🐝 the birds and the bees
The most important 101 we all need.
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Everyone knows about 'the birds and the bees' talk — a topic that Indian parents will never even consider discussing with their kids. But do you know what's equally as important as having that conversation? Financial literacy.
And while you might've received generic advice like buy gold or save in FDs, there are tons of great options out there. One of them is mutual funds.
But any discussion of mutual funds is incomplete without:
"Mutual Fund investments are subject to market risks, read all scheme related documents carefully before investing."
What the hell does this even mean? There has been a lot of buzz about mutual funds in the news lately: Good, bad, and ugly. But before diving into that —
What is a mutual fund?
Let's say, you want to invest in a bunch of securities, but don't have enough financial know-how or time to do so. So you invest in a company that hires someone (money manager) to do it for you in exchange for some fees. That's exactly what a mutual fund is.
Why invest in them? Here's what you might've heard -
They're diversified, and hence safe.
There are fewer fees involved.
You can invest in a lump sum or start SIP with as little as ₹500.
Diversified how? They're not limited to stocks. You can also invest in bonds and debt instruments.
And this is where the bad and the ugly come into the picture.
Enter Franklin Templeton.
Last year, the company — which is one of India's largest mutual fund houses — abruptly shut down six debt schemes worth ₹26,000 crore. This prompted India's regulatory body (SEBI) to impose a ₹5 crore fine on FT and asked them to return ₹512 crore in management fees. It further barred them from launching any new debt schemes for two years.
But the drama doesn't end there.
SEBI also found that FT's Asia-Pacific chief Vivek Kudwa knew about the poor health of these debt funds as he withdrew ₹30.70 crore days before shutting them down.
That said, the overall industry is doing pretty well.
The growing market share of mutual funds has invited many stockbroking firms like Zerodha and Groww to start their own funds. And as more people join the digital revolution, mutual funds investments are only going to go up.
Very exciting indeed.
Do you feel so too? Are you looking to start out your investment journey? Well, not to brag, but this is what we're good at.
Share what you learn 🤝
“Pass on what you have learned.” – Yoda.
The journey to complete financial literacy is long, but with friends, it gets easy. After all, the best way to grow your wealth is by sharing your learnings with each other. And most importantly, we make it easy for you.
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Catch ya later 👋