Day to Day variation in Mutual Fund NAV.

While buying units of an Equity Based Mutual Fund online there was NAV displayed and I calculated the Units I could get on dividing the amount I was investing by the displayed NAV. After 2 days I got the Statement and found that the no of Units were less than I expected by almost 1% and off course the NAV for the transaction was higher by 1% than the displayed NAV.

I found that the NAV displayed while I bought the Units was for the previous day whereas for transactions of Equity Based Mutual Funds the NAV of that day (which is actually declared around 9 PM) applies. Incidentally the Equity Market Indexes (like NSE 50) went up that day and the Securities into which that Mutual Fund had invested went up thereby the NAV went up by 1%.

That led me to look at NSE 50 Index e.g. it closed at 8738.10 on 3-Oct-2016 yesterday and at 8769.15 today going up by 31.05 points (0.35%). So you can expect NAV of Equity based Mutual Funds to go up today from 0.1% to 0.4%. The Market does not always go up and it goes down as well due to various reasons including News like Surgical Strikes by India on Launchpads of terrorists near LOC in PoK on 29-Sep-2016 when NIFTY 50 closed at 8591.2 which is 153.9 points (1.76%) below the previous day close of 8745.15. Fortunately the Market started recovery on the next day and after the Market reopened after weekend it recovered further and today it has closed at 8769.15 which is higher than 8745.15 (28-Sep-2016 closing).

The markets varies throughout the day but it is the closing value which matters for the Mutual Funds.

Forget about NIFTY 50 you are interested in the increase in NAV of Mutual Funds in which you have invested and the value of your investment. Well the best way is to install one of the Android Application for Mutual Funds Portfolio which updates automatically in the night after NAVs are announced for the day.

I am using My Funds - Portfolio Tracker  Android Application for monitoring my Mutual Funds and Shares investment primarily because I can export the updated file to Excel and see it on my Laptop.  

Best site for learning about Mutual Funds and selecting the Funds to invest.

As written in the first post I had invested some money in Stocks. In order to sell them we needed a Trading and Demat Account. I searched on Internet and selected Zerodha. After we got the Trading Account I got attracted to Intra Day Trading (I think most people do because of quick bucks). We lost about Rs 6000/- and quit. Meanwhile I had sent Share Certificates to Zerodha for Demat. The best share among them was State Bank of India (SBIN) in which our investment of Rs 5000/- is worth Rs 1.25 Lacs or more (depending upon the day) today.

After trying to learn about which shares to buy for long term we decided to look for Mutual Funds and bought 100 units of Birla Sun Life Front Line Equity Growth through Zerodha.

I also applied for RBL Bank IPO and got 65 Shares which are trading above the cost price even after a Crash in the Stock Market on 29th Sep 2016 due to Surgical Strike by India on Terrorists Launch Pads in PoK near LOC.

While looking for Best Mutual Funds to buy and learn about types of Mutual Funds I found Relakhs.com This site is the BEST for learning about Mutual Funds Investments and decide about your investments.

We have invested in following Mutual Funds:

Birla Sun Life Frontline Equity Growth Direct
Birla Sun Life MIP II Wealth 25 Growth Direct
ICICI Pru Value Discovery Growth Direct
HDFC Mid-Cap Opportunities Growth Direct
Tata Balanced Fund Growth Direct

There is word Direct in each Fund because the investment is not through an Adviser. Incidentally the above investment is as per recommendation of Relakhs.com who are advising to go for direct to save on expense.

My Tryst with Investments

When I was young (in 1970s) we used to face the question of where to invest to save Income Tax. In those days my seniors were having Life Insurance Policies from the only one insurance company available in the country i.e. Life Insurance Corporation of India popular as LIC but I was against LIC Policy as investment since what my father got after maturity of his policy after 15 years was sum of Premiums plus a little bonus. In our Family Males generally crossed 70 years of age so statistically I was destined to live long unless I chose improper lifestyle.

I had chosen National Savings Certificates issued by Post Office as my favorite investment to save tax in those days.

Later on I came to know about Public Provident Fund (PPF) account. Initially I thought 15 years for Maturity as Long Time but discovered that you could withdraw 50% of Balance etc and it became my favorite for a long time. I also opened two more PPF accounts besides my own in my wife and daughter's name.

I hardly spent anything on my (only) daughter's education and when the question of her marriage came I had sufficient funds in my Matured PPF Account since we Maharashtrians spend peanuts on marriage compared to other communities in India.

Meanwhile I had a Flat in the Capital City Delhi totally financed from House Building Advance from my employers.

During start of 21st Century I was fed up with my job in a Factory in Faridabad and I resigned from service and called my daughter who informed me the good news of her campus placement for a job in Gurgaon. I had completely paid my HBA and asked the Company to adjust the Book Value of my Company Car in Superannuation Fund for service of 4 years with them since having a Car was a necessity in Delhi due to poor state of Public Transport.

Now I had entered risky zone of my life but married my daughter with PPF Funds and started living on interest on Bank Fixed Deposits which used to be very high in good old days. I received 15% per annum compounded quarterly from Times Bank (which was merged in HDFC Bank later on) and 14.5% from Stanchart. I had also opened account with ICICI Bank which had just launched a Branch in Preet Vihar Delhi which is close to our home.

After daughter's marriage I got a job with ALSTOM since they hoped that I could help them successfully commission 4 Units of 50 MW Steam Turbines at Korba East after refurbishment. After the work was over I resigned once again after two years only because I did not like the idea of being a Warranty Manager. This job provided some more Cash but I could not think beyond Bank Fixed Deposits as investment.

I withdrew money from PF since it was not going to pay interest on the funds of people who were not subscribing and invested in Bank FD.

We soon faced survival problem and when thinking about renting our house in Delhi and living on rent at some other place and manage on difference of rent and quarterly interest payment from Bank FDs I got a new Job in Steag.

Steag had secured O&M Contract of 4x600 MW Units at Jharsuguda and I was the best available person for Steam Turbines. The entry of Private Sector had brought good salaries in the Market and although Steag did not pay immediately what I asked but they raised it to my expectation after one year in which we hardly had any work since only one unit was commissioned six months after my joining them.

After working with steag for 5 years I thought that I had sufficient money to survive long life with my wife.

But the falling Bank Interest rates worried us and I invested in SCSS Accounts in my name and wife's name which give us 9.38% quarterly and LIC Varishtha Pension Bima Yojna which also pays around the same rate.

I also shifted Bank FDs to new private Bank which pays 8.75% to senior citizens.

During good days in 1990s I had invested some money is Stocks and kept the certificates somewhere.

I decided that we open Trading and Demat accounts and enter the Market which is the best option for surplus money and meet the inflation in future.

During the job in staeg I had taken couple of insurance policies for self and wife and found that the expense on mortality charges was too high for our age and we no longer need any Life Insurance. I surrendered two policies which were taken 5 years ago to have corpus for investment and my tryst with investments has begun now about which I am going to write in subsequent posts.