other structured paper, which can boost the yield. A lay investor does not normally have access to such paper. At fund houses, there are credit teams that analyse and help avoid defaults — one of the biggest risks of investing in debt.
For a horizon of five years, should I opt for a balanced fund or a pure equity fund? What are the chances of getting below-bank FD returns from a pure equity fund after five years?
While the fund you invest in will depend on your risk profile, investments in diversified equity funds and balanced funds for a longer time horizon (more than five years) generally helps. While past performance cannot predict the future accurately, the average five-year rolling return for the past 20-year period has been around 12%.
A good quality equity fund should be able to outperform that.
Now that Sebi has allowed cash payments of up to R50,000 for buying mutual funds, do I have to give a copy of my PAN every time I pay in cash to buy units?
Investing through cash payment requires an investor to be KYC-compliant. However, as long as the investment in financial instruments does not exceed R50,000 in a financial year, a PAN card may not be required as per the current rules.
The writer is director, fund research, Morningstar India
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