Taxation of multi-asset funds can be complicated—a simple explanation of the rules and how to choose funds in this category.

We discuss modifications that can make the National Pension Scheme (NPS an attractive retirement solution accommodating changing needs. The New Tax Regime has made redundant the “extra Rs. 50,000 tax saving” (or reduction in taxable income). So, finally, NPS can attract the right kind of investor. The new-generation retiree wants the flexibility to retire early…

A reader asks, “Which will fetch more returns over 15 years, an SIP or a lump sum investment?” Comparing the returns of a SIP with a lump sum investment has little practical use. After all, none of us will invest just once in the market or always systematically. Even if we did make the comparison,…

A 30-year-old reader asks, “What MFs should I choose if I can invest Rs 1 Lakh a month?” Here are some model mutual fund portfolios for long-term goals (> 10 years away) independent of the amount to be invested. They are arranged in descending order of preference. We shall also mention relevant fixed-income options. Asset…

A reader says, ” Can you please let me know funds with indexation benefits apart from Parag Parikh Dynamic asset allocation fund and  Edelweiss Multi Asset Allocation Fund excluding EquitySavings and Arbitrage?” A discussion. Let us begin with some context. Note: Tax rules change often. The rules mentioned here are valid as of April 2024…

Recently, there was some buzz on social media and a few articles about how large cap mutual funds have made a “comeback”. In this article, we discuss the performance consistency of these funds using the freefincal equity mutual fund outperformance screener (published monthly). Disclaimer: Fund performance reports present return and risk analysis of a fund with…

SEBI registered fee-only advisor Abhishek Kumar explains why we must check our KYC status and when it must be re-validated. About the author: Abhishek is part of a freefincal’s curated list of fee-only financial advisors and a fee-only India member. His journey has been published earlier: Fee-only Advisor Abhishek Kumar’s tap dancing to financial freedom. Most…

A reader asks, “Consider a mutual fund that is expected to hold more than 35% equity. If the monthly fact sheet of the fund reports an equity allocation of 35% or lower for one month alone, should I pay tax as per slab if I redeem that financial year?” Background: The govt has amended the…

I recently pointed out in a video that combining active and passive investing represents a lack of conviction and is a scattergun approach. I cited the example of holding the Parag Parikh Flexi Cap fund + Nifty/Sensex Index fund. A reader holding Parag Parikh Flexi Cap Fund plus UTI Nifty 50 Index fund wrote in…

A reader asks, “We have a retirement corpus of over Rs. Ten Crores. While we agree that having fewer funds is more manageable, we are nervous about stacking one cr in each fund, debt or equity. Do you think that fear is unfounded?” The number one goal in portfolio management is a peaceful sleep. So…

In this article, we explain in simple terms what a mutual fund stress test is and what investors need to appreciate while investing in mutual funds, especially small cap mutual funds. If you have not seen the movie Margin Call, I strongly suggest you do so after reading this article. You could appreciate the situation…

Ask in any personal finance forum, “Can I invest in XYZ NFO?” there would be an immediate refrain, “Never buy NFOs!”. Context is often the first casualty in such a forum, and this response is no different. All mutual funds carry a past performance disclaimer – past returns do not indicate future returns. Then why…

Many investors are worried about the “over-heated” small cap segment and wonder if they should exit — a discussion. At the time of writing, the last 1Y trailing return of small cap segments has ranged from 33% to 75%. Regular readers may know that freefincal has always opposed investing in small cap mutual funds. Due…

You might have often seen statements like, “Our analysis shows that, over the long term, the stock market shows poor returns for only two out of every ten periods tests. This means that the probability of losing money is quite small”. Such statements are wrong. You cannot, well, must not associate probabilities with stock market…