The Complete MUTUAL FUND INVESTMENT Guide | Ankur Warikoo Hindi

0:00 What should be your mutual fund strategy according to your salary? In fact, let us add one more thing. What should be your mutual fund strategy according to your salary and your risk profile ? In this video there are three salary bands ₹25,000 per month, ₹00 per month and ₹1 Lakh per month. And three risk profiles, low risk, medium risk, high risk. By combining these, we will try to understand how you can invest in mutual funds regularly and in a disciplined manner every month. Where and which mutual funds can be chosen. And how over a long period of time with disciplined investing you can achieve your financial security and independence. But before we start, the most important thing is to ensure three things before ever investing, friend.

0:46 Number one is that you have an emergency fund. God forbid, if any such emergency occurs which you had not planned, in which expenses will be incurred, then so that you do not have to take a loan for it and do not break your investment, there is an emergency fund for this, and the emergency fund should be at least for 6 months, ideally 12 months. 6 and 12 months means whatever are your monthly necessary expenses, which you have to pay every month, you have to spend to live your life, multiply it by 6, that is your minimum emergency fund, multiply it by 12, that is your ideal emergency fund. You can keep it in your bank account. You can get it deposited in FD so that the money remains safe. There is no need to grow it. This should just come in handy in those days of need. Secondly, health insurance for you and your

1:33 family so that in case of any health emergency, you do not have to take a loan again. You do n't have to break your investments. And the third one is life insurance so that God forbid if something happens to your life. May your family remain safe after you. When you have these three things, your money has been used for your security. Now we will use the money we have for our growth and our financial independence. And for that, let's start with a salary of ₹25,000 per month. Low risk profile first. These are people who do n’t want to see the daily ups and downs of the stock market. It doesn't make any difference to them. And that's perfectly fine. Every person has his own path, his own desire. And of course, we have brought some suggestions for them too. They want the money to

2:19 grow slowly and steadily. An almost fixed rate of return is received. If you have a little sense of security, a sense of comfort, a sense of stability, you will get everything. So if you are a low risk profile person and you earn ₹25,000 per month. Of course, I am assuming not just in 25% but in every salary that you will invest around 20% of your salary. So in this case ₹5,000 per month. We will distribute that ₹5,000. We will invest 80% in fixed rate of return assets or stable rate of return mutual funds. And we will invest 20% in equity mutual funds. So out of five, we will invest Rs.4000 in debt mutual funds which give a fixed rate of return or a very stable rate of return and will invest Rs.1000 in equity. Now

3:06 which mutual funds could these be? In this video I will mention names of many mutual funds. There are no trees. No one has given me any money to recommend their name. But please do your homework and choose the right mutual fund. Do n't go by the opinion I am giving you. I am neither qualified nor certified nor do I have the permission to name all these people. So if I am taking it that is because I have used it in personal capacity. But please please please please please do your homework and choose your mutual fund based on your analysis, don't go by these names just because I have mentioned them. So I have made a small list, for this if you are investing ₹4000 every month in a debt mutual fund. Invest ₹3000 in a liquid fund.

3:52 What are liquid funds? These are those mutual funds which invest in fixed deposits, government bonds, corporate bonds, so their rate of return is very fixed. Consider it nearly fixed. And the good thing is that if you sell them after 7 days, there is no penalty. And that rate of return is received accordingly. So suppose you are getting around 7% annual rate of return which is better than FD. So you will get on an average 2% every day. So whether you keep it for 15 days, 25 days, 300 days or 5 years, you will keep getting roughly .02% every day. And that will remain stable. So that's why I like this. Because this keeps the money

4:39 increasing slowly. The end of course continues to grow at a fixed rate of return. So there are many liquid funds. There is Axis liquid fund , there is Aitya Birla Sun Lef liquid fund, there is HDFC liquid fund. Almost every major mutual fund company always has a liquid fund. Whichever company you are comfortable with, you can take their liquid fund. The only thing to bear in mind is the expense ratio. In fact, for all the mutual funds, how much expense do you have to pay for buying that mutual fund and the exit load, as I said, the exit load of liquid funds after those days is zero, you do not have to pay any expense within 7 days, yes, if you sell it, you should not sell it purely but if you sell it then you will have to pay an exit penalty or an exit clause penalty. You can invest the remaining ₹1000 in a corporate bond fund.

5:25 This is a mutual fund that invests only in corporate bonds. Corporate bonds also come with varying degrees of risk. There are very stable corporate bonds called triple A corporate bonds or double A corporate bonds. There are also very risky corporate bonds. So they keep mixing and matching a bit. It is not as fixed as a liquid fund. There is a little ups and downs. But certainly far more stable than an equity mutual fund. You can take any corporate bond fund from SBI or HDFC. We will remain stable in any corporate bond fund equity of large company which is of ₹ 1000. There is a huge range of risk in equity as well. The most stable one that I personally think is the NFT 50 Index. India's top 50 companies are Reliance, TCS,

6:12 Wipro, HDFC the usual suspects their mix and these are the top 50 companies listed on the National Stock Exchange. So you can buy anyone’s NFT 50 index mutual fund. And that will be the ₹1,000 investment that will be in the right direction. I have personally used HDFC. ICICI Prudential has been used. You can use any account like SBI or HDFC. NFT 50 Is What You Need to Remember. Then we come to medium risk. We will balance the medium risk. So 50% we are dept and 50% we are equity. This will be the profile. ₹5,000 we are still investing. So out of that five, we have to invest ₹2500 in debt mutual fund. My suggestion would be do not invest in liquid funds as it has the lowest rate of return among these mutual funds. Put it in a

6:58 dynamic bond fund. So a corporate bond fund which is mixing and matching all these bonds will give a slightly higher return than what would be in a pure liquid fund. There will be ups and downs. Not as much as equity but there will be fluctuations. So it is not necessary that you will get only 02% every day. There could be does where it's likely higher. There could be does where it's likely lower. As interest rates move, this will also move. Especially if you are investing for a long term, then you have to be prepared for that which is why we are taking medium risk but it is certainly far more stable than the equity mutual funds. You can consider ICICI Prudent's All Season Bond Fund. Any other corporate bond fund that has given

7:43 a stable and higher rate of return over the last three 5 years. And if you feel comfortable with the brand name along with how big it is and the brand prestige and repute it has to go for it. Out of the ₹2500 that we have to invest in equity, we will invest ₹1500 in NFT 50, an index mutual fund only. Because he is still stable. But for ₹ 1000 we will introduce a new mutual fund. Which is a Flexi Cap Mutual Fund. This is a mutual fund which does not invest only in big companies. Invests by mixing and matching large and medium sized companies. And now there is some bit of intelligence, research data that is needed. Parag Paric's Flexi Cap Mutual Fund has been very high performing and stable for a long time. Stable in the sense has been one of the highest performing mutual funds. Over a long period of

8:29 time. You can consider that. Any other flexi cap or mixed cap mutual funds can be considered. And that is where ₹1000 will go. For high risk we will reverse the ratio from a low risk one. So we will invest 80% in equity and 20% in debt mutual funds. So, out of Rs. 5000, Rs. 1000 is going into the day mutual fund and we will not try to optimize that much. You can invest it in liquid fund. If you have found a really good corporate bond fund, invest in it too. But it's only 1000 of the entire scheme of things. So you will get only 7 to 8-9%. At the most, I'm not going to get much more than that. So keep it there and that's perfectly fine. If you feel like taking a little more risk then you can put it in a gold mutual fund or gold ETF. So gold is seeded and then ETF is done. That's where it can go. What he does is he tracks the gold.

9:15 And if you want to invest in gold because you think it will be a slightly better asset. It is considered safer but there will be ups and downs in it too. Don't at all think that because it is gold, it is very stable. Equity markets are highly volatile. Gold also fluctuates a lot. Falls a lot. But it is considered to be a slightly safer bet when compared to the stock market and also considered as a hedge to the stock market. It has been observed that when the stock market falls, gold remains stable. Sometimes it even increases. Which could be a good balancing factor. So you can invest ₹1,000 in a debt mutual fund or in a gold ETF or mutual fund. The ₹4000 which we have to invest in equity mutual fund. We will split it into three parts. We will still invest ₹1500

10:01 in Nifty 50 index mutual fund. And ₹1500 will be deposited in the same flexi cap. And at ₹ 1000 we will introduce a new version which is Small Cap. This is the most risky when it comes to stock market mutual funds. It invests in the smallest sized companies which are listed on the National Stock or Bombay Stock Exchange. By definition because these are small companies. There are a lot of ups and downs. When the market falls, small caps fall very badly. When the market grows, small caps grow very aggressively. Because they are small the growth can be far better because the base effect is not that much. And over a period of time it has been seen that they have delivered higher results and higher returns than a large cap and a mixed cap. But be prepared

10:47 for volatility. So that's why we are investing only ₹1000 so that we do n't take much risk. We have ₹1,000 to invest and we have to invest in the right manner. So this mix will be ideal for someone investing ₹4000 in equity mutual funds. ₹1500 Nifty 50 ₹100 Flexi Cap ₹1000 Small Cap. At this income level, the most important thing is not which mutual fund you invest in, how much you invest in, what you do. The most important thing is the discipline of investing. If you get into the habit of investing then that can take you miles and miles ahead. So you have to get in that mindset that you have to invest every month with full dedication whether there is sunshine , shade or floods. And SIPs is the right way of doing it. Because the money is deducted on the same date every month. There are

11:34 no two paths in it. Like when we give a loan to the bank, we never say that we don't have money this month, you can take it next month. No, the bank EMI remains deducted. Treat your SIPs the same way. Every month on that date be it 3rd, 5th, 7th or 17th your money will be deducted. And you have to ensure that with the remaining approximately ₹000 that is saved , you will save or make your monthly expenses. I have invested ₹5,000 in my future self. And that habit and discipline is far more important than the actual decision of where to invest. Because gradually your income will increase. Your risk capital will change. So these mutual funds will also change. These will not remain the same for life. But if you do

12:19 n't get used to it, you will keep it forever. Ok? Now let's come to the salary of ₹00 per month. According to the 20% rule, we will now invest ₹10,000 per month in this salary bank. In low risk we start with 70% dept 30% equity. We will take a little more risk because the money is a little more. And of course in your 20s you can make that happen. Out of the ₹7,000 that you want to invest in debt mutual funds, we will invest ₹3,000 in traditional debt mutual funds while you can invest the same in liquid funds. You can invest in a corporate bond fund. And then we will invest ₹4,000 in gold. So you can buy Gold Bees which is a good Gold ETF and that will then help you manage the stability part of your investment. We will not take much risk in ₹3000. We will

13:04 invest in the safest option in equity which is Nifty 50. If you are ready to take a little more risk then invest ₹2000 in NFT 50 and ₹1000 in Nifty Next 50. Which companies are these? It is ranked 51 to 100 in the total size ranking. So naturally because it is a little smaller, not a little, actually quite small from the top 50, so the returns are a little better but the risk is also higher but it's not as much as a mid cap or small cap or even a flexi cap, so if you are willing to and once you get comfortable my opinion will be that out of that ₹3000, ₹2000 in Nifty 50 and ₹1000 in Nifty Next 50 in medium risk, we will not do 50-50, we will do 40% dept and 60% equity, why because the salary is

13:50 a little higher. More risk can be taken in 20. Because rest everything can be managed with in the remaining amount. Which ₹4000 you have to invest in stable rate of return assets. Out of that, let's put ₹2000 in corporate bond fund but take a little more risk. So this is IDFC's credit risk fund which invests in slightly higher risk corporate bonds. So their returns are a little better, 8 to 10% or again 7 to 9%, so now they can take a little risk. And to balance that ₹2000 we will still put in Gold Bees. So that we keep getting the stable gold returns. Stable cap means healthy gold returns with of course gold volatility. We are investing ₹6000 in equity. My suggestion ₹2000 NFT 50 ₹2000 Mid Cap or Flexi Cap & ₹2000

14:38 Small Cap. For small caps, Nibon India Small Cap is excellent. For flexi cap or mid cap you can go for Parag park and of course there are lots of index mutual funds for Nifty 50. You can choose SBI, HDFC, UDI etc. High Risk 10% Debt 90% Equity. So do n't think too much about the ₹1000 that we have to invest in dept. Put it in the gold seeds. Which is safe means at least safer or invest it in a corporate bond mutual fund. We will introduce some things in the ₹9,000 range. Let's start. ₹2000 NFT 50 or Nifi Next 50 if you are a little more comfortable. Now we will invest ₹3000 in flexi cap, so the total will become 5000. We will invest Rs 2000 in small cap. And in 2000 we will

15:24 begin exploring international markets. There are many mutual funds that invest in international markets. As a fund of funds. And you can start investing in the US market and even China market through two mutual funds which are India based. Motilal Oswal has NSDCC 100 in which you will invest in the top 100 companies listed on NSDCC. So naturally you would want to be there because this is like almost the biggest companies that the world has and one of the largest companies that the world has and then there is the US, then there is the global market, there is the brand name, the cash flow is of a different level. And hopefully then the returns will also reflect the same level. Now comes ₹1 lakh per month. Now This Is Where You Are Earning A Lot As A 20 Year Old. And you can take more risks. Because if God forbid any risk doesn't work,

16:10 you still have time to recover from those risk elements. And that is why I often say that 20 is the best time to start investing. One gets into a good habit of investing. Nature starts to be understood like money. And if God forbid any accident happens, some bad decisions, you make some bad calls that go through and may be even a bad economic environment, you will have time to recover, it will take three, four, five years, it will start again, by then you will probably be 30, you still have 20-30 years before you call it retirement, quits and have to enjoy your money. So there is a really long period and there is a safety cushion when it comes to investing early. Low Risk 60% Debt 40% Equity We are investing ₹00 per month at ₹1 Lakh level. Out

16:59 of which we will now try to invest ₹12,000 in stable rate of return mutual funds. I would invest ₹6,000 in a corporate bond fund that gives you between 7 to 8% returns. And the remaining ₹6,000 in gold because that will then ensure that you also have a gold hedge against the stock market. Out of the ₹8000 in equity, you can invest around ₹3000 in Nifty 50 and the remaining ₹4000 or ₹5000 you can invest in a blue chip fund. Blue chip means those companies which are very large. Usually they are very stable. There is not a lot of volatility as compared to the other companies. But over a long period of time they deliver stable returns. Axis has a blue chip fund. HDFC also has a blue chip fund. SBI also has a blue chip fund. And

17:46 they have given on an average 15 to 18% returns over the last 10 years. So not a bad performance at all. That's where you can spend that money. And because it's blue chip it comes. As I said it is relatively stable when it compares to other companies on the stock market. 30% Debt 70% Equity for Medium Risk. So we are investing ₹6,000 in debt funds. We wo n't put much thought into that either. ₹3,000 Corporate Bonds Any fund ₹3,000 Gold Bees and I think we should be good to go. ₹14,000 that I will split into multiple ways and I will bring thematic mutual funds now into the picture. Because there is a lot of money too. The appetite for risk taking is also gradually increasing. We will invest ₹4,000 in NFT 50. Will play a little stable. Then invest around

18:32 ₹3,000 in thematic mutual funds. Thematic mutual funds mean they are sectoral. They follow a theme. There is a pharma mutual fund , a consumer mutual fund, an auto mutual fund, a finance mutual fund. These are based on sectors and depending on which sector do you like? You feel there is potential. You have done your research and you feel that there has been a historically good performance in this. That perfection can be maintained even in future. Make that investment and we are going to do it only for ₹3000 of the total ₹2000 that we are investing. So we will also be a little bit mitigated in case your bit doesn't take off. Out of the remaining ₹7000, invest ₹3000 in a flexi cap mutual fund which we have discussed earlier. Parag Parik is a good example and then ₹4000 in a small cap NPON India

19:19 is the best example. High risk portfolio I would put 100% in equity. Now this is a very aggressive stand. And I recognize that. But here are two and three reasons why I am saying this. Number one, in this income range it's quite possible that one of your PF will be deducted. And a reasonable amount would be spent every month. So that is like a safety question from a day perspective. The second thing is that you have an emergency fund, health insurance and life insurance. So you are absolutely secure from any emergency and unexpected events. And thirdly you are young in age. Earning money very well. So why not double down so that by the age of 35-40 you are playing in crores. And you can actually see that in the next few years perhaps you will achieve financial independence and you can retire and you can stop

20:05 working just to earn money. You will still continue working but it won't be with the pressure to earn money. It would be for the joy of working and doing something that you want to do on your own. Now how to spend this ₹20,000 ? We will still invest ₹5,000 in Nifty 50 or Nifty Next 50. Depending on what your risk appetite is between the two. ₹10,000 I will put it in a mid cap and a flexi cap because this will be a combination of all sizes of the companies and give a nice healthy return of 15-16 perhaps even more percent over a long period of time. And then for ₹5,000 I will put it in small cap. So this blended hopefully will give you about a 16 17 even 18% possible over a long period of time. This means that your money is doubling every 3 to 4

20:54 years. And that is terrific. Because suppose you invest regularly for 15-20 years. And you are let's say by 25 your money will have grown from 16 to 32 times. By the time you are 45 and that means you will probably have all the money to retire and be financially independent. Now after following all these strategies, there are some mistakes that people often make. Let's quickly go to that. Mistake number one: investing in too many mutual funds. Many things don't yield good returns, friend. Understand that mutual funds invest in stocks. So if you buy many mutual funds then it may happen that you are investing in the same stock but through different mutual funds. So the returns will be the same, right friend?

21:40 That's why I would say no more than three to four mutual funds in any category. So don't spread more than two to three in debt and three to four in equity maximum. Put more money into what is working. Number two: past returns are not reflective of future performance. Especially if you are looking at the performance of the last one year. Last one year many people must have hit sixes and fours. But that does n't mean he will continue killing for the next 10 years too. Look at past returns of at least three ideally 5 to 10 years. If it is stable then only invest in it. And stable does not mean rockstar returns that 25% are being given for the last 10 years. These are all absolutely unsustainable numbers. The

22:29 performance of the stock market in the last one or two years. That is not reflective of how long term performance is. Benchmark Nifty 50 12 to 13% Mid Cap Flexi Cap 15 to 16% Small Cap 18 to 20% If your blended portfolio of equity is earning 15 to 16 17% and blended debt portfolio is earning 7 to 9% you are a rockstar. Trust me you are a rockstar. Because if you can sustain this number for 5, 10 or 20 years, you have no idea what result compounding will bring. Number three, portfolio rebalancing will change your income. Your risk profile will change. So please do not continue with the same mutual fund that you started with.

23:16 Evaluate every year. What has changed? Has my income changed? Has my investing capacity increased? Has my risk profile changed? Has the attitude towards money changed? And based on that rebalance, take a little more debt or reduce debt, take a little more equity or reduce it, increase or decrease the risk in equity a little. All of those decisions need not be taken everyday but should be taken once a year and the biggest mistake is stopping the SIP as soon as the market starts falling. Do n't stop SIP, friend. The basis of SIP is that you keep buying whether the market is up or down. When the market is down you will be able to buy more units. When the market is up, you will be able to buy fewer units.

24:02 And over a long period of time that thing will balance out. This is called cost averaging. And that's why SIPs work. Otherwise, if every person knew that the market is down and one should buy, then every person would have bought and become a millionaire. It is impossible to time the market. And it is really really hard for even the best experts to get that right. So who are we? No, learn one who has no idea. We want to invest passively in a disciplined manner. Where we do n't look at our portfolio every day. View every quarter. Rebalance every year and watch your money grow with just one commitment. And for that it is vital that you do not stop your investing. So whether the market is up or down, SIPs should not be stopped. Last thing

24:50 this is not a mistake but something to bear in mind. Every year try to increase your mutual fund SIP by one step. Minimum 5% ideally 10% which means if you are currently doing a SIP of ₹5,000. After one year, make it ₹5,500. Because that will ensure that as your income is increasing , your expenses are not increasing. Your investment is also increasing. And this will only be adding to your future wealth only to your future self. So it's different that you maintain this as well. Now many people ask how to step up? All these apps like Go, Zerodha Coin, UST provide all the functionality to step up.

25:35 But it is also dependent on the platform itself. So, I am not saying this but if it happens tomorrow that Coin gets shut down or Grow gets shut down or Upstax gets shut down or any other such platform gets shut down then the functionality of Step Up will also get shut down. Because mutual funds do not offer the option of step up. So this is only calculated at the platform level. The right way and at least what I would do is if you have a SIP of ₹5,000 running then continue. Next year, when you know that it has to be made ₹5500, then start a new SIP of ₹500. So that SIP of ₹5000 is still going on. Along with that another ₹500 offer has also been started. Now next year it is ₹500, if we have to increase it by 10% then we have to increase it by ₹550 more. So start another SIP of ₹550.

26:21 So now you have three SIPs running. One for Rs 5000, then one for Rs 500 , one for ₹550 and so on and so on. So it will happen that at some point many SIPS will come. And that's perfectly fine. But stopping the SIP and then again starting another SIP of Rs 5500 may not be the right way of doing it because there is a running momentum as to how you are building it and maybe exit load will also come and 1000 more things will happen plus mostly your capital gains tax may also be applicable. Yes, this reminds me that capital gains tax is levied on equity mutual funds. The taxation on equity mutual funds is levied on capital gains. Meaning you make profit when you pay. There is no tax to be paid for holding. Tax has to be paid only on sale. If you have long term capital gain tax,

27:07 meaning you have held the equity for more than 1 year , then you will have to pay 12.5% ​​of the profit at today's rate. Only if the profit is greater than ₹1 lakh in the financial year. Short term capital gains tax is 20%. Meaning if you sell it within 1 year, whatever your profit is, it could be even less than Rs 1 lakh. You will have to pay 20% on that. What happens with day mutual funds is that it is based on your income tax slab. So whatever your income tax rate is, whatever interest you have earned will be added to your income and you will have to pay income tax on that. These are the rules of taxation. Roughly 25-50% of this income and adding up the low risk, medium risk and high risk, which mutual funds

27:54 in which mix can take you towards your investment in gold. We learned this in this video. And I really hope that you start this journey from tomorrow. This is Akramarik signing off. My fourth book on career is written in a very simple, very relatable and very practical way. I wish someone had given me this book when I was 24 years old and totally confused about what to do about my career ? What should I direct my life to ? I have written this book for that same 24 year old Ankur. It is written for you.