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| Birla Sun Life Dynamic Bond Fund Posted: 24 Jul 2013 04:42 AM PDT Invest In Tax Saving Mutual Funds Online Call 0 94 8300 8300 (India)
Birla MF Dynamic Bond Fund
For riding interest rate cycles
If you are looking to add some debt to your equity-laden long-term portfolio, then Birla Sun Life Dynamic Bond fund is a good choice. With a return of 9.7 per cent annually in the last five years, the fund holds potential to deliver inflation-beating returns in the long term. The above return is a good three percentage points higher than its index Crisil Composite Bond index.
Suitability
Birla Sun Life Dynamic Bond is particularly suitable at this point in time what with interest rates offered by fixed deposits slowly receding.While fixed deposits of banks and companies offer attractive returns in high interest rate periods, they cannot sustain it in down cycles. This is why you will seldom have banks offering attractive rates on long-term deposits of say 5, 7 or 10 years. But Birla Sun Life Dynamic bond seeks to play the credit spread – which is the difference between the government bond (called gilt) and corporate bond rates. It can, for instance, up its exposure to long gilts when it expects a price rally in government bonds or hold higher corporate bonds when the spread between bonds and gilt becomes high. All this, without compromising on credit quality, makes this fund suitable in a period of uncertain/slowly declining interest rate scenario as seen now.This is not to say that investors should substitute this fund for bank deposits. The latter offers guaranteed returns that mutual funds cannot. Also, given that the fund has to be dynamic, a wrong move can also hurt in the short term. But if you are adding some debt for your long-term goals, you may well use an SIP in this fund than go for, say, a bank recurring deposit. The fund has also demonstrated superior performance through SIPs.
Performance
Birla Sun Life Dynamic three-year return (see chart) is much better with SIPs. It delivered 9.2 per cent annually through SIPs. The fund's point-to-point performance over the last three years is lower than peers such as SBI Dynamic Bond and IDFC SSI Medium Term Plan. It is noteworthy that these peers have far higher exposure to long-term gilts compared with the fund's 15 per cent holding. While this strategy has helped peers' returns and may further help if gilt yields fall (triggering a price rally), a portfolio's risk is typically enhanced by holding long-dated instruments like gilt. To this extent, Birla Sun Life Dynamic holds a relatively conservative portfolio and hence the capped returns. This is why it scores well on a risk-adjusted return basis.
That the fund is consistent is proven by its rolling returns. Had you invested anytime since the fund's inception in 2004, your three-year returns would have beaten the benchmark 100 per cent of the time. Its average rolling three-year return of 8.9 per cent suggests that the fund can deliver this return irrespective of when you invested.
Portfolio
The fund holds about 15 per cent in government securities, with maturity of five years and above. Exposure to this debt segment was upped from just about 4 per cent a couple of months ago for a reason.
With open market operation of the RBI expected soon, it would mean a rally in gilts as RBI starts buying them to ease liquidity. Such a move is expected to trigger a short-term rally in government bond prices, providing scope for price appreciation in the portfolio. Otherwise, with over a two-third exposure to AAA and AA rates corporate bond instruments, the fund clearly sees this segment offering returns as corporate yields fall on a declining interest rate scenario. Instruments from HDFC, IRFC, IDFC and LIC Housing Finance are some of the prominent holdings.
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.
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| Posted: 23 Jul 2013 09:53 PM PDT Invest In Tax Saving Mutual Funds Online Call 0 94 8300 8300 (India)
ICICI Pru Dynamic Fund
The cash and equity allocation of the fund is decided by the price to book value-based algorithm, which is done on a daily basis.
Since contra calls form a part of investing style, the fund manager does hold stocks in out-of-favour sectors. Its exposure to energy, metals, chemicals and communication exceeds benchmark allocation by more than 5 per cent. Similarly, it is underweight on financial sector vis-a-vis the benchmark as its exposure has usually been in the range of 10 to 15 per cent and occasionally crossing 20 per cent. Since the fund manager is not bound by a particular style of investing -- whether it is growth, value or contra -- he has the discretion to take aggressive or defensive asset calls, based on market conditions. Reliance Industries and Texmaco Infrastructure and Holdings have been consistently held for more than 8 years.
Also, the fund does not shy away from taking cash calls as its cash allocation has sometimes gone above 20 per cent. Its average equity allocation since its launch is 85 per cent.
Performance
Its long term results reflect consistent performance as its 5-year annualised returns of 7.64 per cent are slightly better than the category average of 5.19 per cent.
Why invest?
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 )
------------------ Best Performing Mutual Funds
|
| Canara Robeco Mutual Fund Dividend Posted: 23 Jul 2013 08:22 PM PDT
Invest In Tax Saving Mutual Funds Online Call 0 94 8300 8300 (India)
Canara Robeco Mutual Fund has announced dividend under the following schemes: 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 )
------------------ Best Performing Mutual Funds
|
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