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Benchmark Investments

Overview

An investment that can help you to beat inflation

All of us have experienced the rise in prices of goods and services we consume over the years. A pack of Bread costs more than what it was a decade earlier. So does a packet of biscuits, television set and gold too.

If your current monthly expenses are 30,000/- per month, then after 20 years you will require 80,000/- a month to just maintain the same lifestyle!

An education degree for your child which currently costs 20 lakh could cost over 34 lakh after 11 years!

The prices of goods and services have been gradually rising over the years and are expected to rise in the coming years too.

What causes this rise in prices?

Inflation is the silent killer of our savings and finance as it gradually reduces the value of our money. Basically, we buy less for the same amount of money

Inflation is measured by 2 ways

  • CPI (Consumer Price Index) - Measures the changes in retail prices of consumer goods and services like food, clothing, medicines, communication, etc
  • WPI (Wholesale Price Index ) - Measures the changes in price paid by wholesalers and manufacturers

What can one do about inflation?

Although inflation is inevitable, one way to tackle it is by investing in an asset class which can deliver returns higher than inflation rate.

Historically, equity has generated inflation-beating returns in the long run. In fact, equity has potential to generate relatively higher returns in the long term than other asset classes such as debt and gold.

Sensex has grown from approx. 700 points in 1990 to approx. 40,129 points on 31October, 2019, thus having shown a growth of 57x over a span of 29 years. (Source – Motilal Oswal)

But investing directly in equities has its own challenges. One has to select a few stocks out of thousands of options. Additionally, investing at the right time may require a lot of time and expertise.

Here is equity mutual funds come in picture , Equity mutual funds invest in a basket of securities, here by spreading the overall portfolio risk & they are managed by professionals which can save investor’s time and efforts on market research Equity funds are diversified across stocks and sectors which can cushion the portfolio against market fluctuations, one can invest consistently, periodically and with as less as Rs. 500 in equity mutual fund via SIP.

Investing in equity via SIP can help you create wealth and generate inflation-beating returns over the long term.

So if you don’t want inflation to eat into your finances, start investing in equity mutual funds and aim to build wealth over the years as well!

Disclaimer:

Benchmark Investments is a Registered Mutual Fund Distributor.

Benchmark Investments is NOT an advisory firm & NOR an Investments advisor.

The contents herein mentioned are solely for informational and educational purpose only

This document is marketing material for a retail audience and does not constitute advice or recommendations. Past performance is not a guide to future performance and may not be repeated. The value of investments and the income from them may go down as well as up and investors may not get back the amount originally invested.

This document is marketing material for a retail audience and does not constitute advice or recommendations. Past performance is not a guide to future performance and may not be repeated. The value of investments and the income from them may go down as well as up and investors may not get back the amount originally invested.

Mutual Fund investments are subject to market risks, read all scheme related documents carefully.

The above calculation and illustration of figures are indicative only and not on actual basis.

We Benchmark Investments are not warrant the accuracy or completeness of the information, text, graphics, links or other items contained in this website.

We may make changes to the contents, or to the information described therein, at any time without any notice.

In case of any variance between what has been stated and what is contained in the relevant Act, Rules, Regulations, Policy Statements, etc, is possible and we do update as per our update made.

We neither endorses in any way nor offers any judgment or warranty and accepts no responsibility or liability for the authenticity, availability of any of the goods or services or for any damage, loss or harm, direct or consequential or any violation of local or international laws that may cause infringement by your visiting on these websites as well as on using websites links which are provided on these website.

Please consult your CA / Tax expert for taxation before investing.

The information provided on this website is to help investors in their decision-making process and shall not be considered as a recommendation or solicitation of an investment or investment strategy.

We do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.

Tax law is subject to continual change, at times on a retroactive basis and may result in incremental taxes, interest or penalties.

There are risks associated with fixed income investments, including credit risk, interest rate risk, and prepayment and extension risk. In general, bond prices rise when interest rates fall and vice versa. This effect is usually more pronounced for longer-term securities.

Stock investments have an element of risk. High-quality stocks may be appropriate for some investments strategies. Ensure that your investment objectives, time horizon and risk tolerance are aligned with stocks before investing, as they can lose value.

Benchmark Investments only acts as a mediator between its clients and the company inviting/accepting deposits, known as Principal Company.

The contents herein above shall not be considered as an invitation or persuasion to trade or invest. We accept no liabilities for any loss or damage of any kind arising out of any actions taken in reliance thereon.

Asset Allocation - a Key Investment Strategy

Asset Allocation

Asset Allocation is the practice of diversifying investments amongst various asset classes like Equity, Fixed Income, Gold and Real Estate to name a few. It helps to reduce investment risk & reduces the dependency of portfolio performance on a single asset class.

Asset allocation is important as asset classes do not move in tandem

Let us look at the performance of various asset classes over the years:

asset allocation

As per the data, every year has a different asset class as winner. While predicting which asset class would perform well each year is like doing crystal gazing! Therefore, it’s wise to divide your investment across asset classes so that outperformance of one asset class can set off the underperformance of others.

Benefits of Asset Allocation

Diversification: Asset allocation helps by spreading your investments across various asset classes thereby reducing dependence on one particular asset.

Reduces risk: Helps reduce or spread risk across different assets.

An all season strategy: Proper asset allocation can help tide through different market phases with relative ease.

No need to time the market: Even market experts can’t time the market, having a right asset allocation can help us avoid timing the market.

Focus on goals: When you have a proper asset allocation in place, you can focus on your goals and not on the market.

3 steps to construct an ideal asset allocation portfolio

  • 1List down your financial goals and priorities amongst them
  • 2Decide on the investment timeframe or goal tenure based on your needs
  • 3Assess your risk appetite & set right expectations from your portfolio

(From risk – return perspective)

Based on your goals, risk appetite & time-horizon; diversify your investment amongst different asset classes. Review investments periodically to bring it to the optimal level by rebalancing investments

Why do we need to rebalance the portfolio periodically?

Rebalancing the portfolio is required to keep the portfolio aligned to the desired asset allocation level. It helps to redeem profit from an asset class that has grown and deploy the money in other assets that have shrunk. Without periodic rebalancing, the risk in your portfolio increases overtime as allocation towards one asset class may significantly increase over others.

Disclaimer:

Benchmark Investments is a Registered Mutual Fund Distributor.

Benchmark Investments is NOT an advisory firm & NOR an Investments advisor.

The contents herein mentioned are solely for informational and educational purpose only

This document is marketing material for a retail audience and does not constitute advice or recommendations. Past performance is not a guide to future performance and may not be repeated. The value of investments and the income from them may go down as well as up and investors may not get back the amount originally invested.

Mutual Fund investments are subject to market risks, read all scheme related documents carefully.

The above calculation and illustration of figures are indicative only and not on actual basis.

We Benchmark Investments are not warrant the accuracy or completeness of the information, text, graphics, links or other items contained in this website.

We may make changes to the contents, or to the information described therein, at any time without any notice.

In case of any variance between what has been stated and what is contained in the relevant Act, Rules, Regulations, Policy Statements, etc, is possible and we do update as per our update made.

We neither endorses in any way nor offers any judgment or warranty and accepts no responsibility or liability for the authenticity, availability of any of the goods or services or for any damage, loss or harm, direct or consequential or any violation of local or international laws that may cause infringement by your visiting on these websites as well as on using websites links which are provided on these website.

Please consult your CA / Tax expert for taxation before investing.

The information provided on this website is to help investors in their decision-making process and shall not be considered as a recommendation or solicitation of an investment or investment strategy.

We do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.

Tax law is subject to continual change, at times on a retroactive basis and may result in incremental taxes, interest or penalties.

There are risks associated with fixed income investments, including credit risk, interest rate risk, and prepayment and extension risk. In general, bond prices rise when interest rates fall and vice versa. This effect is usually more pronounced for longer-term securities.

Stock investments have an element of risk. High-quality stocks may be appropriate for some investments strategies. Ensure that your investment objectives, time horizon and risk tolerance are aligned with stocks before investing, as they can lose value.

Benchmark Investments only acts as a mediator between its clients and the company inviting/accepting deposits, known as Principal Company.

The contents herein above shall not be considered as an invitation or persuasion to trade or invest. We accept no liabilities for any loss or damage of any kind arising out of any actions taken in reliance thereon.

Diversify beyond domestic markets

Investment in international equities presents an opportunity for investors to participate and grow with the globally diversified portfolio. In other words, it is an avenue which can complement investor’s domestic equity portfolio.

Why invest in international Markets?

Take advantage of rising market in different geographies

Investing in different geographies can help in better diversification. For eg: The Indian index grew by 19% whereas the Korean index grew by 45% and the USA Index by 24 % In 2020

Source: MSCI, RBI. Returns mentioned are absolute for the respective year

Exposure to niche segment

Investment in international stocks provides exposure to various sectors and companies which are otherwise not available in the domestic market. For eg: Indian investors not having access to themes like electric vehicles, social media companies and a few others.

Hedge against currency depreciation

In 2011, the Indian rupee traded at Rs.44.5 to 1 USD. This rate has slipped to Rs.78 to 1 USD in 2022. Investment in international stocks, in this case US stocks, can help in hedging against the local currency depreciation.

Source: RBI calculate average

Weather out volatility in domestic market

Indices or assets of different countries do not perform in tandem and each of them carries distinctive risks and opportunities. Spreading investment across international stocks can help you manage volatility in the long run

Diversification in today’s globalised world is a need of the hour as it is a way to -

Take exposure to themes and innovative businesses from across the globe

Reduce dependency of a single economy and country on your portfolio

Reduce overall portfolio risk

Create long term wealth without any geographical boundaries

But handpicking individual international stocks can be a challenging task:
  • It requires a lot of study and research of the foreign markets
  • Access to global stock specific data could not be easy
  • Investing in direct global equities can be relatively expensive
  • It requires constant vigilance on socio-political and economic activities in other countries.

One way to overcome these challenges is by investing in international mutual funds via SIP. With the global team of experts to research and manage exposure to foreign companies and securities, international mutual funds could be a wise option to choose for an investor.

So, if you wish to build a globally diversified portfolio in a cost-effective manner start investing in international mutual funds

Disclaimer:

Benchmark Investments is a Registered Mutual Fund Distributor.

Benchmark Investments is NOT an advisory firm & NOR an Investments advisor.

The contents herein mentioned are solely for informational and educational purpose only

This document is marketing material for a retail audience and does not constitute advice or recommendations. Past performance is not a guide to future performance and may not be repeated. The value of investments and the income from them may go down as well as up and investors may not get back the amount originally invested.

Mutual Fund investments are subject to market risks, read all scheme related documents carefully.

The above calculation and illustration of figures are indicative only and not on actual basis.

We Benchmark Investments are not warrant the accuracy or completeness of the information, text, graphics, links or other items contained in this website.

We may make changes to the contents, or to the information described therein, at any time without any notice.

In case of any variance between what has been stated and what is contained in the relevant Act, Rules, Regulations, Policy Statements, etc, is possible and we do update as per our update made.

We neither endorses in any way nor offers any judgment or warranty and accepts no responsibility or liability for the authenticity, availability of any of the goods or services or for any damage, loss or harm, direct or consequential or any violation of local or international laws that may cause infringement by your visiting on these websites as well as on using websites links which are provided on these website.

Please consult your CA / Tax expert for taxation before investing.

The information provided on this website is to help investors in their decision-making process and shall not be considered as a recommendation or solicitation of an investment or investment strategy.

We do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.

Tax law is subject to continual change, at times on a retroactive basis and may result in incremental taxes, interest or penalties.

There are risks associated with fixed income investments, including credit risk, interest rate risk, and prepayment and extension risk. In general, bond prices rise when interest rates fall and vice versa. This effect is usually more pronounced for longer-term securities.

Stock investments have an element of risk. High-quality stocks may be appropriate for some investments strategies. Ensure that your investment objectives, time horizon and risk tolerance are aligned with stocks before investing, as they can lose value.

Benchmark Investments only acts as a mediator between its clients and the company inviting/accepting deposits, known as Principal Company.

The contents herein above shall not be considered as an invitation or persuasion to trade or invest. We accept no liabilities for any loss or damage of any kind arising out of any actions taken in reliance thereon.

Diversify your Porfolio Through Mutual Fund

Don’t put all your eggs in one basket’ might be the most over used but significant advice for all those investors who are looking to minimise the impact of volatility on their portfol

Different asset classes and instruments have distinct quality, risks and characteristics and Therefore their respective returns potential tend to vary over the same investment horizons/periods. When the investment portfolio includes each asset or product in an appropriate proportion based on respective risk profile1 of an investor, it has potential to enhance the portfolio quality and help you weather out all market phases without you losing any sleep. That is what ‘diversification’ is all about.

Why diversification is essential?

Get exposure to different assets and product

Diversification helps investors attain exposure to multiple assets (equity, debt & gold etc), sectors Like IT, pharma & infrastructure etc.), themes (consumption, ESG etc), geographies (international funds) or investment styles (value, growth, momentum et

Attain suitable & optimal asset allocation

When you invest in multiple assets and diversify your portfolio across different products based on your investment objective and risk tolerance level, it helps you build a suitable asset allocation strategy for your portfolio.

Ride volatility across different market cycles

Since different assets and sectors do not move in tandem, diversifying across assets and sectors can help you ride out volatility across market cycles

Minimise/mitigate market risk

Each asset and investment product has a distinctive risk associated with it. Investing in more than one asset or instrument can help the investors minimise the overall portfolio ris

To create wealth in the long run and minimise the impact of volatility on your portfolio, it is important to build a diversified portfolio that is spread across various asse

Therefore, if you wish to navigate through the market volatility, optimise portfolio returns and minimise overall investment risk, diversification is the way forward

Diversify your portfolio with debt fund

The foundation of a well-diversified mutual fund portfolio is built on both asset classes. While equity funds are essential to generate relatively higher risk-adjusted returns & wealth in the long run; debt mutual funds aim to safeguard the entire investment portfolio.

Debt funds

Debt mutual funds primarily invest in fixed-income generating securities such as treasury bills, commercial papers, certificates of deposit, government and corporate bonds. The bond issuer repays the borrowed sum at a pre-decided interest rate (coupon rate) within pre-defined period (maturity) which becomes the accrual income of debt schemes. The key objective of these funds is to deliver relatively safe and steady income.

Returns on debt fund depend on two components

Accrual income & price movement: Accrual income is the interest income the fund accrues at a particular coupon rate on the bond it holds. The principal amount is repaid by the bond issuer at the time of maturity. And as bond prices are inversely proportional to interest rate movement, the fund may also benefit due to the change in the interest rates. Therefore, the bond prices go up when the interest rates go down and vice-versa.

Credit risk: All bonds are assigned a credit rating from AAA (Highest) to D (Default) which suggests the quality and creditworthiness of the bond issuing company. In between there is an entire rating scale from AA+, AA, AA-,A+, A (26 scales in all). Therefore a bond with a AAA rating has a better credit quality than a AA rated Bond. A fund may embark on credit risk as an attribute and invest in a bond of the company that has a weak or low credit rating but strong fundamentals.

The combination of accrual income, price movement and credit risk of underlying bonds/securities determines the performance of debt funds.

Benefits of investing in Debt Mutual Funds

Stabilit: Debt Mutual Funds invest in debt securities, making them relatively more stable than equity investments.

Freedom to withdrw: Withdraw any time from open ended mutual funds, subject to exit load. Close ended mutual funds have a defined maturity date.

Possibility of better post tax returns: Returns include: Interest income ,Capital appreciation / depreciation in the value of the security due to changes in market dynamics

Indexation Benef: Indexation adjusts the purchase value of your investment to indicate the impact of inflation, while calculating long term capital gains tax for investments held for more than 3 years.

Debt Mutual Funds mainly invest in a mix of debt and fixed income securities such as:

Based on their maturity, debt funds are classified into these categories:

Overnight Fund: Investment in overnight securities having maturity of 1 day

Liquid Fund: Investment in Debt and money market securities with maturity of upto 91 days only

Ultra Short Duration Fund: Investment in Debt & Money Market instruments such that the Macaulay duration of the portfolio is between 3 months - 6 months

Low Duration Fund: Investment in Debt & Money Market instruments such that the Macaulay duration of the portfolio is between 6 months- 12 months

Money Market Fund: Investment in Money Market instruments having maturity upto 1 year

Short Duration Fund: Investment in Debt & Money Market instruments such that the Macaulay duration of the portfolio is between 1 year - 3 years

Medium Duration Fund: Investment in Debt & Money Market instruments such that the Macaulay duration of the portfolio is between 3 years - 4 years

Medium to Long Duration Fund: Investment in Debt & Money Market instruments such that the Macaulay duration of the portfolio is between 4 - 7 years

Long Duration Fund: Investment in Debt & Money Market Instruments such that the Macaulay duration of the portfolio is greater than 7 years

Dynamic Fund: Investment across duration. Besides this maturity-based classification, there are a few other types of debt funds where the kind of securities invested in are specified.

Gilt funds: These funds invest a minimum of 80% of total assets in government securities. These securities, which are also called gilts, are bonds issued by the Government of India. Unlike bonds issued by companies, the chance of the government defaulting on its loan obligation is significantly lower.

Gilt Fund with 10-year Constant Duration: Here, a minimum of 80% of total assets in invested in Gsecs such that the Macaulay duration of the portfolio is equal to 10 years

Corporate Bond Funds: Here, a minimum of 80% is invested in corporate bonds (only in highest-rated instruments)

Credit Risk Fund: Here, a minimum of 65% is invested in corporate bonds (investment in below highest rated instruments).

Banking and PSU Funds: These funds have a minimum 80% investment in debt instruments of banks, Public Sector Undertakings, and Public Financial Institutions

Floater Fund: Here, floating rate instruments comprise a minimum of 65% of total assets.

Disclaimer

Benchmark Investments is a Registered Mutual Fund Distributor.

Benchmark Investments is NOT an advisory firm & NOR an Investments advisor.

The contents herein mentioned are solely for informational and educational purpose only

This document is marketing material for a retail audience and does not constitute advice or recommendations. Past performance is not a guide to future performance and may not be repeated. The value of investments and the income from them may go down as well as up and investors may not get back the amount originally invested.

Mutual Fund investments are subject to market risks, read all scheme related documents carefully.

The above calculation and illustration of figures are indicative only and not on actual basis.

We Benchmark Investments are not warrant the accuracy or completeness of the information, text, graphics, links or other items contained in this website.

We may make changes to the contents, or to the information described therein, at any time without any notice.

In case of any variance between what has been stated and what is contained in the relevant Act, Rules, Regulations, Policy Statements, etc, is possible and we do update as per our update made.

We neither endorses in any way nor offers any judgment or warranty and accepts no responsibility or liability for the authenticity, availability of any of the goods or services or for any damage, loss or harm, direct or consequential or any violation of local or international laws that may cause infringement by your visiting on these websites as well as on using websites links which are provided on these website.

Please consult your CA / Tax expert for taxation before investing.

The information provided on this website is to help investors in their decision-making process and shall not be considered as a recommendation or solicitation of an investment or investment strategy.

We do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.

Tax law is subject to continual change, at times on a retroactive basis and may result in incremental taxes, interest or penalties.

There are risks associated with fixed income investments, including credit risk, interest rate risk, and prepayment and extension risk. In general, bond prices rise when interest rates fall and vice versa. This effect is usually more pronounced for longer-term securities.

Stock investments have an element of risk. High-quality stocks may be appropriate for some investments strategies. Ensure that your investment objectives, time horizon and risk tolerance are aligned with stocks before investing, as they can lose value.

Benchmark Investments only acts as a mediator between its clients and the company inviting/accepting deposits, known as Principal Company.

The contents herein above shall not be considered as an invitation or persuasion to trade or invest. We accept no liabilities for any loss or damage of any kind arising out of any actions taken in reliance thereon.

Do’s and don’ts while investing in MFs

  • Do research before Investing
  • Don't Panic
  • Invest for long-term
  • Invest according to your risk profile
  • Do consider taxation
  • Diversify your portfolio
  • Don't hold under-performing schemes
  • Do buy no-load funds
  • Have realistic goals
  • Don’t try to copy & paste
  • Don’t overdo your research
  • Don’t invest in too many funds
  • Don’t blindly chase returns:
  • Don’t withdraw when markets are down until you really need it
  • Don’t ignore expenses related to the fund:
  • Don’t try to time the markets:

These basic do’s and don’ts will help you stay grounded while building your future with mutual funds.

Disclaimer

Benchmark Investments is a Registered Mutual Fund Distributor.

Benchmark Investments is NOT an advisory firm & NOR an Investments advisor.

The contents herein mentioned are solely for informational and educational purpose only

This document is marketing material for a retail audience and does not constitute advice or recommendations. Past performance is not a guide to future performance and may not be repeated. The value of investments and the income from them may go down as well as up and investors may not get back the amount originally invested.

Mutual Fund investments are subject to market risks, read all scheme related documents carefully.

The above calculation and illustration of figures are indicative only and not on actual basis.

We Benchmark Investments are not warrant the accuracy or completeness of the information, text, graphics, links or other items contained in this website.

We may make changes to the contents, or to the information described therein, at any time without any notice.

In case of any variance between what has been stated and what is contained in the relevant Act, Rules, Regulations, Policy Statements, etc, is possible and we do update as per our update made.

We neither endorses in any way nor offers any judgment or warranty and accepts no responsibility or liability for the authenticity, availability of any of the goods or services or for any damage, loss or harm, direct or consequential or any violation of local or international laws that may cause infringement by your visiting on these websites as well as on using websites links which are provided on these website.

Please consult your CA / Tax expert for taxation before investing.

The information provided on this website is to help investors in their decision-making process and shall not be considered as a recommendation or solicitation of an investment or investment strategy.

We do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.

Tax law is subject to continual change, at times on a retroactive basis and may result in incremental taxes, interest or penalties.

There are risks associated with fixed income investments, including credit risk, interest rate risk, and prepayment and extension risk. In general, bond prices rise when interest rates fall and vice versa. This effect is usually more pronounced for longer-term securities.

Stock investments have an element of risk. High-quality stocks may be appropriate for some investments strategies. Ensure that your investment objectives, time horizon and risk tolerance are aligned with stocks before investing, as they can lose value.

Benchmark Investments only acts as a mediator between its clients and the company inviting/accepting deposits, known as Principal Company.

The contents herein above shall not be considered as an invitation or persuasion to trade or invest. We accept no liabilities for any loss or damage of any kind arising out of any actions taken in reliance thereon.

Financial Independence

The Real Wealth is about Freedom

The term ‘financial independence’ has different meanings for different people. For some it could mean happy and relaxed retirement, while for some it could mean building enough wealth to take care of all their needs and wants. Essentially, financial independence means having enough wealth to pay for living expenses/ to maintain a satisfactory lifestyle without having to worry about earning money.

Once you have accumulated enough corpus for your financial independence, you may choose to work or retire voluntarily because you wish to and not because you have to.

Six-step guide to attain financial independence

1.Don’t mix up income with wealth

Most people mistake ‘wealth creation’ with the high-income job. While income is an integral part of one’s wealth, it doesn’t constitute for entire net worth of an individual. Wealth is what remains with you after deducting your liabilities from the assets

2. Determine your lifestyle

Your lifestyle is the most crucial aspect of financial independence. It is important to decide how you will spend your life when you are financially independent. Draw a plan to know what is going to be your routine and which goals you have to achieve. In any case, your life will change in multiple aspects and you must take into account all the minute details before drawing a financial plan for your dream lifestyle. Being realistic with your lifestyle expectations would help you stay content and happy.

3.List down your expenses

The next step is to chart out numbers. Sustaining a dream lifestyle requires adequate wealth and proper financial planning. It starts with calculating your current and future expenses. Check out your last 3-12 months’ bank and credit card statements and record your expenses categorically. Make separate lists of needs (unavoidable expenses such as groceries, EMIs, medical and essential bills) and wants (discretionary expenses like entertainment, travel, club memberships etc). This way, you can know where and how much you can cut down on to move towards financial independence. Don’t forget to consider inflation while calculating future expense.

4.Spend less, save more, invest even more

Financial independence means taking full control of your money matters and that involves mindful spending and considerable savings. Save up to 3–6 months of expenses and keep it aside as an emergency fund. However, simply saving is not enough to achieve financial freedom. Passive income generated through proper investments can be helpful here. Investment in assets like equity can help you build a corpus in the long run, while investment in debt can safeguard your accumulated money. A well-planned asset allocation plays a vital role in attaining and managing your financial independence.

5. Choose a timeline for everything

Decide at what age you wish to attain financial independence. This will help you understand how much you need to invest every year/month to reach the goal of financial independence. Systematic Investment Plan is one way to make a small and regular contribution towards your long term goal of financial independence and even short term goals that are part of the big plan. The key is to develop financial discipline and cultivate the habit of regular investing and reach goals on time.

6. Plan well in advance for retirement

Retirement, at any age, is the ultimate relief and goal of any individual. Whether you want to retire the old school way when you’re sixty or get on to FIRE (Financial Independence, Retire Early) and quit your job when you are 40, it is never too early to save for retirement. When you invest thoughtfully for retirement, the retirement corpus accumulated would work for you even when you have stopped working.

There’s no ideal time to achieve financial independence, whenever you are able to live your life without worrying about managing finances that would truly be your Financial Independence Day!

Disclaimer

Benchmark Investments is a Registered Mutual Fund Distributor.

Benchmark Investments is NOT an advisory firm & NOR an Investments advisor.

The contents herein mentioned are solely for informational and educational purpose only

This document is marketing material for a retail audience and does not constitute advice or recommendations. Past performance is not a guide to future performance and may not be repeated. The value of investments and the income from them may go down as well as up and investors may not get back the amount originally invested.

Mutual Fund investments are subject to market risks, read all scheme related documents carefully.

The above calculation and illustration of figures are indicative only and not on actual basis.

We Benchmark Investments are not warrant the accuracy or completeness of the information, text, graphics, links or other items contained in this website.

We may make changes to the contents, or to the information described therein, at any time without any notice.

In case of any variance between what has been stated and what is contained in the relevant Act, Rules, Regulations, Policy Statements, etc, is possible and we do update as per our update made.

We neither endorses in any way nor offers any judgment or warranty and accepts no responsibility or liability for the authenticity, availability of any of the goods or services or for any damage, loss or harm, direct or consequential or any violation of local or international laws that may cause infringement by your visiting on these websites as well as on using websites links which are provided on these website.

Please consult your CA / Tax expert for taxation before investing.

The information provided on this website is to help investors in their decision-making process and shall not be considered as a recommendation or solicitation of an investment or investment strategy.

We do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.

Tax law is subject to continual change, at times on a retroactive basis and may result in incremental taxes, interest or penalties.

There are risks associated with fixed income investments, including credit risk, interest rate risk, and prepayment and extension risk. In general, bond prices rise when interest rates fall and vice versa. This effect is usually more pronounced for longer-term securities.

Stock investments have an element of risk. High-quality stocks may be appropriate for some investments strategies. Ensure that your investment objectives, time horizon and risk tolerance are aligned with stocks before investing, as they can lose value. Benchmark Investments only acts as a mediator between its clients and the company inviting/accepting deposits, known as Principal Company.

The contents herein above shall not be considered as an invitation or persuasion to trade or invest. We accept no liabilities for any loss or damage of any kind arising out of any actions taken in reliance thereon.

Fund Categories

The Schemes would be broadly classified in the following groups:

  • Equity Schemes
  • Debt Schemes
  • Hybrid Schemes
  • Solution Oriented Schemes
  • Other Schemes

Equity Schemes

An equity Scheme is a fund that

  • Primarily invests in equities and equity related instruments.
  • Seeks long term growth but could be volatile in the short term.
  • Suitable for investors with higher risk appetite and longer investment horizon.

The objective of an equity fund is generally to seek long-term capital appreciation. Equity funds may focus on certain sectors of the market or may have a specific investment style, such as investing in value or growth stocks.

Equity Fund Categories as per SEBI guidelines on Categorization and Rationalization of schemes

Multi Cap Fund* At least 65% investment in equity & equity related instruments
Large Cap Fund At least 80% investment in large cap stocks
Large & Mid Cap Fund At least 35% investment in large cap stocks and 35% in mid cap stocks
Mid Cap Fund At least 65% investment in mid cap stocks
Small cap Fund At least 65% investment in small cap stocks
Dividend Yield Fund Predominantly invest in dividend yielding stocks, with at least 65% in stocks
Value Fund Value investment strategy, with at least 65% in stocks
Contra Fund Scheme follows contrarian investment strategy with at least 65% in stocks
Focused Fund Focused on the number of stocks (maximum 30) with at least 65% in equity & equity related instruments
Sectoral/ Thematic Fund At least 80% investment in stocks of a particular sector/ theme
ELSS At least 80% in stocks in accordance with Equity Linked Saving Scheme, 2005, notified by Ministry of Finance
Definition of Large Cap, Mid Cap and Small Cap

In order to ensure uniformity in respect of the investment universe for equity schemes, define large cap, mid cap and small cap as follows:

  • Large Cap: 1st -100th company in terms of full market capitalization
  • Mid Cap: 101st -250th company in terms of full market capitalization
  • Small Cap: 251st company onwards in terms of full market capitalization
Market capitalization of companies in category wise
  • Large-cap companies have a market cap of Rs 20,000 crore or more.
  • Large-cap companies have a market cap between Rs 5,000 crore and less than Rs 20,000 crore.
  • Small-cap companies have a market cap of below Rs 5,000 crore.

Debt Schemes

Debt funds have potential for income generation and capital preservation.

A debt fund (also known as income fund) is a fund that invests primarily in bonds or other debt securities. Debt funds invest in short and long-term securities issued by government, public financial institutions, companies

  • Treasury bills, Government Securities, Debentures, Commercial paper, Certificates of Deposit and others

Debt funds can be categorized based on the tenor of the securities held in the portfolio and/or on the basis of the issuers of the securities or their fund management strategies, such as

  • Short-term funds, Medium-term funds, Long-term funds
  • Gilt fund, Treasury fund, Corporate bond fund, Infrastructure debt fund , Floating rate funds, Dynamic Bond funds, Fixed Maturity Plans.

Debt funds Categories as per SEBI guidelines on Categorization and Rationalization of schemes

Overnight Fund Overnight securities having maturity of 1 day
Liquid Fund Debt and money market securities with maturity of upto 91 days only
Ultra Short Duration Fund Debt & Money Market instruments with Macaulay duration of the portfolio between 3 months - 6 months
Low Duration Fund Investment in Debt & Money Market instruments with Macaulay duration portfolio between 6 months- 12 months
Money Market Fund Investment in Money Market instruments having maturity upto 1 Year
Short Duration Fund Investment in Debt & Money Market instruments with Macaulay duration of the portfolio between 1 year - 3 years
Medium Duration Fund Investment in Debt & Money Market instruments with Macaulay duration of portfolio between 3 years - 4 years
Medium to Long Duration Fund Investment in Debt & Money Market instruments with Macaulay duration of the portfolio between 4 - 7 years
Long Duration Fund Investment in Debt & Money Market Instruments with Macaulay duration of the portfolio greater than 7 years
Dynamic Bond Investment across duration
Corporate Bond Fund Minimum 80% investment in corporate bonds only in AA+ and above rated corporate bonds
Credit Risk Fund Minimum 65% investment in corporate bonds, only in AA and below rated corporate bonds
Banking and PSU Fund Minimum 80% in Debt instruments of banks, Public Sector Undertakings, Public Financial Institutions and Municipal Bonds
Gilt Fund Minimum 80% in G-secs, across maturity
Gilt Fund with 10 year Minimum 80% in G-secs, such that the Macaulay duration of the portfolio is
constant Duration equal to 10 years
Floater Fund Minimum 65% in floating rate instruments (including fixed rate instruments converted to floating rate exposures using swaps/ derivatives)

Hybrid Schemes

Invest in a mix of equities and debt securities. They seek to find a ‘balance’ between growth and income by investing in both equity and debt.

  • The regular income earned from the debt instruments provide greater stability to the returns from such funds.
  • The proportion of equity and debt that will be held in the portfolio is indicated in the Scheme Information Document
  • Equity oriented hybrid funds (Aggressive Hybrid Funds) are ideal for investors looking for growth in their investment with some stability.
  • Debt-oriented hybrid funds (Conservative Hybrid Fund) are suitable for conservative investors looking for a boost in returns with a small exposure to equity.
  • The risk and return of the fund will depend upon the equity exposure taken by the portfolio - Higher the allocation to equity, greater is the risk

Hybrid funds Invest in a mix of equities and debt securities.

SEBI has classified Hybrid funds into 7 sub-categories as follows:

Conservative Hybrid Fund 10% to 25% investment in equity & equity related instruments; and 75% to 90% in Debt instruments
Balanced Hybrid Fund 40% to 60% investment in equity & equity related instruments; and 40% to 60% in Debt instruments
Aggressive Hybrid Fund 65% to 80% investment in equity & equity related instruments; and 20% to 35% in Debt instruments
Dynamic Asset Allocation or Balanced Advantage Fund Investment in equity/ debt that is managed dynamically (0% to 100% in equity & equity related instruments; and 0% to 100% in Debt instruments)
Multi Asset Allocation Fund Investment in at least 3 asset classes with a minimum allocation of at least 10% in each asset class
Arbitrage Fund Scheme following arbitrage strategy, with minimum 65% investment in equity & equity related instruments
Equity Savings Equity and equity related instruments (min.65%); debt instruments (min.10%) and derivatives (min. for hedging to be specified in the SID)

Solution Oriented Schemes

Retirement Fund Lock-in for at least 5 years or till retirement age whichever is earlier
Children’s Fund Lock-in for at least 5 years or till the child attains age of majority whichever is earlier

Other Schemes

Index Funds/ ETFs Minimum 95% investment in securities of a particular index
Fund of Funds (Overseas/ Domestic) Minimum 95% investment in the underlying fund(s)

Disclaimer

Benchmark Investments is a Registered Mutual Fund Distributor.

Benchmark Investments is NOT an advisory firm & NOR an Investments advisor.

The contents herein mentioned are solely for informational and educational purpose only

This document is marketing material for a retail audience and does not constitute advice or recommendations. Past performance is not a guide to future performance and may not be repeated. The value of investments and the income from them may go down as well as up and investors may not get back the amount originally invested.

Mutual Fund investments are subject to market risks, read all scheme related documents carefully.

The above calculation and illustration of figures are indicative only and not on actual basis.

We Benchmark Investments are not warrant the accuracy or completeness of the information, text, graphics, links or other items contained in this website.

We may make changes to the contents, or to the information described therein, at any time without any notice.

In case of any variance between what has been stated and what is contained in the relevant Act, Rules, Regulations, Policy Statements, etc, is possible and we do update as per our update made.

We neither endorses in any way nor offers any judgment or warranty and accepts no responsibility or liability for the authenticity, availability of any of the goods or services or for any damage, loss or harm, direct or consequential or any violation of local or international laws that may cause infringement by your visiting on these websites as well as on using websites links which are provided on these website.

Please consult your CA / Tax expert for taxation before investing.

The information provided on this website is to help investors in their decision-making process and shall not be considered as a recommendation or solicitation of an investment or investment strategy.

We do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.

Tax law is subject to continual change, at times on a retroactive basis and may result in incremental taxes, interest or penalties.

There are risks associated with fixed income investments, including credit risk, interest rate risk, and prepayment and extension risk. In general, bond prices rise when interest rates fall and vice versa. This effect is usually more pronounced for longer-term securities.

Stock investments have an element of risk. High-quality stocks may be appropriate for some investments strategies. Ensure that your investment objectives, time horizon and risk tolerance are aligned with stocks before investing, as they can lose value.

Benchmark Investments only acts as a mediator between its clients and the company inviting/accepting deposits, known as Principal Company.

The contents herein above shall not be considered as an invitation or persuasion to trade or invest. We accept no liabilities for any loss or damage of any kind arising out of any actions taken in reliance thereon.

Goal Based Investments

Every individual has financial goals that he needs to reach in the short, medium or long term period. Investing regularly to be able to reach the respective financial goal is called goal-based investing. For example, if you plan to buy a car in next 2-3 yeas, it can be called a short-term goal. Likewise, if you wish to plan for your retirement and children’s higher education, then these can be termed as long term goals.

Importance of Goals Based Investment
  • Discipline Investments
  • Gives a sense of purpose
  • Have clear vision
  • Makes investment easier

Steps In Goals Based Investment Approach

  • 1Identify your goals.
  • 2Prioritize your goals and know when they are due.
  • 3Understand your risk profile or reach out to a financial planner if you are not clear.
  • 4Formulate the right asset allocation matrix based on your risk profile.
  • 5Study and choose the right investment instruments in each asset class. For instance, in equities you will the below options;
  • 6Set monitoring frequency and triggers for re-balancing your portfolio. This is just like regular de-weeding of your garden. Without this, you will lose track of your investments and your portfolio will start to underperform.

Here’s an example of how having a goal-based investing approach ultimately pays off

Mr. Deepak is a disciplined investor practicing goal-based investment strategy for each of his financial goals. He has a fair appetite to take the market risk for his long-term goals. To build a retirement corpus of Rs. 1 crore at the age of 40, he started a monthly SIP of Rs. 15,000 , He wanted to retire at 60

Step 1 - Set a goal

Risk profile: Moderately High

Goal name: Retirement corpus

Goal timeline: 20 years

Suitable Investment option: Equity

Monthly Systematic Investment Plan: 15000

Step 2 - Keep Investing

Goal name: Retirement corpus

Timeline remaining: 20 years

Total investment towards goal 36 Lakhs

Step 3 - Regularly monitored investments – (Stay focused)

In some point of time during sip tenure Mr. Deepak needed urgent money, so he used the surplus from his ‘emergency fund’ and kept the investment in ‘retirement fund’ intact.

In some point of time, may be his existing fund is not performing well so he may change his fund & switch to better performing fund.

Step 4 - Goal achieved

Monthly SIP: Rs. 15,000

Tenure: 20 years

Returns: 12 %

Total investment: Rs. 36,00,000

Investment value: 1,49,87,219

Source: Data taken from sip calculator, monthly sip amount 15000 for 20 Years @12 % cagr basis. . For illustration purpose only. Past performance may or may not sustain, it does not guarantee the future performance.

Achieve your dreams within the stipulated time frame, start Investing Goal-based Investments

Disclaimer

Benchmark Investments is a Registered Mutual Fund Distributor.

Benchmark Investments is NOT an advisory firm & NOR an Investments advisor.

The contents herein mentioned are solely for informational and educational purpose only

This document is marketing material for a retail audience and does not constitute advice or recommendations. Past performance is not a guide to future performance and may not be repeated. The value of investments and the income from them may go down as well as up and investors may not get back the amount originally invested.

Mutual Fund investments are subject to market risks, read all scheme related documents carefully.

The above calculation and illustration of figures are indicative only and not on actual basis.

We Benchmark Investments are not warrant the accuracy or completeness of the information, text, graphics, links or other items contained in this website.

We may make changes to the contents, or to the information described therein, at any time without any notice.

In case of any variance between what has been stated and what is contained in the relevant Act, Rules, Regulations, Policy Statements, etc, is possible and we do update as per our update made.

We neither endorses in any way nor offers any judgment or warranty and accepts no responsibility or liability for the authenticity, availability of any of the goods or services or for any damage, loss or harm, direct or consequential or any violation of local or international laws that may cause infringement by your visiting on these websites as well as on using websites links which are provided on these website.

Please consult your CA / Tax expert for taxation before investing.

The information provided on this website is to help investors in their decision-making process and shall not be considered as a recommendation or solicitation of an investment or investment strategy.

We do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.

Tax law is subject to continual change, at times on a retroactive basis and may result in incremental taxes, interest or penalties.

There are risks associated with fixed income investments, including credit risk, interest rate risk, and prepayment and extension risk. In general, bond prices rise when interest rates fall and vice versa. This effect is usually more pronounced for longer-term securities.

Stock investments have an element of risk. High-quality stocks may be appropriate for some investments strategies. Ensure that your investment objectives, time horizon and risk tolerance are aligned with stocks before investing, as they can lose value. Benchmark Investments only acts as a mediator between its clients and the company inviting/accepting deposits, known as Principal Company.

The contents herein above shall not be considered as an invitation or persuasion to trade or invest. We accept no liabilities for any loss or damage of any kind arising out of any actions taken in reliance thereon.

Market Volatility

What exactly is market volatility?

Market volatility is the range of price change in a given period of time. If price of an asset does not change or fluctuate frequently, that asset is considered as less volatile. Similarly, a highly volatile asset experiences rapid increase and decrease in prices.

Most of the time investors are confused between volatility & risk.

“Volatility is far from synonymous with risk. Risk comes from not knowing what you're doing.” - Warren Buffett

Risk refers to the possibility of suffering capital loss. It is a subjective phenomenon which depicts an investor’s willingness and ability to withstand any loss. Risk as a perception could also arise from low awareness or wrong understanding.

Volatility, on the other hand, is objective in nature and does not always mean capital loss. It denotes the asset’s tendency to move up and down. If embraced & optimised rightly, volatility can be great for long-term investors.

To summarise – Volatility is relative to the price movement of any asset and is universal whereas Risk is based on individual perception and is a subjective term.

Volatility & Investin

The higher the volatility, better the probability of generating higher returns! As we can see despite carrying the highest volatility, equity has outperformed all other assets over a long period of tim

If you stay invested for long term with equity, the probability of you losing money goes down dramatically.

How can you ride volatility

1. Look at the bigger picture/ Focus on long-term investments

Although inevitable, volatility is a temporary hiccup that has insignificant impact on your long-term wealth creation journey. In order to achieve goals easily, it is important to focus on long-term goals and avoid paying attention to short-term volatility

2. Stay patient throughout the investment jou

When market is volatile, exiting the market may seem like a sound strategy. But as Nick Murray said, ‘Time in the market is your greatest natural advantage’; it is wiser to stay patient and wait for the correction. In fact, reacting to volatility rather than riding it can lead to lasting consequences

3.Opt for disciplined investment opti

Investing fixed small amount on a periodic basis via Systematic Investment Plan not only spreads out your investment over different market cycles but also helps in mitigating short term volatility and benefit from it.

4. Stick to your asset allocation strategy

While it is prudent to review the strategy once every year, having a biased allocation towards a single asset may not be the right approach. You should build an asset allocation strategy that aligns with your goals and risk appetite and sustain that strategy

The right way to deal with volatility is to ride through it and not react to it.

Disclaimer

Benchmark Investments is a Registered Mutual Fund Distributor.

Benchmark Investments is NOT an advisory firm & NOR an Investments advisor.

The contents herein mentioned are solely for informational and educational purpose only

This document is marketing material for a retail audience and does not constitute advice or recommendations. Past performance is not a guide to future performance and may not be repeated. The value of investments and the income from them may go down as well as up and investors may not get back the amount originally invested.

Mutual Fund investments are subject to market risks, read all scheme related documents carefully.

The above calculation and illustration of figures are indicative only and not on actual basis.

We Benchmark Investments are not warrant the accuracy or completeness of the information, text, graphics, links or other items contained in this website.

We may make changes to the contents, or to the information described therein, at any time without any notice.

In case of any variance between what has been stated and what is contained in the relevant Act, Rules, Regulations, Policy Statements, etc, is possible and we do update as per our update made.

We neither endorses in any way nor offers any judgment or warranty and accepts no responsibility or liability for the authenticity, availability of any of the goods or services or for any damage, loss or harm, direct or consequential or any violation of local or international laws that may cause infringement by your visiting on these websites as well as on using websites links which are provided on these website.

Please consult your CA / Tax expert for taxation before investing.

The information provided on this website is to help investors in their decision-making process and shall not be considered as a recommendation or solicitation of an investment or investment strategy.

We do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.

Tax law is subject to continual change, at times on a retroactive basis and may result in incremental taxes, interest or penalties.

There are risks associated with fixed income investments, including credit risk, interest rate risk, and prepayment and extension risk. In general, bond prices rise when interest rates fall and vice versa. This effect is usually more pronounced for longer-term securities.

Stock investments have an element of risk. High-quality stocks may be appropriate for some investments strategies. Ensure that your investment objectives, time horizon and risk tolerance are aligned with stocks before investing, as they can lose value.

Benchmark Investments only acts as a mediator between its clients and the company inviting/accepting deposits, known as Principal Company.

The contents herein above shall not be considered as an invitation or persuasion to trade or invest. We accept no liabilities for any loss or damage of any kind arising out of any actions taken in reliance thereon.

Responsible Investing with ESG Funds

Humans are made to evolve; change is part and parcel of our lives. But in this run towards modernisation, we have caused a more significant change—a change in the entire global climate

Responsible investing is a type of investment strategy where investor selects a stock on basis of company’s moral and social framework. In other words, responsible investors want to grow with the companies which seek sustainable growth and align their business interest with the overall environmental and social interests.

One way to invest responsibly in sustainable companies is through ESG mutual funds. ESG (Environmental, Social and Governance) investing allows you to invest in the companies that are acting responsibly and are actively reducing their negative impact on the world.

Under ESG mutual fund investing, the fund manager uses the traditional stock selection process where companies are analysed based on various financial parameters such as financial records, accounts, past performance, factors that are in line with its scheme objective, investment philosophy and overall stock selection strategy. In addition, he validates the company on certain non-financial parameters such as the company’s environment-friendly initiatives, social and ethical practices adopted and their corporate governance framework.

Since ESG compliant companies are ethically sound they have potential to perform better than companies that are not following ESG practices.

An ESG mutual fund evaluates and shortlists companies primarily based on their ESG profile.

E – Environment friendly
  • Adoption of green policies and environment-friendly ecosystem infrastructure
  • Advanced resource management policies to control global warming & worsening climate conditions
  • Measures to reduce emissions & carbon footprint
S - Socially responsible
  • Employee-friendly corporate culture
  • Focus on human resources, relationships, fair and impartial work culture
  • Potential to grow steadily over the years
  • Strong track record
G - Corporate Governance
  • Robust ethical practices
  • Honest management to ensure sustainable growth of the company
  • Adherence to compliance policies
  • Overall strict governance to run a company
Why ESG investing is the right approach?
  • ESG compliant companies have the potential to deliver positive returns in the long run
  • Such an investment can leave a positive impact on society and the environment
  • It is an opportunity to contribute to nature-friendly future and ethical advancement

Take a step towards sustainable investing & become a responsible investor today with ESG fund

Disclaimer

Benchmark Investments is a Registered Mutual Fund Distributor.

Benchmark Investments is NOT an advisory firm & NOR an Investments advisor.

The contents herein mentioned are solely for informational and educational purpose only

This document is marketing material for a retail audience and does not constitute advice or recommendations. Past performance is not a guide to future performance and may not be repeated. ' The value of investments and the income from them may go down as well as up and investors may not get back the amount originally invested.

Mutual Fund investments are subject to market risks, read all scheme related documents carefully.

The above calculation and illustration of figures are indicative only and not on actual basis.

We Benchmark Investments are not warrant the accuracy or completeness of the information, text, graphics, links or other items contained in this website.

We may make changes to the contents, or to the information described therein, at any time without any notice.

In case of any variance between what has been stated and what is contained in the relevant Act, Rules, Regulations, Policy Statements, etc, is possible and we do update as per our update made.

We neither endorses in any way nor offers any judgment or warranty and accepts no responsibility or liability for the authenticity, availability of any of the goods or services or for any damage, loss or harm, direct or consequential or any violation of local or international laws that may cause infringement by your visiting on these websites as well as on using websites links which are provided on these website.

Please consult your CA / Tax expert for taxation before investing.

The information provided on this website is to help investors in their decision-making process and shall not be considered as a recommendation or solicitation of an investment or investment strategy.

We do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.

Tax law is subject to continual change, at times on a retroactive basis and may result in incremental taxes, interest or penalties.

There are risks associated with fixed income investments, including credit risk, interest rate risk, and prepayment and extension risk. In general, bond prices rise when interest rates fall and vice versa. This effect is usually more pronounced for longer-term securities.

Stock investments have an element of risk. High-quality stocks may be appropriate for some investments strategies. Ensure that your investment objectives, time horizon and risk tolerance are aligned with stocks before investing, as they can lose value.

Benchmark Investments only acts as a mediator between its clients and the company inviting/accepting deposits, known as Principal Company.

The contents herein above shall not be considered as an invitation or persuasion to trade or invest. We accept no liabilities for any loss or damage of any kind arising out of any actions taken in reliance thereon.

Systematic Investment Plan

Systematic Investment Plan (SIP) is a popular tool to invest a fixed amount periodically in any mutual fund schemes. SIP enables to invest in small bytes to meet individual’s life goals over a period of time.

Benefits of SIP

Systematic Investment Plan has gained a lot of popularity amongst investors over the years due to its various benefits and features:

  • Flexible in choosing amount & frequency of investments
  • Offers ‘Rupee cost averaging’ benefit
  • Helps become disciplined investor
  • Eliminates need of timing the market
  • Navigates through market volatility
  • Benefit from power of compounding
So what if you had continued with your SIP throughout the global financial crisis (January 2008 to December 2012)

Consider if you would have started SIP of Rs. 10,000 in S&P BSE Sensex since December 2004 and now are in midst of the crisis period

You have the following Options
  • Stop SIP and withdraw full amount – SIP gains will be of Rs. 2.80 lakhs as at January 2008 end. (total investment amount – Rs. 3.80 lakhs)
  • Stop SIP but remain invested – SIP gains will be of Rs. 15.63 lakhs as at May 2021 end (total investment amount – Rs. 3.80 lakhs)
  • Continue the Monthly SIP through GFC - SIP gains would be of Rs. 37.27 lakhs as at May 2021 end (total investment amount – Rs. 19.80 lakhs)

Source: Data taken from sip presentation Invesco India .This calculation is for illustration purpose only. Past performance may or may not sustain, it does not guarantee the future performance.

So, if you aim to generate wealth, continuing your SIP is more beneficial

Disclaimer

Benchmark Investments is a Registered Mutual Fund Distributor.

Benchmark Investments is NOT an advisory firm & NOR an Investments advisor.

The contents herein mentioned are solely for informational and educational purpose only

This document is marketing material for a retail audience and does not constitute advice or recommendations. Past performance is not a guide to future performance and may not be repeated. The value of investments and the income from them may go down as well as up and investors may not get back the amount originally invested.

Mutual Fund investments are subject to market risks, read all scheme related documents carefully.

The above calculation and illustration of figures are indicative only and not on actual basis.

We Benchmark Investments are not warrant the accuracy or completeness of the information, text, graphics, links or other items contained in this website.

We may make changes to the contents, or to the information described therein, at any time without any notice.

In case of any variance between what has been stated and what is contained in the relevant Act, Rules, Regulations, Policy

Statements, etc, is possible and we do update as per our update made.

We neither endorses in any way nor offers any judgment or warranty and accepts no responsibility or liability for the authenticity, availability of any of the goods or services or for any damage, loss or harm, direct or consequential or any violation of local or international laws that may cause infringement by your visiting on these websites as well as on using websites links which are provided on these website.

Please consult your CA / Tax expert for taxation before investing.

The information provided on this website is to help investors in their decision-making process and shall not be considered as a recommendation or solicitation of an investment or investment strategy.

We do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.

Tax law is subject to continual change, at times on a retroactive basis and may result in incremental taxes, interest or penalties.

There are risks associated with fixed income investments, including credit risk, interest rate risk, and prepayment and extension risk. In general, bond prices rise when interest rates fall and vice versa. This effect is usually more pronounced for longer-term securities.

Stock investments have an element of risk. High-quality stocks may be appropriate for some investments strategies. Ensure that your investment objectives, time horizon and risk tolerance are aligned with stocks before investing, as they can lose value.

Benchmark Investments only acts as a mediator between its clients and the company inviting/accepting deposits, known as Principal Company.

The contents herein above shall not be considered as an invitation or persuasion to trade or invest. We accept no liabilities for any loss or damage of any kind arising out of any actions taken in reliance thereon.

Understanding your portfolio risk exposure

Every type of market investment carries some kind of risk. Changes large and small – whether in the specifics of your portfolio or the overall state of the economy – drive market fluctuations can impact your investments.

Here are four investment risks that can affect your mutual fund portfolio.

1.Don’t mix up income with wealth

The risk that you will lose some or all of your principal. As markets fluctuate, there is always a possibility that the mutual funds you hold might be caught in a decline.

2. Inflation risk

The risk of losing purchasing power. If your mutual funds gain 5% in a year and the cost of living goes up by 2%, you are left with a real return of only 3%

3. Interest rate risk

The risk that rising interest rates will cause your mutual funds to decline in value. When interest rates rise, bond prices decline and bond mutual funds may also decline as a result.

4. Credit risk

The risk that the issuer of a bond or other security won't have enough money to make its interest payments or to redeem the bonds for face value when they are due. Securities with a higher risk of default tend to pay higher returns.

Fortunately, not every type of mutual fund is susceptible to every kind of risk. Equity funds, for example, are subject to market risk but help protect against inflation risk.

Similarly, fixed-income funds are susceptible to interest-rate risk but offer some protection against market risk. By diversifying, you can reduce the impact of risk on your portfolio as a whole.

Disclaimer

Benchmark Investments is a Registered Mutual Fund Distributor.

Benchmark Investments is NOT an advisory firm & NOR an Investments advisor.

The contents herein mentioned are solely for informational and educational purpose only

This document is marketing material for a retail audience and does not constitute advice or recommendations. Past performance is not a guide to future performance and may not be repeated. The value of investments and the income from them may go down as well as up and investors may not get back the amount originally invested.

Mutual Fund investments are subject to market risks, read all scheme related documents carefully.

The above calculation and illustration of figures are indicative only and not on actual basis.

We Benchmark Investments are not warrant the accuracy or completeness of the information, text, graphics, links or other items contained in this website.

We may make changes to the contents, or to the information described therein, at any time without any notice.

In case of any variance between what has been stated and what is contained in the relevant Act, Rules, Regulations, Policy Statements, etc, is possible and we do update as per our update made.

We neither endorses in any way nor offers any judgment or warranty and accepts no responsibility or liability for the authenticity, availability of any of the goods or services or for any damage, loss or harm, direct or consequential or any violation of local or international laws that may cause infringement by your visiting on these websites as well as on using websites links which are provided on these website.

Please consult your CA / Tax expert for taxation before investing.

The information provided on this website is to help investors in their decision-making process and shall not be considered as a recommendation or solicitation of an investment or investment strategy.

We do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.

Tax law is subject to continual change, at times on a retroactive basis and may result in incremental taxes, interest or penalties.

There are risks associated with fixed income investments, including credit risk, interest rate risk, and prepayment and extension risk. In general, bond prices rise when interest rates fall and vice versa. This effect is usually more pronounced for longer-term securities.

Stock investments have an element of risk. High-quality stocks may be appropriate for some investments strategies. Ensure that your investment objectives, time horizon and risk tolerance are aligned with stocks before investing, as they can lose value. Benchmark Investments only acts as a mediator between its clients and the company inviting/accepting deposits, known as Principal Company.

The contents herein above shall not be considered as an invitation or persuasion to trade or invest. We accept no liabilities for any loss or damage of any kind arising out of any actions taken in reliance thereon.

What is mutual fund investments?

Mutual fund is a mechanism for pooling the resources by issuing units to the investors and investing funds in securities in accordance with objectives as disclosed in offer document.

Investments in securities are spread across a wide cross-section of industries and sectors and thus the risk is reduced. Diversification reduces the risk because all stocks may not move in the same direction in the same proportion at the same time. Mutual fund issues units to the investors in accordance with quantum of money invested by them. Investors of mutual funds are known as unitholders.

The profits or losses are shared by the investors in proportion to their investments. The mutual funds normally come out with a number of schemes with different investment objectives which are launched from time to time. A mutual fund is required to be registered with Securities and Exchange Board of India (SEBI) which regulates securities markets before it can collect funds from the public.

What are the benefits of mutual fund investments?

Following are some of the benefits and advantages of investing in mutual funds:

1. Professional management

Mutual funds are professionally managed by experts known as fund managers. They track the market and distribute the investments across asset classes to meet the fund’s objective. With the help of strong research teams and their expertise, these fund managers identify the winning securities, buy them at the right time, and most importantly, know when to exit.

2. Reasonable returns

Mutual funds offer the right avenue for investing in various market-linked instruments that have potential to offer reasonable returns

3. Disciplined investing

It’s a good habit to invest that could help for a good future. You can invest in mutual funds through a Systematic Investment Plan (SIP). SIPs ensure that you are committed to investing, which instils financial discipline among investors. This discipline is required to make a productive action plan that could help to develop a good future.

4. Diversification

You might be well-versed with the adage – ‘Don’t pull all your eggs in one basket’. It holds true for mutual fund investments as well and is the premise of diversification. Diversification means spreading your investments across various asset classes to mitigate loss. Consult an expert to understand how to balance your portfolio by selecting the ideal securities to meet your investment goal(s).

5. Tax-saving advantages

Apart from capital appreciation, mutual funds have the potential to offer tax benefits to investors as well. Under Section 80C of the Income Tax Act, 1961, if you invest in equity-linked savings schemes (ELSS).

6. Convenience

Investing in mutual funds today is a piece of cake. The whole process can be done online through various entities such as CAMS (Computer Age Management Services), AMCs (Asset Management Companies), or designated ISCs (Investor Services Centres). You can even track the performance of your portfolio with just a few clicks.

7. Well-regulated

In India, mutual fund investments fall under the purview of the Securities and Exchange Board of India (SEBI). All Indian capital markets, including mutual funds, are required to follow transparent processes, as laid down by SEBI, which protect the interest of the investors. Further, SEBI guidelines make it mandatory for all mutual funds to disclose scheme details each month.

In a nutshell, a mutual fund returns calculator calculates the future worth of your present investment upon maturity after considering various key variables such as the type of investment (SIP or Lumpsum), tenure of investment, and the expected rate of return.

Disclaimer

Benchmark Investments is a Registered Mutual Fund Distributor.

Benchmark Investments is NOT an advisory firm & NOR an Investments advisor.

The contents herein mentioned are solely for informational and educational purpose only

This document is marketing material for a retail audience and does not constitute advice or recommendations. Past performance is not a guide to future performance and may not be repeated. The value of investments and the income from them may go down as well as up and investors may not get back the amount originally invested.

Mutual Fund investments are subject to market risks, read all scheme related documents carefully.

The above calculation and illustration of figures are indicative only and not on actual basis.

We Benchmark Investments are not warrant the accuracy or completeness of the information, text, graphics, links or other items contained in this website.

We may make changes to the contents, or to the information described therein, at any time without any notice.

In case of any variance between what has been stated and what is contained in the relevant Act, Rules, Regulations, Policy Statements, etc, is possible and we do update as per our update made.

We neither endorses in any way nor offers any judgment or warranty and accepts no responsibility or liability for the authenticity, availability of any of the goods or services or for any damage, loss or harm, direct or consequential or any violation of local or international laws that may cause infringement by your visiting on these websites as well as on using websites links which are provided on these website.

Please consult your CA / Tax expert for taxation before investing.

The information provided on this website is to help investors in their decision-making process and shall not be considered as a recommendation or solicitation of an investment or investment strategy.

We do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.

Tax law is subject to continual change, at times on a retroactive basis and may result in incremental taxes, interest or penalties.

There are risks associated with fixed income investments, including credit risk, interest rate risk, and prepayment and extension risk. In general, bond prices rise when interest rates fall and vice versa. This effect is usually more pronounced for longer-term securities.

Stock investments have an element of risk. High-quality stocks may be appropriate for some investments strategies. Ensure that your investment objectives, time horizon and risk tolerance are aligned with stocks before investing, as they can lose value. Benchmark Investments only acts as a mediator between its clients and the company inviting/accepting deposits, known as Principal Company.

The contents herein above shall not be considered as an invitation or persuasion to trade or invest. We accept no liabilities for any loss or damage of any kind arising out of any actions taken in reliance thereon.

What is Riskometer in Mutual Fund ?

Riskometer is an upgrade from the colored product labels 'coloured product labels' introduced in March 2013 that required mutual fund companies to color code the funds based on the risk they carried. This method used color boxes depending on the level of risk of the schemes.

Like all other investment vehicles, mutual funds include some degree of risk. Prior to investing, it is critical to weigh these risks. A mutual fund riskometer can assist you with it. Typically, investment decisions are made based on an investor’s risk tolerance levels. In their early or mid-twenties, a person may, potentially, take a more aggressive approach to investing in equities, whereas a retiree may prefer risk-averse fixed-income investments.

The riskometer consists of 5 levels: low, moderately low, moderate, moderately high, and high. explained below in details – Below is a tabled chart of how mutual fund schemes are categorized on the five-risk level and the requirement for schemes to fall under the new risk category.

Risk level SUITABLE FOR PRODUCTS UNDER THIS CATEGORY INVESTOR PERSONA
Low Conservative Gilt funds / Income fund with maturity less than 90 days Risk-averse and people who give priority to their investment
Moderately Low Moderately Conservative 91 to 3 years short term bonds Normal risk-takers who also prioritize the safety of investment
Moderate Moderate MIPs, / Hybrid debt-oriented funds Long-term investors willing to take a certain degree of risk in a change of lucrative returns
Moderately Moderately Index Funds / Gold ETFs / Long term investors ready to
High Aggressive Balanced equity funds up to 20% in the portfolio / Generally large cap funds expose to some degree of risk
High Aggressive Micro-cap funds / International funds / Sectoral funds High net worth individuals who want long-term investment and do not mind the risk of incurring a loss.
Very High Overly aggressive Not yet specified -
Debt Mutual Funds Riskometer

In Debt securities, the risk is categorized based on the following 3 parameters

  • Credit Risk - Based on the rating of each Security
  • Interest Rate Risk - Based on the Macaulay Duration of the portfolio
  • Liquidity Risk - Based on listing status, Credit Rating and Structure of Debt instrument
Equity Mutual Funds Riskometer

In the equity Mutual Funds is assessed at three-level.

  • Market Capitalization
  • Volatility
  • Impact Cost
Where can you find the riskometer?

SEBI requires mutual fund houses to disclose the risk factor of all mutual fund schemes as below:

  • On the front page of the initial offer form, Scheme Information Documents (SID) and Key Information Memorandum (KIM).
  • Common application form.
  • The product label risk level has to be prominently placed near the caption of the scheme where it should be clearly visible.
  • On all of the scheme advertisements.

Fund houses are mandated to disclose the riskometer, along with the portfolio disclosure, for all their schemes on their respective websites and on AMFI website within 10 days from the close of each month.

The market regulator always try to bring easy & useful & information for mutual fund investors so as to make the picture of riskometer which is more investor-friendly and to bring transparency in the risk associated with mutual fund schemes.

Specially new Investor should consider riskometer in order to take right move in mutual fund investments , it’s new & easy method for calculating the risk .

Disclaimer

Benchmark Investments is a Registered Mutual Fund Distributor.

Benchmark Investments is NOT an advisory firm & NOR an Investments advisor.

The contents herein mentioned are solely for informational and educational purpose only

This document is marketing material for a retail audience and does not constitute advice or recommendations. Past performance is not a guide to future performance and may not be repeated. The value of investments and the income from them may go down as well as up and investors may not get back the amount originally invested.

Mutual Fund investments are subject to market risks, read all scheme related documents carefully.

The above calculation and illustration of figures are indicative only and not on actual basis.

We Benchmark Investments are not warrant the accuracy or completeness of the information, text, graphics, links or other items contained in this website.

We may make changes to the contents, or to the information described therein, at any time without any notice.

In case of any variance between what has been stated and what is contained in the relevant Act, Rules, Regulations, Policy Statements, etc, is possible and we do update as per our update made.

We neither endorses in any way nor offers any judgment or warranty and accepts no responsibility or liability for the authenticity, availability of any of the goods or services or for any damage, loss or harm, direct or consequential or any violation of local or international laws that may cause infringement by your visiting on these websites as well as on using websites links which are provided on these website.

Please consult your CA / Tax expert for taxation before investing.

The information provided on this website is to help investors in their decision-making process and shall not be considered as a recommendation or solicitation of an investment or investment strategy.

We do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.

Tax law is subject to continual change, at times on a retroactive basis and may result in incremental taxes, interest or penalties.

There are risks associated with fixed income investments, including credit risk, interest rate risk, and prepayment and extension risk. In general, bond prices rise when interest rates fall and vice versa. This effect is usually more pronounced for longer-term securities.

Stock investments have an element of risk. High-quality stocks may be appropriate for some investments strategies. Ensure that your investment objectives, time horizon and risk tolerance are aligned with stocks before investing, as they can lose value. Benchmark Investments only acts as a mediator between its clients and the company inviting/accepting deposits, known as Principal Company.

The contents herein above shall not be considered as an invitation or persuasion to trade or invest. We accept no liabilities for any loss or damage of any kind arising out of any actions taken in reliance thereon.

What should an investor look into an offer document?

An abridged offer document, which contains very useful information, is required to be given to the prospective investor by the mutual fund. The application form for subscription to a scheme is an integral part of the offer document. SEBI has prescribed minimum disclosures in the offer document. An investor, before investing in a scheme, should carefully read the offer document. Due care must be given to portions relating to main features of the scheme, risk factors, initial issue expenses and recurring expenses to be charged to the scheme, entry or exit loads, sponsor's track record, educational qualification and work experience of key personnel including fund managers, performance of other schemes launched by the mutual fund in the past, pending litigations and penalties imposed, etc.

How to read the mutual fund offer documents?

Since the SID contains important details of the scheme, it is imperative to go through it thoroughly. While doing so, ensure that you read the below-mentioned points in the SID:

  • Investment objective- This section explains the intent behind the launch of a scheme and how it will be achieved. The investment objective clarifies the doubt investors may have concerning the names of the schemes. For instance, 'Capital Protection Oriented Funds' may not guarantee protection of capital and hence, the investment objective clears such ambiguities.
  • Asset Allocation- This section indicates how the scheme will allot its assets to the relevant asset classes (such as debt, equity, and gold) under usual market conditions. The pattern of asset allocation indicates the range of the maximum and minimum exposure to the various asset classes. Investors can judge if a scheme is debt-oriented, equity-oriented, commodity-oriented, etc., from the asset allocation and give them an idea whether the scheme fits their investment requirements or not.
  • Investment strategy- This section explains the approach or style the fund house will follow while choosing the securities to invest in. This is vital because the investment strategy is a reflection of the systems and processes the fund house follows. Fund houses with a clear investment strategy impart a sense of confidence in the minds of investors.
  • Benchmark of the scheme- A benchmark is chosen for a particular mutual fund scheme so as to structure the scheme according to the constituents of the benchmark.
  • Risk factors- Mutual funds carry certain risks with them which can hamper the valuation of the investments. Investors should be aware of the various types of risks that the scheme carries so that they can evaluate if they can tolerate the risks for the achievement of capital appreciation.
  • Fund manager- The expertise of the fund manager is crucial for the scheme's overall performance in the long run. A few of the qualities that you should look for in the fund manager are the experience, qualification, track record, etc. This information can be found highlighted in the SID.
  • Past performance- Though the past performance of a fund cannot guarantee its future performance, it can be used to guide your investment decision. The SID of an existing mutual fund scheme will bear the scheme's past performance over different time frames. This information can be used to assess if the track record clocked by a particular fund fulfils the investment objective of the fund.
  • Fees and expenses- The expenses charged by the AMC are directly proportional to the net returns delivered by a particular scheme. In the process of fetching optimal returns for the investor, the AMC will levy charges in the form of loads, fund management fees, switching charges, etc. These charges are deducted from the NAV of the scheme and hence, as an investor you should look for a scheme that has a lower expense ratio which would translate to you achieving higher capital gains.
  • Investment options- Most mutual fund schemes offer 2 options of investment - growth and dividend. The dividend option further offers a payout and reinvestment option. Also, there are various modes of investing such as the SIP (Systematic Investment Plan), lump-sum investment, and STP (Systematic Transfer Plan). Remember to read through the SID to look for these options so that you can make an informed decision based on your investment needs.

Disclaimer

Benchmark Investments is a Registered Mutual Fund Distributor.

Benchmark Investments is NOT an advisory firm & NOR an Investments advisor.

The contents herein mentioned are solely for informational and educational purpose only

This document is marketing material for a retail audience and does not constitute advice or recommendations. Past performance is not a guide to future performance and may not be repeated. The value of investments and the income from them may go down as well as up and investors may not get back the amount originally invested.

Mutual Fund investments are subject to market risks, read all scheme related documents carefully.

The above calculation and illustration of figures are indicative only and not on actual basis.

We Benchmark Investments are not warrant the accuracy or completeness of the information, text, graphics, links or other items contained in this website.

We may make changes to the contents, or to the information described therein, at any time without any notice.

In case of any variance between what has been stated and what is contained in the relevant Act, Rules, Regulations, Policy Statements, etc, is possible and we do update as per our update made.

We neither endorses in any way nor offers any judgment or warranty and accepts no responsibility or liability for the authenticity, availability of any of the goods or services or for any damage, loss or harm, direct or consequential or any violation of local or international laws that may cause infringement by your visiting on these websites as well as on using websites links which are provided on these website.

Please consult your CA / Tax expert for taxation before investing.

The information provided on this website is to help investors in their decision-making process and shall not be considered as a recommendation or solicitation of an investment or investment strategy.

We do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.

Tax law is subject to continual change, at times on a retroactive basis and may result in incremental taxes, interest or penalties.

There are risks associated with fixed income investments, including credit risk, interest rate risk, and prepayment and extension risk. In general, bond prices rise when interest rates fall and vice versa. This effect is usually more pronounced for longer-term securities.

Stock investments have an element of risk. High-quality stocks may be appropriate for some investments strategies. Ensure that your investment objectives, time horizon and risk tolerance are aligned with stocks before investing, as they can lose value.

Benchmark Investments only acts as a mediator between its clients and the company inviting/accepting deposits, known as Principal Company.

The contents herein above shall not be considered as an invitation or persuasion to trade or invest. We accept no liabilities for any loss or damage of any kind arising out of any actions taken in reliance thereon.

BENCHMARK INVESTMENTS

Benchmark Investments, 6 Sector II Shanti Niketan, Govindpura Bhopal, Bhopal-462023, India. +91-755-4938282/+91-9826310337 hello@benchmarkinvestments.in.
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Mutual fund and other investments are always subject to market risks. Please read all, Scheme Information Documents (SID), Key Information Memorandum (KIM), Addendums(if any) issued there to from time to time and any other related documents or information carefully before investing. Past performance is not indicative or assurance of future performance or returns. Please consider your specific investment requirements before choosing a fund.

For any grievances, investors can contact at: hello@benchmarkinvestments.in,  Tel: +91-755-4938282 / +91-9826310337.
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