Mutual Funds
Mutual Funds are one of the investment vehicles chosen by Master Turtle for improving financial wellness. Read on to understand what mutual funds are and the types of funds available.
A mutual fund is a collective fund made up of money collected from various investors. Money from this fund is used to invest in stocks, bonds, money market instruments and other securities. A fund manager is appointed to manage the asset allocation of the fund.
As mutual funds have a diverse asset allocation, they are excellent investment vehicles to diversify your portfolio. This mitigates the concentration risk. In addition to this, investors do not have to research various stocks, bonds and other securities before investing in the fund as it is managed professionally by a team of experts.
Types of Mutual Funds
Equity Funds
A mutual fund is classified as an equity fund if at least 65% of its portfolio is allocated to investing in equity shares of companies across different market capitalization. The returns are, thus, dependent on market movements which are in turn influenced by economic and geo-political factors. Equity funds are further classified in the following manner (in the order of risk, from least to highest) –
- Index Funds
- Large Cap Funds
- Multi-Cap Funds
- Mid-Cap Funds
- Sector or Thematic Funds
- Small Cap Funds
In addition to this, there’s a section of funds known as ELSS – Equity Linked Savings Scheme – which is the only kind of mutual funds that falls under Section 80 C of the Income Tax Act, 1961. Investors of this type of fund can claim up to INR 1.5L in tax deductions.
Debt Mutual Funds
Debt mutual funds invest mostly in debt, fixed income and money market instruments such as treasury bills, government bonds, deposits, etc. Returns provided by debt funds are often very predictable. They are further classified into the following (in the order of risk, from least to highest) –
- Liquid Funds
- Short Term and Ultra Short Term Debt Funds
- Fixed Maturity Plans
- Gilt Funds
- Income Funds
- Dynamic Bond Funds
- Credit Opportunities Funds
Balanced or Hybrid Mutual Funds
Balanced or Hybrid mutual funds have assets allocated to both equity and debt instruments. The objective of this type of fund is to balance the risk-reward ratio. Hybrid funds are further classified in the following manner (in the order of risk, from least to highest) –
- Arbitrage Funds
- Monthly Income Plans
- Debt Oriented Hybrid Funds
- Equity Oriented Hybrid Funds
Why Does Master Turtle Recommend Mutual Funds?
Master Turtle has performed intensive research into millions of asset allocation models and provides client-oriented custom asset allocation which helps in building financial wellness! That being said, here are some of the reasons why Master Turtle has chosen Mutual Funds as one of the investment vehicles to become financially wealthy.
- Investments are handled by experts – fund managers, analysts and investment bankers.
- Mutual funds are liquid in nature and can be withdrawn at any time.
- Many mutual funds come with a Systematic Investment Plan.
- The diverse asset allocation minimizes risk and maximizes returns.
- Investments made in mutual funds can be managed online providing ease and flexibility.
- Target oriented coaching is provided by Master Turtle to fulfil the investors aspirations
- You can switch to different types of funds at any time!
Sounds great? Click here to start investing in mutual funds now!
INSURANCE
Insurance is a legal agreement between two parties – the insured and the insurer. According to this agreement, the insurer promises to help the insured in the event of damage or loss to the property that is insured. Thus, insurance is a way to cover risk. Insurance is further classified into two categories –
Life Insurance
A Life Insurance Policy offers financial compensation to the nominee named by the policyholder in the event of death or disability of the latter. Life Insurance policies are further classified into the following:
- Term Insurance – Provides life coverage for a certain time period
- Whole Life Insurance – Provides coverage for the whole life of an individual
- Endowment Policy – A portion of the premiums go toward death benefit, while the rest are invested
- Money back Policy – A portion of the sum assured is paid to the insured as survival benefit
- Pension Plans – A portion of the premiums is directed towards retirement corpus
- Child Plan – Provides financial aid for the children of the insured
- Unit Linked Insurance Plans (ULIPS) - A portion of premiums provide death benefit while the rest are invested in mutual funds
General Insurance
Policies that do not provide coverage for life of the insured but provide coverage for other properties or entities fall under general insurance policies. Examples of such general insurance policies are travel insurance, motor insurance, health insurance, etc.
What Insurance Does Master Turtle Recommend And Why?
Master Turtle recommends buying insurance policies to cover risk as opposed to purchasing them for investment purposes. The investor’s profile is analysed to understand his/her risk character and suggestions for life insurance policies are provided.
The obvious advantage of insurance policies is to provide financial compensation to the family (or nominee) of the insured in the event of death or disability. Insurance policies also promote risk control.
Would you like to see what insurance policies are suitable for you based on your profile? Click here!
SIPSURE
SIPSURE is a revolutionary product provided by Master Turtle, an AI & ML based bot, to help plan insurance premium payments in advance to avoid deferment of premiums and/or lapse of the policy. Here’s exactly how.
How SIPSURE WORKS
Master Turtle analyses the investor’s profile to provide a customized portfolio based on his/her risk character and financial targets. While providing these suggestions, Master Turtle also checks if the investor’s life is insured and then provides insurance recommendations in the following manner.
Existing Insurance
In this case, Master Turtle first checks how much the investor is willing to invest in mutual funds. Let’s say the investor chooses an SIP (mutual funds) of INR 10,000 monthly. He/she is suggested an insurance policy and the premium for that policy stands at INR 300 monthly. Then there are two ways SIPSURE helps plan this –
- By adding to the SIP – This means that the investor now puts aside INR 10,300 every month for investments and insurance.
- By adjusting the SIP – SIPSURE adjusts INR 10,000 for both insurance and mutual funds, meaning, INR 9700 is dedicated to mutual funds while INR 300 goes towards the insurance policy.
No Existing Insurance
In case the investor is already insured, then SIPSURE provides the plan for insurance payments to avoid deferment and/or policy lapse. Let’s use the same example as above – the investor chooses an SIP (mutual funds) of INR 10,000 monthly and he/she is already paying an insurance premium of INR 300 monthly. Then the suggestions provided by SIPSURE, in essence, Master Turtle will be as follows.
- By adding to the SIP –This means that the investor sets aside INR 10,300 every month for investments and insurance.
- By adjusting the SIP –The investor is recommended to put aside INR 10,000 every month wherein INR 9700 is dedicated to mutual funds while INR 300 goes towards the existing insurance policy.
