I have been investing in MF SIPs since 2018. I am 50 years old and working in a private firm. Recently, a friend told me about SIPs in stocks. Could you please clarify the same in detail. – Rajeev, Chennai
SIP in stocks, also called Equity SIP, allows you to systematically invest a pre-specified sum or a pre-specified quantity of shares over a set period of time. That means you can fix the amounts you wish to invest, the intervals, and the stocks to invest in. Most trading members provide this facility to their
investors. Before choosing SIP in stocks, remember that individual stock investments are riskier than mutual funds, where risk is reduced through diversification and professional management. Here, the stock selection and the period of investment assume greater significance.
I am investing in Axis Midcap Fund-Regular for since 2022. SIP amount is Rs.3000. Now I find that NAV of Regular and Growth version of this midcap fund is different. What should I do? – Arya, Kochi
Usually, a mutual fund scheme has Regular Plan and Direct Plan options. Both carry different expense ratios. The Regular plan has a slightly higher expense ratio as it includes the distributor commission as well. Accordingly, the NAV of both plans would vary. If you have enough knowledge of the financial market and can invest on your own by selecting a suitable scheme from among the large universe of funds, don’t need any expert advice, regular monitoring of the portfolio, or other after-sales services from a distributor, you can change the plan to direct. If you want to change the plan from regular to direct, please remember that switching between plans will attract capital gains tax, as it is considered a
redemption and a fresh investment.
I am going to change my name. It will be changed in my Aadhaar, bank account, and PAN. Should I change my name in mutual fund also? – K. Krishnan, Hyderabad
It is ideal to update the name change in all of your investments, including mutual funds. For updating the change in mutual fund investments, you need to first submit the KYC change request along with proof at any of the mutual fund AMC or RTA offices. If you have invested in mutual funds through a
distributor, you can approach them as well.
What are the differences between a zero-brokerage firm and a traditional broker? As a beginner in the share market, which one is good for me? – Thomas Joseph, Pala
The main difference between a zero-brokerage firm and a traditional broker is that zero-brokerage firms don’t charge brokerage fees or transaction fees for trading in stocks, while traditional brokers do. Traditional brokers charge a commission based on the value of the trade. Zero-brokerage firms may
charge a one-time account opening fee but then allow traders to trade for free.
Most traditional brokers provide market research reports and other vital equity research information free of cost to their investors, whereas zerobrokerage firms may charge for access to research reports and other advice.
Also, the branch network of traditional brokers can be of great help to investors for one-on-one interactions on investments or other services like transmission, dematerialization, etc., which need physical documentation.
As a beginner, it is advisable to deal with a reputed traditional broker until you gain enough market knowledge and experience.
