Prajna Capital |
- Quantum Mutual Fund Multi Asset Fund
- Special Dividends - The reasons behind them
- Tax and Debt Mutual Funds
- How to Build a good debt oriented portfolio ?
- Kotak Mutual Fund New FMP - Kotak FMP series
- Life Insurance Plan
- E-Tax Returns Filling is must for income over Rs 10 lakh
- DSP BlackRock new scheme - DSP Blackrock Dual Advantage Fund
- Reliance Mutual Fund new fund - Reliance Fixed Horizon Fund
- Nomination helps in smooth transfer of assets
- Principal Mutual Fund renames Fund - Principal Near Term Fund to Principal debt opportunities fund
- Joint ownership of Property and tax benefit
- Bank Savings account at click of a button - ICICI Bank instant account number
- Do not move away from Equity Investing
- Nominee and claim settlement
- Debt Market Investment Strategies
- Systematic Transfer Plan - STP
- Sundaram India leadership fund merged with Sundaram growth fund
- Bharti AXA Life Young India Plan
- Mutual Fund Statistical Ratios - Useful to study Mutual Funds
- LIC Jeevan Vaibhav
- Capital Protection Funds - A closed ended debt mutual fund
- When to choose traditional insurance policies and when ULIPs
- Bharti AXA Regular Return Fund - Change in Fund Manager
- Know your Insurance objectives
| Quantum Mutual Fund Multi Asset Fund Posted: 04 Jul 2012 04:28 AM PDT Download Mutual Fund Application Forms
Quantum Mutual Fund is launching 'Quantum Multi Asset Fund', an open ended fund-of-funds scheme. The new fund offering will open on Friday, June 22 and close on Thursday, July 5. The fund will reopen for continuous subscription on Monday, July 16, the company said in a statement. The fund will hold a portfolio consisting of equity, debt, money markets and gold schemes of Quantum Mutual Fund. --------------------------------------------- Invest Mutual Funds Online Download Mutual Fund Application Forms from all AMCs Download Mutual Fund Application Forms Best Performing Mutual Funds
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| Special Dividends - The reasons behind them Posted: 04 Jul 2012 04:15 AM PDT Download Mutual Fund Application Forms
Some extra cash is always welcome. More so, if it is from stock investments in a depressed market. That is why investors are all ears when a company announces a special dividend. They are very happy that they will get some extra cash which comes tax-free. In April, Navin Fluorine announced a special dividend of . 60 per share on account of higher income of . 251.90 crore from the sale of carbon credits; Infosys gave a special dividend of . 10 per share to mark the completion of 10 years of its BPO operations. In August 2011, Clariant Chemicals India gave a special dividend of . 30 per share on account of the sale of its Thane property for . 240 crore; and JB Chemicals gave a special dividend of . 40 per share on account of the gain from the sale of its Russia-CIS OTC business. Companies that dole out special dividend are viewed favorably by investors, and could be a starting point to look at a stock. However, look at the future potential of the business, do your math and check how the business has performed minus the special dividend before making a decision
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| Posted: 04 Jul 2012 02:59 AM PDT Download Mutual Fund Application Forms
For resident Indian investors, the tax on short-term capital gain is as per the income tax slab the investor falls under. The long-term capital gain is 10 per cent, or 20 per cent if indexation is taken into account. ------------------------------------------ Invest Mutual Funds Online Download Mutual Fund Application Forms from all AMCs Download Mutual Fund Application Forms Best Performing Mutual Funds
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| How to Build a good debt oriented portfolio ? Posted: 04 Jul 2012 01:28 AM PDT Download Mutual Fund Application Forms
Risk-averse investors can invest in fixed income products as these are giving good returns and are tax efficient
Fixed Income, Fixed Returns
Inflation has been a menace for over three years now. Stocks markets have gone nowhere in this period, with the possibility of a further downslide, due to worsening economic fundamentals and the debt overhang in Europe.
Investors are now tired of waiting for returns from equities. Some have started believing in debt more than they did before. While others opine that they would have been better off in fixed deposits than equities. But, equities perform over the long term. Though the definition of long term is also changing as in the past 3-5 years equities have given negative returns. And we don't know when we will see an uptrend.
Hence, risk-averse and those wanting to play safe, can invest in debt products as it can help tide over uncertainties. Reason: The rate of returns being offered by fixed income instruments have peaked and there are quite a few viable options for constructing a good fixed income portfolio. Add to that their tax efficiency.
For instance, Fixed Maturity Plans (FMPs) are offering between 9 and 9.5 per cent for 1-3 years. And inspite of a benign tax treatment, these give good returns. Capital gains taxes beyond one year is 10 per cent without indexation and 20 per cent with it. Due to this, the net returns are estimated to be between 8.8 and 9.2 per cent. And that is not bad.
FMPs invest in papers that ensure the returns don't vary from the coupon rates of the underlying instruments, irrespective of changes in the interest rate cycle. Typically, those in the high tax bracket are advised FMPs.
Another avenue is debt mutual funds. These offer coupon rates of the underlying instruments, help in capital appreciation. When interest rates move down, the underlying instruments have higher coupon rates than the prevailing rate, would rise in value. This means an increase in the net asset value (NAV) of debt funds, which hold such instruments. Hence debt funds have the potential to offer double digit post-tax returns, in a falling rate scenario. The funds which hold comparatively longer tenures could offer higher capital appreciation.
Amongst debt funds some are dynamically managed, where the duration and instruments are decided by fund managers, who churn the portfolio as per market conditions while some follow a buy and hold strategy. Funds which hold gilts could be volatile, but can offer returns in a falling rate market.
Those looking to invest for a year could look at funds that invest in ultra short term, short term papers. Depending on the tenure these may invest in corporate bonds, certificate of deposits (CDs) of up to one year (CDs of one year tenure are yielding about 10 per cent) and short term commercial paper (CP). These funds can yield attractive returns, even for less than a year. These funds give steady returns when the markets aren't doing well.
Shorter tenure funds (less than one year) are ultra short-term ones. Such funds invest in very short tenures instruments. Since 3-month CD is offering 9.85 per cent and 3 month CP 10.15 per cent, ultra short-term funds would be able to offer attractive returns. If you have less than a year in hand, opt for the dividend option (where dividend distribution tax is paid by the fund house), the investor is taxed as per the tax slab in growth option.
Tax free bonds which came up last year are long-tenure instruments of 10-15 years, yielding 8.2-8.3 per cent over the years. These are attractive over the long-term. These are better than Public Provident Fund (PPF), as the returns are assured. PPF returns are market-linked and can change every year (has given as high as 9.5 per cent and as low as 8 per cent). Those who haven't invested in these bonds till now can buy them from the stock exchange, at an yield of 8 per cent.
Some of the favourites with Indian investors are bank deposits and PPF. Fixed deposits are a favourite primarily due to the low risk associated with it. A one to three year deposit today is offering 8-9 per cent returns (pre-tax).
There are also company deposits which could offer 1-2 per cent more varying across companies. But they are somewhat higher on the risk measure and the investor is advised to look at the rating assigned to the offering before investing. Triple A indicates highest level of safety and AA+ indicates a very good level of safety for return of principal and for receiving interest. PPF offers tax-free returns of 8.6 per cent.
But PPF is a long-term instrument (15 years) and liquidity is constrained. One can invest up to ~ 1 lakh in a financial year, which offers good savings potential for the family.
Investment portfolios can be constructed using these instruments as per specific requirements of investors. There is also the comfort that this is going to yield a decent positive return, irrespective of what happens to our stock markets, our economy and the global economy. Debt funds are liquid, tax-efficient and good if horizon is not clear |Those in the high tax bracket are advised to invest in FMPs |Get locked in FMPs at the current rates before they fall further | --------------------------------------------- Invest Mutual Funds Online Download Mutual Fund Application Forms from all AMCs Download Mutual Fund Application Forms Best Performing Mutual Funds
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| Kotak Mutual Fund New FMP - Kotak FMP series Posted: 04 Jul 2012 12:12 AM PDT Download Mutual Fund Application Forms Kotak Mutual Fund has launched a new fund named as Kotak FMP series 90 370 days. The new fund offer (NFO) for the scheme will be close for subscription on July 9.
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| Posted: 03 Jul 2012 08:46 PM PDT Download Mutual Fund Application Forms
Due to the volatility in the stock market in recent months, insurance customers are looking for the safety of capital and guaranteed returns, rather than high risk and quick earnings through the equity markets. This explains why customers have switched their loyalties to traditional insurance plans lately. However, since the traditional plans are not as transparent as Ulips, it is important to keep a few things in mind before opting for the right traditional plan. To begin with, traditional plans are beneficial for customers with low risk appetite. They are recession-proof and not linked with the ups and downs of the market. It is a perfect solution for those who are mostly seeking insurance rather than investment, or looking to build a corpus for a future milestone in life. Depending on your financial objective, loan liability, and family responsibility, you must choose a suitable traditional plan. Traditional plans that one can avail of:
They are:
One, reversionary bonus. It is the bonus offered by the company that is directly added to the sum assured. This type of bonus may be calculated on a simple or compounding basis.
Two, terminal bonus. When the bonus is given to the customer upon maturity of the plan, it is known of as terminal bonus.
Three, cash bonus. It is the bonus declared by a company and comes in the form of cash.
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| E-Tax Returns Filling is must for income over Rs 10 lakh Posted: 03 Jul 2012 04:12 AM PDT Download Mutual Fund Application Forms
New Delhi: The Central Board of Direct Taxes (CBDT) has made it mandatory for all individuals and Hindu undivided family (HUF) having annual income of more than Rs 10 lakh to file their returns electronically for which digital signatures are not necessary. "E-filing has been made compulsory for assessment year 2012-13 onwards for an individual or a HUF, if the total income exceeds Rs 10 lakh," a press note issued by the CBDT on Monday said.
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| DSP BlackRock new scheme - DSP Blackrock Dual Advantage Fund Posted: 03 Jul 2012 02:10 AM PDT Download Mutual Fund Application Forms
DSP BlackRock Mutual Fund has announced the launch of DSP Blackrock dual advantage fund series 536M. The new fund offer period will close for subscription on July 16. --------------------------------------------- Invest Mutual Funds Online Download Mutual Fund Application Forms from all AMCs Download Mutual Fund Application Forms Best Performing Mutual Funds
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| Reliance Mutual Fund new fund - Reliance Fixed Horizon Fund Posted: 02 Jul 2012 09:52 PM PDT Download Mutual Fund Application Forms Reliance Mutual Fund has launched a new fund named as Reliance fixed horizon fund XXII series 14. The new issue will be open for subscription from July 3.
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| Nomination helps in smooth transfer of assets Posted: 02 Jul 2012 08:41 PM PDT Download Mutual Fund Application Forms
Every time you fill a form for an investment or an asset, you always have to name a nominee of the proceeds of the same for smooth transfer of money in case of an eventuality. However, many feel this is a task and do not name a nominee.
Nomination is generally understood to be an act of officially naming a candidate (friend / relative / legal heir) who will receive the proceeds of investments / assets upon the death of the owner. It is applicable for shares, insurance policies, mutual funds, fixed deposits, bank accounts and so on. In spite of being a simple procedure, it is mostly ignored by individuals.
Other than finding it tedious, many feel that a nominee and legal heir is the same. And hence, in case of an eventuality, the legal heir will take over and so why name a nominee. However, these two individuals may not always be the same.
The definition and use of nomination varies across financial assets. Here's how:
Equities: The law on nomination of equities held in companies has taken a new meaning with perhaps the first interpretation of the provisions governing nomination in the Companies Act, 1956 by the Bombay High Court. It ruled that the rights of a nominee of shares of a company would override the rights of the legal heirs to whom the property may be bequeathed.
The Court opined that under the Companies Act, the relevant section provides that on death of a shareholder, the shares would vest with the nominee. The provision adds that the nominee shall become entitled to all the rights attached to the shares to the exclusion of all others regardless of anything stated in any other disposition, will or otherwise. Therefore, regardless of what is stated in privately executed wills, a company would have to only deal with the nominee as a person now exercising the rights of the deceased shareholder.
Taking note from the above decision, individuals have to be careful in nominating the right person for their demat account(s). More so, care has to be taken to avoid conflicts between bequests made in the will and nominations.
Mutual funds: Barring the above reference, till date for all other assets, a nominee is simply a custodian. Effective from April 1, 2011, nomination is compulsory across all new investments made in mutual funds. In case, an investor does not wish to nominate, then a separate declaration form of the non-intention of making a nomination has to be filed.
In case an investor has failed to provide a nominee, the applicable rules make it mandatory for the mutual fund company to send a request to the unit holder to register a nominee. In case of joint holders in mutual funds all holders have to sign the request for nomination / addition or deletion of the nomination.
In case of death of an investor, transfer of units in favour of the nominee shall be a valid discharge by the asset management company against the legal heirs. Investors should note that every new nomination filed for an existing folio / account will override the existing nominee.
Life insurance: In one of the very early cases on nomination (trustee versus legal heirs), the Supreme Court had held that a mere nomination made in a life insurance policy, under the relevant provisions of the Insurance Act, does not have the effect of conferring on the nominee any beneficial interest in the amount payable under the policy on death. The nomination only indicates the hand which is authorised to receive the amount, on the payment of which the insurer gets a valid discharge of its liability under the policy.
The said amount however, can be claimed by the legal heirs of the deceased in accordance with the succession laws governing the deceased.
Thus, in case of life policies, it is important to have an appropriate nomination in place, to ensure that the proceeds are collected in trust.
Co-operative societies: Co-operative housing society, nomination ensures easy and hassle free transfer of the house. Every member of a society shall nominate a person(s) to whom in the event of his death, his right and interest in such societies shall be transferred. Nomination can be changed at any time. More than one nominee is permissible, provided they are of blood relations.
In case of co-operative societies, it is also necessary that there is a correlation between nomination and will. However, many individuals fear that nomination alone may not give ownership rights to nominees, in the same way as a will would do. At this point, one can infer that a nomination process with the society would involve the owner, the Providing nominations is one of the most basic and simplest steps towards estate planning. Equally important would be to review nominations on a periodic basis --------------------------------------------- Invest Mutual Funds Online Download Mutual Fund Application Forms from all AMCs Download Mutual Fund Application Forms Best Performing Mutual Funds
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| Principal Mutual Fund renames Fund - Principal Near Term Fund to Principal debt opportunities fund Posted: 02 Jul 2012 09:51 AM PDT Download Mutual Fund Application Forms
Principal Mutual Fund has announced that effective May 21, Principal near-term fund (an open-ended debt scheme) shall stand renamed as Principal debt opportunities fund.
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| Joint ownership of Property and tax benefit Posted: 02 Jul 2012 08:12 AM PDT Download Mutual Fund Application Forms
Buying properties jointly with one's spouse is very common. The wife's name is added as a precautionary or safety measure, that is, in order to retain ownership or smooth transfer of ownership in the case of any eventuality like the husbands death. But, in such cases the property purchase may or may not be shared between the spouses. Typically, the husband funds the property purchase while wife is just a co-owner.
As a result, it is assumed that the beneficial owner is the husband and all liabilities and rights — legal and / or tax-related — should ideally be the husband's. But, this may not always be the case.
Recently, Kapil Kumar (named changed) claimed exemption (under Section 54F) for capital gains he earned from sale of a plot of land by buying another residential property. The twist was that though all payments for purchase of the piece of land were made by Kumar, the house was purchased jointly by Kumar and his wife.
As a result, the Assessing Officer (AO), allowed Kumar to claim only 50 per cent of the exemption. Reason: The wife was a joint owner and hence had a share in the tax exemption.
Aggrieved by the AO's order, Kumar filed an appeal before the Commissioner of Income Tax (Appeals) or CIT(A). Here, too, Kumar's claim was dismissed.
However, in another appeal filed before the Income Tax Appellate Tribunal, Kumar succeeded. The Tribunal held that Kumar is entitled to full exemption under Section 54F.
Unfortunately, the Revenue Department filed an appeal with the Delhi High Court against the Tribunal's order.
The High Court observed that though the new residential house was purchased jointly by Kumar and his wife, Kumar had paid the stamp duty and corporation tax at the time of registration. Similarly, he had also paid commission and legal expenses for the house. Not even a single penny had been contributed by the wife. The property was purchased by Kumar jointly with his wife to avoid any litigation after his death. All the funds invested in the house were Kumar's as was evident from his bank statement. Therefore, as a matter of fact, Kumar was the real owner of the house.
Based on the aforesaid facts, the Court opined that the conditions stipulated in Section 54F are qualified. It would be treated as the property purchased by Kumar in his name and merely because his wife is a co-owner, it would not make any difference.
Section 54F of the Income Tax Act mandates that a house should be purchased by the assessee. And it does not stipulate that the house should be purchased in the name of the assessee only. Inclusion of the name of the wife should not stand in the way of the deduction legitimately accruing to the assessee. The objective of Section 54F (and the like provision such as section 54) is to provide impetus to house construction and so long as the purpose of house construction is achieved, a technicality should not impede the way of deduction which the legislature has allowed. Purposive construction is to be preferred as against the literal construction, more so when even literal construction also does not say that the house should be purchased in the name of the assessee only. Section 54F is a beneficial provision which should be interpreted liberally in favour of the exemption / deduction to a taxpayer and deduction should not be denied on hyper-technical ground.
The Court further went on to observe that the word 'assessee' must be given wide and liberal interpretation so as to include the assessee's legal heirs also. There is no warrant for giving too strict an interpretation to the word 'assessee' as that would frustrate the object of granting exemption.
The Court pointed out that that there were judgments of other High Courts giving benefit of Section 54F of the Income Tax Act when the house of an assessee is purchased jointly with his wife.
In view of the aforesaid discussion, the Court ruled that the exemption under section 54F is extendible to Kumar for the total consideration paid by him, for the purchase of the new asset (the residential property) in the joint name of himself and his wife. The appeal of the Revenue Department stood dismissed.
However, tax experts say that if both spouses have contributed to the purchase of a property, they can claim tax exemption in the proportion of their contribution. The key takeaway is that it doesn't matter in whose name the property stands, it is only the person who has effectively paid for the property that will be eligible to and can claim the tax deductions on the same. Often, in the case of properties bought on mortgage, just because of joint ownership, both husband and wife claim the interest deduction. Once again, here it needs to be ascertained which spouse has funded the property and the interest deduction has to be apportioned proportionally. Basically, it is effective ownership that counts and not merely what exists on paper. --------------------------------------------- Invest Mutual Funds Online Download Mutual Fund Application Forms from all AMCs Download Mutual Fund Application Forms Best Performing Mutual Funds
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| Bank Savings account at click of a button - ICICI Bank instant account number Posted: 02 Jul 2012 01:59 AM PDT Download Mutual Fund Application Forms
ICICI Bank offers 'instant number'; activation after KYC check
Now, get a new savings account at the click of a mouse.
ICICI Bank, the largest private sector lender in the country, is offering an 'instant account number' if you apply for a savings deposit account through its website.
While the account will be created instantly and a number allotted to the depositor, the bank will activate the account only on completion of the know-your-customer (KYC) process. The customer has to provide his e-mail address and mobile number at the time of opening the account.
The offer is available across seven types of savings deposit accounts of the bank. The savings accounts for which the account number will be instantly generated include Regular Savings, Silver Savings, Advantage Woman Savings, Senior Citizens Savings, Gold Privilege, Titanium Privilege and Salary. The offer is not available on joint accounts, wealth management accounts and Young Stars accounts.
The move is aimed to increase the bank's savings deposit base by making the account opening process simple.
"This particular service will help a customer to apply online at his convenience without having to walk into a branch. It is a simple 3-step process, at the end of which the customer gets his account number. The account is activated following the fulfillment of the mandatory KYC process," a ICICI Bank spokesperson said.
ICICI Bank's savings deposit expanded 13.7 per cent year-on-year to ~76,046 crore in 2011-12. The bank closed last financial year with a (current account/savings account) ratio of 43.5 per cent. The bank is currently offering this service in 17 locations, including the four metro centers and other major cities in the country. The lender is expected to expand this service in other centers soon. --------------------------------------------- Invest Mutual Funds Online Download Mutual Fund Application Forms from all AMCs Download Mutual Fund Application Forms Best Performing Mutual Funds
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| Do not move away from Equity Investing Posted: 01 Jul 2012 11:25 PM PDT Download Mutual Fund Application Forms It's time to accumulate preferably through a systematic plan In 2010-11, agriculture contributed around 17 percent, services contributed 54 per cent and manufacturing contributed the remaining 29 per cent. In 1990-91, just before reforms began, the contribution of agriculture in GDP was much higher at 32 per cent, services' contribution was lower at 41 per cent and manufacturing was also lower at 27 per cent.
Since the corporate sector had little presence in agriculture, earnings trends were often divorced from GDP growth at that point of time. What is more, since large chunks of corporate India were unlisted, given the monopolistic dominance of unlisted PSUs, there was little interest in tracking corporate trends. That disconnect no longer exists. By and large, corporate growth seems to march in step with GDP growth. A much larger chunk of the economy is also listed, making it easier to track.
In the past decade or even longer, there hasn't been a single fiscal when acceleration or deceleration in GDP growth wasn't matched by a similar trend in corporate growth. There are differences of emphasis and leads and lags, of course. The investment-consumption mix also seems to make a difference in terms of the sectors that outperform and underperform.
This correlation between corporate performance and macro-economic performance gives us an interesting tool to check budgetary estimates versus corporate earnings estimates. Budgetary estimates are top down and they incorporate large error factors. Corporate estimates are bottom-up and carry an error factor as well. Both budgetary estimates and corporate estimates tend to be over-optimistic – it doesn't pay to be a pessimist in either politics or investment.
But recent history tells us that both sets of estimates are more likely to be correct – or rather, the error factors will be smaller - if they are both trending in the same direction. If they are at variance in terms of trend, the corporate estimates are more likely to be correct.
There may be a variety of reasons why corporate estimates are usually slightly more accurate. Maybe its simply easier to gather data on, and study a given company, or sector, than to map the course of an entire national economy. Another is that a corporate analyst has his or her personal livelihood at stake, if egregious errors occur. A third is of course, senior executives and promoters may lose both credibility and net worth if they intentionally mislead auditors and analysts.
As of now, there is indeed a variance in estimates. The budget estimates suggest that some sort of rebound in GDP growth is expected during 2012-13. Meanwhile, corporate earnings estimates have been cut after the Q4 results.
The consensus on the Nifty Sensex basket is that earnings growth in FY 2012-13 is likely to be 2-3 per cent lower than the estimates made in February after Q3 results. What is more, the earnings downgrades are pretty much across the board. To my mind, slow corporate growth implies lower than assumed revenue collections, as well as lower than estimated GDP growth.
There may be positive earnings surprises in 2012-13. Or inflation may suddenly drop. Or the global economy may sort itself out sending another flood of cash India's way. But the current data backs the pessimistic outlook. Consumer price inflation is above 10 per cent and the index of industrial production is negative. What is worse is that this trend of slower growth and high inflation has been visible now for over a year.
There is no sign that the government is prepared to take policy action to combat it. If the policy drift continues, there is a high probability that the market will also continue to head downwards. Under such circumstances, it is very difficult to make money in the short-term.
People above a certain age will remember the situation between 1996 and 1998 when the market went nowhere for three years. They may also recall the situation between 2000-2003 when the market went down for four years.
We could see another long bear market of a similar nature. The problem is, there isn't much an investor can do in circumstances where growth is flattening out and equity prices are going sideways or down. Waiting it out is about the best strategy.
There is no sense in abandoning equities at these levels. Eventually, the Nifty will go back above 6,000 so there is some margin of safety. Keep accumulating steadily, preferably using some sort of systematic plan. Defensive sectors like FMCG and pharma will definitely retain more value than the overall market so it makes sense to go overweight in these stocks.
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| Posted: 01 Jul 2012 10:26 PM PDT Download Mutual Fund Application Forms
In case a non-legal heir is a nominee, writing a will can help LIFE insurance policies help on maturity or in the event of untimely death of the policyholder. But, to ensure that your loved ones get the money you intended to leave behind for them without any hassle, you must nominate your family or legal heir to receive the proceeds from the life insurance policy. Nomination can be made in a life insurance policy where the one that proposes and the person whose life has been insured are the same. A nominee is usually chosen while buying a policy by providing details in the proposal form. However, one can nominate someone else or change the nominee during course of the policy.
Nomination prevents disputes and delays in settlement of death claims. It is important to give correct and valid nomination for the insurance policy so that later on, the family of the policyholder can get sum in sured at the earliest.
In several instances, customers forget to review or change nominations, such as an ex-wife after divorce. In case of untimely demise of the policyholder, despite not being a legal heir, the nominee will get the policy payout. The insurance company generally releases the payment to the nominee, unless informed of the complexities well in advance. If there is no nominee in the policy, the process of getting a policy payout can be a hassle. In the absence of a will, the claimant will have to get a succession certificate from the court to prove that he/she is the rightful heir to the policy payout.
Insurance companies discourage policyholders from nominating people who are not legal heirs. We tell them that in the absence of a right nominee, the whole point of buying an insurance policy to cover risk in the future may be futile. One can also have multiple or successive nominations. Nomination can be changed by filling up a simple form with information of the new nominee. ------------------------------------------- Invest Mutual Funds Online Download Mutual Fund Application Forms from all AMCs Download Mutual Fund Application Forms Best Performing Mutual Funds
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| Debt Market Investment Strategies Posted: 01 Jul 2012 07:44 PM PDT Download Mutual Fund Application Forms
The Reserve Bank of India (RBI), in the last monetary policy review in April 2012, surprised the markets with a 50 basis points repo rate cut, vis à -vis market expectations of 25 basis points. RBI's announcement came in the backdrop of falling core inflation data and tepid economic growth. The fiscal deficit target of 5.1 per cent for FY13, though lower than FY12, could be a big challenge for the government to achieve, on account of limited pass-through of higher oil prices to end users and slippages in revenue collections. Any slippage in deficit is likely to lead to higher government borrowings, which could not only put pressure on yields but also pose a threat to growth by crowding out private investments.
In the near term, we see limited scope of further monetary easing in the coming months on account of factors, such as an elevated crude oil price, an inflationary budget and weak rupee, all of which pose upside risks to inflation. In the medium term, we could be looking at an aggregate repo rate cut of 100 basis points in FY13, of which 50 basis points has already been front-ended, along with some measures to address the liquidity deficit in the system. We hold the view that if India's gross domestic product (GDP) growth rate continues to be below trend, we could see inflation declining further and give some room to RBI to initiate further rate cuts in the latter half of FY13.
We believe that short-term income funds, which have an average maturity of two to three years, will do well for investors in the current scenario. While the yield curve has steepened mildly post-rate cut in April, further steps to ease liquidity and falling inflation are expected to lead to decline in short-term rates and steepen the curve further over the next 12 to 15 months. In such a scenario, short-term income funds can outperform the ultra-short and liquid funds. In the longer end, government securities' (G-Sec) yields are likely to be range-bound. While the supply pressure, accompanied with limited scope of monetary easing, could put a floor to yields, the magnitude of Open Market Operations (OMO) could potentially put a cap on yields. Since we are not expected to see a steady decline in G-Sec yields, funds which will be actively and dynamically managed, can gain from the market opportunities. Such funds have the flexibility to invest across fixed income assets and can be looked at with a medium-term horizon of 18 months and above. --------------------------------------------- Invest Mutual Funds Online Download Mutual Fund Application Forms from all AMCs Download Mutual Fund Application Forms Best Performing Mutual Funds
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| Systematic Transfer Plan - STP Posted: 29 Jun 2012 09:46 AM PDT The basic premise of systematic investment plans (SIP) is that you shouldn't invest in one go, you should spread your investments to take advantage of different market levels. An STP is a systematic transfer plan that is useful when you have a big amount to invest, but don't want to invest it into an equity mutual fund in lump sum, because you might catch a peak. In such a scenario, you can invest that entire amount in a debt fund or a liquid fund, which are not affected by the ups and downs of the equity markets. And from that debt fund, you mandate that a particular amount is periodically transferred to an equity fund. That is how an STP works.
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| Sundaram India leadership fund merged with Sundaram growth fund Posted: 29 Jun 2012 08:51 AM PDT Download Mutual Fund Application Forms
Sundaram Mutual Fund has approved the merger of Sundaram India leadership fund with Sundaram growth fund. The merger will be effective from July 11
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| Bharti AXA Life Young India Plan Posted: 29 Jun 2012 12:47 AM PDT
FEATURES: Bharti Axa Life Young India Plan is a regular premium and traditional participating plan. This plan is specially designed for the young and offers life cover risk till the insured reaches retirement age of 60.
For example, for a 25-year-old male, for a base sum assured of Rs 2,00,000 premium will be Rs 11,678. In case he opts to increase life cover at the first milestone after his wedding at the age of 31 by Rs 8,00,000, he will be charged an additional annual premium of Rs 1,688. If he chooses to raise his life cover by Rs 40,00,000 at the second milestone of childbirth, the additional annual premium will be Rs 9,440.
Anyone who has financial responsibility must buy a term plan with significant life cover so that in case of an unfortunate event in the future, the interest of the family can be safeguarded. There are no maturity benefits in a term plan. This plan has limitations because the additional life cover terminates at 50 years, which is hardly a time when all responsibilities are met.
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| Mutual Fund Statistical Ratios - Useful to study Mutual Funds Posted: 25 Jun 2012 10:59 PM PDT Download Mutual Fund Application Forms
What is Standard Deviation?
What is Beta?
What is R-Square?
What is Portfolio P/B Ratio?
What is Jenson's Alpha? What is Turnover Ratio? -------------------------------------------- Invest Mutual Funds Online Download Mutual Fund Application Forms from all AMCs Download Mutual Fund Application Forms Best Performing Mutual Funds
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| Posted: 25 Jun 2012 08:46 PM PDT Download Mutual Fund Application Forms
Jeevan Vaibhav is a smart adaptation of the Jeevan Vriddhi policy launched by LIC a few months ago. Jeevan Vriddhi offered returns ranging from 4.7% to 7.09% compounded annual growth rate (CAGR) and death cover equal to five times the amount of single premium. For Jeevan Vaibhav, LIC has limited the death cover to about twice the amount of single premium and has increased the annual returns to 7.7% to 8.0% CAGR instead.
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| Capital Protection Funds - A closed ended debt mutual fund Posted: 25 Jun 2012 10:22 AM PDT Download Mutual Fund Application Forms
As the tenure of the scheme increases, allocation to equities also goes up as less money is required to ensure the capital at the end of the tenure, compared to a scheme with a shorter tenure. Should You Invest? Markets have been range bound with downward bias for the past couple of years. Most of the negatives are already in the price. The attractive valuations of Indian equities make good investment case with a three-year view. If you are keen on investing in stocks, but really worried about the downside risk, you can consider investing in a capital protection oriented fund. These funds make sense for risk-averse investors looking for options to invest in equities, provided they are willing to remain invested throughout the term of the scheme. Downside But capital protection oriented funds have some disadvantages as well. Being a closed-ended scheme, it is listed on the stock exchange and there is little chance that you will get to exit at fair value because of the poor liquidity of most such products listed on the exchanges. The second big disadvantage is that these funds are taxed like debt mutual funds. Long term capital gains are taxed at 10.3% without indexation or 20.6% with indexation, whichever is lower. Also, according to mutual fund experts, the performance of these schemes has been a mixed bag. There are 45 capital protection oriented funds across 11 fund houses listed on the stock exchanges. If you do it yourself, you need not sacrifice liquidity all together and can bring down the tax impact, too. You can pick up a combination of three-year fixed maturity plan from a reputed fund house and an equity fund with good track record. Decide your extent of investment in the FMP by looking at the prevailing yields for that tenure and invest the rest in equities. For example, in case of the three-year tenure, if the yield for the three-year paper is around 8%, you should put 80% of your corpus in FMP. For 7% and 9% the share of FMP should be 82% and 77% in your money. Rest of the money goes into an equity fund. Here the tax impact will be lower than CPOF, but money invested in the FMP won't be liquid. If you are in the lowest tax bracket, you can also consider investing in a combination of a bank fixed deposit and an equity fund. But if you don't have time to zero in on the right schemes and find mathematics difficult, opt for a CPOF. -------------------------------------------- Invest Mutual Funds Online Download Mutual Fund Application Forms from all AMCs Download Mutual Fund Application Forms Best Performing Mutual Funds
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| When to choose traditional insurance policies and when ULIPs Posted: 25 Jun 2012 08:56 AM PDT Download Mutual Fund Application Forms
CHOOSING the right life insurance product is not easy. It requires careful thought and consideration, and, a thorough evaluation of your present financial circumstances and your requirements in the future.
Life insurance products are broadly categorised into traditional and unit linked (most commonly equity-linked) products. The difference between traditional and equity-linked products depends on whether the investment risk is borne by the insurer or by the customer. In simple terms, a traditional product is where the premiums are invested by the insurer (as per the regulatory investment guidelines) and the customer gets certain guaranteed and non-guaranteed benefits for paying and non-guaranteed benefit premiums. In unit-linked products, the customer chooses (from a list of available funds), the investment option, and, his/her premiums are allocated after deducting charges. The value of these invested funds could then go up or down depending on the performance of the underlying investment (typically equity shares), and this risk is borne the customer and not the insurance company.
So, how does one decide which product is more suitable? Before buying, it is important that you review your financial plan.
One should note that the core objective of buying insurance is protection of the family in unfortunate circumstances. Whichever type of product you choose, first ensure that the level of protection is in line with your requirements, that is, your income, number of dependents and age. In both traditional and unit-linked products, you can tailor the protection level by choosing the appropriate sum assured and add-on protection riders. Once your family protection is assured, we can set out some general guidelines.
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| Bharti AXA Regular Return Fund - Change in Fund Manager Posted: 25 Jun 2012 07:27 AM PDT Download Mutual Fund Application Forms Bharti AXA Mutual Fund has changed the fund manager of Bharti AXA Regular Return Fund, with effect from May 21, 2012. Now, Mr. Alok Singh, Chief Investment Officer-Fixed Income will be designated as the fund manager in place of Mr Ramesh Rachuri & Mr Gaurav Kapur
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| Know your Insurance objectives Posted: 25 Jun 2012 01:56 AM PDT
THERE are a few assumptions that need to be changed when it comes to the area of insurance. Looking at these details while taking an insurance decision will help in deciding the list of policies to build the required insurance cover, as well as tackle the changing situation over a period of time. Here is a look at some of these areas for a proper decision when required.
Insurance and returns: One of the first things that most people want is some form of return from their insurance policy. This is not necessary as there are different types of policies with different set goals. If there is a savings policy, it will generate some returns, but when it comes to other types of policies like a term plan, there is no question of any returns. Term policies are meant for the general protection of the family members or dependents in case of death of the breadwinner of the family and, hence, there will be a large payout of premium. Thus, the nature of the policy has to be seen to measure the returns.
Higher insurance is required: One of the things that a lot of people believe in is that there has to be a high insurance cover present, but this is not always the case. If there is just a single dependent on the individual, and the financial condition is such that a certain amount of insurance cover would be required, then the moment the amount requirement is fulfilled, there is no need to undertake any more action. In many cases, even though the total insurance cover is adequate, just because there is a need to generate higher business, there is advice given to the individual to take another insurance policy to increase the total figure. This can lead to a situation where they will actually have more insurance than what they actually require.
All goals can be achieved through insurance: There is also a tendency among people to look at objectives and then try and achieve the same by using insurance policies.
Think about the fact as to whether you use equities or gold for every goal that you want to achieve, and the answer would be no. Similar should be the condition when it comes to insurance. There is a way in which the insurance policies are structured and positioned, but this does not mean that the individual has to use them in that particular way. What is important is that the person has to see the actual use to which the policies can be put to, and then match what can be done with what is available.
Think long term: Another thing to consider while taking an insurance policy is to look at the long term situation, and not just think about the next three or five years. Once this kind of perspective is available, it would be easier to decide on the insurance policies, for your different needs. This will also help in realising the true benefits of the instrument, and in getting the best out of the situation.
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