Strategic Asset Allocation refers to allocation of funds in various asset classes based on Investor’s risk profile and financial goals. Tactical Asset Allocation refers to allocation of funds in as per the trend or anticipated price movement in an asset class. While investing according to Strategic Asset allocation strategy, one invests from a long term … Continue reading Strategic and Tactical Asset Allocation.
Debt refers to borrowings by Government of India, Public Sector Organizations and the Private sector companies to raise capital for their long term and short term needs. Debt instruments are segregated as Government debt and Private sector debt. Also as short term and long term debt. Indian Government borrows money every year from the public … Continue reading Types of Debt Instruments.
Market Capitalization of a company is defined as the market price of one equity share of the company multiplied by the total number of equity shares issued by the company. Large Caps are companies with market valuation of Rs 25,000 crore or more. Mid-Caps are companies with market valuation of up to Rs 25,000 crore. … Continue reading Large Cap Mid Cap and Small Cap.
A question which most Investors think about is “What should be my asset allocation Strategy”?. It is generally believed that Equity exposure should decrease as age increases and vice versa. Some investors think that Equity and Equity based products are too risky and avoid them altogether. Equity is, however, an essential part of any good … Continue reading Asset Allocation Strategy.
ETFs or Exchange Traded Funds have been gaining popularity in India over the last five years. ETFs offer some advantages over Mutual Funds but also suffer from some limitations: 1. Liquidity: ETFs are bought and sold over a stock Exchange. If a particular ETF is not popular or widely used it may become difficult to … Continue reading Limitations of ETFs.
Mutual Funds are a great Investment tool and have rewarded Indian Investors handsomely in the last twenty-five years. Mutual Funds suffer from a couple of limitations as mentioned below: 1. The Duplicity of selecting Stocks: When we invest in two Large Cap Funds or any category of Mutual Funds, both the Schemes contain many stocks … Continue reading Limitations of Mutual Funds.
ETFs offer the following advantages over Mutual Funds: 1. Lower Fund Management Charges. 2. Eliminates duplicity or overlap of buying Stocks through different Mutual Funds. 3. Exposure to the entire Stock Market in a Country or Region through One or Two ETFs. 4. Global Exposure. 5. Easy Liquidity throughout the Year. 6. Tax implications as … Continue reading Advantages of Exchange Traded Funds over Mutual Funds.
Index Funds are mutual funds, which are based on an underlying index, such as the Nifty 50 or the Sensex. Index Funds are passively managed funds, meaning that the fund manager plays an inactive role in managing the fund. These funds try to replicate the underlying index with the exact weight given to each stock … Continue reading Index Funds and ETFs.
An Index is a collection of Stocks. It is composed of Stocks from a particular Industry, Country, Continent or the World. It is also segregated as Developed Markets, Emerging Markets and Frontier Markets (Under-Developed Countries). An Index can be theoretical, or it can have practical applications in the form of Index Funds and ETFs. Indices … Continue reading Index.
Indians have been investing in our domestic stock market for several decades. The BSE Sensex was launched in 1979 and NSE Nifty in 1993. Mutual Fund Sector was privatised in 1992 after India’s liberalisation initiative and since 2010 Alternative Investments such as Venture Capital, Private Equity, Angel Investing, started gaining momentum. There is one area … Continue reading International Investments.
