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0:00 Today in this video we are going to expose mutual funds and how they make money from you. You think that my money will grow every year if I am doing SIP in mutual funds or making lump sum investment. But your money will not increase, your money will definitely be deducted. I will show you the exact calculation of how much will be deducted and you will be shocked. Today in this video you are going to know something that you may not have known till now. Let us talk about mutual funds. I promote ETFs. You all know this. But look here when I am talking about mutual funds. For example, Motilal Oswal's Nifty is India's Defence ATF. Meaning, this company is making investments in defense. If you
0:46 invest money, it will be invested in defense stocks. I was seeing here that its tracking error is 2.17%. Now I am going to show you live how much difference this tracking error of 2.17 makes. Now see what is amazing? I have no enmity with Motilal Oswal. Motilal Oswal also has a defense ETF here. I am also invested in this ETF. If you look inside this ETF, the one-year return is around 26%. Its returns in my portfolio are coming above 40%. Now you will say that if this is showing 26 then how is yours coming to 40? Well, I follow a strategy, which I will give you in the upcoming videos, the investing strategy of ETF, I will show you exactly how you can get even higher returns than these returns. So, I am going to give you the same system which I follow myself.
1:33 So as I said, the company is the same right now. Motilal Oswal owns India's Defence ETF and Motilal Oswal owns India's Defence Index Fund. Meaning both should be beans. But here the tracking error is 2.17 and the tracking error of ETF is 0.27%. What is happening? 2% at one place and 0.2% at another place means there is a difference of 10 times in the tracking error. But how much difference does this make to the returns ? let's watch. So if I click on this index fund and try to show you the return for one year, then the return for one year here is 16%, here it is coming 26 and 16 is the same
2:20 thing. These are defense stocks only. If defense stocks run up, the index fund should also run and if stocks run up, the ETF should also run up. Butt ETF is giving 10% higher return. So does tracking error make such a big difference? Yes, this 2% difference that you are seeing is a huge difference. And look, I am not able to understand why these mutual fund people look so innocent to these mutual fund people who are mutual fund investors that in ETF they are charging expense ratio of 0.41%. And in mutual fund you are taking 0.42%, meaning one is extra. But here the expense ratio is also high. You also have to pay exit load and you know
3:07 that there is no exit load in ETFs. Ok? The exit does not load. So now look, either this screener that I opened would have been different because this screener is from a different company. You are showing on another company's screener. I am using a screener from the same company. At one place I am showing you ETF and at another place I am showing you mutual fund and the difference is in front of you. Now you will say that this is a matter of each mutual fund. How does it matter ? Mostly it contains beans only. It does n't make any difference. Now there is just one thing in this which you have to take care of a little. If you are matching the returns when . So when I am talking about index funds, the index funds were launched in July and their ETF was launched in August. So that is why you are seeing here that the price has come down a little bit, so that is also an adjustment in the returns. So it wo
3:53 n't be exactly a difference of 10%. The difference will be less. But the point is that this difference still exists. So why is there a difference ? The difference is occurring due to tracking error. How much difference will it make to your money? Let's understand on the screen. You will be stunned. Now let's move on to the screen and understand. Allright. So now we understand how mutual funds make money. It is very important for you to understand this. Look, you feel like this if you have invested some money in mutual funds. Let us assume that you have made an investment of Rs 1 crore till now. You were doing SIP and your investment has been made of Rs 1 crore. People feel that the expense ratio which was to be cut has already been cut. Meaning, suppose you were doing a SIP of ₹00 per month and within that, whatever
4:38 your expense ratio was of 0.4, 0.5 or 1%, it has been deducted. You feel so. But this is your biggest betrayal. Why? Because if you invested ₹ 1 crore. I assume that you have stopped SIP. Right now you have only invested Rs 1 crore. So, I am writing about the mutual funds to you every year, here every year whatever they have told you, we will deduct the expense ratio. He will keep cutting it every year. You will say what is there that is not there in ETF. Will not spend every year in ETF. Brother, we will cut into ATF too. There is a cut in ATF too. But the expense ratio in ATF is generally very low. Your mutual funds have higher expense ratios. At many places, if I
5:25 compare just index funds, there is a difference of five times. That means there is a difference of five times in terms of expense ratio. I will give you an example. You go and check it yourself. Now I will show it to you on the screen also. If you invest in NIFI index fund then expense ratio is very low. It is not 1%. It is only 0.2%. Meaning 20 paise. If you invest ₹1 lakh, how much of your money will be deducted in the name of expense ratio? You will say if it is only ₹200 then ₹200 is nothing. You will say if I have invested ₹1 lakh for ₹200. But you will get the same expense ratio of Nifty 20 inside the ETF. 0.04%
6:12 means only ₹40 on ₹1 lakh, this is a difference of five times. This is a difference of five times in simple index funds and very few people invest in index funds when we talk about mutual funds. You choose funds which have high expense ratio and you are not even aware of it. Now see, every year will pass like this. Now, if you are getting 1% of your money deducted from the mutual fund, then understand how much it will cost you. Let's go a little further and understand how costly this will be. Look, you just invested ₹1 crore. It doesn't matter whether this money will increase next year or not. If your expense ratio is 1% and regular
6:58 mutual funds typically have an expense ratio of around 1%. I am not saying that this is some alien thing. I have never heard it. This is very normal. People don't even know that the expense ratio is being cut. And people do not even stay invested in mutual funds for that long. Meaning most people withdraw their money from mutual funds within 1 year. So, you will die due to exit load in 1 year, even if you impose exit load of 1%. So this was also deducted by 1% and this was also reduced by 1%. So what happened? For example, we are taking Rs 1 crore. Someone might have ₹10 lakh. Someone might have Rs 5 lakh. So you can apply it accordingly. Someone may even have Rs 100 crore. So, out of ₹1 crore, ₹1 lakh is deducted from your account in the name of expense ratio. And for what did your ₹1 lakh get deducted? In the name of exit load. Now the market has also given returns. Even
7:45 if the market gives returns, you think that yes, we got a return of 10% in mutual funds. It was not a return of 10%, the return was 12%. If the return was 12%, you got only 10% because this deduction is not visible as it gets adjusted in the NAV and when you redeem it, the money will be deducted from your account and you do not even realize that you are being cheated. So mutual funds as I told you in the last video are not right. The ETF is correct. Meaning, I think that actually the earnings in mutual funds are higher. The companies' earnings are high. Just now I showed you the example of Motilal House. So every company that is selling mutual funds and selling ETFs has to keep the ETFs cheap. So because there is money in it, that is why there are so many advertisements. There is
8:31 no advertising in ETF and look, it is the same company. If we take Motilal Oswal or HDFC, then it is HDFC's mutual fund and HDFC's ETF. You will get ETF at a cheaper rate. I am making this video just to explain this thing to you. Now understand further. This money that will be deducted from you over the years will make a huge difference. This 1% makes a huge difference. I will now show you that these people who distribute mutual funds are called mutual fund distributors. As I told you, I am also a certified AMFI registered mutual fund distributor. So I can also legally sell you mutual funds. But what am I telling you? You take an ETF. I don't earn any money from that. But I will tell you what dreams are shown to us. We are told to get SIP done for you people. So if I make you do a SIP
9:17 in mutual fund and sell it to you under me, then I will put my code vote, then what will happen with that ? Let us assume the mutual fund company was earning 1%. So she will share 1 percent with me in this. There could be any number of them. She will say I will give 0.5%, I will give 0.7%. They also give it to you depending on the volume. So they will give anything. For the sake of example, I am just saying roughly that let's assume that he was passing on the full 1% to me. So what example is shown to us that brother, you should increase your AUM. How will AUM increase now? Let us assume that SIP is being done under me and SIP of ₹1 crore per month is being done by many people together. Ok? So if SIP is of ₹1 crore then it becomes ₹12 crores for the year. Now he will pass on that ₹12 crore to me as ₹12 lakh as a commission. But he will say this is
10:04 not a game Pushkar. Understand what the game is. Next year these people's money will increase. So it could be 12, it could become 15, it could become 20, anything could happen. And you are also bringing a SIP of Rs 12 crore separately. You are already working hard. People's SIPs are still running. New people are also being added. But let us assume that it is only Rs 12 crore. So what? We gave you a commission of Rs 12 lakh. But your previous amount of 12 crores, now let's assume it has increased to 20 crores, so we will give you ₹20 lakhs more, so we will give you ₹32 lakhs next year, what do you tell us after that, this is not for me because I don't do this, but if I did this, then I would have been getting money in the same way, what will happen next year, now see yours, let's assume next year your SIP is same, it is a SIP of 12 crores only,
10:52 then you will get a commission of 12 lakhs, plus let's assume this 12 crore which became 20 crores is still 20 and this also becomes 12 + 20. So now we will give you a commission of 20 and 20, which means this will be yours ₹52 lakh and like this your commission will keep increasing every year. Because if people are not redeeming the previous fund, the value of the previous fund will increase. So if your AUV becomes say 100 crores, 1000 crores. If you say such things then you will get commission accordingly. From whose pocket is this money coming? When your money is being deducted, some mutual fund distributor is earning. And there is nothing wrong in the fact that a mutual fund distributor works hard. Explains. I meet many people, friend, that guy told us in which mutual fund to
11:37 invest the money. In which mutual fund to invest money. That guy told you this. You didn't know. Right? By the time you finish this video, you will understand which mutual funds and which ETFs you should invest in. After that you can decide. I will make a next video on Alldo ETF in which I will be telling you all the ETFs sorry mutual funds because ETF is also a mutual fund. I will explain to you how many types of ETFs there are and then you can decide the ETF yourself as per your goals, how much risk you want to take and how much return you want. You can also do SIP in ETFs. I told you in the last video. Today I will also show you a detailed explanation of how to do SIP in ETF. There is also weekly
12:22 SIP in ATF, I will show that to you also now. So what is your benefit from this ? Your money is being saved. So now here's something you may have totally missed. I told him, look at this mutual fund distributor, he is getting Rs. 12-12 lakh through his SIP. I mean, think about it according to your own understanding. If your SIP is running then the mutual fund and the mutual fund distributor are definitely earning. But your money is growing, let's assume that your money which you had invested of Rs. 12 crore or 12 lakh has increased to 20 crore, it has increased to 40 crore tomorrow, so you see, no matter how many new SIPs you do, the company will definitely earn on it, plus your old Rs. 10 crore, 20 crore, 20 lakh, 50 lakh, whatever you are getting,
13:08 you will keep paying money on it for your entire life as long as you hold the mutual fund, means you are thinking that this year my friend has already reached a holding of Rs. 50 crore. Having fun with mutual funds. Holding in mutual funds has reached Rs 50 crore. So what is 1% on 50 crores? ₹50 lakh will be deducted. You won't know it because it will show lower returns. Adjusts to NAV. So how is this money deducted? The expense ratio keeps getting adjusted within the NAV, or net asset value, of your mutual fund. So a common man is innocent, he doesn't know anything. Money is deducted from his NAV on daily basis. So if 1% was to be deducted per year , it does not work on a yearly basis. He says you will withdraw your money in 3 months.
13:53 So we increase the NAV a little less on daily basis. The market will grow more but the NAV will grow slightly less. You won't even know it. They keep adjusting on a daily basis. Keep withdrawing your money on a daily basis. Meaning, he is going home. If a mutual fund manager is going home, he will play this game on his way home and will withdraw money from your account and put it in his pocket and only then will he go home. Even while you are sleeping, your deduction in NAV of the mutual fund will continue. It has to happen. As long as you keep money in mutual funds, money will be deducted. You can again ask me whether it will not be deducted in ETF, it will be deducted but it will be less and why do we need to invest in ETF, we should invest in stocks only because we get diversification, so the
14:38 benefit of diversification is same in mutual funds as well as in ETF and we can buy ETF at our desired price, in the last video, I had exposed that the mutual funds are showing NAV of their own choice, they are showing NAV of next day, people are troubled but they cannot fight with anyone, they are helpless, so all these things are being told to you today. Maybe it doesn't matter to you today. But when your money will grow tomorrow, it is possible that you may not invest that much money today. But you will earn tomorrow, right? So this video is not for today but for your entire future. For the future of your children. So now let us understand on the screen how much difference this 1% difference that I mentioned makes. Regarding the exit load, people feel that the exit load is applicable only for one year. If you invest in mutual funds for more than a year then there is
15:24 no exit load. This is a myth. If you are investing for one, two or three years, then you will definitely not be charged exit load in the first 2 years. But in the last third year, you will be charged exit load. There is no exit load in ETF, so at some point of time you will have to pay money to the mutual fund from your pocket. It doesn't matter to them. So it is not like if we hold it for more than a year then we will get long term capital gain. It wo n't be short term. Well, tax is levied on both. Ok? So if you make money from ETFs to mutual funds, you pay tax. But exit load is always charged in mutual funds. Ok? So if a person is doing a SIP of ₹00 per month and let's assume he was doing it for the long term for his children. Been doing it for 25 years. Now let us say the market gave a return of 12%. Ok?
16:11 How much money is this at a fair return of 12%? If you say so, it is enough. With a SIP of Rs 500, this becomes Rs 8.5 crore in 25 years. We have not adjusted for inflation yet. But what will happen if 1% is redundant? what difference does it make friend? In mutual funds, whatever is happening, let it continue. Isn't it? These days those ads of Asian Paints and OPS are coming, in those paints they show the difference that let them remain as per the old times. Let them lag behind the times. You choose new Birla Oppo Paints Asian Paints was expensive. There was a monopoly. Oppo is cheaper. The quality is also good. But still people will say that Asian Paints is the best. Mutual funds are the best. Isn't it? So you should not compare ETF with Oppo. ETF is better. What difference does 1% make here ? Here you were making ₹8.5 crores.
16:58 Now if you love your money then 1.5 crore extra is being created. Just Rs 1.5 crore, not more. There is a saving of Rs 1.5 crore with this video. What difference did it make? If you want to save Rs 1.5 crore then follow this or else ignore it. Otherwise the mutual fund is still running. Hail. So here there is a difference of Rs 1.5 crore due to just 1%. [MUSIC] Okay? If you think this is significant then now let us understand how to do SIP in ETF? Brother, do you know the SIP of mutual funds? Well, don't miss the next video because I will tell you which ETFs are good. People say that we give money to the mutual fund distributor because he once told us in which mutual fund to invest the money. And then they talk about the active mutual fund, there will be alpha in it. You know Warren
17:45 Buffett had made a bet with a fund manager that he would not be able to beat even the index fund. Most of the funds, I am talking about actively managed funds, are not able to beat index funds. Now you will shine the example of one half. This was an actively managed fund. It gave higher returns. So there was one, there were two, there were five. There are thousands of mutual funds that did not beat. Is there any guarantee that your money was invested in the same fund which outperformed the market, that too by 1, 2% to 5%. What is the guarantee? If you know so much then you should race on the horse that is going to win the race or you can go to Vision 11 and make a team because there you will tell you exactly who will score a century, who will take the maximum number of wickets, you know it and that is still easy, you know how many mutual funds there are, look here on this
18:31 screener, 1467 mutual funds are visible on the mutual fund screener, a team has to be made on Dream 11, 11 players are playing here, 11 players are playing there, there are 22 players, nobody wins in that, here you will select from 1400 mutual funds as to which one will outperform the market. very good. Maybe you should do it. Now even if you want to do it, I will still tell you. There are many ETFs that outperform Nifty. Do watch the next video. Ok. So now we are talking about how to do SIP in ETF, brother inside ETF. You look here, go to your demat account. Here you click on investor mode instead of trader mode. You switch. What do you have to do after that?
19:20 Write down the name of your favorite ETF. For example, I am showing you Nifty Twenty. Ok? Let's move to Nifty 20. Now suppose you want to do SIP in Nifty Bees. You will see the option SIP below. Click on this. After this you can select quantity or amount. You say that I can do a SIP of ₹1000 per month. What difference does ₹1000 make ? I want to do SIP of Rs 2000 or I want to do SIP of Rs 2 lakh. You can enter a custom amount here. For example, you say I will do it for ₹2500 per month. Yes, you can do it for Rs 2500 per month. You click on continue. After that here it is asking you whether you want to do it weekly or monthly. Money can also be invested weekly through SIP in ETF. So you select weekly. Yes, I will do it weekly. Ok? And also select on which day you want to do it weekly. You think, no no, Tuesday Tuesday is fine. It
20:05 is Tuesday. It is the day of Bajrangbali. We will take the market to the next level. Many people believe so I will select Zee Tuesday. You think, no no, I will take it on Friday. I will make a small investment so you can select Friday. It's up to you. Whatever you feel like, whatever day you like, whatever your astrologer says, take that day and continue. After that you can invest here. As soon as you confirm to buy. So as soon as you confirmed, you confirmed your SIP here. You just have to keep money in your demat account. That's it. Your SIP will continue. There is so much work to be done and SIP is being done in ETF. But which ETFs? What Nifty Twenty? Is there a better ETF than Nifty V? We will understand this in the next video. Look, some people might be getting hurt by these videos of mine. If the income of such people is linked to mutual
20:51 funds then they will feel that mutual funds are the right thing. Brother, what are you doing? This does n't happen. Isn't it? What does he say? what are you pulling? Tell me in the comments. So what do you mean by saying that? You are investing in mutual funds. ETF is also a mutual fund. It's beans. They are just cheap. Your money is being saved. I think this should make a difference to you. So I am making videos. You want to invest in ETFs. Want to invest in stocks? Still want to invest in mutual funds? If you want to trade in the stock market, you will need a demat account. You can go and open a demat account for free. You will find the link in the description and pin in the comment. Even if you want to invest in mutual funds, you need a demat account. Even if you want to invest in ATF, you need a demat account. This is only needed if you want to buy stocks. So, if you don't have a demat account yet, open one for free and now I will tell you about new ETFs which you
21:36 probably don't know about yet, how you can invest in foreign stocks while sitting in India, that too through ETFs at your own rates. I am going to explain all this and as I said, how you can get even higher returns, we are also going to discuss that in the upcoming videos. So please subscribe. Please click on the bell icon. Demat account link in description and comment. Please share this video because this video can save money of many people. Share this video. We will see you in the next video.
