Category: Mutual Funds Review

We recommend investing by means of SIP in HDFC TaxSaver Fund [ELSS]. Here is a small analysis on how these fund managers adjust the folios to beat the benchmarks even when the markets under turmoil and thus crate wealth for discplined investors like us.

Assume your SIP is on the 15th of Every Month. The Market hit a bottom of 12,676 [BSE Sensex] on July-15th. NAV of this fund on that date is Rs 122.67. On Sept-15th, Sensex is at 13,531 and NAV of this fund is Rs 137.29.

The benchmark index has risen by 6.7% while the NAV of the fund has appreciated by 11.9% between the above two dates [15/7 and 15/9] So this is how with continuous monitoring and shuffling of portfolio the fund managers beat benchmarks. His job now is to fall slower than the markets and he is a winner 🙂

One of this blog’s reader / mutual fund investor asked me on if he should switch-out of HSBC Equity Fund and Reliance Growth Fund which have been downgraded by Dhirendra Kumar @ Value Research.

Well Dhirendra certainly is a Sr. Analyst but we differ from his frequent upgrading and downgrading of Funds. We are also seeing that HDFC Top 200 is back to 5 Star Rating so is HDFC Prudence fund. [They were at 4 Star for few weeks] This swift rating change has confused some investors. Please don’t be, continue to invest regularly despite difficult times and uncertainty in the market.

In one of the previous posts, I have written about HDFC’s process. The internal process in the AMC is designed & in place in such a way that the outcome to investors may not get the best in the industrybut you will certainly be in the Top-5 is my conviction.

Latest Return over Investment Reviews of,

• HDFC Top 200 Fund
• HDFC Equity Fund
• HDFC Tax Saver Fund
• HDFC Long Term Advantage Fund
• HSBC Equity Fund

Except for HSBC Equity, which is relatively new [6 years of track record] all the other funds have given higher returns for SIP investors. Questions, Comments and Critics can be sent to feedback @ dalalstreet dot biz.

JP Morgan AMC India is on a fund launching spree. The AMC has filed an offer document with Securities and Exchange Board of India (SEBI) to launch its Latin America Equity Off-Shore Fund, an open-ended fund of funds scheme. Just last week we saw that JP Morgan has filed with the SEBI to launch a Greater China Fund.

The scheme offers growth option only. The minimum subscription amount for the scheme is fixed at Rs 10,000 and in multiples of Re 1 thereafter.

The fund house will infuse up to 80%-100% in units of JPMorgan Funds – Latin America Equity Fund with medium to high risk profile. Similarly, it might invest 0-20% in money market instruments and/or units of liquid schemes with low to medium risk profile.

The objective of the scheme is to grant long term capital appreciation by investing in JPMorgan Funds – Latin American Equity Fund.

We all know that the basic principle of maximizing returns is to BUY Low and Sell High. However, the Indian Investor in general has always failed to Invest when the markets are cheap. On the contrary, they invest in Gold when it is cheap and consider it as a long term investment but are scared to invest in equities or maybe they have short term perceptions. [We have all seen in Reliance Power IPO]

Sr. Fund Manager, Mr. Prashant Jain of HDFC Mutual Fund has written an excellent note to his investors saying,

Best returns are typically on investments made in bad times.

You can read the entire document written by Prashant Jain here. [PDF]

JP Morgan Mutual Fund plans to launch JPMorgan JF Greater China Equity Off-shore Fund, an open-ended Fund of Funds scheme. The fund house has filed offer document with Securities and Exchange Board of India (SEBI) in this regard.

The fund house will invest up to 80%-100% of the raised funds in units/shares of the scheme. Similarly, it will invest up to 20% in money market instruments and/or units of liquid schemes.The fund primarily invests in a diversified portfolio of companies incorporated or which have their registered office located in, or derive the predominant part of their economic activity from, a country in the Greater China region.

The scheme offers only growth option. The minimum subscription amount under this option is fixed at Rs 10,000 and in multiples of Re 1 thereafter.

Slowing economy has increased the risks on investments in Commercial Papers – CPs of companies with low investment ratings.

Companies with low investment rating are going to find it even more difficult to raise money in the already liquidity hungry market. Mutual fund houses are reducing the exposure to commercial papers issued by companies with low investment rating.

Slowing economy has increased the risks on such investments and fund managers are in no position to take any chances. Total investment liquid and liquid plus schemes and FMPs in these instruments has declined to around Rs 1670 crore at the end of July this year compared to Rs 3000 crore at the end of January this year.

Poor liquidity conditions prevailing in the market has also given more space to the fund managers to concentrate only on high investment rating companies. Usually these companies pay lower rate of return which forces fund managers to diversify in high risk investments. However, during the current high interest rate regime, even the companies with top investment ratings are willing to pay at par with the market rates.