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MF Investment Help
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You can fill up the systematic transfer form and submit.
I hope you have stayed for atleast 1 year in HDFC EQUITY.
There is no entry load in HDFC TOP 200. But there can be an exit load in HDFC Equity fund if you have come out within 1 year. ...
In reply to:
Switching charges enquiry
Posted by :
Guest
Please advise if there are any charges for switching from one equity fund to another within the same AMC. I want to switch hdfc equity having current value of Rs 1200000/- to hdfc top 200 which too has ivestment of Rs 700000/- with monthly Rs 3000/- sip. Please note I do have other AMC funds in my portfolio. 
Tracked by: 0 Boarder
Hello,
I have already invested in equity via tax saving fungs and returns are ok for last year.
My funds are:
Sundaram Tax, Rs 3000
Fidility tax Rs, 1000 and
Dws tax Rs, 1000
though all have done better, i am considering of shifting my sip money of fidility tax to other 2 funds and stopping fidility.
Is it a good move, Please help?...
Tracked by: 0 Boarder
While choosing funds go for the consistent performers - not necessarily the best performing fund. Look at the value research rated funds. (5* or 4*). Invest 60- 70% of your money in large cap funds. Balance can go into midcap/thematic funds. Avoid sector funds as far as possible- if you still want to invest - invest not more than 10% - opt for dividend payout and book profits regularly . Invest always via SIP. 6- 8 funds are more than enough. Do not look at the NAV while investing. It does not matter - whether NAV is 10 or 100. Look at the performance in the last 3 years / last 5 years....
In reply to:
how to get
Posted by :
dsvas
Thank you for the information given by you, another information regarding which is the best mutual fund.i saw different sites and and different books stated that no one cannot say that same scheme is the best one.how can i judge that it is the best fund.i think that i can take my own dession in selection of scheme(not the adivce of the agentt). what are the parameters taken in consideration, i konw little about 1)fund managers prformance(how can i know)2)fund size 3)nav there are some parameters which i don't know if you know please convey to me.
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Choosing a mutual fund seems to have become a very complex affair lately.
There are no dearth of funds in the market and they all clamor for attention.
The most crucial factor in determining which one is better than the rest is to look at returns. Returns are the easiest to measure and compare across funds.
At the most trivial level, the return that a fund gives over a given period is just the percentage difference between the starting Net Asset Value (price of unit of a fund) and the ending Net Asset Value.
Returns by themselves don't serve much purpose. The purpose of calculating returns is to make a comparison. Either between different funds or time periods. And, you must be careful not to make a mistake here. Or else, you could end up investing in the wrong funds.
Absolute returns -
Absolute returns measure how much a fund has gained over a certain period. So you look at the NAV on one day and look at it, say, six months or one year or two years later. The percentage difference will tell you the return over this time frame.
But when using this parameter to compare one fund with another, make sure that you compare the right fund. To use the age-old analogy, don't compare apples with oranges.
So if you are looking at the returns of a diversified equity fund (one that invests in different companies of various sectors), compare it with other diversified equity funds. Don't compare it with a sector fund which invests only in companies of a particular sector.
Don't even compare it with a balanced fund (one that invests in equity and fixed return instruments).
Benchmark returns -
This will give you a standard by which to make the comparison. It basically indicates what the fund has earned as against what it should have earned.
A fund's benchmark is an index that is chosen by a fund company to serve as a standard for its returns. The market watchdog, the Securities and Exchange Board of India, has made it mandatory for funds to declare a benchmark index.
In effect, the fund is saying that the benchmark's returns are its target and a fund should be deemed to have done well if it manages to beat the benchmark.
Let's say the fund is a diversified equity fund that has benchmarked itself against the Sensex.
So the returns of this fund will be compared vis-a-viz the Sensex.
Now if the markets are doing fabulously well and the Sensex keeps climbing upwards steadily, then anything less than fabulous returns from the fund would actually be a disappointment.
If the Sensex rises by 10% over two months and the fund's NAV rises by 12%, it is said to have outperformed its benchmark. If the NAV rose by just 8%, it is said to have underperformed the benchmark.
But if the Sensex drops by 10% over a period of two months and during that time, the fund's NAV drops by only 6%, then the fund is said to have outperformed the benchmark.
A fund's returns compared to its benchmark are called its benchmark returns.
At the current high point in the stock market, almost every equity fund has done extremely well but many of them have negative benchmark returns, indicating that their performance is just a side-effect of the markets' rise rather than some brilliant work by the fund manager.
Time period -
The most important thing while measuring or comparing returns is to choose an appropriate time period.
The time period over which returns should be compared and evaluated has to be the same over which that fund type is meant to be invested in.
If you are comparing equity funds then you must use three to five year returns. But this is not the case of every other fund.
For instance, cash funds are known as ultra short-term bond funds or liquid funds that invest in fixed return instruments of very short maturities. Their main aim is to preserve the principal and earn a modest return. So the money you invest will eventually be returned to you with a little something added.
Investors invest in these funds for a very short time frame of around a few months. So it is alright to compare these funds on the basis of their six month returns.
Market conditions -
It is also important to see whether a fund's return history is long enough for it to have seen all kinds of market conditions.
For example, at this point of time, there are equity funds that were launched one to two years ago and have done very well. However, such funds have never seen a sustained declining market (bear market). So it is a little misleading to look at their rate of return since launch and compare that to other funds that have had to face bad markets.
If a fund has proved its mettle in a bear market and has not dipped as much as its benchmark, then the fund manager deserves a pat on the back.
Final checklist -
Here are some quick pointers when comparing funds.
- Compare funds that are similar. For instance, compare Alliance Equity with Franklin India Prima. Both are diversified equity funds. Similarly, compare UTI Auto with J M Auto, both being auto sector funds. Or Birla Midcap with Magnum Midcap, both being funds that invest in mid-cap companies.
Don't compare the performance of Alliance Equity with UTI Auto or even Alliance Equity with Birla Midcap.
- When returns are compared, make sure that the time period is identical. Or else, you may be looking at the one-year returns for one fund and the three-year returns for another.
For instance, if you were told that the return of HDFC [Get Quote] Equity was 59.72% and that of Franklin India Prima was 61.74%, it would be misleading.
Because the return stated of HDFC Equity is a one year return while that of Franklin India Prima is the three-year return.
- Compare a fund with it's own stated benchmark, not another. For instance, Fidelity Equity, Escorts Growth and BoB Growth are all diversified equity funds with different benchmarks.
Fidelity Equity - BSE 200
Escorts Growth - S&P CNX Nifty
BoB Growth � Sensex
While there are other factors that have to be considered when investing in a mutual fund, returns is the most important. So make sure you do your homework right on this count. ...
Tracked by: 3 Boarders
Dear Kentmss
Thanks for updating....
Regds
Ashport...
In reply to:
Please Advice
Posted by :
kentmss
Ashport, DSPML now allows 1000 sip
Tracked by: 0 Boarder
Investors always judge a fund by the return it gives, never by the risk it took.
In any historical analysis of a mutual fund, the return is remembered but the risk is quickly forgotten.
So a fund manager may have used very high-risk strategies (that are bound to fail disastrously in the long run), hoping that his wins will be remembered (as they often are), but the risk he took will soon be forgotten.
What is risk?
Risk can be defined as the potential for harm.
But when anyone analysing mutual funds uses this term, what is actually being talked about is volatility.
Volatility is nothing but the fluctuation of the Net Asset Value (price of a unit of a fund). The higher the volatility, the greater the fluctuations of the NAV.
Generally, past volatility is taken as an indicator of future risk and for the task of evaluating a mutual fund, this is an adequate (even if not ideal) approximation.
How risk is measured
There are two ways in which you can determine how risky a fund is.
- Standard Deviation
Standard Deviation is a measure of how much the actual performance of a fund over a period of time deviates from the average performance.
Since Standard Deviation is a measure of risk, a low Standard Deviation is good.
- Sharpe Ratio
The Sharpe Ratio of a fund measures whether the returns that a fund delivered were commensurate with the kind of volatility it exhibited.
This ratio looks at both, returns and risk, and delivers a single measure that is proportional to the risk adjusted returns.
Since Sharpe Ratio is a measure of risk-adjusted returns, a high Sharpe Ratio is good.
How to check the fund's risk
So how would you figure out how risky a mutual fund is?
Value Research, a mutual fund research outfit, carries out a rating every month which is also carried on rediff.com. If you would like to take a look at the latest ratings, click on the relevant month: March, April, May.
In this rating, each fund is given a star. The funds with a 5-star rating are the best. Those with a 1-star rating are the worst.
This star rating is based on risk-adjusted return. In a very simple way, it gives investors an understanding of whether a fund is taking an acceptable amount of risk in generating the kind of returns it is doing.
A fund's return for each month is taken since the day it is launched (only funds with a minimum performance of history of three years are considered).
This return that a fund gives is compared to other 'riskless' investments, like government investments, which have no risk per se. This means funds do not rate very high if they give phenomenal returns, but have taken tremendous risks to do so.
1. Don't just look at the NAV, also look at the risk
Alliance Buy India and Alliance Equity both have 3 stars. That does mean their NAV is identical. In fact, the NAV of Alliance Equity is 91.66 while that of Buy India is 16.05.
However, Alliance Buy India took an average risk and delivered an average return, while Alliance Equity took an above average risk to get the above average returns. Hence their stars are identical, depiste one having a higher NAV.
2. Higher rating does not mean better returns
A fund with more stars does not indicate a higher return when compared with the rest. All it means is that you will get a good return without putting your money at too much risk.
Birla Equity Plan has a 4-star rating while Alliance Tax Relief '96 has a 2-star rating. However, the fund with the 2-star rating has a higher NAV (131.96) than the one with the 4-star rating (39.37).
3. Higher rating does not mean more risk
Birla Advantage has an NAV of 67.09 while Franklin India Prima has an NAV of 122.92.
This does not necessarily mean that Franklin India Prima is offering a higher risk since the return is higher.
In fact, according to our ratings, Franklin India Prima is a 5-star fund while (risk is below average) while Birla Advantage is a 2-star fund (risk is above average).
On a final note
When you decide to invest in a mutual fund, you must look at risk and return.
Always ask yourself one question: What are the chances of my losing money?
Do not get misled by high returns. You could also end up losing a substantial part of your savings.
Note:: The NAVs are fictitious for the sake of example....
Tracked by: 3 Boarders
Ashport, DSPML now allows 1000 sip...
In reply to:
Please Advice
Posted by : ashport
Dear Kentmss
Sorry for the intervention....but DSPML TIGER and DSPML Top 100 both dont allow Rs 1000 SIP. Minimum SIP amount is Rs 2000.
Thanks
Ashport
Tracked by: 0 Boarder
Dear Ashal,
Thanks for the reply.Some hope.Details are as follows.Would like to know best path forward.
Policy: ICICI LIFETIME. Started on 24th Aug-2004,premium 20000 per month. Sum assured to begin with was 1 lakh. 100% in maximiser fund.
Within a year, of the policy the insuranse coverage was increased to 11 Lakh.
In Nov 2007, I shifted the whole amount to PROTECTOR fund, (Approx. 13.20 Lakhs). However monthly premiums were continued to go into maximiser fund.
As on date,
Maximiser fund: Units= 3431.26 @ NAV of 51.11 &
Protector fund: Units= 83015.91@ NAV of 16.46.
I'm NRI, premiums paid thr NRE A/C.
Request tax and insurance experts to suggest best path forward. I want to withdraw the amount and have written to stop further premiums.
Best regards,
Prahlad....
In reply to:
Tax on withdrawals from ULIP
Posted by : ashalanshu
Dear pralhad, First of all if it is possible, contact ur ins. company & ask to increase the Sum assured. by that much amount that ur prem. comes below the limit of 20% rule.
If it is not possible, don't worry, ur case is boarderline case. as ur prem. were 21% only calculate ur fund value on a split of 20+1%. The fund value u get as major part 'll be tax free & only the fund value u get from ur 1% excess prem. 'll be get added to ur taxable income from other sources in the year of receipt.
detailed calculation can be made if u post detailed data.
Thanks
Ashal
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n order to cushion the losses resulting from stock market slowdown and rising inflation levels, Rajesh Gupta, a 43-year-old salaried professional, was advised to invest a part of his money in gold.
His financial planner backed this advice with the fact that gold has traditionally worked as a hedge against inflation and the declining dollar and has given the investor steady returns.
But Rajesh didn’t want to deal with issues associated with storing gold in its physical form or ensuring the purity of the gold. His financial planner then told him to invest either in Gold Exchange Traded Funds (ETFs) or gold mutual funds.
But the question remained, which one? To help you make the choice, SundayET gives you a lowdown on how to buy gold ETFs and gold mutual funds.
Different asset classes-
According to Lakshmi Iyer, product head-vice-president, Kotak Mutual Funds, “The basic difference between gold ETFs and gold mutual funds are that they belong to two different asset classes.”
Gold ETFs give the investor the opportunity to invest in units of gold, which are then traded on the exchange as a single stock. The units issued under the scheme represent the value of gold held in the scheme. Gold ETFs hence fall into the category of commodities.
Gold mutual funds, however, fall into the equity category as they invest in equity and equity-related securities of gold mining companies. Since gold mining companies are not listed on Indian stock exchanges, the gold mutual funds invest in world gold funds that invest in gold mining companies across the world.
Returns available-
The predominant criterion for all investment remains the returns that can be expected from these funds. An investor should expect a return of around 15% per annum over a two to three-year time horizon.
Says Pankaj Sharma, executive V-P and head, business development and risk management, DSP Merrill Lynch Fund Managers, “The world gold fund has given absolute returns of 31.9% in the period since its inception in August 2007 to July 2008.”
He adds that the gold fund they invest into has given an annualised return of 29.5% over the last three years. However, most financial advisors advise that investment in gold must be made for the purpose of diversification and at any point in time, about 10-15% of your assets must be invested in gold.
Nature of funds-
There is also a strict difference with the regard to the aims of this fund and how they are managed. Gold ETFs are known to follow a passive investment strategy.
“The fund simply buys and holds gold on behalf of the investor without actively managing it. The aim is to give returns as close as possible, post-expenses , to that given for gold as a commodity,” says Iyer. However, when choosing between ETFs, investors need to be aware of the tracking error, which is the difference given by the gold ETF and those given by physical gold.
In fact, when investing in a mutual fund, the investor can rely on the expertise of a fund manager who indulges in active portfolio management and is able to make crucial decisions regarding selecting stocks of gold companies.
“The fund manager has an understanding of the quality of gold reserves to mined and will be able to decide which companies will do better than others,” says Ruchir Parekh, fund manager, AIG World Gold Fund.
The multiplier effect-
The reason most gold mutual funds give for choosing a mutual fund is that stock prices of gold mining companies have risen much more than the price of gold itself.
According to Parekh, “The GDM index, an index of gold miners, has moved up close to 6.5 times since 2000 as compared to a gold price increase of over three times in the same period.”
“There is a multiplier effect on the profitability of gold mining companies with the rise in gold prices, on account on operating leverage,” adds Sharma.
Cost benefits-
ETFs give investors the opportunity of buying as less as 1 unit on the exchange.
Since investors can enter the trade through brokers, there is no entry or exit load and brokerage expenses are not very high.
This is favourable in comparison to mutual funds, which have a defined load structure, entry and exit loads and other expenses.
However, things like minimum unit size vary for investors who invest in ETF via asset management companies.
The trading edge-
The advantages of holding ETFs are seen during trading, given that ETF units can be traded like shares.
It gives the investor the ability to buy and sell quickly at market price, making them highly liquid assets.
Moreover, intra-day trading is also possible with an ETF, which is not possible with open-ended mutual funds.
Moreover, portfolio disclosures occur only once a month in a mutual fund but everyday in an ETF.
(Source-ET)...
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Dear friend, as u r now member of MMB, One thing is sure, u 'll get valuable advise about ur investments. A lot of us have no access to so called quality advisers, That's why we joined here @ MMB.
It is good on ur part that u r learning from ur mistakes & at the same time r ready to rectify the same. My dear friend if u r for long term say 10-15 years, don't fret much over current downturn of ur portfolio. Over the period, ur losses 'll be wiped out & there 'll be a lot of positive portfolio, but do remember to readjust & rebalance ur portfolio.
happy investing
Thanks
Ashal...
In reply to:
A New Commer - Pls Guide
Posted by : Guest
Dear ashalanshu,
Thanks for the reply. The fact is, i am an NRI so I get very less time to be in India to apply for funds and manage my portfolio fully. Now I have started correcting my mistakes to decrease the number of MF's. I have no MG agent who guides me.
I am not beating bank FD but what i think is to receive atleast minimum returns what bank pays. I don't want few years to go by in loss. I think this comes out from the fact that I have less experience and am in the fund market for very less time. I am correcting my mistakes. I want to enter Debt funds to protect the portfolio going downside.
Tracked by: 0 Boarder
Dear Live wire,
You may Discontinue SIP in Following Funds & Switch the Existing amount to Better Performing Funds.
Reliance Equity Opportunity
Franklin India Opportunity Fund
You May also Redeem Principal Equity Fund
Following Funds can be Considered for SIP or L.S. Investment.
Reliance Regular Saving Fund Equity
Templeton India Equity Income Fund
DWS Alpha Equity Fund/Investment Opportunity Fund
DSPML Equity / Top 100 Fund
P.C.Sharma
...
In reply to:
I have sips of reliance equity opp,fra
Posted by : Live wire
dear sir ,
I have sips of icici infrastructure fund, reliance equity opp, franklin india opp fund and also lumpsum investments in principal equity &uti infrastructure.plus i want to make new sips &lumpsum investment in mutual fund should i stick on my old mutual funds or canu recommend mesome better performing mutual funds , iamalso looking to exit from some of my old mutual funds kindly advice as i ma having losses in my investment right now
Tracked by: 1 Boarder
Ranjan ji,
Thanks for reply. I occasionally visit valueresearch, now I will do it regularly. ...
In reply to:
MF Diversification
Posted by : RANJAN
Look at the returns for a period of say last 3 years and last 5 years.
Compare it with the benchmark returns. Easiest way is to see the ratings of the fund. If value research ratings of the fund is 5* or 4*
- continue to invest via SIP in the fund. Otherwise you can start SIP in a better rated fund.
Tracked by: 1 Boarder
Look at the returns for a period of say last 3 years and last 5 years.
Compare it with the benchmark returns. Easiest way is to see the ratings of the fund. If value research ratings of the fund is 5* or 4*
- continue to invest via SIP in the fund. Otherwise you can start SIP in a better rated fund. ...
In reply to:
MF Diversification
Posted by : pradesh
Dear Ranjan ji,
I often read on this board that one should review the performance of the fund in which one has invested. Will you please tell me a couple of parameters (to start with) which are important in such review so that I can start thinking on them. Regards,
Tracked by: 1 Boarder
Dear Ranjan ji,
I often read on this board that one should review the performance of the fund in which one has invested. Will you please tell me a couple of parameters (to start with) which are important in such review so that I can start thinking on them. Regards,...
In reply to:
MF Diversification
Posted by : RANJAN
Investing in mutual funds gives you diversification as compared to stocks. So risk gets reduced. Investing in too many funds - does not reduce risk - it increases risk. Ultimately what matters is your net returns. What you can achieve with 6-8 funds - why do you want to invest in 20 or more funds? If you do so - what happens is - some funds will do well - most other funds will perform below average - your net returns will come down. Some funds invest major portion in other markets. Such funds are treated like debt funds - when it comes to tax consideration. So be aware of the tax implications. Unless you have sufficient experience in Indian market - better to avoid such funds.
Tracked by: 0 Boarder
Mr. Dhirendra Kumar is quite right But what is ur opinion about fund size for Diversified Equity Fund ...
In reply to:
New to investing: Opt for diversified equity funds
Posted by : MMB Messenger
Dhirendra Kumar of valuereaserachonline.com feels a good diversified equity fund is the best way to get started for investors looking at regular investing for three years and beyond.
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