MFs in India [Mutual Funds]

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arnott
Posts: 1
Joined: Fri Jul 13, 2018 3:45 pm

MFs in India [Mutual Funds]

Post by arnott » Fri Jul 13, 2018 3:53 pm

hi all,

I am looking for advice on MF investing in India. I am new to investing and John Bogle's ideas. The last 3 months have been eye opening to say the least.

I live in the US, and I like the index fund approach using vanguard funds. Is it possible to do this in India ? My dad, who is retired, needs to put some money in some MFs. Looks like in India, all funds have high expense ratios and high front and back end expenses too.

Can someone point me to some good mutual funds with reasonable expense ratios and cost ?

Thanks,
Arnott

Update:
My father is an Indian citizen. I will not be investing.
Last edited by arnott on Mon Jul 16, 2018 8:33 am, edited 1 time in total.

Valuethinker
Posts: 35015
Joined: Fri May 11, 2007 11:07 am

Re: MFs in India [Mutual Funds]

Post by Valuethinker » Sat Jul 14, 2018 6:23 am

arnott wrote:
Fri Jul 13, 2018 3:53 pm
hi all,

I am looking for advice on MF investing in India. I am new to investing and John Bogle's ideas. The last 3 months have been eye opening to say the least.

I live in the US, and I like the index fund approach using vanguard funds. Is it possible to do this in India ? My dad, who is retired, needs to put some money in some MFs. Looks like in India, all funds have high expense ratios and high front and back end expenses too.

Can someone point me to some good mutual funds with reasonable expense ratios and cost ?

Thanks,
Arnott
Are there India listed ETFs?

The India index is so narrow that international diversification would be a good idea. Alas foreign exchange controls could prevent this?

newdoc123
Posts: 4
Joined: Tue Feb 28, 2017 9:29 pm

Re: MFs in India [Mutual Funds]

Post by newdoc123 » Sat Jul 14, 2018 6:53 am

i recommended my father.. UTI's NIFTY 50 which is an index fund.. lowest expense ratio... 0.1% they claim to be passively index.. i recommended the direct plan..
good luck..

tenkuky
Posts: 375
Joined: Sun Dec 14, 2014 4:28 pm

Re: MFs in India [Mutual Funds]

Post by tenkuky » Sat Jul 14, 2018 9:42 am

I would check on whether a US-based person can invest in MFs in India, not all brokerage houses permit that.
Another issue is FATCA reporting requirements and how easy will it be to get documentation for this. It means additional paperwork at tax time.
And there is the forex equation: YTD, the rupee has depreciated against the $ by about 7%.
All things to think about before investing.

Mors
Posts: 191
Joined: Wed Aug 16, 2017 10:06 am

Re: MFs in India [Mutual Funds]

Post by Mors » Sat Jul 14, 2018 4:32 pm

Here you will find all the ETFs available to the Indian stock exchange.

https://en.wikipedia.org/wiki/List_of_I ... aded_funds

I see it lacks international exposure, other than Motilal Oswal Mutual Fund - Motilal Oswal MOSt Shares Nasdaq Index N100 ETF.

You can also help yourself finding the cheapest funds here: https://www.valueresearchonline.com/fun ... se&cat=118

Look to diversify with International stocks as much as possible.

core4portfolio
Posts: 208
Joined: Thu Dec 26, 2013 2:12 pm

Re: MFs in India [Mutual Funds]

Post by core4portfolio » Sat Jul 14, 2018 5:05 pm

Based on asset allocation, you can go. IMHO index funds doesn’t performed well in India due to some reason . Returns are vastly differeniate and active fund managers were beating it very easily. For instance HDFC Mid cap fund, ICICI blue chip fund etc..Choose one AMC and go with that. IDFC have index fund which will be very cheap nifty index funds.
I generally recommend HDFC Balanced fund renamed as HDFC hybrid equity fund - Growth Direct mode as portfolio’s only one fund (65% stock and 35% bonds ) which will take care of all. But it’s expense ratio is higher for its convenience.
Allocation : 80/20 (80% TSM, 20% TBM) | Need to learn fishing sooner

TedSwippet
Posts: 1712
Joined: Mon Jun 04, 2007 4:19 pm

Re: MFs in India [Mutual Funds]

Post by TedSwippet » Sun Jul 15, 2018 3:26 am

arnott wrote:
Fri Jul 13, 2018 3:53 pm
I live in the US, and I like the index fund approach using vanguard funds. Is it possible to do this in India ? My dad, who is retired, needs to put some money in some MFs. Looks like in India, all funds have high expense ratios and high front and back end expenses too. Can someone point me to some good mutual funds with reasonable expense ratios and cost ?
Assuming that your father lives in India and is not a US citizen or US green card holder, his best route to Vanguard funds would probably be to buy Vanguard Ireland domiciled ETFs on the London (or other European) stock exchange.

India has an income tax treaty with the US, but the dividend rate is 25% and so hardly any better than the 30% non-treaty rate, and in particular is worse than the 15% US/Ireland rate. India has no estate tax treaty with the US, and so anything above $60k in US assets would be at risk of 40% US estate taxes.

More in these wiki pages:
Nonresident alien's ETF domicile decision table - Bogleheads
Nonresident alien taxation - Bogleheads
Nonresident alien with no US tax treaty & Irish ETFs - Bogleheads

gotester2000
Posts: 444
Joined: Sun Nov 12, 2017 1:59 am

Re: MFs in India [Mutual Funds]

Post by gotester2000 » Sun Jul 15, 2018 6:16 am

If your father is an Indian citizen and resident he can invest there. Most AMCs do not allow US resident to invest in their MFs due to FATCA.
Active beats passive comfortably there - index is narrow so not recommended. Just buy a large cap,multi cap and mid cap from 3 different AMC and go direct.

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