Should Investors Consider Fund of Funds in their Portfolio?

A Fund of Fund means a mutual fund scheme that invests in other mutual fund schemes. The fund manager invests in other mutual funds instead of directly investing in equities or bonds. The portfolio is catered for investors with different risk profiles and financial goals. The Fund of Funds offers such benefits that the investors gain from the diversification as a result of investing in various fund categories.

The most sought-after Fund of Funds in India are:

Multi Asset allocation fund of funds are mutual funds that invest in and even other asset classes such as gold, equity, debt, and other commodities.
Gold Fund of Funds are funds that have underlying investments in Gold ETFs
International funds are investments in mutual funds that comprise bonds and shares of global companies.
Investing in a fund of funds is a smart choice if one looks into a few aspects.

Advantages

An investor’s investment is diversified across several funds from various sectors..
This investment strategy of the fund of funds in India can helps one to get exposure in some of the top-performing mutual funds even with a limited investment budget.
In case of Fund of Funds, taxation levied is payable by an investor, only when the fund is redeemed. However, both short-term and long-term capital gains are subject to tax deductions in India, depending upon the annual income of the investor and the time of investment.
There is no taxation on fund of funds scheme if Fund Manager rebalances the scheme portfolio.
Disadvantages

The basic meaning of Fund of Funds is that the mutual fund invests in many funds that further invest in several securities. It is quite possible that the Fund of Funds, will own the same stocks and securities through different funds. This reduces the potential for diversification.
The Fund of Fund expense includes expenses of the underlying funds owned by the Fund of Funds.
Who should Invest?

Investors who wish to invest long term may avail of the fund of funds benefits by investing in such funds.
The main aim of the fund of funds in India isto augment returns by investing in a diverse portfolio thus trying to minimise the overall risk.
Individuals with limited financial resources and low liquidity needs which they can spare for a more extended period of time can choose avail of the benefits of a fund of funds. Since such funds invest in different types of mutual funds, the investor also gains access to high-value funds.
Also new investors with limited knowledge looking for a long-term and diversified investment option can invest in such funds.

How Do Investors Compare Mutual Fund Schemes?

Generally, mutual fund scheme is made up of investments in equity, debt or a mixture of both. They can be further classified structurally as open-ended or close-ended mutual fund schemes.

However, comparing the performance of mutual fund scheme is not such a simple thing and involves assessing other parameters.

Benchmark
Analyze the performance of the fund with respect to the benchmark. While comparing mutual fund schemes one can consider a parameter as a fund which gains more when the market rises and loses less when the market falls.

Investment period
Investment horizon relates to the time period within which the investor wishes to invest in the given fund. For instance, equity funds are suitable for a long-term investment period. The fund objective for this period generally would be wealth creation at relatively high risk.

If you wish to invest surplus funds for a short term, investors may consider liquid funds as an option for investment.

Risk
According to the investment thumb rule, higher the risk higher the chances of reward . Hence, while comparing mutual fund scheme performance, one may use alpha, sharpe and beta ratios to calculate the inherent risk-reward potential of a mutual fund. Sharpe reveals the amount of return per unit of risk. Alpha tells how much extra return the fund achieves over and above the benchmark.

Suppose two funds Fund A and Fund B have a Sharpe ratio of 1.8 and 2; respectively, here, Fund B depicts higher risk-adjusted returns than Fund A.

Expense ratio
It is an annual fee levied by the fund house on unit holders to manage the portfolio on their behalf. A higher expense ratio reduces the profits earned by the investors. Look for a fund that has the lowest expense ratio in the given category. Direct plans have a lower expense ratio than regular plans because there is no distributor commission. Equity funds have higher expense ratio because of higher transaction costs and brokerage than debt funds.

Sector Allocation
A mutual fund scheme allocates the invested capital according to its investment objective. With reference to asset allocation, SEBI has given a mandate, which every fund in a particular category follows. However, two funds belonging to the same category need not have similar sector allocation.

Fund A might invest more in financial services, whereas Fund B might have major investments in FMCG companies while maintaining SEBI mandate.

While comparing two funds, analyse the sector allocations also. Ensure that the fund risk profile aligns with your risk appetite and choose accordingly.

Finding the Best Business Insurance Advisor in Australia

The first step that you need to take if you want to start surviving in a cut throat economy like Australia is to find a good business insurance advisor in Australia. It is true that we are a country that prides itself with its ‘English culture’ and a well versed English speaking population. But what most people do not realize is that you can actually save yourself quite a lot of money on business insurance in Australia if you approach the right entity. And while there are some people who will try to charge you exorbitantly for their advice and expertise, there are also others who are ready to work with you. The trick is to identify the right consultant for you!

In this day and age, time is often the biggest problem when it comes to starting up a new company. In fact, in order to be taken seriously in the business world, you have to have the best business insurance advisor in Australia as well as the financial planner. A good financial planner is much better than an expert on the law, which is what the financial planner plays. He or she is in charge of ensuring that your company runs smoothly without too many problems, as well as helping you deal with problems that may arise over the course of your business operations.

It is highly recommended that you choose a business insurance advisor in Australia that can give you sound financial advice. You need someone who is able to make you understand the importance of maintaining appropriate balance sheets. He or she should also be able to help you achieve good returns for the investment you have made in your company. This, in turn, is imperative to your survival and profitability. If you have a financial planner at your beck and call, you would never find yourself at the end of the financial road having lost all your money.

The business insurance advisor in Australia that you choose must be someone who is comfortable working by phone. This way, he or she can make a personal connection with you. By so doing, you can relax knowing that the advisor is genuinely working for you. He or she can explain things to you in a manner that makes you understand them.

As a business owner, it is very important that you find an expert to help you manage the risks involved in running your business. This means that you should never settle for any insurance company just because it is cheap. The most ideal company to get your business insurance advisor from is one that would give you the right advice. This way, you can ensure that you get the best service and coverage at the best prices available in the market.

Surprise Your Little Sister, Present Her a Picnic Basket on Her Birthday!

Picnic baskets hit the markets as the latest gifts for all occasions! They come in two types. Both are fun to use and they could be used for any purpose you wish. While creating one, of your own not just adds a touch of elegance to your part but also makes it more appealing because of sentimental value. You can create one for your sister’s birthday. You just need a big one with large handles, and a colorful plastic tablecloth which you will have to use with a lining. Inside it, put in, paper plates, flatware, napkins, utensils and knives of bright colors to add to the totality of the entire summer.

This particular token which you have created all by yourself, would surely be cherished by the recipient since they are aware that you have not just poured your heart in creating it of the most astonishing design, you’ve also put in a sufficient amount of time and effort.

Everyone is not blessed with the talent, creativity or skill that might allow them to design such lovely picnic baskets and that is the reason why most people just opt for purchasing them. The list below gives you the details about the various categories of these picnic baskets

1. Two-fold type – these picnic baskets can be opened on both sides at the same time. This kind of basket is divided in two parts and you can have the option of simply putting the essentials of your picnic on one side, and the other essentials on the other side. This type picnic basket is ideal if you love to carry big blankets or hand towels which cannot be put inside the basket alongside other picnic necessities including food.

2. Shelved picnic baskets – these are ideal for soda or wine bottles, as well as other bottled products as these picnic baskets have special spill-proof compartments for such essentials.

3. House-like picnic baskets – these are for people who love eating while they travel to their picnic destination. These types are made in a way to look like houses where you can open either top side so you can have access to the foods that you packed without upsetting the rest of the other things inside your basket. There are even extra spaces for keeping feeding bottles and other stuffs that you might want to use during your trip.

If your sister’s birthday is just around the corner, you can either make one for her or if you run short of time, you can even purchase these from online dealers. One such site is beachmall.com. You may visit this site and you are sure to get just the right kind of these baskets you have been longing to present your sister!