What is XIRR: A simple introduction

If you have invested in mutual funds, the annualized returns that you see in portfolio trackers are from an XIRR calculation. It is important to understand that XIRR is an “adjustment” and not get carried away with the large numbers that you see. A simple explanation of what is XIRR.
XIRR or extended internal rate of return is a measure of return used when multiple investments (at different points in time) are made in a financial instrument. read more

How tax (DDT) affects mutual fund dividends and lowers return (examples)

We are aware that debt mutual funds are subject to a dividend distribution tax (DDT). From April 1st 2018, equity mutual funds will also be subject to DDT. Here some examples as to how DDT affects mutual fund dividends and lowers returns.  This post is in response to Ankit Jain’s comment in Equity Mutual Fund Dividends are taxed 12.942% (not 10%): Here is how to avoid this.

What is dividend distribution tax and how does it work? read more

Clean up your mutual fund portfolio before March 31st 2018!

Every dark cloud has a silver lining. The Equity LTCG tax and the dividend distribution tax on equity mutual funds from April 1st, 2018 is the perfect stimulus to clean up our mutual fund portfolios. Here is how to do it.

1: Update your portfolio. Have all your mutual fund holdings in one place. Not applicable to those who slow down the Value Research server every day from 8:10 – 10:30 pm checking for the day’s gains and losses and wonderful insights from those. read more

How to review a mutual fund portfolio

I discuss simple ways in which a mutual fund portfolio associated with a long-term goal can be reviewed. This is a grey area in personal finance and there is no optimal way to do this. Each individual must necessarily develop their own style of review.  So multiple solutions are the norm here.

This post is about reviewing an existing equity portfolio and not about creating a new one. To create a new one, you can consider reading, Minimalist Portfolio Ideas for Young Earners read more

Death of a good mutual fund: DSP BlackRock Treasury Bill Fund

So AMCs’ have started ringing in changes to fall in line with SEBI’s Mutual Fund Scheme Categorization. DSP Blackrock is the first to announce a change in fundamental attributes of several of its funds. As expected, a wonderful debt fund, DSP BlackRock Treasury Bill Fund, will cease to exist. Thanks to Khushroo T Satarawala for posting details on FB group, Asan Ideas for wealth.

The circular is dated Jan 8th 2018 and has the following exit option read more