Sunday, September 4, 2011

Prajna Capital

Prajna Capital

How to choose a Gold ETF?

Posted: 04 Sep 2011 02:02 AM PDT

 

 

Expense ratio Is Key.

 

 

Gold ETFs are listed on major stock exchanges that one can buy and sell from, just the way one buys and sells shares. You will need a demat account to buy gold ETFs, which are closest to investing in physical gold without the risks involved in holding physical gold.


Gold ETFs invest directly in physical gold which means the buying and selling price of all the gold ETFs is identical. The returns generated by gold ETFs at any given point of time are also similar though there will be a minuscule difference between the schemes because of their different expense ratios. So, look for the ETF with the least expense ratio to invest in.


Ideally you should invest in gold ETFs once you have a well diversified portfolio of funds and restrict exposure to gold by allocating not more than 5-10 per cent of your total investments.

 

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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

 

 

 

 

Insurance cover for your loans!

Posted: 04 Sep 2011 12:22 AM PDT


Loan insurance is a concept catching up in India. Most people taking a loan are not aware about what they would do in case they are unable to make the monthly payments towards the loan.

What is Loan Insurance?

Loan protection insurance, or loan payment protection insurance, is a form of payment protection insurance. This type of insurance can help you protect your monthly loan payments if you become unemployed or suffer an accident or sickness. Loan protection insurance will typically be used to protect a home loan, car loan or even sometimes personal loans.


Under a loan insurance cover, the lump sum amount reduces as the outstanding loan decreases as per the loan schedule.

What are the benefits of loan insurance?

Loan insurance means during tough times, you'll have an insurance cover to take care of the EMIs or of the outstanding loan amount. This is especially useful:

a) In case of death or disability due to an accident or sickness

b) In case of loss of job

This effectively reduces the burden on your family in case of any unfortunate event that occurs with you. They would be saved from the financial trauma of paying off the loans.

In cases of a joint loan application, a joint loan insurance plan can be taken which will effectively cover you and your partner. Both will have the reassurance that if either of you should be faced with redundancy, illness, have an accident or even die, your repayments will be made for you.

What kinds of loans are covered under such an insurance schemes?

Loan insurance is offered mainly for home loan borrowers. However, some banks offer loan insurance for personal loans as well as auto loans.

Do I have to pay any premium for such insurance? If yes, how much?

Like any insurance you do need to pay premium for the insurance. There are only a few banks which offer this kind of insurance without any premium. Premium amounts usually vary from bank to bank and depend primarily on:

1) The age of the person taking the loan - the premium is usually higher for older people

2) The loan amount - if the loan amount is high, the premium payment will also higher owing to the fact that the bank has a higher liability in such cases

3) The tenure of the loan - If the repayment period is longer, the premium to be paid is also higher

4) The medical record of the individual - if your physical health is good, the premium amount comes down. However, if you are suffering from any kind of serious ailments the premium amount will go high

What are the things to keep in mind while checking about loan insurance?

Loan insurance is something that you need to give careful thought to. You need to check:

i) What does the loan insurance cover? - Does it cover death by accident or death by any cause? Does it cover temporary disability only or does it cover permanent disability as well?

ii)Eligibility for the insurance - Check about the eligibility criteria for the insurance. Check whether the loan needs to be of a certain amount

iii) Payment of premium - Check whether you can pay the premium as part of the EMI or does it have to be made as a lump sum amount

iv) Is a medical check-up necessary? - Check whether a medical checkup is necessary in all cases.

Are there any tax benefits because of the insurance being a 'life insurance' scheme?

Yes, there are tax benefits that you can get with such kind of insurance. Since you are paying a life insurance premium, you can get deduction under Section 80C. However, if it is clubbed with your EMI payments, you will not get the insurance benefit.

 

Mutual Fund Review: SBI Magnum Midcap Fund

Posted: 03 Sep 2011 11:09 PM PDT

 

Investment Objective:

To provide investors a long term capital appreciation along with the liquidity of an open-ended scheme by investing mostly in a diversified mixture of Midcap equity stocks.

Those businesses whose market capitalization at the time of speculation is lower than the last stock in the S&P CNX Nifty Index less 20% (upper range) and higher than Rs. 200 crores, are termed as the midcap companies.

 

Asset allocation

Instrument

% of Portfolio

Risk Profile

Equities of Midcap companies and equity related instruments

65-100%

High

Equities and equity instruments that are not related to Midcap companies

0-20%

High

Foreign Securities/ADRs/GDRs

0% - 10%

High

Debt and Money Market Instruments

0 - 30%

Low

 

Scheme highlights

1. Open ended growth Scheme

2. CDSC no more than 1.5% for exit within a period of 12 months from the date of reopening of the investment system.

3. Minimum: Rs 5000 and multiples of Rs. 1000

4. Growth options for dividends.

Minimum Application:

Rs. 5000 and in multiples of Rs. 1000

Entry Load: NA

Exit Load: NIL if the scheme is redeemed after 1 year and 1 % if the scheme is redeemed within one year from the date of investment.

Systematic Investment Plans:

·                           Rs 500/month - 12 months

·                           Rs 1000/month - 6months

·                           Rs 1500/quarter - 12 months

 

Systematic Withdrawal Plan:

Not less than Rs. 500 of amount can be withdrawn each month or quarter by issuing proceed instructions to the Registrars at any time.

Disclaimer:

"Mutual Funds and securities investments are subject to market risks and there is no assurance or guarantee that the objectives of the Scheme will be achieved. Please read the Statement of Additional Information and Scheme Information Document carefully before investing".

"In Mutual Funds, the past performance is not guaranteed in future".

The information contained in this website has been obtained from sources considered to be authentic and reliable. However, InvestMutualfunds.net is not responsible for any error or inaccuracy or for any losses suffered on account of information.
 

Debt Schemes from Birla Sun Life AMC

Posted: 03 Sep 2011 09:07 PM PDT

Long Term Fund

Birla Sun Life Income Plus

Birla Income Plus (BIP) is an open-ended debt scheme with the objective to generate consistent income through superior yields on its investments at moderate levels of risk through a diversified investment approach.

Birla Sun Life Income Fund

Birla Sun Life Income Fund (Formerly: Alliance Income Fund) is an open-ended income scheme with the objective of generating income and capital appreciation by investing 100% of the corpus in a diversified portfolio of debt and money market securities.

Birla Sun Life Dynamic Bond Fund

Birla Dynamic Bond Fund is a scheme with an investment objective to generate optimal returns with high liquidity through active management of the portfolio by investing in high quality Debt and Money Market Instruments.

Gilt Fund

Birla Sun Life Gilt Plus

•  Liquid Plan
•  PF Plan
Its Objective is to generate income and capital appreciation through investments exclusively in Government securities.

•  Regular Plan
Birla Gilt Plus invests exclusively in Central Government Securities with an objective of generating income and capital appreciation for the investors.

Birla Sun Life - Government Securities Fund (LTP)

The Scheme seeks to provide investors investors current income consistent with a portfolio invested 100% in securities issued by the Government of India or the State Government and the secondary objective is capital appreciation.

Short Term Fund

Birla Sun Life Liquid Plus

The primary objective of the scheme is to generate regular income through investments in debt and money market instruments. Income may be generated through the receipt of coupon payments or the purchase and sale of securities in the underlying portfolio. The scheme will under normal market conditions, invest its net assets in fixed income securities, money market instruments, cash and cash equivalents.

Birla Sun Life - Short Term Fund

Birla Sun Life Short Term Fund aims to generate income and capital appreciation by investing 100% of the corpus in a diversified portfolio of debt and money market securities with relatively low levels of interest rate risk.

 

Floating Rate Fund

Long Term Plan

The primary objective of the Scheme is to generate regular income through investment in a portfolio comprising substantially of floating rate debt/money market instruments. The scheme may invest a portion of its net assets in fixed rate debt securities and money market instruments. The scheme will endeavour to minimize interest rate risk and act as a hedge against increase in interest rates.

Short Term Plan

The primary objective of the Scheme is to generate regular income through investment in a portfolio comprising substantially of floating rate debt/money market instruments. The scheme may invest a portion of its net assets in fixed rate debt securities and money market instruments. The scheme will endeavour to minimize interest rate risk and act as a hedge against increase in interest rates.

Cash Fund

Birla Sun Life Cash Plus

Its objectibe is to provide reasonable returns at a high level of safety and liquidity through judicious investments in high quality debt and money market instruments.

Birla Sun Life - Cash Manager

Birla Sun Life Cash Manager aims to provide current income, which is consistent with a portfolio that offers superior liquidity by investing 100% in a diversified portfolio of debt (fixed income) & money market securities.

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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

 

How To Use Bank Ombudsman?

Posted: 03 Sep 2011 09:42 AM PDT

Two in every three complaints was turned down as the customer was ignorant about rules

In the last financial year, the Banking Ombudsman (BO) received 79,266 complaints from unsatisfied consumers. Shockingly, as many as 51,847 or 62 per cent of these were rejected due to procedural mistakes.

The BO's office has recently being dealing with issues regarding banking regulations, interest rates on loans, penalty interest on credit card usage and ATM withdrawal penalties. The office was started by the Reserve Bank of India (RBI) as an alternate dispute resolution (ADR) mechanism, to settle those that could not be solved at the banks level. Supposed to be impartial, the BO listens to arguments from both the bank and the aggrieved customer. When both parties acknowledge the decision, they need to sign an agreement and the case is considered settled.

However, approaching the BO has to be done in the prescribed manner. Typically, most people complain directly to the BO, thinking their case will then be considered a priority by the bank. However, such a step is considered as a first resort complaint, not entertained by the BOs office. One must first contact the bank or its nodal officer; if still dissatisfied, then approach the BO.

To some extent, banks could be blamed for this confusion. While they do display the contact details of both the banks nodal officers and the banking Ombudsman for the customers benefit, there is no mention of whom to contact first and how.

"There are many reasons for rejections. Most people do not follow up on their complaints or mention their contact detail or complain about non-banking. Often, the complaints have come without even first contacting the bank," says D G Kale, general manager, customer service department, RBI.

There are various steps to approaching the BO. When you feel the bank has been cheating you, you can approach its nodal officer. If the officer cannot help or does not satisfactorily resolve the issue, then the BOs office should be approached. If, one approaches the BO directly, the complaint will be sent back to the banks nodal officer, a delay of 15-20 days.

One also needs to be certain about whom the complaint can be raised with. For instance, those regarding mutual fund products, structured products and other investment schemes you have made via your personal banker or banks investment advisor should be made to the Securities and Exchange Board of India. Similarly, complaints regarding an insurance product or unit linked insurance product bought from your bank should be taken up with the Insurance Regulatory and Development Authority, not the BO.

The BOs office tries to handles most of its cases within the first three months itself. Having the requisite documents to prove your side of the argument will go a long way in securing a verdict in your favour.

According to Kale, "Since the BOs office puts out its findings in the public domain, banks run a risk to their reputation. Bigger banks have, as a result, become more customer-savvy and try to take care of problems before customers reach the BO." The BOs decision, however, is not the law as it has no judicial, semi-judicial or even quasi-judicial role in the system. The options are a consumer court, civil court and even the criminal court in case of cheque-bounce issues. The BO cannot be approached if these forums have been. The other condition to approaching a BO is the amount in contention; it should be less than 10 lakh.

BNP Paribas Mutual Fund Launches BNP Paribas Fixed Term Fund Series 22 - D

Posted: 03 Sep 2011 09:14 AM PDT

BNP Paribas Mutual Fund has launched a new fund namely, BNP Paribas Fixed Term Fund Series 22 - D a closed ended debt scheme with tenure of 369 days. The new issue will be open for subscription from 24th August to 7th September 2011, at an offer price of Rs 10 per unit. The investment objective of the scheme would be to achieve growth of capital through investments made in a basket of fixed income securities maturing on or before the maturity of the scheme. No exit load will be charged for the scheme. The performance of the scheme will be benchmarked against Crisil Short Term Bond Fund Index and will be managed by Mr. Alok Singh.
 

Restricted use of credit card can help to achieve your goal

Posted: 03 Sep 2011 09:04 AM PDT

Restrict yourself to using just one credit card as multiple cards can cause financial damage that could hurt your future

The only way to assure that you achieve your goals on time is to avoid expenses. While you may think that this is not possible, here's a list of things you can keep in mind when it comes to your plans tic money and credit:

Cash is always a better option: Swiping your credit card at every go is not a feasible option.

Using cash helps you not only keep a tab of how much you spend but also avoid debt. However, you need to keep in mind that excessive spending of the same can also lead to debt and damage your monthly budget plans.

Keep a check on the price tag: Just because it is expensive, does not mean it is worth buying. Before buying anything, do check the price of the same and explore if you can get the same product at a discounted rate.


Know your credit card limits: It would be wise not to use your credit card if you are close to reaching your credit limit. Keep an account of how much your bank allows. Restricting over usage of your credit card makes sure that you stick to your financial budget and avoid any extra surcharges by the bank.

Limited access to credit cards: I always tell my clients and my family members that one card is enough. Limit yourself to using only one card because you never know the financial damage multiple cards can cause. If you are being offered a card by a bank or planning to apply for one, make sure you understand the terms that are being offered. If you already are in possession of multiple cards, leave some of them back. This way you are not even tempted to use them all.

Stick to a budget: Living on a household budget ensures that you reach your financial goals without too many glitches. If you do feel like spending, look out for good deals that would help you retain a certain limit of spending money. Ask a financial planner to help you figure out a budget and a small amount of petty cash. Maintain this every month, so that you are aware as to how much you should spend.

Expenses are a part of our life and so are financial goals. A good financial plan can not only help you with your daily expenses but also help in attaining your goal.


Understanding the importance of the same will lead you not only to a credit-free future but also a financially secure one.

 

Married couples and monetary decisions for a happy life

Posted: 03 Sep 2011 08:12 AM PDT

To Ensure That Your Spouse Is Included In All Your Financial Dealings Ensure That He/She accompanies you each time you visit your chartered accountant, financial planner, investment advisor or the likes. So that, each one knows how, when, where and how much money is being invested or borrowed Seema Desai was devastated by the sudden demise of her husband. The children, though with her then ,were soon going to leave to return to their lives abroad. And she would be left alone to fend for herself. To make matters worse, she had no clue about the monetary matters. As when it came to saving and investing, she had always depended upon her husband.

She had never completely understood terms such as mutual funds, insurance plans, tax saving, pension and retirement planning and so on. Money matters bored her to death. And every attempt by her husband to include her in the financial planning had failed miserably. Her attitude had always been that as long as her husband was taking care of it, why should she bother? Today, the thought of having to cope with managing finances on her own was perhaps giving her as much stress as his demise.

To avoid such situations, one must ensure that he/she is accompanied by her spouse for each visit to the chartered accountant, financial planner, investment advisor or the likes. So that, each one knows how, when, where and how much money is being invested or borrowed. Additionally, married couples must plan their expenses in conjunction with each other. To this end, it is important that you draw up your budgets together and arrive at a mutually agreeable financial plan. This will help you streamline the expenses as well as up your collective investments.

Your family's comfort and happiness will eventually depend on how you manage your money. Buying a house, planning for you child's education, medical emergencies, family vacations, all require prudent allocation of resources. Plus along the way, will be unexpected challenges disrupting your meticulous planning. You, therefore require all the help and resources at your disposal and the sooner you bring in your partner, the more equipped will both of you be to plan for life effectively.

BANK ACCOUNTS

The first step is to deal with bank accounts. In a democratic marriage, though the first instinct is to merge your finances, it is important to have separate accounts, too. Of course, have a common account too, where you can pool in the money required for household and other common expenses. It is also equally crucial to have separate joint accounts, one for husband and wife and the other for wife and husband, even if one of them is not assessed for tax. Payment of equated monthly instalments, credit card bills and even investments should be from the account of the person who is actually liable to pay for the expense or investment. This will help tremendously, especially while filing your tax return. Given that in the new Income Tax Returns form, individual disclosures of high value transactions must be compulsorily made.

PROPERTY

Remember that real estate can be co-owned. Buy the property with both husband and wife having an equal share. The housing loan should also be taken equally and the interest and principal payments should be made separately by each from their respective bank account. If this is done, each one is entitled to an interest deduction of up to `1.5 lakh under Section 24 of the Income Tax Act and a principal deduction of `1lakh under Section 80C.

So, between the two of you, taxes on income up to `5lakh can be saved in these cases.

EXPENSES

Setting up a monthly budget is a great way to develop a mutually agreed upon vision of spending and saving habits in a marriage. First, you must make a small modification to the usual mindset. Normally, savings constitute of the amount left after deducting expenses from income. But, here's a suggestion: let expenses be equal to income minus savings. It is the same equation, but redrawing it is more efficient for your finances in the long run. This will help you build a corpus to fund all your future goals.

So, starting next month, pre-decide how much you want to save out of your income and the balance figure will automatically make up your expenses. Don't set too ambitious a target though. Start small and make the adjustments as you go along. This strategy will introduce an element of financial discipline in both of you.

SBI Mutual Fund - Gold Fund

Posted: 03 Sep 2011 07:21 AM PDT

 

SBI Mutual Fund has announced the launch of a Gold Fund, an open ended fund of fund which will invest in SBI Gold ETF. This will be the fourth fund of fund investing in Gold ETFs.

 

Investment Strategy

The investment objective of the scheme is to seek to provide returns that closely correspond to returns provided by SBI Gold Exchange Traded Scheme. The scheme will invest upto 100% in the units of SBI Gold ETF. It may also invest upto 5% in money market securities or liquid schemes.

 

Fund Manager

Mr. Raviprakash Sharma will be the fund manager of SBI Gold Fund. He is a Chartered Accountant and also holds a C.F.A. Charter. With over 12 years experience in Indian capital markets in various capacities including portfolio management and dealing in equity shares on behalf of clients. He has worked with HDFC Mutual Fund, Citigroup Wealth Advisors, Kotak Securities, Times Investors Services and Birla Sun Life Securities. Mr. Sharma also manages Magnum Index Fund and SBI Gold Exchange Traded Scheme.

 

Fund House

SBI Mutual Fund is one of the oldest fund houses in the industry which launched its first scheme in 1987. The fund house has nearly Rs 48,000 crore of assets under management as on June 30, 2011.

 

Basic Details

NFO Opens: August 22, 2011
NFO Closes: September 5, 2011
NFO Price: Rs.10
Options: Growth and Dividend
Minimum Application Amount: Rs.5000
Exit Load: 1% if redeemed/switched-out on or before 1 year from the date of allotment and NIL if redeemed/switched-out after 1 year.
Benchmark: Domestic Price of Physical Gold
Fund Manager: Mr. Raviprakash Sharma

 

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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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