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Economic Times
7 days ago
- Business
- Economic Times
Father's Day 2025: How to ensure financial security for your father
Tired of too many ads? Remove Ads Approaching retirement Tired of too many ads? Remove Ads Popular in MF 1. HDFC Defence Fund adds Bharat Forge and Bharat Dynamics in its portfolio in May Tired of too many ads? Remove Ads For young fathers Early planning As Father's Day is celebrated today, it's the perfect occasion to move beyond traditional gifts and give your dad something truly meaningful—financial security. While traditional gifts are great gestures, helping your father plan for or strengthen his retirement can offer peace of mind that lasts far beyond this one reached out to an expert to understand how to build the portfolio allocation and plan financial security for the Read | Explained: What all Gen-Z should know about mutual funds Retirement, after all, is a stage of life that demands smart financial planning . Many from the older generation have long relied on fixed deposits and similar instruments for post-retirement income. But with inflation eating into post-tax returns, such traditional savings avenues may no longer be expert highlights that planning for retirement is crucial because, after a certain age, regular income stops, but expenses continue, often increasing due to inflation and healthcare Guha Thakurta, Executive Director at Anand Rathi Wealth Limited shares four steps to ensure financial security post retirement and the mistakes one should avoid post sharing the steps to ensure financial security, the expert mentions that an investor should reassess his after-retirement financial goals and expenses for example household needs, healthcare, travel or support for family. Secondly, investors should have a plan for accumulated wealth to be invested in income generating and capital preservating keep a separate fund for 6 to 12 months of expenses in a safe option like liquid fund or savings account as this helps to handle unexpected costs without disturbing the main investments. And lastly, one should keep checking their financial plan every year or after any major change in your life as this will help you to stay aligned with your goals and adjust to new investors look for the best or top mutual funds to invest without considering their risk appetite, investment horizon, and goals which often results in loss of capital, underperformance in the portfolio, or unfulfilment of main Read | ITC and BSE among stocks that mutual fund bought and sold in May Thakurta shares the mistakes that one should avoid while planning post 60 which includes planning with today's value of money can be misleading as inflation eats into your savings over time, so always adjust your goals example, if a person wants to retire today with Rs 2 crore it will not be the same amount after 30 years as inflation will have a greater role to play. The target amount changes to Rs 11 crore post adjusted of it is not recommended to put all your money in one place as one should invest in assets with low correlation to beat inflation and can construct the portfolio in a manner which is proper debt to equity mix to beat inflation while keeping risk low. And lastly, medical expenses can rise quickly in old age so having good health insurance and a separate medical fund is a must to avoid financial are many investment options available to make investments but an investor should always choose the correct avenue based on their risk appetite, investment horizon, and fathers looking for stable income and capital safety, the expert shares that there are several reliable investment options such as bank fixed deposits (FDs) remain a popular choice, especially among retirees, as they provide assured returns and flexibility in FD returns may not always beat inflation so another option for senior citizens is the Senior Citizen Saving Scheme (SCSS), a government-backed plan designed specifically for individuals above 60 which offers attractive interest rates, quarterly payouts, and tax benefits under Section 80C in old tax regime but not suitable for an individual opting for New Tax are annuity plans offered by insurance companies for retirement planning and such insurance plans come with a lock in period and usually fail to deliver inflation-beating returns so the investor should not look at insurance as an investment product and should go for the term plan, the expert further adds that investing in pure debt mutual funds for retirement may seem like a safe choice, they don't usually deliver high returns, and hence are less effective for long-term wealth creation and more importantly, after the recent tax changes, debt mutual funds are no longer eligible for indexation benefits. 'Now, gains are taxed as short-term capital gains at your slab rate, regardless of holding period. This reduces their post-tax efficiency, especially for retirees in higher tax brackets,' Thakurta shared with Read | HDFC Defence Fund adds Bharat Forge and Bharat Dynamics in its portfolio in May Investment in equity mutual funds through SIP and SWP The expert believes that investing in equity mutual funds through SIP (Systematic Investment Plan) is a smart way to build wealth for retirement as SIPs allow you to invest small amounts regularly in mutual funds that invest in stocks, which can potentially offer annual returns of 13 to 14% over the long you have built a sizable corpus, you can switch to an SWP (Systematic Withdrawal Plan) to withdraw a fixed amount every month as retirement income and this approach helps provide regular cash flow while the remaining corpus continues to grow, Thakurta said.'Retirement planning is a long term journey and choosing diversified equity mutual funds for retirement planning is ideal, as they help to beat inflation and generate long-term wealth and can be a powerful vehicle to help you retire rich.'This is where mutual funds can play a powerful role. They offer the flexibility and diversity needed to manage money effectively at every stage of younger fathers who are still working and have several years before retirement, equity mutual funds are a smarter long-term choice. They invest in stocks and aim to deliver inflation-beating returns over time, making them suitable for wealth creation through consistent investments like advocates equity mutual funds as it can be a powerful tool for long-term wealth creation as they provide diversification and flexibility, which reduces investor risk by providing them the ability to invest across multiple market caps and investors get the benefit of compounding which amplifies the wealth generation process over a longer period of time and equity mutual funds have historically delivered inflation-beating returns of 11-13% over long periods, making them one of the best tools for building a retirement corpus, he of the most effective ways to accumulate wealth for retirement is through a Systematic Investment Plan (SIP) as SIPs allow investors to contribute a fixed amount at regular intervals, ensuring disciplined investing and reducing market timing risks and over the long run, SIP strategy smooths out market volatility, making SIPs an ideal choice for retirement planning, the expert Example, if one starts SIP of Rs 25,000 with an annual step up of 10% for their father when he is of age 40 years, you would accumulate Rs 5 crore when he reaches at the age of 60 Read | NFO Insight: Baroda BNP Paribas Health and Wellness Fund opens. Is it the right prescription for your portfolio? For fathers who have already retired and rely on their savings for monthly expenses, consider suggesting a Systematic Withdrawal Plan (SWP) as this allows your dad to invest a portion of his retirement savings in a mutual fund and withdraw a fixed amount at regular intervals and it not only ensures steady income but also allows the remaining corpus to stay invested and potentially Thakurta shared a SWP plan for retirement as an SWP allows you to withdraw a fixed amount from your mutual fund investment regularly, making it a useful tool for monthly income after retirement and the remaining money stays invested and keeps expert also advised to start with a safe withdrawal rate, like 5 to 6 percent, to make your savings last longer as it's flexible and helps manage expenses without depleting your corpus too shared that if an investor invested a corpus of Rs 1 crore at age 60 and expected a monthly cash flow of Rs 50,000 per month from his investment account then an investor with an asset allocation of 70:30 in equity and debt can end up with corpus of Rs 3 crore with a 4% starting withdrawal rate and a 5% incremental withdrawal rate while ensuring the ease of liquidity in the portfolio.
Time of India
13-06-2025
- Business
- Time of India
Franklin India Money Market Fund turns Rs 10,000 SIP to Rs 70 lakh in 23 years
Franklin India Money Market Fund has turned Rs 10,000 monthly SIP to Rs 70 lakh since its inception in 23 years. A lump sum investment of Rs 10,000 would have grown nearly fivefold to Rs 49,649 since its inception with a CAGR of 7.14%. The fund has recently achieved a dual milestone of completing 23 years of existence and surpassing Rs 3,400 crore assets under management ( AUM ). These dual milestones highlight the fund's enduring characteristics of providing relatively low risk, high liquidity and optimal yield for investors seeking to park their short-term surpluses, according to a press release by the fund house. Also Read | HDFC Defence Fund adds Bharat Forge and Bharat Dynamics in its portfolio in May Best MF to invest Looking for the best mutual funds to invest? Here are our recommendations. View Details » by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like La alimentación para perros que está revolucionando 2025 DOGFYDIET Leer más Undo Launched in 2002, the fund invests in money market instruments like certificate of deposits, commercial papers and treasury bills with maturities of up to one year, making it ideal for investors looking for short term investment avenues with relatively low risk and providing liquidity of the corpus with optimum return potential. On the basis of trailing returns, the fund has outperformed its benchmark NIFTY Money Market Index A-I over the past one year, five years and 15 years as well for the period ending May 30, 2025, the release said. Live Events 'We feel that investors may benefit from a soft interest rate environment by investing in a money market portfolio which is deployed with an optimal duration. The portfolio may likely benefit from accrual strategy with optimal duration risk,' said Chandni Gupta, Vice President and Portfolio Manager – Fixed Income, Franklin Templeton Asset Management India. The scheme invested 87.21% in money market instruments and 12.02% in government securities at the end of May 2025. The fund is jointly managed by Chandni Gupta and Rohan Maru. Also Read | NFO Insight: Baroda BNP Paribas Health and Wellness Fund opens. Is it the right prescription for your portfolio? With a robust track record, disciplined investment approach, and strong focus on liquidity and capital preservation, Franklin India Money Market Fund continues to be a sound choice for investors seeking short term investment solutions. The fund is suitable for investors who are seeking regular income for short-term and a money market fund that invests in money market instruments. ( Disclaimer : Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
Economic Times
28-05-2025
- Business
- Economic Times
Defence sector based mutual funds rally up to 60% in 3 months. Will the momentum continue?
Defence sector based mutual funds have rallied upto 60% in the last three months. There are around six funds in the category including active and passive and gave an average return of 57.70% in the same period. Three schemes in the category gave over 60% return. Motilal Oswal Nifty India Defence ETF offered the highest return of around 60.49% in the last three months, followed by Motilal Oswal Nifty India Defence Index Fund which gave 60.23% return in the same period. Also Read | Defence ETFs gain 17% in one week. Should you add to your portfolio? Groww Nifty India Defence ETF and Aditya Birla SL Nifty India Defence Index Fund gave 60.12% and 59.96% returns respectively in the similar time period. Groww Nifty India Defence ETF FOF gave 59.45% return in the mentioned time period. HDFC Defence Fund, the only active fund based on the defence sector, delivered 45.93% return in the mentioned period. Experts attribute this surge to a combination of strong earnings delivery by the sector constituents, policy momentum with increased capital allocation by the Indian government and trigger coming from actual use case of India's Defence Capability in recent India-Pakistan faceoff at borders.'Key holdings in defence index funds reported strong earnings growth. The Indian defence budget allocation for FY25 has maintained a sharp focus on indigenization. Capital outlay of Rs 1.72 lakh crore continues to support new orders. Defence exports reached an all-time high of Rs 21,083 crore in FY24 (up 12% YoY), reflecting rising global demand for Indian defense manufacturing. This surge in earnings, coupled with a policy push and a favorable geopolitical backdrop, led to substantial price rerating and fund outperformance,' said Atul Shinghal, Founder and CEO, Scripbox. In addition to these factors, another expert adds that Defence funds have benefited from the recent surge in prices of defence stocks. Defence stocks have been on the rise in recent months after they were hit badly during the sell-off earlier this year. 'Many countries around the world, including India are ramping up their military capabilities, leading to increased defence spending. In India, this trend was further strengthened post the Operation Sindoor, as the Indian government plans to further improve our defence capabilities,' said Nilesh D Naik, Head of Business – Investments, the last six months, defence based passive funds returned 34% with Motilal Oswal Nifty India Defence ETF being the topper as the fund delivered 34.22% return in the last six months, followed by Motilal Oswal Nifty India Defence Index Fund which gained 33.73% in the same Nifty India Defence ETF FOF gave 33.35% in the last six months. HDFC Defence Fund, the only active fund based on this sector, gave 15.86% return in the same period. Also Read | HDFC Defence Fund increases stake in HAL, Solar Industries, and 4 other stocks in April Despite seeing the historical stellar performance by these funds, experts don't recommend investing in these sectoral funds. Shinghal of Scripbox mentions that despite strong sector fundamentals, current valuations are stretched as the trailing P/E ratio of the Motilal Oswal Nifty India Defense Index stands at a steep 61.35x, while the P/B ratio is 13.22x—significantly higher than broader market averages. which in turn indicates that the future growth might be already priced further adds that the Sharpe Ratio is negative (-0.07), indicating poor risk-adjusted return over recent volatility, despite high absolute returns and the index has 77.5% exposure to mid and small caps, which increases vulnerability to sharp corrections during risk-off sentiment willing to allocate or have existing investments in these funds can follow the strategy Shinghal shared. He mentioned that existing investors should hold and consider profit booking in a staggered manner, new investors should avoid fresh lump-sum allocations and tactical SIPs may be considered only on 10–15% corrections, and lastly the total allocation to defence sector should be between 2-4% and should not exceed 4% of total equity the other hand, Naik advices that thematic funds such as this are typically meant for seasoned investors who have their core portfolio in place and who want to take a tactical bet based on their views on a specific sector or theme. 'With recent rally in defence stocks, many of them have now recovered significantly and are trading at close to their all time highs. While the long term defence sector story seems strong, investors should be extremely cautious while investing in such funds post this rally, given the current valuations,' he earlier analysed that in a week's time, defence sector based ETFs have gained upto 17% in one week's time. The focus on defence stocks came after reports that the Modi government has called a meeting with defence makers post the recent India-Pakistan faceoff at the stellar performance of defence funds, Shinghal comments on the outlook for the sector and mentions that while India's long-term defense growth story is intact, current valuations do not offer a favorable risk-reward for fresh allocations and investors are advised to retain moderate exposure (up to 4%), book profits where returns have exceeded expectations, and re-enter during valuation corrections or policy-driven should always choose a scheme based on risk appetite, investment horizon, and goals. (Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times) If you have any mutual fund queries, message on ET Mutual Funds on Facebook/Twitter. We will get it answered by our panel of experts. Do share your questions on ETMFqueries@ alongwith your age, risk profile, and Twitter handle.
Time of India
28-05-2025
- Business
- Time of India
Defence sector based mutual funds rally up to 60% in 3 months. Will the momentum continue?
Defence sector based mutual funds have rallied upto 60% in the last three months. There are around six funds in the category including active and passive and gave an average return of 57.70% in the same period. Three schemes in the category gave over 60% return. Motilal Oswal Nifty India Defence ETF offered the highest return of around 60.49% in the last three months, followed by Motilal Oswal Nifty India Defence Index Fund which gave 60.23% return in the same period. Best MF to invest Looking for the best mutual funds to invest? Here are our recommendations. View Details » by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Hoa Binh: Unsold Furniture Liquidation 2024 (Prices May Surprise You) Unsold Furniture | Search Ads Learn More Undo Also Read | Defence ETFs gain 17% in one week. Should you add to your portfolio? Groww Nifty India Defence ETF and Aditya Birla SL Nifty India Defence Index Fund gave 60.12% and 59.96% returns respectively in the similar time period. Groww Nifty India Defence ETF FOF gave 59.45% return in the mentioned time period. Live Events HDFC Defence Fund , the only active fund based on the defence sector, delivered 45.93% return in the mentioned period. Experts attribute this surge to a combination of strong earnings delivery by the sector constituents, policy momentum with increased capital allocation by the Indian government and trigger coming from actual use case of India's Defence Capability in recent India-Pakistan faceoff at borders. 'Key holdings in defence index funds reported strong earnings growth. The Indian defence budget allocation for FY25 has maintained a sharp focus on indigenization. Capital outlay of Rs 1.72 lakh crore continues to support new orders. Defence exports reached an all-time high of Rs 21,083 crore in FY24 (up 12% YoY), reflecting rising global demand for Indian defense manufacturing. This surge in earnings, coupled with a policy push and a favorable geopolitical backdrop, led to substantial price rerating and fund outperformance,' said Atul Shinghal, Founder and CEO, Scripbox. In addition to these factors, another expert adds that Defence funds have benefited from the recent surge in prices of defence stocks. Defence stocks have been on the rise in recent months after they were hit badly during the sell-off earlier this year. 'Many countries around the world, including India are ramping up their military capabilities, leading to increased defence spending. In India, this trend was further strengthened post the Operation Sindoor, as the Indian government plans to further improve our defence capabilities,' said Nilesh D Naik, Head of Business – Investments, In the last six months, defence based passive funds returned 34% with Motilal Oswal Nifty India Defence ETF being the topper as the fund delivered 34.22% return in the last six months, followed by Motilal Oswal Nifty India Defence Index Fund which gained 33.73% in the same period. Groww Nifty India Defence ETF FOF gave 33.35% in the last six months. HDFC Defence Fund, the only active fund based on this sector, gave 15.86% return in the same period. Also Read | HDFC Defence Fund increases stake in HAL, Solar Industries, and 4 other stocks in April Despite seeing the historical stellar performance by these funds, experts don't recommend investing in these sectoral funds. Shinghal of Scripbox mentions that despite strong sector fundamentals, current valuations are stretched as the trailing P/E ratio of the Motilal Oswal Nifty India Defense Index stands at a steep 61.35x, while the P/B ratio is 13.22x—significantly higher than broader market averages. which in turn indicates that the future growth might be already priced in. He further adds that the Sharpe Ratio is negative (-0.07), indicating poor risk-adjusted return over recent volatility, despite high absolute returns and the index has 77.5% exposure to mid and small caps, which increases vulnerability to sharp corrections during risk-off sentiment phases. Those willing to allocate or have existing investments in these funds can follow the strategy Shinghal shared. He mentioned that existing investors should hold and consider profit booking in a staggered manner, new investors should avoid fresh lump-sum allocations and tactical SIPs may be considered only on 10–15% corrections, and lastly the total allocation to defence sector should be between 2-4% and should not exceed 4% of total equity exposure. On the other hand, Naik advices that thematic funds such as this are typically meant for seasoned investors who have their core portfolio in place and who want to take a tactical bet based on their views on a specific sector or theme. 'With recent rally in defence stocks, many of them have now recovered significantly and are trading at close to their all time highs. While the long term defence sector story seems strong, investors should be extremely cautious while investing in such funds post this rally, given the current valuations,' he added. ETMutualFunds earlier analysed that in a week's time, defence sector based ETFs have gained upto 17% in one week's time. The focus on defence stocks came after reports that the Modi government has called a meeting with defence makers post the recent India-Pakistan faceoff at borders. Post the stellar performance of defence funds, Shinghal comments on the outlook for the sector and mentions that while India's long-term defense growth story is intact, current valuations do not offer a favorable risk-reward for fresh allocations and investors are advised to retain moderate exposure (up to 4%), book profits where returns have exceeded expectations, and re-enter during valuation corrections or policy-driven consolidations. One should always choose a scheme based on risk appetite, investment horizon, and goals. If you have any mutual fund queries, message on ET Mutual Funds on Facebook/Twitter. We will get it answered by our panel of experts. Do share your questions on ETMFqueries@ alongwith your age, risk profile, and Twitter handle.
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Business Standard
13-05-2025
- Business
- Business Standard
Defence funds: Enter via SIP with 10-year view to manage valuation risk
The Nifty India Defence Total Return Index (TRI) has risen 27.4 per cent over the past three months, outperforming the Nifty 50 TRI, which gained 8.2 per cent. Defence-focused mutual funds have mirrored this rally. The category includes one active fund, HDFC Defence Fund, with assets under management (AUM) of ₹5,487.27 crore, and passive schemes from three fund houses — Motilal Oswal, Aditya Birla Sun Life, and Groww. These schemes manage ₹9,133.82 crore collectively. These funds invest in defence equipment and other stocks related to the defence sector. 'A look at the Nifty India Defence Index's constituents reveals that it is a highly concentrated, top-heavy index. There is also a paucity of listed names in this space,' says Kaustubh Belapurkar, director–manager research, Morningstar Investment Research India. Sound prospects Jefferies estimates India's defence sector opportunity at $100–120 billion over the next five-six years, with growth projected at 13 per cent compounded annually from financial year (FY) 2022-23 to FY2030. In FY24, domestic defence production reached a record ₹1.3 trillion. 'With the trend of protectionism in defence spreading globally, the Indian government has launched the Make in India initiative in the defence sector, which is a key driver for its growth,' says Vishal Dhawan, chief financial planner, Plan Ahead Wealth Advisors. The recent border tensions with Pakistan could lead to a spike in India's defence budget. 'This would mean higher revenues and profits for the companies in this sector,' says Abhishek Kumar, Securities and Exchange Board of India (Sebi) registered investment advisor and founder, He adds that investing in these funds may also help investors diversify their portfolios beyond traditional sectors. Concentration, valuation risk Heavy inflows have driven many defence stocks up by 60–70 per cent annually over five years, leading to expensive valuations. 'The current price-to-earnings (P/E) ratio of the Nifty 50 is 22, while the Nifty India Defence Index is at 52. The price-to-book value for the two indices is 4 and 13 respectively. Thus, the Nifty Defence Index valuations are more than two-three times the Nifty 50,' says Dhawan. HDFC Defence Fund stopped accepting investments in mid-2024 — a development that investors should regard as a cautionary signal. While defence firms are winning large orders, these typically take years to convert into revenue. 'This could create a mismatch between the size of the order book and immediate profitability,' says Dhawan. Kumar highlights that these funds could take a hit if defence spending slows or due to elevated valuations. Right time to enter? Given the sharp run-up, most investors should avoid entering now. Only those with a strong fundamental view of the sector and its companies should invest. 'These investors will have to be extremely patient and must be ready to ride out a down cycle before the sector moves up again,' says Belapurkar. Dhawan adds that only experienced investors with a high risk appetite, a grasp of market cycles, and comfort with volatility and timing risk should invest. Kumar cautions that conservative or inexperienced investors, those seeking stable returns, or those with short-term goals should stay away. Exposure to these funds should be taken in the satellite portfolio and limited to 5 per cent of the equity portfolio, while the minimum horizon should be 10 years. Investments should be staggered. Tactical investors should wait for valuations to normalise.
