Mutual fund companies in Delhi

Sebi's rule of seed capital should provide some comfort to investors. As per this rule, at least 1 per cent of the total investment in each fund must come from the fund house itself, subject to a maximum of Rs 50 lakh. This applies to all open-ended funds and will ensure that the fund house has its own money invested in all schemes at any given point of time, Alam says.

"Retail investors should go with track record and consistency of the fund manager. While the performance of the Mutual fund companies in Delhi is important, if the fund manager is consistent during good and bad market conditions, I would prefer to remain with that fund,'' he adds.

Mutual fund companies in Delhi

In the past NFOs have been launched to capture the flavour of the season. But why would you choose to invest in a new fund with a similar mandate and objective over an existing fund with a good track record?'' Roy asks.

However, according to Raghav Iyengar, Executive Vice-President, ICICI Prudential AMC, investors should not simply avoid an NFO because it lacks track record. "Look at the pedigree of the fund house, their investment philosophy and track record of other schemes. Also look at the experience and background of the Mutual fund companies in Delhi management team that would manage the scheme,'' he says.

Mutual fund companies in Delhi

With more number of funds being launched, it becomes a problem to weed out non-performing funds. Not just returns, but the risk the fund is taking is equally important. So, investors should also look at the risk-reward ratio of the funds and Mutual fund companies in Delhi.

For instance, out of the six NFOs launched over April-May, three are equity mid and small-cap, two are international equity and one is a multi-asset fund. But there are already 54 equity mid and small-cap and 38 international funds. So, why should investor look at the current crop of NFOs?

Mutual fund companies in Delhi

For instance, some investors may trust only large funds or some may trust funds that are large internationally but may be small in India.

Some of the fund houses maybe trying to take advantage of the bull market and launch schemes in categories where they don't have presence, says Tanwir Alam, Founder and MD of Fincart Mutual fund companies in Delhi.

"Over the last two to three years there has been no bumper NFOs because no new set of investors have come in. Many people still believe that an NFO is cheaper because the units are available at Rs 10. They think it is similar to getting stocks at par. But that is not the case,'' he says.

Mutual fund companies in Delhi

According to Gaurav Roy, co-founder and COO, Bigdecisions.in while mutual funds may be trying to cash in on the current upswing in the markets, retail investors should have compelling reasons for investing in a specific NFO,.

"Retail investors should invest in NFOs only when there is a compelling reason for it Mutual fund companies in Delhi. For instance, if the fund is investing into an asset class or a market or sector that you haven't yet invested in, or if you trust the fund house and it is launching a fund in a category where it does not have existing schemes,'' he says.

Investment planning services in India: Dividend yield mutual funds

The stock market participants are betting big on a strong pro-reform government at the Centre. And if it happens, the market is likely to witness a quick upward movement. In such a scenario, dividend yield funds can be a good investment option for investors searching for value at higher level, says Niranjan Risbood, director – fund research, Morningstar India. If the poll results are not as expected, the markets may fall across the board. A portfolio formed on the basis of dividend yield may recover quickly due to strong fundamentals, compared to growth-oriented portfolios. “These funds typically invest in stocks that offer a dividend yield of around 2% and can be good investment choice for investors seeking value Investment planning services in India,” says Risbood.

Investment planning services in India: Dividend yield mutual funds

Though most of these funds have managed to beat BSE Sensex in the five-year frame, only a few have managed to outperform broad markets in one and three-year period. “In last couple of years, defensive sectors such as pharma, FMCG and IT were doing well. And cyclical sectors such as capital goods and infrastructure have started doing well in the last six months. These sectors don’t have many dividend yield stocks,  Investmentplanning services in India  which brought the performance of dividend yield investment strategy under pressure,” explains Shah.

Investment planning services in India: Dividend yield mutual funds

A dividend yield fund aims to limit the downside and earn capital appreciation by investing in stocks quoting at dividend yield more than that of the benchmark and can offer good growth in future. Nine mutual funds use the dividend yield strategy to deploy money. Most of these have managed to contain volatility, measured by standard deviation. However, the returns have been a mixed bag. “A stock bought at attractive dividend yield limits downside risk and if it is fundamentally sound, it can give capital appreciation in addition to dividend income and Investment planning services in India,” says Alam.

Investment planning services in India: Dividend yield mutual funds

“Though these funds can act as a cushion in volatile markets and may offer above average returns in the long-term, they seldom make it to the top of the performance chart,” says Tanvir Alam, founder and chief executive officer, Fincart, Investment planning services in India a financial planning firm. These schemes are meant for conservative equity investors, focusing more on containing risk than earning top of the table returns.

“Investors keen to protect the downsides should consider investing in dividend yield funds to the extent of around 10% of their equity portfolio,” adds Alam. He likes Birla Dividend Yield Plus Fund with a five-year investment time frame.

Investment planning services in India: Dividend yield mutual funds

Dividend yield funds are in a sweet spot now. The space has not rallied much in the recent past and has strong fundamentals in place,  Investment planning services in India  which makes it a good investment option for investors looking for value,” says Anand Shah, chief investment officer, BNP Paribas Mutual Fund. He recommends allocating some money to these funds with an investment horizon of five years and above, as the markets take a bit more time to reward value investors.