Today market fell about 5%. In the morning it was gap down about 2-3% and then 4% and 5% closing.
Say we want to take the advantage of todays fall or we expect that market will close much lower at the end of the day . And, suppose we expect tomorrow market to open gap up.
How do we time the buying Mutual Funds to take advantage of the best NAV?
I understand there is cut off time of 3 pm for equity MFs but not sure how exactly it works.
Also, if we SIPs and conditional orders, how and which days NAV they get executed at?
If AMCs left to decide, they can execute the order at NAV that suits them !!
oh ok. Thanks.
But, can some one explain how actually ETFs useful for this? Do they reflect NAV instantaneously?
Or, if I order an ETF at 2:10 PM, would my ETF get allotted at the NAV of around 2:10 PM ?
Ok so buying of ETF is slightly different from buying a normal Mutual fund.
ETFs are bought and sold on stock market (you need demat and trading account) and price of ETF units changes continuously (like any normal share)
MF generally publishes a hourly NAV for ETFs, but this is just indicative NAV, actual trading happens at Market price (which can be slightly different based on liquidity)
So in you example you can place order for ETF at 2:10 PM in market and you will get price at that particular moment. (always use limit orders for buying/selling ETF)
But as I said previously, if you intend to capture intraday movement, ETF is more suited then normal fund.
to add, EFT’s are linked to indicies. For eg. NIFTYBEES is in relation to Nifty 50. All a ETF does is mirror the composition of the assets by weight in the Index. SEBI further stipulates for ETF’s to be an effective measure it has to out-perform the underlying, in this case, index, to account for dividend received. Before Fund’s where taking the dividends, they still can, but the performance will be lower, hence people will start switching to other Fund ETF.
I would like to add, don’t look at MF’s under a microscope. Buy when you have money that you wont need in 3~5yrs. I bought some MF when Nifty was at ~18,000, under current situation I feel Nifty might pull down to 15k. If it does, I will add some more. Not take out. Keep MF’s with a view of at least 5yrs.
Read up about MF and various other types of funds at Zerodha Varsity.. The dude who wrote it, really did a fine job. Even if you have a good knowledge of Funds, it still is a good read.
if you search “historical nav of mf” you will get some sites where you can download the nav history for you selected time frame.
It is also available via kite api. if you already subscribe for kite api then you can use getHoldings(). I just started to do this and am finding some discrepancies in nav records. When records are kept in upto 4 decimal places differences of .001 shows up. Specially when one like to tally to the last paise. I am guessing NAV prices aren’t as fine-tuned as equity prices.
For buying selling exact tally, use the Fund site. for a ball-park estimation you can use the api to pull all the navs for funds listed in Z-Coin.
So, where do you place order for the ETFs to take the advantage of the current NAV ? Does Coin execute the ETF order to reflect what is updated about 15s ago?
So to confirm/clarify - There was a recent fall on Jan 17 2024 - if I bought equity mf and pay before 11.30 am via UPI/IMPS on that same day - I will get NAV at the end of the day of Jan 17th 2024 correct? So basically I would not know what nav I will get because it will be decided at the EOD ? That is why you are suggesting ETF rather than MF ? @Jason_Castelino
What if I bought MF same day but after cut off time lets say 6 pm - I will get NAV of EOD Jan 18th correct?
That’s pretty old thread. I had to refresh what I said
Yes, that was the gist of it.
If your sole goal was catching intraday low, it is better off you buy ETF. Looking at fall in market if you place order before 11:30, but if market recovers by EOD, you get NAV at EOD and hence miss the fall.
