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| Franklin India High Growth Companies Fund Posted: 14 Sep 2016 04:57 AM PDT Franklin India High Growth Companies Fund Online One of the key developments that the Street is keenly waiting for is a cut in interest rates by Reserve Bank of India. With demand rising gradually, a rate cut is expected to boost earnings growth for companies. In such a situation, schemes which invest in high growth companies are best suited, especially when seen from a long-term perspective. One such scheme is Franklin India High Growth Companies Fund. Fund managers Anand Radhakrishnan, Roshi Jain and Srikesh Nair strictly follow valuation parameters when it comes to choosing stocks.Valuation parameters, such as enterprise value, price-to-earnings growth ratio, forward price-to-sales ratio and discounted earnings per share, play a critical role in selecting companies for investments. Taking into account these parameters, the fund managers invest in companies which are poised for high growth in their respective sectors. This approach has been in favour of the scheme and it has performed stupendously well, especially over a long period of time. At present, the scheme is largely invested in large-sized companies. Besides banking sector, the fund managers have shown keen interest in energy companies such as GAIL, BPCL and IOC. Factors such as attractive valuations and new capacities coming on board are a few key reasons for interest in these companies. This scheme is recommended for only long-term investors who have investment horizon of at least three years.  ------------------------------ Invest Rs 1,50,000 and Save Tax under Section 80C. Get Great Returns by Investing in Best Performing ELSS Mutual Funds Top 10 Tax Saver Mutual Funds to invest in India for 2016Best 10 ELSS Mutual Funds in india for 2016
1. BNP Paribas Long Term Equity Fund 2. Axis Tax Saver Fund 3. Religare Tax Plan 4. DSP BlackRock Tax Saver Fund 5. Franklin India TaxShield 6. ICICI Prudential Long Term Equity Fund 7. IDFC Tax Advantage (ELSS) Fund 8. Birla Sun Life Tax Relief 96 9. Reliance Tax Saver (ELSS) Fund 10. Birla Sun Life Tax Plan
Invest in Best Performing 2016 Tax Saver Mutual Funds Online For further information contact Prajna Capital on 94 8300 8300 by leaving a missed call ------------------------------ Leave your comment with mail ID and we will answer them OR You can write to us at PrajnaCapital [at] Gmail [dot] Com OR Leave a missed Call on 94 8300 8300 ------------------------------ |
| Posted: 14 Sep 2016 12:45 AM PDT Invest Gilt Funds Online The average small investor will find it much simpler to take the mutual fund route and invest in a gilt fund. Mutual funds are also more tax efficient compared to investing in G-Secs directly. This is because the interest received on G-Sec is taxable in the hands of investors. So it may not suit investors in the highest 30% tax bracket. If someone in this bracket buys a G-Sec with a coupon rate of 7.2%, his post-tax yield will be only 4.98%. However, in mutual funds, this taxable interest gets converted into capital gains. This is because the mutual funds are pass-through instruments and therefore, there is no tax-incidence at that time. The capital gains are taxed at 20% after indexation if the holding period exceeds three years. If we assume the same 7.2% return from the gilt fund and an indexation of 5% due to inflation, the 20% tax will be levied only on the remaining 2.2% (20% of the 2.2%). So the post tax yield from the gilt fund will be higher at 6.76%. Another problem is the extreme volatility in the secondary bond market. Since bond prices are inversely correlated to interest rates, prices zoom when interest rates fall. On the other hand, G-Secs quote at a discount when rates are hiked. G-Secs are good products, but lay investors should not confuse them with assured return products such as bank FDs. There is a possibility of capital loss in GSecs. The volatility may emotionally impact investors even if they are ready to hold till maturity. If the interest rates start reversing and G-Secs trade at a discount, lay investors may feel cheated. Who should invest G-Secs can be a good option for senior citizens and retirees looking for long-term assured income. They can buy 20-25 year bonds and be assured of a steady income for the full tenure of the bonds. However, note that this income will be fully taxable. More importantly, it will progressively become insufficient as inflation pushes up their requirements every year. But it will still be a better option than annuities provided by insurers. If you are investing for the shortto medium-term or don't have a fixed invest ment horizon, then go through gilt funds. Direct G-Sec investors have to keep on reinvesting coupons and the mutual funds route relieve investors from that headache. Gilt funds offer better experience because of the fund management expertise it brings in. This expertise comes at a price: fund houses charge 0.5-1% every year for managing your money. Actively managed gilt funds usually recover the fund management costs and beat their benchmark comfortably Open-ended gilt funds are also more liquid. You can redeem and get your money within a day's time. In direct G-Sec investments, it can take longer. In the first step, only banks and PDs who have direct access to the NDS-OM will be doing it, so the liquidity may not be high, especially if you want to trade. Stock brokers are staying away for the time being because most of them are not PDs. As of now, we don't have access to NDS-OM. So we are evaluating the possible options to offer this service to clients. Since there is not much business expected from here, banks also may not try to popularise this avenue. G-Secs may not become popular in near future because banks may continue to push the products they are interested in.
Is it time invest in GSecs now? The bond market has been rallying for almost 6 months now. The 10 year benchmark bond yield fell below 7.17% on Friday. The general expectation is that rates will continue to decline in the short term. Due to several favourable factors, the 10-year yield may break the 7% lev el and may remain below that for some time. However, experts say this is not the time to take aggressive bets because we may be close to the lower end of the cycle. G-Sec yield has not yet bottomed out, but the risk-reward is not favourable anymore. We studied the average 1-year return from gilt funds at various bands of the bond yield. When the 10-year yield is between 9% and 10%, the average 1-year return was 16%. Investors lost when the yield was between 5% and 6%. As of now, it is placed between 7% and 8% and historically, gilt funds generated only 6% returns in the next one year in such situations. However, very long-term investors can get in without much worry. Investors getting in now should get into 10-year plus duration. The interest rate will come down in the long term because we are transforming from a developing economy to a developed economy ------------------------------ Invest Rs 1,50,000 and Save Tax under Section 80C. Get Great Returns by Investing in Best Performing ELSS Mutual Funds Top 10 Tax Saver Mutual Funds to invest in India for 2016Best 10 ELSS Mutual Funds in india for 2016
1. BNP Paribas Long Term Equity Fund 2. Axis Tax Saver Fund 3. Religare Tax Plan 4. DSP BlackRock Tax Saver Fund 5. Franklin India TaxShield 6. ICICI Prudential Long Term Equity Fund 7. IDFC Tax Advantage (ELSS) Fund 8. Birla Sun Life Tax Relief 96 9. Reliance Tax Saver (ELSS) Fund 10. Birla Sun Life Tax Plan
Invest in Best Performing 2016 Tax Saver Mutual Funds Online For further information contact Prajna Capital on 94 8300 8300 by leaving a missed call ------------------------------ Leave your comment with mail ID and we will answer them OR You can write to us at PrajnaCapital [at] Gmail [dot] Com OR Leave a missed Call on 94 8300 8300 ------------------------------ |
| Investments for Small Investors Posted: 13 Sep 2016 11:24 PM PDT Investors, unknowingly, act in ways that harm their interests. Much of it has to do with behaviour. If these small but significant behavioural aspects are kept in check or improved upon, it will benefit their investment portfolio to a great extent in the long run. ACCUMULATING A LUMP SUM Waiting to accumulate `50,000 over 10 months, instead of starting with `5,000 straightaway , is neither right nor an efficient investing strategy .Not right because it is likely that the amount will be spent on an impulse purchase, and not efficient because while you accumulate, the money earns a meagre 4% savings account interest. The mantra to be followed is: invest as you earn. If you draw a pay cheque monthly , invest monthly. SAVING INSTEAD OF INVESTING Savings instruments, such as fixed deposits, offer safe and predictable returns, desirable to fulfil short-term goals. Taxable interest income and returns that may not beat inflation, however, are their downside. For longterm goals, such as children's education and a retirement corpus, invest ing in equity-oriented instruments is necessary . The returns are tax-efficient and likely to beat inflation. NO GOAL OR TIME HORIZON When encashing investments, it matters less that your SIP tenure has completed. What matters is whether you need the money to meet a goal. If it is not, then even if the SIP tenure is over, you can stay invested. NO INCREMENTAL INCREASE As income rises, one needs to increase investments too. This will ensure that the intended corpus keeps pace with inflation as well the increase in one's standard of living. GOING BY PAST PERFORMANCE It is common for investors to confuse past performance of markets with future returns. Thus, when the going is good and valuations are above average, investors may commit higher amounts to markets than what their risk profile permits. On the other hand, when the past performance is bad and valuations are cheaper, investors may keep away . Both the scenarios are far from ideal. A rewarding strate g y is to follow an asset-allocation-based approach. NOT ACCOUNTING FOR THE POWER OF COMPOUNDING Investing is a rewarding experience for the patient investor. Rs 5,000 invested monthly , at 12%, will amount to `63,413 in a year. This is just a 6% appreciation on a capital of `60,000. This appreciation will rise to 36% over five years--`3 lakh appreciates to `4.08 lakh. The appreciation shoots up to 92% over 10 years, and `6 lakh will fetch `11.5 lakh. One has to be mindful that `5,000 is invested on a monthly basis. To successfully accumulate large amounts to meet financial goals, planning in advance, an early start and staying the course are a must. ------------------------------ Invest Rs 1,50,000 and Save Tax under Section 80C. Get Great Returns by Investing in Best Performing ELSS Mutual Funds Top 10 Tax Saver Mutual Funds to invest in India for 2016Best 10 ELSS Mutual Funds in india for 2016
1. BNP Paribas Long Term Equity Fund 2. Axis Tax Saver Fund 3. Religare Tax Plan 4. DSP BlackRock Tax Saver Fund 5. Franklin India TaxShield 6. ICICI Prudential Long Term Equity Fund 7. IDFC Tax Advantage (ELSS) Fund 8. Birla Sun Life Tax Relief 96 9. Reliance Tax Saver (ELSS) Fund 10. Birla Sun Life Tax Plan
Invest in Best Performing 2016 Tax Saver Mutual Funds Online For further information contact Prajna Capital on 94 8300 8300 by leaving a missed call ------------------------------ Leave your comment with mail ID and we will answer them OR You can write to us at PrajnaCapital [at] Gmail [dot] Com OR Leave a missed Call on 94 8300 8300 ------------------------------ |
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