Essel and zee group exposure: Investors in some FMPs of Kotak Mutual Fund that mature between April 8 and May end, will not get their full redemption amount back on maturity.

Kotak FMP Series 127 and 183 that matured on April 8 and April 10 had an exposure of nearly 18 percent and 19 percent, respectively, to the Essel Group.

The scheme said it may face a delay in recovering its money that it had invested in the non-convertible debentures (NCD) of two of Essel group companies, namely Edisons Utility Works Pvt Ltd and Konti Infrapower & Multiventures Pvt Ltd.

As a result, investors may get their part redemption proceeds upon the scheme’s maturity and the rest will come to them as and when the fund house recovers the money from the companies.

Investors may get part redemption, rest when fund house recovers money scheme facing delay in recovering money from NCDs of two Essel group company. The FMP was launched around November 2015.

risk

Although the NCDs are backed by equity shares of Zee Entertainment Enterprises Limited (Zee), most of the lenders and mutual funds who had lent money (in other words, bought the debt securities) to the Essel group had chosen to not sell the shares to recover the money if there is any default.

Check the factsheet regularly if you are invested in debt and balance funds

Lenders have granted this moratorium till around September 2019 by which time they, including Kotak AMC, expect the group to repay all its dues.

The 3- year FMP scheme, which matures in April-May 2019, has invested in debt securities, money market instruments and government securities. Amongst other investments, the scheme also invested in Non-Convertible Debentures (NCDs) issued by Edisons Utility Works Pvt Ltd and Konti Infrapower & Multiventures Pvt Ltd (both are Essel Group companies – secured by equity shares of Zee Entertainment Enterprises Limited) and IL&FS Transportation Networks Limited (Credit Enhancement by Parent Support Agreement of IL&FS). The three firms are facing headwinds due to company and sectoral-specific issues. For IL&FS Transportation Networks, Kotak Mutual Fund has made a 100% provision for this investment as the company has been classified in the Red category where recovery is uncertain and will be dependent on the resolution plan achieved by the new board/NCLT.”

Kotak FMP due for maturitykotak

NCDs or debt securities that are backed by the group companies equity shares come with a cover that is agreed upon at the time of the agreement.

Total of 10 fund houses namely ICICI, HDFC, KOTAK, FRANKLIN, UTI, L&T, RELIANCE,SBI etc..had lent to 16 companies belonging to Essel Group. Some of this money lent was backed by shares of the above companies that were pledged.

Overall the mutual fund industry has an exposure of around Rs.8000 crs to Zee/Essel Group in deb across mutual funds and schemes. Of this around 1700 cr is in FMPs and the rest in open-ended debt funds.

Detail portfolio of Kotak FMP S127 

Download (PDF, 79KB)

Detail portfolio of Kotak Fixed Maturity Plan S183

Download (PDF, 78KB)

Totally around 55 FMPs have exposure to Zee/Group Debt. The maturities have just started. In the next 2-3 months, almost 30-40 of these FMPs will mature. So all the investors in such FMPs may be impacted

“This has resulted in a breach of top-up covenants…there were a lot of deliberations with the promoters of the Essel Group along with other lenders (Mutual Funds, NBFCs etc). A supermajority of lenders have decided not to declare an event of default as it may result in steep fall in price given panic selling in the Zee thereby eroding collateral value and resulting in sub-optimal recovery,” said the note by Kotak AMC to its investors.

Do your mutual funds have exposure to Essel Group?

The fund house added that “Essel promoters are working for the resolution of above through a strategic sale of Zee in a time-bound manner. The above resolution is likely to be achieved by September 30, 2019 as per communication from Essel promoters.”

Meanwhile, the FMP is due for maturity. How it pays back to the investors remains to be seen, as the fund house has not done side-pocketing yet for this particular scheme. Side pocketing is a practice whereby the bad asset- the debt security that defaulted- in a scheme is segregated from the rest of the scheme. Once segregated, a set of units will contain investments made in the troubled paper, while the other set of units will contain all other investments and cash holdings. The good part of the scheme is open for sales and repurchase, but the bad portion is frozen. If and when the fund house recovers the money from the bad assets, it pays off the money to unit holders whose investments were stuck in the fund before the default.

Conclusion: You have to wait and hope the problem resolves. The probability of the problem resolving is high and you may get your total money back. And also interest for this period.

Polycab India Ltd IPO Review and list of anchor investors

Polycab India Ltd is a manufacturer and seller of wires, cables and fast moving electrical goods. Its a popular brand for wires in India. They sell their products under brand name “POLYCAB”. They are one of the largest manufacturers of wires in the industry. The product range includes power cables, control cables, solar cables, building wires and more. The other products includes welding cables, round cables, railway signaling cables, speciality cables and green wires. The other business includes electric fans, LED lighting and luminaires, switches and switchgears, solar products and conduits and accessories.

For Fiscal 2018, they have a market share of approximately 18% of the organized wires and cable industry and approximately 12% of the total wires and cables industry in India, estimated at ₹ 525 billion based on manufacturers realization. Apart from wires and cables, they manufacture and sell FMEG such as electric fans, LED lighting and luminaires, switches and switchgears, solar products and conduits and accessories.

polycab

Polycab India raises Rs 401 cr from anchor investors and the List of anchor investors

IPO Dates & Price Band:

  • IPO Open: 05-April-2019
  • IPO Close: 09-April-2019
  • IPO Size: Approx ₹1346 Crore
  • Face Value: ₹10 Per Equity Share
  • Price Band: ₹533 to ₹538 Per Share
  • Listing on: BSE & NSE
  • Retail Portion: 35%
  • Equity: 17,582,000 Shares

Market Lot:

  • Shares: Apply for 27 Shares (Minimum Lot Size)
  • Amount: ₹14,526

Allotment & Listing:

  • Basis of Allotment: 12-April-2019
  • Refunds: 15-April-2019
  • Credit to demat accounts: 16-April-2019
  • Listing: 18-April-2019

Company Promoters:

  • Inder T Jaisinghani
  • Ajay Jaisinghani
  • Ramesh T Jaisinghani

Polycab IPO Lead Managers:

  • Axis Capital Ltd
  • Citigroup Global Markets India Pvt Ltd
  • Edelweiss Financial Services Ltd
  • IIFL Holdings Ltd
  • Kotak Mahindra Capital Company Ltd
  • Yes Securities (India) Ltd

Polycab IPO Registrar:

Karvy Computershare Private Limited

Object of the issue:

The Company shall not receive any proceeds from the Offer for Sale
The Net Proceeds from the Fresh Issue are proposed to be utilised towards the following objects:
1. Scheduled repayment of all or a portion of certain borrowings availed by the Company;
2. To fund incremental working capital requirements of the Company; and
3. General corporate purposes

Qualitative Factors:

Market leader in wires and cables in India
Diverse suite of electrical products with varied applications across a diverse customer base
Strong distribution network
Manufacturing facilities with high degree of backward integration
Strong brand in the electrical industry
Experienced and committed management team

 key

Key Business Strategies:

Enhance and strengthen our leadership position in wires and cables

Continue to expand the FMEG business

Expand distribution reach

Continue to invest in technology to improve operational efficiencies, customer satisfaction and sales

Strengthen brand recognition

Basic Financial Details:

financial

Financials( Consolidated) of Polycab India Ltd:

Earnings per Share (EPS)2017-18 Rs 26.23
Earnings per Share (9 M)2018-18 Rs 25.31
Book value as on 31.12.2018 Rs. 192.64
RoNW  for 2017-18 : 15.78%
Upper Price Band/last EPS: 20.49
Upper offer price/Book Value Ratio: 2.79

If we annualize consolidated EPS of Rs 25.31 for 9 months ended Dec-18 and a higher price band of Rs 538, the P/E works out to 16x. Similarly, if we take consolidated EPS of 3 years average of Rs 20.79, P/E works out to be 26x. Means company is asking highest price band of Rs 538 in the P/E of 16x to 26x. Its competitors like Havell India is trading at P/E of 72.5x (Highest), Bajaj electricals are trading at 61.42x and KEI Industries at P/E of 23x (Lowest) and the industry average is at 54x,hence the highest Polycab IPO Price of Rs 538 per share is reasonably priced.

peers

Risk:

Its Company, Subsidiaries, Joint Ventures, Directors and Promoters are involved in certain criminal and civil legal proceedings. Any adverse decision in such proceedings may render us/them liable to liabilities/penalties and may adversely affect our business, financial condition, results of operations and cash flows.

Significant increases or fluctuations in prices of, or shortages of, or delay or disruption in the supply of primary raw materials could affect its estimated costs, expenditures and timelines which may have a material adverse effect on its business, financial condition, results of operations and cash flows.

Polycab continued operations at its manufacturing facilities are critical to it’s business and any disruption, breakdownor shutdown of its manufacturing facilities may have a material adverse effect on its business, financial condition, results of operations and cash flows.

Polycab is heavily dependent on the performance of the wires and cables market. Any adverse changes in the conditions affecting the wires and cables market can adversely impact its business, financial condition, results of operation s,cash flows and prospects.

Polycab inability to maintain the stability of its distribution network and attract additional distributors and dealers may have a material adverse effect on its results of operations and financial condition.

If polycab are unable to maintain and enhance its brand, the sales of its products will suffer, which would have a material adverse effect on its results of operations.

Polycab is highly dependent on its key management team as well as its mid-to-senior personnel and its success depends in large part upon its Promoters. The loss of or its inability to attract or retain such persons could materially adversely affect its business performance.

Polycab has substantial capital expenditure and working capital requirements and may require additional financing to meet those requirements, which could have a material adverse effect on its results of operations and financial condition.

Polycab faces significant competitive pressures in its business. Its inability to compete effectively would be detrimental to its business and prospects for future growth.

Polycab operates in a labor-intensive industry and is subject to stringent labor laws and any strike, work stoppage or increased wage demand by its employees or any other kind of disputes with its employees could adversely affect its business, financial condition, results of operations and cash flows.

Polycab depend on a limited number of third parties for the supply of its primary raw materials and delivery of products and such third parties could fail to meet their obligations, which may have a material adverse effect on its business,results of operations, financial condition and cash flows.

Grey market premium

Current GMP is Rs.75/- to 80/-  and Kostak is Rs. 700/-

DISCLAIMER:

No financial information whatsoever published anywhere here should be construed as an offer to buy or sell securities, or as advice to do so in any way whatsoever. All matter published here is purely for educational and information purposes only and under no circumstances should be used for making investment decisions. Readers must consult a qualified financial advisor before making any actual investment decisions, based on information published here.

Jana Small Finance Bank Offers Upto 9.6% Interest rate : Review and MF holding

Jana Small Finance Bank (erstwhile Janalakshmi Financial Services Limited) commenced operations as a non-banking finance company (NBFC) on March 4, 2008, and was later classified as a non-banking finance company-microfinance institution (NBFC-MFI). The bank received a licence to set up a small finance bank on April 28, 2017 and commenced banking operations on March 28, 2018. Jana Holdings Limited (JHL), a non-banking finance company-non-operative financial holding company (NBFC-NOFHC), holds a 45.37% stake in JSFB as on February 28, 2019.

fixedeposits

JSFB has a diversified presence across 18 states and 2 union territories in India, with a portfolio of Rs.7,164 crore as on November 30, 2018. The share of the top 3 states of Tamil Nadu, Karnataka and Maharashtra was about 51% as on November 30, 2018. The bank raised Rs. 1,636 crore equity during FY2018 and Rs.601 crore during 11M FY2019 from existing and new investors.

For H1 FY2019, the bank has reported a net loss of Rs.1,291.8 crore on a managed portfolio of Rs.6,941 crore as on September 30, 2018. In FY2018, JSFB reported a net loss of Rs. 2,503.8 crore on a total managed asset base of Rs. 10,022.4 crore compared to a net profit of Rs. 170.1 crore on a total managed assets base of Rs. 15,730 crore during FY2017.

FD RATES

Credit challenges

Weak recoveries from harder overdue buckets continue to weigh down on asset quality – JSFB’s asset quality has remained weak with 90+ dpd3 at 31.7% (Rs.2,336.4 crore excluding write-off and Rs.3,264.4 crore including write-off) as on December 31, 2018 compared to Rs. 3,270.6 crore4 in March 2018 (Rs. 1,990 crores in March 2017) because of modest collections from the overdue buckets and limited impact of the various recovery programmes.

key financial

Outlook: Negative

The Negative outlook factors in the expected weakness in JSFB’ earnings and capital profile going forward. The ratings would be downgraded further if the bank’s recoveries and disbursements remain subdued thereby prolonging any meaningful improvement in its earnings and capitalisation, or if its liquidity profile deteriorates because of the bank’s inability to mobilise adequate external funding or deposits. The outlook would be revised to stable in case of a steady revival in its profitability indicators and improvement in its capital structure.

rating history

ratingMutual fund Holding of JSFB :

  1. DSP Credit risk Fund 08/07/2019
  2. UTI Unit link Insurance plan  26/04/2019
  3. Kotak Credit Risk  08/04/2019
  4. Kotak Medium Term   08/04/2019

Should you invest?

Like any other commercial bank, deposit of up to ₹ 1 lakh is insured by the Deposit Insurance and Credit Guarantee Corp. (DICGC), a subsidiary of RBI. DICGC has a list of insured banks on its website, and as of know, seven of the 10 small finance banks are listed on its website.

“The credit rating practices and mechanism of small finance banks might not be at the same level as that of an older public or private sector bank. So, I would be circumspect about these new age small banks as compared to the older banks, and hence would classify them as somewhat risky.

 

New National Pension System ( NPS ) withdrawal rules

The Pension Fund Regulatory and Development Authority (PFRDA)  has relaxed partial withdrawal norms for NPS subscribers. With this, NPS subscribers can withdraw up to 25% of their money from their corpus thrice in their lifetime.

The first withdrawal is now permissible after three years from the date of joining. Earlier, NPS subscribers were allowed to withdraw their corpus after completion of 10 years.

This amount will be tax-free in the hands of subscribers.

New Image

Currently, NPS subscribers can withdraw partially for higher education or marriage of their children, fund their entrepreneurial dream or professional skill development, construction or purchase of first house and treatment of specific ailments like cancer, kidney failure, paralysis etc.

Like NPS, EPFO also allows partial withdrawals. However, since there is no such limit on withdrawals, many people pull out their money from their EPFO account. As a result, many subscribers are left with a small corpus for their post-retirement days defeating the very purpose of EPFO.

Another key development is the choice of a pension fund for central government employees. Now, such employees can choose pension funds including private sector pension funds, with the change of fund being allowed once every year.

Partial withdrawal is permitted under the following conditions

1. For higher education and marriage of children including a legally adopted child.

2. For purchase or construction of a residential house or flat. In case, the subscriber already owns a house other than ancestral property, either individually or in the joint name, no withdrawal is permitted.

3. If the subscriber, their legally wedded spouse, children, including a legally adopted child or dependent parents suffer from any specified illness, which shall require hospitalization and treatment in respect of diseases such as Cancer, Kidney Failure (End Stage Renal Failure), Primary Pulmonary Arterial Hypertension, Multiple Sclerosis; Major Organ Transplant, Coronary Artery Bypass Graft; Aorta Graft Surgery; Heart Valve Surgery; Stroke; Myocardial Infarction; Coma; Total blindness; Paralysis; Accident of serious/ life-threatening nature; Any other critical illness of a life-threatening nature, withdrawal is allowed.

4. To cover expenses by a subscriber for skill development/re-skilling or for any other self-development activities.

5. To cover the expenses by a subscriber for the establishment of own business or any start-ups.

6. To cover medical and incidental expenses arranging out of disability or incapacitation suffered.

Mistakes investors make without an advisor

Easy access to financial information on the internet means that any investor can access a list of top performing schemes. Newer, easy to use online investment platforms have also taken the pain out of the transaction process. So do investors need expert guidance on financial matters?

The answer is a resounding yes. This is because an advisor’s role is not limited to identifying the best performing schemes; he matches client needs to right investments and helps them make wiser investment choices.

Here are seven investment mistakes that clients tend to make without the guidance of an advisor.

mentor1

Saving but not investing:

Most individuals save a certain portion of their earnings. However, these savings are often lying idle in their bank accounts. Owing to their busy work-schedule, investors may not get time to immediately research and invest their savings.

A financial advisor helps investor channelize his savings into investments. By helping an investor budget his earnings and expenses, he reduces the amount of cash lying idle in the bank. In short, an advisor helps an investor manage his money better and invest more.

cash

Starting late:

Delaying financial planning is quite common among investors. Goals like retirement and financial planning for a family seem far away for a millennial investor. However, many of them forget that time is the best friend of investments. Starting early gives investors more time to accumulate the required corpus. It allows them the flexibility to stop or adjust their investments temporarily in case of an emergency. Starting late can put a financial burden on investors, as they will have to save more to reach their key financial goals such as retirement.

Often people splurge their earnings on items they really don’t need.  Through a discussion on financial goals, an advisor can help the individual visualise the corpus he needs to accumulate to fulfil his financial dreams. This may encourage an individual to invest rather than spend frivolously.

compound

Wrong investment choices:

Wrong investment choices do not just refer to investments made in a Ponzi scheme; it also includes investments made out of line with an investor’s risk-return profile. To elaborate an investor may consider himself to be a risk-taker and invest in high yield bonds. Alternatively, he may invest a majority of his corpus in equities. However, in reality, his personal responsibilities and goals require him to take a more conservative approach. This is an example of a wrong investment choice.

A financial advisor makes a holistic evaluation of the investor’s risk tolerance, liquidity needs, goals and income before recommending an investment. This analytical and exhaustive approach helps advisors recommend the most suitable investment options to their clients. Moreover, an advisor can also help warn you against any investment scam.

New ImageInvesting based on the preconceived notion:

Our friends, family members often influence our investment decisions. For example, a young professional may invest the majority of his money in gold and FDs just like his parents. He may shun equities having seen his relatives lose money in day-trading. However, based on risk profile and age, he may be better off investing in riskier products.

Financial advisors can help clear any investment related misunderstandings from the minds of investors and guide them on making better investment choices.

LIC Jeevan Shikhar Plan : Tax Saver or Loser

Letting behavioural biases influence their decision:

Selling off their investments during a slight market correction, holding on to loss-making investment, ignoring research which does not align with the investor’s view are all examples of behavioural biases influencing investor’s decisions.

Advisors can help investors identify these biases and encourage them to stick to their financial plan rather than acting under the influence of emotions.11111

Taking too much debt:

Many investors dream of building their own home or buying a car. Generally, investors fund these purchases through a loan or EMI. If the amount of debt is not kept in check, it can balloon and become unmanageable. Excess debt may also hurt an investor’s credit score which in turn lead to higher rates on future loans.

By budgeting their income and expenses, advisors help evaluate whether an investor can comfortably service a loan.

Government Cautions People Against Risks in Investing in Virtual ‘Currencies’ ( Bitcoin ); Says VCs are like Ponzi Schemes

The ministry of finance cautioned people against the risks of investing in virtual currencies such as bitcoin which lack government fiat, comparing them with Ponzi schemes.

This follows a crackdown by the South Korean government on trading of bitcoins which led to an 8% drop in its value on Thursday.

Download (PDF, 38KB)

Are We Headed for Another Dot-Com Disaster?

bitcoin

“There is a real and heightened risk of investment bubble of the type seen in Ponzi schemes, which can result in sudden and prolonged crash exposing investors, especially retail consumers, losing their hard-earned money. Consumers need to be alert and extremely cautious as to avoid getting trapped in such Ponzi schemes.”

Bitcoin compared to other bubbles.

The Reserve Bank of India (RBI) has issued three warnings against investments in cryptocurrencies — one each in December 2013, February 2017 and earlier this month. “The government also makes it clear that VCs are not legal tender and such VCs do not have any regulatory permission or protection in India. The investors and other participants, therefore, deal with these VCs entirely at their risk and should best avoid participating therein.”

Be alert Bitcoins are not approved by RBI

 

Why do I need a personal accident Insurance Policy?

These days due to increasing number of vehicles in the country, the number of accidents are happening. Life is capricious or uncertain. Anything can happen to anyone at any point in time. People purchase insurance to protect themselves financially against such unfortunate events. A good insurance portfolio ensures that all eventualities cover you or your finances. Life insurance proceeds will ensure that your family achieves the financial goals in your absence. A health insurance plan will provide quality health care for you and your family. Many people of us are inclined to feel that if we have adequate life, health or critical insurance, your finances are protected.

What about an accident or an illness that causes total or partial disability, which in turn compromises your ability to earn income at the level before the accident. Life insurance will typically not cover such a scenario. Health insurance covers only hospitalization expenses. You can see there is a gap, which is not covered. It is in such cases that a Personal Accident Cover can come in handy. Personal Accident Insurance plans offer limited coverage but are still better than nothing.Under your term cover, you might get the accident benefit rider on extra payment but it will mostly pay off in the cases of permanent total disability, thereby leaving all other temporary and partial disabilities. 

accidentAccidents are categorized as one of fatal health hazards worldwide. When this health hazard is put into the frame of a country where one person dies by accident every four-minute, it does require our attention. According to World Health Organization (WHO) report, about 12.5 crore people die every year due to accidents and between 200-500 crore sustain injuries.

A personal accident policy covers death, permanent total disability, permanent partial disability and total temporary disability due to an accident. First of all, these events have to happen in an accident. If the insured person dies or gets totally or partially disabled through a natural illness, such disability (or death) will not be covered under a personal accident policy.

If one day on your way back home you meet with an accident which may leave you paralyzed for life? It is scary. But, this can happen and might leave a long-lasting impact on your life. With lives lost daily and injuries rising rapidly due to accidents, we come across many cases of permanent total or permanent partial disability. A personal accident cover helps in such a scenario by providing coverage for disability, which is not typically covered under either life or health insurance.

personalWhat if you fall victim to temporary total disablement, how would you meet the income/Job loss caused by it. In such a case, your personal accident cover comes handy with income coverage part. This means, if for some time you are completely bedridden due to injury, you will be paid a certain percentage of your sum assured weekly to compensate the income/Job loss scenario.

When you are young, your chances of meeting with an accident are higher. According to WHO report, people aged between 15 and 44 years account for 48% of global road-traffic deaths; If this is just the data for deaths, imagine the rate of disability prone youth. Hence, it is always advisable to opt for a personal accident cover when you first start earning. The plan provides a considerable protection for a very low premium. While you get 100% payout in case of permanent total disability, in partial disability you get paid depending on the extent of the loss. For example; for the loss of an eye, the policy will pay 50% of the total coverage, for the loss of a leg it will typically pay 50-70% of the total coverage.

Say a strict no to Guaranteed Life Insurance Plans

Regardless of the fact whether you got hit by a two-wheeler or a four-wheeler, your personal accident insurance will cover even minor things like falling off a bike, among others. Not only this, even small injuries like broken bones, fractures, cuts, burns, etc. which do not require hospitalization, get covered under a personal accident cover.

The rule of thumb says you should go for a cover that is eight to ten times your annual income. The personal, emotional or mental trauma triggered by accident often leaves a permanent scar on life. Therefore, having a personal accident insurance can decrease that stress and can make your life a little less stressful. It can brace you from the financial hardships.

plan

The premiums for an accident cover are abysmally low. For a sum assured of Rs 5 lakh, your premiums can be as small as Rs. 600/- p.a. for death, total and partial disability coverage. This is probably equivalent to what you may pay for a meal for two when buying a food delivery app. However, we suggest that you should always buy a cover, which is at least ten times your annual salary. This is because your accident cover acts as your income in the event of death or disability. The product currently is an evolving one, and most insurers provide a protection of up to Rs 30 lakh online. The higher sum assured can be brought offline only.

HOW CAN YOU SETTLE YOUR INSURANCE CLAIM IF REJECTED?

Personal accident cover is required only to take care of permanent disability (total or partial). Your life insurance, health insurance, and emergency corpus should take care of accidental death, accident-related hospitalization and temporary loss of income.

Permanent disability, total or partial, can compromise your earning ability. In fact, it can even add to your expenses. You may require domiciliary treatment (treatment at home), physiotherapy sessions or nurse support. No health insurance coverage will cover such costs beyond a point.

Under performance of Equity Mutual Fund against their respective Benchmarks

A large number of equity mutual funds in the country has underperformed against their respective benchmark indices over the last five years.

Around 44% of the open-ended diversified equity mutual fund schemes failed to beat their benchmark in the last year. Nine schemes underperformed their benchmarks by over ten percentage points. 31 schemes underperformed by five to ten percentage points. There are 275 open-ended diversified equity schemes.

MFEven the schemes that managed to beat their benchmarks in the last year, 26 schemes outpaced their benchmark by only up to two percentage points.

Moving to specific categories, out of 65 large cap schemes, 30 schemes underperformed their benchmark.

What are Dynamic Funds? ( Video )

The mid-cap category was the worst hit, with 62 percent schemes underperforming. We had a total of 34 mid-cap schemes on our list. 

Around 50 percent multi-cap schemes failed to beat their benchmark. Four in seven small-cap schemes remained under-performers.

Sectoral schemes, which are considered risky because of their focused sector exposure, had 11 under-performing schemes out of 49 schemes in total.

We have compiled a set of top under-performing funds in one-year period across equity categories given in the following table.

return

The scorecard reveals a majority of large-cap equity funds failed to beat the S&P CNX Nifty, the benchmark for large caps, with 53.33 percent underperforming their benchmark over the last five years, 57.14 percent during the previous three years and 52.63 percent over the previous year.

The percentage of actively managed equity funds underperforming the benchmark indices has seen a declining trend since December 2010. However, their number still exceeds those outperforming the index.

Retirement Fund : What is a Systematic Withdrawal Plan ( VIDEO )

Many actively-managed equity mutual fund schemes have failed or struggled to beat their benchmarks. Always place a lot of emphasis on consistency of performance while choosing a scheme to invest. As a rule, ignore short-term scorching performance while picking a scheme.

However, data from the diversified funds and equity-linked saving schemes (ELSS) suggests a percentage of funds outperforming the benchmark in both one-year and three-year period is stable as compared to five-year period.

Active managers of equity-oriented hybrid funds have also fallen behind benchmarks over both the one-year and five-year time frames.

 

DISCLAIMER

No financial information whatsoever published anywhere here should be construed as an offer to buy or sell securities, or as advice to do so in any way whatsoever. All matter published here is purely for educational and information purposes only and under no circumstances should be used for making investment decisions. Readers must consult a qualified financial advisor before making any actual investment decisions, based on information published here.

LIC CANCER COVER PLAN – REVIEW

LIC had launched its second health insurance related plan which is named as LIC Cancer Cover (Plan-905) on 14th November 2017. LIC’s Cancer Cover is a regular premium payment health insurance plan which provides financial protection in case the Life Assured is diagnosed with any of the stages of Cancer during the policy term. This plan covers both the early stage cancer and significant stage cancer.

It is an online health insurance plan which has low premiums, and it comes with some benefits and add-on features.

LIC CANCER PLANFeatures-

It comes with numerable benefits like lump sum benefit, premium waiver benefit, income benefit which would be paid till ten years every month, and many more.

  • This plan has one month grace period.
  • Loan facility is not available in this policy as the policy will not acquire any paid-up value or surrender value.
  • The term period of policy is 10-30 years.
  • Tax rebate available under Income Tax under section 80D for premium amount paid.
  • It comes with two sum assured plans, i.e., Level 1 and Level 2.
  • This policy is non-linked and regular premium paying health insurance plan.
  • Basic sum assured is between Rs 10 Lakhs to Rs 50 Lakhs.
  • Free look period of 15 days if the policyholder is not satisfied with terms and conditions of the policy.
  • The policy will lapse if premium not paid within the grace period, though it can be revived but within two years of first unpaid premium.
  • The policy can be bought through online on LIC website.
  • No third party agencies are involved in this policy.
  • Nominations are available in this plan.
  • Policy can be assigned under as per Sec 38 of Insurance Act 1983.

Say a strict no to Guaranteed Life Insurance Plans

Sum Assured Options-

  • Level Sum Insured

The basic sum insured will remain the same throughout the policy term period.

  • Increasing Sum Insured

The sum insured increases by 10% of basic sum insured each year for first five years starting from the first policy anniversary or until the diagnosis of  first event of cancer, whichever is earlier. On diagnosis of any specified cancer as mentioned above, all the claims will be based on the increased sum insured at the policy anniversary coinciding or prior to the diagnosis of the first claim and further increases to this sum insured will not be applicable.

Benefits-

  • Lump sum Benefit-
  1. Early stage cancer In this stage, the early stage cancer is diagnosed, 25% of sun insured would be paid immediately to be insured.
  2. Major stage cancer in this stage of cancer, 100% sum insured would be paid on being diagnosed.
  • Premium Waiver Benefit-
  1. Early stage cancer In this stage of cancer, first three years premium would be waived and later the premium payment to be continued.
  2. Major stage cancer In this stage, all future premium payments would be waived off.
  • Income Benefit-
  1. Early stage cancer benefit is not available.
  2. Major stage cancer In this stage, 1% of basic sum insured would be paid every policy month for ten years irrespective of the policy term, i.e., even if policy tenure is over, this benefit amount has been paid.

LIC Jeevan Shikhar Plan : Tax Saver or Loser

  • Tax Benefit-

Tax benefits are available under section 80D of medical insurance but not under 80C as this is health insurance plan and not life insurance plan.

  • No Maturity and Death Benefit is available in this plan.

Eligibility Criteria for this plan-

LIC TABLEPremiums Payable under this plan-

For 20 years of term period and sum insured of Rs. 10 lakhs would have premiums accordingly:

  • Male whose age is 30 years For level 1 premium is Rs. 1,404 and for level 2 premiums is Rs. 1,841.
  • Male whose age is 40 years For level 1 premium is Rs. 3,044 and for level 2 premium is Rs. 4,224.
  • Male whose age is 50 years For level 1 premium is Rs. 9,936 and for level 2 premium is Rs. 14,101.
  • Female whose age is 30 years For level 1 premium is Rs. 2,856 and for level 2 premium is 3,953.
  • Female whose age is 40 years For level 1 premium is Rs. 5,546 and for level 2 premium is 7,753.
  • Female whose age is 50 years For level 1 premium is Rs. 9,900 and for level 2 premium is Rs. 13,476.

Waiting periods in this plan-

A waiting period of 6 months will be applied from the date of issuance of policy or date of revival of risk cover whichever is later, to the first diagnosis of any stage of cancer.

What are the Reasons Behind Most Women not Having a Health Insurance Cover?

Exclusions-

  • Any Pre-Existing Condition.
  • If the diagnosis of a Cancer was made within 180 days from the Date of issuance of policy or date of revival of risk cover whichever is later.
  • For any medical conditions suffered by the life assured or any medical procedure undergone by the life assured if that medical condition or that medical procedure was caused directly or indirectly by Acquired Immunodeficiency Syndrome (AIDS), AIDS-related complex or infection by Human Immunodeficiency Virus (HIV).
  • For any medical condition or any medical procedure arising from the donation of any of the Life Assured organs.
  • For any medical conditions suffered by the Life Assured or any medical procedure undergone by the Life Assured, if that medical condition or that medical procedure was caused directly or indirectly by alcohol or drug (except under the direction of a registered medical practitioner).
  • For any medical condition or any medical procedure arising from nuclear contamination; the radioactive, explosive or hazardous nature of nuclear fuel materials or property contaminated by nuclear fuel materials or accident arising from such nature.

 

DISCLAIMER

All matter published here is purely for educational and information purposes only and under no circumstances should be used for making investment decisions. Readers must consult a qualified financial advisor before making any actual investment decisions, based on information published here.