Wealthpro investment solutions offers tailor – made wealth management services to Retail, High Networth Individual and Corporate Clients. We strongly believe that Investment Planning is the stepping stone to achieve one's financial aspirations.
We focus on advising on numerous schemes offered by Mutual Funds of all AMCs currently acting in the Market based on their performance as well as strategical expertise. We will provide exhaustive investment advisory, portfolio management and all allied support 24*7. Our executive will provide you on call as well door step services.
The entire process of investment advisory will be based on financial planning model which can be summarised as below:
The most important and foremost part of starting an investment exercise is base on setting of financial goals. Goal setting comes up with following three strategies:We focus on investment with Financial Planning mode. An investor should know few basic things before investing his or her money. He or she shall know the following:
1. Where the money is being invested. The theme that we picked for the investor should match with his or her intention of investing. Basically, investment advising should be evaluated on the basis of the age of the investor as well as their risk taking affinity
2. How long the investment tenure will be!! The client shall know the tenure of investment in priority. Different concepts have different investment horizon before it starts raining profits. Many a times the investor complains about not getting any profit out of their investment. Following a religious way of investment might change their opinion. Just need a pathfinder.
3. Why an investor approach mutual fund or any other product in place of any banking or post office or life insurance products. Because this have a transparent, low cost and massive experience of fund managers with indirect equity approach with no hidden cost precisely. But the investor shall know their expectation from MF investment. All the investors should set a trigger return percentage for their investment. If the investor knows their expectation benchmark of return, it is more effective on our part to suggest the best avenue.
Thus above three thumbrule helps an individual to categorise and priortise their financial goals and help them achieve.
There are hundreds and thousands of schemes and options available in the mutual fund industry. For a layman, it is very difficult to select an appropriate option out of them to start with. Even for an existing investor, it is important to keep searching for newer schemes for further investment. This helps optimising an investor financial appreciation.
There are various asset class in Mutual Fund Industry.
Mutual funds industry have numerous schemes active in the market on the above said asset classes. We help you to decide an appropriate mix of various investment options.
According to leading experts, portfolio performance is mostly driven by appropriate asset allocation. Having the right mix of stocks, bonds, and cash is more important than selecting the right security or investing at just the right time. That is why an investment must follow a disciplined strategy and be monitored on a regular basis, while remaining flexible enough to adjust to ever changing market conditions. Choosing the appropriate model requires a thorough understanding of your tolerance to risk and a commitment to a minimum time horizon.
Last but not the least, we will keep monitoring the developments of your portfolio over the period. our portfolio will be monitored and never left to chance. Using disciplined and expert advice, we will help you move toward your financial goals. Changing economic conditions are often accompanied by the market forces that directly affect your portfolio and prompt the need for realignment of the asset classes. A member of the team will check your portfolio for re-balancing each quarter and bring the assets back into balance when needed. Your financial advisor will keep you informed of the investment strategist’s philosophy, market commentary, and up-to-date portfolio allocations.
You may receive core summary reports for your accounts on a quarterly basis and custodial statements on a monthly basis. This allows you to review and measure your progress toward your financial goals and suitability of investment strategies. Your financial advisor will continually monitor the investment portfolio, oversee the investment strategist’s decisions, and keep you on track.
There are 8 common types of Mutual funds
Return Grade : Generally safer investment but with a lower potential return then other type of mutual funds
Return grade is on higher side in comparison to Bonds and income funds.
Aggressive BF hold more equities and fewer bonds while Conservative BF hold fewer equities relative to bonds.
Return grade is on higher side in comparison to income funds but lower than pure equity funds.
Return Grade is at per with the index at any point of time. Is on a lower side in comparison to actively managed equity mutual funds.
Let’s have a detailed look at the differences between fixed deposits and debt funds. The table below helps you decide which investment is suitable for you.
|Particulars||Debt Funds||Fixed Deposits|
|Rate of returns||14-18%||6-8%|
|Investment Option||Can choose either an SIP investment or a lumpsum investment||Can only opt for a lumpsum investment|
|Early Withdrawal||Allowed with or without exit load depending on the mutual fund type||A penalty is levied to withdraw prematurely|
|Investment Expenditure||An expense ratio of 2.5% is charged||No management costs|
Banks offer a pre-set interest rate for fixed deposits based on the tenure chosen. Debt fund returns are solely dependent on the market movement – they have historically earned higher returns (sometimes even more than double) in the form of capital appreciation on top of interest.
One good thing about fixed deposit is, market highs and lows will not impact the returns you earn. So typically, debt funds outdo fixed deposits by a huge margin during market highs and slightly underscore FDs when the market is down.
Short-term debt fund( less than 3 years) gains are added to your income and they are taxed at the applicable tax slab. For long-term gains, they are taxed at 20% after the indexation benefits.
Fixed deposit returns are added to your income and they are taxed according to the applicable tax slabs.
Everyone knows that inflation puts a damper on savings as it leads to loss of currency value. Debt mutual funds, albeit the risk, have the potential to pace with inflation. For instance, you have invested in an FD at 7% interest and the inflation rate is 5%, the adjusted return would be a measly 2%. Debt funds deliver better.
|Fixed Deposits||Debt Mutual Fund||Equity Mutual Fund|
|Return (% p.a.)||9.0%||9.0%||9.0%|
|Holding Period||1 Year||1 Year||1 Year|
|Indexed Investment Amount||-||107,500||-|
|Tax Paid (as applicable)||2,700||300||-|
|Post Tax Returns||6,300||8,700||9,000|
|Post Tax Returns (%)||6.3%||8.7%||9.0%|
Ultimately, you should weigh your decision on your risk appetite, time horizon, and investment goals. All we suggest is that when the market looks positive and you notice several prospects for economic growth, it makes more sense to opt for debt funds than fixed deposits.
Notwithstanding the above, investing in mutual funds offer advantages:
✓ Facilitates diversification;
✓ The minimum investment amount required is low;
✓ Offers economies of scale, translating into better returns for you;
✓ Offers innovative modes of investing and withdrawing – Systematic Investment Plans (SIPs), Systematic Transfer Plans (STPs), Systematic Withdrawal Plans (SWPs), etc.;
✓ You can tactically allocate your investible surplus; and
✓ Your hard-earned money is professionally managed by professionals who hold years of experiencein financial research and fund management.
You ought to choose the category of mutual fund schemes (equity and/or debt) and their type wisely, paying heed to your risk profile, investment time horizon, and the financial goals you’re striving to achieve; so that your asset allocation is done optimally.
For instance, when you’re averse to risk, the investment horizon is relatively short (less than 3 years) and financial goals are approaching, a dominant portion of the investible surplus should be parked in debt instruments, where debt mutual funds can be considered. But here too, tread carefully and take into cognisance of the interest rate cycle. At present, if you hold a slightly high risk appetite and have a long time horizon of at least 3 years, not more than 20% of your entire debt portfolio may be allocated to long-term debt funds via dynamic bond funds (as they are enabled by their investment mandate to take positions across maturity profile of debt papers).
In case you have a time horizon of less than a year and risk profile doesn’t permit, stay away from funds with longer maturities.
If you have a short-term investment horizon of 3 to 6 months, you could consider investing in ultra-short term funds (also known as liquid plus funds). And if you have an extremely short-term time horizon (of less than 3 months) you would be better-off investing in liquid funds. Don’t forget that investing in debt funds is not risk-free.
Those of you, who have a very high risk appetite or can afford to take risk, diversified equity oriented mutual funds, would be suitable. But take enough care to select to best or winning mutual fund schemes for your portfolio. Focus on mutual fund houses that follow strong investment processes and systems, and make sure you have a long-term investment horizon of at least 5 years and your financial goals too, are afar. It would be best to systematically stagger your investments. Those who are new to equity investing prefer the mutual fund route by opting for balanced funds and large-caps. Moreover, prefer the SIP mode of investing, which will help you mitigate the risk better. Thoughtlessly investing or speculating can be hazardous to your wealth and health.
While mutual funds offer various modes of investing, one should preferably consider his or her convenience while investing in mutual funds. Some of the key modes of investment offered by mutual funds are:
(Let us run you through this in more detail ...)
(The other mode of investing is popularly known as SIP...)
Now let's take an example to see how SIP works...
...Suppose you have Rs 1.2 Lakh in your bank account, you may easily split your investment over a period of 12 months and invest Rs 10,000 per month in the mutual fund scheme through SIP...
|Systematic Investment Plan||Lump-Sum|
|Month||S&P BSE Sensex||Investment
Source: ACE MF, PersonalFN Research)
(The above scenario is shown for illustration purpose only. The actual scenario may differ from the above illustration. Past performance may or may not result in future.)
Say if this was a scenario in the beginning of C.Y. 2013 and, as can be seen in the table, if you invested this money in equities or in S&P BSE Sensex over a period of 12 months in C.Y. 2013; then with the same amount of money, the investments via SIP would have helped you accumulate more number of units than your lump sum investment. We can see that the value of your one-time investment of Rs 1,20,000 was in the negative for a while due to the downside market movement, while simultaneously SIPs helped you accumulate more units. As a result your investment via SIP would have delivered returns better than the lump sum investment. However this is just an example of how SIPs can help you benefit even from market volatility. It is not necessary that SIPs outperform lump sum investment every time; but they do help you with disciplined investment and rupee cost averaging that help you steadily create wealth in the long run.
(The next mode of investing that we would like to explain is...)
(Though less popular, STP is an advanced version of SIP, which functions with a similar objective... so let's see what makes STP different from SIP...)
Now let's see how STP works...
If you wish to invest Rs 1.2 Lakh lying in your bank account, but without putting all your money directly to market risk, you may opt for STP. Through STP, the entire Rs 1.2 Lakh can be invested in a low risk liquid scheme of the mutual fund house of whose equity scheme you wish to invest in.
|Month||Opening Balance in Liquid Fund (Rs)||Transfer to Equity Fund (Rs)||Closing Balance in Liquid Fund (Rs)||Return from Liquid Fund @ 7% p.a. (Rs)||Return from Equity Fund @ 12% p.a. (Rs)||Final Value of each Transfer (Rs)||Total Value of Investment (Rs)|
(Source: PersonalFN Research)
(The above scenario is shown for illustration purpose only. The rate of Returns mentioned above is an assumption. Past performance may or may not result in future.)
So here in the table, we can see that Rs 1.2 Lakh invested in a liquid fund is gradually transferred to an equity fund over a12 month period. At the end of 12 months, the Rs 1,20,000 transferred to the equity fund which we assume to have grown @ 12% p.a. would appreciate to Rs 1,28,093; while the liquid fund if it is able to yield 7% p.a. may provide a gain of Rs 4,026. So through STP you can gradually transfer a fixed amount each month from a liquid fund to an equity fund at various market levels and over time create a portfolio of equity mutual funds without putting all your money at risk at one point of time.
It is noteworthy that the Indian mutual fund industry has never stopped itself from trying or innovating strategies that can fulfil your needs as an investor, may it be while investing your money or withdrawing it to meet your financial goals. So let us now shed some light on a few of the other techniques introduced by some mutual funds that may be effective while managing your finances...
(Value-averaging Investment Plan is a relatively new method of investing in equity markets through a mutual fund. While in SIP the monthly investment is a fixed amount, in VIP the monthly investment varies which is calculated as per the targeted performance.)
|Month||S&P BSE Sensex||Systematic Investment Plan||
Value Averaging Investment Plan
(Source: ACE MF, PersonalFN Research) (The above scenario is shown for illustration purpose only. The actual scenario may differ from the above illustration. Past performance may or may not result in future.)
Let's take an example of VIP and see how it works. Say you, as an investor, want to invest Rs 10,000 a month for a certain period of time in C.Y. 2013. If you start with Rs 10,000 in January 2013, and at the end of the first month, as we see, the market discounts, and the value of your investment becomes Rs 9,740. So now you need to invest Rs 10,260 (20,000-9,740), to make the investment worth Rs 20,000 (over a period of 2 months). Likewise, at the beginning of the 5thmonth in May 2013, if the value of your investment is Rs 44,042, then you need to invest Rs 5,958 (50,000 -44,042) only to make the amount reach the target amount of Rs 50,000in 5 months. So at the end of 12 months you would have invested Rs 120,000 by adjusting the market returns, but the actual money that is debited from your bank account is Rs 113,865. And if we compare the gains on total investment, then we can see that VIP has managed to offer slightly better returns than SIP. But do not forget that here the comparison between SIP and VIP is made for the same underlying investment or scheme and the outcome may be otherwise in actual terms for different schemes, based on their performances.)
(The other similar concept is...)
(Value-averaging transfer plan works on a similar concept while flexibly transferring money from one scheme to another based on the set target...)
(The next concept is...)
(Another less popular but useful concept is...)
(Systematic Withdrawal Plan is a smart way to plan for your future needs by withdrawing amounts systematically ...)
Investments by NRIs in Mutual Funds can be made on a repatriable or on a non-repatriable basis, as preferred by the investor
To invest on a repatriable basis, you must have an NRE or FCNR Bank Account in India. The Reserve Bank of India (RBI) has granted a general permission to Mutual Funds to offer mutual fund schemes on repatriation basis, subject to the following conditions:
The Reserve Bank of India (RBI) has granted a general permission to Mutual Funds to offer mutual fund schemes on non-repatriation basis, subject to the following conditions:
No permission of Reserve Bank either by the Mutual Fund or the NRI investor is necessary.
No. As an NRI one does not need any specific approval from the RBI for investing or redeeming from Mutual Funds. Only OCBs and FIIs require prior approvals before investing in Mutual Funds.
Although all equity funds exempt you from paying long-term capital gains tax of 10.4% up to an amount of ₹1 lakh (apart from grandfathering clause), there is one breed of equity funds that give you tax deduction benefits at the time of making an investment. These are equity-linked saving schemes (ELSS), more popularly known as tax-saving mutual fund (MF) schemes.
An ELSS gives you tax deduction benefit of up to ₹1.5 lakh under Section 80C. This is the only pure equity investment vehicle that offers Section 80C deduction benefits.
The only catch here is it comes with a 3-year lock-in. Other equity funds don’t carry a lock-in. Remember, the lock-in also applies to your systematic investment plans (SIP); every monthly instalment you make in an ELSS is subject to a 3-year lock-in.
Other than deduction benefits and the lock-in, an ELSS is quite the same as a diversified equity fund. It invests in equity shares of companies across sectors and market capitalisations. When investing in ELSS, care should be taken to not invest in a new scheme every year to save taxes. One ELSS in the portfolio—in which you keep topping up every year—is more than enough.
There are a plethora of savings schemes to help you build your wealth, such as FD, PPF and NSC to name a few. But the returns from these schemes are taxed. This is where ELSS stands out with its dual-benefit – its returns are generally higher & partially taxable (Returns are not taxable until 31 March 2018. After 31 March 2018, returns will be taxable at a concessional rate of 10% if gains are greater than Rs. 1 lakh. This coupled with a mere lock-in period of 3 years is all the more reason for you to invest in ELSS now.
|Investment||Returns||Lock-in Period||Tax on Returns|
|5-Year Bank Fixed Deposit||6% to 7%||5 years||Yes|
|Public Provident Fund (PPF)||7% to 8%||15 years||No|
|National Savings Certificate||7% to 8%||5 years||Yes|
|National Pension System (NPS)||8% to 10%||Till Retirement||Partially Taxable|
|ELSS Funds||15% to 18%||3 years||Partially Taxable|
Section-80 of the Indian Tax Act allows deduction upto Rs. 150,000 from your total annual income. This limit was enhanced in the 14-15 fiscal. Yet, many taxpayers find a major chunk of this getting consumed by mandatory deductions