.
Hi Sreekanth,
I’ve tried to invest in HDFC mid cap opportunities – direct fund using myCams app. What’s your opinion on myCams app/www.camsonline.com?
If the plan name has direct, does that mean direct plan only? Does camsonline is a distributor or fund house? I’m puzzled.
Please help.
BR, Srikanth Varma
Dear Srikanth.
I do not have first-had experience on the said APP.
Yes, if the plan name is Direct, it is Direct plan option only. You can cross check it by looking at NAV of both Regular & direct plans of same scheme. The NAV of direct plan will be slightly higher than regular plan NAV.
CAMS is an R&T agent & also a distributor.
Ok. Thanks for quick reply Sreekanth.
I found myCams app to be very easy and convenient to use.
Although we can take the Direct MFs from CAMS & MF Utility, after quick research, I got to know that there few fund houses that are not serviced by CAMS (Ex: Franklin). Where as almost all fund houses are serviced by MF Utility. But I found MF Utility has way more to go to be as seamless as CAMS. It’s just a personal opinion though! 🙂
Dear Srikanth,
Yes, MFU is a relatively new platform but offers all schemes of different fund houses.
For list of CAMS services and other R&T agent services funds, click here..
Hi Sreekanth,
The Article gives a lot of information..Thanks
However , i have been waiting to invest in an ELSS direct plan since long . But all the AMC’s i reached say that investing through them is regular plan.
Even the demat account i hold with kotak is a regular investment as per my advisor.
Can you help me understand where can i get to invest this elss direct plan and how.
Request you to suggest best online portals for the same.
Thanks
Dear Achuth..
AMCs saying so ?? That’s strange!
You can invest in Direct plans by visiting the fund house portal or through online platforms like MF Utility.
Dear Sreekanth,
1.What is better Dividend or Growth option ?
My agent did not explain.
I trusted him.
2.Whats the smallest realistic amount that I can start with for Direct Online funds while I am still learning ?
3.Do I need to track performance every day ?
4.How do I know that a fund is not doing well and has no future ?
5.How do I avoid switching funds prematurely and regretting later ?
Vijaya Paranjpe
1. Dividend/Growth: Generally Growth schemes are better. The following are some of the facts of dividend funds.
a. Dividend funds distributes dividend in no particular frequency.
b. Dividend MF may distribute dividend resulting in reduction of the principal amount you have invested.
c. Dividend distribution is taxed at 25 per cent which is disadvantage for long term equity investors.
Whenever you can, go for growth funds.
2. Smallest Amount: Some fund houses supports direct investment of even 500 Rs in SIP. Some fund houses the minimum is 1000 Rs per installment for an SIP.
3. Performance Tracking: No need to track performance everyday. It is indeed not advisable to check everyday. Checking the portfolio half yearly is a wise practice. You can check quarterly as well but anything less than that would be not advisable.
4. Fund Status: There are so many tools such as valueresearchonline, moneycontrol which provides rating of funds. You can easily track the return on investment and comparison of peers to find the good fund.
5. Switching funds: Patience is the key. Do good research, invest and keep calm. Valuate your funds every half yearly. Many time doing nothing is a good choice in long term equity investments.
Nicely explained…Thank you dear Venkat for sharing your views.
Yes, patience is the key.
Also, do not give too much importance to STAR RATINGs. They are generally based on the last 1 to 2 years performances of the funds.
The list can change every now and then. So, advisable to stick to the CONSISTENT ones.
Read:
How to compare and select the right mutual fund scheme?
Dear Mr.Sreekanth or Mr.Venkat,
I know I should ask this in my bank. But I need your good advice.
I need to retire FDs maturing in 2017 and convert the amounts into MFs.
Which ones should I retire first ?
Those with the poorest interest rate or by chronology of date ?
Rates are 8 % and 9.25 %
And Maturity dates are from May 2017 till October 2017.
thankyou,
Vijaya
Dear vijaya,
Firstly, kindly let me understand – why do you want to move from FDs to MFs? May I know your investment objectives & time-frame?
Dear Mr.Sreekanth,
I am 54 years old and have only just understood the futility of investing in FDs given the inflation and Tax deduction on FDs and that it is wiser to invest in MFs.
I would like to know how to retire my FDs and direct that money into MFs.
I am a doctor ,single and no children and have no goals or objectives.
I would only like to plan for retirement.
Will premature retirement of FDs be harmful ?
Or should I only use savings from bank accounts to invest in Funds instead of making new FD 4yaIgreceipts?
Thanks.
Vijaya
Dear Vijaya Ji,
May I know your expected age of retirement?
Kindly read this article : Retirement planning made Easy!
I am in good health .
I want to work till my age of 77 to 80 since I am a Consultant in private practice.
I am 54 now.
Thanks,
Vijaya
Dear vijaya Ji,
Considering your profile, I believe you can plunge into equity oriented products right now. You may switch the FDs which are maturing now to equity funds.
You may start with Balanced fund +Diversified Equity fund.
You have the option to invest lump sum amount or can set up STPs (Systematic Transfer plan) from Liquid fund to Equity funds for say next 1 to 2 years.
Ex – HDFC Liquid fund to HDFC Balanced fund.
Kindly read:
Best Equity funds.
Best Balanced funds.
Dear Sreekanth,
Thankyou for replying promptly each time.
1.My exsisting FDs are going to mature in May 2017 and thereafter.
You have advised switching FDs to MFs only on maturity.
I have made two FDs in Aug and Sept 2016.
Would it be prudent to retire them since I stand to lose only 1 %?
2.Considering the situation in India right now ,is it a good time to invest in MFs ?
If yes, which week in November ? Or December ?
I appreciate your guidance and find your tips valuable.
Vijaya
Dear Vijaya Ji,
If you are investing for longer period say >5 years or so, you may pre-close the FDs and switch to MFs.
Kindly do not try to TIME the markets. It is next to impossible.
Dear Sreekanth,
I would like to understand the benchmarks.
Example :How do Nifty 50,100 and 500 help to decide how a fund is faring (with respect to HDFC Bal.Fund Growth option which i am considering) ?
Vijaya
Dear vijaya,
These are indices and constitute certain number of Stocks. These indices primarily give broad idea about how markets are moving/performing. The fund may or may not necessiarily replicate the same, as it may contain different set of stocks/securities. If you want to compare a fund with an index, then the better way can be to compare it with the respective benchmark index of the fund.
For example : The benchmark index for SBI BLUECHIP fund is S&P BSE 100.
Dear Sreekanth,
I read your excellent guidelines for drafting a Will.
I have a new question about MFs.
My mother is 81 years old and is a Consultant Surgeon with an active practice.
She has invested only in Term Deposits all her life.
I want to know if I may convince her to invest in MFs at her age.
Regards,
Vijaya
Dear Vijaya,
What would be the investment objective? Is it for wealth accumulation, which will be inherited by her legal heirs?
Dear Sreekanth,
FDs are not viable investment options.
She is 81 and not really bothered about Wealth.
I manage her money.
I think Mother will bequeath her assets and properties equally to her legal heirs.
2 daughters.56 and 54.
No son.
Please guide me considering her age.
Thanks
Vijaya
Dear Vijaya Ji,
If you are planning to switch (existing corpus) to MFs, you may consider Equity oriented balanced funds.
Can set up STP (Systematic transfer plan) from Debt funds (can invest lump sum here) to Equity balanced funds.
Future investments can be made through SIPs.
Read : Best balanced funds.
I have already my own portfolio with all leading Mutual Funds. Uptilnow, I was investing through distributor/agent. Now I want to invest for additional purchases directly. Can I purchase ? The Portfolio number which I already have can be used , I think. What procedure I will have to follow ?
Dear BHARAT,
You can use the same folio and buy the direct plan units.
You can do this through fund house websites or platforms like MFU or invezta etc., (MFU is free of charges)
1) what about DSP blackrock tax saver fund
2) are balanced funds come under ELSS.
Dear davinder,
Balanced funds are not ELSS funds.
Read:
Best Equity oriented balanced funds.
Best ELSS funds.
Hi Sreekanth,
While researching what MF to invent, i red your articles, really informative. Thanks for your service.
Based on my research, I have sorted out following fund for SIP, could you suggest whether these funds are good for long term, lets say 7 years, 10 years and 15 years?
Small and Mid-Cap: (10k)
Franklin (I) Smaller Cos (G) – 2500
UTI Mid Cap (G) —-5000
DSP-BR Micro Cap Funds (G) – 2500
Large Cap Funds: (6k)
Franklin India Opper —- (3000)
UTIL Equity Funds (G) — (3000)
Diversified Funds: (4k)
UTI MNC Fund —– (2000)
Franklin High Growth Cos (G) —-(2000)
Thanks
Sankar
Dear Sankar,
These are good funds. But investing in multiple funds that too from the same fund category, may not be that beneficial.
Read:
MF Portfolio overlap analysis tools.
What are large/mid/small cap funds?
How to select the right mutual fund scheme?
This article is very helpful for the beginners like me. I have never invested in anything except PPF. I am planning to start investing in ELSS considering my goals: Tax Saving, Mid-term Investment and Long Term Investment. Would you guide me to go for Direct plans? And is there a tutorial available online which can teach me how to start and maintain a good MF portfolio?
Dear Yagnesh,
You may visit freefincal.com and you can find very informative articles on MFs.
Kindly read:
My MF portfolio picks!
How to select the right mutual fund scheme?
MF portfolio overlap analysis tools!
CAN DIRECT MUTUAL FUNDS BE PURCHASED IN DMAT FORM THROUGH THE AMC WEB SITE, IT WILL BE EASY TO TRACK THE INVESTMENTS, MF UTILITY PLATFORM IS VERY TEDIOUS.. DMAT PURCHASES WILL BE BETTER OPTION… DO YOU RECOMMEND THIS..?
Dear AMOL,
If you are investing only in Mutual funds then Dmat account may not be that beneficial.
Would like to know what are the negative aspects of MFU? (Personally, haven’t used yet, so would like to know).
Does MFUtility and CAMSOnline both provide platforms to buy Direclt MFs ?
Anything to note before we chose one of these ?
Regards,
Tarani
Dear Tarani ..Yes, both provide. But CAMS may levy some charges (like transaction fee etc). Kindly check with them.
Hi Sreekanth,
While registering for the MFU to generate CAN. Following details are asked to be filled. ARN / RIA SEBI REGN No and EUIN. I am not sure what needs to be filled for both as I am not a Registered under SEBI.
Could you please throw some light on it. Can I leave it as a blank since I am a Retail investor ?
Dear Vignesh ..Leave it blank if you are investing in Direct plans! Those are the details of Advisor/Agent/Intermediaries.
How Direct plans are beneficial as we are buying them at Direct plan rates. For example when we opt to buy any MF under direct plan the higher rate is applied.
Dear Vinod ..And you will get higher NAV performance compared to regular plan NAV.
Hi, Its really a very good article.
My question : I tried buying some ELSS Direct Funds through online. however, its asking for a Portfolio number, Which I don’t have.
Can you please give me some more information on it and How to obtain one?
Thanks in advance.
Dear Raghu,
Some fund houses websites accept only additional investments that is one should have already invested and have Folio number.
Suggest you to invest one time investment of say Rs 5000 or so in a fund through an agent or other online distribution platforms or through CAMS and afterwards you may use the same folio number to make additional investments.
Another option is to invest through MF utility platform.
I invested Rs. 25000 in a mutual fund scheme through HDFC bank. My statement shows that 24,999 has been invested. When do they charge commission?
I’m planning to do SIP through CAMS once my portfolio no. is created in the funds I want to invest in.
P.S. In their FAQs they have mentioned trail, brokerage fees. However, they have also attached a note saying that as of 1st October 2015 they have opted out of transaction fees. It’s confusing!
TIA
Dear Nisha,
You may consider MF Utility platform for direct plans.
Sir,
Please advice if the Mutual Funds Direct Plans be purchased only on line or we can also purchase them by visiting the Mutual Fund Office.
Regards!
Vibhas
Dear VIBHAS ..You can invest in them offline too.
Hi Shreekanth,
Once people say switch to the other plan like entirely other mutual fund if exiting one not performing well. In that case what to do to transfer all amount(NAV) to new one? or we have to just discontinue existing one and fress start another one.
if i buy direct MF plan from my broker website like Rmony or Zerodha is it chargable?
regards,
Rakesh Sharma
Dear Rakesh ..Kindly check with your service provider regarding the transaction charges.
Hi Sreekanth, Have few queries reg. Direct Plan
* do you when is this Direct plan started ?
* AUM of Direct & Regular plans are separately maintained ?
* There are many online distributors like orowealth. com who provides 0% distribution cost and claims we can get multiple AMC MFs from single website – is this good approach ? what might happen if these online websites are shutdown in next few years ?
Dear Muthu,
1 – The “Direct Plans” were launched with effect from January 1, 2013.
2 – Yes.
3 – Kindly note that these are just Transaction execution platforms and are not the custodians of your investments. Your money will be with the AMCs/fund houses.
Dear Sreekanth
Thanks, I did some reading from your website and others
1 – Thanks
2 – It seems its the same AUM for both Direct & Regular plan , the only difference is the Expense Ratio.
3- Thanks
4 – Read about MFU, but unfortunately online submission of requests are NOT available. We may need to fill the printed form and submit to MFU POS centres.
By chance do you have any idea when the online MFU functionality will be available ?
Dear Muthu,
2 – For example : HDFC Equity Fund – Direct Plan has Rs 2,727.81 cr as AUM as on June 2016 & HDFC Equity Fund – Regular Plan has AUM of Rs 12,000 Cr. A Fund has to have a separate AUM so that separate NAV can be calculated.
4 – I believe the online functionality has been made available (however I am not using MFU for my investments).
Online facility is provided by MFU. Once CAN is generated, you have to send an email to [email protected]. Please check https://www.mfuindia.com/InvestorFAQ
Hi Sreekanth,
I have below ELSS Regular funds started a year ago.
RWGP-RELIANCE RETIREMENT FUND – WEALTH CREATION SCHEME – GROWTH PLAN
I understood that it has lock-in period of 5 years and and so no option to switch it to DIRECT plan at this time.
I wish to invest this amount into another one good folio. So can I stop paying the amount and stay the account alive for next 4 years. Or Any other better suggestion, please let me know.
Thanks You.
Regards,
Savin
Dear Savin ..Yes you can discontinue the contributions if you think there are better alternatives as per your requirements.
Read :
Reliance retirement fund – Review.
List of best investment options.
Hi,
Currently I am investing in regular plans of mutual funds of different fund houses from my HDFC demat account and the units are credited to my demat account.
I wanted to know can I buy the direct plans of various fund houses also in the same way from the HDFC demat account or I need to visit individual websites of fund houses to buy?
Is HDFC bank considered as agent/distributor for buying funds?
While choosing the fund for buying in my demat account, I am given both option of regular and direct plan in the drop down list.
Thanks and regards
Dear Sandeep,
If they are giving the option to buy Direct plans, kindly do so.
But as a demat account provider, they do charge per transaction or quarterly fees for operating the demat account.
Read:
MF utility platform for direct plans of MF schemes.
Thanks for a great post on Direct funds. I am already investing through fundsindia in axis long term mf on a regular basis. Since i want to invest for long term , i want to ask that Can i also invest in same fund (with a direct option) through an Axismf website?
Will this be good option to stop my all the future investments in the regular plan (without closing that , since its only 6 months and lockin is 3yrs) and make all the future investments in direct plan of Axis long term with the axismf website?
Please guide me about the same.
Dear Neha,
Yes, you can invest. If you are comfortable investing directly through a fund house website, kindly go ahead, direct plan can give a slightly better returns than the regular ones.
You may create a dummy portfolio on online portals like moneycontrol.com to track your investments.
CAMS Online (and maybe KARVY Mfs) provides a online to invest in MF’s .
Would that be DIRECT mode investing, or is CAMS/ Karvy acting as a distributor.
Dear Jeevan,
They are distributors. But when submitting the application forms if you tick ‘DIRECT plan option’ then the investments will be made under direct plan only.
If you would like to invest in Direct plans, you can consider MF utility or invest directly by visiting respective fund houses websites.
Hi,
I am Reddy, I would like to invest 10,000/month in MFs for long term upto 20 years. The goal is for clearing home loan / retirement saving. Could you please suggest me what Direct Mutual funds to invest in.?
Regards,
Reddy
Dear Mr Reddy,
Kindly read below articles:
Best Equity funds 2016.
Best balanced funds.
MF portfolio overlap analysis tools.
How to identify best mutual fund schemes based on risk ratios?
I am Rama, presently investing in SIP 2000 in Reliance small cap and 2000 in Sundaram select mid cap. Additionally I would like to invest another 10000 pm in SIP. Could you pls suggest few funds preferably direct funds.
Few are in my mind: SBI blue chip – 4000 pm.
SBI small and mid cap find – 3000;
Franklin India Smaller Companies Fund – 2000 pm. All are growth funds. and If I want to buy direct funds where to buy.
Pls suggest, thanks in advance for your valuable suggestions.
Dear rama,
May I know your investment objective & time-frame?
Kindly note that investing in too many funds from the same fund category may not be that beneficial.
Read:
MF Utility for MF investments : direct plans.
What are Large/Mid/Small-cap fund categories?
Hi,
I am new to all kind of investments. Been researching extensively since last week. After much reading have decided to invest 5000-8000 pm in mutual funds & 5000 in PPF.
1. Can you please suggest a portfolio for me as in the total number & type of MF i should invest in. Please also suggest the names of the MFs.
2. Which of the online portal will be better between MFU, Investza & Orowealth.
3. I have an saving bank account with axis bank having internet banking facility. The internet banking app also shows mutual fund account. If a open & link a mutual fund account to my axis bank internet banking, will i be able to buy direct MF from it.
Dear Aiman,
Kindly share details about your financial goals, time-frame and investment objective(s)??
I would not like to comment on any specific platform. All three are good ones.
Hi Shreekanth,
i am totally new investor having no idea of MF investment. I am looking for ELSS SIP. The main purpose is to SAVE TAX also gain some good returns.
Through Online research i found that Axis long term ELSS is better option. kindly advise on that.
also i heard that you can’t go for SIP Direct plan without investing a min. lump sum amount as told by Fund house.
please give some guidance on that and advise me what should be the plan i should choose?
what should be the best way?? Should i go for Online process or directly walk in the Fund house and ask them for Direct ELSS plan?
Dear,
Kindly think beyond TAXES when investing.
The lump sum amount can be around Rs 5,000, so after that you can create SIP for say Rs 1k per month.
Suggest you to invest directly online or through MF Utility online MF Platform.
Hello Sreekanth,
Thanks for the detailed information that you have provided here! Really helpful for people to understand the world of mutual funds.
I want to invest Rs. 10000/pm for next 14 years with the aim of accumulating funds for my daughter’s education.
Currently I have 10 Yrs Bank RD of Rs 2000/pm with interest rate 10.75%.
For remaining 8000, I am planning to start a long term SIP in Mutual Funds
SIP Years: 14
SIP Amount:8000/pm
Can you please suggest good funds which can help in reaching the target.
Based on my research I have shortlisted below funds.
1. ICICI Prudential Value Discovery Fund (Equity Multi Cap) 2000/pm
2. Franklin India High Growth Companies Fund (Equity Multi Cap) 2000/pm
3. HDFC Balanced Fund (Hybrid- Equity oriented) 2000/pm
4. Tata Balanced Fund (Hybrid- Equity oriented) 2000/pm
Should I go with this fund selection. Could you please suggest if you have any better options.
Dear Amit,
10.75% RD? That’s a good rate of interest 🙂
But you may read this article: Why one should avoid investing in RDs/FDs for longer-period?
Suggest you to check overlap between 1 & 2 funds. Read : MF Portfolio overlap analysis tools.
I believe that one Balanced fund is enough and you may consider one mid-cap oriented fund.
Read: Best Equity funds 2016.
Thanks Sreekanth for the suggestions!
RD is made on the name of one of the senior citizen members of my family started 4 years back and it does not fall under taxable income, so I think no issues there. 🙂
I will consider i as debt mutual fund and it it only 20% of the current portfolio.
Overlap of fund 1 & 2 is 22% and stock overlaps seems ok. Please suggest if this is not particularly ok.
Agree that I can think of only one balanced fund and replace second with mid cap fund.
Though both balanced funds 3 & 4 appears equally good to me, do you have any particular choice out of these two if I have to choose one.
And I have shortlisted below funds from midcap category. Can you suggest which one to go for from this or any different one.
A. Franklin India Prima Fund
B. HDFC Mid-Cap Opportunities Fund (Any issues here because asset value has crossed 10000 Crs )
C. BNP Paribas Midcap Fund (Cannot invest online though 🙁 )
Regards,
Amit
Dear Amit,
Yes, both balanced funds are good ones. TATA fund is bit aggressive in terms of Equity allocation (%).
All three are good ones 🙂
I think it is possible to invest through MF Utility platform ??
Thanks Sreekanth!
I have decided to add one fund from category-Equity Small Cap. I think considering my time horizon which is about 14 years, this sounds a good option.
(Help one)-Can you please suggest on this.
And the fund I have choosen is Franklin India Smaller Companies Fund. (Help two)-Please let me know if any other better option that you know.
So my portfolio would be as below
1. ICICI Prudential Value Discovery Fund (Equity Multi Cap) 2000/pm
2. Franklin India High Growth Companies Fund (Equity Multi Cap) 2000/pm
3. Tata Balanced Fund (Hybrid- Equity oriented) 2000/pm
4. Franklin India Prima Fund (Equity Mid Cap) 2000/pm OR HDFC Mid-Cap
Opportunities Fund (Equity Mid Cap) 2000/pm
5. Franklin India Smaller Companies Fund (Equity Small Cap) 2000/pm
(Help three) I am confused for (Equity Mid Cap) category between the two funds I mentioned above because of below two things that come to my mind. Can you please help in choosing one from these.
A. Asset value of ‘HDFC Mid-Cap Opportunities Fund’ has crossed 10000 Crs and I
think may be it is looking to go more towards large cap
B. If I choose ‘Franklin India Prima Fund’ then 3 out of 5 funds from the portfolio are
from same AMC i.e. Franklin India.
About you question of investing in ‘BNP Paribas Midcap Fund’ through MF Utility,
I think one cannot invest in to BNP Paribas through MF Utility. It is not in the list of Participating AMCs mentioned in MF Utility website.
Appreciate you help!
Thanks and Regards,
Amit
Dear Amit,
1 – Franklin fund is a good one.
2 – Kindly check overlap for the two Multi cap funds. Read: MF Overlap analysis tools.
3 – You may go ahead with HDFC Mid-cap fund.
Thanks Sreekanth for your suggestions!
Do any AMCs charge any ‘transaction charge’ for investing directly through the websites of the AMCs? After logging into HDFC MF’s online platform, feeling confused about their schedule of charges. Do they charge Rs. 100 per online transaction? That would defeat the whole purpose, right?
Dear Sandeep,
Kindly read below info, got it on HDFC MF website.
What is the amount of transaction charges to be paid by me?
The amount of transaction charges depends on the amount of investment, type of investor (existing / new) and whether the distributor, if any, has opted for receiving transaction charges.
a) If you are an existing investor in any Mutual Fund, you will be charged Rs. 100 as transaction charge per purchase transaction / SIP registration of Rs. 10,000 or above. No transaction charge is applied on purchase transactions below Rs. 10,000 and on switches / redemptions / STP registrations.
b) If you are a new investor in Mutual Funds, you will be charged Rs. 150 as transaction charge per purchase transaction / SIP registration of Rs. 10,000 and above.
c) In case of SIP registrations, the transaction charge shall be applicable only if the total commitment amount through SIP is Rs. 10,000 or above. The transaction charges will be recovered in 4 installments.
d) No charges will be applied to your transaction if you do not use a distributor for that transaction or if your distributor has opted-out of receiving transaction charges.
What is the transaction charge for direct investments?
Transaction charges are not applicable for direct investments.
Read this at this link, click here..
Hi Sreekanth,
I am investing in 30000/- in below MF’s for past 1 year. I wish to continue investing for a minimum period of 8-10 years.
Kindly let me know whether the below funds are good.
Principal Emerging fund – 4000
DSP Black rock Micro cap fund – 4000
AXIS LONG TERM EQUITY FUND – GROWTH PLAN – 2000
ICICI PRUDENTIAL VALUE DISCOVERY FUND – GROWTH- 2500
SBI BLUE CHIP FUND – REGULAR PLAN – GROWTH- 2500
SBI MAGNUM MIDCAP FUND – REGULAR PLAN – GROWTH OPTION – 2000
RELIANCE SMALL CAP FUND – GROWTH PLAN – GROWTH OPTION – 2000
ICICI PRUDENTIAL TECHNOLOGY FUND – GROWTH – 2000
SBI IT FUND – REGULAR PLAN – GROWTH – 2000
RELIANCE PHARMA FUND – GROWTH PLAN – GROWTH OPTION- 2500
SBI PHARMA FUND – REGULAR PLAN – GROWTH – 2500
Mirae Asset Emerging blue chip fund – 2000
Dear Narayanan,
Kindly go through below articles;
MF portfolio overlap analysis tools.
What are large cap/mid/small cap funds?
My MF portfolio .
Dear Sreekanth,
Thanks a lot for sharing the Mutual Fund comparison tool, after comparing I have arrived at below funds, Kindly let me know your opinion.
Large Cap:
* SBI blue chip fund : 4500/-
Small & Mid-cap:
DSP Blackrock microcap fund : 4000
Reliance small cap : 2000
For above 2 there is 15% overlap of stocks, which I personally think its not a problem.
Diversified Equity:
Mirae asset emerging bluechip : 5000
Principal emerging fund : 4000
ICICI value discovery fund : 2500
Comparing Mirae and Principal results in 32% overlap, Principal & ICICI results in 16% overlap, same 16% for ICICI and Mirae asset. Personally feel that I can invest in all the three. Your comments would be much appreciated.
Sector Based:
SBI Pharma fund : 4000
UTI Transpor & Logistics : 2000
For Tax:
AXIS ELSS : 2000
Dear Narayanan,
I still believe that your list is big.
You may pick one Diversified equity. Also, though Axis LTE is an ELSS fund you can consider it as a multi-cap/diversified fund only.
Dear Sreekanth,
After much deliberation i have reduced my MF portfolio to below schemes. Kindly let me know your views.
1. SBI Blue Chip – 8000/-
2. DSP Microcap – 4000/-
3. Franklin Smaller cos – 4000/-
4. Mirae Asset Emerging blue chip fund – 8000/-
5. Axis ELSS – 4000/-
6. UTI Logistics and SBI Pharma fund – 6000/-
Would appreciate your kind response.
Regards,
Narayanan
Dear Sreekanth,
Just to add, I have compared the MF’s with the help of the website that you shared.
Small Cap
Reliance Small CAP DSP blackrock Micro 15%
Reliance Small CAP SBI Midcap 7%
Reliance Small CAP Franklin India 14%
DSP blackrock Micro SBI Midcap 8%
DSP blackrock Micro Franklin India 16%
Franklin India SBI Midcap 16%
Diversified
Mirae Asset ICICI Prudential 16%
Mirae Asset Principal 32%
Mirae Asset Axis ELSS 16%
ICICI Prudential Principal 16%
ICICI Prudential Axis ELSS 11%
Axis ELSS Principal 16%
I feel like, i have selected the right funds, my aim is to have 1 to 1.5 crores in 10/12 years time. Is it feasible, i am open to increase my SIP to even 40/50k to attain my goals. Kindly let me know.
Regards,
Narayanan
Dear Narayanan,
Individually all funds are good ones. But you may re-think again if to have 3 small cap funds or not.
In this case, your portfolio risk profile is very high and kindly stay invested for very long-term.
Dear Sreekanth,
Appreciate your kind response. In your view kindly let me know how I can split up my 34k monthly investment? My investment horizon is definitely somewhere between 8-12 years.
Kindly let me know how you would invest 34k per month?
Regards,
Narayanan
Hi Sreekanth! It’s a useful blog that you have written, especially for investors like me who have renewed interest in mutual funds. I have a couple of queries regarding the direct mutual funds.
1. Do the AMCs charge any exit load for direct plans after the mandatory 3-year lock in period gets over ?
2. I am looking at investing lump sum amounts (my budget being 6-8 lakhs) instead of SIPs in a few direct mutual funds like HDFC Balanced Fund, ICICI Pru Value Discovery, and ICICI Pru Focused Blue Chip with at least 10-12 years horizon and with a vision of saving enough for my kids’ education. Do you think I can take slightly riskier attitude and invest in other fund houses such as Birla and Franklin Templeton?
Regards,
Neha
Dear Neha,
1 – Kindly note that only ELSS Funds (in case of Equity oriented funds) have a mandatory 3 year lock-in period. Normally the exit load on equity funds is levied if the holding period is less than one year.
2 – All funds have their own well-performing MF schemes. The shortlisted funds are good ones.
Kindly read:
Best Equity Funds 2016.
My MF Portfolio picks.
MF portfolio overlap analysis tools.
What are large/mid/small cap funds?
Kids’ Education goal planning & calculator.
Thank you Sreekanth…
Hi Sreekanth…I’m looking at a 7 to 10year investment horizon with a above medium risk taking capability. I’m looking at investing 7k to 10k SIP per month. What direct funds would you propose ?
Dear Anand,
You consider balanced fund like HDFC balanced fund, diversified fund like ICICI Pru Value discovery fund & one large cap fund like Birla Frontline equity fund.
Kindly read –
Direct plans Vs Regular plans : Comparison of Returns.
Best Equity funds.
hi, after you suggestion i have started elss sip of 4 k in franklin india tax shield , now if i want to save more tax should i invest in another elss or increase the sip in present scheme.
Dear gaurav..Suggest you to make additional investments in Franklin Taxshield itself.
Hi after reading ur blogs i came to know that i am over paying for my term cover of 1 cr started 2 yrs back last premium was 14k which is increasing every year i guess, but duration is for 40 years, its HDFC click to protect plan, should i buy another plan the premium is due in august?
Dear Gaurav,
You mean to say that your life insurance policy premium is increasing on every renewal?
Hi my term insurance premium is increasing sice last two years
Dear Gaurav..That’s surprising..May I know the plan name?
Hdfc click to ptotect
Dear Gaurav..I am not sure about this. Have you taken any rider along with the base cover? Need to look at your policy. Suggest you to contact hdfc customer care and get the clarification.
Hi Sreekranth,
Let me say how valuable a service you are doing here! Extremely informative and of immense help to financially educate people. I would like your opinion/advice on a few things.
I am an NRI . I have invested Rs.1,11,000 in a debt fund (SBI savings fund-Direct Plan-Growth) in Sept. last year as an emergency fund. My intention is quick liquidity. Is liquid fund a better option? If so should i switch to a SBI liquid fund ?(since I am currently with SBI)
I have invested with ICICI prudential IPRU wealth builder II insurance product which will give me life coverage.
I would like to do a long term investment , looking into the next 10-20 years. I understand equity mutual fund will be a good choice. Please do advice on a few good opportunities i can invest. Also I would like to create funds for kid’s education and wedding(I am married but i do not have any kids at the moment). In this case how should i proceed.\
Your inputs would be much appreciated.
Thanks in advance
Dear NIHTIN,
Why do you want to switch to a Liquid fund? Are you looking for better returns than SBI savings fund which is an Ultra Short Term Debt fund??
Read: Best Debt Funds for 2016.
Kindly note that ‘ ICICI prudential IPRU wealth builder II’ is an ULIP scheme. Are you sure that the risk cover offered by this plan is sufficient enough to cover your life?
Read:
If life is unpredictable, insurance can’t be optional.
Best Term insurance plans.
For 10+ years goal(s) : You may consider investing in Diversified & mid/small cap funds.
Read:
What are Large/Mid/Small cap funds?
Best Equity funds.
List of Best Investment options.
Kid’s Education goal planning Calculator.
Retirement planning calculator.
hi i have a sip of 1500 each in icici blue chip. mirae asset opportunities and birla sun life dynamic, i invest 54000/- pa in lic since 4 yrs , and have a 1 cr term cover,and now dont want to invest further,
1. am i making a mistake
2. i want same to be invested in elss, franklin inida tax shield
Dear gaurav,
Kindly share details of LIC plans (Plan name, tenure, commencement date..)
Kindly provide complete scheme name of Birla fund.
ICICI Bluechip & Mirae funds are good ones.
If your investment objective is to accumulate long-term wealth + tax saving, you can consider Franklin Taxshield fund.
Hello thanks for the response, its birla sunlife dynamic fund , mY LIC policy name is jeevan anand (old) , i have paid 4 premiums of 54 k each.
Dear Gaurav,
Suggest you to ‘surrender’ your Jeevan Anand policy and allocate the premium to equity mutual funds for your long-term goals (if any).
Read:
Term insurance + PPF (Vs) Traditional plans.
How to get rid off unwanted life insurance policy?
thanks a lot , i have a term cover of 1.5 cr already and a health cover of 1o lakh too, i have a ulip hdfc pro growth plus in which i have i have invested 50 k p.a four times, its net value has increased only by 15 k, its a 100% income fund, i have a option of switching it to blue chip, balanced,opportunities, short term. pls suggest
Dear Gaurav,
In case if you do not mind taking risk now, you may change the fund type to blue-chip or balanced for the remaining term of your ULIP policy.
My suggestion would be to surrender it and re-invest the fund value in a balanced equity fund by yourself.
thanks once again, i can do it only after five years i guess, since its a lock in period is five., just last question if i allocate my previous and future premiums in opportunities will it grow better than blue chip/balanced.?
Dear Gaurav..If you opt for ‘opp fund’, premium will be allocated to this fund which invests primarily in ‘mid cap equities’, so probablity of getting better returns compared to other funds is high, but at the same time exposure to ‘risk’ is also high.
Hi i have some old funds named hdfc tax saver growtg and uti long term equity tax saver i have invested 3 lakh around 4 years ago and rhese funds are rated very poorly and also performing poorly , should i redeem them or continue them ? Thanks
Dear Gaurav..I believe that both the funds have under-performed compared to the average returns generated by ELSS fund category.
Suggest you to switch to Axis LTE or Franklin Tax shield if you would like to invest in ELSS funds only.
If tax saving is not a priority, you can consider other equity oriented funds.
Read: Best Equity funds 2006.
Hi,
I invest in axis lte via zerodha , initially i was told I would receive a account statement from AMC as a proof of investment , but now they tell me that since the investment in mutual funds is in demat form thus the AMC will not be sending me the account statement or proof of investment directly instead I can use the allotment mail they(zerodha) have sent or I can use the consolidated statement from csdl every month .
Is that correct ? can I actually use the allotment mail (Includes folio number ,number of units etc )they have sent as a proof ?
Thanks in advance
Dear Rapu,
You can use the statement received from CSDL as proof of investment.
Thanks for the informative article. Please let me know how to track and what to track in MF portfolio
Dear Harsh..How are you investing in Mutual Fund schemes? Are you doing them through any platform or individual fund house website(s)?
Very informative.
If i invest in direct plan then post allotment, can i use the transfer in facility of ICICI direct to move the MF to icici direct for easier tracking? does that continue as a direct plan in that case?
Dear Aditya..Kindly contact your service provide (icicidirect) regarding this.
I believe that ICICIdirect does not offer direct plans.
Hi Sreekanth,
this is a very usefull blog.
After going through this article on direct investing in MF through MFU, I researched more and I found that this facility is still not available to individual investor (investing in direct plans though MFU), you still need to go through the R&T agents (CAMS etc), is that still correct, or are there any recent development, where individuals can directly invest in direct plans through MFU ?
Thanks
Dear PauZ..I believe that investors can invest in Direct plans through MFU. You may also kindly check with them directly.
Read: MF Utility platform for Direct plans.
Thanks I will check the link
Hi Shrikant
I have account with share khan and now i want to invest in Axis Mutual fund .
My queries are as follows.
1. if i purchase the the axis fund through sharekhan is better option or should i purchase it directly from axis website to mimimise the brokerage charges
2. as is said i have account with sharekhan , they given me CDSL demat and DP account, if i purchase the MF directly from axis , i need to submit kyc document to CDSL again.
Please
Dear shiva,
1 – If you are comfortable buying directly through the website, kindly go ahead.
2 – Kindly check if your PAN KYC is verified or not. Click here
Read: How to get eKYC done for MF investments?
Hi!
Your article on Direct MF schemes was very informative ..
I think there was some provision in Budget 2016 for switch between same MF scheme capital gains
tax being not applicable..
PL confirm my understanding
Thanks
Dear Minoti..As far as I am aware that there is no such provision..In case if you have any source/link, kindly share it.
HI Sreekanth
can you please tell me which are the best mutual funds plans that I can start investing in if I want to create long term wealth and on what basis do you select them, especially those whoa re new to mutual funds.
thanks.
Dear ashish..Kindly read this article : Best Equity mutual funds.
Hi Sreekanth, Thanks for writing such a knowledgeable article.
Could you please let me know if you are a fee only financial planner or a fee based planner?
Do you suggest Direct plans to your clients.
Could I please have your email id and contact details.
Also, I have a quick question if you could answer please. If I decide to invest in a Mutual fund via SIP, is it mandatory for me to put the amount each month in the MF or is it up to my will to invest whenever I want.
Thanks
Nishant
Dear Nishant,
I used to fee only Financial Planner. Recently I have stopped offering FP services.
You can PAUSE your SIPs. Also, there can be different value addition features available based on the online MF platform you opt for.
HI Sreekanth,
Nice forum.. I thought of investing in elss around 8 K per month via direct option could you assist me on the below ..
1. 8 k as 2k each on 4 elss funds or 3k, 3k, and 2k in 3 elss funds would be best ?
2. What would be difference if we invest via respective fund house or via CAMS, Karvy etc…
Dear Sudhakar,
1 – 1 or 2 ELSS funds can be considered.
Read:
Best ELSS funds 2016.
Check MF portfolio overlap..2 – You can consider investing through MF Utility online platform in various direct plans offered by diff fund houses.
Read : MF Utility online platform..
Dear Srrekanth,
Thanks for you kind reply…
1.instead of investing 8K as 4k in 2 elss i feel to invest as 3k, 3k and 2 k in 3 elss fund….. what would you say:)
2. If you say 3 elss then what would you suggest, Axis long term,Franklin India Tax shield Fund and what would be the third one ?
3. If i invest via respective fund houses , is that possible to maintain in mfutility later?
Dear Sudhakar,
1 – But invest in 3 ELSS funds only after checking their portfolios.
2 – Birla Sunlife Tax Plan.
3 – Yes. (Read : MFUtility online MF platform..)
Hi Sree,
1.If you suggest me to go via only 2 funds 4k each… will that be axis long term and Franklin India Tax shield right?
2. What would be diff if i invest via respective fund house and mfutility ? ( apart mfutility will be single platform to maintain portfolios)
3. How would we know if i am KYC registered?
Dear Sudhakar,
1 – The performances of both the funds have been outstanding.
2 – No major diff.
3 – Check it here..
Read: What is eKYC?
HI Sreekanth,
Its quite urgent one, need to invest 50 K which should cover tax as well…. i have left with only 2 days now… could you pls let me know which will be the best scheme or fund to invest pls….
Regards,
Sudhakar PR
Dear Sudhakar..May I know your investment horizon?
Kindly read:
List of Best Investment options.
Best ELSS Funds.
Think beyond taxes when investing!
anything is fine Sree however 3 to 5 yrs would be good
Dear Sudhakar..You may consider Franklin Taxshield fund, suggest you to remain invested for atleast 5 years or so.
Hi Srikanth,
Really thanks for a help ! I have invested in Axis long term and Franklin India Tax shield 4 K each SIP via MFU.. Big thanks to you…. Also have few more queries,
1. How is the returns calculated for SIP plans, ex: my first sip was 4th April and NAV for axis long term was 30.354 & units as 131.779
now as on 6th April NAV is 30.060, there is slight drop here… how would it impact here…
2. What is diff in having the holdings in CAN or Demat?
3. In addition i thought of investing 5K on monthly basis within these 3 shares whenever is possible :
DSP-BR Micro Cap Fund – RP (G)
ICICI Pru Exp&Other Services-RP (G)
BNP Paribas Equity Fund (G)
Are those funds are doing goods?
I don’t see the name of these funds as “Direct”. Is that mean there will be brokerage charges if I invest on these ?
Dear Sudhakar,
1 – That means the fund’s returns have dropped compared to the previous month’s.
2 – Dmat is not mandatory for holding MF units. Demat a/c – you may have to pay certain service charges to the provider.
3 – 3 shares? or Mutual funds? 🙂
May I know your investment horizon?
Read:
Best Equity funds 2016.
MF portfolio overlap analysis tools.
Dear Sree,
Thank so you much for your kind responses…
3. both 🙂
Also just to give more info for you , i already invested in ELSS in Axis & Franklin 4 K each which covers tax, so now i am planning to invest 5 K extra and not necessity its to be in tax or not but expecting some good returns….
So when i was analyzing the stocks i found few are doing exceptional and i selected in that 2 funds
1.DSP-BR Micro Cap Fund – Direct (G) -> Small & Mid cap
2. ICICI Pru Exp&Other Services-DP (G) ->Diversified equity
Let me know diff in positives/negatives for
investing in shares & MF generally and let me know if these funds are good to go ahead….
so awaiting your valuable inputs..
my investment horizon would be more than 10 yrs…
your forum is really a good one and even i have recommended my friends to go through your forum for useful information…Thanks once again
Dear Sudhakar,
You mean to say that you have analyzed the stock portfolio owned by the funds??
DSP Micro cap is a good one. There are better options than ICICI Exp fund. Read: Best Equity funds 2016.
(Personally I prefer Franklin Smaller companies fund to DSP micro cap).
HI Sree,
Once again thank so much for your reply…
1. I mean analysing their historical details 🙂
2. So is that u referring ” Franklin (I) Smaller Co -Direct (G) ?
3. So both DSP-BR Micro Cap Fund – Direct (G) & Franklin (I) Smaller Co -Direct (G) are good one to start invest right?
4 Could you pls let me know will that wise to purchase them as shares whenever i have extra money such as 5k on each month ? Any negative on this point?
5. Or only SIP will be wise to do
Dear Sudhakar,
3 – Yes, but do compare if there is any high overlap of their portfolios. Read: MF portfolio overlap analysis tools.
4/5 – Whenever you have investible surplus and/or when you think equity markets have fallen too much, you can surely consider investing additional amounts in your existing funds.
Dear Sree,
I am not clear on point 4/5 🙂 could you bit more clear pls…
are u suggesting to invest in sip or shares pls 🙂
Dear Sudhakar,
Kindly understand that SIP is method to invest and not a product. I am referring to mutual funds.
Dear Sree, i can understand the SIP concept let me put my questions is diff way..
suppose i want to invest 5K on each month..
my question is now…
Should SIP is best or with that amount i can buy shares on each month ?
Kindly let me know ur thoughts pls…
Dear Sudhakar..As mentioned in my previous comment, I am referring to mutual funds only and I do not provide suggestions on direct Equities.
Thanks once again Sree for your kind help !!
I have selected the 4 funds and i am planning to invest 4k or 5k on 2 or 3 funds from the below…. would be great helpful if u can help me ranking/ordering the below funds pls so that i can pick accordingly…. investment horizon would be more than 10 yrs:)
1. DSP-BR Micro Cap Fund – Direct (G)
2.SBI Small & Midcap Fund -Direct (G)
3.Franklin (I) Smaller Co -Direct (G)
4. Mirae Emerging Bluechip -Direct (G)
Also let you know that i already investing 4 k Axis Long Term Equity – Direct (G) & 4k on Franklin (I) Tax Shield -Direct (G)
Dear Sudhakar,
The shortlisted funds are primarily small-cap oriented funds and all are good ones. But it may not be that beneficial to invest in multiple funds that belong to same fund category.
Suggest you check their portfolio overlaps and I believe that we have already discussed about the overlap thing 🙂
My ranking would be:
Franklin Smaller cos fund
Mirae fund
DSP micro cap &
SBI Small & Mid-cap.
Dear Sree, Thank you so much !!!! Sure i will have a check on the overlap tool ,
however if i want to invest in 2 funds then would you suggest to take 2 from smal& mid cap or what will be the combination to take if i want to invest in 2 funds pls
Dear Sudhakar,
I will go with : Franklin Smaller cos fund & Mirae fund 🙂
Dear Sree,
Thank you so much !!
is that u referring ” Franklin (I) Smaller Co -Direct (G)” ?
becoz i dont want to take any chance with naming.. since they have lot of funds:)
Yes dear Sudhakar 🙂
Million thanks to you Sree !!!
will come back later if i have any questions 🙂
HI Sreekanth
I really appreciate your efforts for sharing financial knowledge to us. Thank you very much.
I have registered to MF Utilities, also linked my Demat to it. I would like to invest in direct mutual funds.
What if I do not hold MFs in Demat and are my returns affected?
Regards
Sayyed
Dear Fareed..The returns are not affected.
Can NRIs invest in Direct plans
Dear Kumar..Yes they can but suggest you to kindly go through this article …FATCA compliance & mutual funds investments.
Dear Sreekanth,
This site is really excellent
I have invested in SIP with HDFC bank in my kid’s name for 10k each month. Can I get it converted to direct funds? Kindly advice
Also please suggest some links to read about mutual fund basic for totally amateurs like me
Dear Ganesh,
Yes, you can covert them.
Kindly read : MF Utility online MF platform for Direct Plans of MFs.
You can follow articles available in websites like valueresearchonline, freefincal, jagoinvestor etc.,
I am living in Malaysia and like to invest in some unit trust in India . Is there anyway I can open an account and invest without going to India ? Is there any tax implication ?
Dear Kumar,
By ‘unit trust’, do you mean mutual funds? or is it Unit Trust of India (UTI)?
Hi Sreekant.. your article is simply superb… i thought of investing in elss around 8 K per month in 4 mutual fund 2k each…
Kindly let me know which 4 will be best to opt from ur point of view..
Axis long term equity,Reliance tax saver,BNP paribas, Franklin tax shield, ICICI pru tax are in my minds 🙂
Dear Sudhakar,
You may invest 1 or 2 ELSS funds, that’s would be beneficial.
Read : MF Portfolio overlap analysis tools.
Axis & Franklin funds are good ones.
Hi Sreekanth,
I am in my late twenties and have a one year old daughter. I have around INR 40,000 which I want to invest. Would like to invest for a period of 5 years. I have no idea about investing in ELSS or MFs. Want your advice on investing this amount with the objective of highest returns. Can you pls help me? Thanks!
Dear Pranjal,
Sure, but let’s first work on insurance requirements.
Do you have adequate life cover? Do you and your family have health insurance?
Kindly read:
Why having adequate INSURANCE is important?
Financial planning pyramid.
Hey Sreekanth,
I am new to this world . Have just invested in Fixed deposits in banks, PPF and SSA till date.
Now , I want to invest for higher returns.please advise where shld i invest?
Dear Preeti,
Kindly let me know about your financial goals & investment horizon.
I have replied to your queries posted in ‘Top ELSS funds‘ article. Kindly check.
Thanks for a Quick Reply!
I have checked the reply on that article.Thanks for info.
I want to invest 50k per annum for good returns but dont know anything about mutual funds, ELSS and all. Can you please advise how should I move forward with less risk?
I want both short term and long term investment options.
Dear Preeti,
Equity oriented mutual funds are risk oriented ones. You can consider investing in them if your investment horizon is atleast 5 years.
ELSS Funds offer tax saving option too and have a lock-in period of 3 years.
Balanced funds offer you benefits of both the worlds ie equity & debt (fixed income).
If your objective is tax saving + long-term wealth accumulation then invest in ELSS fund.
If your objective is accumulation only then you may consider a balanced fund like HDFC balanced fund (growth) to start with.
For short-term option (say 6 months to 3 years), kindly read:
Best Debt mutual funds for 2016.
Best MIP MFs.
Hi Sreekanth,
This very educational article and I appreciate the efforts you have taken in writing this for us. This will certainly be beneficial to novice in finance like me. I have a question and need your suggestions.
I had invested in 2010 in below schemes, both are tax saving funds and invested through Distributors.
1. SBI Magnum taxgain Scheme – Growth
2. HDFC TaxSaver Growth
Could you please suggest, whether i should just switch to direct funds or move out of these schemes (as both seems to be not performing ) and invest lump sum in midcap/diversified schemes ? If yes, then can you please suggest me some good funds to invest into?
Thanks for your help!
Regards,
Sushant.
Dear Sushant..Let me know your investment horizon (time-frame) plz??
Dear Sreekanth,
Thanks for quick reply! I’m planning for long term only, up to 10-15 years or so.
Regards,
Sushant
Dear Sushant,
If your time-frame is >10 years and not looking out for tax saving option, suggest you to invest in one diversified equity fund and one mid-cap oriented fund.
You may redeem the existing funds’ units and invest in funds like Franklin Prima Plus & UTI mid-cap.
Kindly read:
Best Equity funds.
Hi Sree,
Simply Superb Article..Precise and very Useful…
I have started investing in Axis ELSS fund from this month with a SIP of 5k/month and want to change the investing technique from
SIP to lumpsum.Is it possible to do so? If yes? How?
I have invested in ELSS Axis regular growth plan but want to invest in Direct plan now.How can i do the same?
Thanks in Advance..
Dear Ashmit,
You may just pause/cancel the future SIPs. I personally prefer to invest lump sum mode especially in an ELSS fund. I have given the procedure on how to switch from regular plan to direct plan.
Also, kindly read: Best ELSS funds.
Hi Sreekanth,
Thanks for this informative article. This is very useful for new investors and everything is explained in simple manner.
I would like to ask one question, Why Direct plan have no CRISIL Ranking where as Regular plan will have good ranking? e.g DSP-BR Micro Cap Fund – RP (G) — Rank 1
DSP-BR Micro Cap Fund – Direct (G) —- No Ranking ?
Thanks !
Sushant
Dear Sushant,
It is not that all regular plans are ranked good. It is just that as of now credit rating agencies are ranking regular plans only. Direct plans have not yet completed three years, so no enough data is available to rank them.
Soon, we will see the star ratings or rankings on Direct plans too.
Dear Sreekanth,
Thanks for the instant reply! appreciate your help..
Please keep up the amazing work you are doing. I will soon come up with some new questions for you again 🙂
All the Best !!
Regards,
Sushant
Dear Sreekanth,
I am a regular viewer of your articles and very much impressed.
I am doing SIP with Sundaram Mutual for the fund – Select Midcap Regular plan from January 2015.
I wish to switch this SIP from Regular to Direct plan by next month on wards.
Pls. let me know the procedures.
Thanks a lot.
Dear Jayan,
I have explained the procedure in the article.
Kindly contact Sundaram AMC and submit ‘Regular to Direct Switch’ form.
Kindly be aware of Tax implications (if any).
Hi Sreekanth
I would like to invest in HDFC children’s Gift fund – Direct Growth plan through online. I am a new investor for HDFC. I’m not able to invest online since only exisiting customers are allowed to invest online( exisiting folio no need to be provided to log in) But in other AMC’s this is not the case (e.g Franklin & UTI ). Please let me know other procedure to invest in Direct fund..
thanks
regards
Mahesh prasad
Dear Mahesh,
If you wish to invest in hdfc mutual funds online, you can make your first minimum investment by visiting HDFC bank or HDFC AMC or CAMS office.
(or) If you know a broker / distributor (or have a demat account), make a first minimum investment in a HDFC fund you prefer.
After that, you can invest directly through hdfc mf website using the Folio number.
Dear Srikanth,
All the informations in your web site are very informative and valuable and surely I will pass on this to all my friends. I have a query. Suppose if A and B have invested Rs. 9 lakhs in total in a joint account of MIS in Post Office (with A as first holder and B as second holder for 7 lakhs and B as first holder and A as second holder for Rs.2 lakhs) @ 8.4%, how much interest should be taken in A’s income and B’s income? Is it A for 7 lakhs and B for 2 lakhs or 4.5 lakhs each for A and B. Your early reply is requested. Thanks.
Dear KRISHNAN,
It depends on the shares that have been mentioned by A & B in application form. Also, who is contributing to these accounts also matters? (source of income).
Dear Mr. Srikanth,
Thanks for your reply. It means that If A has contributed Rs. 7 lacs from his/her source of income and B has contributed Rs.2 lacs from his/her source of income, the interest income should be taken into account for tax purpose according to their contribution only and not 50:50. Thanks once again.
Regards
Dear KRISHNAN,
Your understanding is correct. The same can be mentioned in the application form too.
Dear Mr. Srikanth,
In the application since the share of each depositor has not been asked no mentioned had been mentioned in it. Will there be any problem in it? Or should they give any separate declaration for it. Your advice is requested. Thanks.
Dear KRISHNAN,
You can give a declaration to your banker regarding this. Kindly check with your banker/postoffice and request you to share the update here.
Dear Mr. Sreekanth,
Today I have come to know from one Post Office Agent that the total interest in the joint account of two persons in MIS should be shared equally by both the person and in case of three it should be shared 1/3 by each person and should be taken into their income accordingly while filing IT return irrespective of their contributions . Is it like that? If possible can you please find out and reply?
Regards
Dear KRISHNAN,
It is always better to share it as per the contribution ratio so that you will be in a better position to justify in case if there is any scrutiny or if you receive any tax notice.
Dear Sree,
First of all I would like to say Thank you. Your articles are very genuine and easy to understand.
I am NRI and made an investment in MFs. I am doing STP from Debt Option which is Icici regular saving to the following funds
ICICI VALUE DISCOVERY
ICICI BAL ADVANTAGE
ICICI FOCUSED BLUE CHIP.
Please advice how is my Portfolio. I am investing 20k each for 10 years.
I am now planning to invest in other AMCs so I would request you to advice me some good 3 MFs for 10 year horizon in Small and mid cap specially. I am high risk investor.
All above funds are direct funds.
Best regards
Ammar
Dear Ammar,
Thank you for your appreciation.
ICICI Adv fund is relatively new fund compared to other top performing Balanced or hybrid funds.
ICICI Bluechip & ICICI value discovery are managed my same fund manager. Also, all your funds are from one AMC only. You may consider to diversify across AMCs and can add one Mid-cap fund like UTI midcap or hdfc midcap opp fund.
Kindly read:
Top Equity funds
Top Balanced funds
MF portfolio overlap analysis tools
MY MF Portfolio.
Hello Sir,
Franklin India PRIMA PLUS GROWTH
Franklin India Smaller Companies Fund – Growth
HDFC BALANCED FUND – GROWTH
UTI EQUITY FUND GROWTH
UTI – MID CAP FUND -GROWTH
How are above funds to start in SIP from this month, each fund 2000 Rs I am planning. How are these funds and fund allocation for moderate Risk Plan. I want to invest for 10 yrs minimum? What is u r suggestion ?
Dear Suresh,
Good ones. Check portfolio overlap between Franklin Smaller co fund & UTI mid cap fund. If there is high overlap say 60% or so, you may select one of the two.
Read : MF portfolio overlap analysis tools.
Hello,
Your blog is really amazing .I would like to know your view for my existing investment .I have invested in MF for last 4 months in direct plan.pls check my portfolio and share your view whether it is good or not.
My Investment time horizon is more than 10 years
Large Cap
1) ICICI blue chip–1k
2) UTI equity fund–1k
Midcap Fund
1) Canara Robeco emerging fund–2k
2)ICICI pru value discovery fund–1k
3) HDFC mid cap fund—–1k
Balance Fund
1) HDFC Balance Fund—1k
Dear Nikhil,
Individually all your funds are good ones. But it is not advisable to invest in multiple funds from same fund category (large cap or midcap).
Kindly read : MF portfolio overlap analysis tools.
My aim to create the wealth for future perspective like my child higher education,marriage .Also tell me the best portfolio for me.
Hi,
I started investing like this :
kotak select focus fund — 2500 SIP
Franklin smaller cos fund — 2500 SIP
SBI BLUECHIP —– 5000 SIP
TATA BALANCED — 6000 SIP
INDIABULLS LIQUID — 50000 (lump sum)
Am I in right path?
I am also thinking to invest in UTI dynamic bond growth… so should I do it in SIP or lumpsum ?
Thanks,
Arnab
Dear arnab,
Kindly share your investment objective(s), time-frame and fin goals details??
Hi Sreekanth,
Nice information ..
I am currently investing through NJ money broker, he is not charging any money for this investments i am investing through broker, however they are get paid by the Mutual Fund AMC..
The broker is providing single login access to all the mutual funds i invest where i can check all SIP investments details at a single screen..
By investing with Broker i am i loosing any money ?
Please confirm.
Thanks,
Shravan
Dear Shravan,
The AMC has to deduct these transaction costs from their profits and then pay them as commissions to your distributor (NJ).
Hence, the returns generated by Regular plans (your case) will be slightly lower than the Direct plans.
But, if you are comfortable with your broker, remain invested. But do understand the advantages and disadvantages of both options.
Excellent article Sreekant. Very Informative.
Thank you Suguna..Keep visiting 🙂
Hi Sreekanth,
Is it possible to transfer direct plans from other MFs to ICIC direct. If yes, is there any charges involved. After transfer plan will continue as Direct plan or will change to Regular ?
Dear Suresh,
You can switch from Direct to Regular plans. I believe that no ‘Exit loads’ are applicable in this scenario. Will continue as Regular plans.
Hi Sreekanth,
Thanks for your article. This is very useful for beginners like me. I have started SIP from Aug’15 onwards and monthly adding 20K to the portfolio through ICICI Direct. When it is going to feasible to switch my existing accumulations to Direct plan.
Please suggest.
Thanks & Regards
Hi Mr Sreekanth
I just love your articles and also share them with my friends.
Recently I have received one e-mail from cdsl with a consolidated account statement of my mf holdings and demat ac holdings based on my PAN no. I came to know that one of my demat account with Anand rathi which I had already instructed to close after clearing all dues and transferring all holdings is showing an active status even after few years of closing.
What should I do? I don’t hv any proof of instruction for closure now.
Regards
Chandra Sekhar
Dear Chandra,
Thank you for following and sharing my articles 🙂
Kindly contact their customer care and if there are no holdings get it closed. You may send an email too (for tracking and documentation purpose).
Wow.. wonderful…complicated issue in a simple language and i have understood the whole stuff.. Thanks a lot..
how can i change my mutual funds to direct with AMC rather through Demat A/c?
Dear Anupama,
You need to contact respective fund house customer care and submit ‘conversion forms’. Also, kindly be aware of the applicable Exit loads and tax implications.
hi shrikanth,
investing in MF online is better or offline, through demat account is better or to get from fund houses respectively, is it better to invest one time in MF , if so which one can i go for, for good returns . thnks.
Dear fredrick,
As mentioned in the article, if you know what and how to buy then go DIRECT.
Invest a lump sum in MF is fine, but you need to remain invested for long-term.
Sreekanth, Thanks for This article. My questions is do you have list of best mutual funds which are tax saving? If yes, which is good way to invest in mutual fund, direct or SIP? (the purpose is only to save tax). Thanks.
Dear Deepa,
Kindly read my article on ‘Best ELSS funds‘.
It is lump sum vs SIP and not ‘direct or SIP’.
hi Sreekanth Reddy,
This is Ramesh from Andhra pradesh.First of all I would like to thank you for giving such a valuable information ,which is useful for the beginners.As, I am also a biginner in investing Mutual funds recentely I started investment in the following funds(ELSS) by investigating the previous returns and collision rations based on your previous post.can you please give me an advice whether these funds selection is good or bad:
1.Axis Long-term equity growth fund regular plan -RS.2000 per month
2.Birla sun life tax relief 96 regular plan-Rs.2000 per month
3.Reliance retirement wealth creation regular plan-Rs.1000 per month
I Just started above investments on 28-sep-2015.can u please tell me whether can I continue or quit any of those and please suggest some funds with good returns . I will invest for a period of 7-8 years.
Dear Ramesh,
What is ‘collision rations’?
Axis & Birla funds are good ones.
Regarding Reliance fund : Kindly read my review.
Sorry,srikanth its mutual funds overlapping.thanq for u r quick response. Have a nice day…