Sir, how do you plan the fund movement from these funds to your trading account? For example take the case of friday, market was down and gave good opportunity to add to our portfolio, but since the funds are parked in short term funds it takes about a day or 2 to credit to our account and we miss the opportunity. Earlier I used to buy short term funds but now I am using liquidbees instead as the margin gets added immediately on making a sale. Is there a better way to manage this?
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Risks are if the bond prices undergo changes drastically then these funds also can suffer losses.
These funds invest our money in various short tenure maturing bonds so that the effect of bond pricing is minimal.
Tax treatment is as per debt mutual funds.So if you make short term profits it is taxed as short term capital gains...after 3 years it is taxed as long term capital gains with indexation benefits....but as we invest for short term,it is subject to ST capital gains.....we use it for parking the surplus funds and not for investments.
ST
These funds invest our money in various short tenure maturing bonds so that the effect of bond pricing is minimal.
Tax treatment is as per debt mutual funds.So if you make short term profits it is taxed as short term capital gains...after 3 years it is taxed as long term capital gains with indexation benefits....but as we invest for short term,it is subject to ST capital gains.....we use it for parking the surplus funds and not for investments.
ST
A few things will get planned out of habit. One will soon realize that there isn't much of a difference in the short/ultra short Liquid MFs anyway.
and you wont even make that much in say 10-20 days either, unless its 100Cr
At 1Cr with 7%p.a, its inr. 1918 per day.
Especially if you're swinging with MF you need the speed, so the trick I use for that is to use the same Fund house and SWITCH the equivalent units
EDIT: What I meant is, the 0.1 to 0.4 % difference in return wont matter unless the principal amount is an astronomical number when the period is a few weeks.
and you wont even make that much in say 10-20 days either, unless its 100Cr
At 1Cr with 7%p.a, its inr. 1918 per day.
Especially if you're swinging with MF you need the speed, so the trick I use for that is to use the same Fund house and SWITCH the equivalent units
EDIT: What I meant is, the 0.1 to 0.4 % difference in return wont matter unless the principal amount is an astronomical number when the period is a few weeks.
Last edited:
A few things will get planned out of habit. One will soon realize that there isn't much of a difference in the short/ultra short Liquid MFs anyway.
and you wont even make that much in say 10-20 days either, unless its 100Cr
At 1Cr with 7%p.a, its inr. 1918 per day.
Especially if you're swinging with MF you need the speed, so the trick I use for that is to use the same Fund house and SWITCH the equivalent units
EDIT: What I meant is, the 0.1 to 0.4 % difference in return wont matter unless the principal amount is an astronomical number when the period is a few weeks.
and you wont even make that much in say 10-20 days either, unless its 100Cr
At 1Cr with 7%p.a, its inr. 1918 per day.
Especially if you're swinging with MF you need the speed, so the trick I use for that is to use the same Fund house and SWITCH the equivalent units
EDIT: What I meant is, the 0.1 to 0.4 % difference in return wont matter unless the principal amount is an astronomical number when the period is a few weeks.
During market uptrend its not a issue as I will be fully invested and the idle cash is low, but when the trend changes cash starts accumulating over time it needs to be managed and as I dont prefer to keep cash in broker account I am purchasing liquidbees. (This also gives about 5-6% returns) or buy short term funds. Other way is put major portion of the cash in short term fund and keep remaining in liquidbees. Hence wanted to check with ST sir if there is any better way to manage this.
I always keep certain liquidity ready in my bank account particularly when markets are in correction mode.I use local brokers for my delivery purchases. I have kept a small margin of 3 Lacs with both....but as I do only intraday cash market and delivery with them they have given me practically unlimited exposure .I can buy without having balance in my account with them and I have to make payment on T + 2 day before 10:00 am. So if I buy on Friday,I need to make payment on Tuesday before 10:00. I don’t wait till last day and I always make payments one day before the date.As long as I honour payin dates, there is no limit on how much I can buy without having money in the brokers account.But as a self discipline I never buy in anticipation of money coming in my account. The money has to be in the account before I buy.The broker is 100% sure that when I am buying I have money in my bank account and it can be transferred to him in next 10 minutes if so required,so he has a comfort level as in last so many years my payment is not delayed even once.
So I was expecting market to go down on Wednesday and given instructions for resumption before 3:00 on Wednesday ( though I was not expecting a crash.) and the money was ready in my bank account on Friday morning...all done on internet....
I am using debt funds not mainly for returns but I am scared of keeping large amount in banks due cyber frauds...so I use 2-3 funds for parking the money.
Smart _ trade
So I was expecting market to go down on Wednesday and given instructions for resumption before 3:00 on Wednesday ( though I was not expecting a crash.) and the money was ready in my bank account on Friday morning...all done on internet....
I am using debt funds not mainly for returns but I am scared of keeping large amount in banks due cyber frauds...so I use 2-3 funds for parking the money.
Smart _ trade
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