Tuesday, October 16, 2012

Prajna Capital

Prajna Capital


How to save tax by investing in Post Office Time Deposit (POTD)?

Posted: 16 Oct 2012 05:11 AM PDT

Invest Mutual Funds Online

Call 0 94 8300 8300 (India)



POTDs are similar to bank fixed deposits.

Although available for varying time duration like one year, two year, three year and five year, only 5-Yr post-office time deposit (POTD) qualifies for tax saving under section 80C.

Happy Investing!!

We can help. Call 0 94 8300 8300 (India)

Leave your comment with mail ID and we will answer them

OR

You can write back to us at PrajnaCapital [at] Gmail [dot] Com

 

---------------------------------------------

Invest Mutual Funds Online

Transact Mutual Fund Online

Download Mutual Fund Application Forms from all AMCs

Download Mutual Fund Application Forms

Best Performing Mutual Funds

    1. Largecap Funds Invest Online
      1. DSP BlackRock Top 100 Fund
      2. ICICI Prudential Focused Blue Chip Fund
      3. Birla Sun Life Front Line Equity Fund
    2. Large and Midcap Funds Invest Online

      1. ICICI Prudential Dynamic Plan
      2. HDFC Top 200 Fund
      3. UTI Dividend Yield Fund
    1. Mid and SmallCap Funds Invest Online

      1. Reliance Equity Opportunities Fund
      2. DSP BlackRock Small & Midcap Fund
      3. Sundaram Select Midcap
      4. IDFC Premier Equity Fund
    1. Small and MicroCap Funds Invest Online

      1. DSP BlackRock MicroCap Fund
    1. Sector Funds Invest Online

      1. Reliance Banking Fund
      2. Reliance Banking Fund
    1. Tax Saver Mutual  Funds  Invest Online
      1. ICICI Prudential Tax Plan
      2. HDFC Taxsaver
      3. DSP BlackRock Tax Saver Fund
      4. Reliance Tax Saver (ELSS) Fund
    2. Gold Mutual Funds Invest Online

      1. Relaince Gold Savings Fund
      2. ICICI Prudential Regular Gold Savings Fund
      3. HDFC Gold Fund


The current rate of interest on the 5 year POTD is 7.50% p.a., compounded quarterly. The minimum investment amount is Rs. 200, there is no maximum investment amount. Interest on these deposits is calculated quarterly and paid out annually.

Return (p.a.)

Effective 7.71% as interest is compounded quarterly

Risk

NIL

Lock In

5 years

Income from Investment

Fully taxable

Maturity Proceeds

Maturity proceeds includes interest which is already taxed every year

NRI/PIO eligible

No

Franklin India Smaller Companies Fund

Posted: 16 Oct 2012 03:55 AM PDT

Buy Gold Mutual Funds

Invest Mutual Funds Online

Download Tax Saving Mutual Fund Application Forms

Call 0 94 8300 8300 (India)

Mid and small cap stocks are stocks of companies having a high growth potential over longer time frame. To put it simply, they have the potential of being large caps of future. But having said that mid cap stocks are high risk-high return investment proposition as they aim to generate wealth by generating a superior alpha (as compared to large caps) returns, but exposing their investors to greater risk. Moreover, during turbulent times they have a tendency to fall more as compared to stocks in the large cap segment. Hence the funds focusing on the mid and small cap segment are ideal for investors willing to take high risk for relatively higher gains.

Franklin India Smaller Companies Fund (FISCF) is one such open-ended fund from the stable of Franklin Templeton Mutual Fund, which follows a blend style of investing. Being launched in January 2006 the fund has completed over 5 years now.

Primary objective of the fund is "to provide long-term capital appreciation by investing in mid and small cap companies. "Moreover, it follows a mandate of investing 75% - 100% of its assets in smaller companies, while its exposure to other companies may vary in the range of 0%-25%. Also having a defensive consideration, the scheme may invest upto 25% of its assets in debt and money market instruments to manage its liquidity requirements.

 

Equity Portfolio

Holdings

April 2011

May 2011

June 2011

July 2011

August 2011

Pidilite Industries Ltd.

6.3

6.3

7.1

6.9

7.2

Ipca Laboratories Ltd.

4.1

4.7

5.0

5.0

5.3

Gujarat State Petronet Ltd.

4.1

4.3

4.1

4.9

5.3

Amara Raja Batteries Ltd.

2.9

3.4

3.7

4.1

4.8

IndusInd Bank Ltd.

4.1

3.4

3.7

3.8

4.3

Bharti Airtel Ltd.

3.2

2.6

2.9

4.1

4.2

Gujarat Mineral Devp. Corpn. Ltd.

2.8

3.0

3.3

3.6

4.1

Exide Industries Ltd.

2.7

3.0

3.1

3.1

3.3

Yes Bank Ltd.

2.1

1.4

2.9

3.0

3.0

FDC Ltd.

2.8

2.8

2.7

2.8

2.9



 

Being benchmarked against the CNX Midcap Index; FISCF's portfolio constitutes of 'A' and 'B' group stocks, but 'B' group ones hold a dominance constituting 78% of the portfolio. It is comprised of total 49 stocks as per the latest portfolio. Top-10 stocks and top-5 sectors constitute 44.32% and 43.64% respectively. While undertaking its stock picking activity, FISCF follows a bottom up approach, and assigns more weightage to company specific factors rather than sectorial trait and performance. Moreover, the fund manager refrains from churning the portfolio too often (as revealed by its petite portfolio turnover ratio of 0.53 times), and adopts a "buy and hold" strategy.

 

How FISCF has fared vis-à-vis its peers

Scheme Name

6-Mth (%)

1-Yr (%)

3-Yr (%)

5-Yr (%)

Std. Dev. (%)

Sharpe Ratio

DSPBR Small & Mid Cap (G)

5.4

-12.7

21.3

-

9.90

0.15

Sundaram Select Midcap (G)

5.7

-11.3

18.6

12.6

11.25

0.12

SBI Magnum Global'94 (G)

11.6

-7.2

15.6

10.2

10.99

0.11

Birla SL Midcap (G)

3.1

-16.2

15.2

12.6

10.61

0.11

Franklin India Smaller Cos (G)

-0.3

-15.4

13.5

5.0

10.35

0.09

JPMorgan India Smaller Cos (G)

2.9

-13.2

8.0

-

10.47

0.06

CNX Midcap

-2.6

-19.6

11.4

10.2

10.29

0.07

(Standard Deviation and Sharpe ratio is calculated over a 3-Yr period. Risk-free rate is assumed to be 6.37%)

The table above reveals that the performance of FISCF has not been very luring. Over a 3-Yr and and 5-Yr time frame, the fund has clocked a return of 13.5%and 5.0% respectively, thereby outperforming its benchmark over a 3-Yr time frame, but failed to match the performance of its benchmark over 5-Yr time frame.

Also, when assessed on the volatility front, FISCF has exposed its investors to rather high risk (as revealed by its Standard Deviation of 10.35%) and the risk adjusted returns (as reveled by the Sharp Ratio of 0.09) are quite ordinary, thus making it a high risk-moderate return investment proposition in the category.

 

Fund Manager Profile

Name of the Fund Manager

Mr. K. N. Sivasubramanian

Mr. R. Janakiraman

Total Work Experience

Over 16 years

Over 13 years

Managing the fund since

Apr-07

Feb-08

Qualifications

B.E (REC, Jaipur), PGDM (IIM-C)

B.E (GCT, Coimbatore), PGDM (IIM-B)

 

Although the returns generated by Franklin India Smaller Companies Fund are not very stellar, existing investors can continue to hold their investments in the said fund. This is because the portfolio held by the fund is well diversified and robust, where after a bottom-up approach adopted by the fund manager, not much churning is carried out. On the returns front, yes it exposes its investors to higher risk, but the risk-adjusted returns are quite moderate.

We believe that investors would be better-off by investing in funds which have exposed investors to lower risk and have a proven track record across market cycles. You should always take an expert opinion before investing, as holding merely funds for the longer duration wouldn't ensure better returns but better fund management coupled with patience surely does. 

Happy Investing!!

We can help. Call 0 94 8300 8300 (India)

Leave your comment with mail ID and we will answer them

OR

You can write back to us at PrajnaCapital [at] Gmail [dot] Com

 

---------------------------------------------

Invest Mutual Funds Online

Transact Mutual Fund Online

Download Mutual Fund Application Forms from all AMCs

Download Mutual Fund Application Forms

Best Performing Mutual Funds

    1. Largecap Funds Invest Online
      1. DSP BlackRock Top 100 Fund
      2. ICICI Prudential Focused Blue Chip Fund
      3. Birla Sun Life Front Line Equity Fund
    2. Large and Midcap Funds Invest Online

      1. ICICI Prudential Dynamic Plan
      2. HDFC Top 200 Fund
      3. UTI Dividend Yield Fund
    1. Mid and SmallCap Funds Invest Online

      1. Reliance Equity Opportunities Fund
      2. DSP BlackRock Small & Midcap Fund
      3. Sundaram Select Midcap
      4. IDFC Premier Equity Fund
    1. Small and MicroCap Funds Invest Online

      1. DSP BlackRock MicroCap Fund
    1. Sector Funds Invest Online

      1. Reliance Banking Fund
      2. Reliance Banking Fund
    1. Tax Saver Mutual  Funds  Invest Online
      1. ICICI Prudential Tax Plan
      2. HDFC Taxsaver
      3. DSP BlackRock Tax Saver Fund
      4. Reliance Tax Saver (ELSS) Fund
    2. Gold Mutual Funds Invest Online

      1. Relaince Gold Savings Fund
      2. ICICI Prudential Regular Gold Savings Fund
      3. HDFC Gold Fund

 

 

SIP in Gold

Posted: 16 Oct 2012 02:53 AM PDT

Buy Gold Mutual Funds

Invest Mutual Funds Online

Download Tax Saving Mutual Fund Application Forms

Call 0 94 8300 8300 (India)

SIP in Gold

SBI Gold Fund enables you to invest in gold through Systematic Investment Plan (SIP), thus inculcating a regular savings habit to your investments. This ensures that you can reap the benefits of investing in gold through a small but regular amount. The following table shows the SIP returns in Gold for the past 10 years. It is seen that Gold has displayed a consistency in performance.

 

Period

1 Year

3 Years

5 Years

7 Years

10 Years

Amount Invested

60,000

180,000

300,000

420,000

600,000

SIP Start Date

01/08/2010

01/08/2008

01/08/2006

01/08/2004

01/08/2001

Gold Price (Rs/Gm) (As on July 29, 2011)

2292.98

2292.98

2292.98

2292.98

2292.98

Total no. of units accumulated

30

110.98

233.55

411.97

767.04

Investment value (as on July 29, 2011) in Rs.

68,797.16

254,483.35

535,535.46

944,640.43

1,758,806.03

Returns on SIP in Gold (%)

28.63%

23.94%

23.44%

22.80%

20.41%

Source: Bloomberg. Past Performance may or may not be sustained in future.

Happy Investing!!

We can help. Call 0 94 8300 8300 (India)

Leave your comment with mail ID and we will answer them

OR

You can write back to us at PrajnaCapital [at] Gmail [dot] Com

 

---------------------------------------------

Invest Mutual Funds Online

Transact Mutual Fund Online

Download Mutual Fund Application Forms from all AMCs

Download Mutual Fund Application Forms

Best Performing Mutual Funds

    1. Largecap Funds Invest Online
      1. DSP BlackRock Top 100 Fund
      2. ICICI Prudential Focused Blue Chip Fund
      3. Birla Sun Life Front Line Equity Fund
    2. Large and Midcap Funds Invest Online

      1. ICICI Prudential Dynamic Plan
      2. HDFC Top 200 Fund
      3. UTI Dividend Yield Fund
    1. Mid and SmallCap Funds Invest Online

      1. Reliance Equity Opportunities Fund
      2. DSP BlackRock Small & Midcap Fund
      3. Sundaram Select Midcap
      4. IDFC Premier Equity Fund
    1. Small and MicroCap Funds Invest Online

      1. DSP BlackRock MicroCap Fund
    1. Sector Funds Invest Online

      1. Reliance Banking Fund
      2. Reliance Banking Fund
    1. Tax Saver Mutual  Funds  Invest Online
      1. ICICI Prudential Tax Plan
      2. HDFC Taxsaver
      3. DSP BlackRock Tax Saver Fund
      4. Reliance Tax Saver (ELSS) Fund
    2. Gold Mutual Funds Invest Online

      1. Relaince Gold Savings Fund
      2. ICICI Prudential Regular Gold Savings Fund
      3. HDFC Gold Fund

 

 

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