Growing Principle

Rajat Jain is an old hand at fund management. In his 18 years of experience, he has worked in various capacities including fund manager and head of research. Currently he holds charge of two funds-Principal Global Opportunities and Principal Resurgent India Equity. A mechanical engineer by education, he knows the nuts and bolts of the markets well.

How does Principal Global Opportunities Fund work?
The fund was launched in April 2004. It was the first fund to offer an opportunity to Indian investors to invest outside India. At that time the regulations permitted a very restricted investment universe. So our list was very limiting. But that changed in August 2006 when the regulations were liberalised. Then we repositioned the fund as a feeder fund that feeds into Principals Emerging Markets Fund. Principal manages over $6 billion in emerging market equity assets.

What is the Emerging Markets Fund investing strategy?
Principal group uses a mix of qualitative and quantitative analysis in its stock picking. They are bottom-up stock selectors. The fund takes no cash calls.

The benchmark is MSCI Emerging Markets. Principal Global Investors, which is managing the emerging markets fund, do not take major calls on either a sector or a country. They are bottom up stock selectors. As part of risk control, they take controlled exposures to individual stocks, countries and sectors vis-à-vis the benchmark. They will have limited divergence vis-à-vis the benchmark. But within that, they will go for the best stocks in respective countries or sectors. They will pick the best stocks in a sector across countries.

So despite controlled sector and country calls, the coverage ratio of the fund is 35-40 per cent. This translates into around 60 per cent of the stocks adding alpha. So it is a very stock specific strategy. No country or sector call, but rather stock calls. So, in a manner of speaking, they may not hit many home runs, but hit multiple singles i.e. they take multiple small bets rather than few big bets.

Does it have any India allocation?
No. It is an offshore fund, i.e. the fund is fully invested in the Principal Emerging Markets Fund.

Other than your tax saving fund which has done very well recently, why have your equity funds not done too well?
Our equity funds have done well. In the last two years the performance of our equity funds has been very strong and they are among top quartile in different categories.

(by valueresearch)

Fidelity announces dividends in two schemes

MUMBAI: Fidelity Fund Management has announced dividends in the Fidelity Equity Fund and the Fidelity Tax Advantage Fund.

The dividend in the Fidelity Equity Fund is Rs 2.50 per unit (Face Value of Rs 10 per unit) and the maiden dividend in the Fidelity Tax Advantage Fund is Rs 1.50 per unit (Face Value of Rs.10 per unit), both subject to availability of distributable surplus.

All investors registered in the Dividend Option of the two funds as on March 13, 2008 will be entitled to this dividend, which will be tax-free in the hands of the investors.

Pursuant to payment of dividend, the Net Asset Value per unit of the dividend options of the respective schemes will fall to the extent of the payment and statutory levy (if applicable). Under the dividend reinvestment option, the dividend declared will be re-invested at the ex-dividend NAV.

Fidelity Fund Management Private Limited is the Indian arm of Fidelity International Limited, one of the world's leading global investment management companies with operations in 23 countries.

(by economic times)

20% Dividend in Kotak Opportunities Fund

Kotak Mutual Fund announced a 20% dividend (Rs 2.00 per unit on a face value of Rs 10), under the dividend option of Kotak Opportunities Fund. The record date of the same has been fixed as March 14, 2008.

This would be the seventh dividend by the fund since its launch and second in this year. The last dividend was of 60% being paid in January, 2008.

(by valueresearch)

How Many Schemes?

I would like to invest Rs 20,000 in a SIP every month. Should I invest the amount in one scheme or in four different schemes?
-Rushi D. Vaidya

Ideally, you should diversify your investments between a few funds (the actual number depends entirely on the amount you are investing). This strategy ensures that your portfolio is not dependent on the performance of one single fund. However, one needs to avoid over-diversification as that would achieve nothing. For Rs 20,000 per month, it would be wise to opt for a maximum of three funds (assuming these are your only mutual fund investments). Consider well rated large- and mid-cap funds and a balanced fund. The latter would provide the debt component and reduce the portfolio's downside risk.

(by valueresearch)

Annual dividend in Franklin India Flexi Cap Fund

Franklin Templeton Investments has announced a 30% dividend under the dividend plan of Franklin India Flexi Cap Fund.

The record date fore the dividend payouts is March 12, 2008.