Prajna Capital

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• Liquid Mutual Funds vs Bank FDs
• Sector Mutual Funds - High Risk and High Return Investments
• HDFC Quarterly Interval dividend

Liquid Mutual Funds vs Bank FDs Posted: 10 Apr 2014 05:07 AM PDT Download Tax Saving Mutual Fund Application Forms Invest In Tax Saving Mutual Funds Online Buy Gold Mutual Funds Leave a missed Call on 94 8300 8300   Liquid Mutual Funds are better than Bank FDs    Most of us generally have a good amount of money lying around in our various savings bank accounts, earning just about 4% per annum. This money may be part of our salary waiting to be spent, maturity amounts of insurance policies or FDs, redemptions from investments or any other credits received from elsewhere. We may not have any immediate plans to spend, invest or reinvest this money. When the money becomes available, we take our own time to plan its further use while it keeps lying in the savings bank account earning a low return. But did you know that you can earn double the returns of a savings bank account while having almost the same level of safety, liquidity and ease of transaction? Liquid funds - These are a class of mutual funds that have no exposure to stocks and invest only in debt (fixed income) instruments, generally with a residual maturity of less than 92 days. These investments are mostly in money market instruments, short-term corporate deposits and treasury bills. Liquid funds provide good liquidity, low interest rate risk and also the prevailing market yield. Along with liquidity, the safety factor makes these funds a preferred parking option for HNIs and corporates as a good alternative to savings bank accounts and short-term fixed deposits. Most liquid schemes don’t have a lock-in period and offer redemption proceeds within 24 hours directly into your bank account. All mutual funds have liquid schemes and try to provide the convenience of investments and redemptions in line with advancements in technology. You can invest in liquid funds through SMS, online banking, phone banking, call centre services and also physical applications. The same applies for redemptions also. If it’s so easy and safe, why are these funds not so popular among common investors? That is simply because of a lack of awareness. Mutual funds are generally associated with investments in stocks, while banks occupy a much larger part of retail investors’ consciousness than mutual funds do. You should remember some important points while investing in liquid funds. These are essentially short-term investments. If you keep your money here for too long, typically more than a year, you may lose out on better opportunities elsewhere. Another advantage of liquid funds is that if you think your money is likely to be lying around for a longer time than thought initially, you can seamlessly shift it to longer duration debt mutual funds or even equity funds without much hassle. On the issue of taxation, even with part-redemptions from a liquid fund within a year, the gains will be taxed according to your income tax slab. Beyond a year, the gains get the benefit of indexation as a long-term gain. You can invest in growth, dividend and dividend reinvestment options. Dividends paid by these funds are tax-free in your hands. Liquid funds also score over bank deposits because they do not deduct tax at source (TDS). Investors who tend to keep a sizeable balance in their savings bank accounts, and that too for a long period, may look at investing in liquid funds to enhance returns. It can make an appreciable difference to what you get to keep in the end. For further information contact Prajna Capital on 94 8300 8300 by leaving a missed call Leave a missed Call on 94 8300 8300 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 Invest Any Mutual Fund Online Download Mutual Fund Application Forms from all AMCs Download Mutual Any Fund Application Forms --------------------------------------------- Best Performing Mutual Funds Largecap Funds Invest Online DSP BlackRock Top 100 Fund ICICI Prudential Focused Blue Chip Fund Franklin India Bluechip ICICI Prudential Top 100 Fund B. Large and Midcap Funds Invest Online ICICI Prudential Dynamic Plan HDFC Top 200 Fund UTI Dividend Yield Fund Birla Sun Life Front Line Equity Fund Franklin India Prima C. 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Sector Mutual Funds - High Risk and High Return Investments Posted: 10 Apr 2014 04:09 AM PDT Download Tax Saving Mutual Fund Application Forms Invest In Tax Saving Mutual Funds Online Buy Gold Mutual Funds Leave a missed Call on 94 8300 8300     Returns from these funds can be higher in the long run but watch out for volatility, which can be more than diversified mutual funds or index funds Judging by the positive reaction to the recently launched Central Public Sector Enterprise (CPSE) Exchange Traded Fund, a lay investor may be forgiven for assuming that sector funds or thematic funds are back in favour. Sure, this product is being marketed as an instrument that will allow retail investors to take exposure to highly rated public sector corporations. This is probably the only reason that is working in its favour. Most stocks in that ETF sport a good dividend paying record, although it has a higher weighting to the energy sector. Holding for the long term may help people reap the benefits of this ETF. But, given the diverse nature of the stocks, the ETF is any but sector- based. It's a thematic fund based on sound dividend paying public sector units. Nevertheless, the spotlight is now on sector funds. The returns from the stock markets in 2013 seem to suggest that investing in certain sectors can provide larger profits than investing in diversified funds. Many diversified funds have undershot the eight per cent gain in the Sensex last year. A case for concentrated portfolios In equity markets, two categories of funds outperformed all other asset classes by a huge margin — the technology sector, which comprises IT and allied industries, and the pharmaceutical sector. While the former raked in close to 46 per cent returns, the pharma sector came a close second with 32 per cent. Does this make a case for investing in sectorial funds? Should investors make highly concentrated bets? Sector funds invest in stocks of a particular sector such as FMCG, pharma, banking and so on. For example, a pharma fund will invest in healthcare stocks such as Cipla, Sun Pharma and a banking fund will invest only in stocks such as SBI, ICICI Bank, HDFC Bank and so on. Given the narrow mandate and focus, a fund manager has restricted the number of stocks in a particular sector to choose from. Because of this, a sector fund consists of fewer stocks compared to a diversified equity fund. Often the size of most sector funds is less than ₹ 100 crore. This could result in a high expense ratio for an investor. Not much choice with ETFs Investors also have the choice of Exchange Traded Funds (ETFs) which also represent a particular index such as Nifty, Banking, etc. The most important aspect here is the expense ratio, which is less than 0.70 per cent compared to sector funds offered by mutual funds that charge anywhere between 2.25 per cent and 3 per cent as annual fund- management expenses. At present, ETFs do not offer as many choices among sectors as offered by mutual funds. Hence, most investors prefer investing in mutual funds. Ideally, ETFs are recommended only for sophisticated investors. For retail investors, indexed ETFs are more suitable than sector ones. Through various economic cycles, some sectors do well; others don't. Hence, this necessitates research by an investor before buying such funds. Sector funds have very high volatility compared to diversified equity funds and hence come up with nasty surprises if economic policies or business environment change the pattern for the sector. Avoid flavours of the season For example, during the last leg of the bull run in 2007, many AMCs had launched infrastructure funds banking on the growth in that sector expecting favourable government policies. After the markets tanked in 2008, many infrastructure funds lost heavily and, even after five years, many have still not recovered from the losses. Similarly, one cannot expect last year's performers — technology and pharma sectors — to continue providing high returns this year too. For a first- time investor, diversified equity funds should be the first choice as someone new to the market may not be prepared for the volatility that dogs sector funds. Also, these funds should not be considered for your main financial goals such as children's education, retirement, etc. Your core portfolio should always comprise good diversified funds, which are less volatile and command a better long- term performance track record. Look for diversification and balance In diversified equity funds, one can stay for the long term as the best sectors in the economy would ideally be covered by such funds. However, one needs to track sector funds more as fortunes of a particular sector may keep shifting over time. This might necessitate switching out of those funds before the situation is about to get worse. So, don't expect to hold these funds for the long term, though at times you may hold them for a fairly long period expecting the fortunes in that sector to improve. Usually during a slowdown in the economy, defensive sectors such as FMCG and pharma typically tend to do better than other sectors while banking and infrastructure suffer. Similarly, the banking sector which fell by 13 per cent last year is expected to do well when the economy starts doing well. This does not mean that you can predict tomorrow's winner easily. One needs to keep tabs on the changes in the economic and regulatory environment — and invest accordingly. For most, this would be a daunting task. Hence, avoid getting into sector funds. The lure of large returns can be a great pull; nevertheless, if you cannot track the sector's ups and downs, then you are better off investing in diversified equity funds or index ETFs. These offer you exposure to a diversified portfolio. Don't go overboard. Restrict your exposureto sector funds to between 10 per cent and 20 per cent of your equity allocation — and ideally utilise the systematic investment plan route. And remember, review the sector regularly for any change in sentiment and outlook. The quantum of dividend shall be Rs 0.0389 per unit. The record date has been fixed as April 03, 2014. For further information contact Prajna Capital on 94 8300 8300 by leaving a missed call Leave a missed Call on 94 8300 8300 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 Invest Any Mutual Fund Online Download Mutual Fund Application Forms from all AMCs Download Mutual Any Fund Application Forms --------------------------------------------- Best Performing Mutual Funds Largecap Funds Invest Online DSP BlackRock Top 100 Fund ICICI Prudential Focused Blue Chip Fund Franklin India Bluechip ICICI Prudential Top 100 Fund B. Large and Midcap Funds Invest Online ICICI Prudential Dynamic Plan HDFC Top 200 Fund UTI Dividend Yield Fund Birla Sun Life Front Line Equity Fund Franklin India Prima C. Mid and SmallCap Funds Invest Online Reliance Equity Opportunities Fund DSP BlackRock Small & Midcap Fund Sundaram Select Midcap IDFC Premier Equity Fund Birla Sun Life Dividend Yield Plus SBI Emerging Businesses Fund HDFC Mid-Cap Opportunities Fund ICICI Prudential Discovery Fund D. Small and MicroCap Funds Invest Online DSP BlackRock MicroCap Fund 2.Franklin India Smaller Companies E. Sector Funds Invest Online Reliance Banking Fund Reliance Banking Fund ICICI Prudential Banking and Financial Services Fund F. Tax Saver Mutual Funds Invest Online 1. ICICI Prudential Tax Plan 2. HDFC Taxsaver DSP BlackRock Tax Saver Fund Reliance Tax Saver (ELSS) Fund G. Gold Mutual Funds Invest Online Relaince Gold Savings Fund ICICI Prudential Regular Gold Savings Fund HDFC Gold Fund Birla Sun Life Gold H. International funds Invest Online 1. Birla Sun Life International Equity Plan A 2. DSP BlackRock US Flexible Equity 3. FT India Feeder Franklin US Opportunities 4. 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HDFC Quarterly Interval dividend Posted: 10 Apr 2014 03:38 AM PDT Download Tax Saving Mutual Fund Application Forms Invest In Tax Saving Mutual Funds Online Buy Gold Mutual Funds Leave a missed Call on 94 8300 8300     HDFC Mutual Fund has announced dividend under the dividend option of HDFC Q Interval Plan B Wholesale-D, HDFC Q Interval Plan B Retail-D and HDFC Q Interval Plan B Retail Direct-D.   The quantum of dividend will be the entire distributable surplus as on the record date. The record date has been fixed as April 07, 2014. The quantum of dividend shall be Rs 0.0389 per unit. The record date has been fixed as April 03, 2014. For further information contact Prajna Capital on 94 8300 8300 by leaving a missed call Leave a missed Call on 94 8300 8300 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 Invest Any Mutual Fund Online Download Mutual Fund Application Forms from all AMCs Download Mutual Any Fund Application Forms --------------------------------------------- Best Performing Mutual Funds Largecap Funds Invest Online DSP BlackRock Top 100 Fund ICICI Prudential Focused Blue Chip Fund Franklin India Bluechip ICICI Prudential Top 100 Fund B. Large and Midcap Funds Invest Online ICICI Prudential Dynamic Plan HDFC Top 200 Fund UTI Dividend Yield Fund Birla Sun Life Front Line Equity Fund Franklin India Prima C. Mid and SmallCap Funds Invest Online Reliance Equity Opportunities Fund DSP BlackRock Small & Midcap Fund Sundaram Select Midcap IDFC Premier Equity Fund Birla Sun Life Dividend Yield Plus SBI Emerging Businesses Fund HDFC Mid-Cap Opportunities Fund ICICI Prudential Discovery Fund D. Small and MicroCap Funds Invest Online DSP BlackRock MicroCap Fund 2.Franklin India Smaller Companies E. Sector Funds Invest Online Reliance Banking Fund Reliance Banking Fund ICICI Prudential Banking and Financial Services Fund F. Tax Saver Mutual Funds Invest Online 1. ICICI Prudential Tax Plan 2. HDFC Taxsaver DSP BlackRock Tax Saver Fund Reliance Tax Saver (ELSS) Fund G. Gold Mutual Funds Invest Online Relaince Gold Savings Fund ICICI Prudential Regular Gold Savings Fund HDFC Gold Fund Birla Sun Life Gold H. International funds Invest Online 1. Birla Sun Life International Equity Plan A 2. DSP BlackRock US Flexible Equity 3. FT India Feeder Franklin US Opportunities 4. ICICI Prudential US Bluechip Equity 5. Motilal Oswal MOSt Shares NASDAQ-100 ETF 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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