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June 19, 2021

BNP Paribas Mutual Fund

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BNP Paribas Mutual Fund

About BNP Paribas Mutual Fund

The BNP Paribas Mutual Fund is a small-sized mutual fund that was incorporated in 2003 and commenced operations in 2004. It offers several different funds that have had stable yields ever since their inception. The BNP Paribas Mutual Fund, although relatively new, offers a wide variety of options for people who are looking to invest for the long term.

The total value of the assets under the management of the BNP Paribas Mutual Fund is 7,707 crore as of 1 March 2021.

The fund offers debt and equity options for people who wish to go the traditional high or low-risk way in mutual fund investment and hybrid schemes for those looking for the middle path. This helps the fund cover a wide range of consumer choices and risk profiles.

The BNP Paribas Mutual Fund is sponsored by BNP Paribas Asset Management Asia Limited, which was previously known as BNP Paribas Investment Partners Asia Limited. BNP Paribas is a banking group based in France and is the eighth largest bank in the world, purely based on the total value of assets. BNP Paribas has operations in 72 countries on six continents.

The bank itself was formed by the merger of two French banks, Banque Nationale de Paris (BNP) and Paribas, in 2000. Both these banks are counted among the oldest banks in the world.

In 2020, BNP Paribas was the top-performing bank in the Eurozone and one of the top-performing banks in the world. It has over 2 lakh employees worldwide, and the value of its assets is more than 2 trillion EUR.

The BNP Paribas Mutual Fund offers a total of 17 schemes. Among these, 6 are equity schemes, 7 are debt schemes, and 4 are hybrid schemes. Sharad Sharma served as the CEO of the BNP Paribas Mutual Fund, and it has 4 people on its board of directors.

Important information

Name of the AMCBNP Paribas Mutual Fund
Incorporation Date4 November 2003
SponsorsBNP Paribas Asset Management Asia Limited (BNP Paribas Investment Partners Asia Limited)
TrusteeBNP Paribas Trustee India Private Limited
Board of DirectorsChandan Bhattacharya Sanjay Sachdev Sharad Sharma Rakesh Vengayil
MD/CEOSharad Sharma
CIOChockalingam Narayanan
AAUMRs. 7707 Cr as of 1 March 2021
AuditorsPrice Waterhouse Chartered Accountants LLP
CustodiansThe Hongkong and Shanghai Banking Corporation Limited
AddressBNP Paribas House, 3/1 North Avenue, Maker Maxity, Bandra Kurla Complex, Bandra (E) Mumbai 400051
Contact Number022-33704000
Emailcustomer.care@bnpparibasmf.in

Best BNP Paribas Mutual Fund Schemes

The BNP Paribas Mutual FUnd might not be as large as many other funds in the market but does have a number of successful schemes. Ten of these are listed below.

1. BNP Paribas Large Cap Fund Direct

The BNP Paribas Large Cap Fund has been among the most successful funds of the last five years. It has a Value Research rating of 4, and investors have realized returns of over 49% in the past year and almost 16% in the last five years, as of 1 March 2021.

Minimum InvestmentINR 5000
Minimum Additional Investment INR 1000
Minimum SIP InvestmentINR 300
Minimum WithdrawalINR 1000
Exit Load1% for redemption within 365 days for units more than 10% of investment; Nil for redemption after 365 days
Return Since Inception:15.12%
AssetsINR 1027 Crore
Expense Ratio1.04%
*All values as of 1 March 2021

2. BNP Paribas Long Term Equity Direct

The BNP Paribas Long Term Equity Fund is among the best-performing equity funds in the BNP Paribas Mutual Fund. It has an AUM of 495 Crore as of 1 March 2021 and has returned 49.42% over the last year and nearly 16% over the last five years.

Minimum InvestmentINR 500
Minimum Additional Investment INR 500
Minimum SIP InvestmentINR 500
Minimum WithdrawalINR 500
Exit LoadNil
Return Since Inception:14.96%
AssetsINR 495 Crore
Expense Ratio1.09%
*All values as of 1 March 2021

3. BNP Paribas Conservative Hybrid Fund Direct

The BNP Paribas Conservative Hybrid Fund is an equity fund that has an AUM of 320 Crore as of 1 March 2021. It has returned more than 10% in the last five years, including nearly 15% in the last year.

Minimum InvestmentINR 1000
Minimum Additional Investment INR 500
Minimum SIP InvestmentINR 300
Minimum WithdrawalINR 1000
Exit Load1% for redemption within 180 days; Nil for redemption after 180 days
Return Since Inception:9.94%
AssetsINR 320 Crore
Expense Ratio0.45%
*All values as of 1 March 2021

4. BNP Paribas Short Term Fund Direct

The BNP Paribas Short Term Fund Fund has been an extremely successful fund, and though it is a comparatively small debt fund with an AUM of 342 crore, it has returned nearly 8% in the last five years as of 1 March 2021.

Minimum InvestmentINR 5000
Minimum Additional Investment INR 1000
Minimum SIP InvestmentINR 300
Minimum WithdrawalINR 1000
Exit LoadNil
Return Since Inception:8.52%
AssetsINR 342 Crore
Expense Ratio0.35%
*All values as of 1 March 2021

5. BNP Paribas Low Duration Fund Direct

The BNP Paribas Low Duration Fund is a high-performance debt fund that has among the highest returns for any debt fund in the BNP Paribas Mutual Fund.

Since its inception, it has returned over 8% and has accumulated an AUM of over 314 crores as of 1 March 2021.

Minimum InvestmentINR 5000
Minimum Additional Investment INR 1000
Minimum SIP InvestmentINR 300
Minimum WithdrawalINR 1000
Exit LoadNil
Return Since Inception:8.27%
AssetsINR 314 Crore
Expense Ratio0.14%
*All values as of 1 March 2021

6. BNP Paribas Multi Cap Fund

The BNP Paribas Multi Cap Fund is an equity product and has been able to return nearly 15% in the last five years as of 1 March 2021, including over 59% in the last year.

Minimum InvestmentINR 5000
Minimum Additional Investment INR 1000
Minimum SIP InvestmentINR 300
Minimum WithdrawalINR 1000
Exit Load1% for redemption within 90 days; Nil for redemption after 90 days
Return Since Inception:15.47%
AssetsINR 520 Crore
Expense Ratio1.04%
*All values as of 1 March 2021

7. BNP Paribas Midcap Fund

The BNP Paribas Midcap Fund is another equity fund that has performed rather well since its inception and has had a constant rate of return of over 15% a year over the last 5 years, as of 1 March 2021.

Minimum InvestmentINR 5000
Minimum Additional Investment INR 1000
Minimum SIP InvestmentINR 300
Minimum WithdrawalINR 1000
Exit Load1% for redemption within 365 days for units more than 10% of investment; Nil for redemption after 365 days
Return Since Inception:18.94%
AssetsINR 860 Crore
Expense Ratio0.80%
*All values as of 1 March 2021

8. BNP Paribas Focused 25 Equity Fund

The BNP Paribas Focused 25 Equity Fund has an AUM of nearly 183 Crore as of 1 March 2021. It has had a constant annual rate of return that has been over 9% since its inception.

Minimum InvestmentINR 5000
Minimum Additional Investment INR 1000
Minimum SIP InvestmentINR 300
Minimum WithdrawalINR 1000
Exit Load1% for redemption within 365 days for units more than 10% of investment; Nil for redemption after 365 days
Return Since Inception:7.31%
AssetsINR 183 Crore
Expense Ratio0.82%
*All values as of 1 March 2021

9. BNP Paribas India Consumption Fund

The BNP Paribas India Consumption Fund is a market-indexed fund with an AUM of nearly 699 crores as of 1 March 2021. Its rate of return has been over 49% over the past year, being a relatively new fund.

Minimum InvestmentINR 5000
Minimum Additional Investment INR 1000
Minimum SIP InvestmentINR 300
Minimum WithdrawalINR 1000
Exit Load1% for redemption within 365 days for units more than 10% of investment; Nil for redemption after 365 days
Return Since Inception:21.72%
AssetsINR 699 Crore
Expense Ratio0.85%
*All values as of 1 March 2021

10. BNP Paribas Substantial Equity Hybrid Fund

The BNP Paribas Substantial Equity Hybrid Fund invests mostly in equity stocks in the Indian market and has provided a handsome rate of return of over 14% since its inception as of 1 March 2021. It has an AUM of over 537 crores.

Minimum InvestmentINR 5000
Minimum Additional Investment INR 1000
Minimum SIP InvestmentINR 300
Minimum WithdrawalINR 1000
Exit Load1% for redemption within 365 days for units more than 10% of investment; Nil for redemption after 365 days
Return Since Inception:14.13%
AssetsINR 537 Crore
Expense Ratio0.62%
*All values as of 1 March 2021

How can you invest in BNP Paribas Mutual Fund Via EduFund?

The BNP Paribas Mutual Fund can be an efficient tool to ensure that your child gets to study abroad without hassle. Among the many ways that you can invest in the BNP Paribas Mutual Fund, EduFund offers you great insights into the performance of the fund over time.

It also puts you in contact with experts in the funding of education abroad, so you can get your doubts resolved and make the best decisions for your child. Here are the steps to follow if you are looking to invest in the BNP Paribas Mutual Fund using EduFund.

  • Download the EduFund app from the App Store or the Google Play Store.
  • Create an account on EduFund.
  • You will be greeted with a page that requires you to entire your ambitions for the education of your children. You can choose to enter the country that you want to send your children to, the level of education that you want your children to pursue abroad, and the major that you want them to undertake while studying abroad.
  • Once you have submitted this information, you can also enter the range of ranks that you want your children’s college to fall in and the type of city you want your children to undertake their education in.
  • Once you have entered and submitted this information, you will receive a list of colleges that match your criteria. This list will also include the mean tuition fees of the target programs in these colleges.
  • Once you have gained an insight into the kind of tuition fees your children’s education will entail, you may choose the BNP Paribas Mutual Fund scheme that you wish to invest in. Every scheme page will also provide you with an insight into the length of time it is likely to take for you to accumulate the target tuition fees using the scheme.
  • Through EduFund, it is also very easy to track the historical performance of the mutual fund scheme that you are targeting. You gain a deep insight into the working of the fund, including risk profile, fund manager, and yields.
  • You can also get your doubts about higher education resolved by expert counselors that EduFund provides. These counselors have years of experience in the costs involved in sending students to study abroad and can provide great advice regarding the right fund for you.

Leading Fund Managers at BNP Paribas Mutual Fund

With the education of your children abroad being so important to you, it is evident that you would want the money you invest to be handled by experts in the field of finance and investment.

In a mutual fund, the key to the success of your investment lies with the fund manager of your scheme. The fund manager determines the allocation of your money across different domains, aiming to minimize risk while maximizing returns.

Being a fund manager is one of the most important positions a mutual fund employee can attain and comes with great responsibility.

The fund managers of BNP Paribas Mutual Fund are extremely competent individuals who have years of cumulative experience in researching, analyzing, and investing in different markets and domains. Here are the top find managers of BNP Paribas Mutual Fund.

Chockalingam Narayanan

Mr. Chockalingam Narayanan is one of the most experienced fund managers in any similar-sized mutual fund in India. He has over 15 years of experience and has not just managed funds but has also been a research analyst.

He continues to play a really important role in the research team of BNP Paribas Mutual Fund, alongside heading the equities team.

Mr. Narayanan earned his Post Graduate Diploma in Management from T. A. Pai Management Institute at Manipal. He gained vast experience in the fields of investment research and market analysis working at firms such as Deutsche Equities India Pvt. Ltd. He has also previously worked at Batlivala & Karani Securities.

The total AUM of the schemes managed by Mr. Narayanan is Rs. 832 Cr as of 1 March 2021. he manages the BNP Paribas Arbitrage Fund Direct. This scheme has yielded a CAGR of over 6% between 2018 and 2021 and has still managed to retain a low-risk profile.

Abhijeet Dey

Mr. Abhijeet Dey is yet another fund manager at BNP Paribas Mutual Fund with rich experience in both investment research and market analysis. He brings to the table almost 20 years of experience in these fields, having worked with several large companies before joining BNP Paribas.

Mr. Dey completed his bachelor’s degree in mechanical engineering before moving on to Sydenham Institute of Management & Entrepreneurship Education at Mumbai University for a master’s degree in management studies. He went on to work for India Infoline as an equity research analyst.

He then moved to Frost & Sullivan, India, where he was an automotive industry analyst and also served as a part of the Equity Research team at Pioneer Intermediaries.

He then went on to become the Vice President of Research at Kotak Asset Management Company, where he tracked the Automotive, Cement, and Capital Goods Sectors. In 2011, Mr Dey joined BNP Paribas.

Mr. Dey has an AUM of over Rs. 4000 Cr as of 1 March 2021, and manages the BNP Paribas Multi Cap Fund Direct, which yielded a CAGR of over 50% in 2020. Between 2018 and 2021, the CAGR has been 11.48%, while it has been 15.78% between 2016 and 2021. This is among the top multi-cap schemes across all mutual funds in terms of five-year returns.

Karthikraj Lakshmanan

Mr. Karthikraj Lakshmanan has great experience in fund management and research, having previously worked for some of the market leaders in the world of finance. He has an experience of more than fifteen years and continues to leverage this experience at BNP Paribas Mutual Fund while managing the largest value of assets.

Mr. Lakshmanan completed his graduation in commerce before pursuing a Post Graduate Diploma in Business Management from the S.P. Jain Institute of Management Research in Mumbai. He has also Level 3 of CFA from the CFA Institute in the U.S.A.

He initially joined ICICI Bank as a management trainee before moving on to Goldman Sachs Services Pvt. Ltd. as a Business Analyst. he served here for one year and was then a Senior Research Analyst at ICICI Prudential Asset Management Company. He joined BNP Paribas in 2008 and has been there ever since.

Mr. Karthikraj Lakshmanan manages assets worth a total of more than Rs. 5400 Cr as of 1 March 2021. He is the manager of the BNP Paribas Substantial Equity Hybrid Fund Direct, which has returned more than 16% CAGR between 2018 and 2021.

This fund has been given the top rating by both CRISIL and Value Research. He also manages the BNP Paribas Large Cap Fund Direct, with annual returns of over 15% between 2018 and 2021. This scheme is also highly rated by multiple rating agencies.

Mayank Prakash

Mr. Mayank Prakash serves as a fund manager at BNP Paribas Mutual Fund. He has more than ten years of experience and manages a significant proportion of the AAUM of the mutual fund. 

Mr. Prakash completed his Associate Chartered Accountant qualification from the Institute of Chartered Accountants of India. He also holds a Master of Business Administration degree from the Institute of Business Management in Kolkata.

Mr. Mayank Prakash has previously worked at Kotak Mahindra Asset Management Company, where he was a fixed-income trader for five years.

After this, he was a fund manager in fixed income at the Kotak Mahindra Mutual Fund, in which capacity he served for ten years. Since 2015, Mr. Prakash has been a part of the BNP Paribas Mutual Fund.

Mr. Mayank Prakash has a total AUM of over Rs. 4600 Cr as of 1 March 2021. He manages the BNP Paribas Substantial Equity Hybrid Fund Direct, which has returned a CAGR of nearly 16.5% between 2018 and 2021 and over 40% in 2020.

Additionally, he is also a fund manager of the BNP Paribas Arbitrage Fund Direct and the BNP Paribas Liquid Fund Direct.

Vikram Pamnani

Mr. Vikram Pamnani has developed rich experience in financial research and management through his professional endeavors. He has more than a decade’s worth of experience and uses this experience to manage multiple schemes at BNP Paribas Mutual Fund.

Mr. Vikram Pamnani completed his bachelor’s degree in Business Administration and Management from SIES College Of Commerce & Economics in Mumbai.

He then went on to earn a Master of Business Administration Degree from SIES College of Management Studies. He worked as an Executive at Deutsche Bank for two years before becoming a dealer in fixed income at Canara Robeco Asset Management Company Ltd. He was then a fund manager at Essel Finance Asset Management Company Ltd, before joining BNP Paribas in 2017.

Mr. Pamnani manages a total AUM of over Rs. 2200 Cr as of 1 March 2021. He is the manager of the BNP Paribas Liquid Fund Direct, which has returned over 6% CAGR between 2016 and 2021.

He also manages the BNP Paribas Overnight Fund Direct, which is one of the latest schemes launched by the AMC. This scheme returned over 3% in 2020 while retaining a low-risk profile. This is one of the best-performing overnight schemes across mutual funds.

Why should you invest in BNP Paribas Mutual Fund?

Saving up for the education of your children is one of the most important decisions you take in your life. Substantial portions of your income can go into ensuring that your kids study at the best educational institutions in the world.

The tuition fees of these institutions are often extremely high and have only been rising in the past years. Running into thousands of dollars annually, the costs involved when you add tuition and living expenses can often be beyond reach through common savings. This is why it is extremely important to start saving for your kids’ future early on in life.

The BNP Paribas Mutual Fund, despite not being the largest fund in the market, is extremely stable and capable of providing great returns over the long term.

The fund is sponsored by BNP Paribas, which is one of the largest banks in the world. With a total asset value of over 2 trillion EUR, BNP Paribas is extremely stable and serves millions of customers, with millions more being added by the year.

With a presence in more than 70 countries and on every continent except Antarctica, BNP Paribas is a name recognized worldwide for its commitment to its customers. The roots of BNP Paribas lie in banks that are more than 125 years old – the fact that it has lasted this long is a testament to its consistency.

There are various factors thanks to which the BNP Paribas Mutual Fund is trusted by thousands of Indians. Over the past few years, this mutual fund has shown incredible consistency in returns.

Whether over the short term or the long term, an investment in the BNP Paribas Mutual Fund has meant a promise of decent returns. When you invest in a mutual fund for the education of your children, the least you expect is that there will be decent returns, enough to accumulate the exorbitant tuition fees required. Investing in the BNP Paribas Mutual Fund can ensure such returns and a bright future for your children.

The fund managers aren’t the only employees of the mutual fund that investors need to worry about. The first contact with prospective customers happens with fund advisors in local BNP Paribas branches.

These fund advisors are extremely competent and capable of providing you with the right advice for your target returns. Once you have communicated the motive of your investment to the advisors, they will make sure they come up with the scheme that best matches your needs. You can rely on BNP Paribas Mutual Fund advisors to recommend the right scheme for you.

Just as you want to ensure the best education for your children, you must expect the best of services from your mutual fund. BNP Paribas has built a global reputation for providing rich returns to its customers, and its India operations are no exception.

Through an investment in the BNP Paribas Mutual Fund, you can compound your wealth manifold in the shortest of time periods, collecting enough to send your children to the college of their choice. While investing in mutual funds, be wary of the risks they carry and the market situation, and you shall reap rich benefits in no time!

Invest in BNP Paribas Mutual Fund using EduFund

There are several reasons that thousands of people choose to invest in mutual funds when it comes to the education of their children.

When you choose the right mutual fund with a target in mind, you ensure constant yields over a sustained period of time. If you start investing early, by the time your child is of age, you can potentially have enough money to ensure that education abroad is no longer a far-off dream.

When you invest in mutual funds, you also ensure that your money is in the hands of competent professionals who have years of investing experience. They are best placed to ensure that your money yields a significant return over a period of time.

EduFund provides you access to customer-friendly counselors with years of experience in education financing. Additionally, you need no technical expertise to invest using EduFund and the process of investment takes no more than a few minutes. Transactions are completely safe and secure, following international standards.

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Everyone speaks about the rewards of preparing early for education funds and securing them as soon as possible. What they forget to explain is how to reach that goal. Fear not, for we have prepared a list of things you might want to tick off if you want to secure your child’s education.  1. Choosing the right platform is important There are a number of investment platforms available for investors. As an investor with a goal in mind (the education fund for your child), it is important to choose a platform that is built for that purpose or has certain advantages in the pursuit of your goal. There are two great advantages of choosing a goal-specific platform - one, you separate your investments in a way that you know how much amount is set aside for that particular goal every month, and second, you get the added goal-related benefits that the platform could offer. In the case of EduFund, a platform built for parents to save for their children's education fund, you have added advantages like readily available education loans if you fall short, or free counseling if your child needs it. 2. Investing in the right mutual funds  Once you decide to invest in mutual funds to achieve higher returns than Fixed Deposits, you also need to do your research to find which investment schemes are best suited for you. Many factors play crucial roles in this procedure. For example, one of the first things you need to consider is the balance between your monetary goals and the level to which these will be fulfilled by the fund returns and the risk associated.  Time is another important factor that will shape your decision in this matter. You also need to consider what exactly you want out of your investment whether it is tax reductions or high returns with high risks or more stabilized returns with low risks. To indulge in smart investments, stay aware of the best investment schemes currently trending in the stock market. 3. Investing in international stocks Parents who like to stay alert about the current trends related to the education system and finances must be well aware of the phenomenon called education inflation. This is what makes a global education exponentially more expensive than one attained within India.  The value of the Indian Rupee has depreciated over the years against foreign currencies like the American dollar. This means that the cost of a course pursued in a foreign land like the US or the UK will be tenfold compared to the same course pursued in this country. The cost of living will be equally high overseas. A smart way to deal with this problem is to invest in international equity funds. This means higher returns because if you invest in US stocks, you will be earning in dollars, not rupees. Moreover, if your investments in Indian stocks get affected by market fluctuations, you can still depend upon your foreign stock investments which will remain relatively more stable.  4. Consider the availability of education loans  Sometimes your life savings and your investment returns are not enough to fund your child’s education. Do not worry. Education loans can take care of your child’s aspirations in such situations. Even if you are in a position to be able to afford your kid’s dream college, student loans are still a healthy way to teach your kid the value of money and how to build credit.   Creditworthiness is a virtue that will financially discipline your child so that they can take monetary decisions in your absence. It will also ensure that they can take future loans as part of their education fund at low-interest rates. Only loans exceeding a very high amount of money require collateral or a security deposit, which means you can easily avail of student loans.  5. The right guidance for your children Career and academic counseling sessions are crucial for your kid if they are going through a transition phase in their lives. As their primary caregiver, you are entitled to guide their way but sometimes what might be required is professional help. You are longer required to pay for these counseling sessions. A platform like EduFund offers them the best education counseling services in India for free of cost. Let nothing stop your child from achieving their goals.  6. Expert advice to get you to your goal EduFund believes in helping you attain as much clarity on financial affairs as possible. In case of expert advice on investment, you can rely on the world-class experts from EduFund. The Edufund app provides you with all the useful tools to attain the best from your child’s education fund.  For example, it comes with a calculator that helps you calculate the education cost. This is a smart calculator developed to give you inflation-adjusted rates. This is the first step toward getting an idea of how much you will need to invest or save up as an education fund.  FAQs How do I plan my child education fund? Starting early is key to building your child's education fund. You can start saving with mutual funds, PPF, US stocks, Indian stocks, fixed deposit and much more. Before starting it is important to consult a financial advisor and figure out the cost of education before starting an SIP. Which fund is best for child education? Here are some of the best funds for your child's education fund: Axis Long-Term Equity FundSBI Equity Hybrid FundParag Parikh Flexi Cap FundAditya Birla Sun Life Tax Relief 96 Fund Growth Aditya Birla Sun Life Tax Plan-GrowthDSP BlackRock Tax Saver Fund Growth Axis Long-Term Equity Fund Growth How do you build a corpus for child education? The first step to building a corpus for child education fund is to figure out the cost using the College Cost Calculator. Knowing the financial goal you need to invest in before starting an SIP helps you remain focused and know the exact amount you need to save monthly to get started. Conclusion What seems like a mammoth task can be easily managed by diving it into smaller tasks and simplifying it. Each small step is quite crucial in itself. But once you have the checklist ready, you can be sure if not losing sight of things. DisclaimerMutual fund investments are subject to market risks. The previous performance of a fund or scheme is no guarantee of future success. Please read the offer document carefully before investing.
5 reasons why SIP is the best investment choice?
Finance March 7, 2023

5 reasons why SIP is the best investment choice?

A systematic investment plan or SIP is the best plan that helps you invest in mutual funds on a regular basis.  You can choose to invest weekly, monthly or even quarterly – the most popular choice being monthly. There are multiple reasons why SIPs are the best way to grow your money especially when you have a goal to plan – e.g. your child’s education. SIPs can be bought easily and you can start with a very low amount - Rs. 500 per month. In this blog, we will talk about the ‘Big 5 advantages’ that SIPs offer to you as a parent. But before that, let's understand what a SIP is What is SIP? A SIP or systematic investment plan is an investment mode through which an investor can create a regular mechanism of investment for themselves. Let's take the example of investor X. Investor X wishes to invest Rs. 10,000 every month in a mutual fund. In this case, investor X can create a SIP for a fund they want to invest in and the money will be deducted every month automatically (the deduction can be weekly, monthly, or even quarterly, depending on the investor's choice). Think of it as a recurring deposit, with better returns. Now that we know what a SIP is, let's get to know why investing via SIP is the best choice you can make to enlarge your corpus. CALCULATE MONTHLY SIP 5 Reasons SIP is the best These are the 5 main reasons why you should invest via a systematic investment plan to reach your financial goals 1. Suitable for Long-Term Investment Any financial advisor will tell you that if you want to invest long-term, SIP is the way to go. The reason is simple, regular investing and automatic deductions keep investors motivated to stay invested and reach their investment goals quicker. During the 2008 financial recession, many people withdrew money from mutual funds. However, the ones that remained invested via SIP, attained a huge profit once the markets rose. Long-term investing makes sure that even if the market is down at the moment, once the markets rise, the investor will make profits. 2. Goal-planning ‍SIPs are good tools to plan for a future goal – to buy a 4-wheeler or to pay for college tuition fees maybe 10-15 years from now. When you determine the amount required to achieve your goal, you will know how much you should invest and how long it will take to reach your goal. This will help in planning effectively. Having financial goals is very important to creating a financially secure future. One must have a defined idea about what financial goal one wants to reach by the age of 30, 40, 50, and so on. 3. Effect of Compounding Compounding is one of the biggest advantages of a SIP. Over time your investments grow because you start earning returns not on your principal amount, but on the interest that keeps getting added to it. Let's take an example. Suppose you invest Rs.1,000 in a mutual fund that gives you a yearly return of 10% p.a. Your amount becomes 1,100. at the end of the first year. At the end of the second year, the rate of return is 11%, this time the returns will be calculated on Rs. 1,100 and not the principal amount, which is, Rs. 1,000. ‍This ensures the growth of your corpus and is one of the reasons why experts advise you to not withdraw your investments when the market is down. 4. Curated by Experts With the increasing number of fund types like equity, debt, mixed, gold-based, etc. there is a wide variety to choose from based on your risk appetite and preferred investment duration. This has led to customized offerings based on individual needs, supervised by experts in the SIP domain. All you need is to specify your goal and timeline and you are provided with the best possible funds that can meet your future goals. ‍SIPs have become popular over the past few years, because of the ease of investing and the flexibility provided in terms of the amount of money that can be invested. You can stay invested as long as you want, although average returns have been higher when invested in the long term. Research also shows that the returns offered by SIPs are more than recurring deposits in banks, in the long term. 5. Automates Your Investment Experience SIPs automate your investment experience, which makes you a regular investor. It is easy and convenient and because of the online surge, today, it is super easy to invest via SIP. If you choose the lump sum method, you will have to manually invest an amount and there may be times when you can miss an installment. ‍With automated installments and a streamlined process, investing via SIP has now become an extremely popular method, to reach long-term goals like saving up for your child's education. FAQs Why is SIP investment good? By investing through SIPs, you will do away with the burden of timing the market as you could then avail the benefit of Rupee Cost Averaging. By investing through SIP, you will tend to invest in the up and down markets. This helps you shy away from the volatility of the market. Additionally, you will benefit from the power of compounding, which fundamentally generates returns not only on capital but also on returns. Is SIP good for students? Investing in SIP can be a huge benefit for students. It cultivates a healthy investment habit, and they can invest a small amount to start their journey. SIP is best for beginners and a comparatively safe investment vehicle. What are the features of SIP? A SIP offers the following features: It is best for long-term investment, brings financial discipline, allows small investment amounts, benefits from the power of compounding, and is a comparatively safer investment tool. Why do people prefer SIP? A systematic investment plan helps bring discipline to an individual’s investment habits. A SIP will automatically deduct a pre-decided amount periodically. Investors also do not need to worry about timing the market while investing via SIP. It is one of the best investment vehicles for beginners. Consult an expert advisor to get the right plan TALK TO AN EXPERT
SIP
5 tips to know before investing in US stocks
Finance September 16, 2022

5 tips to know before investing in US stocks

If you want to invest in the US stock market to benefit from US stocks, you may start by opening an international trading account in India. But before investing in US equities, here are the 5 important things to know before investing in US stocks. 1. Regulatory framework One of the oldest, most effective, transparent, and well-regulated stock markets in the world is the one in the United States. On US stock markets are listed some of the largest businesses in terms of market capitalization, sales, and profitability. The worldwide exposure and flavor that US markets offer are crucial since many of these listed firms have a significant global presence, scale, and operational structure. The regulatory body that monitors the operation of the US stock markets is the Securities and Exchange Commission (SEC), which was founded in 1934. It guarantees the strict application of laws and rules that establish the highest standards of openness and integrity—essential for stock markets as well as for the safety and trust of investors. 2. Impact of Foreign Exchange  The volatility in the value of the US and other currencies should be taken into account while investing in US equities. This is because before any gain (or loss) for an Indian investment is realized, it would be converted using the appropriate exchange rate in the Indian rupee. The gains (or losses) will fluctuate in lockstep with changes in the exchange rate. An Indian investor must be aware that the exchange rate can be unpredictable and is influenced by a wide range of political, economic, and supply and demand variables. 3. Liberalized Remittance Scheme According to the Reserve Bank of India's Liberalized Remittance Scheme, an individual may invest up to $ 250000 per year in US equities from India (LRS). The cap covers any money sent abroad for purchases, travel, education, or other international transactions during the year. The investor's brokerage account has to be filled before making any investments in US equities. Investors must complete Form A-2, which is available from RBI-authorized dealers. Any sum over the $250000 cap requires RBI approval. Additional read: US stocks for investing in child education 4. Taxation To make your efforts worthwhile, it is crucial to take into account the tax consequences of your international assets. Due to the Double Tax Avoidance Agreement (DTAA) between the US and India, the same income cannot be taxed twice on investments made in the US stock market. 5. Dividend tax The dividends from US stocks are taxed at a fixed rate of 30% for overseas investors. However, as a result of the tax agreement between the US and India, citizens of India pay a 25% tax rate (deducted before distribution). However, because of the double tax avoidance agreement between the US and India, the tax paid in the US may be claimed as a foreign tax credit in your domestic filing. 6. Capital gains tax Your assets in the US are not subject to capital gains tax. However, India requires you to pay tax on your overseas capital gains. This may be divided into two groups.: Long-term capital gain (LTCG)If you keep the equities for more than 24 months before realizing capital gains, you will be subject to indexation advantages and a 20% tax rate in addition to any relevant fees and other surcharges. Short-term capital gain (STCG)Standard income-tax regulations apply to any gains from assets held for less than 24 months, and they are added to your ordinary taxable income. You must also take into account the recently implemented Tax Credited at Source or TCS. Under the new regulations, a 5% TCS will be applied to all international transfers over INR 7 Lakhs in a fiscal year. It is not an additional expenditure to deduct this advance tax when submitting your taxes each year. Charges on US stock-broking account  Using an Indian stock brokerage account to invest in the US stock market is prohibited. You would need to create one with a US stock brokerage company instead. To provide this service, the majority of Indian stock brokers who allow you to invest in US equities typically collaborate with a US stockbroker. You would also be required to pay certain fees for a US stock broking account, just like you would for an Indian trading account. This is something you should also take into consideration when you buy US stocks because these fees can reduce your earnings. These fees include Annual Maintenance Costs, brokerage charges, bank charges, transaction charges, and more. Invest in the US stocks with EduFund  Download the EduFund app and create an account to start investing in US stocks. With zero charges and no hassle account opening process from the comfort of your home, you can start investing in FAANG stocks in your portfolio to geographically diversify your portfolio!! Thus, investing in US firms and equities may give investors access to the worldwide market, credibility, and an opportunity to increase their wealth. Consult an expert advisor to get the right plan TALK TO AN EXPERT
US Market
5 top investments for risk-averse investors
Finance August 22, 2022

5 top investments for risk-averse investors

All investments are associated with risks. Yet, the risk is not uniform, and it's essential to be aware of the different levels of risks linked with all types of investment instruments. This is why the first thing to consider before investing is how much of a risk appetite has – how much risk one is willing to take. Want to know the best investment options for risk-averse investors but still generate good returns? Continue reading this article to know more! What is risk averse? Risk-averse refers to an investor who chooses to preserve the capital over and above its potential to generate returns that are higher than the average. Risk can refer to many factors – volatility, currency, market, credit rating, etc. Risk-averse can also refer to a conservative investor. Low risk symbolizes stability in investments. A low-risk investment generates guaranteed reasonable returns, if not outstanding, above benchmark returns. But chances are near zero that the principal investment amount will be lost. Whereas a high-risk investment option may gain or lose money over time. Risk-averse investors are unwilling to accept market volatility. They prefer their investments to be highly liquid - readily available to be withdrawn. Such investors usually include old investors or retired individuals who depend on their savings for their daily expenses. Additional read: Taxation in mutual funds Is FD a good option for risk-averse investors? One should constantly adjust their returns against the current inflation rate. The current Fixed Deposit interest rates are 5-7% p.a. on average. But the current inflation rates are around 6-8% p.a. Give these figures a thought. The price you pay for your everyday goods and services is rising at 6-8%, whereas your FD investments are growing at only 5-7%. FDs do not increase the value of your money over time. In fact, you actually lose money or its purchasing power over time. Do you think FDs are the safest investment option? Banks defaulting on payments is rare but definitely possible. The Deposit Insurance and Credit Guarantee Corporation (DICGC) guarantees Rs. 5 lakhs per person per bank if the bank defaults. Let's not forget the liquidity part of this instrument. Fixed deposits can have a lock-in ranging from 3-5 years. Banks penalize the investors for withdrawing money before the lock-in is over. This penalty is in the form of a reduction of interest rate by a certain percentage. What are the best investment options for risk-averse investors? The market is filled with many investment options for investors with varying risk appetites. Let's look at some of the best investment options for risk-averse investors: 1. Short-term bond fund: The best alternative for investors who do not want exposure to FDs or volatile instruments. Short-term bond funds – bond funds with low maturity and a high potential to offer better returns. Debt Funds with longer maturity are subjected to interest rate risk. But short-term bonds have a lower interest rate risk as their maturity period is much lower. 2. Municipal and Corporate Bonds: State and local governments and companies usually raise money by issuing bonds to the public. Bonds offer lower risk than stocks. When a company is winding up, the bondholders are given first preference in the payment and settlement order. 3. Other debt funds: Other debt funds include banking and PSU Funds, ultra-short duration funds, Dynamic Bonds, etc. You could always invest a lump sum in these debt-based mutual funds and opt for a Systematic Withdrawal Plan (SWP). This would ensure that along with the returns being generated on your investments, you would also get a monthly income from these investments. This investment option is one of the best options for older people who want a monthly income. 4. Liquid funds: Invest in top-rated liquid funds to avoid loss of capital with a higher degree of safety for your primary investment. Also, when the market moves up, your investment performs better and generates higher returns in line with the market. 5. Dividend growth stocks: Stocks are not as safe as cash, savings, or other debt-based instruments. But they are safer than options and futures. Dividend-paying stocks are considered safer than high-growth ones as they minimize volatility, if not eliminate it. You don't depend on the value of the stock as you get a dividend as a regular income on your investment. Apart from debt-based investments, you could also apply a staggered investment approach in equity-based mutual funds for a long-time horizon. A periodically rebalanced portfolio helps you minimize your portfolio volatility and ensures efficient capture of up-market and down-market movements even with equity exposure.  Take the help of an Investment Advisor who will guide you through goal-based planning and help you choose your investments that are most suitable to your goals and objectives and your risk appetite. Consult an expert advisor to get the right plan for you TALK TO AN EXPERT
5 types of mutual funds
Finance January 7, 2023

5 types of mutual funds

Investing in mutual funds for your child’s education is always advisable. First of all, it is a less stressful option than investing in direct equity stocks because that requires you to have in-depth knowledge of market trends and fluctuations. Secondly, with mutual funds, there are a variety of schemes you can opt for depending on a range of factors. These factors could include the time period for which you can invest before liquidating, the amount of money you can invest, the amount you require to secure the education fund, the level of risk you can take, and so on.  When it comes to building an education fund, here are the top 5 types of mutual funds you can choose from. 1. Large-cap mutual funds The defining characteristic of large-cap equity funds is the fact that these funds invest in the top 100 Indian companies that have the highest market value. Large-cap mutual funds can bring in impressive returns if you remain invested for a long period. If you are a person who wants to avoid taking very high risks with your investments and has decided on investing early for your child’s education, this is the way to go. The average returns rate has historically beaten that of Fixed Deposits and similar investment alternatives. 2. Mid-cap mutual funds Mid-cap funds invest in Indian companies that come in the next best 250 in terms of market value. These funds are for you if you are ready to take on a higher level of risk. Justifiably, the return rates also tend to get higher. One way to satiate the risk appetite of mid-cap equity funds is to let them season for at least 7-10 years. If your child is in primary or middle school, investing in such a scheme will generate a wholesome amount of wealth by the time they are ready to pursue a college education.   3. Equity-linked saving schemes  Among the various perks of investing in mutual funds is the tax deduction benefit. Equity Linked Saving Schemes are devoted to enabling investors to save taxes, as the name also indicates.  The only catch here is that it has a compulsory lock-in period of at least 3 years. The aim here is to keep you invested longer to counter the risk level. If you can spare that amount of time, then ELSS is definitely a go-to. An added benefit is the historically high level of returns.   4. Low-risk options  There is this whole myth surrounding mutual funds that they only come with a high-risk factor. On the contrary, a debt fund is also a kind of mutual fund that comes with low risk, so much so that it remains undisturbed by market fluctuations.  Debt funds are still a better option than Fixed Deposits because they can generate a higher percentage of returns. So, if you are not in favor of taking high risks, debt funds are a go-to.  5. Hybrid mutual funds  If you are confused about your investment options or even hesitant about risking too much, the answer to your problems is a hybrid mutual fund. This kind of fund is a mixture of equity as well as debt.  Hybrid mutual funds bring in the best of both worlds. They tend to generate good returns at low risk. FAQs What are the different types of mutual funds? Large-cap mutual funds Mid-cap mutual funds Equity-linked saving schemes Low-risk options Hybrid mutual funds Which type of MF is best? The best type of mutual fund is the Hybrid mutual fund. Which MF gives highest return? Equity linked mutual funds are considered the mutual funds with the highest returns. Conclusion There will be miscellaneous financial goals you will be required to set if you are a family person. One among these might be to straighten up the roadmap to your child’s academic and career aspirations. The first step is calculating your expected expenses with the help of an education cost calculator. The calculator will help you draw your investment map to fulfill your child's aspirations. The earlier you invest, the more prepared you will be to make critical decisions as the moment arrives. DisclaimerMutual funds are subject to market risks. The previous performance of a fund is no guarantee of future success. Please reach out to an expert to know more about the schemes before investing.
Mutual Fund
5 ways to make getting an education loan easier for your child
Finance July 27, 2022

5 ways to make getting an education loan easier for your child

Today's expanding world of opportunity benefits greatly from education loans. Your child has so many educational courses to choose from. A decent education is essential for your child's growth and development, and several institutions throughout the world provide student loans with low-interest rates to those who cannot rely on their savings. Banks and other financial organizations provide outstanding education loans with a reasonable interest rate and loan payback time.  An education from a reputable university is the first step to a prosperous profession. The cost of college expenses is rising quickly, though, and for parents who might not have enough money, taking out an education loan sounds like a perfect alternative for their child. In reality, the cost of higher education overseas and for Indian parents has increased enormously due to the rise of the dollar value versus the rupee. This pattern is also observed in TransUnion CIBIL data, where the average ticket size of a newly issued student loan increased by 48 percent from INR 5.73 lakhs in 2015 to INR 8.5 lakhs in 2018.  So, here are the five best ways if you are planning to get a student loan for your kid and help them to pursue higher studies easily. Choose the right course  Let your child choose a subject that fascinates them enough to make it their career. Don't allow your child to do what the majority of others are doing to deter them from following a passion of yours. For example, a student who is required to study engineering could not do well or even finish the course if they are least interested in the subject  However, if the student in question were interested in law, he would make a brilliant attorney and have a successful profession as well as a happier life. Therefore, a wise piece of advice for parents is to let their kids discover their passion by researching the course's requirements before making a choice. After completing their education, you should consider your child’s career possibilities and see if they can find employment to help you pay off the debt. Research about banks  Make sure to do your thorough research before choosing a bank. Avoid making rash or emotional decisions when applying for a loan. By conducting an extensive study, you can comprehend the varied interest rates, processing costs, terms, and conditions, etc. The amount you must repay varies depending on each bank's interest rate. You will need to spend and repay a certain amount of money for every point in the interest rate. Verify if your loan's interest rate is fixed or fluctuating. Making a choice between these rates is crucial since it significantly impacts how you intend to repay your loan and how much your EMI will be.  Borrow only what you need  If you want to take out an education loan for your child, resist the urge to request the utmost amount permitted. If your child has any financial awards, such as scholarships, you should constantly assess how much you have or how much you can afford to support your child’s education. Decide how much you want to borrow from the bank as an education loan after doing the math for the amount you have. As a parent, you must help your kids understand that every amount they take will have a specific interest rate levied on it. Hence, it is essential to borrow only the amount they can repay. https://www.youtube.com/watch?v=4gTQkdePOWM Educate your child about the loan  Whether you want your kid to continue their education in India or overseas, you should be aware of the specifics of their current coursework and any loans you have taken out. A VISA will allow your child to enter a foreign nation but does not give them access to everything. They could be questioned about their intentions and entry procedures at the airport. Your child should be ready to answer any queries about their course, organization, teachers, tuition costs, loan amounts, repayment terms, interest rates, etc. Your kid should also be aware of their personal information and information about their families, such as names, birthdates, residences, levels of education, and jobs.  Plan for repayment   Even though interest starts to accumulate from the first month, students may occasionally be given a moratorium or one-year grace period before they must begin making loan payments. One advantage of this time frame is that, even if your child can pay the EMI after this grace period, you can start repaying the EMIs early and assist your child in paying off the loan more quickly by doing so.  Early investment and saving can help reduce the financial burden that a high-quality education places on families, but some parents may not have the opportunity to do so since they are already dealing with admissions. An education loan could be the best option in such situations.  However, choosing the correct course, university, and financial institution may assist enhance the possibilities of simple loan payback, making the student debt-free sooner rather than later. This is in addition to creating a decent repayment plan. Consult an expert advisor to get the right plan for you  TALK TO AN EXPERT
Loans
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