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Month: October 2017

Why should I invest in liquid funds?

Liquid cash is usually deposited in the savings bank deposits. But as the name suggests, a savings account is not an investment account and thus, the deposited money doesn’t earn much interest.Customers save their liquid cash in their bank account as the amount is accessible anytime. Well, wouldn’t it be wonderful if there would be an investment vehicle that allows liquidity besides providing some returns? One such investment vehicle available is ‘liquid mutual funds’. The returns on liquid funds in current markets varies from 6-7.5 percent.1 lakh invested for 1 day gives you approximately 18 Rupees. What Are The Benefits Of Liquid Mutual Funds? Liquid funds are debt mutual funds that invest your money in short-term market instruments such as government securities, commercial papers,treasury bills, and call money. Benefits from the liquid mutual funds include: The earnings earned through dividends are tax-free. Post-tax returns after dividend distribution tax are better than the returns from the savings account. No exit load on the redemption of liquid funds done overnight. Liquid funds provide the discipline of not keeping excess unproductive money with self. They contribute to long-term investment goals. The best part is even while you rest, your money does not. Liquid fund investments are considered least volatile as they are invested in instruments with high credit rating, hence least risky. Investors can redeem and get the money in their bank...

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Understanding fund flows in Indian markets

What is the one of the most important thing in any business? Supply and Demand So to get a better understanding of the current Indian stock market let’s understand the fund flows. Market Cap = 130 lakh crores. Approximate holding pattern -: Promoters – 48% FII – 22% Mutual Funds – 6% Insurance companies – 3% Retail Investors – 21% FII is the reason why global scenarios,currency prices,valuations and growth of other markets become so important in stock markets. Current Scenario-: Sellers                                 Buyers 1) New IPO’s                     1) Mutual fund 2) FII’s.                               2) Retail Insurance companies and promoters are almost neutral . Almost same hence the tug of war. Everyone is waiting for a correction to invest so imagine how much support the market provides. 3 engines of a bull market-: 1) FII’s 2) Mutual funds 3) Insurance When this happens the retail blindly follows. We are nowhere close to this yet. Getting into details-: Equity Mutual Funds: Market Cap – 6.5 lakh crores August inflow-: Monthly inflow – 20000 crores Monthly SIP – 5500 crores (SIP’s are usually sticky and remain for long term) I expect this will increase as peoples...

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