Wednesday, August 31, 2011

Prajna Capital

Prajna Capital

Mutual Fund Review: HSBC MIP Savings Plan

Posted: 31 Aug 2011 07:13 AM PDT

Name: HSBC MIP Savings Plan-Growth
Type: Open-Ended Debt-MIP
Fund Manager: Mr. Shailendra Jhingan, Mr. Jitendra Sriram & Mr. Viresh Mehta
Inception Date: February 13, 2004

Monthly Income Plan (MIP) are the marginal equity funds that provides a conservative investors the stability of debt and growth potential of equities. In MIPs, typically a large portion (75-100%) of the fund is invested in debt and money market instruments and the rest in equity. MIPs are typically suitable for investors who want to largely play it safe, but don't mind taking a little risk in order to increase the potential returns than pure income/debt funds would provide.

HSBC MIP is an open-ended income scheme with the primary objective to seek generation of reasonable income through investments in debt and money market instruments. The secondary objective of the scheme is to invest in equity and equity related instruments to seek capital appreciation. The scheme's savings plan is aggressive in its equity allocation and could invest up to 25% in equities and equity related instruments and up to 100% in debt and money market instruments (including cash and money at call).
 
The scheme has grown at a CAGR of 9.25% since its inception in February 2004 and has comfortably outpaced its benchmark and peers during the selected time frame. Higher equity allocation and vibrant equity markets along with the judicious asset allocation in debt & money market instruments has enhanced the returns of the scheme. Its one year and two year returns at 9.91% and 10.68% are superior to the returns posted by peers and benchmark for the same period As on August 2006 the scheme has an asset base of Rs 80.36 crore and has declined by Rs 21 crore compared to the pervious year same period.
 
Although the scheme could invest upto 25% of its assets in equities but the scheme have restricted its average equity allocation to 20.4% in last one year. As on August 2006 it has apportioned 48.34% of its assets in debt, 20.48% in equities and rest in cash & equivalent. Its debt component has been fluctuating in the range of 39% to 61% over last one year with average allocation at 48.3%.
 
 
 
The scheme has allocated 24.8% of its debt portfolio in securitised debt securities and 13.7% in commercial bond. It has invested 16% of its assets in AAA rated papers, 8.6% in AAA (SO) rated and 9.95% in AA+ (SO) rated paper. As on August 2006 it had an average maturity of 555 days and is higher than the category average. On the equity side its portfolio is spread across 16 stocks which seem to be large for fund with an asset base of Rs 80 crore and equity allocation at 20%. Top five holdings account for less than half of its equity portfolio with Reliance in top place. The scheme has large cap oriented portfolio and IT sector has received highest exposure at 24% followed by Diversified and Oil & Gas sector at 17% and 9% respectively.
 
Minimum investment required to enter the scheme is Rs 5000 in growth option and Rs 25000 in monthly dividend option and Rs 10000 in quarterly dividend option. It charges an Exit load of 0.5% for investments less than Rs 10 lakh and if redeemed within 6 months and nil for investment amount greater than Rs 10 lakh. While no entry load is charged for the scheme. It is benchmarked against Crisil MIP Blended Index. Expense Ratio of the scheme as on July 31, 2006 is 1.95% and is in line with the category average of 1.95%.

MIP schemes have been doing well from quite some time thanks to the soaring equity markets. HSBC MIP Savings Plan is an aggressively managed MIP scheme as it could invest upto 25% of its assets in equities and is thus suitable for the investors having risk appetite for the same.
 

Stock Review: LG Balakrishnan

Posted: 31 Aug 2011 05:01 AM PDT

The company makes metal forming and transmission parts for the auto sector. They have 17 plants. In Q1, they have posted topline of Rs 215 crore and EPS of close to about Rs 16. If one extrapolates the same, they have posted an EPS Rs 64-65 for FY12 that translates into a PE multiple of 4.2-4.3.

The price to book is less than 1. The total enterprise value of the company is about Rs 310-315 crore. This is because they have very low debt of just Rs 80-90 crore. The market cap of the company is close to about Rs 210.

Talking all this into consideration, it is a very consistent performer. The respectable holding of the promoters stands at 47-48% and 7% is held by the IFC Washington. The share just corrected by 8-10% and one can expect a price of Rs 400 in next 10-12 months.

HDFC Cash Management Fund - Call Plan

Posted: 31 Aug 2011 04:56 AM PDT

Objective

To generate optimal returns while maintaining safety and high liquidity.

Option/Plan

Dividend Plan, Growth Plan. The Dividend Plan offers Daily Dividend option (reinvestment facility only); Weekly and Monthly Dividend option (with payout and Reinvestment facility).

Minimum Application Amount

For new/ existing investors :Rs.100000 and any amount thereafter (Under each Option).
 

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Invest in Birla Sunlife Mutual Funds Online

 

Invest in UTI Mutual Funds Online

  

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Invest in IDFC Mutual Funds Online

 

 

 

Stock Review: Thermax

Posted: 31 Aug 2011 04:13 AM PDT

The kind of performance we have seen from ABB , Crompton Greaves nobody is happy to touch the capital goods and Thermax also falls in this category. But, I have different view for this stock. The company is an engineering solution provider for heat recovery, waste recovery, water treatment, etc. It caters to the core sector industries like cement, steel, fertilizer, dairy. The company has been a consistent performer.

There have been no slippages on quarter on quarter basis except for last year or a year back. One of their overseas subsidiary did not perform well and they had to take an exceptional hit. In FY11, its turnover went up close to one billion dollar. They posted an EPS of close to Rs 30 plus. Going by their Q1 performance, they have been able to maintain the topline of Rs 1,000 crore.

The profitability is always back ended, it comes in the second half of the year. The promoters hold 62% stake and 28-29% is held by institutional investors. It is debt free company and has a very low float. On can can lap these stocks in a market correction like this one.

The stock moved to about Rs 700 couple of month back. At that time people come out with buying ideas on the stock. But whenever there is a correction of this kind people first try to jump out of these stocks. This is the time where one should really accumulate the stock.

A positive view on this stock, largely on account of consistency in performance going ahead. They have an order pipeline of 18 months close to about Rs 7,000 crore order. Taking all this account and the reduction expected in commodity prices will be quite well for the stock. This stock can touch Rs 600 price in the next four-six months time.

Tata Equity Opportunities Fund

Posted: 31 Aug 2011 04:10 AM PDT

Objective

To provide medium to long term capital gains and/or income distribution along with capital gains tax relief to its unitholders, while at all times emphasising the importance of capital appreciation.

Option Available

Growth & Dividend

Entry Load

For Each Investment amount < Rs. 2 Crores - 2.25%.
For Each Investment amount >= Rs. 2 crore - Nil.

Exit Load

For investments greater than or equal to Rs.2 crore: Nil.
For investments less than Rs.2 crore: 1%, if redeemed with in 6 months from the date of allotment.
No exit load will be charged on investment made by the fund of fund scheme.

Minimum Application Amount

Rs.5,000/- and in multiples of Re.1/- thereafter.
 

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Also, know how to buy mutual funds online:

 

Invest in DSP BlackRock Mutual Funds Online

 

Invest in Reliance Mutual Funds Online

 

Invest in HDFC Mutual Funds Online

 

Invest in Sundaram Mutual Funds Online

 

Invest in Birla Sunlife Mutual Funds Online

 

Invest in UTI Mutual Funds Online

  

Invest in SBI Mutual Funds Online

 

Invest in Edelweiss Mutual Funds Online

 

Invest in IDFC Mutual Funds Online

 

Mutual Fund Review: DSPBR Balanced

Posted: 31 Aug 2011 03:52 AM PDT

 

While DSPBR Balanced might not seem exciting, it will show its mettle in long-term performances…

Though not the most exciting offering around, it won't disappoint over the long run. Its 10-year annualized return of around 21 per cent (as on May 31, 2011), ahead of 80 per cent of its peers, bears testimony to that. However, investors would not be over the moon with last year's below-average returns.


"This is a more defensive fund," says Shah, with reference to other offerings in the category. "In 2010, mid caps out performed large caps significantly and this fund has only 50 per cent portfolio in mid caps." Hence the underperformance with regards to its peers which had a greater tilt towards mid caps.

What hit the fund in 2010, helped it in 2011. As on April 29, 2011, the fund lost 2.87 per cent (category average: -3.29%). A similar trait was noticed in 2008 when the fund's fall was curtailed to 5 per cent less than the category average. At that time, a reduced exposure to equity came to its aid.

Though equity allocation has touched a low of 57 per cent (November 2008), it largely remains within a range of 65 to 75 per cent and has averaged around 69 per cent since 2006.
Despite more than half of its equity portfolio in large caps, this fund follows more of a multi-cap strategy. Once Shah took over mid 2006, the fund moved from a large cap portfolio to make way for mid caps. The equity portfolio of this fund is basically just a replica of the DSPBR Equity which in turn is a blend of the DSPBR Top 100 and DSPBR Small & Mid Cap funds. If Shah brought in the mid-cap blend, he simultaneously increased the number of stocks too, currently at 74. This has resulted in a low concentration with a long tail of stocks (51) that have an allocation of less than 1 per cent. Currently, no stock has an allocation of over 4 per cent.

Neither will you find aggressive sector bets here.


Though stocks like Reliance Industries, ITC and Glaxosmithkline Pharmaceutical etc that have been held for a long period of time, the portfolio is churned quite frequently. Its turnover ratio of 2.32x over the past one year signifies that. But Shah views it differently, "It is an active portfolio and this has always been the investment style where the large cap stocks are rotated regularly to benefit from market volatility in fairly valued stocks. The mid cap portfolio is more structural".

As far as debt is concerned the fund invests in a variety of papers. Currently majority is into debentures with small amounts in Certificate of Deposits (CDs) and preference shares. The average maturity of the portfolio has come down from 1.31 years in November 2010 to 0.23 years at present.

 

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Also, know how to buy mutual funds online:

 

Invest in DSP BlackRock Mutual Funds Online

 

Invest in Reliance Mutual Funds Online

 

Invest in HDFC Mutual Funds Online

 

Invest in Sundaram Mutual Funds Online

 

Invest in Birla Sunlife Mutual Funds Online

 

Invest in UTI Mutual Funds Online

  

Invest in SBI Mutual Funds Online

 

Invest in Edelweiss Mutual Funds Online

 

Invest in IDFC Mutual Funds Online

 

 

 
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