What is mutual fund downside protection and why is it important?

Would you prefer a fund that beats the index whenever the index moves up or would you prefer a fund that falls lower than the index? Our first response would be, why not both? Unfortunately, it is not as simple as that. Very few funds manage to do both. In this post, I discuss why downside protection is important in choosing a mutual fund.

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In this post, I would prefer to steer clear of exact definitions. Those interested can consult: Nov 2017 Freefincal Equity Mutual Fund Outperformance Screener read more

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Franklin India Balanced Fund: A quiet, consistent performer

In this post, I discuss two quiet, consistent performers in the equity-oriented  (or “balanced”) mutual fund space: Franklin India Balanced Fund and Canara Robeco Balance Fund.  Let us begin with some definitions: (1) consistent performer: A fund that has consistently outperformed a chosen benchmark over the period studied (in this case, every possible 3Y, 5Y and 7Y period from April 2006) both in terms of risk and downside protection. read more

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How to invest a lump sum in an equity mutual fund?

“If I have a lump sum, what is the best way to invest it in an equity mutual fund?”, is a question that I am asked repeatedly. In this post, let us discuss simple ways to invest a lump sum in an equity mutual fund.

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Announcement 1: You Can Be Rich Too with Goal Based Investing, my first book is now available at at a 35% discount for Rs. 258. It comes with nine online calculators. Get it now. read more

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Why Income Tax Hurts and Mutual Fund Commissions Don’t?!

Each financial year, we do our best to reduce as much income tax as possible. I am only referring to legal means (!)- the most common of which is investing in tax-saving instruments. We do this because income tax hurts. The thought of losing a significant chunk of our salary fills us with a sense of loss*. Why do most of us not feel that sense of loss while investing in commission-based (regular) mutual funds? Especially when investing via banks, demat accounts and via “free accounts”? If you are a direct fund investor, do consider forwarding this to a fellow investor who thinks “someone else” will the sales guys their commissions. read more

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Reducing Tax With Partial Mutual Fund Withdrawals: Examples + Calculator

There are times in life when you require money for a need in stages. The most common example is monthly income. Those who do not have much money to play with, cannot take risks and must rely on interest income which is always taxable as per slab. On the other hand, those who have some money to work with can consider investing in instruments where the profit is treated as capital gains. Here are some examples with a calculator to consider the lower tax that will be applicable. read more

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