Markets stare at worst-ever FPI sell-off in 2018: All you need to know

Foreign portfolio investors (FPIs) have sold the highest-ever $9.1 billion worth of domestic debt and equity in the first nine months of 2018. This is also the first-ever year in which overseas investors have been net sellers in both the debt and equity markets.

At $7.1 billion, the selling in debt markets is by far the most, followed by $5.9 billion in 2013. Then too, the rupee, bond and stocks had tumbled after the US Federal Reserve announced the end of quantitative easing (QE).

The sell-off this year has come when the Fed has embarked upon delivering the biggest annual rate hike in more than a decade. The central bank has already lifted rates thrice this year by 75 basis points to 2.25 per cent, and another quarter-point hike is expected in December.

Meanwhile, the 10-year US Treasury yield has climbed to a 4-year high of 3.2 per cent. Experts say FPI outflows from Indian markets this year are on expected lines, as the Fed had signaled its tightening plans in advance. Not just India, but Asian peers such as Indonesia, South Korea, Thailand, Taiwan and The Philippines have seen sharp FPI outflows this year. Most others, however, have seen positive flows into bond markets. Sharp inflows into mutual funds (MFs) largely helped offset FPI outflows from India. However, flows into equity MFs are moderating. If FPI outflows accelerate further, counter-balancing by MFs could be a challenge.

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Equity mutual funds saw Rs 121 billion net inflow in May: AMFI

Inflow into equity schemes last month was Rs 121 billion, up 8 per cent over April, shows data from the Association of Mutual Funds of India (Amfi). This was still below the 12-month average of Rs 144 billion.

Those in the sector say equity inflow has been holding up despite market volatility. While benchmark indices remained flat, the broader market mid-cap and small-cap indices had dropped as much as 8 per cent in May. Sundeep Sikka, chief executive officer (CEO) at Reliance Nippon AMC, says in the current market environment, continued healthy contribution from systematic ...Read Full Story

A guide to creating a retirement budget -Business Standard

Retirement means taking things easy. But in order to have a happy one it is never a good idea to be complacent about the planning. Finance institutions like HDFC Life offer tailor-made innovative pension plans to provide financial security for a happy retired life without compromising on living standards.

Experts, in fact, recommend that retirement planning should start from the day you start earning. Presenting six steps to help retire in comfort.

1. Budget for retirement

Knowing post-retirement expenses is crucial to retirement planning.

Two ways to do it:

a. Estimate the retirement fund
Every individual needs roughly about 70% to 80% of pre-retirement gross income. Sooner one starts, the better it is. That way even after the paychecks stop coming, life doesn’t.

It’s a good idea to consult a financial advisor on how to create a monthly budget. Many reputed financial firms, like HDFC Life, have formulated retirement expense worksheets, so the help needed to pencil out a budget for retirement is just a click away.

b. Create a detailed monthly budget for retirement
Some expenses, such as those on clothing and entertainment, come down. Others, such as transportation, medicine and insurance, go up. Typically, during the initial retirement years, people spend more on travel and leisure activities, and later, more on health. It is important to note that everyone’s situation is different, so what works for one individual may not work for another.

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2. Start an SIP 
3. Get a life insurance 
4. Allocate a sizeable portion of any raise to saving
5. Factor in inflation and surprise expenses
6. Don't dip into corpus before you retire

Exploring Untapped Potential of Mutual Funds

The Mutual Fund industry has seen unprecedented growth in the past 3 years. In November 2016, total assets managed by mutual funds touched a record high of ?16.5 lakh crores rupees, a year on year growth of 27%.

Total number of folios in India also reached a record number of 4.7 crore. However, mutual funds still suffer extremely low penetration in India. A 7% share of Assets under Management (AUM) of Mutual Funds to GDP is significantly lower than some other emerging economies like Brazil (42%) and South Africa (33%).

Introducing Direct plans of mutual funds

MoneyFront aims to highlight the true potential of mutual funds to investors by firstly adopting the no-conflict option of direct plan of mutual funds. Direct plans are an alternative to the regular plans of mutual funds where you can skip the distributors and agents and invest directly with the Fund House.

Exploring Untapped Potential of Mutual Funds A direct consequence of this is an increase in returns by up to 1.5% annually, as the commissions paid to the distributors/agent are not charged to the scheme. MoneyFront, in its endeavour to provide maximum benefits to clients offers only ‘Direct Plans’.

For investors who are not well-versed about mutual funds or who need help with their asset allocation, MoneyFront also offers investment advisory that provides model portfolios and scheme recommendations tailor-made to the investor’s financial goals and risk tolerance levels. Over and above that, the investors have access to a vast library of news, views, developments, and statistics related to mutual fund schemes and everything else that impacts them.(read more...)