How good is max life monthly income advantage plan?

It is a life insurance cum monthly income plan that promises to offer guaranteed monthly income till maturity and a lumpsum on maturity. However, the IRR calculation reveal that the benefits of this policy may be deceptive to the investors looking for capital growth over a long term.

Can I cancel max life monthly income advantage plan?

Yes. Policyholders can surrender their max life monthly income advantage plan during the 15 day free-look period, no questions asked. They may also surrender after the free-look period by returning the policy document with a policy cancellation request.

Navi US Total Stock Market FoF NFO: An Elaborate & Insightful Review

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Navi mutual fund has come up with an NFO targeting International markets. It will be a fund-of-fund.

Is investing in Navi US Total Stock Market FoF NFO, worth it?

In this research-based review, we will review the Navi US Total Stock Market FoF NFO in detail and provide meaningful insights at the end of the review.

SYNOPSIS:

Benchmark’s (CRSP US Total Market Index) Bio
Key Features of Navi US Total Stock Market FoF NFO
Investment Objective of Navi US Total Stock Market FoF
Investment Strategy of Navi US Total Stock Market FoF

Is Vanguard ETF able to produce a higher yield?
Review of SWTSX-Schwab Total Stock Market Index Fund
Pros of Investing in Navi US Total Stock Market FoF
Cons of Investing in Navi US Total Stock Market FoF
The Final Takeaway of Navi US Total Stock Market FoF

Benchmark’s (CRSP US Total Market Index) Bio:

CRSP US Total Market Index is a well-diversified and broader index having exposure to multiple sectors. The CRSP US Total Market Index currently includes more than 4,000 stocks with a median market capitalization of $1.4 billion. It tracks almost 99.5% of U.S stocks ranging from small-cap stocks to giant stocks like Microsoft, Apple, etc.

Key Features of Navi US Total Stock Market FoF NFO:

Before analyzing and doing a review of this fund, it is essential to understand the key features.

Investment Objective of Navi US Total Stock Market FoF:

The primary aim of this scheme is

to provide long-term capital appreciation
By investing in the units of
Vanguard Total Stock Market ETF (VTI) (or)
Schwab Market Index Fund (SWTSX)

Investment Strategy of Navi US Total Stock Market FoF:

To evaluate and review this fund, an in-depth understanding of the investment strategy is needed. The Investment strategy of Navi US Total Stock Market FoF will be passive. The scheme will target to invest in units of Vanguard Total Stock Market ETF (VTI) or Schwab Total Stock Market Index Fund (SWTSX).

Investment Flow:

Navi US Total Stock Market FoF

↓

Vanguard Total Stock Market ETF/Schwab Total Stock Market Index Fund

↓

CRSP US Total Market Index

A small portion of the net assets will be invested in debt and money market instruments or will be held as cash. The VTI ETF aims to track the CRSP US Total Market Index, a broad US index covering nearly all of the US equity market, across multiple sectors and comprising more than 4,000 stocks.

Is Vanguard ETF able to produce a higher return?

Let us review the performance of the Vanguard ETF.

Yes, Vanguard Total Stock Market ETF tracks the performance of the CRSP US Total Market Index. It follows an index-sampling strategy and is managed passively. Its large amount of holdings reflects the entire investable U.S securities. The fund has a relatively low expense ratio of 0.03%.

The top three highest weighting sectors of Vanguard ETF are

Technology (27.7%)
Consumer Discretionary (15.7%)
Industrial Care (13.9%)

Review of SWTSX-Schwab Total Stock Market Index Fund:

A quick review of the Schwab Total Stock Market Index Fund will give you better insights.

Schwab Total Stock Market IndexFundtracks the total return of the entire U.S equity market. Asset under Management was around $19.09 billion. The fund is compiled with large, small, and mid-sized companies.

Top Holdings of SWTSX are

Apple, Inc. (AAPL)
Microsoft Corp. (MSFT)
Amazon.com (AMZN)

Meta (FB)
Alphabet Inc. (GOOGL)
Tesla Inc. (TSLA)

Pros of Investing in Navi US Total Stock Market FoF:

Based on our evaluation of this fund, let us see the findings in support of this fund.

Long-term investments have the potential to get better returns.
The First fund in India offers to invest in Vanguard ETF.
The fund offers a potential safeguard over the depreciation of INR VS USD.
This scheme will suit aggressive Investors looking for exposure to the US equity market.

It will be a good chance for Investors willing to add international funds to their portfolios.
Stock selection risk/fund manager bias is eliminated.
The Expense Ratio is expected to be below.
International equity exposure brings better diversification to your portfolio.
Equity exposure in a developed market and the matured market will bring more stability to your portfolio.

Cons of Investing in Navi US Total Stock Market FoF:

Based on our evaluation of this fund, let us see the findings against this fund.

Short-term investing in this scheme can lead to potential loss.
No track record on the ability of this fund to maintain a low expense ratio.
The scheme can be prone to geopolitical risk, and other macroeconomic risks.
Currency risk is an additional risk brought by this fund to your portfolio.
This fund may underperform the benchmark index owing to

1.)

fees, expenses, and trading costs

2.) 5% liquid debt investments and

3.) Tracking error

This fund is not dynamic in nature. During market crashes, this fund will neither be able to take any proactive step nor will be able to take any course corrective steps. Similarly, when there is a momentary market opportunity, this fund will not be able to capitalize on that.
This fund will not be able to deliver market-beating returns.
This fund does no research on the underlying stocks. It BLINDLY buys the entire Index. Actively managed funds have better potential to take calculated risks than this fund.

The Final Takeaway of Navi US Total Stock Market FoF:

If you are a conservative investor or a first-time investor, then first you can choose to invest in Indian equity funds first.

If you are looking for global equity exposure after having built a core portfolio with Indian equity funds, then you can consider existing International funds with a good track record of the low expense ratio and less tracking error.

This fund is not suitable for you if you are looking for

Market beating returns
Dynamic fund management
Short term investments

If you are an aggressive investor and want to invest on an experimental basis, then in that case you may choose to invest a minimum amount in this fund.

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