Mutual Funds ki Baat with S Naren, ED and CIO, ICICI Prudential AMC
Those who are courageous often find success, and it's important to learn from our errors. Don't pass up this unique opportunity to hear from a genuine industry leader and gain valuable insights in this video
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Mutual Funds ki Baat with Mr Swarup Mohanty, CEO, Mirae Asset Investment Managers
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Mutual Funds Investment: What Are Open Ended and Closed Ended Funds
As youngsters we always think about investing somewhere or growing our savings. The question is, “Where should we do this?” Invest in mutual funds. A mutual fund sectors size, asset class, and flexibility are generally considered when classifying it. The two types of funds are open-ended funds and close-ended funds.
Open-ended funds are available to investors continuously, whereas close-ended funds are available only for a limited amount of time. Let us understand the difference between these two, availability is the first. It is only possible to purchase close-ended funds during new fund offers or from the stock exchange after they have been listed. Open-ended funds can still be subscribed to after the nfo closes and units can be redeemed whenever they want. Close-ended funds however liquidate when they reach maturity and the money goes to the subscribers based on their holdings. Only a few open-ended funds can be converted into closed-ended funds.
The second one is a fixed corpus. Contrary to open-ended funds, closed-ended funds have a fixed corpus and a fixed term, usually around 3-5 years. Close-ended funds require you to block those funds for a while, open-ended funds however let you buy and sell whenever you want.
So, guys there are two more differences that will give you accurate information on open and close-ended funds, liquidity and listing. Liquidity for open-ended funds is provided by the fund itself while liquidity for close-ended funds is provided by the market. Conversely open-ended funds aren't listed on the stock exchange and handle all transactions themselves. Funds listed on reputable stock exchanges provide liquidity to investors.
Looking at the fourth aspect, it's the unit price. There's no limit how much you can trade on open-ended mutual funds at their current nav. NAV stands for net asset value which is just another name for unit price. Due to the fact that close-ended schemes trade on stock exchanges their prices may differ from their nav. In addition to this there are also some technical differences between these two so you have to make a wise choice when you do need to make investments and think about your future business establishment.
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Quadruple your money with this rule: Rule of 144
What's better than doubling or tripling your money, it's quadrupling it. The rule of 144 gives you an estimate of how long it will take for your money to grow by four times. The rule of 144 is similar to the rule of 72 and 114. Simply divide 144 by the assumed return rate to get an estimated number of years for your money to quadruple. So, if your investment account earns 11% assumed return rate it can take 13.09 years for your money to quadruple.
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The Difference Between ETF and Mutual Fund Explained
Are ETFs and Mutual Funds really two different things? Let’s find out.
What are Mutual Funds?
Mutual Funds are professionally managed investment schemes wherein the fund manager pools together the money from several investors to invest in a variety of securities as per the predefined objectives. SEBI has classified mutual funds into different types, one of which is an ETF.
What are ETFs?
Exchange Traded Funds or ETFS are mutual funds that replicate a specific benchmark index. For instance, an ETF can mirror BSE Sensex 30 index. ETFs are traded on the stock exchange where you can buy and sell ETF units just like a share.
Mutual Funds vs ETFs
Mutual Funds |
ETFS |
Buy and sell from the fund house. |
Buy and sell on stock exchanges (trade takes place between investors). |
Actively managed, so higher expense ratio. |
Passively managed, so lower expense ratio. |
You don’t have to pay any commission or brokerage fees. |
Since ETFs are traded like other securities on the exchange, investors have to pay a brokerage. |
Returns are based on the performance of the portfolio, which is dependent on the decisions of the fund manager. |
Returns are based on the performance of the index, which is based on the performance of the stock that make up the index. |
How to buy ETFs and Mutual Funds?
Whether you decide to invest in Mutual Funds or ETFs, you will need a demat and trading account to buy and store your securities. Consider opening one with a reputed broker like ICICI Direct.
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Difference between Intraday trading and Investing
Intraday Trading |
Investing |
Short-term: A day trader has a short-term view, lasting no longer than a single session |
Long-term: An investor typically has a longer-term view stretching several months or years. |
Buy and sell: A day trader does not take delivery of the shares- all his shares are squared off before the market closes. |
Buy and hold: An investor takes delivery of his shares and sells them at the appropriate time, as per is requirement. |
Selling short: A day trader can go short; sell shares he does not own. |
Going long: Investors typically don’t short the market. They are in it for the long haul. |
Quick takes: A day trader looks to take advantage of small price movements. |
No short-cuts: An investor seek shares that will have large upside price movements over time. |
Volatility: A day trader seeks to benefit from short-term volatility. |
Stability: An investor is not influenced by sudden price swings. |
Technical: A day trader mostly uses technical analysis. |
Fundamental: An investor relies on fundamental analysis. |
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Benefits of investing in mutual funds through SIP
Start small
In some funds, we can start with Rs. 100 per month.
Invest with discipline
Regular monthly investments are better than ad-hoc investing.
Pay automatically
SIPs are convenient. You can have yours auto-debited!
Lower your risk
Lump sum investing exposes you to volatility risk.
Reduce cost ownership
SIPs reduce cost of ownership in volatile markets over the long-term.
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The difference between Lumpsum and SIP explained
Lumpsum Investment Systematic Investment Plan You invest a large sum in one go. You invest small amounts periodically, like every month. Ideal when prices are not volatile and are likely to steadily rise. Best in most conditions, but particularly when markets are volatile. You must time the market to get the best returns. You don’t need to time the market; just keep investing regularly. Good for seasoned investors, who have a higher risk appetite. Good for most investors, who prefer lower risk. Good for investments in liquid funds, which provide stable returns. Great for investments in equity mutual funds, where returns are volatile.
Lumpsum Investment |
Systematic Investment Plan |
You invest a large sum in one go. |
You invest small amounts periodically, like every month. |
Ideal when prices are not volatile and are likely to steadily rise. |
Best in most conditions, but particularly when markets are volatile. |
You must time the market to get the best returns. |
You don’t need to time the market; just keep investing regularly. |
Good for seasoned investors, who have a higher risk appetite. |
Good for most investors, who prefer lower risk. |
Good for investments in liquid funds, which provide stable returns. |
Great for investments in equity mutual funds, where returns are volatile. |

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