The 43 strong mutual funds tallied Rs 13.15 trillion by September 2015. The trend is upbeat in the industry. According to AMFI India, There are 2,191 MF schemes. Of these, about 1,000 are fixed maturity plans (FMPs) that you can just strike off your list if you’re wondering where to start putting your money. Close to 130 schemes are liquid in nature; that’s where you park your money temporarily—a sort of substitute to your savings bank account—till you find a more permanent place to invest. That leaves close to 430 fixed income schemes and an equal number of equity funds. Still, 1,000 is a big number to choose from if you wish to have just five-eight schemes in your portfolio. Therefore, you need expert services to choose the one suitable for you
Another important feature of the industry in 2015, was the take over of Deutsche Mutual Fund by Pramerica Mutual Fund when so far the industry witnessed takeover of foreign players by national players. Nomura reduced its stake from 35% to 19.3% in LIC-Nomura MF and KBC sold out its 49% stake in UNION-KBC. Reliance Mutual Fund took over the Goldman Sachs Mutual Fund.
The participation of Indian Mutual Funds in the capital markets has outgrown that of FIIs in August 2015 and it is a marked difference in the game from the past decades.
Even though, EPFO having permitted to invest 5% of its Rs 1 trillion assets in ETFs, not much flow has happened so far into the MF industry.
The risk clause of the MF was underlined when the J P Morgan India Short Term Income Fund and J P Morgan India Treasury Fund had to eventually close down due to presence of stressed AmTek Auto in their portfolios. The Fund house was kind enough to waive fund management fee for rationed redemptions, but investors felt the heat of unindented cashflows.
Those comtemplating retirement in the next one year needs to seriously look at the table below:
Term Deposits |
||
Particulars |
Rate% pa |
Tenure(Yrs) |
SBI |
7.20% |
10 |
Post office |
8.50% |
5 |
PPF |
8.70% |
15 |
SCSS |
9.30% |
5 |
NSC IX |
8.80% |
10 |
As an add-on, one may look at the Fixed maturity Plans, MIPs and other alternatives. But one needs expert advice to choose what is uniquely suitable for you in your current situation.
Happy investing
