Principal Mutual has announced a dividend of 110 per cent and 25 per cent under Principal Personal Tax Saver Fund and Principal Growth Fund, respectively. The record date for the same is December 31, 2007.
(by valueresearch)
Mutual Fund News update from Nishit Doshi (9824021680) a leading MF Advisor based in Ahmedabad. Gujarat.
Sunday, December 30, 2007
Sundaram BNP Paribas Mutual Fund has announced a dividend of 30% (i.e. Rs 3 per unit on the face value of Rs 10) under Sundaram BNP Paribas Tax Saver.
(by valueresearch)
30% Dividend under Sundaram BNP Paribas Tax Saver
Sundaram BNP Paribas Mutual Fund has announced a dividend of 30% (i.e. Rs 3 per unit on the face value of Rs 10) under Sundaram BNP Paribas Tax Saver. The record date for the same has been fixed as December 28, 2007.
(by valueresearch)
(by valueresearch)
ABN AMRO Mutual Announces Merger of Schemes
ABN AMRO Mutual Fund has merged ABN AMRO Dividend Yield Fund and ABN AMRO Opportunities Fund. ABN AMRO Dividend Yield Fund will cease to to exist with effect from February 10, 2008. With this merger the fund house has revised its load structure for AMRO Opportunities Fund. The scheme will now charge an entry load of 2.25 percent for investment less than Rs 5 crores.
(by valueresearch)
(by valueresearch)
UTI Children's Career Bond Plan Renamed as UTI CCP Advantage Fund
Effective January 30, 2008, UTI Mutual Fund proposes to change the name of UTI Children's Career Bond Plan to UTI CCP Advantage Fund.
The fund house has also revised the load structure. From on onward the fund would start charging an entry load of 2.25 per cent. While, an exit load of 1 percent would be charge if the units are repurchased between 3-5 years, 3 percent would be charge if the units are repurchased between 1-3 years and 4 percent would be charge if the units are repurchased within 1 year.
(by value research)
100% Dividend under DSPML Technology.Com Fund
DSPML Mutual declares dividend under DSPML Technology.Com Fund. The record date for the same is January 04, 2008 and the quantum of the dividend is Rs 10 per unit on the face value of Rs 10.
(by valueresearch)
(by valueresearch)
Friday, December 28, 2007
Magnum Midcap Fund Declares Dividend
SBI Mutual Fund has announced December 31, 2007 as the record date for the declaration of dividend under Magnum Midcap Fund. The quantum of dividend will be Re 3.50 per unit on the face value of Rs 10.
(by valueresearch)
(by valueresearch)
Dividend Declaration under Two Schemes of Principal
Principal Mutual has announced a dividend of 110 per cent and 25 per cent under Principal Personal Tax Saver Fund and Principal Growth Fund, respectively. The record date for the same is December 31, 2007.
(by valueresearch)
HDFC MIP Long-term-G
With as much as 25% exposure to equities, HDFC MIP Long-term is one of the most aggressive of its types. And it is this aggressive nature that has kept the fund ahead of its peers
With debt investors expecting double digit returns; HDFC MIP Long Term has delivered. With 25 per cent of assets committed to equity, it has been amongst the most aggressive in its category. As of September 30, 2007, only two MIPs (of a total 38) maintained an exposure of more than 25 per cent to equity. Given the fabulous rally in equities since its inception, it is no wonder that the fund stands unbeaten; managing a fifth of the category's assets under management and ranking ahead of its peers based on pure returns.
Within its equity portfolio the fund sticks to a long term strategy, with little churn in the portfolio. The fund has however shown more aggression in the debt side. While traditionally the fund has shown a preference for high quality AAA rated paper, this year there has been a move to extract higher yields and look at AA and below rated papers. Since June this year the average maturity period of the fund's debt holdings has also increased.
A higher maturity profile in turn makes the fund more sensitive to interest rate changes. This may well be a tactical move in expectations that henceforth interest rates will move south. While the fund in itself has not witnessed many bear phases, its equity portfolio manager fills in the gap, he is amongst the most experienced in the industry. There has been a discernible improvement in the fund's performance during down phases. Over the recent slide during the quarter of March 2007, the fund delivered a 0.76 per cent increase, safer than the average category's loss of (-) 0.31 per cent. All in all, an aggressive fund that keeps costs consistently below average and diligently distributes dividends is how you can describe from the fund.
(by valueresearch)
With debt investors expecting double digit returns; HDFC MIP Long Term has delivered. With 25 per cent of assets committed to equity, it has been amongst the most aggressive in its category. As of September 30, 2007, only two MIPs (of a total 38) maintained an exposure of more than 25 per cent to equity. Given the fabulous rally in equities since its inception, it is no wonder that the fund stands unbeaten; managing a fifth of the category's assets under management and ranking ahead of its peers based on pure returns.
Within its equity portfolio the fund sticks to a long term strategy, with little churn in the portfolio. The fund has however shown more aggression in the debt side. While traditionally the fund has shown a preference for high quality AAA rated paper, this year there has been a move to extract higher yields and look at AA and below rated papers. Since June this year the average maturity period of the fund's debt holdings has also increased.
A higher maturity profile in turn makes the fund more sensitive to interest rate changes. This may well be a tactical move in expectations that henceforth interest rates will move south. While the fund in itself has not witnessed many bear phases, its equity portfolio manager fills in the gap, he is amongst the most experienced in the industry. There has been a discernible improvement in the fund's performance during down phases. Over the recent slide during the quarter of March 2007, the fund delivered a 0.76 per cent increase, safer than the average category's loss of (-) 0.31 per cent. All in all, an aggressive fund that keeps costs consistently below average and diligently distributes dividends is how you can describe from the fund.
(by valueresearch)
In Search of High Returns
I intend investing Rs 30,000 in an equity fund for the next six months. I am looking at a 20-25 per cent return. My aim is to utilise this money for my wedding expenses. Please advise which funds to invest in.
With the markets on fire, it is difficult to sound convincing while answering such a query. But the truth is that equity markets are extremely volatile and risky in the very short term of six months to a year. That is not to say that a 20-25 per cent return is inconceivable. It has happened in the past. The Sensex returned an impressive 20 per cent during the September 2005 quarter (July -September) and again during the March 2006 quarter. But don't count on it. Such a strategy is nothing short of gambling. You might as well try your luck at the casino.
(by valueresearch)
With the markets on fire, it is difficult to sound convincing while answering such a query. But the truth is that equity markets are extremely volatile and risky in the very short term of six months to a year. That is not to say that a 20-25 per cent return is inconceivable. It has happened in the past. The Sensex returned an impressive 20 per cent during the September 2005 quarter (July -September) and again during the March 2006 quarter. But don't count on it. Such a strategy is nothing short of gambling. You might as well try your luck at the casino.
(by valueresearch)
Pink Health
Reliance Pharma has beaten peers in its category by leaps and bounds
The pharma sector has proved to be a laggard in the past one year. For the one-year period ended December 10, 2007, the BSE Health Care index gained a meager 9.61 per cent. Naturally, it's only fair to expect pharma funds to be badly hit. And that they are. There are currently five pharma funds in the industry, managing overall assets of Rs 351 crore (as on November 30, 2007). All of them together delivered an average return of 9 per cent, underperforming the index. But, Reliance Pharma appears to be in the pink of health. It has outperformed the category and its peers convincingly. During the same one-year period when the category average was 9 per cent and the pharma index delivered 9.61 per cent, this fund gave an astounding 43.2 per cent return. This is nothing new for the pharma fund. Reliance Pharma has managed to top the category ever since it's launch in 2004 and has maintained a concentrated portfolio of 13-15 stocks for over a year now. The fund managed to lead the pack by going for some excellent stock picks like Divi's Laboratories. The stock has yielded 223.4 per cent in the above one-year period. The stock continues to be its top holding.
Other picks that have paid off include Ankur Drugs & Pharma and Dishman Pharmaceuticals & Chemicals.
Being the biggest in its category, the fund has Rs 117 crore (as on November 30, 2007) of assets under management.
(source: valueresearch)
The pharma sector has proved to be a laggard in the past one year. For the one-year period ended December 10, 2007, the BSE Health Care index gained a meager 9.61 per cent. Naturally, it's only fair to expect pharma funds to be badly hit. And that they are. There are currently five pharma funds in the industry, managing overall assets of Rs 351 crore (as on November 30, 2007). All of them together delivered an average return of 9 per cent, underperforming the index. But, Reliance Pharma appears to be in the pink of health. It has outperformed the category and its peers convincingly. During the same one-year period when the category average was 9 per cent and the pharma index delivered 9.61 per cent, this fund gave an astounding 43.2 per cent return. This is nothing new for the pharma fund. Reliance Pharma has managed to top the category ever since it's launch in 2004 and has maintained a concentrated portfolio of 13-15 stocks for over a year now. The fund managed to lead the pack by going for some excellent stock picks like Divi's Laboratories. The stock has yielded 223.4 per cent in the above one-year period. The stock continues to be its top holding.
Other picks that have paid off include Ankur Drugs & Pharma and Dishman Pharmaceuticals & Chemicals.
Being the biggest in its category, the fund has Rs 117 crore (as on November 30, 2007) of assets under management.
(source: valueresearch)
Thursday, December 27, 2007
Timing Pitfalls
I want to invest some money in the market but I think it is already at a very high level. Should it fall, I may lose my capital. But should it continue to rise, I will gain. I am planning to invest in an equity fund as and when the market corrects 200 points. Please advice.
- Anonymous
What you are doing is trying to time the market. Here's our advice to everyone waiting for a correction. There may not be one. The laws of physics do not apply to stock markets; therefore what goes up need not come down. At least not in the near and immediate future.
Stick to a simple principle of investing regularly. If you have a lump sum amount, invest it in an ultra short-term debt fund and institute a Systematic Transfer Plan into an equity fund. Else stick to a plain vanilla SIP. Once done, all you need to do is monitor your fund for slackness in performance. If you are invested in a Value Research rated fund, look out for a re-rating of the fund. It's really as simple as that.
(valueresearchonline)
- Anonymous
What you are doing is trying to time the market. Here's our advice to everyone waiting for a correction. There may not be one. The laws of physics do not apply to stock markets; therefore what goes up need not come down. At least not in the near and immediate future.
Stick to a simple principle of investing regularly. If you have a lump sum amount, invest it in an ultra short-term debt fund and institute a Systematic Transfer Plan into an equity fund. Else stick to a plain vanilla SIP. Once done, all you need to do is monitor your fund for slackness in performance. If you are invested in a Value Research rated fund, look out for a re-rating of the fund. It's really as simple as that.
(valueresearchonline)
Friday, December 21, 2007
Borrowed Funds
I have the option of breaking a fixed deposit or taking a loan against it and investing it in mutual funds. Which is a better option?
We would like to make our stance very clear - please stay away from investing borrowed money. Investors who use borrowed money for investing in equities usually have deep pockets and they too use different strategies to hedge the risk undertaken.
Apart from a loan against a fixed deposit (FD), many banks offer investment services where you can borrow money and they invest it in mutual funds for you. These funds are then liquidated on a quarterly basis to pay off your interest liability. Investment in a high-risk asset class such as equity is very capable of turning negative and eating into your capital. You could get saddled with a higher interest payout than what your FD earns.If you have a high-risk appetite, a better option would be to break the FD and invest that money in mutual funds.
Alternatively, you can break your FD and invest this capital in a Post Office Monthly Income Plan and create an SIP out of the monthly interest pay-outs from it. Though the amount invested in equities will be less, it keeps your principal amount safe.
(by value research)
We would like to make our stance very clear - please stay away from investing borrowed money. Investors who use borrowed money for investing in equities usually have deep pockets and they too use different strategies to hedge the risk undertaken.
Apart from a loan against a fixed deposit (FD), many banks offer investment services where you can borrow money and they invest it in mutual funds for you. These funds are then liquidated on a quarterly basis to pay off your interest liability. Investment in a high-risk asset class such as equity is very capable of turning negative and eating into your capital. You could get saddled with a higher interest payout than what your FD earns.If you have a high-risk appetite, a better option would be to break the FD and invest that money in mutual funds.
Alternatively, you can break your FD and invest this capital in a Post Office Monthly Income Plan and create an SIP out of the monthly interest pay-outs from it. Though the amount invested in equities will be less, it keeps your principal amount safe.
(by value research)
Crash Unlikely
Anand Shah is an electronics engineer from REC Surat. Soon after graduation, he joined Kirolskar Oil Engines for two years before taking up studies again. Subsequently, he passed out from IIM (Lucknow) in 2000 with a specialisation in finance. Soon after, he joined Kotak on the buy side as an analyst. His role entailed research on various sectors and companies after which he moved to fund management. He joined Prudential ICICI AMC in January this year where he manages two funds - ICICI Pru Power and ICICI Pru Fusion S-II.
Do you see a market crash in the near future?
The rise is the reflection of very strong GDP growth rates in the last three years and expectation of the same being sustained in the foreseeable future. We believe that strong earnings growth of India Inc will sustain going forward and thus market valuations are reasonable on a one-year forward earnings basis. Also, the balance sheet of India Inc is stronger then ever. We are of the opinion that the market might remain volatile in times to come, however a market crash is unlikely.
What is the strategic and tactical orientation of ICICI Prudential Power?
Power fund is a diversified equity fund with a strong bias towards large caps. The fund will continue to focus on bottom-up stock picking and pursue growth ideas. Within the mid-caps, its focus is towards sectors with secular growth opportunities that individual companies can pursue to become large-cap companies.
Which are your top sector preferences?
Capital Goods
Media
Capital goods companies would be one of the largest beneficiaries of investments by government in infrastructure and by investments of the corporate sector in new capacities. The media sector would be one of the key indirect beneficiaries of growing consumerism of the large Indian middle class population, which is benefiting from rising job opportunities and ever-increasing salary levels.
This interview appeared in the October 2007 issue of Mutual Fund Insight.
(by value research)
Do you see a market crash in the near future?
The rise is the reflection of very strong GDP growth rates in the last three years and expectation of the same being sustained in the foreseeable future. We believe that strong earnings growth of India Inc will sustain going forward and thus market valuations are reasonable on a one-year forward earnings basis. Also, the balance sheet of India Inc is stronger then ever. We are of the opinion that the market might remain volatile in times to come, however a market crash is unlikely.
What is the strategic and tactical orientation of ICICI Prudential Power?
Power fund is a diversified equity fund with a strong bias towards large caps. The fund will continue to focus on bottom-up stock picking and pursue growth ideas. Within the mid-caps, its focus is towards sectors with secular growth opportunities that individual companies can pursue to become large-cap companies.
Which are your top sector preferences?
Capital Goods
Media
Capital goods companies would be one of the largest beneficiaries of investments by government in infrastructure and by investments of the corporate sector in new capacities. The media sector would be one of the key indirect beneficiaries of growing consumerism of the large Indian middle class population, which is benefiting from rising job opportunities and ever-increasing salary levels.
This interview appeared in the October 2007 issue of Mutual Fund Insight.
(by value research)
Foreign Money Driving Markets
Armed with a degree in mechanical engineering from REC, Suratkhal and an MBA from IIM (Bangalore), Lahiri's first stint was as an area marketing executive for Crompton Greaves for a year. Pursuing his interest in equities, Lahiri moved to Dolat Capital, a domestic institutional stock broking firm, as part of their equity research team. In June 2004, he moved to DSPML Fund Mangers as part of the equities fund management team.
Do you see a market crash in the near future?
It's difficult to take a call on the market in the short term, given that it is being driven by foreign flows at this point in time. News on the domestic front, especially on the political side, continues to be an issue.
What is the strategic and tactical orientation of DSPML T.I.G.E.R.?
DSPML India Tiger Fund is a thematic fund with a focus on companies and sectors that are likely to prosper from growth related to economic reforms and infrastructure investment. We believe these are the key drivers of economic growth and corporate profitability in India going forward. We continue to remain bullish on this theme and feel that there is significant value that can be extracted over the long term. We're looking to capture the earnings growth story over the next three to five years and are looking towards the power, roads and construction sectors to deliver the returns.
Which are your top sector preferences?
Capital Goods
Cement sectors
They look very favorable right now since the earnings growth in these sectors will be higher than consensus expectations.
This interview appeared in the October 2007 issue of Mutual Fund Insight.
(by value research)
Do you see a market crash in the near future?
It's difficult to take a call on the market in the short term, given that it is being driven by foreign flows at this point in time. News on the domestic front, especially on the political side, continues to be an issue.
What is the strategic and tactical orientation of DSPML T.I.G.E.R.?
DSPML India Tiger Fund is a thematic fund with a focus on companies and sectors that are likely to prosper from growth related to economic reforms and infrastructure investment. We believe these are the key drivers of economic growth and corporate profitability in India going forward. We continue to remain bullish on this theme and feel that there is significant value that can be extracted over the long term. We're looking to capture the earnings growth story over the next three to five years and are looking towards the power, roads and construction sectors to deliver the returns.
Which are your top sector preferences?
Capital Goods
Cement sectors
They look very favorable right now since the earnings growth in these sectors will be higher than consensus expectations.
This interview appeared in the October 2007 issue of Mutual Fund Insight.
(by value research)
New Fund from UTI - UTI Investment Bond Fund
UTI Mutual Fund makes one more addition in its fund's list with the launch of a new debt fund called UTI Investment Bond Fund Plan 60 (60 months plan). It is a close ended income fund, comprising of four series. This is the first series being launched by the AMC and is open for subscription from November 26, 2007 to December 31, 2007.
The scheme aims to generate regular returns by investing in a portfolio of fixed income securities normally maturing in line with the maturity period of the respective plans. It would invest 70 to 100 per cent in debt and money market instruments and upto 30 per cent in equity and equity linked instruments.
Snapshot
Face Value: Rs. 10
Plans: Retail and Institutional
Options: Dividend (payout and reinvestment) and Growth
Minimum Investment
Retail: Rs. 5000 for the growth option and Rs. 10000 for the dividend option
Institutional: Rs.1 crore
Benchmark Index: Crisil MIP Blended Index
Fund Manager: Deb Bhattacharya
Load Structure: The plan would offer redemption facility on a half-yearly basis after the closure of the issue. The investor may redeem the units on the stipulated date (based on the date of the closure of the issue).
(by value research)
The scheme aims to generate regular returns by investing in a portfolio of fixed income securities normally maturing in line with the maturity period of the respective plans. It would invest 70 to 100 per cent in debt and money market instruments and upto 30 per cent in equity and equity linked instruments.
Snapshot
Face Value: Rs. 10
Plans: Retail and Institutional
Options: Dividend (payout and reinvestment) and Growth
Minimum Investment
Retail: Rs. 5000 for the growth option and Rs. 10000 for the dividend option
Institutional: Rs.1 crore
Benchmark Index: Crisil MIP Blended Index
Fund Manager: Deb Bhattacharya
Load Structure: The plan would offer redemption facility on a half-yearly basis after the closure of the issue. The investor may redeem the units on the stipulated date (based on the date of the closure of the issue).
(by value research)
DSPML Balanced-G
The DSPML Balanced fund has a few weak points, but it is one fund that gives out consistent returns. It might not be an obvious option, but the fund is certainly worth a look in
Though it has delivered above average performances, and even managed top quartile returns in a few years, DSPML Balanced does not turn heads.
Its tactical asset allocation has done little to deliver impressively. Over the past 21 months, the equity exposure has fluctuated in a wide range of 9 percentage points. According to the September 2007 portfolio, the fund has parked 72 per cent of its assets in equity.
The tilt towards mid- and small-cap stocks from December 2006 is here to stay. This automatically gives the fund a riskier tilt. To balance the effect, the shift was accompanied by an increase in the number of scrips from 60 to as many as 75.
Clearly, the fund shies away from taking big sector or even stock specific bets. So don't expect trailblazing returns from such a portfolio. But then one does not look for such returns in a balanced fund.
Our grouse is that even in bearish phases, the fund's track record is not consistent. The instances of the fund losing much less than the category average have been offset by times when it fell much harder than the average. In the recent lean quarters of June 2006 and March 2007, the fund lost as much as the average player. So investors cannot even count on the fund to limit downside risk.
Having listed the weak points, what you can expect from this fund is stability and consistency of returns. The fund will not knock the lights out, but its performance will be in line with the category average.
All in all, the fund may not be the first choice but it is definitely worth a second look.
(by value research)
Though it has delivered above average performances, and even managed top quartile returns in a few years, DSPML Balanced does not turn heads.
Its tactical asset allocation has done little to deliver impressively. Over the past 21 months, the equity exposure has fluctuated in a wide range of 9 percentage points. According to the September 2007 portfolio, the fund has parked 72 per cent of its assets in equity.
The tilt towards mid- and small-cap stocks from December 2006 is here to stay. This automatically gives the fund a riskier tilt. To balance the effect, the shift was accompanied by an increase in the number of scrips from 60 to as many as 75.
Clearly, the fund shies away from taking big sector or even stock specific bets. So don't expect trailblazing returns from such a portfolio. But then one does not look for such returns in a balanced fund.
Our grouse is that even in bearish phases, the fund's track record is not consistent. The instances of the fund losing much less than the category average have been offset by times when it fell much harder than the average. In the recent lean quarters of June 2006 and March 2007, the fund lost as much as the average player. So investors cannot even count on the fund to limit downside risk.
Having listed the weak points, what you can expect from this fund is stability and consistency of returns. The fund will not knock the lights out, but its performance will be in line with the category average.
All in all, the fund may not be the first choice but it is definitely worth a second look.
(by value research)
UTI Infrastructure Advantage NFO Extended
UTI Mutual Fund has extended the date of closing for their new closed ended fund - UTI Infrastructure Advantage. The NFO is now open till December 24, 2007. Earlier this NFO was scheduled to close on December 19, 2007.
(by valueresearch)
(by valueresearch)
Dividend declared in Templeton India Growth Fund
The record date for the declaration of dividend under Templeton India Growth Fund (TIGF) is December 26, 2007. The quantum of dividend is Rs.4.50 per unit on the face value of Rs 10.
(by value research)
(by value research)
Birla Mf launch NFO - BIRLA SUN LIFE SPECIAL SITUATION FUND
Birla Sun Life AMC launches BIRLA SUN LIFE SPECIAL SITUATION FUND(An open ended diversified equity scheme) from today.
A fund targeted at harnessing the potential of Special Situations for the investors.
- No market cap bias
- No style bias
- Would invest in Special situations in stocks
- Contra plays
- A fund that can provide extra returns over the market returns.
Special Situations: By the very name “Special situations” are ones that are not very frequent in a company’s lifecycle. The special situations may arise either because of an event that is intrinsic to the company or at times due to external factors.
Benefits of special situations: Special situations are more often positive surprises that result in enhanced value or rerating of the stock. Special situations may result in significant extra gains in stocks whenever they occur. These gains may get reflected immediately or over a longer period of time depending on the situations.
Kinds of Special Situations: There are multiple kind of special situations – Mergers & Acquisitions (M&A) , Takeovers, Private Equity (PE) infusion, Demergers, Structuring of business, Open offers, Delistings, Contra plays etc.
In this fund we will also be participating in Primary Market Activities i.e. IPOs.
Wednesday, December 19, 2007
Fine Balance - HDFC Prudence Fund
This fund has one important virtue: it manages to lose less than the category average in periods of downside. Couple this with its tendency to top charts & you get a safe & sure fund in HDFC Prudence
This fund treats its investors well. Be it in protecting the downside or generating great returns, it has delivered magnificently.
During the lean years of 2000-2001, the fund lost less than the average balanced fund. In the recent past as well, the fund has done a commendable job of protecting the downside. During the quarters of June 2006 and March 2007, when the average category loss stood at (-) 7.97 per cent and (-) 3.23 per cent respectively, HDFC Prudence managed to return a loss of (-) 6.58 per cent and (-) 3.18 per cent during the respective quarters.
Furthermore, the fund has been amongst the most efficient in pulling out of each such slump and ensuring that the momentum is not lost.
Being a chart topper was a habit for this fund. Till last year, at least. While that in itself is not a disturbing fact, it tends to nag when compared with this year's performance, which is short of the category average. We can't find a fault with its stock or sector moves. But where we did find significant change was in its diversification. Owing to a rising corpus (increase of 100 per cent since January 2006) combined with a mid-cap orientation, the count of stocks has increased from 30-35 (early 2006), to as many as 50 scrips. This has been accompanied by a steady decline in the concentration of holdings.
While this will help the fund retain its low risk grade, it looks like returns have been compromised. But going by the fund's long term track record, we prefer giving the fund manager the benefit of the doubt. We stick to our verdict that this is among the best choices around.
(by value research)
Taxing Queries Answered
Tax Planning Benefit
For how many years will I get the tax benefit by investing in an equity-linked saving scheme?
The tax benefit under Section 80C (exemption from income tax for investments in ELSS and other instruments) for investments of Rs 1 lakh is applicable for only one financial year. It's applicable only for the year in which the investment is made. So if you invested Rs 20,000 in a tax planning fund in FY 2006-07, you cannot use this to avail a tax breather for FY 2007-08, even if you didn't use the benefit in 2006-07.
Capital Gains on ELSS
What is the tax payable on profits of an ELSS fund after the three-year lock in period?
Zilch! You don't pay any tax on the capital gain at the end of the three-year lock in. However, if these tax provisions change in the future, you may be in for a surprise.
No Limits
Can I invest in tax planning funds even though I have exhausted the Rs 1 lakh limit?
Yes, you can. However, given the three-year lock in, it makes more sense to invest in an open-ended, non-ELSS diversified equity fund. In case of a change in fund management, slackened performance, poor market conditions, emergency requirement of money etc. one has the option of redeeming units. Moreover, when it comes to picking a good performing fund, investors today are spoilt for choice.
So it is better to avoid a restriction of a three-year lock in on your investment.
(by value research)
For how many years will I get the tax benefit by investing in an equity-linked saving scheme?
The tax benefit under Section 80C (exemption from income tax for investments in ELSS and other instruments) for investments of Rs 1 lakh is applicable for only one financial year. It's applicable only for the year in which the investment is made. So if you invested Rs 20,000 in a tax planning fund in FY 2006-07, you cannot use this to avail a tax breather for FY 2007-08, even if you didn't use the benefit in 2006-07.
Capital Gains on ELSS
What is the tax payable on profits of an ELSS fund after the three-year lock in period?
Zilch! You don't pay any tax on the capital gain at the end of the three-year lock in. However, if these tax provisions change in the future, you may be in for a surprise.
No Limits
Can I invest in tax planning funds even though I have exhausted the Rs 1 lakh limit?
Yes, you can. However, given the three-year lock in, it makes more sense to invest in an open-ended, non-ELSS diversified equity fund. In case of a change in fund management, slackened performance, poor market conditions, emergency requirement of money etc. one has the option of redeeming units. Moreover, when it comes to picking a good performing fund, investors today are spoilt for choice.
So it is better to avoid a restriction of a three-year lock in on your investment.
(by value research)
Markets Fairly Valued
An old war horse, Pankaj Kaji has more than 30 years of experience in foreign exchange and fund management. A post graduate in commerce, he has worked for global financial powerhouses like Deutsche Bank's global market arena and ANZ Grindlays' treasury division. One of the most experienced fund managers, Kaji joined ICICI Prudential's investment team five years ago where he manages the debt funds.
Deven Sangoi has been associated with ICICI Prudential AMC for the past two years. Sangoi had previously worked with Alchemy Stocks and Shares Limited. He has been managing ICICI Pru Balanced since October 2005. He is also managing some other equity funds at the AMC including ICICI Pru Emerging Star and ICICI Pru Growth. Sangoi is an electronics engineer and an MBA.
Do you see a market crash in the near future?
We do not see the market crashing in the near future. The fundamentals in the Indian market look good on the back of strong earnings. The monsoons have also been above average, which further strengthens the situation. Thus the market is fairly valued in the current scenario. However, there might be some correction if the money flows slow down. Investors should look at SIP as a long-term investment tool as it helps ride the volatility by mitigating the risks.
What is the strategic and tactical orientation of your fund?
We focus on bottom-up investment with significant bias towards large-cap companies. We also have a judicious mix of mid-cap companies that have sustainable long-term growth potential.
Which are your top sector preferences?
Financial Services
Capital Goods
Financial Services, because of the growth in the Indian economy and a spectrum of new offerings, resulting in high consumer spending, backed by increasing salary levels. Capital goods because of increase in capital expenditure required for building India, its infrastructure etc.
This interview appeared in the October 2007 issue of Mutual Fund Insight.
(by value research)
Deven Sangoi has been associated with ICICI Prudential AMC for the past two years. Sangoi had previously worked with Alchemy Stocks and Shares Limited. He has been managing ICICI Pru Balanced since October 2005. He is also managing some other equity funds at the AMC including ICICI Pru Emerging Star and ICICI Pru Growth. Sangoi is an electronics engineer and an MBA.
Do you see a market crash in the near future?
We do not see the market crashing in the near future. The fundamentals in the Indian market look good on the back of strong earnings. The monsoons have also been above average, which further strengthens the situation. Thus the market is fairly valued in the current scenario. However, there might be some correction if the money flows slow down. Investors should look at SIP as a long-term investment tool as it helps ride the volatility by mitigating the risks.
What is the strategic and tactical orientation of your fund?
We focus on bottom-up investment with significant bias towards large-cap companies. We also have a judicious mix of mid-cap companies that have sustainable long-term growth potential.
Which are your top sector preferences?
Financial Services
Capital Goods
Financial Services, because of the growth in the Indian economy and a spectrum of new offerings, resulting in high consumer spending, backed by increasing salary levels. Capital goods because of increase in capital expenditure required for building India, its infrastructure etc.
This interview appeared in the October 2007 issue of Mutual Fund Insight.
(by value research)
Polls Will Trigger Fall
Venugopal has wide experience as an equity analyst. He has the experience of managing several funds at Tata AMC like Tata Midcap, Tata Contra, Tata Equity Opportunities, Tata Balanced, Tata Young Citizens, Tata Pure Equity, Tata Capital Builder and Tata Infrastructure. Venugopal is a mathematics graduate and also holds an MBA degree with specialisation in finance
Do you see a market crash in the near future?
If polls are announced in India there could be a sharp correction. But it is unlikely to be a crash.
What is the strategic and tactical orientation of Tata Balanced?
The Tata Balanced Fund invests 65-75 per cent in equities at all points of time. The rest of the assets are invested in quality fixed income securities or money market instruments. Within equities, the fund follows a strategy of growth at reasonable price. The endeavour is to identify strong growth opportunities ahead of time and patiently let these play out. The strategy adopted in managing this fund is also a mix of top-down and bottom-up, in the sense that, first sectoral opportunities are identified and then stocks are selected from within the sector. The fund also seeks to finely balance exposure to large- and mid-cap stocks and, depending on the market condition, exposure is skewed a little to either of these segments. Over the last few years, the fund has remained patiently invested in some high pedigree stocks, market/technology leaders in there respective segments. The equity portfolio is fairly diversified at all times with 30-40 stocks. Also, there is a fair bit of sectoral diversification.The fund has rarely invested more than 5 per cent in any single stock. As fund manager, my focus and effort has been to maintain consistency of returns at all times while giving the fund as much fire power to deliver higher returns.
Which are your top sector preferences?
Industrial Capital Goods
Ferrous Metals
The fund is also bullish on power, construction and cement.
This interview appeared in the October 2007 issue of Mutual Fund Insight.
(by value research)
Do you see a market crash in the near future?
If polls are announced in India there could be a sharp correction. But it is unlikely to be a crash.
What is the strategic and tactical orientation of Tata Balanced?
The Tata Balanced Fund invests 65-75 per cent in equities at all points of time. The rest of the assets are invested in quality fixed income securities or money market instruments. Within equities, the fund follows a strategy of growth at reasonable price. The endeavour is to identify strong growth opportunities ahead of time and patiently let these play out. The strategy adopted in managing this fund is also a mix of top-down and bottom-up, in the sense that, first sectoral opportunities are identified and then stocks are selected from within the sector. The fund also seeks to finely balance exposure to large- and mid-cap stocks and, depending on the market condition, exposure is skewed a little to either of these segments. Over the last few years, the fund has remained patiently invested in some high pedigree stocks, market/technology leaders in there respective segments. The equity portfolio is fairly diversified at all times with 30-40 stocks. Also, there is a fair bit of sectoral diversification.The fund has rarely invested more than 5 per cent in any single stock. As fund manager, my focus and effort has been to maintain consistency of returns at all times while giving the fund as much fire power to deliver higher returns.
Which are your top sector preferences?
Industrial Capital Goods
Ferrous Metals
The fund is also bullish on power, construction and cement.
This interview appeared in the October 2007 issue of Mutual Fund Insight.
(by value research)
Showing Talent - Tata Balanced Fund
A lot of intelligent stock picking and exposure to particular sectors has seen the fund outperform itself quite often. Find out what makes Tata Balanced is a worthwhile representative of its type
This year, this perennial outperformer has found itself near the head of the pack. A combination of low exposure to auto stocks, holdings in financial services and its long-term strategy in the basic-engineering, metals and energy space paid off. In the technology space, losses were minimised by astute stock picking and leveraging on smaller companies.
By and large, the fund plays it safe and does not make any adventurous moves. This was not the case earlier though. Last year, when the market corrected, it got badly hit and lost 25 per cent in a single month (May 12-June 13, 2006). The outcome was a swift move to large caps from a dominant mid-cap portfolio. This was a well timed lesson because large caps began to rally soon after. Over the past one year, it has been doing well and frequently outperforms the average.
Initially, one was advised to go with this fund if they were willing to nap during the bear phases since it performed dismally during market downturns. Not so after its portfolio revamp. This year, we were pleasantly surprised to find that the fund lost a mere (-) 1.55 per cent at the end of March 2007 (category loss: -3.23 per cent).
However, it has been very erratic in rebalancing its portfolio, swaying from a 65 per cent to 74 per cent exposure to equities.
Though one of the smallest of the four funds featured here, its size seems to have worked to its advantage. With its excellent performance this year, we are very bullish about the future of this fund.
(by value research)
This year, this perennial outperformer has found itself near the head of the pack. A combination of low exposure to auto stocks, holdings in financial services and its long-term strategy in the basic-engineering, metals and energy space paid off. In the technology space, losses were minimised by astute stock picking and leveraging on smaller companies.
By and large, the fund plays it safe and does not make any adventurous moves. This was not the case earlier though. Last year, when the market corrected, it got badly hit and lost 25 per cent in a single month (May 12-June 13, 2006). The outcome was a swift move to large caps from a dominant mid-cap portfolio. This was a well timed lesson because large caps began to rally soon after. Over the past one year, it has been doing well and frequently outperforms the average.
Initially, one was advised to go with this fund if they were willing to nap during the bear phases since it performed dismally during market downturns. Not so after its portfolio revamp. This year, we were pleasantly surprised to find that the fund lost a mere (-) 1.55 per cent at the end of March 2007 (category loss: -3.23 per cent).
However, it has been very erratic in rebalancing its portfolio, swaying from a 65 per cent to 74 per cent exposure to equities.
Though one of the smallest of the four funds featured here, its size seems to have worked to its advantage. With its excellent performance this year, we are very bullish about the future of this fund.
(by value research)
Monday, December 17, 2007
HDFC GROWTH FUND - Potential Energy
A new fund manager has stepped up the performance of HDFC Growth. After a couple of dismal years, the fund has finally managed to be worth reckoning. But given its past, investors should wait & watch
The fund's revved up stance should appeal to its investors who are in search of more pickup from this offering. After a fairly uneventful 2004 and 2005, HDFC Growth beat the category average by 10 percentage points last year. Savvy sector selection has been a testament to the fund manager's skills. While its peers were neutral towards the healthcare sector, the fund's allocation increased from 4.44 per cent in January 2006 to 11.33 by the end of the year on the back of concentrated bets in Sun Pharmaceuticals and Divi's Laboratories.
Similarly, the fund defied popular trend and pruned its allocation to financial services while increasing it to the automobile sector. Typical to the fund's style, the increased exposure to particular stocks or sectors is done in a systematically and phased manner by building positions slowly. With a comfortable diversification across 35 stocks, buy-and- hold seems to be the preferred strategy with stocks like BHEL deeply entrenched in the portfolio for more than 73 months. But aggression is evident in its significant exposure to mid- and small-cap stocks. In fact, for a period of 12 months between March 2004-'05, the fund's focus shifted to mid cap stocks.
But don't get carried away by the current performance. By and large, it has been a middle-of-the-road performer with periodic spurts of brilliance. What's impressive is that in such a frenzied market, it has managed to deliver great results and emerge out of the shadows. This can probably be credited to the new fund manager who has been around for a year. Going by the recent performance, HDFC Growth may finally have earned a place in the sun. This fund is worth a second look.
(by value research)
The fund's revved up stance should appeal to its investors who are in search of more pickup from this offering. After a fairly uneventful 2004 and 2005, HDFC Growth beat the category average by 10 percentage points last year. Savvy sector selection has been a testament to the fund manager's skills. While its peers were neutral towards the healthcare sector, the fund's allocation increased from 4.44 per cent in January 2006 to 11.33 by the end of the year on the back of concentrated bets in Sun Pharmaceuticals and Divi's Laboratories.
Similarly, the fund defied popular trend and pruned its allocation to financial services while increasing it to the automobile sector. Typical to the fund's style, the increased exposure to particular stocks or sectors is done in a systematically and phased manner by building positions slowly. With a comfortable diversification across 35 stocks, buy-and- hold seems to be the preferred strategy with stocks like BHEL deeply entrenched in the portfolio for more than 73 months. But aggression is evident in its significant exposure to mid- and small-cap stocks. In fact, for a period of 12 months between March 2004-'05, the fund's focus shifted to mid cap stocks.
But don't get carried away by the current performance. By and large, it has been a middle-of-the-road performer with periodic spurts of brilliance. What's impressive is that in such a frenzied market, it has managed to deliver great results and emerge out of the shadows. This can probably be credited to the new fund manager who has been around for a year. Going by the recent performance, HDFC Growth may finally have earned a place in the sun. This fund is worth a second look.
(by value research)
Bull Run To Last
Bhandarkar is the centre of attention for the performance of JM Basic, which he has been managing since December 2006. He also manages three sector funds -JM Auto, JM Healthcare Sector and JM Telecom Sector. Along with CIO, Sandeep Sabharwal, they make a formidable team. He has just over five years of experience in equity research fund management. His last assignment was with Lotus AMC. Prior to this, he was with SBI Funds Management as a junior fund manager. He holds a Masters in Management Studies.
Do you see a market crash in the near future?
In our view, the Indian market is in a long-term bull run which is likely to last for the foreseeable future. However, markets can move between undervaluation (pessimism) and overvaluation (euphoria) from time-to-time. Currently, we believe that the market is slightly stretched on an overall basis and to that extent a healthy correction can be anticipated. However, there still exist a number of stock and sector specific opportunities which can generate significant wealth in the medium term.
What is the strategic and tactical orientation of your fund?
On the strategic front, the investment strategy of the scheme is a combination of the top-down and bottom-up approach. Out of the several broad industries that the fund focuses on, at the first stage the allocation will be top-down. This is necessary to make sector allocations based on the sectors that we believe are likely to outperform going forward. Subsequent to this, the best stocks in those sectors will be identified through a bottom-up approach. The typical portfolio of the scheme at any point of time will comprise of 15-25 stocks.
Tactically, we employ various approaches. The fund has no market cap bias. Hence we continuously analyse relative value between mid- and large-caps and take positions accordingly. Secondly, we tend to reorient our portfolio on high beta stocks when our outlook for the market is bullish and veer towards low beta stocks when we believe the market is likely to correct. Finally, at times the fund may increase or decrease the cash levels as a tool to enhance performance.
Which are your top sector preferences?
For this fund specifically:
Construction
Industrial Capital Goods
(by valueresearch)
Do you see a market crash in the near future?
In our view, the Indian market is in a long-term bull run which is likely to last for the foreseeable future. However, markets can move between undervaluation (pessimism) and overvaluation (euphoria) from time-to-time. Currently, we believe that the market is slightly stretched on an overall basis and to that extent a healthy correction can be anticipated. However, there still exist a number of stock and sector specific opportunities which can generate significant wealth in the medium term.
What is the strategic and tactical orientation of your fund?
On the strategic front, the investment strategy of the scheme is a combination of the top-down and bottom-up approach. Out of the several broad industries that the fund focuses on, at the first stage the allocation will be top-down. This is necessary to make sector allocations based on the sectors that we believe are likely to outperform going forward. Subsequent to this, the best stocks in those sectors will be identified through a bottom-up approach. The typical portfolio of the scheme at any point of time will comprise of 15-25 stocks.
Tactically, we employ various approaches. The fund has no market cap bias. Hence we continuously analyse relative value between mid- and large-caps and take positions accordingly. Secondly, we tend to reorient our portfolio on high beta stocks when our outlook for the market is bullish and veer towards low beta stocks when we believe the market is likely to correct. Finally, at times the fund may increase or decrease the cash levels as a tool to enhance performance.
Which are your top sector preferences?
For this fund specifically:
Construction
Industrial Capital Goods
(by valueresearch)
JM Basic - Mercurial Rise
Coming out from the depths of mediocrity, the fund has shone like never before. The JM Basic fund has its tremendous returns to back itself, but the overly cautious might want to stay away
JM Basic has left behind its days of mediocrity and is unabashedly trouncing the competition. As on October 10, 2007, its year-to-date return was 65.37 per cent, a lead of around 32 per cent above the category average.
The fund's recent performance wouldn't mean much if it weren't indicative of something more. It is. Sandip Sabharwal took over as CIO (Equity), JM Mutual Fund, in December 2006 (fund manager Asit Bhandarkar joined at the same time). Together, their turnaround of the portfolio was nothing short of dramatic.
The problem of domination by few sectors was dealt with by broadening the investment mandate. So besides energy and petrochemicals, it now includes power generation and distribution, electrical equipment supplies, metals, construction material and construction. Hindustan Construction, IVRCL Infrastructures, Nagarjuna Construction, Action Construction and Punj Lloyd all came in under the fresh mandate. The portfolio was also beefed up from a meager 12 stocks (November 2006) to 27. While this has done well to mitigate the risk, the allocation to large caps decreased. Bharat Electronics, Siemens and Suzlon made way for smaller stocks like Bharti Shipyard, Kalpataru Power, Thermax, Cummins India, Greaves Cotton, MIC Electronics and Apar Industries.
This isn't a fund for the cautious. Its risk lies in its limited investment universe. Sectors like banking, pharmaceuticals or technology will never find a place here. So though it is hard to argue with its excellent results, it may be too narrow a choice for some investors. Consider it in conjunction with your overall portfolio and risk appetite.
(by valueresearch)
JM Basic has left behind its days of mediocrity and is unabashedly trouncing the competition. As on October 10, 2007, its year-to-date return was 65.37 per cent, a lead of around 32 per cent above the category average.
The fund's recent performance wouldn't mean much if it weren't indicative of something more. It is. Sandip Sabharwal took over as CIO (Equity), JM Mutual Fund, in December 2006 (fund manager Asit Bhandarkar joined at the same time). Together, their turnaround of the portfolio was nothing short of dramatic.
The problem of domination by few sectors was dealt with by broadening the investment mandate. So besides energy and petrochemicals, it now includes power generation and distribution, electrical equipment supplies, metals, construction material and construction. Hindustan Construction, IVRCL Infrastructures, Nagarjuna Construction, Action Construction and Punj Lloyd all came in under the fresh mandate. The portfolio was also beefed up from a meager 12 stocks (November 2006) to 27. While this has done well to mitigate the risk, the allocation to large caps decreased. Bharat Electronics, Siemens and Suzlon made way for smaller stocks like Bharti Shipyard, Kalpataru Power, Thermax, Cummins India, Greaves Cotton, MIC Electronics and Apar Industries.
This isn't a fund for the cautious. Its risk lies in its limited investment universe. Sectors like banking, pharmaceuticals or technology will never find a place here. So though it is hard to argue with its excellent results, it may be too narrow a choice for some investors. Consider it in conjunction with your overall portfolio and risk appetite.
(by valueresearch)
Sundaram BNP Paribas CAPEX Opp.-G - Ride Cautiously
It's there but barely still. The Sundaram Capex Opportunities fund has had a good performance record but its stock allocation makes it vulnerable. As the headline suggests - ride cautiously
Though it joined the infrastructure party only in September 2005, Sundaram Capex Opportunities has shown promise. With annualised returns of 56 per cent, it was one of the top five diversified equity funds last year with returns of over 70 per cent.
Despite a portfolio of around 60 stocks, the fund manager refrains from frequent churning. Patterns of continuity are apparent with as many as 17 stocks entrenched in the portfolio since launch, and most of them among the major holdings.
But this should not be interpreted as a sign of safety. The portfolio of 60 stocks appears deceptively diversified. The fund remains essentially a concentrated offering with the top three holdings averaging at 23 per cent in the last 12 months while a long tail of stocks have a negligible exposure of under 1 per cent.
This puts tremendous pressure on the top holdings to perform. While the fund has been lucky with most of them, it has not managed to completely stay out of trouble. It erred with its entry/exit timing in stocks like Avaya Global Connect, HEG, Pratibha Industries, Universal Cables and Valecha Engineering.
Though the investment mandate is focused on the infrastructure segment, the portfolio has been broadened to include metal and energy stocks, in addition to the obvious capital goods and construction picks.
Despite the impressive performance, this top-heavy, thematic fund should not form the core of your holdings. Invest a limited portion of your portfolio in such a fund if you want to ride the infrastructure wave.
(Source: Value Research)
Though it joined the infrastructure party only in September 2005, Sundaram Capex Opportunities has shown promise. With annualised returns of 56 per cent, it was one of the top five diversified equity funds last year with returns of over 70 per cent.
Despite a portfolio of around 60 stocks, the fund manager refrains from frequent churning. Patterns of continuity are apparent with as many as 17 stocks entrenched in the portfolio since launch, and most of them among the major holdings.
But this should not be interpreted as a sign of safety. The portfolio of 60 stocks appears deceptively diversified. The fund remains essentially a concentrated offering with the top three holdings averaging at 23 per cent in the last 12 months while a long tail of stocks have a negligible exposure of under 1 per cent.
This puts tremendous pressure on the top holdings to perform. While the fund has been lucky with most of them, it has not managed to completely stay out of trouble. It erred with its entry/exit timing in stocks like Avaya Global Connect, HEG, Pratibha Industries, Universal Cables and Valecha Engineering.
Though the investment mandate is focused on the infrastructure segment, the portfolio has been broadened to include metal and energy stocks, in addition to the obvious capital goods and construction picks.
Despite the impressive performance, this top-heavy, thematic fund should not form the core of your holdings. Invest a limited portion of your portfolio in such a fund if you want to ride the infrastructure wave.
(Source: Value Research)
New Debt Fund from Franklin Templeton
Franklin Templeton Mutual Fund has launched a new open end income fund called Templeton India Ultra-short Bond Fund. It will be available for subscription only on December 18, 2007. The fund would primarily invests in fixed income instruments of shorter maturity and money market instruments
The fund is offering Retail, Institutional and Super Institutional Plan with: Growth and Daily Dividend Reinvestment options. The minimum investment amount for retail, institutional and super institutional plan would be Rs. 25000, Rs. 5 crores and Rs 15 crores, respectively. The fund's performance would be benchmarked against Crisil Liquid Fund Index. The designated fund manager for the scheme is Mr. Ninad Deshpande and Mr. Sachin Padwal Desai.
(by value research)
The fund is offering Retail, Institutional and Super Institutional Plan with: Growth and Daily Dividend Reinvestment options. The minimum investment amount for retail, institutional and super institutional plan would be Rs. 25000, Rs. 5 crores and Rs 15 crores, respectively. The fund's performance would be benchmarked against Crisil Liquid Fund Index. The designated fund manager for the scheme is Mr. Ninad Deshpande and Mr. Sachin Padwal Desai.
(by value research)
30% dividend under Tata Growth Fund
Tata Mutual has announced a dividend of 30% (i.e. Rs 3 per unit on the face value of Rs 10) under the dividend option of Tata Growth Fund. The record date for the same is December 21, 2007.
(by value research)
(by value research)
Birla FTP - Quarterly Series 23 Declares Dividend
Birla Mutual Fund has announced December 20, 2007 as the record date for the declaration of dividend under Birla Fixed Term Plan - Quarterly Series 23. The quantum of dividend will be 100 per cent.
(by value research)
(by value research)
HDFC Quarterly Interval Fund - Plan A Declares
Retail and Wholesale Plan of HDFC Quarterly Interval Fund - Plan A announced December 21, 2007 as the record date for the declaration of dividend. The AMC plans to distribute entire appreciation in the NAV as dividend.
(by value research)
(by value research)
Sunday, December 16, 2007
Information Glut
Have you seen the TV ad in which an investor at a company's shareholders' meeting stuns the management by his in-depth knowledge of the company's annual report? The ad is interesting because it suggests-quite correctly, I believe-that businesses routinely hide or obscure information that they are required to reveal. Companies are supposed to reveal a great deal of information but the sheer quantity makes it easy to hide or disguise facts. Even if the information is not actively obscured, its sheer mass means that selecting what is relevant is a task.
Whether it is the offer document for a company's IPO or a new mutual fund, the issuer complies perfectly with the rules of disclosures but the final effect is mostly useless. To see proof of this, just get hold of a dozen people who have invested in IPOs or mutual funds lately and ask them if they have read the offer documents. If these are typical retail investor then the number of investors who have read the document will inevitably be zero. To my mind, this is the fault less of the investor and far more of the way such documents are written and the regulations that govern them. The focus seems entirely on the quantity of information that is revealed, rather than the way it is presented and prioritised. It's a bit like the difference between Altavista and Google. Old internet hands would remember a search engine called Altavista which, for a brief period, was very popular before Google dethroned it around 1997 or 1998. Altavista was all about quantity and was good at throwing up a huge number of pages in which your search term existed. Google, on the other hand, was all about quality and its real ability lies in being able to put the most relevant links right on top of the first page. When it comes to providing information, what really matters is not quantity but the way things are prioritised and presented. Offer documents-and other mandatory disclosures-need to be designed with the focus not on how much information can be stuffed into them but how easy it is for the relevant information to be found and understood.
Whether it is the offer document for a company's IPO or a new mutual fund, the issuer complies perfectly with the rules of disclosures but the final effect is mostly useless. To see proof of this, just get hold of a dozen people who have invested in IPOs or mutual funds lately and ask them if they have read the offer documents. If these are typical retail investor then the number of investors who have read the document will inevitably be zero. To my mind, this is the fault less of the investor and far more of the way such documents are written and the regulations that govern them. The focus seems entirely on the quantity of information that is revealed, rather than the way it is presented and prioritised. It's a bit like the difference between Altavista and Google. Old internet hands would remember a search engine called Altavista which, for a brief period, was very popular before Google dethroned it around 1997 or 1998. Altavista was all about quantity and was good at throwing up a huge number of pages in which your search term existed. Google, on the other hand, was all about quality and its real ability lies in being able to put the most relevant links right on top of the first page. When it comes to providing information, what really matters is not quantity but the way things are prioritised and presented. Offer documents-and other mandatory disclosures-need to be designed with the focus not on how much information can be stuffed into them but how easy it is for the relevant information to be found and understood.
It is interesting to see that the SEC (America's security markets regulator) has just released a model executive summary of the offer document for mutual funds that is just three pages long. These three pages have only a small amount of the most relevant information that is presented in easy to understand language in an easy to read print size. What is most interesting is that the design of this document is clearly based on the idea that when it comes to information, the way to emphasise what is important is to leave out what is not important. Full disclosure is also available, but in a separate detailed document. There's no reason why such a principle cannot be applied in India, not only to the offer documents and prospectuses of company and mutual funds, but also to financial results and annual reports. I think the structure, content and design of such documents should be specified to the last detail with the actual language, prioritisation of information and even the fonts and font sizes laid down with nothing but the ease of understanding and comparability in mind.
Investors, analysts and mediapersons often talk admiringly of experts who can understand such documents. I think the fact that experts are needed to read such documents is the real problem.
(by value reserch)
JP Morgan India Equity Fund Declares Dividend
The record date for the declaration of dividend under JP Morgan India Equity Fund is December 20, 2007. The quantum of dividend is Rs 1 per unit on the face value of Rs 10.
(by value research)
(by value research)
14% dividend under UTI Variable Investment scheme
UTI Mutual has announced a dividend of 14% (i.e. Rs 1.4 per unit on the face value of Rs 10) under UTI Variable Investment Scheme - Index Linked Plan. The record date for the same is December 20, 2007.
(by valueresearch)
(by valueresearch)
Dividend Announced in Two Schemes of Reliance Mutual
Reliance Mutual Fund has announced dividend under the quarterly dividend option of Reliance Medium Term Fund and Reliance Monthly Income Plan. The record date for the same is December 20, 2007.
(by value research)
(by value research)
Friday, December 14, 2007
ABN AMRO Equity Fund Declares 60% Dividend
ABN AMRO Mutual Fund has announced a dividend of 60% (i.e. Rs 6 per unit on the face value of Rs 10) under ABN AMRO Equity Fund. The record date for the same is December 18, 2007. This is the fourth dividend payout from the fund since its launch.
(by value research)
(by value research)
Franklin Templeton Revises Minimum Investment Amount
Franklin Templeton Mutual has revised the minimum investment amount under the institutional and super institutional plans of Templeton India Treasury Management Account and Templeton Floating Rate Income Fund Long Term Plan, respectively.
(by value research)
SBI Magnum Global Fund - Changing Track
Magnum Global has had a see-saw ride over the years. At times it finds itself at the bottom of the category & then comes out tops only to languish again, making it hard know what one does with this fund
It's hard to know what to do with this fund.
From a fairly dismal track record, it was the best performer in 2004 and the second best in 2005. Last year too it had a great run. But with the recent increased diversification, low concentration levels and huge asset base, this mid-cap fund is in uncharted territory. And this year, it is struggling to live up to its performance standard.
From a large-cap bias, it began to aggressively invest in mid- and small-cap stocks in 2004. The move paid rich dividends. During the three-year period from 2004 to 2006, the fund generated better returns as compared to its category in every quarter.
The fund's strength has been its ability to pick trends, invest aggressively and ride through the momentum to make huge gains. So while other fund managers balked at dabbling in real estate plays during their high rise in 2006, this one caught on to Ansal Properties and Infrastructure aggressively. And it was handsomely rewarded for its courage. Some of its other profitable picks include Dishman Pharmaceuticals, Sintex Industries, India Cements, Infotech Enterprises and Jai Prakash Associates. Its earlier focus of 30-35 stocks has given way to 70, none of which account for more than 5 per cent. This could be the fall-out of its large asset base which has crossed Rs 1,700 crore. Its five-year returns of 64.95 per cent (annualised) rank it way ahead of the category's 51.19 per cent. But its year-to-date and one-year returns are below the category average.
Though we still think it's a keeper, potential investors may want to wait for signs of improvement.
(by value research)
It's hard to know what to do with this fund.
From a fairly dismal track record, it was the best performer in 2004 and the second best in 2005. Last year too it had a great run. But with the recent increased diversification, low concentration levels and huge asset base, this mid-cap fund is in uncharted territory. And this year, it is struggling to live up to its performance standard.
From a large-cap bias, it began to aggressively invest in mid- and small-cap stocks in 2004. The move paid rich dividends. During the three-year period from 2004 to 2006, the fund generated better returns as compared to its category in every quarter.
The fund's strength has been its ability to pick trends, invest aggressively and ride through the momentum to make huge gains. So while other fund managers balked at dabbling in real estate plays during their high rise in 2006, this one caught on to Ansal Properties and Infrastructure aggressively. And it was handsomely rewarded for its courage. Some of its other profitable picks include Dishman Pharmaceuticals, Sintex Industries, India Cements, Infotech Enterprises and Jai Prakash Associates. Its earlier focus of 30-35 stocks has given way to 70, none of which account for more than 5 per cent. This could be the fall-out of its large asset base which has crossed Rs 1,700 crore. Its five-year returns of 64.95 per cent (annualised) rank it way ahead of the category's 51.19 per cent. But its year-to-date and one-year returns are below the category average.
Though we still think it's a keeper, potential investors may want to wait for signs of improvement.
(by value research)
Poised For Good Growth
The two of them look after Magnum Global. Sheth has six years of work experience and Pandey, seven.
Sheth also looks SBI One India fund with another fund manager but takes care of Magnum Balanced and Magnum NRI Inv FlexiAsset on his own. His last assignment was with ASK Raymond James. Besides being a commerce graduate and holding an MMS in finance, he is pursuing his CFA, AIMR USA.
Pandey manages two sector funds - Magnum FMCG and Magnum Pharma, an equity diversified fund (Magnum Emerging Business) and a debt specialty fund (SBI Arbitrage Opportunities Fund). Pandey is a science graduate and has done his CFA from ICFAI.
Do you see a market crash in the near future?
Markets have a tendency to over value or under value a particular company or a crisis or the overall situation. This phenomenon shall continue and we shall see volatility on either side. But, needless to say, structurally we are poised for good economic growth which should be reflected in corporate earnings and, in turn, get reflected in stock prices. So, with some intermittent slowdown or correction, the market on the whole is expected to do well in foreseeable future of three to five years.
What is the strategic and tactical orientation of your fund?
Magnum Global is a diversified equity fund with specific focus on mid- and small-capitalisation stocks. The approach or style of investing is blended with both growth as well as value stocks finding a space in the portfolio. The fund focuses on companies which are emerging blue chips, displaying sustainable high growth rates. While high growth sectors / companies find more weightage, value stocks (with significant margin of safety) are also well participated. We usually take long-term stock/sector calls in this fund.
Which are your top sector preferences?
Given the current thrust on infrastructure development, which is important and inevitable for our economic growth to continue, our preferences remain in sync with economic sensitivity.
Industrial Manufacturing
Infrastructure Developers
Cement
(by value research)
Sheth also looks SBI One India fund with another fund manager but takes care of Magnum Balanced and Magnum NRI Inv FlexiAsset on his own. His last assignment was with ASK Raymond James. Besides being a commerce graduate and holding an MMS in finance, he is pursuing his CFA, AIMR USA.
Pandey manages two sector funds - Magnum FMCG and Magnum Pharma, an equity diversified fund (Magnum Emerging Business) and a debt specialty fund (SBI Arbitrage Opportunities Fund). Pandey is a science graduate and has done his CFA from ICFAI.
Do you see a market crash in the near future?
Markets have a tendency to over value or under value a particular company or a crisis or the overall situation. This phenomenon shall continue and we shall see volatility on either side. But, needless to say, structurally we are poised for good economic growth which should be reflected in corporate earnings and, in turn, get reflected in stock prices. So, with some intermittent slowdown or correction, the market on the whole is expected to do well in foreseeable future of three to five years.
What is the strategic and tactical orientation of your fund?
Magnum Global is a diversified equity fund with specific focus on mid- and small-capitalisation stocks. The approach or style of investing is blended with both growth as well as value stocks finding a space in the portfolio. The fund focuses on companies which are emerging blue chips, displaying sustainable high growth rates. While high growth sectors / companies find more weightage, value stocks (with significant margin of safety) are also well participated. We usually take long-term stock/sector calls in this fund.
Which are your top sector preferences?
Given the current thrust on infrastructure development, which is important and inevitable for our economic growth to continue, our preferences remain in sync with economic sensitivity.
Industrial Manufacturing
Infrastructure Developers
Cement
(by value research)
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