EduFund Blogs

Individuals' interest in index funds is increasing due to an overarching desire to compound and capitalize on wealth.   Amid constant volatility in markets, it has become imperative to explore investment ways that dilute any potential risks of losing on high-return investments.  This is why people are incredibly inclined toward building different buckets instead of leaving all eggs in a single basket. In investment terms, diversifying the portfolio by investing in different equities and sectors is one of the best techniques to evade market risks.  It is where investment in index funds emerges as a market dominator in the current Indian scenario.   What are Index funds?  Index funds work differently from active funds. These funds are appropriate for those wishing to evade risk and diversify investment. One can only manage the investments passively.   It implies that a person cannot invest directly in an index but through mutual funds called “Index Funds.” A manager or investor invests in the same equities as present in the index.  The market index leverages a company’s market capitalization to determine the total weightage of securities in the index. The total value of the company shares is equivalent to the number of outstanding shares.  As per Economic Times, “Since February 2020, the number of index funds has surged 144% and the assets managed by these investors grew by 590%”.   As a part of the ongoing research by the Economic Times, “The number of index funds grew from 32 in February to 78 in July 2020”. ETF draws the investor’s interest during this phase.  https://www.youtube.com/shorts/FlrxZAJjemE Who should invest in index funds?   Investments in index funds are profitable only for a selective bunch. If you meet the below investment behavior, index funds are just right for you:  You wish to evade any risks associated with investment/slash investment risks  You want to diversify your portfolio by starting and investing a low amount  You prefer to invest only a fixed amount in a particular index fund  You would like to invest in multiple investment forms – like real estate, gold, equities  Early savings help in child's future Read More How to invest in index funds?   Index Funds are a type of investment vehicle like mutual funds and exchange-traded funds that help achieve results on specific indexes. Here is how you can invest in index funds:   1. Figure out your investment goals  Before investing, it is important to ensure clarity over the present and future financial goals.   When do you want to retire?   How long till you achieve your financial goals?   What do your risk appetite and budget look like?   2. Pick one index to invest in  Index Funds, apart from helping diversify the investment, track broad sectors like large capitals and emerging markets. Different index types serve different purposes.   While deciding on the index to invest in, analyze the below parameter:   Which industry do you share knowledge in and is growing lately?   How much is your risk tolerance?   What are the company size and market capitalization?  What index fund would you find comfortable investing in (stocks, bonds, or commodities)?   Highlighting and improvising on these parameters will help you choose the right index fund. It will help build a growth foundation.   3. Decide the index funds to invest in  Each fund and company has different marketing capital, growth potential, and shares available to invest in. The best research method is by researching Asset Under Management (AUM). It is the total investment value that an expert manages on the client's behalf. Analyze the AUM index of a given fund and the ease of trading.  Here are some best index funds for 2022:  IDBI Nifty Junior Index Fund Growth  ICICI Prudential Nifty 50 Index Plan Direct-Growth  UTI Nifty Next 50 Index Fund Direct-Growth  As per ClearTax - “IDBI Nifty Junior Index Fund Direct Plan-Growth, is one of the most profitable index funds in India."  Index funds companies can vary in their short and long-term costs.  4. Sign up for a brokerage account   After signing up for a brokerage account, utilize the above points to figure out the best index funds to invest in. Here, an investment expert may help you meet the purpose according to your financial goals.   In the initial stage, having expert backing works well. An expert can help you develop an investment strategy that aligns with personalized financial goals. It makes investment in index funds a smooth journey.   5. Manage investments cautiously   It is important to manage and check potential opportunities for growth. Start with small investments and set up automatic monthly deductions. Monitor the fluctuations and returns throughout the year. Modify the strategy if the market demands.  While Index funds are a great way to start investing, it's good to remember no market is without risks. FAQs What are the benefits of investing in index funds in India? Index funds offer benefits such as broad market exposure, diversification, low costs, and simplicity. They track a specific index, like the Nifty 50 or BSE Sensex, providing exposure to multiple stocks. Their passive nature keeps costs lower compared to actively managed funds. Index funds are easy to understand and suitable for long-term investors seeking market returns. How can I choose the right index fund in India? Consider factors like the index being tracked, fund performance, expense ratio, and fund house reputation. Look for funds with a low tracking error and a consistent track record. Evaluate the fund's size and liquidity. Read the scheme's offer documents, prospectus, and seek expert opinions to make an informed decision. What are the risks associated with investing in index funds in India? Index funds are subject to market risks and fluctuations. Their returns are influenced by the performance of the underlying index. If the index experiences a downturn, the fund's value will also decline. Additionally, tracking errors may occur, resulting in deviations from the index's performance. It's important to understand these risks and have a long-term investment horizon when investing in index funds. Consult an expert advisor to get the right plan for you  TALK TO AN EXPERT

Earlier we discussed the cookie jar investment method. In this article, we will discuss more investing options. Every investor wants to put their money into the best investment alternatives to get the best returns. Some people invest for financial security, while others meet their investment objectives.   Your investing alternatives are dependent on your risk tolerance, investment horizon, financial goals, and liquidity requirements.  In reality, risks and returns are precisely proportionate. That means the greater the risk, the greater the likelihood of returns will be. There are primarily two kinds of investment opportunities in the country.   That is financial and non-financial assets. We can further split financial assets into market-linked assets such as mutual funds, stocks, and ETFs. Some fixed-income products are bank FDs, PPFs, and Bank RDs.   Gold investments, real estate, Treasury bills, and other non-financial assets are also examples.   Let us now see which of these different investment options is suitable for India's various categories of investors.   Source: pexels Investment Options for Housewives   Housewives are often left behind in the race to make investments. However, there are many options in which a housewife can put her savings to grow her money.   Some of the best options are investments in direct equity (if they have a relative level of experience) and mutual funds. By investing in mutual funds, they can reap the benefits of professional management of their money and diversification of investment.   Investment in ETFs, bonds, and even PPFs are viable options to grow their savings over time steadily.  Investment options for salaried people  Salaried people often struggle with managing their expenses. As a salaried employee in India, you will have various investment opportunities to invest and increase your hard-earned money wisely.  Different instruments are available for investing ranging from traditional investment options like fixed deposits, recurring deposits, national pension schemes, and ULIPs to modern investment options such as investing in shares, cryptocurrencies, etc.   Investments in stocks and cryptocurrencies can provide returns as high as 10 to 15% per annum. At the same time, safer investment options include mutual investment in mutual funds like equity mutual funds and debt mutual funds.   Most risk-free investment options are bank fixed deposits, government bonds, etc. Salaried people have great potential to create wealth if they budget their expenses and investments.   Investment options for senior citizens  In old age, the thirst for returns is not as high as in youth. So, senior citizens usually need investment alternatives that mainly protect their money rather than growing it.   So, the need is for safe investment options. For elderly people over the age of 60, the Senior Citizens' Savings Scheme. It is one of the risk-free tax-saving investing choices available in the country.   It is one of the most significant investment ideas for seniors because they get a steady income in the form of a competitive interest rate of 8.6% per annum, making it a highly profitable investment option.  Another viable option is the Pradhan Mantri Vaya Vandana Yojana. It is for elderly adults aged 60 and up and provides them with a guaranteed return of 7.4% p.a.; pension income is payable monthly, quarterly, semiannually, or yearly depending upon the option selected.   Some other instruments include the Post Office Monthly Income Scheme and National Pension Scheme.   Low-risk investment options  Investments with low risk are always popular because they do not exhibit unnecessary volatility, so investors have less worry about the undertaking.   Low-risk investment options include Fixed Deposits, National Savings Certificates, Public Provident Funds, National Pension Schemes, and Gold. All these investment options are primarily fixed-income type investments – guaranteeing a particular level of return.   Gold has historically risen in value through tough times and often proves to be a hedge against inflationary pressure in the economy.   Investment options for students   As a student, you usually do not have too much money, but the biggest thing you have is time – which you can use to your advantage. Also, as a young investor, you have the option to take a significantly higher risk in terms of your investment options.   Students can invest even fundamental amounts through Systematic Investment Plans (SIPs) every month in mutual funds, index funds, and ETFs. Acquiring knowledge about bond investment will also be beneficial.   Since students have a higher risk appetite, they can also mobilize a small part of their investment amounts into cryptocurrencies after thorough research. Since there is less expendable money, choosing free brokers or low-cost brokers is essential.   Using simple rules of spending, students can save and invest small amounts over a long period and thus, grow their wealth. Investing Options - Summarised 1. Equity Shares Direct equity investment, out of all the investment options covered here, delivers the best combination of stock appreciation and dividends.   When a long-time horizon (10 years or more) is taken into account, equity markets can be somewhat unpredictable in the short run, but they provide greater inflation-adjusted returns.   You can diversify your portfolio by purchasing stocks from companies in different industries, allowing you to account for economic growth in other sectors.   Equity is the riskiest asset class due to the unpredictability of global markets and the probability of sectoral instability. When markets crash during difficult economic circumstances, there is always the risk of significant capital wipe-out.   2. Equity Mutual Funds Mutual funds that invest in equities are known as equity mutual funds. Instead of buying individual stocks in a specific industry, you can buy a mutual fund that encompasses that industry's growth. These are less hazardous due to their diversified nature.   An equities mutual fund invests more than 65 percent of its assets in the stock market (according to SEBI rules). An equity mutual fund can be active or passive.   Fund management's expertise also influences these mutual funds' performance.   3. Debt Mutual Funds Debt mutual funds, as the name implies, invest most of their assets in debt instruments. These funds are appropriate for investors with a moderate risk appetite and desire for consistent returns.   Government bonds, corporate bonds, treasury bills, and other money market instruments are also in the portfolio of debt mutual funds. Low risk does not imply that there is no risk.   Credit risk and interest rate risk are two risks that you should be aware of before investing in debt mutual funds.   4. Fixed Deposits (FD) A bank FD is safer than practically every other investment choice. With a high level of safety comes a poor rate of return.   FDs are a method to maintain your money where it is (returns are often so low that they don't even keep up with inflation), not a strategy to increase it.   Depositors have protected up to a maximum of Rs 5 lakh apiece in the event of a bank failure (under the Deposit Insurance and Credit Guarantee Corporation).   Bonds: Bonds are fixed-income securities representing a loan a borrower advanced to the investor. When governments or even listed companies want to raise money in the form of debt, they issue bonds to the public.   You can purchase these bonds in the bond market. Bonds offer fixed interest payments to the bondholders (a variable interest payment system is also there).   Bond prices and interest rates move in the opposite direction. At the time of maturity, the total principal has to be returned. There are different types of bonds, like government, corporate, and municipality bonds.    The risk of investment in bonds also arises from the possibility of potential inflation outstripping the rate of interest on the bonds.   Furthermore, when you buy bonds that are not well-rated, there remains a chance of default, wherein you might lose out on what you lent out.   5. National Pension Scheme (NPS) This investment vehicle is for people over 60. PMVVY offers a 7.4% annual guarantee.   Pension income, payable monthly, quarterly, bi-annually, or annually, with pension sums ranging from Rs 1000 to Rs 9250, is available. With a 10-year duration, the maximum investment amount is Rs 15 lakh.   The senior citizen, or their nominee in the event of the senior citizen's death, receives the maturity amount.   6. Public Provident Fund (PPF) PPF is a tax-free (interest) investment that lasts for 15 years. The government reviews the interest in PPF accounts every quarter.   A PPF account can also be opened with a monthly contribution of Rs 500. PPF is a remarkably safe investment because the interest received is covered by a national guarantee.   7. Gold Gold is often known to be a safe haven for investors. In your portfolio, gold will operate as a hedge.   In the past, gold has proven to be a winner when the economy has been in the doldrums. Gold is an attractive investment in the long run because of its rising price.   Digital gold, sovereign gold bonds, gold ETFs, and physical gold are options for purchasing gold. It's also a highly liquid asset to own. FAQs What are some low-risk investment options? Some low-risk investment options include Fixed Deposits, National Savings Certificates, Public Provident Funds, National Pension Schemes, and Gold. These options offer a relatively stable return on investment and are less volatile. Which investment options are suitable for senior citizens? Senior citizens can consider investment options such as the Senior Citizens' Savings Scheme, Pradhan Mantri Vaya Vandana Yojana, Post Office Monthly Income Scheme, and National Pension Scheme. These options provide steady income and are designed to protect their money. What investment options are suitable for salaried individuals? Salaried individuals have a range of investment options, including traditional options like fixed deposits, recurring deposits, national pension schemes, and ULIPs. They can also consider investing in stocks, cryptocurrencies, and mutual funds like equity and debt funds. What are the recommended investment options for students? Students with a higher risk appetite can consider investing in Systematic Investment Plans (SIPs) in mutual funds, index funds, and ETFs. They can also explore bond investments and allocate a small portion of their investment amount to cryptocurrencies. Using low-cost or free brokers is recommended for students with limited funds. TALK TO AN EXPERT

Mutual Fund vs FD is a long-standing debate in the financial arena. While one offers fixed and stable returns, the other offers a chance at wealth generation.  Fixed Deposits are the most popular and favored investment mode among Indian households. And why not! It feels safe to have an investment that guarantees a risk-free return. An FD allows you to put a lump-sum amount with the bank with a fixed interest rate and lay back for a good long period. Once the deposit matures, you can withdraw your money and enjoy the interest earned over the selected period.  Mutual Funds enable you to pool your money and earn a return. Every Mutual Fund has a portfolio manager who invests your money into stocks according to your risk appetite and ROI. Therefore, the return on Mutual Funds depends on the market conditions. Unlike fixed deposits, it does not have a lock-in period. Choosing the right investment journey for your child is the primary concern for every parent. If you are confused between Mutual Funds and Fixed Deposits, then look at both these investment options from various standpoints.  Inflation-adjusted rate of return  Inflation is the most crucial yet commonly ignored aspect of investment. It is the rate at which the value of your money decreases with time. Inflation reduces your purchasing power and creates financial instability.  In India, FDs do not offer an inflation-adjusted rate of return. The maximum rate of interest on FDs is 5% to 7%. However, the inflation rate in recent years has been recorded somewhere between 4-6%.  Inflation-adjusted return that you receive adds zero value to purchasing power. Instead, if the inflation rate goes higher than the interest rate, you will likely lose the money you have invested.  On the other hand, Mutual Funds are highly responsive to the market conditions. Also, they come with the benefit of compounding on SIP investments. You can start with an amount as low as Rs. 500, and your money will grow every month. Mutual Funds, especially equity-based mutual funds, are influential enough to adjust the impact of inflation on your money.  Risk Factor Fixed deposits feel safe on the surface because they are government-regulated. But, when it comes down to investing in your child’s education, the risk against this safety goes scary. The need of the hour is to grow your money. FDs may keep your money safe but add nothing to growth.  Mutual funds, however, allow you to mitigate the risk through portfolio diversification. You can identify your risk appetite and stash your money accordingly. Moreover, you have experts who guide you through your investment journey and help you attain your financial goals.  Tax Implications Tax payable on fixed deposits is subject to the Slab rate under the Income Tax Act, 1961, as amended from time to time. Also, the interest that you earn on FDs is tax-exempt under sec 80 TTB to the extent of Rs. 50,000.  Whereas, Mutual Funds listed under Capital Gains are taxable. The tax rate would vary depending on the Mutual Fund and its income. The duration for which the Mutual Funds are held before the sale is significant for taxation purposes.  Source: Freepik Liquidity  Keeping the persistent trend of Education Inflation in mind, it isn’t wise to lock your money into Fixed Deposits. Once you make a choice, you can not withdraw until maturity.  Mutual Funds come with no lock-in and are highly liquid. You can choose between a lump sum and a SIP investment. It enables you to start small but earns high market-based returns. You can take away your money at will! What are mutual funds? Read More Wealth generation With the pace at which the colleges are upscaling their fee structures, it has become challenging to keep up with the cost. Therefore, parents don’t just have to save but ensure wealth accumulation to pay for the price.  Unfortunately, fixed deposits fail here. The ultimate return you receive from an FD would fall far below the level of return you need. However,  if planned early and the right way, mutual funds are incredibly potent to help you reach your target. All you need to do is make the best out of the investment. Start early and extract the magic of compounding! Parents need to look at the broader picture when choosing an asset for their child’s education. Due to their low Inflation-adjusted return, fixed deposits are likely to fail as productive assets. And, it doesn’t matter how safe FDs are if they don’t help you meet your desired goals.  Mutual Funds offer you a safer opportunity to invest in stocks, especially if you don’t have the financial knowledge. Moreover, you don’t have to stress your pocket to invest. All you need is the magic of the 3Ps: planning, patience, and persistence! FAQs What is a Mutual Fund? A mutual fund is a financial trust that collects funds from investors and invests them into different instruments like stocks, bonds, and other money market instruments. How to invest in a Mutual Fund via the EduFund App? Step 1: Log in to the EduFund website or the EduFund app. Step 2: Complete your KYC and move ahead to create your investment account. Step 3: Choose the option of mutual fund investments. Step 4: Analyse your risk profile on the app by answering your household income and expense, the number of dependents you have, the highest level of maturity you have in terms of investments, your period of investment, and similar questions. Step 5: After answering the above questions, you will know what type of investor you are and the degree of risk you might be willing to take. The EduFund website or the EduFund app will suggest some mutual funds you might want to invest in, with a recommended SIP value. Step 6: Choose the fund and start investing. What is an FD? Fixed Deposits are the most popular and favored investment mode among Indian households. An FD allows you to put a lump-sum amount with the bank with a fixed interest rate and lay back for a good long period. Once the deposit matures, you can withdraw your money and enjoy the interest earned over the selected period. Consult an expert advisor to get the right plan for you TALK TO AN EXPERT

As an investor, there are many standard rules of money-making that you might have come across. In this article, we will learn about the very famous 15*15*15 rule. We will discuss the compounding magic that works wonders here.   The rule says that if you invest Rs 15000 per month for 15 years and generate 15% returns annually via a SIP in an equity mutual fund, then at the end of the 15 years, you will have an accumulated wealth amounting to Rs 10,027,601 (Rs 1.00 crore).   Breaking it down, we see that the total investment amount over the 180 months is Rs 15000 x 180 = Rs 27,00,000 – this means that the total returns you generate are equal to Rs 73,00,000.   The rule is so powerful that if you double the investment period from 15 years to 30 years, your accumulated wealth will equal Rs 10.38 crores (wealth increases 10x times).   The staggering figures that appear above are the result of compounding. What is compounding interest?  Compound interest implies interest earned on interest. The magic happens when you keep adding funds to your investment and do not break it.   As your invested value grows every year, the base (on which returns are generated) increases. The return generated also rises with time - this is how a very normal amount of Rs 15000 per month can lead you to become a crorepati in 15 years.  A time frame of investment is an essential factor when we talk about compounding. The more time you give your investment, the more returns you will generate. This is because your investment base is growing bigger and bigger over time.   As we saw above, doubling the investment time increases the wealth corpus by ten times.   Let us take an example to see how compounding works. Assume that person A starts to invest from the age of 20 and stops investing at 30 years of age, whereas person B starts to invest from 30 years until his retirement at 60 years. The table below clearly illustrates the magic of compounding.   Person A turned out to be the smarter among the two investors because he started his investment journey ten years earlier than person B and thus, was able to amass a fortune even with just one-third of the investment amount of person B.   The most considerable teaching that the 15*15*15 rule gives us is giving our investments ample time in the market; more importantly, the earlier you begin, the richer you become.   Mutual funds offer you high flexibility in switching from one category to another, with redemption at desirable times. To take advantage of compounding, start your investment journey today.

Equity mutual funds are investment instruments that primarily invest in stocks of various companies across different sectors.   The aim of the fund manager is to maximize returns by allocating money among stocks with the help of screening criteria such as market capitalization or by investing in stocks of varying sectors.  Equity mutual funds are the riskiest category of mutual funds because of the high exposure (at least 65%, according to the rules laid down by the Security and Exchange Board of India) to equity markets.   However, this also leads to higher returns (on average) than other classes of mutual funds.  The risk involved in this investment arises from the general market conditions and the specific sectoral performance. A good option for investors looking to grow their capital over the long term, with considerable exposure to the stock market, is an Equity mutual fund.  Investment in these funds is possible through the SIP (Systematic Investment Plan) format and lump-sum format. Investors with different objectives and risk profiles have other options (among equity mutual funds) to invest in. Difference between Equity and Equity mutual funds  Direct investment into equity means purchasing stocks of listed companies directly through your Demat account.   In contrast, when you purchase an equity mutual fund, you are giving your money to the fund manager managing that fund to invest primarily in equity and some investment in other instruments to balance the fund.  While investing directly in equity, you have to decide which company to invest in and other related decisions. When you invest in equity funds, you choose to choose the fund, and the fund manager takes care of the further details, like the fund will constitute what companies' shares, in what ratio, etc.  Also, mutual funds offer diversification by giving us the option to make investments in diverse companies and sectors through an equity mutual fund, thereby exposing us to a more significant section of the market and possibly reducing our risk.   Investment in these funds is possible through the SIP (Systematic Investment Plan) and lump-sum formats. Investors with different objectives and risk profiles have other options (among equity mutual funds) to invest in. These are the main difference between direct equity and equity mutual funds investment source: freepik Different types of equity mutual funds 1. Categorization based on the market capitalization of companies Large-cap funds, Mid-cap funds, Small-cap funds, and Multi-cap funds.   Market capitalization tells us about the company's size; it is calculated as follows: Market Cap = Price of share * No. of shares outstanding  Companies having a market cap of more than Rs. 20,000 crores are known as large-cap companies. A mid-cap company has a market capitalization between Rs. 5,000 and Rs. 20,000 crores and small-cap companies have a market capitalization of less than Rs. 5,000 crores.  2) Sector funds These types of equity mutual funds invest the majority amount in particular sectors; that is, there is a concentration of investment into specific sectors in the economy, like FMCG, pharma, technology, PSUs (Public sector undertakings), etc.  3) Theme-based funds Theme-based equity mutual funds are pretty similar to sectoral funds because they invest in "themes" like ESG (Environmental, Social, Governance), Make in India, Digital India, and many other themes in the public and private sectors.  4) Focused funds Investments via these funds mean that more than 65% of investments are in equity only and related investments.  5) Contra funds Just as the name says, contra equity mutual funds follow contrarian investing methods – identifying potential market winners and investing in them.  6) Taxability-based categorization ELSS (Equity linked savings scheme) funds allow for deductions under section 80C of the Income Tax Act.  How do equity mutual funds work?  Equity mutual funds work simply. To state it in words, equity mutual funds invest more than 60-65% of their assets in stocks of different companies.  The fund manager tends to invest in names to maximize the overall return from the fund.  Are equity funds the same as mutual funds?  Equity funds are a type of mutual fund that primarily invests in equity shares of companies. FAQs Are equity mutual funds good? Equity mutual funds usually have a high potential to earn great returns among all mutual funds. However, with high returns, a high risk is also included. Hence, investors with a higher risk appetite are considered suitable for these funds. Which equity mutual fund is the best for me? Deciding the best equity mutual fund for oneself depends on a lot of factors that have been discussed above. However, here are some top options based on their annualized 5-year returns - PGIM India Midcap Opportunities Fund, Parag Parikh Flexi Cap Fund, Axis Midcap Fund, etc. Is equity mutual fund good as a long-term investment plan? Long-term investment plans bring wealth creation for investors. And that's where Equity Mutual Funds shine. Consult an expert advisor to get the right plan for you TALK TO AN EXPERT

ETFs have been doing the rounds in the market for a long time and have penetrated deeply into investor portfolios. Thanks to their liquidity, accuracy, and ease of understanding, these instruments have proven to be a boon for retail and institutional investors. Advantages of ETFs The most eye-catching amongst them is their lower costs. But why are these ETFs cheaper? The answer to this question is the ETF structure and how they operate. Reasons why ETFs are cheaper?  Most ETFs are passive index funds. These funds generally track the underlying index with full or partial replication, thereby reducing the need for actively managing a fund which is usually the case with mutual funds.  Index-tracking mutual funds are also expensive as compared to similar ETFs. Let's suppose an investor wants to sell or buy an ETF; the investor does the same by directly placing an order with the broker. However, to transact in a mutual fund, the investor needs to contact the fund manager, sell these units in the secondary market, and revert to a tedious process that costs more. The mantra is simple "less work = fewer costs" ETFs use an "in-kind" method of creation and redemption of shares. What is the in-kind creation process?  An in-kind creation process means that if an investor has a portfolio precisely similar to the underlying security basket of the ETF, then the investor can directly exchange this portfolio for the equivalent number of ETF shares.  The option was available only to large sum investors or institutional investors, but now it is available for retail investors too. This type of transaction reduces the number of transactions an investor must go through to get ETF shares. Thus, the transaction fee and paperwork commission are not there. What is the in-kind redemption process? An in-kind method of redemption process is also in place. The investor can opt for an in-kind redemption process by exchanging the ETF share for underlying securities rather than selling them in the secondary market.  The above-mentioned process again enables the fund to buy and sell securities without entering the secondary market, leading to a reduction in paperwork and other transaction costs, thus allowing a cost-effective running of the fund. Consumers, thus, benefit in the form of a lower expense ratio. Administration charges are also one of the key factors which increase the cost of holding mutual funds vis-à-vis ETFs.   Since ETFs trade on the stock exchange. The fund house need not get involved in the everyday transactions of the fund. The issuer needs to come into the picture only during the creation and redemption process of the shares.   Consider this: When investors trade Tesla (TSLA) shares, the company has no direct involvement. ETF issuers have no direct participation when investors sell their shares on similar lines.   On the other hand, a mutual fund needs to be involved in every transaction since all transactions happen through him.  Mutual funds charge an annual 12b-1 fee. What is a 12b-1 fee? It is an expense that the mutual fund undertakes to promote and market the mutual fund to increase its AUM.   If you wonder whether they transfer these expenses to their investors, the answer is - YES, they transfer these expenses! The world is not a fair place after all.  According to the Securities and Exchange Commission (SEC), "these fees are deducted from a mutual fund to compensate securities professionals for sales efforts and services provided to the fund's investors."   The original motive for sharing these costs was to increase the popularity of the mutual funds by lowering the expenses of mutual fund houses, but in today's world, where they have infiltrated almost every portfolio, charging this fee is a bit controversial.   ETFs are far less expensive than mutual funds because they do not charge 12b-1 fees, thus, they have a lower expense ratio. Conclusion ETFs are significantly cheaper than other such investment vehicles due to their operation and structure.   ETFs are intrinsically more cost-effective than mutual funds since they trade on exchanges like stocks, eliminating many operational fees of running a mutual fund.   Furthermore, because most ETFs are passively managed and linked to an index, issuers have fewer costs to pass on to investors, resulting in reduced expense ratios. Consult an expert advisor to get the right plan TALK TO AN EXPERT FAQs Is it better to buy ETFs than mutual funds? Which option is better - ETFs or Mutual Funds - the answer to this question varies from investor to investor. However, if you are looking for an investment that is more tax-efficient, ETFs would be a better option for you. Are there any disadvantages to owning ETFs? There are two sides to every coin. Just like its tremendous advantages, there are some drawbacks that investors must be aware of before buying ETFs. Some of the disadvantages include high trading fees, low trading volume, operating expenses, tracking errors, etc. Should I switch from mutual fund to ETF? Switching from mutual funds to ETFs would likely be the right choice for you if the fund you're investing in has a high expense ratio or, due to undesired distribution of capital gains, you find yourself paying too much in taxes every year.

As the festivities of the year-end begin, the world of finance is going to look back at this year as one that brought hordes of new investors, one that witnessed rapid recovery from the pandemic, and one that renewed the investor’s sense of optimism in the markets.   The markets have hit all-time highs this year and it is natural to wonder what is to be expected of the new year. In this article, we dive into the trends that might continue, and some that might fade away.   1. Another year of the bulls?  The markets might have recovered well from the historical lows of the pandemic but the supply chains are still yet to function at a hundred. In the new year, companies around the world would look at consolidating their supply chains and getting back to leaner ways.  The profitability that took a hit for most companies due to their logistical inability to meet demand, would likely get back on track with most of the world opening back up. And if there is one thing that drives a bull run, it is profits and dividends.   2. New investors this new year   According to the NSE, over 5 million new investors registered on its platform since April of this year. This is partly to be credited to the emerging platforms that have made investing accessible to the common man. Another key factor has been the educational efforts from various agencies to bring the markets to the people.   For India, it is a bright sign of advancement as more capital is being poured into the equities market by newer investors. This is a trend that we might see more of in the coming year and thankfully so.   3. The focus on goal-based investing   A rising trend among Indian investors has been goal-based investing. For some, the goal is long-term like their retirement, for others, it is medium-term goals like housing and education.   With EduFund, our education-focused investment platform, we’ve seen more and more parents starting an education fund to beat the rising education inflation worldwide. It has been through SIPs, where they set aside a small sum each month to generate that education corpus for their children.   As is with any action, with a purposeful goal, investing too becomes easier. This trend might be here to stay for the next year and beyond.  4. The Web 3.0 phenomenon  It does seem like an eternity ago when investment vehicles were limited. Today, the number of options available for investment is nearly countless, with new ones emerging every passing day.   From NFTs and the Metaverse to cryptocurrency and other resultant products of Web 3.0, the investor of today is exposed to many newer options. Naturally, the volatility of these untested waters is a concern. It is surely wise to restrict these investments to a small percentage of your portfolio, and stick to the tried and tested regulated markets.   Nevertheless, the coming year is sure to see more capital poured into channels emerging from Web 3.0.   5. The Internet educators   If India has to see a large percentage of its population participating in the markets, content creators creating shorts, reels, slides and long-form videos are going to play a key role.   A delightful addition to the financial realm this year has been internet content creators who have been making exceptional content on finance and educating the young and old. This wave of creators has seen their following and influence increase and the coming year is sure to see more creators emerging and driving educated decisions from investors.  Conclusion   Timing the markets is an art form that hasn’t been mastered yet. Wise investors are ones that are disciplined and invest regularly despite market ups and downs. The all-time highs are going to be sooner or later surpassed, and that’s us counting on India and its vast potential - this year, this coming year, this decade and beyond.   FAQs What are some best investment options for 2023? Some of the top investment options for the year 2023 are S&P 500 Index Funds, real estate, Dividend Stock Funds, mutual funds, cryptocurrency, High-yield Savings Accounts, etc. What will the stock market be like in 2023? Although the performance of the stock market varies highly due to various factors, most of the stock market forecasts have predicted a moderate improvement for the year 2023. Which sector is expected to boom in 2023? For the year 2023, the govt. is focused on the following sectors - capital goods, manufacturing, defense, railways, sustainability, and public sector banks.

When you are looking to invest in mutual funds, there is another detail that you need to consider. There are two options that are given to you by the mutual fund – The growth option and the dividend option. Consider an ABC fund that invests in Large-cap funds. When the fund earns profits (when funds’ holdings i.e., the stocks or bonds it has invested into have price appreciation, when those stocks distribute dividends, or when the selling of stocks or bonds provides returns) in the process, it can either distribute it to its investors or it can invest back these gains into the fund.  The growth option In this option, the profits are added back to the investment corpus of the fund (the number of units held remains constant). NAV = Funds Assets - Funds Liabilities / Total Number of Shares The NAV of the fund increases, as the fund's assets, increase with accumulated profits. For example: Consider the ABC fund with a NAV of Rs 100. After a year, if the fund has achieved a profit of 20 per share and if it has not distributed it to its investors, the NAV would be Rs 120. If you had 10 shares of this fund, on selling it after one year you would receive 120*10= Rs 1200. Your cost price was 100*10= Rs 1000. Hence, your gains would be 1200 – 1000 = Rs 200. The dividend option (Dividend payout option) In this option, the fund’s profits are not accumulated or reinvested into the fund. They are distributed to the investors. The gains are distributed either annually or quarterly, and only when the fund makes profits. The fund manager decides the frequency and the number of dividends. Once the dividend is paid out, the NAV of the fund decreases (it always does not decrease by the exact dividend amount as there are other factors that impact the NAV). The number of units held remains constant. For example: If the ABC fund has a NAV of Rs 30. If as an investor, you own 1000 shares of the same - if the fund declares a dividend of Rs 3, you would receive 3*1000 = Rs 3000 as a payout. The NAV of the fund would also decrease to NAV - Dividend. Rs 30 – 3 = Rs 27. Dividend reinvestment In this option, the dividends are declared, but the investors do not receive a cash payout. They are paid in “kind” or with the shares of the fund itself. Hence, as an investor, you would have more shares of the fund. For Example Dividend ReinvestmentRemarksNAV of fund20Initial StageNumber of units held100Dividend Declared2As declared by the Fund managerNAV after dividend Declaration18For the fundDividend Receivable (not paid out)200Investor's EntitlementAdditional Units of Funds that can be purchased with the Dividend                  11.11 Dividend Receivable/New NAVThe final number of units                111.11 Initial + Additional Which fund should you be investing in? There is no one-size-fits-all rule that we can follow. It depends on the investor and his or her requirements. If you would like to receive payments from the fund to fund your expenses, opting for a dividend payout plan would be ideal for you. However, if you are a long-term investor who wants to lock in the funds, and wait to reap the returns, you can opt for the Growth option where the profits are accumulated. In the long run, the Growth option provides a higher return than the dividend option and could be a faster way for wealth accumulation. You can find all the mutual fund options mentioned above on EduFund, a secure platform to invest in the biggest mutual funds in the country.  Things to Look forGrowth OptionDividend PayoutDividend ReinvestmentDividend DeclarationNoYesYesImpact on NAVIncreasesDecreasesDecreasesDividend in your hands (Bank account)NoYesNoUnits heldNo changeNo changeIncreases FAQs Which is better dividend or growth fund? Dividend option for mutual fund is good for investors looking for liquidity. While growth fund is for those who are focused primarily on growth and wish to stay invested for a while. Which option is good growth or IDCW in mutual fund? IDCW is a good option for investors looking for liquidity and growth is a good option for investors looking for wealth generation. How much MF dividend is tax free? If the dividend amount generated from mutual funds is less than Rs. 10 lakh, then investors do not have to pay taxes. If the amount exceeds this limit, the investor has to pay 10% of the total earnings as tax during a particular year. What is disadvantage of growth fund? The biggest disadvantage of growth fund is that they are highly volatile and may fall dramatically. Consult an expert advisor to get the right plan TALK TO AN EXPERT DisclaimerNAVs in the article are only indicative and not exact measures. They are only for representation of the direction of adjustments.

Headquartered in Seoul, South Korea, Mirae Asset Financial Group is one of the key players in the Asian financial market. Its asset management wing, Mirae Asset Global Investments, began its operation in 1997 and has expanded its business globally in a relatively brief period. Mirae Asset Global Investments is a diversified asset manager providing innovative solutions worldwide to help investors achieve their goals in a transforming world. Originating in the backdrop of the Asian currency crisis, Mirae Asset began cautiously, and they focused more on the Korean market initially. Founded by the visionary Hyeon Joo Park, Mirae Asset became the first AMC to present mutual funds to retail investors in 1998.  After consolidating its presence in the South Korean market, Mirae Asset quickly moved to capture the global market. They first established their corporate office in Hong Kong in 2003.  In 2005, they launched the first overseas investment in South Korea, the Mirae Asset Retirement Pension Fund. Two years later, they started their business in India and the UK. The following year they expanded to the USA and Brazil while winning accolades for being the largest investor in the emerging Asian markets. Comparatively, in a short time, they have reached several landmarks.  The Indian wing of the AMC, Mirae Asset Global Investments (India) Ltd, was launched in November 2007, becoming only their second overseas branch after Hong Kong. Though Mirae Asset has been present in the Indian market since 2004, as a foreign institutional investor, they began the domestic business only in 2008. Their growth is based on solid principles and philosophies. They consider open communication with their clients has been helping them stay ahead of the competition while ensuring that they keep the faith granted to them safe. They take responsibility for the client’s future as the core of their values, and this influences the dealings that help them hold on to the client’s trust. At Mirae, investment and growth go hand in hand, which is why they continue to innovate, and envision building a healthier and happier society. Mirae Asset Global Investments, as a global asset manager, has been delivering innovative investment solutions. Mirae Asset Global Investments was founded in Asia and now has a presence in 15 countries, where they take a collaborative approach to managing a fully diversified investment platform. They have 40-plus offices worldwide, and it is the 18th largest Global ETF Manager by AUM. They have clients in 36 countries, and 1,717 products are distributed globally. Since its first fund launch in 1998, they have diversified its lineup by building its global investment network and capabilities. The fund house has 554 USD billion (As of December 31, 2020) total Asset Under Management (AUM). Mirae believes in sustainable investing, which is an investment discipline that aims at considering environmental, social and corporate governance (ESG) criteria to generate a long-term competitive financial return and positive societal impact. The umbrella of sustainable investing covers socially responsible investing, impact investing and ESG Investing.  Powered by a unique perspective and the expertise of their global investment professionals, they adapt to their client's changing needs and deliver fresh solutions across asset classes, providing investors with insightful ways to create portfolios and achieve their investment objectives. They currently invest over $554bn (AUM as of December 31, 2020) on behalf of clients, and this provides them with the scale and expertise to identify opportunities in an evolving world. Mirae Asset global investment in India Mirae Asset India started its journey in India with the establishment of an Asset Management business with a seed capital of USD 50 Mn. It is now recognised as one of the fastest-growing AMCs in India, actively managing/advising on USD 9,269 AUM for its clients (December 31, 2020).  Mirae Asset Global Investments (India) Private Limited (MAGI India) has transferred its asset management business to its wholly-owned subsidiary, Mirae Asset Investment Managers (India) Private Limited (Mirae AMC), as part of an internal restructuring of its business with effect from January 1, 2020.  Accordingly, MAGI India ceased to act as the Asset Management Company (AMC) of Mirae Asset Mutual Fund (MAMF), and Mirae AMC is the AMC of MAMF effective January 1, 2020. Mirae Asset in India has over 21 branches, and the Asset under Management is INR 70,900 Cr with 32 lakh portfolios and a monthly SIP Book of INR574 Cr as of 28th February 2021. Currently, Mirae Asset Mutual Fund is managing 24 Domestic Funds and Advisory of 3 Offshore Funds (11 Equity, 8 Debt, 2 Hybrid, 3 ETF) Mirae Asset Capital Markets (India) Pvt Ltd. with USD 300 Mn seed capital, was established in 2018. Mirae Asset Venture Capital has invested USD 104 Mn in growing Indian start-ups. They have invested USD 41Mn Dedicated Fund in Alternate Investment Fund. Mirae AMC offers 9 Equity funds across diverse market caps and themes in India.  They include Mirae Asset Banking & Financial Services Fund, Mirae Asset Arbitrage Fund, Mirae Asset Midcap Fund, Mirae Asset Focused Fun, Mirae Asset Healthcare Fund, Mirae Asset Tax Saver Fund (ELSS), Mirae Asset Great Consumer Fund, Mirae Asset  Emerging Bluechip Fund, and Mirae Asset Large Cap Fund.  Equity funds endeavour to provide the potential for high growth and returns. They are best suited for investors with a long-term investment horizon. The fund house offers 8 debt funds in India with an AUM of INR 5,602 Cr (as of December 2020). Their debt funds include  Mirae Asset Ultra-short duration fund, Mirae Asset Banking and PSU Debt Fund, Mirae Asset Overnight fund, Mirae Asset Fixed Maturity Plan Series III, Mirae Asset Short Term Fund, Mirae Asset Dynamic Bond Fund and Mirae Asset Savings Fund.  Fixed Income or Debt Funds endeavour to provide the potential for stable and regular returns. They are best suited for investors with a short to the medium-term investment horizon. The fund house offers 2 hybrid funds and 2 FoFs in India with a total AUM of INR 4,273 Cr (as of Dec 2020). The funds include the Mirae Asset ESG Leader Fund Fund, Mirae Asset Equity allocator Fund, Mirae Asset Equity Savings Fund, and Mirae Asset Hybrid Equity Fund.  Hybrid funds invest across two or more asset classes (usually a mix of stocks and bonds). These funds aspire to strike a balance between risk and returns by aiming to generate income in the short run and achieve wealth appreciation in the long run. The fund house has made global ETF footprints in 9 countries with 391 ETFs and an AUM of 54 billion US dollars (Dec 2020.). Based on their deep understanding of the ETF market and global stance, they have been focusing on growing the India ETF market. In India, their ETF has an AUM of INR 469 Cr as of Dec 2020. An Exchange Traded Fund (ETF) is a fund that trades on an exchange, just like a stock and replicates the portfolio and performance of a publically available index. ETFs, offer low-expense investment solutions. Private Equity: Based on their strong inbound deal inflow, the Indian startup ecosystem took strong notice of Mirae Asset, a significant player in VC investments. They have a total of 149 USD million as of Dec 2020.  The latest news is that around six mutual fund houses are seeking SEBI’s permission to offer nine international schemes, and Mirae Asset Mutual Fund is one among them. Mirae Asset Mutual Fund plans to launch:  Mirae Asset Global NextGen Tech Fund of Fund: An open-ended fund of fund scheme predominantly investing in equity exchange-traded funds listed in the US.Benchmark: NASDAQ 100 Total Return Index Mirae Asset US FANG Plus ETF: An open-ended scheme replicating/tracking NYSE FANG+ Total Return Index. Benchmark: NYSE FANG+ Total Return Index For many, it makes sense to invest in stocks of a country where they may be looking at emigrating or sending their child for further studies. Such investments will help cover them from currency fluctuations. It also offers diversification, which is suited for large portfolios. Most advisors also suggest that investors should stick to developed markets like the US for geographic diversification unless the investor had an advisor to guide them. (source: livemint.com) Important information about Mirae Asset Mutual Fund Name of the AMCMirae Asset Investment Managers (India) Private LimitedIncorporation Date30 November 2007SponsorsMirae Asset Global Investments Co. LtdTrusteeMirae Asset Trustee Company Pvt. Ltd.Trustees' NameDr Manoj Vaish- Independent Director Dr Barendra Kumar Bhoi -Independent Director CA.Uttam Prakash Agarwal- Independent Director Mr K Ramasubramanian -Independent Director (Associate)MD/CEOMr Swarup Anand MohantyCIOMr Mahendra Kumar JajooCompliance OfficerMr Ritesh PatelInvestor Service OfficerMr Neelesh SuranaRegistrar and Transfer agentKFIN Technologies Private Limited Unit: Mirae Asset Investment Managers (India) Private Limited (ISIN INF769K01CP4) Karvy Plaza, H. No. 8-2-596, Avenue 4, Street No. 1, Banjara Hills, Hyderabad - 500 034 Andhra Pradesh Phone:(040) 23312454/ 23320751/ 23320752 Fax   (040) 23311968 Email: customercare@karvy.com E-mail: MIRAEMF.customercare@kfintech.comToll-free Number 1800-2090-777Email Addresscustomercare@miraeasset.comRegistered AddressMirae Asset Investment Managers (India) Private Limited. Unit No. 606, 6th Floor, Windsor Bldg, Off CST Road, Kalina,  Santacruz (East), Mumbai - 400 098. Email: customercare@miraeasset.co.in Website: www.miraeassetmf.co.in Ph: 91 - 022 - 6780 0300 Ten top-performing Mirae Asset Mutual fund schemes Mirae Asset Hybrid - Equity Fund (Category Hybrid: Aggressive) Mirae Asset Cash Management Fund (Category - Debt: Liquid) Mirae Asset Emerging Bluechip Fund (Category - Equity: Large & Midcap) Mirae Asset Tax Saver Fund (Category - Equity: ELSS) Mirae Asset Large Cap Fund (Category - Equity: Large Cap) Mirae Asset Great Consumer Fund (Category - Equity: Sectoral/Thematic) Mirae Asset Dynamic Bond Fund (Category - Debt: Dynamic) Mirae Asset Equity Savings Fund (Category - Hybrid: Equity Savings) Mirae Asset Focused Fund (Category – Equity: Multicap) Mirae Asset Short Term Fund (Category - Debt: Short Term) 1. Mirae Asset Hybrid - Equity Fund (Category Hybrid: Aggressive) This is an open-ended hybrid scheme investing predominantly in equity and equity-related instruments. The recommended investment horizon for this fund is 3+ years. The investment is done in a portfolio mix of equity and fixed-income instruments. This scheme is suitable for those looking for wealth creation. Key information Minimum InvestmentINR 5000    Minimum Additional Investment INR 1000Minimum SIP InvestmentINR 1000Entry LoadNil Exit LoadIf redeemed within 1 year (365 days) from the date of allotment: 1%. If redeemed after 1 year (365 days) from the date of allotment: NILReturn Since Inception15.49 % (Growth) (Date of Inception: 29th July 2015).NAVINR  18.504  (April 22, 2021) (Regular Growth) INR 20.372 (April 22, 2021)  (Direct-Growth)AUMINR 4,829 Cr (As on March 31, 2021) 2. Mirae Asset Cash Management Fund (Category - Debt: Liquid) This is an open-ended liquid scheme that invests predominantly in the money market and debt instruments. This fund provides minimal interest rate risk and looks to maintain high portfolio liquidity. The scheme looks to give stable returns with minimal mark to market and credit risk. Investors can invest from one day to six months in this scheme and the fund is predominantly in the money market and debt instruments. This is ideal for investors who want to invest for a very short term and are looking for an alternative to bank accounts/deposits. Key information Minimum InvestmentINR 5000    Minimum Additional Investment INR 1000Minimum SIP InvestmentINR 5000Entry LoadNil Exit LoadExit load of 0.0070% if redeemed within 1 day; 0.0065% if redeemed within 2 days; 0.0060% if redeemed within 3 days; 0.0055% if redeemed within 4 days; 0.0050% if redeemed within 5 days; 0.0045% if redeemed within 6 days.Return Since Inception15.49 % (Growth) (Date of Inception: 12th January 2009).NAVINR  2,147.9966 (April 22, 2021) (Regular Growth) INR 2,175.7905 (April 22, 2021)  (Direct-Growth)AUMINR 3,462 Cr (As on March 31, 2021) 3. Mirae Asset Emerging Bluechip Fund (Category - Equity: Large & Midcap) This is an open-ended equity scheme investing in both large-cap and mid-cap stocks. Investors who are looking to invest for over 3 years and looking for high returns can invest in this fund. Investors should also be ready for the possibility of moderate losses in their investments. The fund invests at least 35% in large-cap stocks and at least 35% in midcap stocks to provide long-term capital appreciation. This fund is suitable for those looking for wealth creation.  Key information Minimum InvestmentINR 5000    Minimum Additional Investment INR 1000Minimum SIP InvestmentINR 5000Entry LoadNil Exit Load1% for redemption within 365 daysReturn Since Inception    20.87% (Regular) (Date of Inception: 9th July 2010). 23.89% (Direct) (Date of Inception:01-Jan-2013)NAVINR  77.374 (April 22, 2021) (Regular Growth) INR 83.586 (April 22, 2021)  (Direct-Growth)AUMINR 16,190 Cr (As on March 31, 2021) 4. Mirae Asset Tax Saver Fund (Category - Equity: ELSS) This is an open-ended equity-linked saving scheme with a statutory lock-in of 3 years and tax benefit. Investors who are looking to invest for over 3 years can opt for this fund. The scheme invests predominantly in equity and equity-related instruments with a 3-year lock-in providing tax benefit and growth of capital. This fund is suitable for those investors looking for wealth creation and tax savings. Key information Minimum InvestmentINR 5000    Minimum Additional Investment INR 500Minimum SIP InvestmentINR 500Entry LoadNil Exit Load1% for redemption within 365 daysIf redeemed after 1 year (365 days) from the date of allotment: NILReturn Since Inception    21.8 (Direct) (Date of Inception: 28th December 2015)NAVINR  24.97 (April 23, 2021) (Regular Growth) INR 26.978 (April 23, 2021)  (Direct Growth)AUMINR 6934 Cr (As on March 31, 2021) 5. Mirae Asset Large Cap Fund (Category - Equity: Large Cap) This is an open-ended equity scheme predominantly investing across large-cap stocks. Investors who are looking to invest for over 3 years can opt for this fund. The scheme invests predominantly in large-cap stocks (top 100 companies by market capitalization). This fund is suitable for those who are looking to invest money for at least 3 plus years and looking for high returns. Key information Minimum InvestmentINR 5000    Minimum Additional Investment INR 1000Minimum SIP InvestmentINR 1000Entry LoadNil Exit Load1% for redemption within 365 daysIf redeemed after 1 year (365 days) from the date of allotment: NILReturn Since Inception  15.27% ( Regular-Growth) (Date of Inception: 4th April 2008)NAVINR  63.979 (April 23, 2021) (Regular Growth) INR 69.091 (April 23, 2021)  (Direct Growth)AUMINR 23762.37 Cr (As on Feb 28, 2021) 6. Mirae Asset Great Consumer Fund (Category - Equity: Sectoral/Thematic) This is an open-ended equity scheme following the consumption theme. Investors who are looking to invest for over 5 years can opt for this fund. The fund invests in companies benefiting directly or indirectly from consumption-led demand. Investors who have advanced knowledge of macro trends and prefer to take selective bets for higher returns compared to other Equity funds are keen to invest in this type of fund. This is a suitable investment for wealth creation. Key information Minimum InvestmentINR 5000    Minimum Additional Investment INR 1000Minimum SIP InvestmentINR 1000Entry LoadNil Exit Load1% for redemption within 365 daysIf redeemed after 1 year (365 days) from the date of allotment: NILReturn Since Inception  15.79% ( Regular-Growth) (Date of Inception: 29th March 2011)NAVINR  43.811 (April 23, 2021) (Regular Growth) INR 49.007 (April 23, 2021)  (Direct Growth)AUMINR 1,174Cr (As on March 31, 2021) 7. Mirae Asset Dynamic Bond Fund (Category - Debt: Dynamic) This is an open-ended dynamic debt scheme investing across duration. Investors who want to invest money for 3 or more years and a longer duration can select this. This scheme is considered less risky compared to equity funds. The fund invests across money market instruments and debt securities including government bonds.  Key information Minimum InvestmentINR 5000    Minimum Additional Investment INR 1000Minimum SIP InvestmentINR 1000Entry LoadNil Exit Load1% for redemption within 365 daysIf redeemed after 1 year (365 days) from the date of allotment: NILReturn Since Inception  7.06% ( Regular-Growth) (Date of Inception: 24th March, 2017)NAVINR 13.2162 (April 23, 2021) (Regular Growth) INR 13.9008 (April 23, 2021)  (Direct-Growth)AUMINR 148Cr (As on March 31, 2021) 8. Mirae Asset Equity Savings Fund (Category - Hybrid: Equity Savings) This is an open-ended scheme investing in equity, arbitrage and debt. Investors who want to invest money for 1 to 3 years can choose this scheme. The fund invests in a mix of equity, arbitrage and debt instruments and is suitable for income generation.  Key information Minimum InvestmentINR 5000    Minimum Additional Investment INR 1000Minimum SIP InvestmentINR 1000Entry LoadNil Exit Load1% for redemption within 365 daysIf redeemed after 1 year (365 days) from the date of allotment: NILReturn Since Inception12.04% ( Regular-Growth) (Date of Inception: 18th December 2018) 13.29% ( Direct-Growth) (Date of Inception: 18th December 2018)NAVINR 13.06 (April 23, 2021) (Regular Growth) INR 13.405 (April 23, 2021)  (Direct-Growth)AUMINR 206 Cr (As on March 31, 2021) 9. Mirae Asset Focused Fund (Category – Equity: Multicap) This is an open-ended equity scheme investing in a maximum of 30 stocks intending to focus on large-cap, mid-cap and small-cap categories (i.e., multi-cap). Investors who have advanced knowledge of macro trends and look for higher returns compared to other equity funds, often choose this. The investment horizon is 5+ years and the fund invests across market caps- large-cap, mid-cap and small-cap and across sectors and themes (maximum 30 stocks). This fund is suitable for wealth creation. Key Information Minimum InvestmentINR 5000    Minimum Additional Investment INR 1000Minimum SIP InvestmentINR 1000Entry LoadNil Exit Load1% for redemption within 365 daysIf redeemed after 1 year (365 days) from the date of allotment: NILReturn Since Inception25.01% ( Regular-Growth) (Date of Inception: 15-May-2019) 27.07% ( Direct-Growth) (Date of Inception: 15-May-2019)NAVINR 15.427 (April 23, 2021) (Regular Growth) INR 15.925 (April 23, 2021)  (Direct-Growth)AUMINR 5,472  Cr (As on March 31, 2021) 10. Mirae Asset Short-Term Fund (Category - Debt: Short Term) This is an open-ended short-term debt scheme investing in instruments such that the Macaulay duration of the portfolio is between 1 year to 3 years. Investors who want to invest for 1-3 years and are looking for an alternative to bank deposits can choose this fund. The recommended investment horizon is 1-3 years and the fund invests in debt instruments and money market instruments with a short maturity. This investment is suitable for income generation. Key information Minimum InvestmentINR 5000    Minimum Additional Investment INR 1000Minimum SIP InvestmentINR 1000Entry LoadNil Exit Load1% for redemption within 365 daysIf redeemed after 1 year (365 days) from the date of allotment: NILReturn Since Inception7.33% ( Regular-Growth) (Date of Inception: 16th March 2018) 8.17% ( Direct-Growth) (Date of Inception: 16th March, 2018)NAVINR 12.4572 (April 23, 2021) (Regular Growth) INR 12.7623 (April 23, 2021)  (Direct-Growth)AUMINR 785 Cr (As on March 31, 2021) How can you invest in Mirae Asset Mutual Fund via EduFund? Investing in Mirae Asset Mutual Fund via Edufund is a simple, four-step process.  Step 1 - Download the EduFund App from Google Play Store or Apple App Store and create an online account. Step 2 - Select a Scheme - Browse a wide range of Mirae Asset Mutual Fund schemes and choose the right scheme suiting your financial goals. You may invest in a Systematic Investment Plan (SIP) or a lump sum. The inbuilt recommendation engine suggests the best scheme for your financial objectives. Step 3 - View and Track Your Transaction(s) - The amount you have invested will reflect in your EduFund account within four working days. You can track the Mirae Asset Mutual Fund NAV, account balance, statement, and other information in the app. Alternatively, you can purchase, redeem, or switch Mirae Asset Mutual Fund units. Step 4 - Speak with a Mutual Fund Counsellor - You can connect with a mutual fund consultant to share your goals and get personalised advice.  EduFund uses top-class authentication and encryption technologies to ensure bank-like secured transactions and safeguard your investments.   7 best performing fund managers at Mirae Asset Mutual Fund It is the fund managers who play a prominent role in driving value and generating growth for the investors' money. The following are the seven best-performing fund managers in Mirae AMC whose funds have consistently churned out the best returns.  1. Mr Neelesh Surana - Chief Investment Officer Mr Neelesh brings with him about 24 years of professional experience in financial services, including fund management. He supervises and manages Equity schemes. Prior to this assignment, Neelesh was associated with ASK Investment Managers Pvt Ltd as a Senior Portfolio Manager, where he was managing domestic and offshore portfolios. He manages an AUM of INR 22,136 Cr and 5 schemes 2. Mr Gaurav Misra- Sr Fund Manager-Equity Mr Gaurav Misra has over 23 years of experience in investment management and equity research functions. Prior to this role, he worked as Senior Portfolio Manager with ASK Investment Managers Limited. He has an AUM of INR 28,532 and handles 6 schemes. 3. Mr Harshad Borawake- Head of research and Associate fund manager Mr Borawake's professional experience spans more than 14 years, and his primary responsibility includes Investment Analysis & Research. Prior to this assignment, he was associated with Motilal Oswal Securities as Vice President (Research). He has also been associated with Capmetrics & Risk Solutions as Research Analyst - Equity. His AUM is INR 28,739 Cr, and he manages 9 schemes. 4. Mr Ankit Jain- Fund Manager Mr Jain's professional experience comprises more than 7 years, and his primary responsibility includes Investment Analysis & Fund Management. He has been associated with the AMC as a Research Analyst since September 7, 2015. He was previously associated with Equirus Securities Pvt Ltd and Infosys Ltd. An AUM of INR 20,904 is under him and handles 9 schemes. 5. Mr Vrijesh Kasera - Fund Manager Mr Kasera brings with him professional experience covering more than 10 years. His primary responsibility includes Investment Analysis & Research. Prior to this assignment, he was associated with Axis Capital Ltd., as an Equity Research Analyst. He has also been associated with Edelweiss Broking Ltd. He has an AUM of INR 6,117 and handles 6 schemes. 6. Ms Bharti Sawant - Fund Manager Ms Sawant is an M.S. in Finance (ICFAI Hyderabad), CFA and B.Com. Prior to joining Mirae AMC in September 2013, she was associated with Sushil Finance Securities Pvt. Ltd., Latin Manharlal Securities Pvt. Ltd., and Kabu Shares and Stocking Pvt. Ltd. for Financial Analysis and Research. She manages an AUM of INR 278 Cr and handles 3 schemes. 7. Mr Gaurav Kochar - Fund Manager Mr Kochar has over 6 years of experience as a Research Analyst and Internal Auditor. Before this assignment, Mr Kochar was associated with Ambit Capital and Kotak Mahindra Bank. Why invest in Mirae Asset Mutual Fund?  Mirae Asset Mutual Fund is one of the fastest-growing asset management companies in India. The fund house aims to provide innovative investment solutions to its investors to help achieve their long-term objectives. Powered by unwavering philosophies and global expertise, Mirae Asset Mutual Fund offers advanced and original solutions across asset classes. Whatever a client’s investment needs are, Mirae Asset Mutual Fund has a fund for the investor. Clients can choose long-term or short-term from various equity-oriented or debt-oriented funds. They have a mutual fund to suit every investor's needs. Mirae Asset Mutual Fund offers a diverse range of schemes across various segments like equity funds, debt funds, balanced funds, equity-linked savings schemes (ELSS), etc., to cater to every investor's needs. In the Equity space, they have built our expertise in fundamental bottom-up analysis over the years to identify companies with sustainable competitiveness in their respective markets. This process is differentiated and further enhanced by having on-the-ground research and investment teams in key markets globally. Their unique approach to fixed income offers a wide array of products on a country, regional and global level. Their broad product base not only leverages their on-the-ground teams of fixed-income PMs and analysts but their internally developed IT platform. Their suite employs various solutions, including proprietary quantitative strategies. The fund house aims to maximise long-term growth through income and capital appreciation by investing in income-producing securities. Select EduFund for investing in Mirae Asset Mutual Fund EduFund makes the process of investing in Mirae Asset Mutual Fund convenient. EduFund's experienced consultants give you customised solutions for all your financial goals. You can start investing from a lowly INR 5,000 and grow your capital comfortably. With EduFund, you get the following benefits -  Customised Research-Based Financial Plan -  EduFund's scientific fund tracker screens over 1 lakh data points and 400 financial scenarios to recommend you the best mutual funds.  Customer-Friendly Counsellors Help You Create a Financial Plan - EduFund's counsellors are trained to handle all kinds of queries from customers. They spend as much time with you as you need and resolve all your issues to help you create a robust financial plan. Invest Less, Earn More - Not only the best Indian mutual funds, but EduFund also offers you the facility to invest in US Dollar ETFs and international mutual funds. Use Free Tools - EduFund offers various free tools for its customers, including College Savings Calculator, SIP calculator, etc.  No Technical Expertise Required - You do not need to be an expert in finance to understand which mutual fund is the best for you. EduFund does it for you. Value-Added Benefits - You may get value-added benefits like no commission, free advisory, and nil-hidden charges. Secure Transactions - EduFund is RIA-registered and uses top-class 128-SSL security to enable safe transactions. Special Support for Children's Education - EduFund has a dedicated team of experts who help you fulfil your children's educational goals. FAQs Which is the best Mirae Asset mutual fund? Top-rated Mirae Asset mutual fund: Mirae Asset Hybrid – Equity Fund (Category Hybrid: Aggressive) Mirae Asset Cash Management Fund (Category – Debt: Liquid) Mirae Asset Emerging Bluechip Fund (Category – Equity: Large & Midcap) Mirae Asset Tax Saver Fund (Category – Equity: ELSS) Mirae Asset Large Cap Fund (Category – Equity: Large Cap)  Is Mirae Asset a good investment?   Mirae Asset Global Investments is a diversified asset manager providing innovative solutions worldwide to help investors achieve their goals in a transforming world. They have 40-plus offices worldwide, and it is the 18th largest Global ETF Manager by AUM. They have clients in 36 countries, and 1,717 products are distributed globally.    Mirae Asset Mutual Fund offers a diverse range of schemes across various segments like equity funds, debt funds, balanced funds, equity-linked savings schemes (ELSS), etc., to cater to every investor’s needs. Talk to a financial expert before making any investment decisions. Is Mirae Asset a Chinese company?   Headquartered in Seoul, South Korea, Mirae Asset Financial Group is one of the key players in the Asian financial market. Its asset management wing, Mirae Asset Global Investments, began its operation in 1997 and has expanded its business globally in a relatively brief period.   Originating in the backdrop of the Asian currency crisis, Mirae Asset began cautiously, and they focused more on the Korean market initially. Founded by the visionary Hyeon Joo Park, Mirae Asset became the first AMC to present mutual funds to retail investors in 1998.   Who is the owner of Mirae Asset?   Hyeon Joo Park founded the company. Originating in the backdrop of the Asian currency crisis, Mirae Asset began cautiously, and they focused more on the Korean market initially. Mirae Asset became the first AMC to present mutual funds to retail investors in 1998. 

Why do we invest in mutual funds? The fairly obvious answer would be to earn returns on our investment and to have enough corpus for our future goals. We need tangible numbers on our screens that give us a good night’s sleep that we have invested in the right fund. However, there are multiple measures for the returns earned by the mutual fund, and we see multiple percentage numbers flashing on our screens. These measures are explained with examples in the following paragraphs - 1. Absolute Returns This represents the growth of your investment in absolute terms without considering the time period. For example, if you had invested Rs 10,000 in a mutual fund and it grows to Rs 15,000, the gain earned would be Rs 5000. Absolute returns would be Rs 5000/Rs 10,000 = 50%. Even if your investments grew to Rs 15,000 in 10 years the absolute returns would still be 50%. 2. Annualised Returns (also known as CAGR) This measures the increment in the value of your investment on a yearly basis. The effect of compounding is included in this return (Compounding in simple terms is earning returns on the profits earned from your investment). For example, if the initial investment is Rs 10,000 and the value of the investment after 5 years is Rs 15000, then the annualized returns would be 8.4% and if the time period was 3 years, the returns would be 14.5%. This measure takes the time period into consideration and gives a measure of y-o-y returns on your investment in the fund. 3. Annual Returns This is computed by considering the return earned by the scheme from January 1st (first day of business) to December 31st (Last business working day). If the NAV of a fund was Rs 100 on January 1st and the NAV on December 31st was 120, the gain would be Rs 20 and the annual return would be 20%. This is the most simplistic measure which is used for communication with the investor. Market conditions play a significant role in the returns earned by mutual funds. Hence, it is advisable to compare annual returns across time periods with respect to the category average or the benchmark as declared by the fund. 4. Point-to-Point Returns This measures the annualized returns between two points in a given time period. For example, if you would want to look at the performance of a fund in the pre-Covid years i.e., 2017-2019, one would consider the point-to-point return to compute the same. The NAVs at the start and end dates are required to compute these returns. 5. Total Returns Initial ValuesNAV Initial50Initial Investment10000Units Purchased = Investment/NAV200After 1 yearNAV 52Value of investment = Units * NAV10400Capital Gains400Assuming a Dividend is declared by the fund in this 1 yearDividend Declared/ unit2Dividend earned (Units * Dividend/Unit)400Total Returns800Total Return % (Total Return/Initial Investment)8% Total return includes the returns earned from capital gains and dividends and is expressed as a percentage of the initial amount invested. Consider that you had invested Rs 10,000 into a fund whose NAV was Rs 50. Total Returns % = Capital Gains + Dividend earned / Initial Investment Here, the total return earned would be 8%. 6. Trailing Returns It is the annualized return of the period that ends on the date of calculation (or today or the latest NAV). Trailing returns of 1, 3, 5 or 10 years (etc) can be calculated. For example, a 1-year trailing return from today (27th Feb 2020) would be calculated by taking the latest NAV and the NAV of the fund 1 year ago. This measure is used by most of the mutual funds and pages which analyze the past performance of the funds.  Initial NAV (27th Feb 2018)40Final NAV (27th Feb 2021)70Years3Returns 20.5% For example, if the NAV of a fund today is Rs 70 and the NAV of the fund 3 years ago was Rs 40, the trailing 3-year return would be 20.5%. Returns = [Final NAV / Initial NAV] (1/Years) - 1 As an investor, this measure aids in screening the fund's performance and analyzing the consistency of the fund manager in providing the returns to their pool of investors. However, one should note that these returns could offer a biased perspective as they are based on relative market conditions – current vs past conditions. Hence, an investor should consider 3,5, and 10 years to understand the consistency in earnings and the fund's ability to sail over market tides. In bull markets, where there is high optimism in the market, the trailing returns are high, as the Final NAV would be soaring high, whereas, in bear markets, these returns would be on the low. 7. Rolling Returns These are annualized returns (CAGR) but are computed using overlapping periods. They give the measure of the growth of an n-year return over a period of m years.  For example, if you would like to invest in an equity mutual fund for 5 years, you would look at the data in 5-year blocks and compute the 5-year return over a 10-year period (say). As shown in the table below, we have considered a period from 2005-2020 to calculate the 5-year rolling returns (n=5, m=20). Aligning with our objective, to calculate the return of 2010, we consider the NAV that was 5 years ago which is 2005. The exercise is performed for all the years to obtain the range of returns that the fund has given to the investors. One can also calculate the Rolling Return Average, by calculating the average of all the returns computed in the previous step = 7.4% (in this example). Yearly DataNAV5years agoNAVReturns (CAGR)01-01-201010001-01-2005785.1%01-01-201110301-01-2006805.2%01-01-201211001-01-2007874.8%01-01-201312001-01-2008905.9%01-01-201415001-01-2009959.6%01-01-201516101-01-201010010.0%01-01-201617201-01-201110310.8%01-01-201719001-01-201211011.6%01-01-201819801-01-201312010.5%01-01-201921001-01-20141507.0%01-01-202020001-01-20151614.4%01-01-202120801-01-20161723.9% These can be calculated on a daily/weekly/monthly basis till the latest NAV for a fixed period of time. It gives a more accurate picture of the fund’s performance in various market conditions, eliminating the bias that could be associated with calculating the return at a fixed point in time.  8. SIP Returns All the above measures are suitable for lumpsum investing where one considers the returns between two points. However, in the case of SIPs, there is a systematic flow of amounts into the fund at different points in time. This return can be calculated using the Internal Rate of Return (IRR), which is a financial metric used to compute the return of a series of cash inflows and outflows. Conclusion: The measures for calculating returns have been highlighted above which are to be used in conjunction with the objective to obtain the accurate measurement of the performance. You could get started with your investment journey by analyzing funds on the EduFund app or this website

Do you want to get into the stock market? Maybe because you saw your friend make quite a bit of money betting on some trendy things like Ethereum or GameStop. Or maybe you think mutual funds could help you raise funds for your child’s education plans. Different financial goals require different strategies and approaches. If you are new to the stock market, it is important for you to know the basics, like the difference between investing and trading. Everything looks too complicated as a rookie investor and we get it. Let us try and simplify some things for you. What is investing? An investment is when you allocate money somewhere with the intention of compounding it in the future. Investment is a tool of wealth generation. Basically, when you invest money into something, like stocks and bonds, mutual funds, or real estate, you do it with the idea of making a profit in the long term. This profit usually comes from the value or price of your asset increasing over time. If you have invested money into a stock, for example, you get a profit when the price of the stock increases over time.  Investment is an excellent, mostly passive way of wealth generation. For the long term, especially when you have goals for child investment like education plans, sending your child to study abroad, etc. What is trading? Trading in the stock market is exactly what it sounds like, you trade stocks. When you trade in stocks, you buy stocks like any other goods or commodities and sell them for a profit. Traders deal in stock with the intention of short-term profit generation. They don’t hold their assets for a long time, unlike investors who can stay invested in the same asset for years. Traders can sell their stock within months, weeks, days, or even minutes. As such traders have to have a really good understanding of the pulse of the market and where a stock will go in the short-term future.  Image by Anna Nekhrashevic on Pexels Trading takes a little more active effort than investing because you need to be on top of the situation in the market at all times and buy and sell at the right time. As such trading is ideal for making fast money in the short term. 1. Difference in timelines Trading depends on changes in the market that happen over the course of a short period. This means that they cannot plan for the long term. A stock that is predicted to shoot up within the coming month, likely will not continue to shoot up over the next few years. Rather it is more likely to fall or plateau. A trader tries to predict the optimal timeline to buy and then sell the stock within this period of time. But they cannot stay invested in the stock for the long term as it would cause losses.  This means that the timeline of holding a stock for a trader is much shorter. Trading depends on buying low and selling high in the short term. In contrast, investors tend to buy and hold. Investment relies on the price of the asset slowly and stably appreciating over time. Trendy and unpredictable stocks or other assets do not make good investments. One cannot guarantee the value of these stocks over a long-term period. This is why investors usually choose relatively stable and reliable securities or invest in mutual funds and ETFs that are managed by professionals.  Investment requires having patience and confidence in your stock and holding it for a long time. Investors don’t let short-term changes in the market bother them and focus on increasing value over the long term.  2. Difference in risk Putting money in the stock markets always carries risk. You are at the mercy of myriad different and unpredictable factors that may affect the price of your investments.  Trading typically carries more risk than investment. When you want to generate wealth or make a profit over a relatively short timescale, you need to take more risks. This means investing in stocks that may behave unpredictably. Making quick, short-term financial decisions on limited information is intrinsic to trading. This is another factor that makes trading riskier. Investment also carries risk, however, this risk is typically lower than with trading. When you are an investor, it is important for you to lower risk. You can do this by diversifying your portfolio to include both higher-risk, more lucrative securities as well as safe, low-risk investments. This is called balancing your portfolio.  Another way of becoming an investor, especially when you don't have a lot of capital or expertise is to invest with an AMC (Asset Management Company). AMCs lets you invest in mutual funds and ETFs which are structured, diversified, and professionally managed basket securities. These funds let you have a balanced, secure portfolio which is ideal for investments.  3. Difference in goals Investors and traders tend to have different goals. Since traders are looking to make money fast rather than over the course of years, their goals tend to be more short-term. Additionally, trading is risky. To ensure high-profit margins in a relatively short time, traders must invest in unpredictable stocks. This does not mean that traders don’t have long-term goals. However, they usually don’t plan to achieve their long-term goals through trading alone. Sometimes you have high-stakes goals. You cannot leave your child’s education plans or study abroad dreams to the mercy of unpredictable stocks on the market. For a goal like this, a long-term, reliable strategy for wealth generation is required. For goals like these, you need to be an investor. Conclusion While trading and investing both involve buying and selling securities on the stock market, they carry entirely different risks and involve different approaches and strategies. Keep in mind that there is no reason for you to choose. You can dabble in trading while also keeping safe investments on hand. It all depends on your financial goals and long-term future plans. In this day and age, with rising inflation, a little extra cash never hurts. But at the same time, be careful while taking risks on the stock market, especially if you are a parent. Secure your and your children’s future and education plans through solid investments. Keep the risks in mind when you are trading and try to start slow instead of taking big risks with large amounts of money.  A good financial advisor can be a good investment. You should also put in the effort to try and understand the basics of investment and financial planning. Educating yourself is always a good investment. Expertise and knowledge are investments you will never lose. FAQs Will I earn more money through investing or trading? As an investor, based on your risk appetite, you can take advantage of 15-20% yearly returns. But, as a trader, if you have great experience and analytical skills, you can earn those same returns in just a week. But, it must be remembered that 'higher the returns, greater the risk'. Which is riskier - trading or investing? Although both options come with their own risk, trading can be considered significantly riskier than investing. How can I become an investor? There are many ways for you to become an investor. The easiest way is to download the Edufund app, register yourself, and complete your KYC verification. The next step would be exploring various investment options at the top AMCs and then start investing! TALK TO AN EXPERT

It is becoming increasingly obvious these days that investment is the best way for most people to achieve their financial goals. Costs of education are rising and the advantages of going to study abroad are becoming more and more obvious. For many people, these rising costs of education have necessitated a changed approach to finances. A good investment strategy and portfolio are clearly the way to go. However, many beginner investors do not know enough about investments and how or where to invest.  In this guide, we cover index funds: what they are, how they work, who should invest in them, and things to consider. If you have been thinking about investing in mutual funds or ETFs, read on to know more.  What is an Index fund? Index funds are a type of passively managed, equity funds. As the name suggests, these funds have a portfolio that is made to imitate a financial index, like BSE Sensex, NSE Nifty, etc. Both ETFs and mutual funds can be index funds. Returns from an index fund, typically mirror the growth of the index that they are tracking. How does an Index fund work? An index fund works by tracking a financial index. A financial index is a measure of the stock market or a subset of the stock market. An index fund consists of the same stocks that comprise a certain index, in the same proportions. So if, for example, a particular index fund is tracking Nifty, its portfolio will have the same 50 stocks that comprise Nifty. Then, the performance of the fund will depend on the performance of Nifty.  Unlike an actively managed fund, index funds do not have a team of analysts and experts constantly researching the market and creating strategies. The fund manager only ensures that the fund tracks its respective index as closely as possible. Things to consider when investing in Index funds 1. Risks and Returns Index funds are passively managed and track a financial index. This means that they are less volatile than other equity funds that are actively managed and hence, less risky. This is because actively managed funds strive to beat their benchmark but index funds track particular financial indices and try to remain as close to the benchmark as possible. This means the returns of an index fund usually replicate the performance of the index. This makes these funds reliable and lucrative during a market rally but less so during a slump.  One thing to keep in mind, however, is the tracking error. Most index funds do not replicate their respective indices exactly. There is a small deviation which is called a tracking error. You should always choose a fund with a low tracking error to reduce risk.  2. Investment timeline and goals Since index funds are considered lower-risk funds, they are suitable for investors looking to make long-term, passive, investments. These can be investments made for the future education plans of a very young child or retirement plans. With long-term investment windows, any short-term fluctuations can be balanced out or averaged. But if your goals are less long-term, for example, education plans for an older child, you should consider investing in a more actively managed fund. A good financial advisory service can help you make these decisions. 3. Investment costs and fees Index funds are passively managed. Since these funds track indices and don’t require active management, they incur lesser fees. An actively managed fund has to pay for analysts and experts to do research and create investment strategies. A passively managed fund does not have to do that. They have lower operating and management fees, transaction charges, etc. This means that these funds have a lower expense ratio ( the percentage of your total investment that you have to pay to the fund as management fees and other charges). 4. Taxation Index funds are subject to dividends distribution tax (DDT) and capital gains tax. DDT is deducted at source when the fund pays its dividends to stakeholders. DDT is generally applied at a rate of 10%. Capital gains tax is the tax levied on the capital gains made when you redeem units of your index fund. The amount of tax depends on your holding period. If you held the units for less than a year, then you will have to pay short-term capital gains tax (STCG) which is 15%. Capital gains from a holding period of above one year are considered long-term capital gains (LTCG) and are taxed at 10%. LTCG under Rs.1 Lakh is not taxable. Who should invest in an Index fund? Index funds are ideal for investors who want to invest in the equities market but do not want to take a lot of risks. If you are open to a long-term investment with relatively low but fairly predictable results, index funds can be a good option for you.  Keep in mind that index funds will follow the index and not give you any market-beating returns. If you are looking to make investments for your child’s education plans, you may want to stick to index funds for the stability they offer. However, a much better option would be a diversified investment portfolio with index funds as one of the components.  Education plans are rather high-stakes goals and so it is understandable to want to go safe. However, education, especially if you plan to study abroad, is also expensive. Actively managed equity funds tend to have generally higher returns. Keeping both in your portfolio can help you get the best of both worlds, general stability as well as good returns. Conclusion Index funds are a good and reliable way of passive investment for people who do not have the time to constantly monitor and manage their portfolios. They are especially useful when the markets are doing well and financial indices are on a general rise. However, recession and economic instability can cause a slump and bring down the value of index funds. To offset such eventualities, it is important to diversify your portfolio.  Financial planning, after all, requires active effort and involvement. The securities and assets you invest in should be properly aligned with your financial goals. If you lack the know-how or expertise to figure these out yourself, you can always consult a financial planner or other such services. For specific goals like education plans, you can hire specialized financial planning experts like EduFund. A good investor understands his investments and takes risks in accordance with his goals and his capacity. Therefore, putting in the time to figure out what kind of investor you are and what kinds of investments are best for you, is always a worthwhile endeavor. FAQs What are some best index funds? Some of the best index funds include IDFC Nifty 50 Index Direct Plan-Growth, Nippon India Index Fund S&P BSE Sensex Plan Direct-Growth, UTI Nifty 50 Index Fund, etc. Is it good to invest in index funds? Index funds provide you with low-cost investment methods. They can bring you better gains than fund managers do. Do index funds pay dividends? Since regulations require it, Index funds do pay dividends in most cases. TALK TO AN EXPERT

As a parent, no doubt you want the best for your kids. Global education can open doors and create opportunities for your child like nothing else can. However, the expenses involved in going to study abroad can be intimidating and discouraging for many people. Education loans are always an option, but debt is a big long-term liability and is not exactly an exciting prospect, is it? So, how can you raise funds for your child’s education without having to resort to education loans and other forms of debt? Well, that requires a bit of foresight and planning.  Saving is always an option but is it the best option? After all, you can save what you have but you cannot use your savings to generate more wealth. And with rising inflation, investing may be the better option in the long run. How is investing different from saving? Saving money is not a very complicated concept. We all save money, either for future purchases, emergencies, or other causes. Saving money typically involves putting aside money from your income in a safe place, like a bank account or a locker. Savings can accrue a small amount of interest, especially when you are using a bank account. However, in general, your savings do not compound or generate profit through interest or appreciation in any significant way. Investing money involves buying and holding an asset for a period of time with the intention of generating profits from it. When you invest money in the stock market, in bonds, or in real estate or jewelry, you do it with the intention of eventually selling the asset after a period of time and gaining profit. This profit is gained from the value of your assets changing and appreciating over a period of time due to inflation and/or other factors. 1. Investment generates wealth This is an important distinction between savings and investment. Investment is a tool for wealth generation. You are not simply setting aside money when you invest, instead, you are using it in a very specific way to generate more money. While you can earn a small amount of interest on a savings account, this is still minimal compared to the profits that can be gained through strategic investment. Savings is an instrument of wealth preservation. By keeping your money idle and parked in a bank account, you ensure that it remains safe. It is not exposed to the market or its constant fluctuations, it stays as it is. This makes savings a low-risk option as compared to investment. However, remember, the lower the risk the lower the returns. You don’t make any gains or profits from a savings account. When you have long-term goals like a child education plan to work towards, simply saving is not enough. You need to look for ways to actively generate wealth to counter the ever-rising costs of global education.  2. Investment helps you beat inflation With inflation, the value of money decreases. Think about it this way, a commodity worth Rs. 500 in 1980 would have been considered fairly expensive. Today, we can easily spend that amount of money in a single day and not even think twice about it. This is because, with inflation, the value of Rs. 500 has decreased.  So, even if you save a fairly significant sum of money, it may end up becoming insignificant over time as inflation eats its value. Investment helps you beat these odds. When you invest in some asset, its value keeps appreciating over time with inflation. Therefore, the money that you have invested in the asset appreciates with it. Instead of eating away at the value of your money, inflation helps you generate more wealth. 3. Investment helps you realize your goals Because investment is an instrument of wealth generation and because it helps you beat inflation, it is also a better way of realizing your financial goals. Saving does not play out well in the long term for expensive goals. These goals require you to accrue money that may be in excess of what you can reasonably or realistically save. Investing that money is a more reliable way of achieving your goal amount. Keeping your money idle makes it liable to depreciation due to inflation. Investing helps you generate wealth. This is why, when you have long-term goals on the horizon, it is better to invest. Such investment obviously requires a strategy. Markets always carry risk and your investments can succeed or they may fail and leave you at a loss. To counter that, one must always try to invest intelligently and strategically to balance out the risk. Mutual funds and ETFs which are professionally managed investment funds are a good way of doing this for beginner investors. Then why save at all? If investing is better in all these ways, then why save at all? Isn’t it better to simply invest all of your extra money? Well, let's not get ahead of ourselves. All investment carries risk. Markets can be volatile and unpredictable. The price of your assets may go up in the long term, or they may fall and leave you at a loss. Savings, on the other hand, ensure that your money doesn’t go anywhere. Keeping your money idle is not always a bad thing. By doing so you ensure that no matter what happens, you have some money kept secure for rainy days. Savings can provide you with a much-needed cushion in case your investments fail or fall prey to a market slump. Savings are also a good way to collect money for short-term financial goals. When it comes to short-term or less expensive goals, inflation is less likely to be a factor. For example, if you are planning on buying a new refrigerator next year, inflation is likely not going to make big problems for you when it comes to costs or the value of your saved money.   Savings are a good way of ensuring you have a safety cushion or emergency fund. It is also good for short-term financial goals. It is always wise to have at least some savings on hand. Conclusion Savings and investments are both important ways of preparing yourself for the future. While investment is riskier, it is the best way of ensuring long-term capital gains and wealth generation. Saving for a rainy day is a wise and responsible thing to do. However, to beat rising inflation and ensure the best education possible for your child, investment is the smart way to go. Investing your money through a service like EduFund can help you fulfill your child’s study abroad dreams. You don't always have to work hard. Work smart. FAQs Will my bank FDs help me beat education inflation? Regular bank FDs usually provide up to 7 or 7.5% returns. Education inflation, on the other hand, increases at the rate of 10% every year. This means that FDs do increase your money but do not increase the value of your money; hence, they fail to beat education inflation. Is it more important to save or invest? Savings are Important, of course. However, savings don't necessarily increase the value of your money with time due to inflation. You need a plan that gives your returns higher than inflation. And that solution is an investment. Which is easier: Saving or investing? To a beginner, investing may seem like a complicated domain to enter, but with some basic research and through easy-to-access tools like the EduFund app, investment can be as easy as having a savings bank account. Consult an expert advisor to get the right plan TALK TO AN EXPERT