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COMPLIMENTARY COPY, NOT FOR SALE

VOLUME 11, EDITION 4 THE PATH TO PROSPERITY

The potion of wealth

The best time to start investing for growth is now!
Amrit Kaal - For India and its investors.

Amrit Kaal for women

There was never a better time to invest than now.
Knowledge Partner
An Investor Education & Awareness Initiative by
1 Aditya Birla Sun Life Mutual Fund
Contents
3 CEO’S MESSAGE
A message to readers by
9 INVESTMENT NUGGETS
All that you need to know
19 RETIREMENT
PLANNING
Plan your retirement
A Balasubramanian about passive funds

4 WEALTH
WISDOM BITES 11 COVER STORY
l The potion of wealth
21 CHOOSING A
MUTUAL FUND
A mutual fund for
10 Financial every need
commandments l Amrit Kaal for women

6 INVESTMENT

23
INSIGHTS
Freedom INVESTORS’
and money HANGOUT
Investor queries
answered by
Dhirendra Kumar

17 MILLENIALS

26
AND MONEY
7 financial tips for millennials

7
TRAVEL
MYSURU
FINANCIAL
PLANNING Travel to Mysuru
Income - to be transported
Savings = back in time
Expenses

Disclaimer: The views and opinions expressed are those of Value Research India Pvt. Ltd. and do not necessarily reflect the views of
Aditya Birla Sun Life AMC Limited (“ABSLAMC”) /Aditya Birla Sun Life Mutual Fund (“the Fund”). ABSLAMC/ the Fund is not guarantee-
ing/offering/communicating any indicative yield on investments. ABSLAMC or any of its officers, employees, personnel, directors make
no representation or warranty, express or implied, as to the accuracy, completeness or reliability of the content and hereby disclaim any
liability with regard to the same.

2
 CEO’S MESSAGE
A BALASUBRAMANIAN
MD & CEO, Aditya Birla Sun Life AMC Limited

Dear Readers, And according to a recent CAMS report, in

We have entered into the Amrit Kaal. FY22, 25 lakh first-time investors were
As we reflect on the first half of 2023, we take millennials who chose to invest in mutual funds.
pride in the positive developments in the Indian Even passive investing through index funds has
and global markets. gained significant momentum both globally and
Globally, energy prices and interest rate hikes in India. I believe that both active and passive
have moderated, contributing to a stabilising investing can coexist harmoniously.
macroeconomic environment. Additionally, India The key is in selecting the most suitable
Inc.’s encouraging earnings report have addressed funds for yourself, after carefully considering
the concerns about a recession. their asset classes.
Both government and private sector spend is In this light, we bring you this issue. We talk
on the rise, positioning us as a promising about investing in Amrit Kaal - a period of
investment destination. The country’s auspicious growth and prosperity. We consider
fundamental economic strength also makes it an growth and wealth for our women, we have
attractive proposition for long-term growth something for our millennials, and of course we
opportunities. From an investor’s perspective, this answer your questions.
is reassuring. We hope that this issue helps you
It’s exciting to note a surge in young investors, understand the opportunities and trends during
including women. As per one of the recent AMFI this unprecedented phase, help you make
reports, over the last three years, the number of informed decisions, and maximise your
women investors who have opened mutual fund investment potential.
accounts has grown significantly. Do give it a read!

3
 WEALTH WISDOM BITES
K S RAO
Head—Investor Education and Distribution
Development, Aditya Birla Sun Life AMC Ltd.

10 Financial commandments
Embrace your financial freedom this Independence Day.

A
s our country may vary from your retirement planning,
completes its children’s education, owning your dream
77th house or any other long-term to medium
Independence term commitments. Having a clear
Day on August 15, 2023, roadmap to these goals is essential.
we all can resonate with
the spirit of freedom. Start early
The auspiciousness of Mixing investment with time creates
this occasion not only magic. It harnesses the power of com-
commemorates the pounding by investing as early as possible.
freedom of our nation, but The longer you remain invested, the chanc-
also gives us the inspiration es of growing your wealth increase. So, initiate
to reflect on another form of your investment journey as soon as possible and
independence. It is the most provide it the maximum time to grow.
crucial freedom that enables
personal liberation, our Embrace financial prudence
financial independence. Save today, spend tomorrow! The essence
Financial independence is the of financial independence lies in
stepping stone to a life where dreams living within your means.
are pursued, adventures are experienced, Abstain from extravagant
and the well-being of loved ones is ensured. spending, concentrating
It provides an enduring sense of peace,
reduces stress and creates a safety net for
future uncertainties.
On this 77th year of independence, let’s take
a moment to reflect on the road to our financial
independence. Here are 10 commandments to
guide you on this financial freedom journey.

Set clear financial goals

The first commandment of financial freedom is instead on saving and investing some of your
to set a tangible financial goal and to devise a earnings. Consistent saving creates a surplus
strategy to accomplish it. This helps in deciding that can be invested. So, accumulate steadily,
the amount you would require in future and the and propel yourself closer to your financial inde-
timeline needed to achieve them. These goals pendence goals.

4
 Mutual Fund SIPs
Choose them as companions in your finan-
cial journey. Systematic Investment Plans
(SIPs) are the ideal vehicles for long-
term investment. By investing a fixed
sum at regular intervals, SIPs nullify the
impact of market volatility and opti-
mise returns over the long run. This
makes them an essential part of your
financial plan. In fact, they should be
your Sab se important plan.

Revise your financial plan

periodically
As your life circumstances and finan-
cial objectives evolve, so should your
investment plan. Regular reassessments
and adjustments of your financial strate-
gy are crucial to stay on track with your
changing needs, and eventually your finan-
Diversify your investments cial independence goals.
Balancing financial risks is key to investments.
Distribute your investments across varied asset Manage your emotions
classes and industries to mitigate risk. Avoid impulsive investment decisions driven by fear
Diversification safeguards your portfolio or greed. Exercise discipline and rationality in man-
against market volatility and enhances the aging your investments, focusing on long-term
probability of long-term returns. This is where financial aspirations rather than short-term market
mutual funds excel, enabling you to invest in movements. Prioritise Goals over Emotions.
diverse assets with better risk management.
Seek professional advice if needed
Imbibe the long-term approach When managing your investments seems daunt-
Investing is a marathon, not a sprint. Resist the ing, consider seeking advice from a financial advi-
urge to time the market and maintain a long- sor. Their expert perspective, tailored to your
term perspective instead. Don’t let short-term financial situation and goals, can offer valuable
market volatility shake your long-term invest- insights and strategies. They can provide person-
ment strategy. Stay put till you realise your goal. alised advice tailored to your unique financial cir-
cumstances and goals.
Stay educated and informed This Independence Day, let’s plan for our financial
Arm yourself with knowledge. Stay up-to-date independence. Let’s strive to achieve our goals, enjoy
with financial news, economic trends, and a fulfilling life, and contribute to the growth and
investment strategies. Constantly learn, adapt, prosperity of our nation during this Amrit Kaal’.
and refine your investment approach. This will Embrace these 10 commandments and take the
help you make informed decisions. reins of your financial future into your own hands.

Disclaimer: Mutual Fund investments are subject to market risks, read all scheme related documents carefully.

5
 INVESTMENT INSIGHTS
DHIRENDRA KUMAR
CEO, Value Research

Freedom and money

I
t’s the season for that stage.
freedom-themed A silver lining in the If you want to achieve
everything, and I COVID times was that financial freedom, don’t
feel there really is a many people discovered
deep connection first-hand how a little Trade in equities with a
between freedom and financial freedom goes short-term mindset
personal finance. a long way in a crisis.
Attaining financial A lot of people have
freedom is a worth- had professional trouble Invest borrowed money
while and a big person- since April 2020.
al goal for all of us However, those who had
because nothing dam- the basics in place
Buy insurance products except
ages one’s peace of came through mostly
term plans and health insurance
mind as the lack of fine. And the basics are
financial freedom. Like very basic - good health
all freedoms, aware- and term insurance Buy Bitcoin or any
ness of financial free- cover, no excessive other ‘crypto’
dom occurs only when EMIs, and a year or
it’s missing, meaning two’s expenses saved
financial slavery is what up in liquid investments. Invest in IPOs without
we feel acutely, not Those who had done knowing about them
financial freedom. this at least since the
Like other freedoms beginning of their
(like political freedom or careers, felt more
Invest only in aggressive
freedom from bad relaxed about-facing
assets like equity
health), there are differ- problems in life.
ent levels of financial It sounds obvious, Invest in anything except heavily
freedom, and the high- but the first step is to regulated funds and stocks
est is not having to earn save, and the second is
for the rest of one’s life. to save enough. Many
Now, apart from those of us don’t even start Buy or sell equity (or equity funds)
who have inherited large for years after starting based on market fluctuation
fortunes, or those to earn. Given the over-
whose burden we tax- whelming consumerism,
payers carry, it takes it’s not easy to start Entirely avoid aggressive
most of us an entire either, but it’s most assets like equity etc.
working life to reach certainly the only way.

6
 FINANCIAL PLANNING
VINOD BHAT
Portfolio Manager and Equity Strategist,
Aditya Birla Sun Life AMC Ltd.

Income - Savings = Expenses

The first step to planning finances.

V
anshika, was about to finish
her 4-year B.Tech degree,
from a reputed Engineering
college. She wanted to do
her PhD in bio-medical engineering
from a reputed university in the USA.
Due to her consistently high
academic performance, she even
secured admission in one of the
leading universities in the USA for a
Master’s program. It was not random
success, but years of hard work,
planning, and dedication that
Vanshika and her parents had put into
her career.
But there was a catch.The univer-
sity would not give her any financial
aid, although they indicated that she
had high chances of getting a
research or teaching assistantship.
Vanshika needed to fund her tuition and liv- The next day, Vanshika’s parents took
ing expenses herself. And it was steep! The her to meet Siddharth, their Financial Advisor.
total cost for the two year program would ‘Vanshika, you were not alone in planning
come close to `1.5 crore. Even with an assis- this. Your parents were planning as well.’
tantship, she would still need around `1 crore Siddharth smiled.
of tuition expenses. ‘I don’t understand’ Vanshika was won-
Vanshika was worried. She considered post- drously intrigued.
poning her education plans for a few years, to ‘Ever since you started preparing for entrance
earn, save up money, and then apply again. exams in the ninth grade, your parents were con-
‘Don’t worry, beta. You’re not the only one fident of your success. They realized, that you
planning and preparing for this moment. We will might even pursue higher studies abroad and
support you.’ her mom consoled her. they wanted to be prepared financially,’
‘We have a surprise for you. Tomorrow morning, Siddharth shared.
you’ll know.’ her dad added. ‘Yes, and we were fortunate to meet

7
 control over it.’
‘So, what is the right way
to think about it?’ Vanshika
inquired.
‘Income – Savings =
Expenses,’ her parents
replied together with a smile.
‘Yes. And it’s important to
understand this,’ Siddharth
added. ‘From our pay check,
we should first keep aside at
least 20 per cent, more, if
possible, as savings towards
our goals. Then spend the
remaining amount wisely. So,
Siddharth at the right time,’ Vanshika’s dad if my in-hand salary every month is `100, then I
added. ‘He showed us the data for tuition fees would save `20 as soon as I got my salary and
and living expenses at top US universities and budget only `80 for all my expenses.’
how the cost for education is increasing every ‘The biggest advantage of doing this is that
year. He explained how, at the time you would we feel in control. Also, we start building a cor-
finish your Engineering degree, the cost for a pus towards our goal. Actually, we ending up
Master’s degree in the US could come in the `1 cutting a lot of frivolous expenses which are a
crore to `1.5 crore range.’ distraction from our goal,’ Siddharth continued.
‘Siddharth advised us to start saving some ‘That’s right. We started saving `25,000 per
money every month and investing it,’ her month specifically for your higher education,’
mother continued. Vanshika’s mom chimed in. ‘That’s `three lakh of
‘I only showed your parents the path,’ saving per year. And we have been doing this for
Siddharth interjected. ‘Eight years ago, we set eight years.’
up a goal to create a fund of `1 crore for your ‘‘Wow. I didn’t know this. You must have
higher education, and came up with a plan to made quite a few sacrifices for this. But the sav-
achieve it. Fortunately, we had enough time to ings still add up to just `24 lakh,’ Vanshika was
build a corpus and your parents took my quick with numbers.
advice seriously.’ ‘That’s right. But they didn’t stop there,’
‘Really? So, what exactly did you tell them to Siddharth answered. ‘That was just the
do?’ Vanshika was quite curious now. first step.’
‘Well, the first thing I told them was to ‘Yes, the next step was to invest it wisely.
change their mindset,’ Siddharth started. And that’s where Siddharth proved his mettle,’
‘Typically, we think of our income, expenses, Vanshika’s Dad told her.
and savings as Income – Expenses = ‘So, what exactly did you do? I am very inter-
Savings,’ he added. ested to know that now,’ Vanshika exclaimed.
‘But isn’t that what all of us have been taught She was naturally curious.
all our life?’ Vanshika exclaimed. (To be continued)
‘Yes. And that sets everyone off on the
wrong path which many are never able to recov- Vinod Bhat is the author of the book ‘The Financial Independence Marathon’
which has been recently published by Penguin India. Readers can refer to the
er from. Savings becomes a by-product and we book for many such golden nuggets. The book is available on Amazon.in at:
https://www.amazon.in/Financial-Independence-Marathon-Unlock-Power/
end up feeling helpless thinking we have no dp/0143459988

8
 INVESTMENT NUGGETS
All that you need to know
about passive funds
Curious about passive funds? Let’s get started
with an introduction.

P
assive funds mirror a
market index, such as the DIFFERENT TYPES OF PASSIVE FUNDS
Nifty or Sensex. They
invest in the same
Index funds
proportion as the stocks that
These funds replicate popular indices like
constitute the selected index. For
Nifty50 or Sensex. They can be bought or
instance, a passively managed
sold like any other mutual fund scheme and
fund that tracks the Sensex
operate in the same way.
invests in the stocks of the same
30 companies that form the
Sensex in the same proportion. Exchange Traded Fund (ETF)
Unlike regular funds, ETF units are not
Difference between purchased from the fund house but are traded
passive and active funds on the stock exchange like equity shares.
Passive funds are guided by an Their prices differ from their NAV (Net Asset
index, and the fund manager does Value). To invest in ETFs, you need a Demat
not exercise their judgement when and a trading account. However, ETFs
selecting or trading stocks. In generally have a lower expense ratio
contrast, active fund managers compared to index funds.
may or may not invest in all the
companies of an index and use
their expertise to decide when to Fund of Funds (FOFs)
buy or sell. FOFs may or may not track an index. These
So, when a new company, X, schemes invest in one or more other mutual
enters the Sensex with proportion fund schemes. For instance, Fund A (FOF)
‘P,’ a passive fund will invest in X may simply invest the investors’ money in
in proportion P. However, an active another mutual fund scheme, say Fund B.
fund manager may choose not to However, some FOFs allow
invest in it. the fund manager to actively
decide how much to invest
Advantages of passive in each scheme and make
funds ongoing allocation changes.
Low cost – Index funds and Such FOFs cannot be
ETFs have lower expense ratios considered passive funds.
than active mutual funds since

9
 cate index movements accurately. For example, if an
Wondering what factors to consider while open-end fund tracking the Sensex increases by 90
choosing a passive fund? basis points while the Sensex rises by 1 per cent, the
Click here! difference would result in a tracking error.
Since the objective of an index fund is to mimic
the index, a lower tracking error indicates a more effi-
cient fund.

Factors to consider when choosing

an ETF
In addition to the previously mentioned factors,
consider liquidity and the difference between the
Net Asset Value (NAV) and the traded price on
the exchange.
they do not involve active management. However, in Remember that buying ETF units directly from
the case of FOFs, you may incur the cost of both the the fund house may only be feasible for large
FOF and the underlying fund’s expense ratios. investments (e.g., `1 crore or more). It is better to
purchase an ETF unit at a trading price lower than
Reduced risk of fund manager errors – the NAV of the fund.
Although active fund managers strive to outperform Additionally, check the liquidity of the ETF, which
the index, they sometimes make mistakes. indicates how frequently it is traded on the stock
For example, they may invest in a company that exchange. Higher trading volume or liquidity ensures
goes bankrupt, resulting in a stock price crash. On easier selling when needed.
the other hand, Index funds replicate the market
index, like the Sensex, thereby reducing the risk of
such occurrences.

Disadvantages of passive funds

You miss out on the opportunity to earn higher
returns than the market index and benefit from the
expertise of a fund manager. The design of index
funds and ETFs inherently limits the possibility of
achieving returns higher than broader indices.

Factors to consider when choosing an Should you invest in passive funds

index fund Investing in passive funds suits conservative investors
Expense ratio – The lower, the better! who do not aim to outperform the market index. If
The expense ratio directly impacts the returns of a you desire higher returns over longer periods, actively
passive fund, as all funds tracking the same index managed schemes are a better option.
have the same portfolio. An index fund with a lower Similarly, investing in FOFs is sensible only when
expense ratio than another tracking the same index the underlying fund (in which the FOF invests) is not
will likely generate higher returns. Therefore, look for easily accessible. For example, FOFs investing in for-
the index fund with the lowest expense ratio. eign mutual fund schemes or indices like the
Tracking error – The lower, the better. NASDAQ have a valid investment case.
Yes, again! Otherwise, it is more practical to invest directly in
Tracking error occurs when the fund fails to repli- the underlying fund.

10
 COVER STORY

The potion of wealth

The best time to start investing for growth is now!
Amrit Kaal - For India and its investors.

11
T
he best day to start investing was But better infrastructure without efficient tax-
yesterday. The next best? Today! ation is a half-baked solution. In this sense, GST
And, what better time to start than in was a real game-changer because it brought a
‘Amrit Kaal’? uniform tax structure and reduced compliance.
Amrit Kaal - is the time which is traditionally Yet another factor that drove our economic
regarded as the most auspicious time to begin growth was the making of Digital India. This
new work. included various initiatives like establishing iden-
But, if you were to consider it with financial tity through Aadhar, the ease of payment through
principles in mind, this is the time to witness and the UPI, and the ongoing aggregation of all this
participate actively in the magic of compounding. data across platforms.
We’re finally past the tipping point in our growth Combine this with our increasing domestic
curve. This is the time when Independent India’s consumption, our transition from an agricultural
efforts throughout the last 75 years, finally seem economy to a service-led economy, the ‘Make in
to reflect in its visible, tangible growth. India’ initiative, and the PLI schemes for manu-
It is in this context, that we witness India’s facturers. And lastly, factor in our focus on clean
recent economic growth being nothing short of a and green energy.
perfect winning-against-all-odds script.
Organisations like the IMF and the World Bank Understanding ‘Amrit Kaal’
are raving about India’s resilience even in the According to Mr Deepak Bagla, the former head
currently chaotic world. of Invest India – India’s investment promotion
and facilitation agency, our GDP is roughly USD
Factors behind this growth 3.5 trillion. It took 67 years to reach the first tril-
The government’s push for better infrastructure lion, eight years to reach the second trillion, and
is fueling India’s growth, especially for an effi- only five years to reach the third trillion!
cient transport network. More roads and flights You know what is incredible about this?
simply mean more business with easy access to To a keen eye, this is the same magic of com-
consumers. pounding at a macro level, as seen in individual

Millennials shape the future of mutual funds

More than 50% of new investors are millennials (FY19-FY23)

50 New Investors Millenials

40 48

30 37

20 29
26
21 22
10 19
16
12 12
0

FY19 FY20 FY21 FY22 FY23

No. of investors in lakhs; Source: CAMS

12
investments. When we recommend that you
invest in equity through SIP for a long time, this Want to embrace financial freedom?
is precisely what we are talking about - the time Click here!
value of your money! Your ability to grow your
money significantly over time.

What does all this mean for you

These combined factors establish that this is truly
a period of growth, development, and prosperity.
This means we have a unique opportunity at
the moment. The opportunity to let India make
us rich. So, even if you have missed the bus of
equity investing, you can still get on it, and this
time, the bus will go farther and faster. So, the
obvious question is, how to go about it?
keep investing.
Start investing with This is another reason why an SIP is the best
discipline way to invest. All you have to do is to set a man-
If you haven’t started investing already, now is date to your bank once, and your money is auto-
the best time! matically deducted from your account. You can sim-
Moreover, investing has never been more ply set a monthly SIP in line with your salary cycle.
accessible in the past, what with Digital India in No wonder, with all these factors, the latest
the picture now. You can start an SIP with as less CAMS data indicates that SIP investing has
as `500. You can do your KYC online, and you grown by leaps and bounds in recent years.
can pay online. More than 50 per cent of the new investors
Moreover, it is crucial to keep investing regu- are millennials. In FY22, 25 lakh first-time inves-
larly with discipline. Many people start enthusias- tors were millennials, and more than 50 per cent
tically but lose tempo, get bored, or forget to of them invested using digital methods.

The digital investor

Fewer millennial investors use paper-based methods now.

120 Digital Electronic Paper

90 16% 15% 19%

33%
46%
60
70% 71% 71%
53%
30 35%

19% 14% 15% 14%

0 10%

FY19 FY20 FY21 FY22 FY23

Mode of transaction in percentage; Source: CAMS

13
 Constant SIP vs Step-up SIP
Stepping-up your SIP contributions every year by 10 per cent can make a huge
difference to your corpus.

Starting SIP : `10,000 Constant SIP Step-up-SIP

Invested in average aggressive hybrid fund 4.51 crore

2.27 crore
1.81 crore

92.65 lakh
78.37 lakh
45.26 lakh
20.79 lakh 30.61 lakh

10-years 15-years 20-years 25-years

Plan your goals quickly move to pure equity funds, say a flexi-
The second step in investment is to plan your cap fund, for good returns.
goals. Financial goals enable you to plan your
investment, amount, time horizon, etc. Increasing your SIP
Typically goals can be either short-term or While this may not be obvious, the real magic of
long-term. For instance, retirement is a long- investment is visible over a long time. And if you
term goal, while buying a car can be a short- can increase investing with time, as your earnings
term goal. Based on this timeline, an investment increase, it even gets better.
is said to have a long-term horizon when you Most people make a simple error. They start.
want to invest for five years or more. They diligently keep investing. But they do not
increase the value of their investments as their
Choosing the right fund earnings increase. As a result, they reap the ben-
This critical step may look complicated, but this efits of compounding but cannot unleash the full
is no rocket science. All you need to do is to potential of wealth generation.
start investing. For instance, the SIP graph above will show
A debt fund is a good choice if you’re invest- you how your wealth can grow significantly if you
ing for a short-term goal. For any long-term increase the value of your investment by 10%
goal, an equity fund is the best option. Over a every year.
long term, even the volatility risk of equities is
reduced.. Conclusion
If you’re a first-time investor in an equity Our message is simple. There’s saving, and
fund, you will benefit from an aggressive-hybrid there’s investment. If you truly want to grow your
fund initially. It reduces your risk and lets you wealth, you must begin investing now. The next
witness the value of systematic investing over 25 years are going to be Amrit Kaal, a period
2-3 years. when the country is going to reap the magical
Once you get a hang of the market, you can benefits of the last 75 years of effort.

14
 COVER STORY
Amrit Kaal for women
There was never a better time to invest than now.

T
he world is changing. So is India.
We’re in an era of growth. And never
before in the history of finance and eco-
nomics have women been more instrumen-
tal. While women are increasingly taking charge of
their finances, they are still far behind where
they can be.
So, in this Amrit Kaal let’s see how our
women can invest and grow
their money better.

Myths around women

and money
One of the common reasons
why many women shy from
investing is the myths sur-
rounding women and finance. The biggest of them put this money in suitable instruments.
is that women do not understand finance or do not Financial decisions are not rocket science.
have the mathematical abilities needed to make the Common sense is as instrumental to finance as any
right decisions. other decision-making process, and women have it
Another myth is that women are not good at in plenty and then some. As far as the more techni-
managing money and they are risk-averse. On top of cal aspects of investing are concerned, there’s
everything else, the belief that women love to always expert advice available, just like it is for men.
splurge is one thing that makes many people believe
that women do not make good investors. How is the scenario changing
For women to be in charge of their wealth, the game
What’s the truth has to change on multiple levels. Change has already
A lot of these myths, are simple gender biases. One begun and is visible to an extent.
doesn’t need a background in Maths and Statistics For instance, India’s recent economic growth has
to make wise financial decisions. been nothing short of a perfect winning-against-all-
Although there is no research available in India, odds script. Organisations like the IMF and the
some reports from the developed economies sug- World Bank are raving about India’s resilience even
gest that women end up spending more on essential in the currently chaotic world. This means more
family needs like food, clothing, medical expenses opportunities for women to invest.
etc. This leads to lower surplus investable income Also, the push behind women’s entrepreneurship,
with them, hence the myth that they spend more. STEM education, equal pay, and women’s safety at
And yet, despite conservative household budgets, workplace, have enabled them to earn more.
our women, through generations, have managed to The latest AMFI data indicates that the number
save money. All that needs to change is for them to of women between 18 and 24 who invest in mutual

15
 More young women investors
Age group 18-24 years Age group 25-35 years
3,00,000 21,00,000
Number of unique
women investors

2,00,000 14,00,000

1,00,000 7,00,000

0 0
Dec-19 Dec-20 Dec-21 Dec-22 Dec-19 Dec-20 Dec-21 Dec-22

Note: Data is based on unique PANs/ PEKRNs; Source:AMFI

funds has grown more than four times (62 per cent For instance, retirement is a long-term goal, while
annualised growth) from December 2019 to buying a car can be a short-term goal. In a long-
December 2022. term horizon, you invest regularly for five years or
Similarly, the number of women investors in the more. A short-term investment horizon is one to
25-35 age bracket has doubled (grew at 33 per three years.
cent) over a similar period. In contrast, the older age l Choose the right fund. This critical step may look
groups have been growing relatively slowly, at 11 per complicated, but this is no rocket science.
cent annualised growth. A debt fund is a good choice if you’re investing
for a short-term goal. For any long-term goal, an
How to start your investment journey equity fund is the best option. It balances your risk
If you still haven’t started investing, our first advice and returns well.
is to begin. Do not give in to the typical biases If you’re a first-time investor in an equity fund,
about women’s investing ability. Just start! you will initially benefit from an aggressive-hybrid
Next, do not hesitate to seek expert advice or fund. It reduces your risk and lets you witness the
support when choosing the right investment options, value of systematic investing over 2-3 years.
specially in the early stages of your journey. Once you get a hang of the market, you can
Remember, the basic principles of investing, quickly move to pure equity funds, say a flexi-cap
finance, and economics remain the same for men fund, for good returns.
and women. So, the previous story remains relevant l Increase your SIP gradually. If you’re a working
to you as much as it is for your male counterparts. woman, keep increasing your SIP as your earnings
To conclude, here are some simple steps sum- increase. If you’re a homemaker, you can still invest
marised to start your journey. an extra amount whenever you get cash gifts, inheri-
l Start investing with discipline. You can start an tance etc.
SIP with as less as `500. You can do your KYC and Remember, your key to success is the consisten-
payments online. cy of investment so that you can create an emer-
l Stay regular. Many people start enthusiasti- gency corpus or a nest egg for your old age.
cally but lose tempo, get bored, or forget to The message is simple. The fundamentals are not
keep investing. gendered. So, your journey doesn’t have to be ste-
l The next step in investment is to plan your goals. reotyped, either. Women can manage finances; they
Your goals can be either short-term or long-term. do manage finance. And successfully so.

16
 MILLENIALS AND MONEY

7 financial tips for millennials

If you have been working for a while but haven’t started
investing yet, here is what you should do.

R
aghav (27) started working with an IT you sell.
company around two years ago. He gets a In Raghav’s case,
salary of `35,000. Even with his tenure, he he should start
has savings of only `20,000. This is even investing in SIP of
though he lives with his parents and has no major `15,000 every
responsibilities. month in two top-
Raghav loves exploring every new cafe that opens rated aggressive
in the city. Besides, he likes going to concerts and hybrid funds for his
movies with his friends. Raghav has made two long-term goals.
significant purchases since he started working: a This money can be
motorcycle and an iPhone. earmarked for a long-
He now seeks our guidance on how to start term goal such as
saving and managing money. He specified that he retirement.
loves travelling and visiting new places often and
would like to plan for this. Why aggressive
Are you in a similar position to Raghav? Here are hybrid funds?
some simple steps that will help you get started. Aggressive hybrid funds
invest around 65-80 per
cent of the money in equity
1. Make a budget
and the remaining in debt.
l Spare some time every month to make a budget.
Small exposure to debt
l Try to limit your monthly expenditure to `10,000
securities helps to stabilise
to `12,000.
equity volatility. Hence,
l Differentiate between needs and wants. A ‘need’
they are ideal for new
is something that you cannot compromise on. A
investors.
‘want’ is something you would like to spend on but
which is not necessary.
3. Avoid borrowing
2. Start saving and investing Like many youngsters, Raghav
l By starting an SIP early, you can accumulate the has recently bought a credit card from the
required corpus faster. bank where he holds his salary account. Although
l Think of your short-term (less than five years) and the credit card has been offered to Raghav at no
long-term (over five years) goals. extra charge, he should note the following points.
l For short-term goals, such as replacing your l The interest rate which banks charge on credit
mobile, invest in ultra-short-duration funds and for cards is usually in the range of 30-36 per cent.
long-term goals, start with aggressive hybrid funds. l Avoid opting for a credit-card EMI because of its
high-cost structure.
Why ultra-short-duration funds? l Even the ‘no-cost’ EMI often has hidden
These funds provide FD-like returns, but unlike an processing charges.
FD, you don’t have to pay tax on the interest unless l First, accumulate the required amount and then

17
buy something. around `50,000 on an annual basis for travelling.
l Stay within your monthly budget, whatever the Similarly, you might have other hobbies and can
credit limit granted to you. start a hobby fund.
4. Set up a travel fund
To fulfil his passion for travelling, Raghav can start
Why liquid funds?
Liquid funds have the potential to earn slightly
an SIP of `4,000 every month in a good liquid
higher returns than a bank deposit without
mutual fund. This way, he will be able to earmark
compromising on liquidity. You do not have to
commit a minimum time period for which you plan
to invest. You can also withdraw money anytime
Why you should start from a liquid fund. It usually takes one to two
investing early working days for the withdrawn amount to come to
By starting early, you can reap the benefits of your bank account.
compounding, as the illustration below shows.

Accumulated Corpus 5. Ensure you have an

emergency fund
`4.62 crore `2.55 crore But, even before Raghav starts doing all this, he
should ensure his financial safety and peace of
mind. He should create an emergency corpus
Rate of Return equivalent to at least six months of his expenses.
Ideally, he should park this money in a mix of
12% 12% sweep-in FD and liquid fund.

6. Buy a life Insurance plan

SIP Tenure Since Raghav is young and unmarried, currently, he
doesn’t have dependents. However, if and when
30 yr 25 yr Raghav plans to marry, he should most certainly opt
(Age : 57 yrs) (Age : 57 yrs) for life insurance.
A good term plan supports your dependents and
Monthly SIP takes care of any loans or financial liabilities you
may incur. In your unfortunate absence, this money
`15000 `15000 will allow your family sustenance and the same
quality of life.
Also, you should be careful not to mix term
If Raghav starts at insurance and investment products. So, ULIPS
and endowment plans etc., are products that you
27 yr 32 yr should avoid.

7. Buy a health Insurance plan

Buy sufficient health insurance even if your employer
has provided one. Health emergencies are usually
unexpected and can be quite expensive. They can
slice through your savings or investments
significantly.
Don’t be like Raghav and start investing with your
next paycheck itself.

18
 RETIREMENT PLANNING

Plan your retirement

Advanced planning can make your retirement a peaceful affair.

T
he main challenge during our working life is
two-fold. The first is about how to save and
accumulate enough. And once you retire, the
second challenge is how to consume your
retirement savings so that you can lead your retired
life without financial dependency.
Indeed, the risk is that you might outlive your
savings.
While considering retirement as a goal from a
savings and investment perspective, one must
remember that the retirement date is not an event
but the beginning of a long stretch of retired life.
There are two key factors that you should take into
account.

Life Expectancy
The biggest mistake most people make while
planning their retirement income is ignoring some
startling truths about life expectancy and inflation.
The longer the time spent in retirement, the
harder it becomes to be certain about the adequacy assuming a 6% inflation rate.
of your assets. If you belong to the urban, upper- And this number keeps rising during decades-long
middle-class group with access to reasonable retirement. It has the maximum impact when you are
medical care, you can expect to spend over two no longer working. Since you’re not earning, you can’t
decades of your life in retirement. adjust your savings to accommodate the rising costs.
And this is just the average. Expenses like healthcare often account for a
A life span of anything above 85 years would bigger chunk of your monthly budget as you age.
mean spending about as much in retirement as your Also, the data from RBI suggests that health-related
working years! costs are rising faster than the overall inflation
basket increase over the last five years.
Effect of inflation When expenses overtake the income generated by
Most people have a broad sense of their living the retirement nest, they start nibbling into the
expenses - what they spend on food, clothing, corpus. To prevent that from happening, you need to
groceries, school fees, occasional outings, etc. But plan so that your retirement income can keep up with
what they fail to account for is that inflation will put inflation.
their expenses in a different orbit by the time they
retire. Where to begin
For example - As a 30-year-old, if you currently Firstly, understand how your income needs will grow
spend `30,000 per month, your monthly expenses in retirement.
can well be around `1.8 lakh by the time you turn 60, As a thumb rule, your expenses will double every

19
 A thumb rule
Your monthly expenses will double every 12 years if inflation hovers around 6%
Pre-retirement expenses Post-retirement expenses Value in thousands

360

240

180

120
90
60
45
30

30 36 42 48 54 60 66 72

Age

12 years, assuming a 6% rate of inflation. Use this choice. equity mutual funds are your best choice.
rule to determine how much your living expenses will They are the surest way to gain high returns and beat
grow by the time you reach retirement age and inflation.
beyond. Starting an SIP in an aggressive-hybrid fund is a
Are the numbers starting to look daunting? Don’t great idea if you’re a new investor. Once you get the
worry! With the right approach, they are achievable. hang of the market in 2-3 years, you can move your
investment to a good flexi-cap fund.
Your retirement plan On a side note, you can also invest in an Equity
If you are planning to invest for retirement, specially Linked Savings Scheme since it has provisions for
early, say at 45, equity mutual funds are your best tax deductions under 80C if you still follow the old
tax regime.

How much do you need to Things to keep in mind

invest to retire at 45 It may seem that you never have enough money to
invest sufficiently to meet your future expenses. This
If you’re If you’re If you’re is where most people make mistakes.
currently currently currently
25 (`) 30 (`) 35 (`) They wait for a large amount that they can invest.
Current 50,000 50,000 50,000 In truth, you can start an SIP with as little as
monthly 75,000 75,000 75,000 `500. The key is to start as early as you can.
expenses 1 lakh 1 lakh 1 lakh
Additionally, you should invest any bonus or spare
Retirement 4.7 cr 3.51 cr 2.63 cr cash rather than being tempted to spend it.
money 7.05cr 5.27 cr 3.94 cr
needed 9.4 cr 7.03 cr 5.25 cr Remember that the general rule of thumb is not
SIP amount 27,000 45,000 85,000 to invest in lumpsum.
SIP amount 40,000 68,000 1.28 lakh It has two benefits. Firstly, it prevents you from
54,000 90,000 1.71 lakh being impacted by any sudden market crashes.
Assumptions - SIP contributions are increased every year by 10%; Inflation: Secondly, it helps you avoid catching a market high.
6% p.a.; Return: 12%; Life expectancy: 85 years; Return during post-
retirement years: 9%
The general thumb rule is to spread over half the
time it took you to earn that amount.

20
 CHOOSING A MUTUAL FUND

A mutual fund for

every need
Mutual fund investors often find it difficult to choose
a suitable type of fund from several options available.
The right approach is to match the time horizon
of your investment to the suitable category
of funds. As per Value Research, six types of
funds are sufficient to provide for goals of
different durations.
Here’s a primer.

Emergency funds and goals

less than 1 year away
Liquid funds can be a suitable
alternative
They invest in debt and money market
securities maturing in not more than 91 days.
They seek to offer reasonable returns
with low risk.

Average returns (%)

0.11 0.54 1.68
1-week 1-month 3-month
Data as on August 11, 2023.
Source: Value Research

21
Goals that are 1 year to 3
years away
Short-duration funds can be a
suitable alternative.
They invest in debt and money market Goals more than 5 years away
instruments such that the macaulay Flexi-cap equity funds can be a suitable
duration of the portfolio is between one alternative. They invest in a diversified portfolio of
and three years. shares of different sectors and sizes.
They aim to offer better returns and If you want to avail tax exemption under Section
liquidity than other savings instruments. 80C, go for Equity Linked Savings Scheme
(ELSS). These are similar to flexi-cap equity funds
Average returns (%) except that they come with a lock-in period of
3.44 6.28 5.91 three years.
If you have never invested in equity before, you
6-month 1-year 5-year
Data as on August 11, 2023; Returns over one year
can go with Aggressive Hybrid funds. These
are annualised; Source: Value Research funds invest 65-80 per cent of your money in
equity and equity related instruments and the rest
in debt instruments.
Goals that are 3 years to 5 Remember: Equity funds fluctuate a lot on a day-to-day basis
years away but over the long term of more than five years they have
reasonably higher return potential. To mitigate the impact
Short-duration funds are suitable in of short-term volatility, always spread your investment over
most cases. several months through a Systematic Investment Plan (SIP),
However, if your goal is non-negotiable, instead of investing in a lump sum.
you can add a bit of equity.
For this purpose, use equity savings
funds. They invest at least 65 per cent in Average returns (%)
equity and equity related instruments with
the rest being invested in fixed-income.
21.40 12.06 12.95
Equity
flexi-cap

ELSS 22.43 12.47 13.27

Average returns (%) Aggressive
Hybrid 17.98 10.90 11.27
8.67 10.54 7.26
3-year 5-year 7-year
1-year 3-year 5-year
Data as on August 11, 2023; Returns over one year Data as on August 11, 2023; Returns over one year are
are annualised; Source: Value Research annualised; Source: Value Research

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risk? Scan this code.
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Disclaimer: The views and opinions expressed are those of Value Research India Pvt. Ltd. and do not necessarily reflect the views of Aditya Birla Sun Life AMC Ltd
(“ABSLAMC”) (formerly known as Birla Sun Life Asset Management Company Ltd)/Aditya Birla Sun Life Mutual Fund (“the Fund”). ABSLAMC/ the Fund is not
guaranteeing/offering/communicating any indicative yield on investments. ABSLAMC or any of its officers, employees, personnel, directors make no representa-
tion or warranty, express or implied, as to the accuracy, completeness or reliability of the content and hereby disclaim any liability with regard to the same.

22
 brought to you by

An Investor Education & Awareness Initiative

Dhirendra Kumar, CEO, Value Research, answers the most-

asked questions at Investors’ Hangout, which is an investor
education initiative broadcast on YouTube and Facebook

When to go for mid- or small-cap funds

Is it okay to invest in an cherry-picking. Make sure you choose to add a mid- or a
index fund and to cher- bake your cake first before add- small-cap fund to your portfolio.
ry-pick a mid- or a small- ing cherries to your investment. That’s because these funds are
cap fund? Instead, focus on continuing volatile, and if you are new to
your investments. Only after investing, the daily ups and
two-three years, when you are downs can discourage you from
Shashank familiar with the volatile nature investing further. In short, keep
If you are a beginner, avoid of the market, should you it simple.

The key to great returns is to be disciplined, and not the funds you choose.

23
Investing for your long-term goals
Where should I invest for equity because equities are vola- might think that equity is vola-
the next ten years? tile. However, if you look at their tile or you don’t have the exper-
five-, 10-, 15-, 20-year and tise to invest in equities direct-
 Sonal beyond returns, you realise they ly. In that case, the answer to
Equity should be your go-to have delivered inflation-beating the following question will calm
option if you plan to invest returns. Other asset classes like your nerves and allow you to
beyond five years. Now, many gold, real estate and fixed-in- make a wise and informed
people feel scared of investing in come pale in comparison. You investment decision.

To counter the volatility of equities, invest in them for the long term.

Various ways of investing in equities

What are the different ways These funds have dedicated
of investing in equities? managers with experience and
skill in choosing stocks for you. Heard about STP
 Rohan somewhere and curious to
The only hitch is that you must
know what it is?
There are two major ways to do select a quality mutual fund.
this. One, you can directly buy Click here!
While choosing a fund, make
stocks. This option can generate sure it is well diversified, mean-
superior returns in the long run. ing it invests in stocks of all
But it is a complicated and high- sizes and across all sectors.
ly risky process, requiring skill Alternatively, you can also
and expertise to pick quality choose to invest in an index
stocks. The second, more conve- fund. These mutual funds simply
nient option is to invest in an track a market index, such as the
equity-oriented mutual fund. Sensex or the Nifty.

Mutual funds can balance risk and rewards better than investing in stocks directly.

Is it worth investing in NPS?

What are the best features the new tax regime, where most locked till the age of 60.
of the NPS? other deductions are unavailable. It can be redeemed before 60
Secondly, its ultra-low invest- only in certain situations and after
 Mohit
ment management fee of 0.09 fulfilling certain conditions. While
There are several benefits associ- per cent. Also, it provides auto- this may look like a drawback, it is
ated with the NPS: matic annual asset rebalancing an advantage for someone who
Firstly, the employer’s contribution and the flexibility to change your lacks the discipline to invest for
to your NPS account of up to 10 pension fund manager at zero retirement consistently. This
per cent of the salary (basic + cost without any tax implications. ensures that the money meant for
dearness allowance) is not con- Thirdly, money invested in the retirement is used only on retire-
sidered taxable income even in NPS Tier I account gets virtually ment and not elsewhere.

Not using your funds before the actual retirement is one of the surest ways to
increase your corpus.

24
The magic of compounding
How does compounding Even Albert Einstein famously earn returns on your original
work? referred to compounding as the investment ( `10 lakh) and on
world’s eighth wonder. To the extra `1 lakh you earned in
 Manas demonstrate why he said that, the first year. As a result, your
Compounding is the result of let’s give you an example of how money would increase to `12.1
continuously reinvesting the compounding works. lakh, which is `10,000 more than
returns from your initial invest- Let’s assume you invest `10 what you would have earned if
ment. By reinvesting your returns, lakh in a mutual fund and earn your money didn’t compound. In
your capital increases in every 10 per cent in the first year. Your the third cycle, your money
cycle. As a result, you allow your money would grow to `11 lakh. increases to `13.31 lakh. So on
investments to grow faster. In the second year, you will and so forth.

“Compound interest is the eighth wonder of the world. He who understands it

earns it ... he who doesn’t... pays it.” – Albert Einstein.

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25
 TRAVEL MYSURU
Mysuru Palace

Travel to Mysuru
to be transported
back in time
You can’t rush through Mysuru in a hurry. The city has so much
to offer that you need time to unravel the history it embodies.

T
he erstwhile capital of in its vicinity, here are the top is at its most authentic form can
Karnataka, Mysuru, is reasons why you should consid- be had from Hotel Mylari.
now the second most er spending your much valued
populous city and the time in this precious city. Mysuru Palace
cultural hub of Karnataka. With Also known as the Amba Vilas
its rich past as its backbone, Mysuru pak and Palace, it is an example of Indo-
today, Mysuru is exceptionally Masala dosa Saracenic architecture. The
comfortable in its own skin. So Mysuru has contributed to the most iconic and beautiful sight
if you find yourself in Mysuru or culinary richness of India and its in the city has to be the view of
greatest contribution undeniably the palace at the night. With
has to be the Mysuru pak—the thousands of tiny lights outlin-
ghee dripping, sweet golden ing its edges, the palace is a
blocks sent from heaven, best of spectacle to watch. It used to
which can be brought along be the official residence and
Sayyaji Rao Road. Equally famous seat of the Wodeyars—the rul-
Mysuru pak is the Mysuru Masala dosa which ers of Mysuru, the royal family

26
 St. Mysuru zoo
Philomena’s
Church

of Mysuru, who ruled the prince- ings of Raja Ravi Varma of morning hours is actually worth
ly state till 1950. The palace Travancore are on display here. it. Doesn’t matter if you are
complex includes twelve Hindu sixty or six, by the end of the
temples—the oldest was built in Mysuru zoo day, you will surely be tired of
the 14th century. There is something about zoos having too much fun.
that turns even the oldest of
Brindavan Gardens humans into young inquisitive R.K Narayan Museum
This beautiful garden has been in kids. Sprawling across 157 Nobody knows where the quaint
the backdrop of several Bollywood, acres, the zoo is one of the village of Malgudi which cap-
Kollywood and Tollywood song city’s prime attractions. The zoo tured our imagination is. So
numbers and it is not uncommon has more elephants than any even if you could not track
for visitors to wonder which were Indian zoo. down Malgudi, you can always
those songs that imprinted the visit the place where the beau-
image of this garden so clearly Jaganmohan tiful stories were woven—the
Palace
their mind. There are illuminated author’s home. RK Narayan’s
musical fountains which dance to house has been recently
filmy tunes. restored thanks to those activ-
ists who managed to persuade
St. Philomena’s Church the Mysuru City corporation to
It is the second largest and one Yoga Immersion Retreat acquire the property and turn it
of the tallest churches in Asia, Are you one of those who really into a museum. R.K Narayan’s
this Neo-Gothic Catholic Church wish they knew yoga? The two- personal effects will surely
was built in the honour of St. week Yoga Immersion Retreat at strike a chord in many of his
Philomena, a young Greek prin- Mysuru builds foundation for fans’ hearts.
cess martyred in the 4th century. beginners. The program starts
on November 17 and will take Jonita Gandhi concert
Jaganmohan Palace place at Ayur Yoga Eco Ashram. Music lovers, Brace Yourselves!
Of the many beautiful palaces Famous Playback singer and
in Mysuru, Jaganmohan palace Wonderla YouTube sensation, Jonita
was built by Krishnaraya Located on Mysuru Road, Gandhi will be performing at the
Wodeyar III in 1861. It is now a Wonderla is one of India’s best Open Air Theatre, University of
museum. With intricate carv- water-theme parks. Though Mysuru Campus on November 5.
ings, its main door itself is a it is closer to Bangalore, spend- Be there to experience the
piece of art. Original oil paint- ing two and a half hours in early musical extravaganza!
 Say Hi To The Country’s First
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