UTI Mutual Announces Closure of UTI SCUP

UTI Mutual Fund has announced the closure of UTI Senior Citizen Unit Scheme. The scheme will be terminated on February 18, 2008.

UTI Mutual Fund has announced an alternate health insurance product of New India Assurance Company to the members upto the age of 58 years, in lieu of UTI SCUP. However, for the members above the age of 58 years, New India Assurance Company will continue to provide the hospitalisation cover as per the existing arrangement.

(by valueresearch)

ABN Amro Opportunities Fund Announces Change in Load

ABN Amro Mutual Fund has announced a modification in the exit load of ABN Amro Opportunities Fund, with effect from January 15, 2008.

Now, the fund would charge an exit load of 1 per cent for all investments less than Rs 5 crore, redeemed within 6 months. An exit load of 1 per cent for investments of Rs 10 crore and above redeemed within 6 months, has been withdrawn.

(by valueresearch)

ICICI Prudential Announces Dividend in Two Equity Schemes

ICICI Prudential Mutual Fund has announced a dividend of 20 per cent each in the dividend options of the following schemes: ICICI Prudential Tax Plan and ICICI Prudential Emerging Star.

The record date for the above dividends is January 18, 2008.

(By Valueresearch)

Investing By NRIs

I am a non-resident Indian (NRI). Are NRIs allowed to invest in Indian mutual funds? If yes, what is the incentive for people like us?
-Saloni Verma

Yes, NRIs are allowed to invest in mutual funds in India. The cheques can either be drawn on your FCNR/NRE bank account (on a repatriable basis) or NRO/NRSR (on a non-repatriable basis). You will also need a PAN number.

Since you are based abroad, Indian mutual funds may well serve your needs. A fund can offer you a diversified portfolio of debt and equity securities, or a mix of both. On the fixed income side, higher interest rates on Indian debt securities make it an attractive option compared to developed markets where interest rates are on the lower side. Debt funds would be an ideal way to start your investment innings here. The clear differential between interest rates will also negate the impact of any adverse movement in the exchange rate. However, we suggest that you park your funds for the long-term as short-term investments won't yield much.

Currency risk could be significant in the short term, as witnessed recently. However, over the long term, these fluctuations tend to smoothen out. Further, the current economic indicators point to a strengthening of the rupee over the long term - something that could work in your favour. The Indian economy is one of the fastest growing economies in the world. Also, loads are on the lower side vis-a-vis markets like the US. Among equity funds, there are a number of funds-generally focused on larger and more liquid stocks which have a good track record. Further, most fund houses, banks and brokerages give investors the option of investing on the Internet. As for incentives, there are no special tax breaks for NRI investors.


(Source: Value Research)

Ground Rules for Investing

Investing is a complex exercise only because we insist on making it so. But the basic principles are simple. As simple that anyone can become a good investor just by following simple and easily understood rules, which also help avoid big mistakes. Here are my rules for investment success.

Develop a Plan: For your short-term goals, make sure you're taking appropriate risks. Invest money that you'll need in the next two years to five years in cash and short-term bonds. If you've taken on too much risk for short-term objectives, pull back now. There's no telling where the bottom of this market is. It's better to cut your losses and preserve the money you already have for short-term goals. For your long-term financial goals, consider equities.

Keep It Simple: Buy a diversified equity fund or an index fund for equity exposure and a floating-rate bond fund for fixed income exposure. These are the basics of the investment world. Sure, you can buy many other types of funds (Petro, MNC, Gilt, Fixed Maturity, Serial Plans etc), but it's hard to go wrong with these two. To keep fund selection simple, stick with a diversified equity funds of well-established fund families. Equities prove to be the best performing long-term asset class. Stay away from exotic speciality and sector funds, unless you have a huge risk appetite and you can take in your stride a 25% loss in a quarter.

Ignore the hot stocks and funds: If you buy this year's top-performing fund or stock, be prepared to see it at the bottom next year. The fancy academic expression for this phenomenon is -- Reversion to the Mean. But the old saying explains it just as well -- what goes up must come down.

Invest Regularly: Investing a little bit of money each month is the surest way to reduce the risk of investing, because you lessen the possibility of buying at the market top. Also, no one is smart enough to anticipate all the moves, both up and down.

Buy and Hold: Short-term trading makes more brokers than investors rich. The income tax department likes the practice, too. If you meet anyone who claims to have made money through short-term trading, resist your temptation to listen any further and move on to a more productive conversation.

Start Early: It is not the "market timing" but time in the market that matters. Power of compounding will turn things in your favour.

Investing is a long-term proposition. Research your investments, remember your goals, re-examine your risk, and limit how much you listen to day-to-day market commentary. And don't let your emotions overpower your sense of reason.


(by valueresearch)