SEO Simplified By Gabs Gaurs &amp; Geets

Step One

Begin by selecting the best asset class allocation for your personal situation. Then decide which investments fit into your allocation strategy.

Step Two

Place each fund into an asset class category. You may need to do some research. Fund prospectuses and proprietary websites are a good place to start.

Major categories include:

(1) International funds,

(2) large-cap funds,

(3) small- and mid-cap funds,

(4) Bond funds,

(5) cash-equivalent funds, and possibly

(6) Real estate funds.

Step Three Assess fund quality. You're not just looking at returns (historical or recent). Here are four criteria for determining quality:

Relative performance: Be sure you're comparing apples with apples and not with oranges. Compare a fund's historical and recent performance with those of similar funds from the same asset class. Make comparisons from different time periods, and also note the performance of indexes tracking the asset class during the same timeframe.

Performance consistency: Looking at a fund's average yearly return. Look at how a fund did during bull markets and bear markets. For retirement investing, it's preferable to select mutual funds with good performance year after year rather than short bursts of superior performance combined with periods of sub-par returns.

Manager tenure: Performance and returns are more important if they're associated with a fund manager or management team. A new fund manager at an existing mutual fund might enable continued consistency--or maybe not. Have you ever been to a restaurant under new management? Sometimes it's the same. Sometimes it's different but still good. Sometimes it's improved . . . and sometimes it's worse.

Manager tenure: Performance and returns are more important if they're associated with a fund manager or management team. A new fund manager at an existing mutual fund might enable continued consistency--or maybe not. Have you ever been to a restaurant under new management? Sometimes it's the same. Sometimes it's different but still good. Sometimes it's improved . . . and sometimes it's worse.

4) Risk measures: Risk-based criteria help evaluate how funds perform, given the risks each fund takes. For example, assume fund A has historically produced greater performance during periods of market gains compared with fund B, but the performance has been at the expense of big risks. You can find risk-related statistics on many financial websites--or you can call the fund company

Next Step Research fund fees.

If you're examining net returns, fees are already factored into the research you've done. However, everything you're researching is in the past. Since you want to choose the best fund for the future, lower fees are preferable when other fund characteristics are relatively equal.

Step Four Determine asset size

When mutual funds grow past a certain point, in terms of assets under management, it generally becomes more difficult for fund managers to stay true to the funds' investing philosophies. Where is that "certain point"? There isn't one answer, but many funds close to new investors when managers believe they've reached it. But some funds don't ever close. They're industry behemoths that may be very successful but lack the agility to manoeuvre quickly in a changing market; and fund managers find it more difficult to purchase some investments that may be integral to a fund's philosophy. The effect of asset size depends heavily on asset class, so judge size relative to other funds in the same category, with a preference for funds that have more manageable levels.

Once you've selected the best funds from each asset class, you can follow your allocation strategy to decide what percentage of your investable dollars should go toward each fund. It takes some work to create a good portfolio just for your needs. Don't get discouraged. If you need help, look for a fee-only adviser to guide you toward the best investments for you

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Certificates of Deposit (CD)

Best Performing Mutual Funds

Largecap Funds:

DSP BlackRock Top 100 Fund

ICICI Prudential Focused Blue Chip Fund

Birla Sun Life Front Line Equity Fund

Large and Midcap Funds

ICICI Prudential Dynamic Plan

HDFC Top 200 Fund

UTI Dividend Yield Fund

Mid and SmallCap Funds

Reliance Equity Opportunities Fund

DSP BlackRock Small & Midcap Fund

Sundaram Select Midcap

IDFC Premier Equity Fund

Small and MicroCap Funds

DSP BlackRock MicroCap Fund

Sector Funds

Reliance Banking Fund

Reliance Banking Fund

Gold Mutual Funds

Relaince Gold Savings Fund

ICICI Prudential Regular Gold Savings Fund

HDFC Gold Fund

Posted: 24 Apr 2012 11:01 PM PDT

These are issued by banks in denominations of Rs0.5mn and have maturity ranging from 30 days to 3 years. Banks are allowed to issue CDs with a maturity of less than one year while financial institutions are allowed to issue CDs with a maturity of at least one year. Usually, this means 366 day CDs. The market is most active for the one year maturity bracket, while longer dated securities are not much in demand. One of the main reasons for an active market in CDs is that their issuance does not attract reserve requirements since they are obligations issued by a bank

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Invest Mutual Funds Online

Download Mutual Fund Application Forms from all AMCs

Bharti AXA Tax Advantage Fund

Best Performing Mutual Funds

Largecap Funds:

DSP BlackRock Top 100 Fund

ICICI Prudential Focused Blue Chip Fund

Birla Sun Life Front Line Equity Fund

Large and Midcap Funds

ICICI Prudential Dynamic Plan

HDFC Top 200 Fund

UTI Dividend Yield Fund

Mid and SmallCap Funds

Reliance Equity Opportunities Fund

DSP BlackRock Small & Midcap Fund

Sundaram Select Midcap

IDFC Premier Equity Fund

Small and MicroCap Funds

DSP BlackRock MicroCap Fund

Sector Funds

Reliance Banking Fund

Reliance Banking Fund

Gold Mutual Funds

Relaince Gold Savings Fund

ICICI Prudential Regular Gold Savings Fund

HDFC Gold Fund

Posted: 24 Apr 2012 10:25 PM PDT

Bharti AXA Tax Advantage Fund

Tax-saving funds (also referred to as Equity Linked Savings Schemes - ELSS) are well suited for investors willing to take risk. However, at the same time they also provide an opportunity to create wealth. Moreover, the lock-in period of 3 years encourages long-term investing, which is a pre-requisite for fruitful return on equity investments. Well-managed tax-saving funds can serve a dual purpose i.e. provide tax benefits (under Section 80C of the Income Tax Act, 1961) and assist investors' to accumulate wealth over the long-term. But to do so, the key lies in selecting a well-managed tax-saving fund with a long-term horizon.

Bharti AXA Tax Advantage Fund (BATAF) is an open-ended tax saving fund from the stable of Bharti AXA Mutual Fund. BATAF is primarily mandated to invest in equities and equity-related securities along with debt and money market instruments. Launched in February 2009, the fund has been in existence for a little over 3 years now.

Investment Objective and Proposition

The fund's investment objective as per its offer document is "to generate long-term capital growth from a diversified portfolio of predominantly equity and equity-related securities across all market capitalisations. The Scheme is in the nature of diversified multi-cap fund. The Scheme may invest in derivatives, if and to the extent permissible under the Regulations and the ELSS Rules, for hedging and portfolio balancing and optimizing returns. However, there can be no assurance that the investment objectives of the Scheme will be realised. The Scheme is not providing any assured or guaranteed returns."

The fund is mandated to invest 80% - 100% of its total assets in equity and equity-related securities and the rest (i.e. upto 20%) in debt and money market instruments to manage its liquidity requirements.

Over the past one year, BATAF's exposure to large cap stocks has been in the range of 71% - 91%, while its exposure to mid & small cap stocks has ranged from of 4% - 24%. The fund's exposure to debt and cash over the past one year has rarely been above 10% which indicates its tilt towards staying invested in equities. As per the portfolio disclosed on February 29, 2012, the fund has allocated 90.0% towards large caps, a petite 4.2% in mid & small cap and has preferred to hold cash to extent of 5.8% of its total portfolio.

Equity Portfolio

Holdings	Oct 2011	Nov 2011	Dec 2011	Jan 2012	Feb 2012
Reliance Industries Ltd.	5.5	5.3	4.9	7.8	7.5
Infosys Ltd.`	8.7	8.6	9.7	6.9	7.0
HDFC Bank Ltd.	5.8	5.7	6.1	6.6	6.7
ITC Ltd.	8.4	8.6	9.1	6.5	6.3
ICICI Bank Ltd.	6.9	5.8	5.2	7.1	5.9
Larsen & Toubro Ltd.	2.8	2.7	2.2	4.5	4.5
State Bank Of India	3.4	3.4	3.3	4.1	4.3
Bharti Airtel Ltd.	4.0	4.4	4.0	4.1	4.0
Tata Motors Ltd.	2.9	2.8	3.0	3.7	4.0
Tata Steel Ltd.	1.4	0.8	0.7	2.4	2.4

The fund holds a fairly diversified portfolio of 49 stocks. Top 10 stocks account for 52.4% while allocation to Top 5 sectors has been 46.4% as per the portfolio disclosed on February 29, 2012. The fund manager has moderately churned the portfolio which is revealed by the portfolio turnover ratio of 1.12 times. BATAF is benchmarked against S&P CNX Nifty

BATAF follows a multi-cap style as it endeavours to generate superior return by investing in equity and equity related instruments across the market capitalizations. Moreover to build its portfolio, BATAF follows a top-down approach and looks into the following points for identifying potential themes and stocks:

· Global and Indian economic scenario

· Domestic policy environment

· Stock valuations

However for the final stock selection process, BATAF follows the bottom-up approach, along with a qualitative framework of MVPS (Macro, Valuation, Policy and Sentiment) for its asset allocation.

How BATAF has fared vis-à-vis its peers

Scheme Name	6-Mth (%)	1-Yr (%)	3-Yr (%)	5-Yr (%)	Std. Dev. (%)	Sharpe Ratio
Canara Robeco Equity Tax Saver(D)	4.2	5.7	38.9	16.1	7.49	0.31
HDFC TaxSaver (G)	5.5	2.5	36.8	11.7	7.00	0.32
ING Tax Savings (G)	0.3	-2.0	34.2	2.6	7.78	0.27
Sahara Tax Gain (G)	4.1	6.1	33.8	14.59	7.74	0.27
Bharti AXA Tax Adv (G)	2.8	-0.6	30.2	-	9.08	0.22
S&P CNX Nifty	6.0	-1.3	25.5	8.1	7.63	0.20

The table above reveals that BATAF has displayed a satisfying performance in the last 3 years by delivering a 30.2% CAGR, and has outperformed its benchmark index by a considerable margin. The fund was launched when Indian equity markets were bottoming out. This seems to have given BATAF the advantage of buying equities at attractive valuations.

However, when assessed on the volatility front, BATAF as compared to its category peers, has exposed its investor to high risk (as revealed by its Standard Deviation of 9.08%), and at the same time, has generated average risk-adjusted returns (as revealed by its Sharpe Ratio of 0.22) for its investors. This thus makes BATAF a high risk-average return investment proposition.

Fund Manager Profile

Name of the Fund Manager	Mr. Gaurav Kapur
Total Work Experience	Over 6 years
Managing the fund since	Mar-11
Qualifications	CFA, CA, MBA from IIFT

As seen above, Bharti AXA Tax Advantage Fund has been able to deliver satisfying performance only by the virtue of it being launched when the Indian equity markets were nearing the bottom during February 2009 (which enabled the fund manager to build the fund's portfolio at attractive valuations). The performance of BATAF looks pretty average when compared to that of some of its category peers. Moreover, the concentrated top-10 stock portfolio and top-5 sector portfolio makes BATAF vulnerable to greater risk.

Given that the fund has generated average risk adjusted returns despite having been launched during the bear market phase; we recommend you to redeem BATAF if you have a low to moderate risk appetite.

A tax saving fund can be a wealth creator provided you are selective about your options. Investment done at eleventh hour can prove to be hazardous as you tend to invest with a sole motive of tax saving and chances are greater that you may commit a mistake while zeroing on the fund. You may be better off by investing in a fund which has a proven track record of performance across market cycles and which comes from a fund house that follows systems and processes

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Invest Mutual Funds Online

Download Mutual Fund Application Forms from all AMCs

Rajiv Gandhi Equity Scheme

Best Performing Mutual Funds

Largecap Funds:

DSP BlackRock Top 100 Fund

ICICI Prudential Focused Blue Chip Fund

Birla Sun Life Front Line Equity Fund

Large and Midcap Funds

ICICI Prudential Dynamic Plan

HDFC Top 200 Fund

UTI Dividend Yield Fund

Mid and SmallCap Funds

Reliance Equity Opportunities Fund

DSP BlackRock Small & Midcap Fund

Sundaram Select Midcap

IDFC Premier Equity Fund

Small and MicroCap Funds

DSP BlackRock MicroCap Fund

Sector Funds

Reliance Banking Fund

Reliance Banking Fund

Gold Mutual Funds

Relaince Gold Savings Fund

ICICI Prudential Regular Gold Savings Fund

HDFC Gold Fund

Posted: 24 Apr 2012 08:50 PM PDT

More often than not investors tend to get lured over rebates, may it be on premium paid for life insurance policies or monetary benefit received upon investing money in a particular scheme. This sole factor of deriving some monetary benefits out of investments made or premiums paid leads to wrong and sometimes disastrous investment decisions.

The Budget 2012 presented on March 16, 2012 has made a similar pitch to the investors by introducing a tax rebate on the 'Rajiv Gandhi Equity Scheme'. Though the complete details are yet to surface, let us understand the scheme with whatever little details we have.

Scheme details:

The 'Rajiv Gandhi Equity Scheme' would allow for income tax deduction of 50% to new retail investors who invest up to Rs 50,000 'directly in equities' and whose annual income is below Rs 10 lakh. The scheme will have a lock-in period of 3 years.

But given the present feature of the scheme, we think there are some areas which need to be addressed, which are:

1. Direct equity exposure: For naïve investors investing in stocks directly may turn out to be a bad idea as picking up good stocks for investing definitely demands more effort as compared to picking up fresh vegetables for cooking. Also, an investor would require to open a demat account for investing in stocks directly.

2. Once in a lifetime rebate: As per available literature on the 'Rajiv Gandhi Equity Scheme', the 50% income tax rebate mentioned would be available for only "new retail investors". Thus it appears to be only a once in a lifetime rebate, where the first time investors (i.e. new retail investors) who are investing Rs 50,000 would get a tax deduction of Rs 25,000 for that particular financial year only, in which they constitute to be new investors in the equity markets .

But we think that if the Finance Minister really wanted to generate voluminous participation in equities from the retail investors, the scheme should not have been restricted to only new investors. This mandate ignores all the existing demat account holders (which are few in numbers as compared to the population in the country) which will restrict deeper retail participation.

3. Income has to be below Rs 10 lakhs: Another negative for the investors is that the individual investor would be eligible for deduction under the said scheme only if his / her annual income is below Rs 10 lakhs. This again impedes deeper retail participation, in era where incomes are rising and more people are being placed in under the "middle class".

Moreover, there is lack of clarity on whether mutual funds (which help investors in taking the equity exposure through the indirect route) would be considered under the said scheme.

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Invest Mutual Funds Online

Download Mutual Fund Application Forms from all AMCs

How to save tax investing in New Pension Scheme?

Best Performing Mutual Funds

Largecap Funds:

DSP BlackRock Top 100 Fund

ICICI Prudential Focused Blue Chip Fund

Birla Sun Life Front Line Equity Fund

Large and Midcap Funds

ICICI Prudential Dynamic Plan

HDFC Top 200 Fund

UTI Dividend Yield Fund

Mid and SmallCap Funds

Reliance Equity Opportunities Fund

DSP BlackRock Small & Midcap Fund

Sundaram Select Midcap

IDFC Premier Equity Fund

Small and MicroCap Funds

DSP BlackRock MicroCap Fund

Sector Funds

Reliance Banking Fund

Reliance Banking Fund

Gold Mutual Funds

Relaince Gold Savings Fund

ICICI Prudential Regular Gold Savings Fund

HDFC Gold Fund

Posted: 24 Apr 2012 07:49 PM PDT

This is a new, market-linked vehicle for those who do not have an EPF facility to target long-term retirement planning. It is open to any Indian citizen between the age of 18 and 55. Minimum investment is fixed at Rs. 6,000 p.a.

The NPS offers two accounts: tier I and tier II. Currently only tier I account is available. This is a non-withdrawable account and investments in this keep accumulating till you turn 60.

Summary of New Pension Scheme Details

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Invest Mutual Funds Online

Download Mutual Fund Application Forms from all AMCs