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Tracked by: 0 Boarder
Dear Ranjan,
We both defer in our views regarding these plans and I respect your views. Since these products are still new, hopefully with time I will understand these products better.
Thanks,
Raj...
In reply to:
MF with free INSURANCE - GOOD OR BAD???
Posted by :
RANJAN
Whether you pay for the insurance or the AMC pays for it by debiting the fund - it does not matter - it cannot be called free insurance.
So invest in the fund if it is doing well to claim 80C exemption and enjoy the insurance benefit. Do not invest for insurance sake. Invest for the sake of performance. If the performance falls - get out and forget the insurance. 
Tracked by: 0 Boarder
Dear Anand,
Excellent debate. It would have been more enjoyable if you had logged in with a login name rather than as a Guest.
Anyway, after the lenghty debate, the takeaway is, that Ultimately, it is the performance that matters. And Dws Tax Saving Fund has been a good performer since its inception. And the more comforting factor has been all the funds from the DWS stable are also doing well in these trying times.
First cover yourself adequetaly with Term Insurance and go for DWS Tax Saving fund and Birla Century sip. Avoid Ulips.
Best of luck,
Srikanth Shankar Matrubai...
In reply to:
MF with free INSURANCE - GOOD OR BAD???
Posted by : Guest
Hello all,
As I am going through lot of querries here, some experts are suggesting MFs/ELSS (like DWS tax saving), which is having free insurance with it.
1) But is it good? as such schemes will eventully pull all insurance expenses money from its MF/ELSS fund? to pay the contracted insurance company (like MetLife in case of DWS tax saver)
2) Are these insurance are really free, or there are any hidden charges that will be recovered by AMC, from fund money? I think this is just a gimmic to attarct ignorant investores.
3) Since all we hate ULIPs to keep insurance and investements separate, then why we suggest MF/ELSS with insurance?
4) Are such funds good for long term, though they are performing well on short term (Like DWS tax saving)?
I have not done much study with this, Kindly reply if u can throw some light.
Regards,
Anand
Tracked by: 1 Boarder
Dear sunnydude, if u right now have 60K Rs. ready with u kindly invest in the following manner.
Invest 30K each in liq. + fund of Sundaram & DWS. Fill the STP form to initiate weekly STP of 1000 Rs. from sund. Lq. + to sund. tax saver & DWS Lq. + to DWS Tax saver.
Ur money in Liq. + fund 'll earn u more returns than ur saving bank acct. weekly STP 'll be as good as SIP (infact more beneficial).
For better returns invest directly to avoid entry load.
thanks
Ashal ...
In reply to:
Tax saving Fund
Posted by :
Sunnydude
Hi,I wish to invest 60k in a tax saving fund through SIP route,should I invest in Sundaram Tax saver or Kotax Tax saver ? Which is the best in the category ? Have lost quite a asmount money in SBI Magnum
Tracked by: 1 Boarder
Dear Sunny,
You can also consider DWS Tax Saving Fund. This Fund not only has given decent returns but as a BONUS offers Free Life Insurance, 5 times your investment. No conditions, no asteriks. Plain and Simple.
Regards,
Srikanth Shankar Matrubai.
...
In reply to:
Tax saving Fund
Posted by : Sunnydude
Hi,I wish to invest 60k in a tax saving fund through SIP route,should I invest in Sundaram Tax saver or Kotax Tax saver ? Which is the best in the category ? Have lost quite a asmount money in SBI Magnum
Tracked by: 1 Boarder
Dear Sunny,
If you had been following our advice, we had become sceptical about SBI Magnum Tax Gain 93's repeatation of its excellent past performance about a year back itself. the number one reason being its Bloated Corpus.
Both of your choices, Sundaram and Kotak Tax Saver Funds are very good. You can definitely go ahead.
You can also consider investing in
Birla Sunlife Tax Relief 96 fund
Fidelity Tax Advantage Fund
Regards,
Srikanth Shankar Matrubai
...
In reply to:
Tax saving Fund
Posted by : Sunnydude
Hi,I wish to invest 60k in a tax saving fund through SIP route,should I invest in Sundaram Tax saver or Kotax Tax saver ? Which is the best in the category ? Have lost quite a asmount money in SBI Magnum
Tracked by: 1 Boarder
Go for Sundaram Tax Saver & DWS Tax saving fund. ...
In reply to:
Tax saving Fund
Posted by : Sunnydude
Hi,I wish to invest 60k in a tax saving fund through SIP route,should I invest in Sundaram Tax saver or Kotax Tax saver ? Which is the best in the category ? Have lost quite a asmount money in SBI Magnum
Tracked by: 1 Boarder
Hi,I wish to invest 60k in a tax saving fund through SIP route,should I invest in Sundaram Tax saver or Kotax Tax saver ? Which is the best in the category ? Have lost quite a asmount money in SBI Magnum...
Tracked by: 0 Boarder
Whether you pay for the insurance or the AMC pays for it by debiting the fund - it does not matter - it cannot be called free insurance.
So invest in the fund if it is doing well to claim 80C exemption and enjoy the insurance benefit. Do not invest for insurance sake. Invest for the sake of performance. If the performance falls - get out and forget the insurance. ...
In reply to:
MF with free INSURANCE - GOOD OR BAD???
Posted by :
vvrk
Dear Anand,
DWS AMC has been one of the most consistent performing AMC arcoss all its funds. The performance of equity and debt funds from this AMC has been good. I beleive everyone should have atleast one fund from this AMC. In my portfolio, I have a 11% exposure to DWS AMC.
Regarding the entry load/exit load of DWS Tax Saving fund, you pay no entry load if you directly invest with the AMC. You do not pay any exit load either. The insurance charges are borne by the AMC, they are not passed on to the investor. It is free insurance to the investor, and that is what we need to be concerned about (though it is not free insurance to the AMC).
Regards,
Raj
Tracked by: 0 Boarder
History of SIP
============
Around four years back, SIP was not very popular. To promote SIP, the fund houses waived entry load, but added an exit load. The benefit to the fund house was they had a reasonable estimate of inflows into the fund which gives them a cushon against outflows. As SIP became popular, the fund houses discontinued the free perks but still kept the exit load.
As an investor, one should look at the benefits that come to us. If one finds SIP attractive, they would invest irrespective of the exit load. I will not term SIP as a gimmick because the AMC benefits from predictable inflows. I will not advise against SIP just because it has an exit load(where as non SIP investing does not have an exit load).
Free Insurance
============
The main source of revenue for the fund houses are the fund management charges. The fund management charges depend on the corpus size of a fund. One way the corpus size can reduce is because of withdrawals done by investors. By offering free insurance, the fund houses are enticing investors to stay investeded for longer duration. This inturn indirectly reduces withdrawals and hence generates better revenue for the fund house. This is the benefit to the fund house for bearing the insurance expenses.
As an investor, one should look at the benefits that he gets. If I am getting insurance without paying anything additional from my pocket then why not try it. I am not really concerned about the expense ratio, as I have to pay the same even if I invest in the fund without opting for free insurance. My only logic is enjoy the free benifit as long as the investment is performing well.
Thanks,
Raj...
In reply to:
MF with free INSURANCE - GOOD OR BAD???
Posted by : RANJAN
Dear Ashal
It is quite clear that free insurance is only a gimmick.
The best thing one should do is to invest in mutual funds only for INVESTMENT sake. Insurance is an added benefit. Stick to the fund only if it is performing well. If it is not, get out and forget the insurance.
For insurance have enough term cover.
Tracked by: 0 Boarder
Dear Ashal
It is quite clear that free insurance is only a gimmick.
The best thing one should do is to invest in mutual funds only for INVESTMENT sake. Insurance is an added benefit. Stick to the fund only if it is performing well. If it is not, get out and forget the insurance.
For insurance have enough term cover. ...
In reply to:
MF with free INSURANCE - GOOD OR BAD???
Posted by : ashalanshu
Dear Friend, I already explained, in my prev. post, how & from where DWS is paying the Ins. prem. The reply u get from DWS people merely confirm the fact.
Actually, Once the FMC is recovered from the fund (remembered it is recovered on daily basis), the FMC is AMC\\`s own money & from this money they r paying the prem.
Thanks
ashal
Tracked by: 0 Boarder
Dear Friend, I already explained, in my prev. post, how & from where DWS is paying the Ins. prem. The reply u get from DWS people merely confirm the fact.
Actually, Once the FMC is recovered from the fund (remembered it is recovered on daily basis), the FMC is AMC\\`s own money & from this money they r paying the prem.
Thanks
ashal...
In reply to:
MF with free INSURANCE - GOOD OR BAD???
Posted by : Guest
(Hope my this post does not get deleted halfway!)
Dear Ashal,
Thanks for your info. However just to confirm, yesterday i mailed the querry to DWS support team and I got the reply just now
My Querry:
------------
Dear Customer Service Team,
Thanks for your reply.
However I would like to get one of my querry clarified before investing in your Tax saving fund.
I observed that you are offering a free insurance with the scheme, however whether the insurance premium for the same is funded from the fund value or it is born completely by the AMC itself on its own?
Plesae reply ASAP, as I need to take decision within couple of days.
Regards,
Anand
----------------
Reply From DWS...
----------------
Dear Sir,
Please note that the cover is bourne by the AMC itself, till the time you are invested in the fund.
The cover is 5 times the amount, upto Rs 5 lakhs, given by Metlife.
Please also note that at the time of filling up our Common application form you will find a \\\\
Tracked by: 0 Boarder
(Hope my this post does not get deleted halfway!)
Dear Ashal,
Thanks for your info. However just to confirm, yesterday i mailed the querry to DWS support team and I got the reply just now
My Querry:
------------
Dear Customer Service Team,
Thanks for your reply.
However I would like to get one of my querry clarified before investing in your Tax saving fund.
I observed that you are offering a free insurance with the scheme, however whether the insurance premium for the same is funded from the fund value or it is born completely by the AMC itself on its own?
Plesae reply ASAP, as I need to take decision within couple of days.
Regards,
Anand
----------------
Reply From DWS...
----------------
Dear Sir,
Please note that the cover is bourne by the AMC itself, till the time you are invested in the fund.
The cover is 5 times the amount, upto Rs 5 lakhs, given by Metlife.
Please also note that at the time of filling up our Common application form you will find a \\\\...
In reply to:
MF with free INSURANCE - GOOD OR BAD???
Posted by : ashalanshu
I'm unable to understand how the main content of my post got deleted. Dear Moderator, if u r reading these messages & keeping a close eye, please do needful to fix this problem, as it is also experienced by others too recently.
Coming to the post's content -
Question - From where the AMC (DWS in this case) is paying the prem. for Insurance cover?
Answer - DWS is paying the ins. prem. from the FMC (Fund Management Charges) recovered from the funds daily.
Now comes the question, how can DWS gives us free Ins.
Many of us already aware about Group Insurance Plans. DWS has taken the same from Metlife for Tax saver fund.
To explain the same, Let us assume there r 10000 investors in this Tax saving fund & the average age of investors of fund is 35 years.
If we check the prem. for a aged 35 individual policy, it is higher than the prem. charged for a group of 10000 people where average age of Gp. is 35. Why, because at the time of giving the policy, the ins. co. knows that it is next to impossible that all these 10000 people 'll die & there 'll be claim, Yes there 'll be claim from some higher age as well as lower age persons, in this case, the ins. co. is charging the prem. for average age, hence in some sense, DWS is paying higher prem. for Y'ger people to cross subsidies older people. As the risk of Ins. co. is less, the ins. co. is passing this benefit to DWS in the form of lower prem. than an individual policy.
The free ins. is provided only on the basic investment amount, hence as the fund perform better & there is increase in the over fund value of individual investor, the higher FMC 'll be recovered against the increased fund value.
The free insurance is capped upto max. 5L & as this free ins. is 5 times of investment, every individual can avail ins. upto 1L amount only. for investment above this amount there 'l be no Ins. but at the same time DWS is recovering FMC from the amount in excess of 1L also. Again this some what subsidizing the prem. of investors with less than 1L investment by the investors with more than 1L investment.
As the fund in question is an ELSS, due to lock in period, DWS is sure to get FMC at least for 3 years & during these 3 years, the investor can't do anything, no matter the fund performs or not. As there is surety of FMC as well as age of investors, DWS may get even lower prem. quote from Ins. co. (Metlife in this case) as per the age profile of investors of the fund.
I hope from all the above info, every body can understand how DWS is able to give free ins.
Thanks
Ashal
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I have invested in Kotak indo world infrastructure. It has already depreciated by 40%. Will this fund ever return our captal?...
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I'm unable to understand how the main content of my post got deleted. Dear Moderator, if u r reading these messages & keeping a close eye, please do needful to fix this problem, as it is also experienced by others too recently.
Coming to the post's content -
Question - From where the AMC (DWS in this case) is paying the prem. for Insurance cover?
Answer - DWS is paying the ins. prem. from the FMC (Fund Management Charges) recovered from the funds daily.
Now comes the question, how can DWS gives us free Ins.
Many of us already aware about Group Insurance Plans. DWS has taken the same from Metlife for Tax saver fund.
To explain the same, Let us assume there r 10000 investors in this Tax saving fund & the average age of investors of fund is 35 years.
If we check the prem. for a aged 35 individual policy, it is higher than the prem. charged for a group of 10000 people where average age of Gp. is 35. Why, because at the time of giving the policy, the ins. co. knows that it is next to impossible that all these 10000 people 'll die & there 'll be claim, Yes there 'll be claim from some higher age as well as lower age persons, in this case, the ins. co. is charging the prem. for average age, hence in some sense, DWS is paying higher prem. for Y'ger people to cross subsidies older people. As the risk of Ins. co. is less, the ins. co. is passing this benefit to DWS in the form of lower prem. than an individual policy.
The free ins. is provided only on the basic investment amount, hence as the fund perform better & there is increase in the over fund value of individual investor, the higher FMC 'll be recovered against the increased fund value.
The free insurance is capped upto max. 5L & as this free ins. is 5 times of investment, every individual can avail ins. upto 1L amount only. for investment above this amount there 'l be no Ins. but at the same time DWS is recovering FMC from the amount in excess of 1L also. Again this some what subsidizing the prem. of investors with less than 1L investment by the investors with more than 1L investment.
As the fund in question is an ELSS, due to lock in period, DWS is sure to get FMC at least for 3 years & during these 3 years, the investor can't do anything, no matter the fund performs or not. As there is surety of FMC as well as age of investors, DWS may get even lower prem. quote from Ins. co. (Metlife in this case) as per the age profile of investors of the fund.
I hope from all the above info, every body can understand how DWS is able to give free ins.
Thanks
Ashal
...
In reply to:
MF with free INSURANCE - GOOD OR BAD???
Posted by : ashalanshu
Dear friend, let me enter in this debate just to clear from where, the prem. of ins. co. is coming?
Here i\\`m taking the example of DWS Tax saver only, as it is the most simple product under MF+Insurance combo.
First the question, \\\\
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Ashal,
Thank you for those nice posts on strucutred products, i have kept it for my weekend read as its quite a heavy post which requires my full attention.
BTW becoz of all these ULIPS insurance premia is going to fall by 40%, at least kotak insurance has reduced insurance premium by 40% for term cover... its because of some margin related waivers... will this translate to bigger maturities to insurance availed before this new regulation.. i mean for those who bought insurance cover before this order was passed will it mean we get more at the end of the cover?...
In reply to:
MF with free INSURANCE - GOOD OR BAD???
Posted by : ashalanshu
Dear friend, let me enter in this debate just to clear from where, the prem. of ins. co. is coming?
Here i\\`m taking the example of DWS Tax saver only, as it is the most simple product under MF+Insurance combo.
First the question, \\\\
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