Myra & Co., helps you to maximize your returns from your mutual fund investments by:
Giving you expert advice:
As your investment manager, we understand your specific financial needs by gauging your goals and risk appetite, eventually recommending matching investment options for you.
Helping you select the right funds:
We analyze fund performance and other portfolio characteristics to arrive at fund rankings and recommendations every quarter. This is done on the basis of a comprehensive model which uses completely objective return, risk and other portfolio related parameters.
Sending you timely account updates:
We regularly send investors a consolidated investment holding statement, which provides a detailed summary of your holdings, with updated valuations and your gains/losses.
Reviewing performance regularly:
We review your investments periodically keeping in mind your risk profile and suggested asset allocation.
A mutual fund is a type of professionally-managed collective investment vehicle that pools money from many investors to purchase securities. Mutual Fund, commonly abbreviated as MF, is an entity which pools in the money of a number of investors who share a common financial goal and invests the same in capital market, i.e. shares, fixed income securities like bonds, commercial papers, corporate deposits etc. An Equity Mutual Fund Scheme in turn invests the accumulated kitty into a basket of shares of different companies, which if invested exclusively by an individual directly, would require a sizeable monetary investment for the same financial intent. This very logic is applicable to Debt Mutual Fund Schemes as well.
MFs are often characterized by the inflow of money when the markets escalate and similarly redemption prevails when it plummets. Such upward & downward volatilities are considered to be opportunities by the rational Fund Managers to be capitalized upon & therefore doesn't affect individual investors. Rather an appropriate portfolio is created based upon investor's risk profile managed by efficient fund management team. Thus, by investing in a mutual fund scheme a Fund Manager ensures maximum return on an individual investment achieved through diversification in a basket of well identified securities / schemes. Besides, an individual also receives the benefit of the Research facilities of the Fund House and expertise of a qualified and experienced Fund Manager.
Mutual Funds offer a range of unique advantages unmatched by most other investment avenues.
Mutual Funds are managed by qualified and experienced portfolio management professionals, who objectively assess company's research, critically analyze financials & market information so as to devise a prudent strategy & methodology to deliver sound investment guidance. They are best qualified to identify and maximize the returns on investments.
By portfolio diversification, Mutual Fund helps to contain the overall investment risk involved. A huge investment amount is required to achieve a comparable diversification (risk mitigation) by investing directly in different equities. Mutual funds offer diversification across asset classes as well as within a specific asset class.
Investments in open-ended mutual fund schemes can be liquidated easily at their Net Asset Values (NAV) which is usually declared on a daily basis on all trading days.
Since the minimum amount to be invested in a mutual fund is low therefore an entry into a low-risk, diversified portfolio even with a very small amount of money is possible.
Equity Linked Savings Schemes (ELSS) offer tax rebates to investors under Section 80C of the Income Tax Act. Also, Dividend income from Mutual Funds is tax-free in the hands of the investor.
Mutual Funds benefit from economies of scale in brokerage, custodial and other fees translating into even lower costs for the investors in such schemes.
Since the fund performances are disclosed to investors on a regular basis, Mutual Funds are a transparent investment vehicle.
The Mutual Funds sector is regulated to safeguard investor interests.
These funds invest mainly in equity stocks, and as such, carry a higher degree of risk, but also give the best returns over a long-time horizon. One can invest in:
- Diversified Equity Funds, which invest in a basket of companies across sectors.
- Large-cap, Mid-cap and Small-cap Funds, which invest according to the market capitalization of companies.
- Index Funds, which invest in the companies that make up an index like the BSE SENSEX, S&P CNX Nifty etc.
- Sectoral Funds, which invest in specific sectors like Pharma or Infrastructure.
- Equity Linked Savings Scheme, which offer tax benefits.
- Equity Funds, which invest in derivatives as well as equity, thereby providing you a hedge against volatility and protecting some amount of downside.
These funds seek to provide both growth and regular income, and invest in both equities and fixed income securities in the proportion indicated in their offer documents. One can invest in:
- Balanced Funds - Invests in a combination of equity and debt instruments. Generally, such funds have a proportionately higher allocation in equity.
- Monthly Income Plans - Invests in a combination of equity and debt instruments. Generally, such finds have a proportionately higher allocation in debt.
Such funds seek to provide a steady income to investors and invest in fixed income securities such as Bonds, Corporate Debentures and Government Securities. While capital appreciation in such funds is limited, risks are also lower and are a good option for regular returns combined with stability of invested principal. One can choose to invest in:
Diversified Equity Funds, which invest in a basket of companies across sectors.
- Short-Term Funds, suitable for investors with a shorter investment horizon, usually less than a year.
- Long-Term Debt Funds, for long-term investments.
- Floating Rate Funds, linking returns directly to the prevailing interest rates.
- Fixed Maturity Plans, offering a fixed maturity date similar to Fixed Deposits. FMPs provide indicative but not guaranteed returns.
These funds seek to provide easy liquidity, preservation of capital and moderate income. They generally invest in safer short-term instruments such as Treasury Bills, Certificates of Deposit, Commercial Paper and Inter-Bank Call Money. Returns on such fluctuate depending upon the interest rates prevailing in the market. Money Market Funds are ideal for corporate and individual investors as a means to park their surplus funds for short periods.
These funds allow you to invest in multiple funds, set on an automatically rebalancing asset allocation strategy. It offers the gains from investing in several top-performing schemes.
Investment in Mutual Funds calls for either a lump sum investment or a systematic investment. A discreet investment manager keeps a close watch on the funds performance, withdraws units systematically & rotates money across different schemes ensuring maximum return. There are several modes of investment in MFs, few of which are:
Systematic Investment Plans (SIPs) : These plans are for investors who would like to build a corpus through a monthly savings program.
- Investing a predetermined fixed amount at a regular interval (monthly, quarterly, weekly etc).
- This allows you to collect mutual fund units over time and aids in averaging cost of purchase.
- No need to time the market when you invest through SIPs.
- You can invest amounts as low as Rs 500.
- The entire process is automated, so your investment takes care of itself.
Systematic Withdrawal Plans (SWPs) : These plans are for investors seeking a periodical (monthly/quarterly) return on a lump-sum investment.
- Under SWPs, you can withdraw small fixed amounts at regular pre-determined intervals (monthly or quarterly) from your mutual fund scheme.
- There are two types of SWP withdrawals that you can undertake - fixed withdrawal and appreciation withdrawal.
- This strategy is useful to receive a periodical cash flow to meet your recurring expenses.
Systematic Transfer Plans (STPs) : These plans are for investors who opt for lump sum investment but would like to have the benefits of Rupee Cost Averaging.
- A combination of a SIP and a SWP, it involves transfer of a fixed amount at a pre-determined interval from a debt fund to an equity fund of the same fund house.
- Good mode of investment for people who want to get a higher rate of interest on their corpus because debt funds usually carry tax benefits over savings accounts and at the same time enjoy the benefits of long-term appreciation of their investments through equity exposure.
A fund's net asset value or NAV equals the current market value of a fund's holdings minus the fund's liabilities (sometimes referred to as "net assets"). It is usually expressed as a per-share amount, computed by dividing by the number of fund shares outstanding. Funds compute their net asset value every day the BSE (Bombay Stock Exchange) / NSE (National Stock Exchange) is open.
Valuation of the securities held in a fund's portfolio is often the most difficult part of calculating net asset value. The fund's board of directors (or board of trustees) oversees security valuation.
The expense ratio allows investors to compare expenses across funds. The expense ratio equals the fee plus the management fee plus the other miscellaneous fund expenses divided by average net assets. The expense ratio is sometimes referred to as the "Total Expense Ratio" or TER.
The SEBI (Securities & Exchange Board of India) requires that mutual funds report the average annual compounded rates of return for 1-year, 5-year and 10-year periods using the following formula:
P (1+T) n = ERV
P = a hypothetical initial payment of Rs.1,000
T = average annual total return.
n = number of years.
ERV = Ending Redeemable Value of a hypothetical Rs.1,000 payment made at the beginning of the 1-, 5-, or 10-year periods at the end of the 1-, 5-, or 10-year periods (or fractional portion).
Turnover is a measure of the volume of a fund's securities trading. It is expressed as a percentage of net asset value and is normally annualized. Turnover equals the lesser of a fund's purchases or sales during a given period (of no more than a year) divided by average net assets. If the period is less than a year, the turnover figure is annualized.