Systematic Investment in Mutual Funds

How to start mutual fund SIP online (without any agent)?
Many of us think on buying a mutual fund and their assumption is that if we buy it online, there will be no commission. There are many sites which says they are channel for online mutual fund purchase. All this is just a marketing strategy to attract small investors like us.
So which is the best option to start a Mutual fund SIP?
There are different categories of mutual funds like LargeCap, Small & Mid Cap, Diversified, Sectorial, ELSS.
If tax saving under Income tax section 80C is not the purpose of your investment, then that is good point to start with.
First and most important suggestion is that Don't invest in too many funds. 5-8 mutual funds of different categories are enough.

Do some research and finalize the mutual fund in which you are planning to start SIP.
There are many ways to finalize good mutual fund.

Assume that you have Rs.10,000 to invest in Mutual fund through SIP every month.
What you should do next?
1. Do not invest in single fund.
2. Do not invest in funds of only one category.
3. Best ways to invest is divide your investment amount as 40% in Largecap, 30% in Mid & smallcap, 20% in diversified, 10 % in Sectoreal. (You can decide on percentage)
4. Sectorial funds are more risky so keep track of that fund and you can switch/move funds between different sectors but don't do it more than once per two years.

Where to Invest
Division of your 10000/- will be
1. 4000/- in LargeCap - Choose 1 or 2 good performing Funds
2. 3000/- in Mid & SmallCap - Choose 1 or 2 good funds
3. 2000/- in Diversified - Choose one good fund
4. 1000/- in Sector fund - Choose one good fund

So you will invest in around 4 to 6 mutual funds only.
If you feel that your fund is not performing good enough, you can change fund but it should not be done before analyzing your SIP returns for at least 15 months.


How to Invest
Go to mutual fund website and there is option for online investment option.
Choose Direct plan of mutual fund
There is no agent commission in Direct plan so you will find difference in NAV of Direct and regular plan of same mutual fund.


Difference between Direct and Regular plan of Mutual Fund

Direct plan : You subscribe directly without agent. Expense ratio is less than regular plan.

Regular : Subscribed through agent.

Update on redemption of Tax saving Mutual funds of year 2010

Earlier I had given details of investment made in tax savings mutual funds in year 2010 and recently in early 2013.
Three year locking period was completed In January 2013 for all the investments done in 2010.
My observation during these three years:
1. Fixed deposit or PPF is better option for tax saving.
2. ELSS mutual fund returns are not good. Instead it is better to invest in PPF for tax saving purpose.
3. Investing in Good stocks if you want to get benefit of appreciation from stock market as Good stocks will give returns better than ELSS Mutual funds as there is additional cost involved in mutual funds like fund management, employee cost, commissions etc.

Details of Redemption:

Fund Name	Purchase Date	Purchase Amount	Sell Date	Sell Amount
Kotak Taxsaver - Dividend (KM100)	21/12/2009	2000	07/01/2013	2563.15
Reliance Tax Saver Fund - Dividend (RC182)	07/01/2010	5000	18/02/2013	4802.12
SBI Magnum Tax Gain Scheme 93 - Dividend (SB023)	07/01/2010	5000	18/02/2013	4015.40
Birla SunLife Tax Relief 96 - Growth (BM382)	07/01/2010	5000	10/01/2013	5440.54
HSBC Tax Saver Equity Fund - Dividend (HS107)	07/01/2010	3000	18/02/2013	3361.75
Religare Tax Plan - Dividend (LT011)	08/01/2010	2000	29/05/2013	2077.75
HSBC Tax Saver Equity Fund - Dividend (HS107)	27/01/2010	2000	18/02/2013	2241.16

Dividend is also credited for few dividend schemes and Details of dividend is as below:

• Reliance Tax Saver Fund - Dividend
• 11-Feb-2011 : 520
• 29-Mar-2012 : 520
• 25-Jan-2013 : 243
• Total Dividend: 1283
• Religare Tax Plan - Dividend
• 20-Jan-2011: 312
• 30-Mar-2011: 117
• Total Dividend: 429
• HSBC Tax Saver Equity Fund - Dividend
• 19-Feb-2010: 373
• Total Dividend: 373
• SBI Magnum Tax Gain Scheme 93 - Dividend
• 22-Mar-2012: 394
• 18-Mar-2011 :450
• 05-Mar-2010 : 450
• Total Dividend: 1294

Investment in Tax saving Mutual Funds

This week i have invested small amount in tax saving Mutual Fund for tax saving purpose.
Three years back i have invested in Tax saving scheme and locking period of all those investment is complete. I have invested in too many schemes that time with small amount in all investments.
Details of investment in year 2010:

Fund Name	Date	Units Allocated	Price	Amount
Kotak Taxsaver - Dividend (KM100)	21/12/2009	204.29	9.79	2000
Reliance Tax Saver Fund - Dividend (RC182)	07/01/2010	346.789	14.418	5000
SBI Magnum Tax Gain Scheme 93 - Dividend (SB023)	07/01/2010	112.587	44.4100	5000
Birla SunLife Tax Relief 96 - Growth (BM382)	07/01/2010	454.545	11	5000
HSBC Tax Saver Equity Fund - Dividend (HS107)	07/01/2010	217.055	13.8214	3000
Religare Tax Plan - Dividend (LT011)	08/01/2010	156.128	12.81	2000
HSBC Tax Saver Equity Fund - Dividend (HS107)	27/01/2010	156.509	12.7788	2000

Reliance tax saver fund is the best performing fund among the funds which i invested. So this time also I choose it for investing. Instead of investing in too many funds, i decided to invest only in 2 funds.
After doing some study, I decided to invest in Axis Tax saver as second option.

I have invested total Rs. 11000 this year.
Details are as below:

Fund Name	Date	Units Allocated	Price	Amount
Axis Long Term Equity Fund - Growth (AX012)	11/01/2013	266.5120	15.0087	4000
Reliance Tax Saver Fund - Dividend (RC182)	11/01/2013	443.1840	15.7948	7000