Mint ST : 2019-02-11
PERSONAL FINANCE : 16 : 12
12 PERSONAL FINANCE MONDAY, 11 FEBRUARY 2019 NEW DELHI Put the amount of monthly instalment Å Amount of each instalment Current value of the total investment (This will be available in the latest account statement) Å Å Add a negative sign ‘-‘ to indicate outflow Step 3 Current value of investments Broke at the end of every month? Hire a financial planner Date of calculation of return bit.ly/2ghbgai Step 4 Select the formulas tab Choose “financial” from function library Select the XIRR function For dates function, select the cells with the dates corresponding to the instalments and the current value For values function, take the cursor to the cell with the first instalment and select all the cells including the last one with the current value Step 5 Convert it into % and this is the annualised return on the SIP investments for the selected period SANTOSH SHARMA/MINT Sunita Abraham ment as a separate investment and then averaging it is not practical. An easier way to do it is to estimate an adjusted rate of return at which each of the instalments grew to arrive at the final value of the total investments. Excel sheets allows you to do this calculation in a simple way using the XIRR function.
But remember, the XIRR is not the actual rate earned on each of the instalments; it is an adjusted common rate at which the instalments grew to the total final value. In a rising market, where each instalment is likely to be invested at a higher level than the earlier ones, the SIP returns will be lower than the point-to-point return over the same period. In a falling market, the reverse is true. Keep in mind that an SIP is not a tool to enable you to earn the best returns but a simple way to bring discipline into investment activities and take the guess work out of investing. [email protected] I f your investments in mutual funds are through the SIP route, then calculating the returns that your investments have earned may not be as simple as calculating the returns from a lump sum investment. This is because you have made the investment at different points in time giving each investment a different holding period in the investment. So, in a 12-month SIP made on the fifth of each month, the first instalment has 12 months to grow, while the last instalment at the end of the year has only a month to grow. The return earned on each instalment will be different depending upon the price or level at which each instalment was invested and the period available for the investment to grow.
Calculating the return on each instal- Fee models Fee-only planners: Charge a fee for the consultation service. This could be a flat fee or a fee as a percentage of the assets under advice Fee-based planners: The planner/advisor also earns a commission from the products sold to you. This could be in addition to a flat fee if the portfolio is small Before you avail the services of a financial planner, it is important to understand their broad business model How much you pay Planners charge ₹5,000 to ₹1 lakh per annum, depending on the number and complexity of services and the portfolio size Some planners focus on a category of investors,likenris,andchargeafee accordingly Term plan premiums Do you need a planner? Yes, most people need to work with a planner L The complexity of the service depends on the portfolio size and need SANTOSH SHARMA/MINT Premium in ₹ as per age (yrs) of policyholder Claim settled (%, FY17) Name of the insurer Plan 30 35 40 Edelweiss Tokio Life Insurance mylife+ : term 8,496 10,042 12,827 97.78% Bharti AXA Life Insurance Flexiterm 8,260 10,384 13,570 96.29% Max Life Insurance Online Term Plan Plus 8,378 10,384 13,334 95.26% AEGON Life Insurance iterm 7,497 9,512 12,717 94.56% e-term 17,044 21,061 26,597 94.45% Life Insurance iraksha Supreme 8,732 10,974 15,104 94.00% i Term Smart 7,886 9,662 12,409 92.25% eshield 11,092 13,228 16,154 92.13% 7,379 8,849 11,464 92.03% 9,740 11,919 15,252 92.03% 9,522 11,516 14,578 90.51% ASK MINT m 9,809 11,680 14,343 89.61% INSURANCE 9,251 11,257 14,089 89.39% 8,968 11,092 14,986 88.88% 13,410 17,112 22,016 88.68% Date of birth has been assumed to be 1 April in the respective year for each age group; Rates are for a male, non-smoker, Delhi-based; Claims information is for FY2017-18 for individual deaths as per Irdai’s Annual Report; In ICICI Prudential and Bajaj Allianz, waiver of premium on disability is included; Sahara Life does not offer pure term plan Source: Securenow Insurance Broker Pvt Ltd VIPUL SHARMA/MINT
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