Prajna Capital

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• DSP BlackRock Mutual Fund
• Debt Mutual Funds - Tenure, credit ratings are the key
• Reliance MF offers portfolio SIP

DSP BlackRock Mutual Fund Posted: 19 Jan 2013 09:13 AM PST   This asset management company completed 15 years of its existence in April this year. All these years all that has changed is its name: from DSP Merrill Lynch to DSP BlackRock post the financial crisis of 2008. This change in name had nothing to do with the financial woes experienced by Merrill Lynch in 2008. In 2006, the asset management business of Merrill Lynch (Merrill Lynch Investment Managers) was combined with BlackRock. The Indian operations got rechristened DSP BlackRock in 2008 and has had no change in its management or investment philosophy.   Throughout its history, this AMC has focused on its fund performance and not believed in launching new schemes for the sake of it. This belief has resulted in the fund house having a wide range of fund offerings across all categories and some novel funds. DSPBR Micro Cap fund, which invests predominantly in the small companies, is a fund that stands out for its focus on an investment theme less travelled. The fund house has a wide range of offerings with some very interesting and well-performing global funds such as a world mining fund, a world gold fund, energy fund, agriculture fund and in recent months a US flexible equity fund. There have been schemes from this AMC that do well over the long run and have been consistent with their performance.   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 in Tax Saving Mutual Funds ( ELSS Mutual Funds ) to upto Rs 1 lakh and Save tax under Section 80C.   Invest Tax Saving Mutual Funds Online Tax Saving Mutual Funds Online These links can be used to Purchase Mutual Funds Online that are regular also (Investment, non-tax saving)   Download Tax Saving Mutual Fund Application Forms from all AMCs Download Tax Saving Mutual Fund Applications   These Application Forms can be used for buying regular mutual funds also   Some of the best Tax Saving Mutual Funds available ( ELSS Mutual Funds ) ICICI Prudential Tax Plan  Invest Online HDFC TaxSaver   Invest Online DSP BlackRock Tax Saver Fund   Invest Online Reliance Tax Saver (ELSS) Fund   Invest Online Birla Sun Life Tax Relief '96 Invest Online IDFC Tax Advantage (ELSS) Fund  Invest Online SBI Magnum Tax Gain Scheme 1993   Invest Online Sundaram Tax Saver   Invest Online Edelweiss ELSS Invest Online   Invest in Tax Saving Mutual Funds Download Any Application Forms Buy Mutual Funds Online Invest Online Buy Gold Mutual Funds Invest Now

Debt Mutual Funds - Tenure, credit ratings are the key Posted: 19 Jan 2013 08:07 AM PST Indian investors prefer investing in debt products like bank fixed deposits (FDs) for reasons such as guaranteed returns (low interest rate risk) and low probability of default (credit risk). In contrast, debt mutual funds have not yet caught up as an investment avenue, mainly because they do not offer guaranteed returns and are volatile in performance. However, it is important for investors to understand the key factors responsible for such uncertainty or volatility in the performance of debt mutual funds so that they are better positioned to benefit from these funds: Debt fund valuations: Impact of credit rating and maturity period (duration) Debt fund valuations depend on the prices of the underlying portfolios of securities, which may fluctuate either way (like stocks) on a day-today basis depending on market dynamics. Hence, the daily net asset value (NAV) of a debt fund may or may not always move upwards. Fluctuation in prices of debt securities leads to volatility in the NAVs of debt funds. Valuation of debt securities is dependent on the interest (coupon) paid by the instrument and the expected return (yield) from such securities. Here, coupon is pre-decided, while yield is largely driven by market factors like repo rates, liquidity situation, etc. The coupon paid is dependent on two other variables: Duration of the security and the credit rating of the security. Investors expect higher coupon from securities that have a longer maturity. This is because uncertainty about interest rates rises as the period gets longer. To compensate for the higher risk, higher coupons are offered for long periods. Further, from a credit rating perspective, a higher rated security would offer a lower coupon and vice versa. Government-owned (sovereign) securities have no default risk. Hence, for a similar maturity period, such a security would offer a lower coupon compared to a AAA-rated corporate security, which in turn would offer a higher coupon than a AA-rated security. Inverse relationship Most investors are unaware of the inverse relationship between price and yield of debt instruments: When the price of a security goes down, the yield on the paper goes up. For example, if one buys a debt instrument with a 10% coupon at a price of Rs 100 per unit, the yield is the same as the coupon, that is 10% (coupon divided by the price). When the price goes down, to say Rs 90, then the yield rises to 11.11% as the same coupon is now available at a lower price. Conversely, if the price rises to Rs 110, the yield drops to 9.09%, clearly indicating the inverse relationship. To derive maximum benefit from this relationship, one must be invested in long-term debt funds or instruments when interest rates are expected to fall. Importantly, long-term securities are more sensitive to interest rate movement than short-term securities. Hence, when interest rates rise, short-term security prices decline less vis-à-vis long-term securities. Debt fund management largely a play on duration in India Most Indian debt mutual funds prefer investing in the highest rated securities. However, from a credit perspective, there is a separate breed of funds called credit opportunity funds that try to maximize returns by investing in lower rated securities. Here, the fund manager's skill is in ascertaining the right securities that have minimal probability of default. However, the true skill of a fund manager lies in the call on duration, in other words the direction of interest rate. If a fund manager feels that interest rates are going to fall in the near term, he/she would increase the average maturity (duration) of the portfolio and decrease if he/she feels interest rates would rise. His/her skill in predicting interest rates and creating a portfolio of securities with relevant maturity (long or short) can earn significant returns for the investors. Some of the best Tax Saving Mutual Funds available ( ELSS Mutual Funds ) ICICI Prudential Tax PlanInvest Online HDFC TaxSaver Invest Online DSP BlackRock Tax Saver Fund Invest Online Reliance Tax Saver (ELSS) Fund Invest Online Birla Sun Life Tax Relief '96 Invest Online IDFC Tax Advantage (ELSS) Fund Invest Online SBI Magnum Tax Gain Scheme 1993 Invest Online Sundaram Tax Saver Invest Online Edelweiss ELSS Invest Online ---------------------------------------- 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 Largecap FundsInvest Online DSP BlackRock Top 100 Fund ICICI Prudential Focused Blue Chip Fund Birla Sun Life Front Line Equity Fund Large and Midcap FundsInvest Online ICICI Prudential Dynamic Plan HDFC Top 200 Fund UTI Dividend Yield Fund Mid and SmallCap FundsInvest Online Reliance Equity Opportunities Fund DSP BlackRock Small & Midcap Fund Sundaram Select Midcap IDFC Premier Equity Fund Small and MicroCap FundsInvest Online DSP BlackRock MicroCap Fund Sector FundsInvest Online Reliance Banking Fund Reliance Banking Fund Gold Mutual Funds Invest Online Relaince Gold Savings Fund ICICI Prudential Regular Gold Savings Fund HDFC Gold Fund Invest in Tax Saving Mutual Funds Download Any Application Forms Buy Mutual Funds Online Invest Online Buy Gold Mutual Funds Invest Now

Reliance MF offers portfolio SIP Posted: 19 Jan 2013 07:22 AM PST Reliance Mutual Fund has launched portfolio systematic investment plan (PSIP) that will enable retail customers to invest in multiple schemes run by the company.   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 in Tax Saving Mutual Funds ( ELSS Mutual Funds ) to upto Rs 1 lakh and Save tax under Section 80C. Invest Tax Saving Mutual Funds Online Tax Saving Mutual Funds Online These links can be used to Purchase Mutual Funds Online that are regular also (Investment, non-tax saving) Download Tax Saving Mutual Fund Application Forms from all AMCs Download Tax Saving Mutual Fund Applications These Application Forms can be used for buying regular mutual funds also Some of the best Tax Saving Mutual Funds available ( ELSS Mutual Funds ) ICICI Prudential Tax Plan Invest Online HDFC TaxSaver Invest Online DSP BlackRock Tax Saver Fund Invest Online Reliance Tax Saver (ELSS) Fund Invest Online Birla Sun Life Tax Relief '96 Invest Online IDFC Tax Advantage (ELSS) Fund Invest Online SBI Magnum Tax Gain Scheme 1993 Invest Online Sundaram Tax Saver Invest Online Edelweiss ELSS Invest Online Invest in Tax Saving Mutual Funds Download Any Application Forms Buy Mutual Funds Online Invest Online Buy Gold Mutual Funds Invest Now

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