Prajna Capital |
- How to Rebuild your Savings?
- Canara Robeco Emerging Equities Fund
- The Role of the Indian Government in Home Insurance
| Posted: 09 Feb 2014 05:31 AM PST Invest In Tax Saving Mutual Funds Online Call 0 94 8300 8300 (India)
MAJOR expenses are often preplanned.
I recently met a well-educated (IIM graduate) professional, who had just been through a major medical expense (for his father). He asked me for help in reconstructing his financial future.
I tried my bit in enlightening him to start his investments engine with simple and basic principles. Strangely enough, he was unaware of a majority of the below mentioned principles: Start saving: We must start spending less than what we earn. Taking leverage to keep us afloat after a major expense can prove to be like getting stuck in a spiraling storm.
Put your savings to good use:
Letting our savings lying idle in the form of money in savings or current account or even as cash at home will cause our recovery to be a long drawn one. Let me illustrate with an example: Even if you save Rs 10,000 per month and put it in a liquid fund (the least volatile and most liquid type of mutual fund product) vis-à-vis savings account or current account, you end up earning a minimum of Rs 4,000 more per annum (Last 10 years, liquid funds have given average returns of 7-11 per cent per annum vis-à-vis NIL and 4 per cent in current and savings accounts, respectively) Diversification of investments: Invest across investment classes like fixed income, equity, gold, real estate, etc. Due to global and local economic factors, like uncertainty, inflation, currency fluctuations, we must look at all possibilities that fall within our risk-return parameters. Consideration of future requirements and time horizon often drives the asset allocation pattern. Post tax returns: Taxation brackets can influence significantly since there are arbitrage opportunities available for capital market products like mutual funds, equities and tax-saving schemes/instruments.
When we end up monitoring even the smallest expense, then we must allocate time to monitor our hard-earned money invested. Just one hour per week is sufficient to ensure that we have a complete hold on our investments.
Emotion is the cause of our investments going awry. We tend to get stuck with our investments because we keep justifying existence of these unproductive investments in our portfolio. Exiting these investments becomes difficult since these erroneous investments tend to make us feel guilty. Even if the decision has been made by us on the recommendation of someone known to us, we must evaluate objectively and exit (even with losses) as soon as we get an opportunity.
Investments are like diet they need to be re-balanced for getting proper outcomes. Just as a dietary imbalance can cause a health scare, an investment portfolio imbalance can cause a wealth scare. Going excessively on an asset class that we tend to prefer may not be an appropriate strategy for financial planning. Most Indians have a fetish for physical assets like gold and real estate and hence, we tend to get overboard on them. This can prove to be counter-productive in high-growth phases in tive in high-growth phases in economy. As seen between 2003 and 2007, equity investments far out-performed gold and also they are far more liquid than gold.
Last but not the least, one should get a skilled and honest investment adviser and stick with that adviser for a long period of time. He / she will ensure that most of the above is followed and followed rigorously.
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 Emerging Equities Fund Posted: 09 Feb 2014 04:00 AM PST Invest In Tax Saving Mutual Funds Online Call 0 94 8300 8300 (India)
Canara Robeco Emerging Equities Fund Canara Robeco Emerging Equities Fund is a mid-cap heavy equity diversified fund with monthly average assets under management at Rs 42.38 crore, as on February, 2013. The fund was launched on February 2005 and is benchmarked against the CNX Midcap.
Performance
The fund’s performance has been extremely poor in the last one year as it fell to third quartile within the category; this period has witnessed under performance in many of the mid-cap funds. Its excellent performance in 2012 and 2010 ensure that the fund is part of the first and second quartile in 3 years and 5 years’ time horizon
During calendar years 2008 and in year-to-date performance the fund was in the third quartile among its peer-set of equity diversified funds. Other than that it has managed to maintain in the top quartile despite the frequent change in the fund managers’.
Monthly Performance of the fund shows that it has started lagging the peer-set since the start of 2013. That could be due to the underperformance of the midcaps, as reflected in the relative performance of the CNX Midcap index vis-a-vis the category average. The fund being overweight to midcap stocks would have suffered. However, while it has managed to outperform the CNX Midcap Index in 3 out of the last 6 months, the underperformance in Dec ’12 and Apr ’13 is very high and a cause of concern.
Risk. In terms of measures of risk such as standard deviation and beta (measured over last three years), the fund has so far taken a lower level of risk compared to the category median.
Risk-adjusted Returns. In terms of measures of risk-adjusted return such as Treynor ratio and Sharpe ratio (measured over last three years), the fund has given a higher risk-adjusted returns compared to the category median.
Processes
Canara Robeco Emerging Equities Fund is mid-cap equity diversified fund. The fund’s investment strategy states that it should invest a minimum of 65 per cent mid and small cap equity. Mid & Small Cap companies are defined as those which are ranked from 151 to 500 on the basis of market capitalisation. The ranking of the stocks will be reviewed periodically. For the other 35 per cent the fund can invest in equities of large-cap companies or in domestic debt or money market instruments.
This fund has a higher expense ratio of 2.91 per cent, this is more than 39 basis points higher than the median expense ratio for the category of equity diversified that stands at 2.52 per cent.
The fund has an exit load of 1 per cent if the investor redeems or switches out within 1 year from the date of allotment. Any redemption or switches after one year has does not levy an exit load.
Portfolio
Number of equity holdings. As of April 2013, the fund has 56 stocks in its portfolio against the category median of 43. Its average portfolio allocation in the last three years has been 44 stocks, reflecting fairly diversified portfolio for a fund with only Rs 42.38 crore of average AUM.
In the last five years (between May 2008- April 2013), the fund has had an average exposure of only 14.77 per cent to large-cap companies. During this period average exposure to mid-cap companies was at 64.44 per cent and to small cap was 10.14 per cent. It has reduced its exposure to small-cap since July 2012. It has had no exposure to derivatives. Meanwhile, its average exposure to Cash & Cash Equivalents (includes CBLO) during the period was 10.68 per cent.
As on April 2013, exposure to large-cap was at 37.70 per cent, mid-cap level was at 51.63 per cent, small cap is 0.80 per cent and exposure to others (including cash and CBLO) was at 7.41 per cent.
The top five sectors in the portfolio as of April 30, 2013 had an allocation of 35.25 per cent. These include Banks, Software, Pharmaceuticals, Consumer Non Durables and Media & Entertainment. In the last 12 months (May 2012-April 2013) a total of 28 stocks have appeared in all months, and together have accounted between 50.03-to-63.99 per cent of the portfolio. Of these 28 stocks, ING Vyasa has accounted for the higher concentration in most of the months. Its highest exposure to a single instrument has been CBLO in 11 out of 12 months. It has averaged at 7.58 per cent over the last one year.
In the past 12 months the fund manager has had a higher exposure to cyclical stocks, forming around 60 per cent of the portfolio, and 16 per cent in defensive picks and 16 per cent in services. This may explain the underperformance in the last one year as it has not been a good period of mid caps in general and cyclical stocks in particular within the midcaps.
Some of the stocks that the fund has added to its portfolio in the last six months are Balrampur Chini Mills, Tech Mahindra, LIC Housing Finance and Glenmark Pharmaceuticals, etc. Meanwhile, it has exited stocks like Orient Paper & Industries, India Cements, Glaxosmithkline Consumer Healthcare, Indraprastha Gas, etc. in the last six months.
Fund Manager
The fund is currently jointly managed by Ravi Gopalkrishnan and Krishna Sanghavi. Both fund managers have taken charge of the fund for the last 7 months.
Ravi Gopalakrishnan has a qualification of MBA (Finance), MS (Finance). He has a total experience of over 20 years. He was Executive Director & CIO-Equities with Pramerica Asset Managers (September 2009 to August 2012). The Pramerica Equity Fund was launched in December 2010. In the year 2011 the fund gave returns of -26.54 per cent when the index fell only -24.62 per cent.
Krishna Sanghavi, 39 years old has a qualification of B.Com, I.C.W.A., M.M.S. (Finance). He has total experience of 17 years. He was Head Equities with Kotak Mahindra Asset Management Company (February 2006 to August 2012).
View
The fund house has a very high expense ratio within its peers, and the fund has seen too many changes in the fund managers over the last couple of years. This fund scheme alone has seen the fund manager change in 2010, 2011 and latest in 2012, yet the fund has managed to perform consistently over periods. This reflects positively on the internal processes and research team that supports the fund management.
The fund invests in the mid-cap space and has a new fund management team. Given the outlook on mid-cap space, the ride could be quite volatile over the next few months. The new team has been in place for now for over 6 months and has had enough time in which to restructure the portfolio according to their style. Investors with high risk appetite or those comfortable with the style of the new managers may consider investing in this fund right away. The moderate and conservative investors should watch the performance for the next 6 months before making an allocation to this fund.
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
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| The Role of the Indian Government in Home Insurance Posted: 09 Feb 2014 02:05 AM PST Invest In Tax Saving Mutual Funds Online Call 0 94 8300 8300 (India)
The Indian Government plays on important role in the promotion of home insurance. The Government is planning to make it mandatory for all developers to ensure that buildings are structurally sound to withstand fire and earthquakes. A spate of tragedies such as the fire accidents in garment factories in neighboring Bangladesh, collapse of buildings in Mumbai and Bangalore due to faulty construction has led the Government to put its foot down and make home insurance mandatory for developers. This will soon be passed in the Real estate Bill. The home insurance premiums will be lower if the building adheres to the necessary norms, Is earthquake resistant, Is of a good design and makes use of good technology. The onus is on the developer and builder to follow the seismic code and use earthquake proof technology, better design in projects, and follow the best practices in urban development and planning. Since the developer has to compulsorily take home insurance he is forced to adhere to the set norms and bears liability for the structure he will follow good construction principles leading to the growth of quality constructions and save the hassle for the customer to go for individual home insurance.
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
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 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 | |
No comments:
Post a Comment