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The investor wants to know about Pocket SIP — what it is and how to start.
How to start investing with a pocket SIP?
Why don’t all fund houses offer a pocket SIP option?
There is a cost involved in processing each SIP — collecting money, allocating units, generating statements, etc. For very small SIPs like Rs 100, fund houses may actually incur a loss due to transaction costs. Still, they offer this facility to encourage long-term participation. Over time, more fund houses are expected to adopt this option because they do not want to lose future investors, said the expert.
Another investor has Rs 5 lakh and wants to invest internationally. Wants suggestions on the three main routes.
1. LRS (Liberalised Remittance Scheme)
Under LRS, an Indian resident can invest up to USD 250,000 per financial year abroad. This allows direct investment in international stocks via international brokers. However, for Rs 5 lakh, costs may be relatively high.
Indian mutual funds have branches in GIFT City offering international exposure. Some schemes require higher minimum investments, but newer options may start around USD 5,000.
3. Indian Mutual Funds with International Schemes
These are the most convenient and tax-efficient options. However, due to regulatory limits (overall industry cap), fresh investments are sometimes temporarily stopped. When schemes reopen, investors can invest.
Options may include exposure to:
- US indices
- Developed world markets
- China
- Europe
4. International ETFs Listed on Indian Exchanges
International ETFs tracking global indices such as the Nasdaq-100 or the S&P 500 can be purchased on Indian exchanges. However, investors should check whether the ETF is trading at a premium or discount to its NAV before buying. If investing through international mutual funds when subscriptions reopen, a lump sum may be required due to the limited investment window.
An investor is getting married soon, and she wants to start investing.
This is an excellent time to begin your financial journey, but instead of investing randomly, it is important to first build a clear and structured roadmap. Even if your current net worth is small, proper planning is essential. Consulting a SEBI-registered investment advisor can help you start on the right path.
A comprehensive financial plan should include:
Clearly defined short-, medium-, and long-term goals
An investor started with a Rs 500 SIP and now invests Rs 20,000 per month. The investor has large cap and small cap funds and wants to add multi asset funds and gold.
According to the expert, multi-asset funds invest in multiple asset classes — equity, debt, precious metals, REITs, etc. Benefits include:
- Built-in diversification
- Automatic rebalancing by the fund manager
- Simplified portfolio management
The expert further added that the investor can choose one good multi-asset allocation fund. No need to select multiple funds in the same category.
Planning for his daughter’s future, an investor is investing to secure his daughter’s future through:
- HDFC Success Plan
- HDFC Children’s Plan
- Sukanya Samriddhi Scheme
Currently, the investor invests more in Sukanya Samriddhi (around 8.2 per cent return) and less in equity mutual funds.
This allocation depends on comfort level. Sukanya offers safety and fixed returns. However, for long-term goals, equity SIPs can potentially generate around 10-12 per cent annually (as per standard projection guidelines).
If comfortable with market volatility and the goal is long-term, increasing equity allocation may help generate a higher final corpus.
If not comfortable with volatility, continue with a higher allocation to Sukanya.
(Disclaimer: The above article is meant for informational purposes only, and should not be considered as any investment advice. ET NOW DIGITAL suggests its readers/audience to consult their financial advisors before making any money related decisions.)
