[sushantr5]

Originally Posted by argchoff

MFU online is good, you can do direct fund as well as regular fund investments from a single platform.

As for foreign funds please note that they will be taxed as per slab i.e. debt funds in India.

However it is a great idea to have some exposure in foreign funds. I would suggest you to look up Mirae asset FANG ETF/FOF and motilal Oswal Nasdaq 100 FOF, S&P 500.

The problem with Indian Mutual Funds investing on foreign securities is the Government Cap which gets exceeded immediately and no fresh investment can be made. I am tax resident of Germany so it will be easy for me to invest from here for long term. But when I am redeeming I have to always redeem in the country from where I have invested.

On Reddit I read that I can use Trade Republic for investment initially, when I am moving to India, transfer everything to IBKR (I heard first time). Then whole scenario of redemption is not clear. I guess I have to redeem to German Bank account which I need to keep active always.

[vaibhav_a_a]

Fresh investment all overseas funds whether lumpsum or fresh SIP or even existing SIP have been stopped till further notice due to RBI mandated limit being reached for individual fund houses as well as the industry on the whole. Of course there is pushback from mutual fund houses but no change in RBI stance as of now.

https://www.cnbctv18.com/personal-fi...s-19531359.htm

[vijaykr]

Originally Posted by sushantr5

Investing in S&P 500 or Foreign Indexes for Long-Term Goals
....

I have come across private platforms like eToro, Scalable Capital, Trade Republic, etc., but I am unsure about their reliability for long-term goals. Are there any platforms that you would recommend for someone in my position?

If you're open to investing directly in the S&P 500 and other indexes in US market, you can consider using Vested which allows investments from NRIs as well.

While exchange rates and withdrawal fees have to be considered, since you're looking at long term this may meet your requirements. Once you're are back in India in time you can continue these investments or even add-on with INR transfers if you'd like to increase exposure.

I use Vested currently more as a diversification option from the Indian market.

[SmartCat]

Originally Posted by sushantr5

On Reddit I read that I can use Trade Republic for investment initially, when I am moving to India, transfer everything to IBKR (I heard first time). Then whole scenario of redemption is not clear. I guess I have to redeem to German Bank account which I need to keep active always.

Interactive Brokers (IKBR) is one the largest and most profitable international brokers. https://en.wikipedia.org/wiki/Interactive_Brokers

So perhaps you can invest in Interactive Brokers EU platform:
https://www.interactivebrokers.eu/

and then transfer everything to India platform?
https://www.interactivebrokers.co.in/

Email or call them up and ask.

[vaibhav_a_a]

I was trying to do a compare myself on whether vested or interactive will work out better for small asset base and long holding (typically via an ETF). Vested's pricing is quite transparent but interactive need to call and ask.

[mrbaddy]

Need suggestion from members here. Sorry for the long post.

Background:
I am 48 now. I have invested in SIPs in regular plans since 2010 through a distributor (very less amount than what I should have invested/can afford). I have never spent much time understanding the investment approach nor increased the SIP amounts. Although I am aware of Direct Plans for close to ten years I have never bothered to spend time to switch my investments to Direct plans nor used the Tax harvesting approach. All of it is my fault. But I take solace in knowing that I have at least stayed invested even those amounts and not withdrawn anything.

Change:
For the last six months, I have spent time in changing this and stopped SIPs in Regular plans and withdrawn some amounts from the Regular plans (without incurring LTCG with gains upto 1.25 lakhs) and reinvested the same amount in Direct Plans. I have engaged a Fee only Financial Advisor and I have increased my monthly SIP contributions almost 10-fold now and I got a suggestion of 4 equity funds (1 from my existing portfolio and 3 new ones). I have also prepared some templates in Excel to help me calculate Capital Gain and am going to do the Tax Harvesting approach to save some tax amount on the gains for the long term.

Need suggestion:

I still have the following amounts (assuming NAV on 03-Jan-25) in regular plans

ICICI Value Discovery Fund: 3.39 lakhs
HDFC Flexi Cap: 15.25 lakhs
Franklin Bluechip Fund: 7.74 lakhs

Financial Advisor recommended to use Tax Harvesting approach to move away from these regular funds and switch to Direct funds and not incur any Capital gains tax. When I did some calculations, it takes me atleast 10 years to move away from these regular plans (assuming the NAV's stay the same for 10 years, which wont be the case). This sounds like a not so good approach.

If I do withdraw all the amount from regular funds as of now and reinvest in the new recommended funds, I will incur LTCG of 1.29 lakhs.

I have also done some calculations using the historical NAV's of the three funds between Regular vs Direct plans for the last years just as a case study. Assuming the current valuation amounts and if I have invested them in Direct plan 10 years, 7 years, 5 years, 3 years, 1 year ago, how much difference it would have generated.




Does it make sense to make the sale now itself from these regular funds and bite the bullet of LTCG in this year for 1.29 lakhs. According to me it makes sense to make the switch now itself just assuming the numbers of the same fund between their regular and direct plans.

Additional assumption points that would support the switch now.

1. With NAVs going to increase in the long term it will take forever to come out of the regular funds.
2. Atleast one of the fund (Franklin Bluechip) is very under performing and the new fund that I am going to invest in has higher returns difference (3% difference in 10 year CAGR, 7% in 5 year CAGR, 9% in 3 year CAGR).
3. I assume taxation is going to further increase to upto 20% (LTCG) in the long term considering the government direction and its related changes in 2018 and 2024.
4. I will also lose the opportunity of not utilizing tax harvesting approach on the new investments (however small it might benefit me in long term) that I am making and might have to face lot of tax burden during my retirement

Would love to hear some counter points on this thought process and why the financial advisor is reluctant to advice in making the sell now. Unless he is worried that I might make the sale and not reinvest,, I dont see any other justifiable point.

[neeravnaik]

Originally Posted by ManasN95

Attachment 2706667

Looking forward to your views and opinions please!

My personal opinion based on my years of experience with mutual funds. Generally sectoral funds should be avoided. PSU/Infra theme has seen a lot of hype in last few months and has seen a lot of run up in prices of these sectors. There is already correction happening and it may not give best returns. Good options for retail investors are multi cap funds which invest across sectors like the PPFAS. Index funds based on Nifty 50 or Nifty next 50 are good options for long term. Can also add US index fund like NASDAQ based.

When selecting funds you can look at data on valueresearchonline. Look for factors like

1. Funds from reputed fund houses like ICICI , HDFC, etc.
2. Funds which have been in market for long time. Sales people try to sell new funds talking them up through different Themes etc. should be avoided
3. Funds which have generally given decent annual or 3/5 yer returns consistently. Don’t look at recent results only (in fact some of top performers now will likely return less in short to medium term through normal market cycle behavior)
4. Always ask for rolling returns as sales people can show anything to be working by smartly choosing time frames
5. Do not invest in more than 4-5 funds. Keep it simple and invest consistently for long.
6. Learn more from sources like freefincal etc.

[FAIAAA]

Originally Posted by ManasN95

Attachment 2706667

Hi all,

This is my mom's portfolio essentially, and her investments and their value as of 01.01.25.

Can you all please suggest if we can make any changes and diversification to this portfolio?

In the SIP table, Rs. 11,000 is the current SIP amount, which can be increased to Rs. 40,000 immediately, and after some credit card loan closures, the SIP amount will be increased to Rs. 66,000 from June.

Also, she has invested lumpsum in a couple of ETFs, which are in loss currently.

Plus, both of us can infuse a total of Rs. 15 lakhs lumpsum right now, but want to get your opinion about what would be a really good diversification, and we are okay with a little aggressive one.

Looking forward to your views and opinions please!

Congratulations on your Mother and your journey towards wealth creation and financial independence. Thanks for sharing your details.
First of all, a Caveat - I am neither a certified financial planner/Registered Investment advisor (RIA)/associated with Financial services industry nor should you blindly follow any advice from me or anyone else without doing your own due diligence. Sharing what I know as a fellow forum member for your benefit as well as of others on the forum.

Let me start by reiterating some basics (these have already been covered earlier on this thread) - Wealth creation is less about choice of funds and more about -
1) Maximizing savings rate
2) Asset Allocation
3) Optimizing risk adjusted returns and not merely maximizing returns ignoring risks
4) Time in the market as opposed to timing the market
5) Allowing Compounding to happen by leaving your portfolio (once finalized) undisturbed and not churning unnecessarily and paying taxes and other transactional costs every time to buy/sell/churn your portfolio
6) Keeping life simple. Ultimately the objective of having money is to be able to sleep well at night and not worry /stress about money of all things.

1) Maximizing savings/investment rate - You have already mentioned that you can increase SIPs and have lumpsum to invest so that's good.

2) Asset Allocation can be seen in 2 ways - A ) Various asset categories B) goals by time horizon. Eventually they converge as you will see soon.
A) Allocation across asset categories-
1) Make a list of all your assets and liabilities and hence Net Assets (Assets - Liabilities) across various asset categories as you hold them today - Equity, Debt, Gold/Silver, Real Estate, Others etc.
2) Depending on your risk profile and psychology towards money (discuss with a Financial planner or use any of the tools available online), decide your asset allocation
3) Typical Asset allocation (Equity/Others) range between 60/40 to 80/20 depending on your age, goals and risk profile
Here are 2 brilliant articles on importance of asset allocation to manage return and risk/volatility -
https://www.etmoney.com/learn/mutual...et-allocation/
https://www.moneycontrol.com/news/bu...-12011221.html
4) Finalize your asset allocation of investable corpus. For example , say Equity - 70%, Debt - 20%, Gold - 10% or some such allocation
5) Equity allocation can further be split (optional) into Domestic & International Equity - for example, US today is 25% of world GDP and yet 60% of World market cap. Also US markets don't correlate with Indian markets and hence provide good complementarity.
6) That's the idea of having investments across Dom Equity, Intl Equity, Gold and Debt etc - different asset classes perform well during different time periods and you want a few to offset the others in your portfolio.

B) Asset allocation by goals/time horizon
1) In this approach, club your goals/financial requirement across 3 time buckets - Short term (0-2 years), Medium term (2-5 years), long term (> 5 years)
2) For Short term, one can look at low risk/less volatile products like Bank FDs, MFs like Money market/Ultra Short/Short term Debt funds or Arbitrage funds etc depending on tax slab for the investor.
3) For medium term, one can look at MFs like Conservative Hybrids or Equity Savings (again choose basis tax slab implications), Multi asset allocation funds
4) For long term compounding, look at pure Equity diversified MFs

Coming to your portfolio, idea should be to simplify and re-align to your family's financial goals and objectives.
I am not getting into Short & medium term allocation as above is self explanatory and you can do the needful, if not done already.

Assuming the funds mentioned above are all for long term investing, some observations and suggestions -
1) You have multiple thematic funds - these depend a lot on market timing. Unfortunately most AMCs launch these funds /public gets to know about them at the peak/fag end of their up cycle when most gains are already captured (in sectors like Defence, PSU, Infra/Capital goods, earnings for next 3-7 years are also factored, as can be seen from their expensive PE multiples). These are only for the nuanced investor who keeps close track of markets.
Unfortunately, they go against diversification principles at 2 levels 1) sector or theme focused 2) within sector/theme, high concentration in a few companies
Action - Your call whether to hold or exit. I will tell you what I would have done - I would Exit (now/gradually depending on whether sitting on gains/losses or whether still in lock-in period of ELSS or not) most of your funds and Retain only the following -
1. Motilal Midcap
2. Quant ELSS
3. DSP Tiger

2) Long term investing is ideally done best through diversified Mutual funds - Flexi Caps, Multi Caps, Large & Midcap etc. Remember, if a company/stock or theme is so good, they will be picked up by these diversified mutual funds.
Action - Invest in quality/time tested Flexi Cap funds like Parag Parikh, HDFC, ICICI, SBI etc. I would pick Parag Parikh and HDFC Flexi cap and maybe a Motilal Oswal Large & MidCap for myself. And invest equally across 2-3 MFs. Your choices could be different. This would be the core (80%) of my Domestic Equity portfolio, while the rest (upto 20% in the 3 funds mentioned above, if at all)

3) If you wish to put some money (yours at best. Won't advocate for your Mother) in an aggressive and extremely volatile fund, You can also check out a few multi cap smart beta indices like Nifty 500 Momentum Quality 50, Nifty 300 Alpha, Nifty 500 Momentum 50 etc. (check NSE for their details . Also lot of videos on Youtube). Again, Venture only if you understand/are comfortable else stick to quality MFs.

4) Invest 5-10% in US equity, if you wish to - Most MFs are closed for subscription (Avoid US ETFs as they are trading at a premium), some may still be open.

5) For Gold (should you choose to invest 5-10%), you can invest through a good Gold MF - lot of options are there like SBI/ICICI/HDFC etc

6) For Debt, there are some great ideas on Debt MFs in this thread. I personally have gone with a Short term debt MF and an Arbitrage fund.

Lumpsum or SIP - Recommend staggered investments given Indian markets are at peak valuations with slowing earnings growth, geopolitical uncertainty etc. Also stock markets returns are lumpy, meaning they go up a few years and then remain negative/flat in other years . 2025 could be a muted/volatile year. It may be a good idea to go lumpsum in case you are allocating to Debt/Arbitrage MFs. For everything else, put the lumpsum money in a Short term debt MF and do a systematic withdrawal and staggered investment /SIPs into Equity MFs over 6-12 months.

Once you have made the changes, stay invested in your new mutual fund portfolio and let the power of Compounding work it's magic for you.

Hope the above helps. All the best!

[SoumenD]

Not sure if its the right thread but since people here discuss investments I have a query:

I used to invest in gold via SGBs till early 2024(started since 2020) but now it’s pretty clear government is no more coming out with any more tranches. How is everyone investing in gold?

Mutual funds/ETFs? What’s the taxation like and are these as good as SGBs? Am majorly into mutual funds(65% allocation currently) and PPF,EPF account for debt allocation. Wanted to invest in gold as well but since SGBs are stopped I haven’t been able to invest in gold. Am not a fan of physical gold ornaments nor is my spouse.

Thanks in advance

[Small Bot]

Originally Posted by SoumenD

How is everyone investing in gold?

We've followed a very old-school approach - buy 22-carat gold coins using schemes in a reputed jewellery shop, and store those coins in our bank lockers along with any inherited jewellery and land deeds.

That said, this gold is less than 5% of our net investment. My spouse and I probably have some earning years on our side (in early 30s still), so our major investment focus for our future is on mutual funds first and real estate next.

[careind]

Originally Posted by SoumenD

I used to invest in gold via SGBs till early 2024(started since 2020) but now it’s pretty clear government is no more coming out with any more tranches. How is everyone investing in gold?

Mutual funds/ETFs? What’s the taxation like and are these as good as SGBs? Am majorly into mutual funds(65% allocation currently) and PPF,EPF account for debt allocation. Wanted to invest in gold as well but since SGBs are stopped I haven’t been able to invest in gold. Am not a fan of physical gold ornaments nor is my spouse.

Thanks in advance

The main attraction in the SGB was that the redemption value is tax free and only the interest ( 2.0/2.5) would be taxed. That effectively meant that you are pretty much inert to rising gold price.
For all other Gold ETFs, one would need to pay the applicable LTCG on capital gains as well.

The only available avenue to escape from taxes is to join in a scheme with a reputed jeweler and depend on their loyalty discount/bonus, but then future purchase would mostly be tied to the jeweler.
Now with SGB drying up, even their schemes could become less attractive.

[DigitalOne]

Originally Posted by sushantr5

I am tax resident of Germany so it will be easy for me to invest from here for long term. But when I am redeeming I have to always redeem in the country from where I have invested.

...when I am moving to India, transfer everything to IBKR (I heard first time).

Originally Posted by SmartCat

Interactive Brokers (IKBR) is one the largest and most profitable international brokers.

ICICIDirect offers global investing in a partnership with Interactive Brokers LLC. See Q#7 "Who is the executing and clearing broker?" in the FAQ here. So, when you sign up for a Global account with ICICIDirect, they in turn open an account with IBKR. Since you are planning to move back to India, this may be a good option to consider transacting both Indian and Global equity on one single platform.

Having said that, a few months back I didn't receive good support from ICICIDirect. When I quit my Germany DAX listed company last year, I opened a Global(IBKR) account and wanted to transfer my Employee stocks from EquatePlus (the employee share plan account service provider) to IBKR. To transfer the shares EquatePlus needed some details (IBAN, SWIFT Code etc) of the IBKR account which I couldn't figure out. ICICIDirect did not respond to emails, and the designated RM had no clue about this. The shares got automatically sold off on the due date. I didn't lose monetarily but have an unwanted tax burden now.

Buying and selling foreign (especially US) equity may not be a problem though.

Originally Posted by vaibhav_a_a

Fresh investment all overseas funds whether lumpsum or fresh SIP or even existing SIP have been stopped till further notice due to RBI mandated limit being reached for individual fund houses as well as the industry on the whole.

I can't understand why there is an industry wide limit?! It seems to be anti-competitive restriction. BTW, I have not received any intimation for an active STP in Franklin Templeton US Opportunities Feeder Fund yet.

Originally Posted by mrbaddy

..
When I did some calculations, it takes me atleast 10 years to move away from these regular plans (assuming the NAV's stay the same for 10 years, which wont be the case). This sounds like a not so good approach.

If I do withdraw all the amount from regular funds as of now and reinvest in the new recommended funds, I will incur LTCG of 1.29 lakhs.
...

Does it make sense to make the sale now itself from these regular funds and bite the bullet of LTCG in this year for 1.29 lakhs.

I didn't understand this part. If the LTCG is 1.29 Lakhs, why should it take 10 years to do tax harvesting? Is it that you want to avoid any STCG liability that you have in these existing regular investments? Even so, you should be able to sell it in one-shot once your STCG period of 1 year is reached. Your LTCG tax liability will be 1.29-1.25 only, right? Or am I missing something here ?

Originally Posted by Small Bot

We've followed a very old-school approach - buy 22-carat gold coins using schemes in a reputed jewellery shop..

Originally Posted by careind

The only available avenue to escape from taxes is to join in a scheme with a reputed jeweler and depend on their loyalty discount/bonus, but then future purchase would mostly be tied to the jeweler.

A few months back, we went to sell/exchange some of my wife's old (slightly damaged) jewellery from a reputed Chennai based jeweller. The old jewellery was also purchased from the same shop decades back. I was not anyway expecting cash in return, but I was surprised that they didn't even give me a credit note to be used at a later date. The only option was to buy new jewellery in lieu of the old on that day itself. Basically they don't want to take any risk of gold price fluctuations. We didn't want to buy on that day, so we returned with our old jewellery.

In summary, check with the shop if they take back the gold coins and give back cash. If not, this is something you should avoid unless you want to buy gold jewellery for a specific purpose at a later date. This is not investment . Gold mutual funds will be the right approach, even if there are recurring fund management expenses, to invest in gold.

[vaibhav_a_a]

Originally Posted by DigitalOne

I can't understand why there is an industry wide limit?! It seems to be anti-competitive restriction. BTW, I have not received any intimation for an active STP in Franklin Templeton US Opportunities Feeder Fund yet.

I got an email from Motilal Oswal re Nasdaq 100 FoF re stoppage in SIP.

p.s. That experience with the jewelry shop is vaguely resembling many loyalty programs.

[AltoLXI]

Originally Posted by DigitalOne

In summary, check with the shop if they take back the gold coins and give back cash.

Last year we gave the old jewelry to one of the famous chain store in MG Road in Bengaluru. What they told was they will melt the gold, estimate the gold value for 24 carat and either will pay in cash for that day's rate or buy gold for that value. I wanted to purchase coin but wife insisted on new necklace and earrings - so jewelry it was.

Another shock to us was valuation of the old gold jewelry. Jewelry bought few decades back were only of 18 carat and we were told there was copper mixed when made.

[mrbaddy]

Originally Posted by DigitalOne

I didn't understand this part. If the LTCG is 1.29 Lakhs, why should it take 10 years to do tax harvesting? Is it that you want to avoid any STCG liability that you have in these existing regular investments? Even so, you should be able to sell it in one-shot once your STCG period of 1 year is reached. Your LTCG tax liability will be 1.29-1.25 only, right? Or am I missing something here ?

Thank you for the reply. Roughly my long term gains are 10.xx lakh odd for which LTCG Tax liability is 1.30 lakhs if I sell everything this year. Please note that I have already sold and reinvested some units in this year and utilized the LTCG limit of 1.25 lakhs.