Capitalstars is a SEBI registered investment advisor. Schedule a call with Capitalstars investment consultant or drop a mail at backoffice@capiltalstars.in and we will get in touch with you. You may also call us on 9977499927

Investment trading in securities market is always subjected to market risks, past performance is not a guarantee of future performance. CapitalStars Investment Adviser: SEBI Registration Number: INA000001647

Capitalstars is a SEBI registered investment advisor. Schedule a call with Capitalstars investment consultant or drop a mail at backoffice@capiltalstars.in and we will get in touch with you. You may also call us on 9977499927

Investment trading in securities market is always subjected to market risks, past performance is not a guarantee of future performance. CapitalStars Investment Adviser: SEBI Registration Number: INA000001647

नई दिल्ली. अब तक आप वॉट्सऐप का इस्तेमाल सिर्फ चैटिंग और फोटोज-वीडियोज भेजने के लिए करते रहे होंगे। अब आप इसके जरिए म्युचुअल फंड में भी निवेश कर सकते हैं। कई म्युचुअल फंड कंपनियों और इन्वेस्टमेंट प्लेटफॉर्म ने ग्राहकों की सुविधा के लिए वॉट्सऐप के जरिए निवेश करने का फीचर ऑफर किया है। महज चंद स्टेप्स में आप अपने वॉट्सऐप के जरिए म्युचुअल फंड में इन्वेस्टमेंट कर सकते हैं। वॉट्सऐप के जरिए निवेश की सुविधा का इस्तेमाल करने से पहले बस एक बात का ध्यान रखना जरूरी है कि आपने KYC औपचारिकताएं पूरी कर ली हों।

1. शुरुआत निवेश की प्रक्रिया की शुरुआत के लिए सबसे पहले सर्विस प्रोवाइडर की वेबसाइट पर जाएं। यहां अपना मोबाइल नंबर डालकर नियम और शर्तों को स्वीकार करें। कुछ सर्विस प्रोवाइडर्स ट्रांजैक्शन की शुरुआत के लिए निवेशक से एक मोबाइल नंबर पर मेसेज भेजने के लिए कहते हैं।

2. शर्तें यह सुविधा सिर्फ मौजूदा रेजिडेंट इन्वेस्टर्स के लिए उपलब्ध है जो सिंगल होल्डिंग फॉर्मेट (इस तरीके में जॉइंट होल्डिंग सपॉर्ट नहीं मिलता) में निवेश करना चाहते हैं। पॉलिटिकली एक्सपोज्ड व्यक्तियों को भी इस सुविधा के जरिए निवेश की अनुमति नहीं है।

3. KYC वेरिफिकेशन जैसे ही आप नियम व शर्तों को स्वीकार कर लेते हैं, तो आपके फोन पर एक मैसेज भेजा जाता है, जिसमें KYC वेरिफिकेशन के लिए पैन नंबर पूछा जाता है। सर्विस प्रोवाइडर द्वारा यह पुष्टि करने के लिए पैन की जांच की जाती है कि इन्वेस्टर केवाईसी अनुपालक है।

4. निवेश की जानकारी आप एक मुश्त रकम या फिर SIP के जरिए निवेश की शुरुआत कर सकते हैं। आपको उस स्कीम को चुनना होगा, जिसमें आप निवेश करना चाहते हैं। इसके साथ आपको यह भी बताना होगा कि आपको कितना पैसा निवेश करना है और इसकी आप कितनी किश्तें भरेंगे। इसके बाद ऑर्डर समरी जेनरेट होगी, जिसमें आपको डीटेल्स को वेरिफाई या एडिट करना होगा।

5. भुगतान वेरिफाई करने के बाद आपके मोबाइल नंबर पर एक OTP भेजा जाएगा। इसके बाद आपको URN रिसीव करने के लिए OTP एंटर करना होगा। SIP ट्रांजेक्शन को एक्टिवेट करने के लिए बैंक के साथ URN रजिस्टर कराना होगा। ये औपचारिकताएं पूरी करने के बाद आप आसानी से वॉट्सऐप के माध्यम से म्युचुअल फंड में निवेश कर सकेंगे।

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We all know that effective from 1st April 2018, we have to pay tax on equity mutual funds if there is LTCG. However, the biggest task is how to calculate or identify the NAVs. To make your life simple, we can now download LTCG Tax Statement of Equity Mutual Funds.

Effective from 1 April 2018, equity mutual funds and direct equity investments will attract 10% long-term capital gains (LTCG) tax on gains exceeding Rs1 lakh a year.

Before proceeding further, let us first understand the taxation of Mutual Funds.

First, let us understand what are the factors that determine the Mutual Fund Taxation. The three major part of these are below.

Your tax will be based on your residential status. If you are resident then the taxation rules will be different and if NRI then it differs. Hence, first, you have to make sure of what is your residential status.

Any fund which invests 65% or more in equity is called as Equity Fund. For example, large-cap funds, multi-cap funds, small and mid-cap funds or equity-oriented balanced funds (where the equity exposure is 65% or more) are all called equity-oriented funds.

If the equity portion is less than that, then they are all treated as debt funds or non-equity funds. For example liquid funds, ultra-short term funds, short-term funds, income funds, gilt funds, debt-oriented balanced funds, gold funds, fund of funds or money market funds.

The holding period for Equity and Debt Funds will be different for taxation purpose. For equity funds, if the holding period more than a year, then it is called long term. If the holding period is less than a year, then such equity mutual funds holding period is considered as short term. Whereas in

Whereas in the case of debt funds, holding period more than 3 years is considered as long-term. If holding period of debt funds is less than 3 years, then it is considered as short-term and taxed accordingly.

After Budget 2018 announcement, as you are aware that you have to pay 10% LTCG Tax on Equity related products also. Below is the method to calculate the LTCG Tax on Equity Mutual Funds be calculated 

Now this above Budget 2018 announcement made the date 31st January 2018 as the most important date for all equity and equity mutual fund investors. Because based on the value of as on 31st January 2018, you have to pay the LTCG Tax.

Hence, it is a cumbersome task for mutual fund investors to mark that date and identify the NAV and the gain as on 31st January 2018.

In order to avoid such difficulty, CAMS and Karvy came with the LTCG Tax Statement of Equity Mutual Funds. Using this feature you can easily download the values and calculate your tax.

As of now, CAMS and Karvy started this facility and in coming days remaining R&T Agents will also start providing this statement.

The list of CAMS serving Mutual Fund Companies is as below.

Hence, if you used CAMS online platform to link Aadhaar to Mutual Funds folios online, then it means that you automatically linked to all Mutual Funds which you are holding in these above listed mutual fund companies.

Along with CAMS, there are other Transfers Agents and they are as below.

In CAMS portal you will find two types of statement to download LTCG Tax Statement of Equity Mutual Funds. They are as below.

In this statement, you will come to know the NAV, Unit Balance and Fair Market Value as on 31st January 2018. The statement looks like below.

The enhanced Capital gain/loss statement will allow investors to view the consolidated capital gains/losses across all mutual funds that are serviced by CAMS. Along with providing short-term and long-term capital gain /loss, the statement will also provide the original cost and the NAV as on 31st January 2018.

You can download the same under myCAMS—>Statements—>Realised Gains.

Both these statements are served as part of CAMS “mail back services” from CAMS website. Hence, you will receive both statements to your registered email id and it is completely free.

Now Karvy also started an option to provide the LTCG Tax Statement of Equity Mutual Funds to unitholders where Karvy is R&T Agents.

You have to visit this link of KARY. You have to provide the registered Email Id and enter the new password. Then you have to select the time period of the statement. Then you can download the statement easily.

As I said above, as of now CAMS and Karvy started this facility. Once other R&T Agents start this, then I will update this post again.

The industry welcomed Modi's win for a second term, saying this will ensure policy certainty.

The market will focus on steps taken by the government to encourage investment and give a push to consumption, which is hitting a soft patch," Kotak Mahindra Mutual Fund's Managing Director and Chief Executive Nilesh Shah said in a statement.

He added that the voters have shown a "maturity" in voting the same government, which will help do away with the policy uncertainty.

Industry body Amfi's Chief Executive N S Venkatesh said he expects the political stability to drive pro-reform economic agenda.

"We now look forward to the new government creating a conducive investment environment for the financial asset class," he said.

The new government will have to "deftly" handle issues like headwinds like growing oil prices and global trade wars which are being faced by the economy, LIC Mutual Fund's Head of Product and Business Development Lav Kumar said.

He added pace of reforms in various sectors will gain pace and the growth rate will also accelerate.

As per the results and trends available, the National Democratic Alliance is set to retain power, with the BJP alone having a single-party majority.

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1. Tenure: 

For Example, While going through Krishna's portfolio, I realized his first investment was in the ELSS fund. He had done SIP in an ELSS fund from the last 12 months. ELSS funds have a lock-in period of 3 years. So if he plans to move his present funds to any other ELSS fund, he has to wait for the next 3 years. If he keeps switching between ELSS funds every year, his portfolio will be full with a bunch of ELSS funds.

2. Index Funds: 

Index funds are a very crucial part of a long term investment portfolio. Krishna portfolio had a missing component of index investing. So, I explained to him Index Investing and how to make the best use of Index funds in investment. I personally prefer investing through Index ETF. Index Funds Returns, in the last 20 Years - NASDAQ 100 is up +468%, DOW JONES is up +191%, GERMAN DAX is up +163%, S&P500 is up +158% and most surprising is India Sensex return. It is up a whopping +928%.


3. Direct Mutual Funds: 

Krishna's portfolio had all regular funds. TER of direct mutual funds is lower than regular mutual funds. TER (Total Expense Ratio) has a direct bearing on your returns massively through the power of compounding. For example, Rs 1 lakh over 10 years at a rate of 15 percent will grow to Rs 4.05 lakh. But if we consider an additional expense ratio of 1.5 percent, your actual total returns would be Rs 3.55 lakh, nearly 14 percent less compared to direct funds. So, the selection of direct mutual funds over regular mutual funds is very important.


4. TER (Total Expense Ratio):

We have already discussed TER in the above point. But, even in the direct fund, TER keeps on fluctuating and communicated to investors through Change in Base TER (Total Expense Ratio) notice/mail from funds. This change must be keenly checked, to align your investment projections and monitor your return impact.



5. Change in Mutual Fund scheme name and changes of fundamental attributes:  

Change in Mutual Fund scheme name and changes of fundamental attributes can have an adverse impact on your investment projection and returns. This might change your overall reason for holding a particular fund.

6. Goal

Last but not least, GOAL. In investing, the goal is your idea of the future projected return combined with investment strategy and timelines. Before mutual fund portfolio review, check whether your goals are changes. In the case of Krishna, he had a change in goal duration and amount. 

Investment  trading in securities market is always subjected to market risks, past performance is not a guarantee of future performance. CapitalStars Investment Adviser: SEBI Registration Number: INA000001647

For more details call on 9977499927 or visit our website www.capitalstars.com

First let us understand what is liquid stocks? In simple terms to say, liquid stocks are the stocks which have more buyers and sellers. This makes holder of stocks or buyer of stocks to easily either sell or buy it. Now let us understand one more definition called “Impact Cost”. This is not related to the cost what you pay for buying a stock like brokerage, transaction charges or depository charges. But the cost you pay for not finding desired quantity of stocks available in market.

Suppose Mutual Fund company decided to buy 1,00,000 stocks of XYZ company in stock market then usually they will not disclose quantity. Otherwise stock price will raise immediately. Instead what they will do is, look for the ideal price. If currently the best buy (bid) order is at Rs.99 and sell(ask) is at Rs.101. Difference between these two is called bid ask price, which currently is Rs.2. Suppose someone try to buy 100 stocks at 101 and sell immediately at 99 then they will loose Rs.2 for each stock they purchased.  Ideal price in above case is considered as Rs.100 which is middle price of best buy and best sell price.

But if mutual fund company not found the desired quantity of 1,00,000 then they need to purchase part by part by considering the ideal price each time. So if the average purchase price of all 1,00,000 raised to Rs.101.50 then the impact cost is calculated as below.

Ideal price (average price between best buy and best sell order) Rs.100 and average price bought is Rs.101.50 Then Impact Cost is

(101.50 – 100)/100 * 100 = 1.50%.

What this 1.50% significe is, mutual fund company paid 1.50% more than the ideal price due to non availability of desired quantity in XYZ stock. If all the 1,00,000 quantity available then the trade might have done at Rs.100 which saved mutual fund company by paying 1.50% more than the ideal price. This additional cost is called Impact Cost.

So more liquid stocks means less Impact Cost where as lesser liquid stocks means higher Impact Cost. This is the main reason why mutual funds always looks for liquid stocks to reduce their Impact Cost.

Impact Cost will play a major role in case of Index Funds. Because Index Funds always replicate the Index which they benchmarked. If they are unable to find the required quantity of Index Stocks then obviously Impact Cost will increase, which will automatically impact on fund performance and deviates more from Index returns.

Capitalstars is a SEBI registered investment advisor. Schedule a call with Capitalstars investment consultant or drop a mail at backoffice@capiltalstars.in and we will get in touch with you. You may also call us on 9977499927

Investment trading in securities market is always subjected to market risks, past performance is not a guarantee of future performance. CapitalStars Investment Adviser: SEBI Registration Number: INA000001647

# The Schemes would be broadly classified into the following groups:

a. Equity Schemes

b. Debt Schemes

c. Hybrid Schemes

d. Solution Oriented Schemes

e. Other Scheme

# Only one scheme per category would be permitted, except ;

# Easier to choose

# One definition

# Sticking to the objective

# Debt funds clearer

# Portfolio review

Capitalstars is a SEBI registered investment advisor. Schedule a call with Capitalstars investment consultant or drop a mail at backoffice@capiltalstars.in and we will get in touch with you. You may also call us on 9977499927

Investment trading in securities market is always subjected to market risks, past performance is not a guarantee of future performance. CapitalStars Investment Adviser: SEBI Registration Number: INA000001647

While buying life insurance, have you ever thought why you are buying insurance? I know around 90% of them have not done their homework before buying. It may be in a hurry to save few bucks of Tax or with the advice of your friend, uncle or neighbour who is agent of some particular insurance company

But which is best-Term Insurance+Mutual Funds or Endowment Plans?

I will show you with example. Suppose Mr.X want to buy Insurance plan and looking for the Insurance cover with return.  Therefore, he will go with endowment plans, which are the common investments in all investors portfolio (About ULIPs I will explain you elaborately in my future posts).

Here I will consider two plans of LIC’s-One is Amulya Jeevan (Pure Term Plan) and Endowment Plan of LIC (Plan No.14). Suppose his age is 30 and he is looking for the cover of 50 Lakh with term of 20 yrs. Then Amulya Jeevan premium is Rs.12,850 and Endowment Plan premium is Rs.2,49,750.

.

 If Mr.X took Amulya Jeevan and start to invest the remaining balance i.e. difference of Endowment Plan Premium and Amulya Jeevan premium, which is Rs.2,36,900 (2,49,750-12,850) in any well diversified funds for the next 20 years. Then his investment at the end of 20 years will be 2,61,98,641 (Term-20 yrs, Monthly he contribute Rs.19,741 which is 2,36,900/12=19,741, Interest considered 15% CAGR). But you may ask how I may consider 15% as return over 20 years investment. If you look at the returns of Sensex from Jan 1980 to Oct 2011, equity gave around 18% CAGR return.

Suppose Mr.X invested in Endowment Plan and his return at the end will be around Rs.1,35,00,000 (SA-50,00,000+Bonus-60,00,000 60 per 1000 SA per year and Final Additional Bonus if any-25,00,000 at Rs.500 per thousand SA). Which will give you around 8.17% CAGR return (even after considering high values for future predictions like Bonus as 60 Per 1000 SA per year and final additional bonus at 500 per 1000 SA). However, if you consider the returns of Private Insurers then it will again come down. As per current trend, Private Insurers’ returns are less than LIC in Endowment Plans.

Therefore, by purchasing Term Insurance and diverting the remaining amount towards Equity, you can earn more than just investing in normal Endowment Plans. For your information, today there are so many Term insurance Plans, which will be available with very competitive rates in market than what LIC’s Amulya Jeevan costs you. However, I took LIC’s example because in India LIC considered as faithful organisation for investment. Insurance company considered as faithful investment organisation and not faithful insurer…strange but true

Capitalstars is a SEBI registered investment advisor. Schedule a call with Capitalstars investment consultant or drop a mail at backoffice@capiltalstars.in and we will get in touch with you. You may also call us on 9977499927

Investment trading in securities market is always subjected to market risks, past performance is not a guarantee of future performance. CapitalStars Investment Adviser: SEBI Registration Number: INA000001647

Do you know a Mutual Fund which is almost 80 years old? You may get surprised. But there is an equity mutual fund on this earth which is almost 80 Yrs old Mutual Fund. What can we learn from this fund?

Many of use listen to the advice from GENUINE Financial Planners or Advisers that you must stay invested for long term. However, the definition of the long-term varies from person to person. For few enthusiastic investors, the long term may be 2-3 yrs. For few, it may be 10 Yrs and for few, it may be 20-30 yrs.

Hence, we assume the meaning of LONG TERM as per our comfort and start investing. But I found many that they neither do asset allocation (may be many times because of not knowing the meaning of it) or stay invested for long term.

Yes, EASILY you can become Crorepati. You no need to work hard. Here are some number and products using them you can easily become a crorepati.

Source: basunivesh.com

Notice the difference between years of becoming Crorepati by keeping money in the savings account to investing in debt products. It is almost 49 years early by merely investing more than 3% return. Same way if we consider equity investment, then the difference is almost 3 times lesser.

By showing above numbers, I am not saying you that you take a risk and invest all your investable surplus in equity asset class. But here my point is that, debt products alone not sufficient to create wealth.

Therefore, by investing in any asset class you can become a crorepati. But what matters is WHEN.

Investment is lazy exercise. Means you no need to act on news based or event based actions for investing. Every now and then we hear in media or from financial experts that we must either BUY or SELL. They never suggest you to hold if forever.

Because the experts who appear in media are almost brokers or sellers. They never feel happy with your laziness. They need some action of either BUY or SELL. If you buy or sell then they earn otherwise NO.

However, wealth can be created by investing for LONG TERM. The proof is the USA’s 80 Yrs old Mutual Fund. You may surprise with listing to this that how this 80 Yrs old Mutual Fund survived for so long. But if you check their strategy then you also feel of zealous.

The Fund Name-Voya Corporate Leaders Trust

Inception Date-18/11/1935

Now let us see the fund performance since it’s inception.

You notice that since inception I mean since 1935 to date, the fund has generated 10.12% returns. It may not be a great number to those who running behind star ratings or chasing fund returns.

However, this 10% to 12% are great numbers who are investing for their long-term goals.

# It is almost 82 Yrs old Fund.

# The fund is holding the same stocks which it started in the year of 1935. It invested in 30 leading US companies equally in 1935.

# It invested in 30 leading US companies equally in 1935. After that, it has not made any changes to portfolio except for automatic corporate actions like a merger, spinoffs, bankruptcy etc. So it sells stocks when company go bankrupt or if the dividend is suspended.

# Currently the fund is holding 22 companies.

# If you invested Rs.10,000 as lump sum investment in this fund in 1935, then that will be now worth of Rs.2.71 Cr. (It is USA Fund but for simplification, I assumed rupee as an investment value).

# The fund has outperformed the market in 40 years without adding or deleting the new stocks.

# The fund buys same company stocks when an investor invests and sell same stock when investor request for withdrawal. But portfolio remained same forever.

# Few stocks which the fund holding since 82 years are DuPont, General Electric, Procter & Gamble, and Union Pacific.

# It also has positions that came through mergers and/or spinoffs. For example, it owns Berkshire Hathaway via an original position in the Atchison Topeka and Santa Fe Railway. It has CBS via a stake in Westinghouse Electric. It owns Honeywell through a stake in Allied Chemical.

# It is a low-cost fund with expense as 0.52%. Its expenses are less. Because of no frequent trading. Holding the same set of stocks for long.

# The formula fund following as per the product brochure is “The founders of the Trust bought equal shares of 30 leading companies in 1935 and decreed they could never be sold. The only exception was companies that went bankrupt, merged or spun off”.

These are the few facts which I learned about funds. This is just a SLAP to all those who churn their portfolio frequently. This is the SLAP to all those who feel EQUITY is not a worthy investment.

This is all about the story of USA based 80 Yrs old Mutual Fund. How can we assume the same with Indian market? Because there are few sets of experts who believe that we must not follow what it happened in the USA. For those, here are few funds which were started in 90’s era and their performance are as below.

1) HDFC Top 200 Fund

Inception date-03/09/1996

Returns of 3 Yrs-16.43%

Returns of 5 Yrs-15.24%

Returns of 10 Yrs-14.44%

2) Franklin India Bluechip Fund

Inception date-01/12/1993

Returns of 3 Yrs-16.11%

Returns of 5 Yrs-14.27%

Returns of 10 Yrs-12.82%

3) SBI Magnum Equity Fund

Inception date-01/01/1991

Returns of 3 Yrs-16.72%

Returns of 5 Yrs-15.33%

Returns of 10 Yrs-12.51%

4) UTI Equity Fund

Inception date-18/05/1992

Returns of 3 Yrs-16.84%

Returns of 5 Yrs-16.45%

Returns of 10 Yrs-14.19%

5) Reliance Growth Fund

Inception date-08/10/1995

Returns of 3 Yrs-23.54%

Returns of 5 Yrs-17.73%

Returns of 10 Yrs-14.09%

6) Franklin India Prima Fund

Inception date-01/12/1993

Returns of 3 Yrs-29.47%

Returns of 5 Yrs-26.20%

Returns of 10 Yrs-16.44%

These are the few among many funds which are since 90’s era and still giving us decent around 10% to 12% returns. There is no specific attachment to these Indian funds. However, I randomly selected.

Notice one thing, all funds 10 yrs returns are over and above 12%. I just IGNORED the star ratings of these funds. I am not saying that these are the BEST funds. However, my point here is investing for the long term without bothering about ups and down of market is actually what the secret of wealth creation.

Source: Basunivesh.com