'First-time investors, busy professionals, NRIs and those with modest sums looking for curated strategies may find FoFs especially appealing.'
Is the parabolic rise in silver running out of steam or just getting started? Ramalingam Kalirajan offers his take on if you should invest in silver now?
Prime Minister Narendra Modi inaugurated the Seva Teerth complex, which will house the Prime Minister's Office (PMO), the National Security Council Secretariat, and the Cabinet Secretariat, marking a shift towards modernizing India's administrative governance.
'Allocating 5 to 10 per cent of one's portfolio and staying disciplined through market cycles helps in having a positive investment experience.'
Ask rediffGURU Naveenn Kummar your insurance mutual fund and personal finance-related questions.
'By investing in a basket of funds, FoFs can help minimise the impact of underperforming funds, thus reducing overall investment risk.'
Ask rediffGURU Reetika Sharma your insurance, mutual fund and personal finance-related questions.
'For most investors, I recommend a low double-digit allocation (10 to 12 per cent) to gold and silver combined.'
The Rs 84,000 crore domestic fund of funds (FoFs) space, which was in the doldrums over the past 18 months, has now caught the attention of investors due to a change in the tax structure in Budget 2024. The broader category, which includes offerings across equity, debt and commodities, has seen a spike in the inflows over the past two months. FoFs typically deploy the pooled capital in one or multiple MF schemes rather than investing directly into equities, debt or commodities.
Passive funds appeal to investors seeking to avoid the risk of underperformance by the fund manager and minimise the need for frequent chopping and changing of funds.
Ask rediffGURU and PF, MF and insurance expert Purshotam Lal your mutual fund, insurance and personal finance-related questions.
New investors should avoid short-term, tactical entries and instead go for staggered buying via ETFs to manage volatility.
Ask rediffGURU and PF, MF and insurance expert Purshotam Lal your mutual fund, insurance and personal finance-related questions.
'Maintain a balanced approach with a preference for short-to medium-duration funds.'
Apart from the emotional value attached to buying gold, the yellow metal offers protection against inflation, interest rate spikes, currency and geopolitical risks, says Anamika Pareek.
Inflows into gold exchange-traded funds (ETFs), which manage a total of Rs 37,390 crore, have surged sharply in recent months. This trend is likely to continue, especially after the reintroduction of long-term capital gains tax (LTCG), which is likely to attract smart money into mutual fund offerings amid a robust outlook for the yellow metal. Smart money, also known as opportunistic flows, refers to strategic investments that are generally of a short-term horizon.
rediffGURU Ulhas Joshi answers your mutual fund queries.
Most investors should have a 5% to 10% allocation to gold for diversification. They should stagger their investments to mitigate timing risk.
Invest with a 5 to 7 year horizon so that you are able to ride out price volatility and benefit from the long-term trends of demand and macroeconomic shifts.
An FoF is a mutual fund that invests in other mutual funds belonging to the same fund house or belonging to other fund houses.
Let reason, not emotion, guide your decisions.
If you already hold significant amounts of equity in your portfolio, avoid MAAFs with over 60 per cent equity. But if you lack equity exposure, an aggressive MAAF may be appropriate.
Another product for high net worth individuals. However, the expense, in some options, is high.
While fund of funds promise best results, higher cost and tax treatment could bring down the returns.
'A 20 per cent equity allocation to ESG funds is a good start.' 'As more evidence on ESG performance builds, investors may increase allocations.'
While the minimum holding period for LTCG taxation has now been lowered, the tax outgo could be a bit higher under the new structure.
'A 10 to 15 per cent allocation to gold in portfolios reduces risk without compromising on potential returns.'
After Bandhan MF's US Treasury Bond 0-1 year Fund of Fund (FoF), Aditya Birla Sun Life (ABSL) MF has come out with US Treasury 1-3 Year Bond ETFs FoF and 3-10 Year Bond ETFs FoF. US bonds, which generally offer low yields, have turned attractive post the 525-basis point hike in US interest rates. According to Bloomberg data, the 1-year and 2-year US treasury yields now stand at 5.4 per cent and 5.1 per cent, respectively. Although the yields remain lower than what Indian government bonds offer, the differential has come down steeply.
With its ability to invest in equities or debt depending on market conditions, ODFoF offers investors the opportunity to add to their portfolios what can typically be termed as an asset allocation fund.
Following alterations in the tax structure, mutual fund (MF) schemes that invest in overseas securities have experienced a sharp decline in inflows. In the first five months of 2023-24 (FY24), international MF schemes have received an average monthly gross inflow of only Rs 270 crore, compared to Rs 490 crore during the same period in the previous year. This decline persists despite nearly all fund houses opening subscriptions for such schemes, with higher redemptions creating headroom for fresh investments.
Investors may take a 5 to 10 per cent exposure to silver. 'Have a long-term investment horizon when investing in silver ETFs to ride out short-term market fluctuations.'
Several mutual funds (MFs) have recently approached the Reserve Bank of India (RBI) as they renew efforts to increase their overseas investment limit. In June 2022, the capital markets regulator Securities and Exchange Board of India (Sebi) permitted MFs to invest in foreign stocks within the aggregate mandated limit of $7 billion after a correction in stocks. One of the proposals shared with the RBI is to link MFs' foreign investment limit to the country's foreign exchange reserves.
Commodity investments can help you diversify your portfolio in asset classes other than equity and debt, says Dwaipayan Bose.
The change in debt fund taxation is seen as boosting the demand for hybrid funds. It is no surprise then that asset management companies (AMCs) have launched a raft of new products in the multi-asset category. However, they seem to be divided on the asset mix and approach. The multi-asset space, which provides fund houses ample scope to innovate, has seen five launches in as many months.
Since MAAFs invest across multiple asset classes, they offer diversification.
rediffGURU Ramalingam Kalirajan answers your personal finance queries.
'It is requested that listed equity shares or units of equity-oriented fund schemes be exempted from capital gains tax (LTCG) if equity shares or mutual funds units are held for at least three years.'
Mutual funds have launched a clutch of new fund offers in the silver ETF (exchange traded fund) category this year and collected Rs 1,400 crore in assets after the introduction of the newly-created investment asset class by market regulator Sebi in 2021. Further, fund houses including Kotak Asset Management Company have filed draft documents with the markets regulator to float silver ETF as well as silver ETF fund of funds for investors, information with the Securities and Exchange Board of India (Sebi) showed. These NFOs (new fund offers) are providing an opportunity to the investors to digitally invest and own silver which is easily tradable during market hours.
Treat silver as part of the procyclical or growth assets in your portfolio, advises Sanjay Kumar Singh.
Omkeshwar Singh, head, Rank MF, a mutual fund investment platform, answers your queries:
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