Prajna Capital

---

• Motilal Oswal Most M50 ETF
• Equity Investing - Stop loss is a strategic device
• Know About The New Pension Bill

Motilal Oswal Most M50 ETF Posted: 24 Sep 2013 04:06 AM PDT Invest In Tax Saving Mutual Funds Online Download Tax Saving Mutual Fund Application Forms Buy Gold Mutual Funds Call 0 94 8300 8300 (India)   The undisclosed application of fundamental parameters to weights is the biggest negative   It is a three-year old open-ended equity exchange-traded fund (ETF) from Motilal Oswal Mutual Fund (MOSF). Although it is linked to the constituent members of the CNX Nifty index, it is not a passive index ETF. PASSIVELY OR ACTIVELY-MANAGED?   It is a passive Nifty ETF that will invest its corpus in 50 Nifty stocks in the same proportion as they officially weigh in the index, which is based on free-float market captilisation of the stocks. But Most M50 ETF invests in the 50 stocks of Nifty based on weights decided by MOSF's proprietary financials-based parameters whose description is disclosed by MOSF but not its application. The fundamentally-weighted 50 Nifty constituents makes up for Most 50 basket, which is the underlying portfolio of this ETF. Shareholder funds, return on equity (RoE) and retention ratio are the parameters that go into deciding the weights of the Most 50 basket. But the scheme infor mation document (SID) of Most M50 ETF does not spell out the details of what level of shareholder funds, RoE or retention ratios of a constituent much company will lead to how weightage for that company. The weights are re-balanced annually when latest yearly financial figures of the compa nies are available. Weights can be re-balanced for reasons other than company fundamentals. SCHEME OBJECTIVE: The idea is invest more in companies that show better financial performance on the three parameters chosen by MOSF, and invest lower amounts in those that show poor financial performance on the same counts. This strategy, MOSF believes, will fetch higher returns for investors in the long run. ASSET ALLOCATION: Underlying Most 50 basket gets 95-100 per cent with up to 5 per cent reserved for cash OTHER FEATURES: The scheme is benchmarked to Most 50 basket. Being a listed ETF, retail investors can buy or sell M50 ETF units on the sto ck exchanges. The undisclosed application of fundamental parameters to weights is a big negative for investors seeking exposure to pure, passively-managed ETFs. The unavoidable long gap of a year between rebalancing of weights is another negative if an investor is looking for dynamic assignment of weights or once a quarter at least. Performance-wise, M50 ETF has failed so far. Based on weekly NAVs between September 20 2011 and now, M50 ETF has trailed Nifty Total Returns Index in rolling one-year returns in all weeks barring a couple. The average of one-year returns in the 103 weeks between M50 ETF and Nifty TRI returns is a negative 3.4 per cent. 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 ------------------ Best Performing Mutual Funds Largecap Funds Invest Online DSP BlackRock Top 100 Fund ICICI Prudential Focused Blue Chip Fund Birla Sun Life Front Line Equity Fund Large and Midcap Funds Invest Online ICICI Prudential Dynamic Plan HDFC Top 200 Fund UTI Dividend Yield Fund Mid and SmallCap Funds Invest Online Reliance Equity Opportunities Fund DSP BlackRock Small & Midcap Fund Sundaram Select Midcap IDFC Premier Equity Fund Small and MicroCap Funds Invest Online DSP BlackRock MicroCap Fund Sector Funds Invest Online Reliance Banking Fund Reliance Banking Fund Tax Saver MutualFunds Invest Online ICICI Prudential Tax Plan HDFC Taxsaver DSP BlackRock Tax Saver Fund Reliance Tax Saver (ELSS) 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

Equity Investing - Stop loss is a strategic device Posted: 24 Sep 2013 01:28 AM PDT Invest In Tax Saving Mutual Funds Online Download Tax Saving Mutual Fund Application Forms Buy Gold Mutual Funds Call 0 94 8300 8300 (India)     Setting one forces you to consider the chances of losing money Market traders use all sorts of stock- picking systems ranging from the exotic to the rational. Some decode lunar cycles, others toss darts at newspapers, while the rational look at price- volume changes and dissect news for potential price- impacts. All successful traders have one thing in common. They use stop losses. There is a survivor bias here –traders who dont set stop losses tend to get wiped out and leave the market. People set stops at different levels and in different ways depending on individual riskappetites and preferences. Long- term active investors also pick stocks according to many different criteria. Some are fundamental in approach but growthoriented. Others look for value. Some buy stories with promise even when the current financials dont justify it. However, active long- term investors generally dont use stop losses. Some benchmark their portfolios to indices but that is different. Most active long - term investors dont have a set strategy for controlling losses in case decisions go wrong. This is an odd gap in investing logic. A long- term investor is taking high risk bets over a long timeframe. Being a buy- only, longterm player is less risky than being a short- term buy/ sell trader, but it is still quite risky. The investor is not leveraged and he doesnt short, which means less risk than in trading. But an investor is also prepared to leave money parked in risky assets over very long periods. Even the most stable of stocks will see large price- swings, given enough time. There will be times when the long- term investor suffers large capital erosion and his returns may be negative for years. It is also inevitable that he will make mistakes every so often. Even the best investors tend to be wrong at least one- third of the time and usually more often than that. It is perfectly possible to end up with two- thirds of a portfolio doing well, while still suffering an overall loss because one- third is doing really badly. How does an investor deal with such situations? Ive never seen very coherent answers in the literature. The traders stop loss is a mechanical device. The details are decided before the trader takes a position. If the stop is kept with discipline, losses are always limited. Without such a mechanical loss- control device, an investor could, in theory, gradually lose all his capital. In fact, many investors, who bet heavily on IT in 2000, or real estate in 2008, did lose 85- 90 per cent. Apart from mechanical utility, there are two behavioural advantages to setting stop losses. First, the very act of setting a stop forces even the highly optimistic to consider the chance of losing money. This is healthy, given the inherent risks. Second, if a crisis occurs, the trader doesnt need to think about what to do - the decision is already taken. Controlling loss in a long- term portfolio is obviously not as easy as setting mechanical stop- losses. But every investor has an individual pain limit - a point where losses become uncomfortable. It makes sense before buying to consider typical situations. Decide what you will do if the stock falls say, 25 per cent from current levels. Will you average down, sell out, or ignore the situation? Write down your thoughts and follow your own instructions if the situation arises. A comparison with a benchmark index is another filter. Put some thought into picking the right index for your portfolio. There is not much point comparing a bunch of small caps to the Nifty. Also, compare all businesses to peers. If the portfolio is doing seriously worse than the benchmark, theres something wrong with the investment style. Assuming the portfolio is not under- performing the benchmark, it is still worth reviewing individual stocks. Ideally, keep notes on why you bought every stock and if the variables change, or new information is available, review. If a stock is doing worse than expected compared to the index and its peers, dig for more information. Above all, be prepared to admit your mistakes. This is a blind spot with all investors. Since an experienced investor does due diligence and has logical reasons for buying, he also tends to become over- attached to the stocks hes bought. No matter how exhaustive the analysis or solid the logic, stocks can move the wrong way for random reasons, or due to concealed weaknesses that dont show up in financials until too late. Getting caught in such situations sometimes is inevitable. We all end up learning from our mistakes. If you have loss control mechanisms in place, the learning process will be that much less painful. 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 ------------------ Best Performing Mutual Funds Largecap Funds Invest Online DSP BlackRock Top 100 Fund ICICI Prudential Focused Blue Chip Fund Birla Sun Life Front Line Equity Fund Large and Midcap Funds Invest Online ICICI Prudential Dynamic Plan HDFC Top 200 Fund UTI Dividend Yield Fund Mid and SmallCap Funds Invest Online Reliance Equity Opportunities Fund DSP BlackRock Small & Midcap Fund Sundaram Select Midcap IDFC Premier Equity Fund Small and MicroCap Funds Invest Online DSP BlackRock MicroCap Fund Sector Funds Invest Online Reliance Banking Fund Reliance Banking Fund Tax Saver MutualFunds Invest Online ICICI Prudential Tax Plan HDFC Taxsaver DSP BlackRock Tax Saver Fund Reliance Tax Saver (ELSS) 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

Know About The New Pension Bill Posted: 24 Sep 2013 12:17 AM PDT Invest In Tax Saving Mutual Funds Online Download Tax Saving Mutual Fund Application Forms Buy Gold Mutual Funds Call 0 94 8300 8300 (India)   |What does the new pension lawdo? The Bill seeks to give statutory powers to the interim authority set up in 2003. It also formally changes the name of the New Pension System to the National Pension System ( NPS). |What is NPS? NPS is a defined contribution scheme for all central government employees, other than the armed forces, who joined after January 2004. It is implemented through a combination of retailers, pension fund managers, and a record- keeper. This scheme is different from the earlier defined benefit scheme. |How does it work? Under the NPS, every subscriber will have an individual pension account, which will be portable across job changes. The subscribers will get to choose fund managers and schemes to manage their pension wealth. They will also get to have the option of switching schemes and fund managers. |Can non- govt employees and general public subscribe? The NPS was extended to all general citizens through a central government notification in May 2009. |Is it compulsory? The Bill provides a structure ( NPS) to plan for old- age income security. However, it is optional for those in the unorganised sector. This differs from the system in countries such as the United States, which have a mandatory system to ensure that all persons have old- age income security. |When was it first introduced? It was introduced in the Lok Sabha in 2005. But this lapsed as it could not be passed before the end of the term of the UPA- I government. |Who were the main opponents of the Bill? The Left parties were opposed to the NPS. Later in the Left- less UPA- II, Mamata Banerjee's Trinamool Congress also opposed the passage when the then finance minister introduced it in 2011. The Bill was referred to astanding committee. Both groups opposed it even this time. |Why are political parties opposed to it? In the NPS, the investment risk is entirely borne by the employees. Further, there will be no explicit or implicit guarantee on the pension wealth, except in cases where the subscriber purchases market- based guarantees. This rule differs from bank deposits, where deposits up to ₹ 1 lakh are guaranteed. |How has NPS done so far? The total corpus and number of enrolments to the NPS have been lower than expected. Recommendations have been made by committees to the government to make efforts to popularise the scheme. |How can it help the industry? The new law could help bring in new pension products in the market, thereby giving a choice to customers. Competition could also improve quality of service and returns. If these measures are successful, these could help mobilise substantial long- term funds, which can be used to build infrastructure. The Pension Fund Regulatory and Development Authority Bill, 2011, was passed in the Lok Sabha on Wednesday. It will now go to the Rajya Sabha. If passed in the Upper House, it would become lawafter the Presidential assent. Business Standard brings to you certain important details about the new Bill 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 ------------------ Best Performing Mutual Funds Largecap Funds Invest Online DSP BlackRock Top 100 Fund ICICI Prudential Focused Blue Chip Fund Birla Sun Life Front Line Equity Fund Large and Midcap Funds Invest Online ICICI Prudential Dynamic Plan HDFC Top 200 Fund UTI Dividend Yield Fund Mid and SmallCap Funds Invest Online Reliance Equity Opportunities Fund DSP BlackRock Small & Midcap Fund Sundaram Select Midcap IDFC Premier Equity Fund Small and MicroCap Funds Invest Online DSP BlackRock MicroCap Fund Sector Funds Invest Online Reliance Banking Fund Reliance Banking Fund Tax Saver MutualFunds Invest Online ICICI Prudential Tax Plan HDFC Taxsaver DSP BlackRock Tax Saver Fund Reliance Tax Saver (ELSS) 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

You are subscribed to email updates from Prajna Capital - An Investment Guide To stop receiving these emails, you may unsubscribe now.	Email delivery powered by Google
Google Inc., 20 West Kinzie, Chicago IL USA 60610