Personal Finance

MF`s SIP`s giving negative returns

Posted by : ashgoel

i see SIP as a downfall control mechanism, if someone can time time market even 10% above its lows, it is prudent to invest lump some.

here are the funds i hve been investing in SIP for last 5 years[whereever applicable]. lumpsome returns are better

Fund Name (list of all the SIP funds 5-Year
of that particular Fund House) Return (%)
SIP Non-SIP
DWS Alpha Equity 0.26 34.59
DWS Investment Opportunity ----- -----
DSPML Equity 0.1 37.91
DSPML Opportunities 0.23 32.92
DSPML Top 100 Equity Reg 0.28 34.97
DSPML T.I.G.E.R. Reg ----- -----
Franklin India Prima Plus 0.25 33.14
HDFC Top 200 0.28 34.94
HDFC Equity 0.26 34.24
HSBC Equity 0.25 36.54
Kotak 30 0.28 36.36
Kotak Opportunities ----- -----
Magnum Contra 0.28 47.58
Reliance Vision 0.23 32.78
Reliance Growth 0.33 44.29
Sundaram BNP Paribas Select Focus Reg 0.28 33.41
Sundaram BNP Paribas Select Midcap Reg 0.29 40.42

Tax Saving ?

Posted by : chchch

Madam, I agree with you that it will be wise to book long term FDs in high interest rate regime. There are some products even in natinalised banks to take advantage of the high interest rate regime. PNB offers a product called Flexi RD, wherein one can initially, say, open the account for say a min. deposit of Rs.100/- to be deposited every month for say 120 months (this is only an illustration). Monthly instalments can be upto 10 times the min. deposit, thus one can deposit Rs.100/- in a particular month or in multiples thereof upto 10 times i.e. Rs.1000/-. Even if the deposit rates go down, the rate of interest applicable will be as on the date of opening the deposit. A more similar product is available in IOB, wherein in the first year one deposits say Rs.100/- per month for 12 month, in the second year Rs.200/- per month and so on thereby increasing the instalments by Rs.100/- every year, UPTO 10 years.

MF`s SIP`s giving negative returns

Posted by : mone

Hello,
I am having SIP`s in the following Mutual funds for the last 18 months. Currently all of them are giving negative returns. Please advice whether i should hold /switch or redem it:

1) HDFC GROWTH FUND - GROWTH
2) RELIANCE GROWTH FUND - GROWTH PLAN
3) TATA INFRASTRUCTURE FUND - GROWTH
4) KOTAK OPPORTUNITIES-GROWTH

Non-SIP funds
1) FIDELITY TAX ADVANTAGE FUND GROWTH
2) RELIANCE TAX SAVER FUND - GROWTH PLAN
3) TEMPLETON INDIA EQUITY INCOME FUND DIVIDEND PLAN

Thanks
Mone

MF`s SIP`s giving negative returns

Posted by : mone

Hello,
I am having SIP`s in the following Mutual funds for the last 18 months. Currently all of them are giving negative returns. Please advice whether i should hold /switch or redem it:

1) HDFC GROWTH FUND - GROWTH
2) RELIANCE GROWTH FUND - GROWTH PLAN
3) TATA INFRASTRUCTURE FUND - GROWTH
4) KOTAK OPPORTUNITIES-GROWTH

Non-SIP funds
1) FIDELITY TAX ADVANTAGE FUND GROWTH
2) RELIANCE TAX SAVER FUND - GROWTH PLAN
3) TEMPLETON INDIA EQUITY INCOME FUND DIVIDEND PLAN

Thanks
Mone

Tax Saving ?

Posted by : ashalanshu

Dear Radhika_nandlal, My take on Interest Rate -

Almost every indian Investor/saver have deposits in Banks. Over the last 18-24 months, the banks r offering higher rates on deposits (test case u r thinking to join this @ 11% FD).

Add 2.25-2.5% administrative cost & profit margin for banks on these deposit rates. The effective lending rate works out to around 12-13% but wait there is another twist in the tale named as CRR (Cash reserve ratio). For every 100 Rs. accepted by bank as deposit, it `ll have to keep 7.5 Rs. (after recent reduction of 1.5%) mandatorilly with RBI & it `ll be non income earning.

So from the 100 Rs. deposited by u, the bank `ll be able to lend only 92.5 Rs. & before the CRR cur the same figure was 91 Rs. only. So the effective lending rate comes around 14-15%. Now add at least 1-2% NPAs (non performing assets), the same lending rate `ll move on to on more higher level around 15.5-16%.

Now change ur shoes from depositor to borrower, R u ready to borrow at such higher rates to purchase -
1. That Plasma Panel
2. That High speed Mobike for ur son
3. That Grand new sedan costing 10+L
4. That sweet little (lavish) home costing anywhere from 20L to some crores depending upon in which place of india u r.
5. That drean swiss vacation
.......
......

The list goes on & on, but one thing is certain u `ll certainly cutback some of the above mentioned purchases or delay the same.

Now imagine u r not a domestic borrower but a corporate borrower. To increase ur capacities or starting a new factory or any other business requirement, after taking loans at such higher rates, how `ll u earn profits when the sale of ur products (CAR, Bike, Consumer goods, Homes....) is going down.

Sooner or later, the interest rate `ll go down, how much
I DON`T KNOW, by when, again I DON`T KNOW.

I know only one thing, for a healthy growth, low interest rates r essential.

Thanks

Ashal

Tax Saving ?

Posted by : chchch

Madam, I agree with you that it will be wise to book long term FDs in high interest rate regime. There are some products even in natinalised banks to take advantage of the high interest rate regime. PNB offers a product called Flexi RD, wherein one can initially, say, open the account for say a min. deposit of Rs.100/- to be deposited every month for say 120 months (this is only an illustration). Monthly instalments can be upto 10 times the min. deposit, thus one can deposit Rs.100/- in a particular month or in multiples thereof upto 10 times i.e. Rs.1000/-. Even if the deposit rates go down, the rate of interest applicable will be as on the date of opening the deposit. A more similar product is available in IOB, wherein in the first year one deposits say Rs.100/- per month for 12 month, in the second year Rs.200/- per month and so on thereby increasing the instalments by Rs.100/- every year, UPTO 10 years.

Tax Saving ?

Posted by : chchch

Madam, I agree with you that it will be wise to book long term FDs in high interest rate regime. There are some products even in natinalised banks to take advantage of the high interest rate regime. PNB offers a product called Flexi RD, wherein one can initially, say, open the account for say a min. deposit of Rs.100/- to be deposited every month for say 120 months (this is only an illustration). Monthly instalments can be upto 10 times the min. deposit, thus one can deposit Rs.100/- in a particular month or in multiples thereof upto 10 times i.e. Rs.1000/-. Even if the deposit rates go down, the rate of interest applicable will be as on the date of opening the deposit. A more similar product is available in IOB, wherein in the first year one deposits say Rs.100/- per month for 12 month, in the second year Rs.200/- per month and so on thereby increasing the instalments by Rs.100/- every year, UPTO 10 years.

Make real estate deals more transparent

Posted by : MMB Messenger

The Government should tighten norms for the real estate sector to protect the interests of the investors.

Tax Saving ?

Posted by : radhika_nandlal

Ashal,

Yes sooner or later bank interest will go down. The best thing to book long term FDs coz interest may go down just as swiftly as it went up.

Make real estate deals more transparent

Posted by : MMB Messenger

The Government should tighten norms for the real estate sector to protect the interests of the investors.

Tax Saving ?

Posted by : ashalanshu

Dear Radhika_nandlal, My take on Interest Rate -

Almost every indian Investor/saver have deposits in Banks. Over the last 18-24 months, the banks r offering higher rates on deposits (test case u r thinking to join this @ 11% FD).

Add 2.25-2.5% administrative cost & profit margin for banks on these deposit rates. The effective lending rate works out to around 12-13% but wait there is another twist in the tale named as CRR (Cash reserve ratio). For every 100 Rs. accepted by bank as deposit, it `ll have to keep 7.5 Rs. (after recent reduction of 1.5%) mandatorilly with RBI & it `ll be non income earning.

So from the 100 Rs. deposited by u, the bank `ll be able to lend only 92.5 Rs. & before the CRR cur the same figure was 91 Rs. only. So the effective lending rate comes around 14-15%. Now add at least 1-2% NPAs (non performing assets), the same lending rate `ll move on to on more higher level around 15.5-16%.

Now change ur shoes from depositor to borrower, R u ready to borrow at such higher rates to purchase -
1. That Plasma Panel
2. That High speed Mobike for ur son
3. That Grand new sedan costing 10+L
4. That sweet little (lavish) home costing anywhere from 20L to some crores depending upon in which place of india u r.
5. That drean swiss vacation
.......
......

The list goes on & on, but one thing is certain u `ll certainly cutback some of the above mentioned purchases or delay the same.

Now imagine u r not a domestic borrower but a corporate borrower. To increase ur capacities or starting a new factory or any other business requirement, after taking loans at such higher rates, how `ll u earn profits when the sale of ur products (CAR, Bike, Consumer goods, Homes....) is going down.

Sooner or later, the interest rate `ll go down, how much
I DON`T KNOW, by when, again I DON`T KNOW.

I know only one thing, for a healthy growth, low interest rates r essential.

Thanks

Ashal

MF`s SIP`s giving negative returns

Posted by : mone

Hello,
I am having SIP`s in the following Mutual funds for the last 18 months. Currently all of them are giving negative returns. Please advice whether i should hold /switch or redem it:

1) HDFC GROWTH FUND - GROWTH
2) RELIANCE GROWTH FUND - GROWTH PLAN
3) TATA INFRASTRUCTURE FUND - GROWTH
4) KOTAK OPPORTUNITIES-GROWTH

Non-SIP funds
1) FIDELITY TAX ADVANTAGE FUND GROWTH
2) RELIANCE TAX SAVER FUND - GROWTH PLAN
3) TEMPLETON INDIA EQUITY INCOME FUND DIVIDEND PLAN

Thanks
Mone