Mutual Funds Handbook

Mutual funds pool money raised from many people and invest it in stocks, bonds or other assets. The combined holdings of a particular fund scheme are known as its portfolio. Each investor in the fund scheme owns a portion of the portfolio, known as units. The price of a unit is calculated using the NAV or Net Asset Value. Think of NAV units as a share from a mutual fund and therefore NAV can go up or down.

Here is everything you need to know about mutual funds:

Understanding Mutual Funds
Let's say you bought one share of Airtel at the beginning of the year for ₹1,000. On the same day, your friend bought one share of Bajaj for ₹1,000. A third friend bought one share of Colgate for ₹1,000. Now let's say that at the end of the year, Airtel ...
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Beginner’s Guide To Investing In Mutual Funds
In an earlier post, I explained what a mutual fund is and how it works. If you haven't read it go ahead and do so because some of the terms written below are explained there. Now let's understand how you can go about investing in mutual funds. Before you can ...
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What is a Systematic Investment Plan?
Let's delve a bit deeper into mutual fund investing. You should read the beginner's guide to investing in mutual funds to orient yourself with the basics before we get into SIP. Do you:
  • believe you don't have enough money to start investing?
  • get scared by market volatility?
  • think you ...
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What is a Debt Mutual Fund?
Debt mutual funds should be your choice of investment when looking for stable and less risky short term investment products. In earlier posts, I discussed how equity funds will work best in fulfilling your long-term goals. But what about short-term goals? Also, not every investor is willing to take the ...
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What is a Systematic Transfer Plan?
In an earlier post, I wrote about how you can start investing with small amounts in mutual funds via SIP & make the volatility of the market work for you in the form of Rupee Cost Averaging. But what if you have a large amount of money available with you ...
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Taxation on Income From Mutual Funds
Let's see how  taxation works for income from mutual funds. Read the previous posts on my mutual funds series here. The profits that you earn from your mutual fund investments after selling your units is a form of income and hence will be taxed accordingly. Income earned by sale of ...
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Tax-saving Mutual Fund Schemes
Equity Linked Savings Scheme or ELSS is a mutual fund scheme which offers the best of both worlds: Long-term wealth creation & tax saving. ELSS serves as one of the best options for your goal of wealth creation and also acts as an effective instrument for tax saving. As the ...
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Why You Should Avoid Closed-End Mutual Funds
I have written about Debt Funds and Equity-Linked Savings Funds in the past. Now, let's take a closer look at Closed-End Mutual Funds. Closed-ended funds, by definition, refer to funds where the investor can subscribe only during the launch period and cannot withdraw money until the tenure of the scheme ...
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What is a Hybrid Mutual Fund?
One of the best things about mutual funds is that there are so many different kinds that everyone can find a suitable mode of investment. No matter what your goals are or what your risk profile is, you can invest easy & make a sound portfolio. In earlier posts I ...
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What is a Systematic Withdrawal Plan?
Are you planning to take a sabbatical from work? Or maybe you are thinking of quitting your full-time job to start something of your own? Or maybe retirement is just around the corner? Then obviously your main concern right now will be to replace that steady and regular income inflow ...
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How Many Mutual Funds Should You Invest In?
It's worrying that so many new investors mistake duplication for diversification. The most common question that new investors (or even existing investors) want an answer to is "How many mutual funds should I have in my portfolio?" The actual number is probably very different from what you think. Before coming ...
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Decoding the new Long Term Capital Gains Tax on Equities
Until financial year 2017-18, Long Term Capital Gain (LTCG) tax on equity or equity oriented mutual funds was Nil, i.e. if investors sold their shares or equity oriented mutual fund units after holding them for more than a year, they paid zero LTCG tax. All the gains (no matter the amount) ...
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Understanding Liquid Mutual Funds
Indians are by nature excellent savers, almost each and every one of us has at least one savings account in their name. We fall in love with our bank balance once it starts approaching a “nice looking” figure. While a big bank balance looks nice, do you know that you ...
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Investment through SIP or Lump-sum?
Mutual Funds offer many different modes of investment to investors for their convenience. Unfortunately, sometimes these investment modes create confusion among investors as they face the dilemma of making the right choice. One such common and the frequently asked question is whether to invest via SIP or lumpsum?  ...
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