More: About Us | Feedback | Privacy


Canara Robeco F.O.R.C.E Fund

Monday, July 27, 2009

Canara Robeco Mutual Fund launched Canara Robeco F.O.R.C.E Fund - an open ended equity fund. The new fund offer (NFO) is open for subscription from 20th July 2009 to 18th August 2009. The scheme will re-open for continuous sale and repurchase within 30 days from the date of closure of NFO.

The scheme will be benchmarked against S&P CNX Nifty. The NFO price for the fund is Rs.10 per unit.

The feature of the fund is to provide long-term capital appreciation by primarily investing in equity and equity related securities of companies in the finance, retail and entertainment sectors.

This fund will offer two plans viz. retail and institutional plus. Both the plans will offer options namely growth, dividend payout and dividend reinvestment.

The minimum installment amount under Systematic Investment Plan (SIP) and Systematic Transfer Plan (STP)/Systematic Withdrawal Plan (SWP) is Rs 2,000 and Rs 1,000 for quarterly and monthly frequency respectively and in multiples of Re 1 thereafter.

The asset allocation under Canara Robeco F.O.R.C.E Fund will be 65-100% in equity and equity related instruments of companies in the finance, retail and entertainment sector, 0-35% in other equity and equity related instruments and 0-35% towards domestic debt and money market instruments.
Read the full article

Published by Webmaster @ 11:21 AM IST.

Prefer HDFC Top -200 for Big Money over Other Funds

Friday, July 17, 2009

I will be writing an Investment Strategy for the next 30 months to make that Big Money. For the same I shall be considering HDFC Top 200 Fund as the engine for us to ride and I am justifying my choice here.

Since my investment horizon is 30 months, and it was a blessing in disguise for me that SENSEX 30 months ago was around 14,000 levels as it is today.

I compared 3 year returns [just in case markets are extremely bad at the end of 30 months, give another 6 months grace] of diversified equity funds with good track record.

HDFC Top 200 fund has yielded 18.1%, 7.4% and 23.7% in the past 3, 2 and 1 year period respectively.

Reliance Growth Fund - 17.1%, 0.2% and 6.5% in the past 3, 2 and 1 year period respectively.

HDFC Equity Fund - 14.1% 0.2% and 19.1% in the past 3, 2 and 1 year period respectively.

IDFC Premier Equity - 26% 5% and 10% in the past 3, 2 and 1 year period respectively.

Since I saw Top 200 in the top 5 league I didn't bother much to research others. You should read Mr. Prashant Jain's interview on why HDFC fund house and the process for my decision. [WoW the article was published exactly a year ago on our website]

However, their are many contrarians in this world and I love them all. So if you have any other fund of your choice, sure, you can go ahead and Replace Top 200 with it :-)
Read the full article

Published by Webmaster @ 11:29 AM IST.

Why AVOID ULIPs and Invest in Mutual Funds ?

Wednesday, July 01, 2009

I thought of sharing this article which is nothing but my own independent study [papers, photocopies from magazines etc] on ULIPs and why I gave a slip to them.

I have a simple rule of not to mix investment with life risk coverage. It is easy to get lost that ULIPs have triple advantage of Life Cover + Critical Illness Cover + Benefit of Aggressive returns offered by the Equity Markets. Lets analyze each of these.

Life Cover: Sure they do cover it. However, if you are employed, most employee insurance should cover this risk. Fine, assume they don't, then you can go ahead and purchase "Term Life Insurance" which costs way too less and is also eligible for Tax benefits on the premium you pay.

Aggressive Returns: Assuming you opted for 100% equity in your ULIP, then here is what data suggests on the returns delivered by ULIPs [For comparison sake, we have been recommending HDFC Funds in Mutual Funds, so lets take ULIPs from HDFC itself] HDFC Life - Equity Managed [ULIP] has given returns of just 12.5% in the past 3 years while HDFC Top-200 has managed to yield 19.5%.

Things not in favor of ULIPS are:
  • 90% of the agents I have spoken to just mis-canvas the product as they want to sell. ULIP expense charges are as high as 28% in the first 2 years [Agents make the most money here]
  • In case of ULIP, you do not have the option for changing the fund - from HDFC Top 200 to say HDFC Growth Fund etc, if the fund manager you have opted for under performs
  • Illness benefits come with lot of caveats and fine prints and coverage doesn't begin immediately.
  • Companies don't disclose Portfolio of Investments regularly [Once in 3 to 4 Months]
  • You can't average daily or weekly to take advantages of spikes in market
  • IRDA is the regulator for ULIPs and doesn't come under the purview of SEBI and hence all this stupid practice of CASH deposits being accepted towards premium payments. [We are honest tax payers and good citizens, hence we don't like this]
So what we normally suggest and practice is to BUY Term Life Insurance to cover risk and opt for aggressive investment in Mutual Funds like HDFC Top 200 or Reliance Growth Fund by SIP. Even after adjusting the amount paid for Term Life Insurance, we are getting better returns than one can get from ULIP. In a way of speaking, we are making money as well as covering risk.

Now addressing the Critical Illness Benefit - it is like a lottery, that if you were to have a heart attack after 3 years of subscribing to ULIP then you beat our Investment strategy of "Term Life Cover + Mutual Fund" because you get lumpsum paid by the insurance company. This is the only benefit I see from ULIP, but who would ever want to have a stroke or an attack ;-)
Read the full article

Published by Webmaster @ 3:57 AM IST.