SBI Small & Midcap Fund to reopen for investments via SIP mode

The SBI Small & Midcap Fund, which was suspended for new investments in October 2015, will reopen for fresh subscriptions through the systematic investment plan (SIP) mode from May 16. It will be called SBI Smallcap Fund and have an investment cap of ₹25,000 per month and per PAN card.

SBI
It is the first fund to reopen for fresh subscriptions after many smallcap funds had put restrictions on inflows because of rising inflows, higher valuations and lower investment opportunities. It was closed for a subscription since it had a capacity constraint of ₹750 crore on its assets under management. 

Download the Factsheet

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Following the introduction of new rules by the Securities and Exchange Board of India (Sebi) for rationalisation of mutual fund schemes, the fund will now fall in the smallcap category. The erstwhile SBI Small & Midcap Fund had emerged from the acquisition of the Daiwa Industry Leaders Fund by SBI in November 2013.

Download the current portfolio

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As per the new rules, a small cap fund can buy stocks beyond 251st stock in terms of market capitalisation. Prior to this, the scheme could buy small-cap stocks only beyond 401st stock in terms of market capitalisation. “These new norms give us 150 more stocks to choose from with higher market capitalisation and hence and we are in the final process of taking internal approvals for opening the scheme for SIPs only.

Download the Fund managers Factsheet

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The fund, with assets of ₹770 crore, is managed by R Srinivasan and is among the best performing smallcap funds. In the past one year, it generated returns of 35.2 per cent, compared to the category average of 17.75 per cent. In the past five years, the fund returned an annualised 36 per cent, compared to the category average of 31.58 per cent. Investors have been flocking to mid-cap and small-cap schemes in the past three years owing to higher returns from such schemes. Several funds in these categories have placed restrictions on inflows because the available stocks are limited and liquidity is low. Reliance Small Cap Fund, L&T Emerging Business Fund, DSP Blackrock Small Cap Fund and Mirae Asset Emerging Bluechip Fund are some funds which have put restrictions on fresh lumpsum investments and SIP inflows into their schemes.

Mutual Fund Investment are Subjected to Market Risks, Read all Scheme Related Document Carefully.

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.

10 things I have learned about investing

Following these simple yet indispensable investment insights can save you a lot of regret and sleepless nights.

You don’t make money by watching TV:

There are many business-news channels now which claim that they help you make money. Ever wondered why they never advertise the track record of the recommendations they make? Or why they only seem to talk about the winning recommendations and not the losing ones? Or why they seem to talk about ‘global cues’ driving the stock market all the time?

Most of the business news TV is best for understanding things in retrospect. In fact, when the business TV wallahs don’t have a reason for what is driving the stock market, they say, ‘global cues’. Also, the short-term orientation of TV channels will essentially make your broker, and not you, rich.

You don’t make money by reading newspapers either:

All the business newspapers these days have a strong personal-finance as well as a stock-market section. But a lot of the analysis on offer is full of hindsight bias, i.e., they come up with nice explanations of things after they have already happened. Further, newspaper reporters can get analysts to say things that fit in with the headline that has already been thought of. Analysts are more than happy saying these things in order to see their name in the newspapers. And it is worth remembering that newspapers have space to fill. So they will write stuff even if the situation doesn’t demand it.

Kirang Gandhi

SIPs work best over the long term:

If you were to ask a typical fund manager about how long one should stay invested in an SIP, the answer usually is three to five years. Honestly, I think that is too low a number. I started my first SIP in December 2005. And more than ten years later, I am actually seeing the benefit of having invested for so long. Also, it is worth remembering that SIPs over the long term are about a regular investing habit which gives reasonable returns than the possibility of fabulous returns that one might earn by choosing the right stock. This is an important distinction that needs to be made.

EMI VS SIP ( Be controlled or take control )

Don’t chase fund managers:

I did this during the 2007-2008 period and lost a lot of money doing it. I think it’s best to stick to investing in good large and mid-cap funds which have had a good track record over a long period of time, instead of chasing the hottest fund managers on the block. The funds with the best returns in the short term (one to three years) keep changing, and there is no way you can predict the next big thing on the block; the point being, investing should be boring. If it is giving you an adrenaline rush, you are not doing the right things.

Endowment policies are not investment policies:

Endowment policies sold by insurance companies are a very popular form of investing as well as saving tax. One reason for this is because they are deemed to be safe. But have you ever asked how much return these policies actually give? If I can be slightly technical here, what is the internal rate of return of an average endowment policy in which an individual invests for a period of 20 years? You will be surprised to know that such data are not available. But from what I understand about these things, endowment policies give a lower rate of return than inflation. So why bother? Endowment policies are essentially a cheap way for the government to raise money, given that most of these policies end up investing the money raised in government bonds. That is all there is to it. If you want to finance the government, please do so, but there are better ways of earning a return on your investment.

LIC Jeevan Labh Plan : Reviews/Features/Return Sheet

What are ULIPs? I am still trying to understand:

ULIPs are unit-linked investment plans, essentially investment plans which come with some insurance. The trouble is if they are investment plans, why are there no past returns of these policies available anywhere? But what are ULIPs? I have put this question to many people, but I am yet to receive an answer. What is the best-performing ULIP over the last five years? No one has been able to give me that answer. This is not surprising, given how complicated the structure of an average ULIP is. Hence, if you want to invest indirectly in equity, it is best to stick to mutual funds.

Sensex/Nifty forecasts are largely bogus:

Towards the end of every year or even around Diwali, all broking houses come up with their Sensex/Nifty forecasts for the next year. Usually, these are positive and expect the index to go up. At the same time, they are largely wrong. You can Google and check. Hence, treat them as entertainment but don’t take them seriously. Stock brokerages bring out such forecasts because it is an easy way to get some presence in the media. Both TV and newspapers, for some reason I don’t understand, are suckers for Sensex as well as Nifty forecasts.

Don’t buy a home unless you want to live in it or have black money:

Much is made about excellent returns from property. The trouble is there are no reliable numbers going around. It’s only people talking from experience. But when people calculate property returns, they do not take a lot of expenses into account. Also, when people talk about property returns they talk about big numbers: ‘I bought this for `20 lakh but sold it for a crore.’ This feels like a huge return, but it doesn’t exactly take into account the time factor as well as loads of expenses and other headaches that come with owning property. Further, these days there are other risks like the builder disappearing or not giving possession for a very long time. This leads to a situation where individuals end up paying both EMI as well as rent. Also, property returns have been negative in many parts of the country over the last few years. And given the current price levels, I don’t think buying a home is the best way to invest currently.

Real estate rental yield is below one percent

Gurus are good fun:

In my earlier avatar as a journalist, one widely followed stock-market guru told a closed gathering of investors that Sensex would touch 50,000 level in six to seven years. He said it very confidently. Confident stock-market gurus make for good newspaper copy. I wrote about it and the story was splashed on the front page of the newspaper I worked for. It was October 2007. Nearly nine years later, the Sensex is at half of the predicted level. The point is that gurus might be good. They might have the ability to predict things in advance. But then, why would they give their insight to the media, and in the process, you, dear reader, for free? Remember this, next time you see a guru making a prediction.

Low interest rates on loans also mean low interest rates on your fixed deposits:

This is something that many people don’t seem to understand. People want low interest rates on their loans, but they are not happy with low-interest rates on their deposits. Banks fund loans by raising fixed deposits. They can’t cut interest rates on their loans unless they cut interest rates on their deposits. It’s as simple as that. Nevertheless, I wonder why people can’t seem to understand this basic point.

 

By Vivek Kaul

Fact sheet of Women fund managers who have outperformed or Underperform over the long-term

Women still constitute only 8 percent of the total number of fund managers in the Indian mutual fund sector but have proved their mettle by delivering significant outperformance.

Altogether 24 women managers manage funds currently, either as primary or secondary managers or as heads of equity or fixed income, compared to 18 last year.

Cumulatively they manage assets worth Rs 3.065 trillion, which equals 15 percent of the total assets under management (AUM) for open-end funds.

The total AUM managed by the women managers has increased in absolute terms, compared to Rs. 2.32 trillion last year.But regarding a percentage of overall AUM, the number remained almost the same as last year.

The number of women in fund management in India has been gradually going up over the years, but the numbers tell us that we still have a long way to go. Many Asian countries have among the highest representation of women in the mutual fund industry.

womens day

61 percent of the AUM managed by women fund managers in India outperformed the benchmark/peer group average over the past one year, 81 percent over past three years, and 86 percent over the past five years, according to the Morningstar report.

Thus, over the long term, funds managed or overseen by women fund managers have delivered significant outperformance based approach. Depends on collective input from investment specialists closest to the source of investment information.

Some women fund manager’s ignored the noise around and proved that career progression isn’t dependent on the gender.

A look at some Women Fund Managers.

Mrs. Swati Anil Kulkarni ( Fund Manager at UTI Asset management.)

Biography

Mrs. Kulkarni is a B.Com (H), MBA (Finance). From Narsee Monjee Institute of Management Studies, Mumbai, CFA and a CAIIB. Prior to joining UTI Mutual Fund in 2004, she has worked with Reliance Industries Ltd.

Summary

Overall, performing about the same as the peer group composite. Nevertheless, over a long track record, the manager has, period by period, consistently managed to outperform the peer group.

Download (PDF, 100KB)

Ms. Roshi Jain ( Fund Manager at Franklin Templeton Asset management.)

Biography

Ms. Jain is a CFA, ACA and PGDM. Prior to joining Franklin Templeton Investments she has worked with Goldman Sachs, London,Goldman Sachs, Singapore, Wipro Ltd. and S. R. Batliboi & Co.

Summary

Overall, performing better than the peer group composite. Over a long track record, the manager has, period by period, consistently managed to outperform the peer group.

Download (PDF, 101KB)

Ms. Jahnvee Shah  ( Fund Manager at Reliance Asset management.)

Biography

Ms. Shah is a B.Sc and an MBA (Finance). Prior to joining Reliance Mutual Fund she has worked with Financial Express.

Summary

Overall, performing worse than the peer group composite. Over a fairly lengthy track record, the manager has underperformed the peer group.

Download (PDF, 96KB)

Ms. Bekxy Kuriakose  ( Fund Manager at Principal Asset management.)

Biography Ms. Kuriakose is a BA (Economics) from Delhi University and PGDM from IIM, Bangalore Prior to joining Principal MF she has worked with L&T MF, Reliance Life Insurance Co. Ltd ,SBI Mutual Fund and Tata Administrative Services.

Summary

Overall, performing about the same as the peer group composite. However, over a long track record, the manager has, period by period, consistently under formed the peer group.

Download (PDF, 102KB)

Ms.Priyanka Khandelwal ( Fund Manager at ICICI Prudential Asset management.)

Biography Ms. Khandelwal is Chartered Accountant and Company Secretary She has been Working with ICICI Prudential Mutual Fund Since October 2014.

Summary

There is an insufficient track record to make any judgment.

Download (PDF, 81KB)

Ms.Payal Kaipunjal ( Fund Manager at Reliance Prudential Asset management.)

Biography Ms. Kaipunjal is an MBA. Prior to joining Goldman Sachs she has worked with Benchmark AMC.

Summary

Overall, performing about the same as the peer group composite. However, over a long track record, the manager has underperformed the peer group.

Download (PDF, 101KB)

Ms.Nidhi Chawla ( Fund Manager at SBI Asset management )

Biography Ms. Chawla holds BBS degree and has also done MBE and CFA. She has over 4 years of experience in mutual fund industry. She is with SBI Mutual Fund since 2007.

Summary

Overall, performing worse than the peer group composite. Over a short track record, the manager has underperformed the peer group.

Download (PDF, 90KB)

Ms.Shalini Tibrewala  ( Fund Manager at JM Asset management.)

Biography Ms. Tibrewala is a B.Com (H), ACA and CS. She has been associated with JM Financials since 2003.

Summary

Overall, performing about the same as the peer group composite. However, over a long track record, the manager has underperformed the peer group.

Download (PDF, 108KB)

Ms.Sunaina da Cunha ( Fund Manager at Aditya Birla Sun Life Asset management.)

Biography Ms. Cunha is a B.Com (H) and MBA from FMS, Delhi. Prior to joining Birla Sun Life Asset Management Company, she has worked with Aditya Birla Management Corporation Ltd.

Summary

Overall, performing about the same as the peer group composite. Nevertheless, over a long track record, the manager has, period by period, consistently managed to outperform the peer group.

Download (PDF, 100KB)

Ms.Ranjana Gupta  ( Fund Manager at SBI Asset management.)

Biography

She is a Commerce graduate from Mumbai University Ms Ranjana joined SBIFMPL in 2008 as Fixed Income Dealer and has over 21 Years of experience in the capital market. prior to joining SBIFMPL, She was heading the broking activities at Twenty-first Century Shares and Securities Ltd from May 1995 to February 2008. She started her career as a dealer in 1995 with OTCEI.

Summary

Overall, performing about the same as the peer group composite. However, over a short track record, the manager has underperformed the peer group.

Download (PDF, 90KB)

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

Ms.Sohini Andani ( Fund Manager at SBI Asset management.)

Biography

Ms. Andani is a Commerce Graduate and C.A. She has over 15 years of experience in financial services. Prior to this, she worked with ING Investment Management Pvt. Ltd., ASK Raymond James & Associates Pvt. Ltd., LKP Shares & Securities Ltd., Advani Share Broker Pvt. Ltd., CRISIL, and with K R Choksey Shares & Securities Pvt. Ltd.

Summary

Overall, performing better than the peer group composite. Over a fairly lengthy track record, the manager has outperformed the peer group.

Download (PDF, 96KB)

Ms.Meenakshi Dawar ( Fund Manager at Reliance Asset management.)

Biography Ms. Dawar is a B.Tech from IGIT New Delhi and PGDM from IIM Ahmedabad. Prior to joining Reliance AMC had worked with IDFC Mutual Fund. She has worked in institutional equities sales and research division on the sell side.

Summary

Overall, performing worse then the peer group composite. Over a fairly lengthy track record, the manager has underperformed the peer group.

Download (PDF, 96KB)

Ms.Khushboo Sharma ( Fund Manager at IDFC Asset management.)

Biography

Ms. Sharma is B.Tech, Post Graduate Diploma in Management (Finance) & CFA Level III Prior to Joining IDFC Mutual Fund she has worked with Franklin Templeton Asset Management India Pvt. Ltd. in Fixed Income Investment Management and Evaluating company Credit and Structured finance deals and has also worked in Thoughtworks Technologies India Pvt. Ltd. in Software Consulting.

Download (PDF, 82KB)

Gargi Bhattacharyya Banerjee ( Fund Manager at Shriram Asset management.)

Biography

Ms. Banerjee is Master of Business Management in Finance and Bachelor of Science with Economics (Hon) from University of Calcutta. Prior to joining Shriram Asset Management Co. Ltd she has worked with Zacks Research Pvt Ltd as Research Head and Shriram Insight Share Brokers Ltd.

Summary

Overall, performing worse then the peer group composite. Over a short track record, the manager has, period by period, over- and under-performed roughly equally.

Download (PDF, 85KB)

Ms.Hetal P Shah ( Fund Manager at Baroda Pioneer Asset management.)

Biography

Ms. Hetal P. Shah is a B.Com, MBA, and JAIIB. Prior to joining Baroda AMC she has worked with Bank of India from may 1999.

Summary

Overall, performing about the same as the peer group composite. However, over a long track record, the manager has underperformed the peer group.

Download (PDF, 105KB)

Ms.Bharti Sawant ( Fund Manager at Mirae Asset management.)

Biography

Ms. Sawant is an M.S. Finance ( ICFAI Hyderabad ), CFA and B.Com. Prior to joining Mirae AMC in September 2013, She was associated with Sushil Finance Securities Pvt. Ltd., Latin Manharlal Securities Pvt. Ltd. and Kabu Shares and Stocking Pvt. Ltd. for Financial Analysis and Research.

Summary

Overall, performing about the same as the peer group composite. However, over a short track record, the manager has underperformed the peer group.

Download (PDF, 93KB)

Ms.Anju Chhajer ( Fund Manager at Reliance Asset management.)

Biography Ms. Chhajer is a B.Com (H) and a Chartered Accountant. Prior to joining Reliance Mutual Fund Ltd. as a fund manager, she has worked with National Insurance Company as a Money Maker Instruments and D.C Dharewa & Co.

Summary

Overall, performing about the same as the peer group composite. Nevertheless, over a long track record, the manager has outperformed the peer group.

Download (PDF, 103KB)

Mrs.Suman Prasad ( Fund Manager at Canara robeco Asset management.)

Biography Mrs. Prasad is B.Sc and PGDMS. She has been associated with Canara Robeco since 1996.

Summary

Overall, performing about the same as the peer group composite. Nevertheless, over a long track record, the manager has outperformed the peer group.

Download (PDF, 103KB)

Real estate rental yield is below one percent

Ms.Chandni Gupta ( Fund Manager at ICICI Prudential Asset management.)

Biography She holds B.E. degree in IT and CFA degree from CFA Institute, USA. She is working with ICICI since October 2012 as Fixed Income Dealer. Prior to that, she has worked with Morgan Stanley, HSBC Bank and Standard Chartered Mutual Fund.

Summary

Overall, performing about the same as the peer group composite. However, over a short track record, the manager has, period by period, over- and under-performed roughly equally.

Download (PDF, 101KB)

Ms.Uma Venkatraman  ( Fund Manager at IDBI Asset management.)

Biography Prior to joining IDBI Mutual Fund, she had worked with B&K Securities, ASK Raymond James, Morgan Keegan and UTI Mutual Fund.

Download (PDF, 79KB)

Ms.Pushpa Rai ( Fund Manager at Escorts Asset management.)

Biography

Ms. Pushpa Rai is a M.Com, MFM (Narsee Monjee Institute of Management Studies) Over 20 years of experience in the financial sector on both, fixed income products as well as equity markets. Previous assignments include Heading Debt funds and managing pension funds, surplus funds with IDBI Capital Market Services (March 2007 – Feb. 2010); Heading Debt and Equity Research at
Mata Securities (Sep 1995 – April 2006).

Download (PDF, 87KB)

Note : Past performance of fund does not guarantee the future returns.

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 prior to making any actual investment decisions, based on information published here.

Warren Buffett that may help you to create wealth in long-term

Warren Buffett’s quotes that can help you invest better in volatile times.

When stock markets turn volatile many investors find it difficult to stay the course. Some investors want to sell off and want to hoard their cash. Some prefer to start buying the stocks that are falling the most. But such knee-jerk reactions may not create wealth for you.

Here are five thoughts of Warren Buffett that may guide you in your investment actions in such volatile times.

1.It’s far better to buy a wonderful company at a fair price than a fair company at a wonderful price.

Quality matters. Just because a company has fallen 20% from its 52 week high does not make it a great value buy. Do check the fundamentals of the company. Corrections in the market must be used to buy quality stocks for your long-term portfolio. Buying them at a fair price makes sense for long-term investors. Good businesses tend to compound their profits and reward the shareholders in the long term. Stick to companies that have exhibited decent business performance across business cycles.

111111

Picking up the micro-cap stocks with great potentials may not reward you if the stories do not materialize as expected. If you have a dud stock in your portfolio, use the spikes to get rid of it. Use the proceeds to buy fundamentally strong companies.

2. Be fearful when others are greedy and be greedy only when others are fearful.

Volatile markets make investors worry about the holdings. The sudden drop in their portfolio’s valuations, make them consider selling out. The same investors were looking for more opportunities when the markets were marching up.

Behavioural issues are a big influencing factor for the retail investors. The emotional swings force them to sell out when it is the time to load up more. Warren Buffett makes it clear that the valuations are attractive when no one is interested in stocks and the other way round.

3. Someone is sitting in the shade today because someone planted a tree long time ago.

This could be one of the ignored quotes of Warren Buffett. It speaks about the delayed gratification and how it impacts one’s future.

If you sow the seeds in the form of regular investments and let them compound over a long period of time, there is a fair chance that you will see the wealth being created.

4. Never ask a barber if you need a haircut.

If you buy the idea of long-term wealth creation and start investing regularly, wealth creation is not guaranteed. You have to stick to asset allocation, and you have to choose the right products that suit your needs.

While choosing your advisor to be sure that his interests are aligned with your interests.

5. No matter how great the talent or efforts, some things just take time. There are no shortcuts – Warren Buffett says. Follow the process and the let the time work for you. The results will be more likely to be in your favour. However, if you try to put your money on tips and get rich quick tricks then you may see some nasty surprises.

‘Ujjwal Bharat’: ABSL Resurgent India Fund – Series 6 Review

Governments across the world are growing more and more socialist and development oriented. In India too, We have noticed that whenever the government has gone about focusing upon a part of the economy or a specific area, there has been long-term development followed by strong market returns for companies operating in that space.

NFOIT and IT-enabled businesses saw a huge surge in 1990’s on the back of favorable govt policy environment and industry growth. 1st half of previous decade saw an emphasis on Infra development, and the 2nd part saw financials taking fore while consumption remained a consistent theme all through. With the new (present) government coming in, Manufacturing got the limelight in 2014 & onwards. All these themes have followed up with strong returns for their investors in the years following govt policy & push. Since its ascent to power, the present government has been reiterating its growth & development agenda through various initiatives and policy directives. Over the past couple of years, the narrative has been gradually shifting to a more grass-roots level financial inclusion & growth and a more sustainable policy environment for ensuring equitable development of the rural and urban economy.

CHARTNote: Past performance of fund does not guarantee the future returns.

Download the Fund Comparison of series 1 to 5

Download (PDF, 90KB)

ujwal bharat

High Govt. agenda

Earlier ABSL launched the ABSL Banking & Financial Services Fund in December 2013, and it proved to be the best performing fund in the pack since that time (generated 30% p.a. vs ~24% p.a. by Nifty Financial Services Index since inception). January 2015 ABSL was launching the ABSL Manufacturing Fund which has delivered 12.9% p.a. vs S&PBSE 500’s 9.4% p.a. As a fund house, other investment calls have also delivered similar performances and are quite visible in the performance of the close-ended series (Resurgent India & Emerging Leaders) where Fund house bet on Small & Midcap in one series and GST theme in another. Almost all series have delivered significant alpha (in range of 2% – 6% p.a.) while being true to mandate.

Aditya birla banking and financial services fund : Review

With a similar moment in the making for Rural Transformation, ‘Ujjwal Bharat’ is the new investment destination of choice. Fund house believes that this theme is a multi-year theme and a strong return generator too. With a power packed team of Satyabrata Mohanty & Milind Bafna (we all know the past few years of superlative performance of ABSL Advantage Fund & ABSL Pure Value Fund) under the aegis of Mahesh Patil.

With the recent tailwind of Union Budget 2018, the government has announced its intent of transforming farmlands of the country into the new Urban! Let’s take advantage of this opportunity.

Salient Features of the NFO:

  • A theme of the fund is geared to benefit from the most significant focus area of the government – Ujjwal Bharat; Huge infra spend & ambitious initiatives by the govt will trigger a cascading effect to a lot of focus areas as well as allied sectors.
  • Multiple structural drivers and tailwinds across sectors aligned to the Ujjwal Bharat story – Agri Inputs, Auto & Ancillaries, Consumer (Discretionary, Durables & Staples), Financials (Banking & NBFCs)
  • Distinctive portfolio strategy to find rerating opportunities across the value chain of the sectors identified.
  • A multi-year theme that will continue to benefit from the strong growth already witnessed by companies across the beneficiary sectors – higher ROE / EPS growth / Sales growth.
  • Complements current investor portfolios with a differentiated theme
  • Correction in markets have already brought valuations to reasonably fair levels across the board

model porfolioAs a fund house, ABSL believes that while there are so many growth drivers for these, will result in rerating for many theme related companies, the unique portfolio strategy of considering 2nd & 3rd order beneficiaries of rural growth for investment will deliver that extra punch in the returns. Sectors like Auto & Auto Ancillaries, Building Materials, Banks & NBFCs, Consumer Staples & Durables, & Agri Inputs are some of the key sectors, where fund house see these potential multi-bagger opportunities.

oppertunity

Scheme Name: Aditya Birla Sun Life Resurgent India Fund – Series 6

NFO open date: 21 February 2018

NFO close date: 07 March 2018

Scheme Type: A close-ended Diversified Equity Scheme ( 3 years and 6 months )

Scheme objective: The investment objective of the scheme is to provide capital appreciation by investing primarily in equity and equity-related securities that are likely to benefit from recove in the Indian economy.

The Scheme does not guarantee/indicate any returns. There can be no assurance that the schemes’ objectives will be achieved.

Scheme Benchmark: S&P BSE 500

Asset Allocation: Equity & Equity related securities: 80%-100% | Money Market & Debt instruments: 0-20%

The scheme may invest up to 20% of the net assets of the scheme in derivative instruments.

Fund Manager: Mr. Satyabrata Mohanty & Mr. Milind Bafna

Mr. Satyabrata Mohanty: Mr. Mohanty is a B.Com (H), Chartered Accountant and CFA. He has been part of Birla group since last 17 years. He has over 12
Years of experience in Finance and Research. He has handled responsibilities across Fund Management (Equity & Debt), Trading and Credit Research functions. Prior to joining BSLAMC, he has worked with Aditya Birla Management Corporation Ltd & joined ABG
as a Management Trainee.

Download the Factsheet of Mr. Satyabrata Mohanty

Download (PDF, 115KB)

Alpha Return:mohanty

Mr. Milind Bafna: Mr. Bafna is a B.E. (Chemical). Prior to joining Birla Sun Life AMC he has worked with Motilal Oswal Financial Services and Reliance
Industries Ltd.

Download the Factsheet of Mr. Milind Bafna

Download (PDF, 97KB)

Alpha Return:

milindHighlights:

Why India is in recovery phase?

Indian economy has turned the corner and is possibly out of the low growth high inflation cycle. The macro trend for the year FY16 has been encouraging with key macro indicators like Current Account Deficit (CAD), Inflation and Foreign Institutional Investor (FII) flows showing improvements.

The term emerging markets symbolizes innovation lead evolution of the marketplaces, India being the fastest growing among EMs becomes the best bet globally. The concern on re-allocation of capital from India to China has subsided post the crash in Chinese equity markets.

In fact, India stands tall as one of the strongest EMS in terms of flows, investor confidence, and performance. We can assign a decent probability to reverse inflows owing to India’s position among the EMs.

The global markets are slowly recovering, India too is set to deliver excellent growth in the medium to long term owing to strong, stable government, improving macros & supportive global sentiment. In addition to this institutionalization of finances by means of demonetization & implementation of GST is likely to result in better capacity utilization & improved earnings for Indian corporates.

India outlookPositive Macros & Key Growth Indicators:

Improving macros like improving PMI index, moderate commodity prices, lowering trade deficit, & govt target of attaining fiscal deficit of 3.2% indicate that the boom is underway.

With the implementation of GST, the tax advantage enjoyed by the unorganized sectors will be reduced significantly & cost of production will go down resulting in the better capacity utilization & growth of the formal economy.

The government has come up with numerous initiatives like ‘Make in India’, ‘Digital India’,‘Financial Inclusion’ etc. that have supported domestic growth as well.

Do Not Compare Yourself with Other Investors While Making Investment

Demonetization has institutionalized the finances further from here the implementation of GST is expected to result in better governance and higher revenue for the government; thus govt.spending in the economy is likely to increase.

Fund house believes in the current scenario; the 8 R’s would be driving the return from equities. Reflation trade taking a bit of set back getting flows back to India, Republicans providing checks and balance for Trumponomics, Remonetization of currency leading to normalization of growth, Rates getting transmitted into the system, Reform process to continue from the government, stability of the Rupee, hopefully a good Rainfall and most importantly Rebound in earnings. These 8 Rs would lead to the most import R which is Returns in the market.driver of ujwal

Risk factors:

Mutual Funds and securities investments are subject to market risks, and there can be no assurance or guarantee that the objectives of the Scheme will be achieved.

Investment in Mutual Fund Units involves investment risks such as trading volumes, settlement risk, liquidity risk, default risk including the possible loss of principal.

The present scheme is not a guaranteed or assured return scheme.

RISK FACTORS ASSOCIATED WITH INVESTMENTS IN FIXED INCOME SECURITIES:

Price-Risk or Interest-Rate Risk, Credit Risk, Liquidity or Marketability Risk, Reinvestment Risk, Pre-payment Risk, Concentration Risk, etc…

Mutual Fund Investment are Subjected to Market Risks, Read all Scheme Related Document Carefully.

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.

 

Mutual fund Strategy: Time to invest in accrual and short-term bond funds

The RBI in its bi-monthly policy review yesterday kept the repo rate unchanged at 6% and continued with the neutral stance.

The investors should stay away from long term bond funds and go for accrual funds and short term funds.

Here is what experts say :

Amit Tripathi, CIO – Fixed Income Investments, Reliance Mutual Fund

The tone in the policy was very balanced. The RBI is more focused on medium term drivers of growth and inflation, and wants to support the nascent recovery. The markets are pricing in many risks that RBI highlighted in its policy. Given RBI’s pragmatic approach and current market levels, one can expect some near term stability in bond yields, which have been very volatile of late.

The overall macro resilience of the economy remains high. However, we are clearly no longer in a rate easing cycle. Investors should prefer moderate duration portfolios with reasonable carry (accrual) for the bulk of their fixed income allocations.

R.Sivakumar, Head-Fixed Income, Axis Mutual Fund

We expect long bond yields to be range bound. However, the lack of a negative is not a positive, and even at current levels, we do not see value in long bonds given the duration risk involved.

Short rates have also sold off in recent months, with the 1-year certificate of deposit now yielding about 7.5% (compared to 6.5% in November). The entire short end of the curve (1-5 years) now appears to have “overpriced” the risk of tight liquidity and RBI policy stance. We see better value in this segment. Moreover, as the broad macro economy improves, we are also seeing improvement in corporate earnings, which is positive for corporate bonds – especially in the non-AAA space. 

Investors with a medium term holding horizon should look to short and medium term funds, while those with a short-term holding period should consider liquid and ultra-short funds.

Debt market

Pankaj Sharma, CIO- Fixed Income, DSP BlackRock Mutual Fund

In lines with market expectations, RBI has kept rates unchanged and maintained the neutral stance. The status quo on rates and a neutral stance indeed reflect a repeat of the balanced tone as witnessed in the December MPC. That said, we believe that macro variables have moved towards the negative territory over the past 2 months as factors like crude oil, yields in developed markets moving higher, fiscal slippage on the domestic front and prospects of change in MSP mechanism do not augur well for interest rates to head lower.

Hence, we maintain a bias for reversal in the interest rate stance sooner than later. Bond yields have been pricing the same and this policy for now will resist hardening of yields from current levels.

From a market perspective, the outcome of the policy is in line with market expectations and hence the immediate reaction is relatively muted.

Lakshmi Iyer, CIO (Debt), Kotak Mutual Fund

The bond markets in India have been witnessing significant volatility lately. The 10-year G – sec yield has risen from the low of 6.37 percent in the month of Jan 2017 to 7.52 percent as of date.

By any count, this is a major bear grip on the market. The bond market has been wary on two counts — One is the rising CPI inflation and the second is the slipping fiscal deficit.

The market was slightly circumspect in light of fiscal slippage and was expecting a stern stance. In contrast, the RBI came with status quo accompanied by a milder stance. This came as a sign of relief for an excessively bearish market. We believe that the central banker’s policy stance would be increasingly data driven and were the crude prices to behave favourably; we may be in for a long pause.

Know more About P/E Ratio and its Significance

We believe that markets globally and in India may witness intermittent bouts of volatility in the bond market. Investors thus can utilise tactical asset allocation strategies to benefit from rising opportunities in the debt market.

Relatively high accruing yields and limited NAV volatility make a strong case for investment in accrual/short-term fund segment. For those seeking to lock into current yield, levels could look at allocation to fixed maturity plans (FMPs).

Bottomline, the policy statement has put a lid on to the markets ultra bearish imaginations and going forward global and domestic data points would be watched for by policymakers as also market participants.

Kumaresh Ramakrishnan , CIO-Fixed Income, DHFL Pramerica Mutual Fund.

“We expected a very cautious tone in the policy document and not expecting a rate hike anytime soon. We had expected the policy document to refer to the slippage in fiscal numbers as stated in the budget announced on Feb 1”

He also says that investors looking to invest in fixed income can go for short term debt funds as they will have low volatility. Investors who are willing to take a bit of risk may go for accrual funds.

“Investors who are completely risk-averse or wish to take the minimum risk possible may go for Fixed Maturity Plans (FMPs),

Existing Investors in long term debt funds should revisit their portfolio and allocate a part of their corpus to short term debt funds.

Since a rate hike cannot be ruled in the coming months, investing in long-term debt funds doesn’t make sense anymore. A rising interest rate scenario is bad news for debt funds, especially long-term debt funds, because of the inverse relationship between yield and prices.

Dwijendra Srivastava, CIO-Debt at Sundaram Asset Management Company
10-year benchmark government securities (G-Sec) closed at 7.53%. “Given the current situation we foresee a rate hike in the next financial year. But the quantum of the rate hike and when it would be announced is difficult to predict at this point of time.” He also added that the 10 year yield will continue to remain in the range of 7.4% – 7.6% in the next few months.
 
Note : Past performance of fund does not guarantee the future returns.

Mutual Fund Investment are Subjected to Market Risks,Read all Scheme Related Document Carefully.

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.

How you can calculate long term capital gains of your mutual fund investment

In a frequently-asked-question series released on 5th Feb 2018, the Central Board of Direct Tax (CBDT) has given four different scenarios to calculate long gains tax on mutual funds.

LTCG MF

Let us look at the scenarios:

Scenario 1: If Mr. X has bought an MF unit on November 15, 2016 at Rs.100, its fair market value is Rs.200 on January 31, 2018, and he has sold it on April 1, 2018 at Rs.250. As the actual cost of acquisition is less than the fair market value as on January 31, 2018, you will have to take the fair market value of Rs.200 as the cost of acquisition and the long-term capital gain will be Rs.50 (Rs. 250 – Rs.200).

Scenario 2: Again, if Mr.X has acquired an MF unit on November 15, 2016 at Rs.100, its fair market value is Rs.200 on January 31, 2018, and it is sold on April 1, 2018 at Rs.150. In this case, the actual cost of acquisition is less than the fair market value as on January 31, 2018. However, the sale value is also less than the fair market value as on January 31, 2018. In such a case, you will have to take the sale value of Rs.150 as the cost of acquisition and the long-term capital gain will be NIL (Rs. 150 – Rs. 150).

How to choose the best mutual fund for your portfolio

Scenario 3: An MF unit is acquired on November 15, 2016 at Rs.100, its fair market value is Rs.50 on January 31, 2018, and it is sold on April 1, 2018 at Rs.150. In this case, the fair market value as on January 31, 2018 is less than the actual cost of acquisition, and therefore, the actual cost of Rs.100 will be taken as actual cost of acquisition and the long-term capital gain will be Rs.50 (Rs. 150 – Rs. 100).

Scenario 4: An MF unit is acquired on November 15, 2016 at Rs.100, its fair market value is Rs 200 on January 31, 2018, and it is sold on April 1, 2018 at Rs.50. In this case, the actual cost of acquisition is less than the fair market value as on January 31, 2018. The sale value is less than the fair market value as on January 31, 2018 and the actual cost of acquisition. Therefore, the actual cost of Rs.100 will be taken as the cost of acquisition in this case. Hence, the long-term capital loss will be Rs.50 (Rs. 50 – Rs. 100) in this case.

Such a loss can be set-off against any other long-term capital gains and you can carry it forward to subsequent eight years for set-off against long-term capital gains.

LTCG

Budget talks about Rs.1 lakh exemption. How is this to be calculated?

Long-term capital gains realised from all transactions under sale of equity shares and equity MF schemes during the financial year will be aggregated. For example, if the total of the long-term capital gain is at Rs.2 lakhs in the financial year, then the investor has to pay LTCG tax of 10% on Rs.1 lakh only.

What is grandfathering?

Grandfathering means the exemption granted to investors on the gains made by them before the new provisions come into force. This is more of a comfort clause while migrating from an easier to a strict tax regime. The government intends to grandfather or exempt gains made until January 31, 2018.

 

 

IPOs with the Route of NFO: A unique theme

Edelweiss Mutual Fund coming with New Fund Offer name EDELWEISS MAIDEN OPPORTUNITIES FUND-SERIES 1.

It is Close Ended Equity Scheme Investing Across large,mid and small cap stocks in Recently 2-3 years listed IPO’s and Upcoming IPO’s.

Since IPO-Initial Public Offering Activity has picked up in recent years with over Rs.1,00,000 cr being raised in last 2 years. Robust IPO activity has created multiple maiden investment opportunities.

This fund is first of its kind in the industry that intends to follow a disciplined approach while investing in recent and upcoming listings.The aim is to make investing in such maiden ideas accessible and simpler for retail investors.

Investing in India’s Prospective Opportunities(IPO) is the mantra of this NFO.

New Sectors Such as Insurance, Diagnostic, Staffing Solutions,stock exchange & Depository, Retail and Asset Management Company are being introduced offering unique Opportunities to play India’s growth story.

Three key aspects of IPO investing:

  1. Access – A dedicated fund Investing in recent IPOs to provide better access and thereby maximizing gains.
  2. Selection – Provides right selection of IPOs as not all IPOs are investment worthy.
  3. Post listing Gain – A structured approach to optimize post listing gains as many IPOs have generated healthy returns over next 12 to 18 months after listing.

EDELWEISS MAIDEN OPPORTUNITIES FUND-SERIES 1 Fund Strategy.

  1. Stock Selection – Best 20-30 ideas from recently listed and upcoming IPOs.
  2. Style – Multi-cap and Sector agnostic approach
  3. Protection – Endeavors to protect downside through put options
  4. Profit Booking – Aims for systematic profit booking through dividend  payouts(subjected to availability)

Positive

Heightened IPO activity provides good investment opportunity.

  1. Select best recently listed and upcoming IPOs through a process driven approach.
  2. Access to large number of IPOs with Limited Money.
  3. Tradition Diversified Mutual Funds give limited exposes to IPOs.
  4. Endeavors to protect downside and declare dividends(subjected to availability).

IPO FINALFund Features

NFO Period: 2nd Feb 2018 to 16th Feb 2018

Maturity Date: 28th June 2021

MICR Cheque: Till end of business hours on 15th Feb 2018

Plans and Options:Regular Plan with Growth and Dividend Payout

Offer of units: Rs. 10/- each during the New Fund Offer Period

Minimum Application Amount-Rs. 5000/-(plus in multiple of rs. 10)

Liquidity: To be Listed on exchange

Fund Manager: Bhavesh Jain and Bharat Lahoti

Download the Fact sheet of Fund manger of Bhavesh Jain

Download (PDF, 93KB)

Download the Fact sheet of Fund manger of Bharat Lahoti

Download (PDF, 95KB)

Benchmark: Nifty 200 Index

The benchmark for the Scheme is NIFTY 200 Index. The performance of the Scheme would be bench marked with NIFTY 200 Index since it is in line with the investment objective and this reflects the primary universe of stocks from where the portfolio would be constructed by the fund managers.

INVESTMENT MANAGER:

Edelweiss Asset Management Limited

Registar:

Karvy Computershare Private Limited.

The AMC / Trustee Company reserve the right to revise the load structure from time to time. Such changes will become effective prospectively from the date such changes are incorporated.

Since the fund having lock-in of 3.5 years. It provide fund manager time to perform him expertise.

Know more About P/E Ratio and its Significance

Risk factors:

Standard Risk factors

Investment in Mutual Fund Units involves investment risks such as trading volumes, settlement risk, liquidity risk, default risk including the possible loss of principal.

Mutual funds and securities investments are subject to market risks and there is no assurance or guarantee against loss in the Scheme or that the Scheme’s objective will be achieved.

The present Scheme is not a guaranteed or assured return Scheme.

Scheme Specific Risk factors:

Risk Factors Associated with Equity & Equity related instruments.

Risks Associated with Fixed Income and Money Market Instruments.

Interest rate risk, Spread risk, Credit risk or default risk, Liquidity Risk, Reinvestment risk,Performance Risk,Market risk,

Risk factors associated with investment in ADRs/GDRs and Foreign Securities.

Risk Factors Associated with Derivative.

Risk factor specifically while using Options (non arbitrage), Risks attached with the use of debt derivatives.

Risk Associated with Securitized Debt.

Risks Associated with Stock Lending & Short Selling.

Risks Associated with Trading of Units on Stock Exchange.

Risk associated with Close Ended Scheme.

Information about the scheme:

Investment objective:

The investment objective of the Scheme is to seek to provide capital appreciation by investing in equity and equity related securities of companies which are new in the sector, early in their growth stage and are poised to benefit from the India growth story in the long-term.

However, there is no assurance that the investment objective of the Scheme will be realized and the Scheme does not assure or guarantee any returns.

Asset allocation and investment pattern:

Under normal circumstances, the anticipated asset allocation under each Series of the Scheme, will be as follows:

Indicative Allocation

(% to net assets)

                       Risk Profile
Equity and Equity

related instruments including derivatives

65% to 100% Medium to High
Debt and

money market instruments

0% to 35% Low

The Scheme will not invest in credit default swaps.

Investment in Securitized Debt will be up to 50% of debt allocation.

Investment in ADRs/ GDRs/ Foreign Securities, whether issued by companies in India and foreign Securities, as permitted by SEBI Regulation, can be up to 35% of the Net Assets of the Scheme.

The Scheme may, if the Trustees permit, engage in short selling of securities in accordance with the framework relating to short selling and securities lending and borrowing specified by SEBI. The Scheme shall not deploy more than 20% of its net assets in stock lending and not more than 5% of the net assets of the Scheme will be deployed in Stock lending to any single counter party.

The Scheme may invest in derivatives up to 50% of the Net Assets of the Scheme.

The cumulative gross exposure through equity, debt and derivative positions should not exceed 100% of the net assets of the Scheme. The exposure to Derivatives mentioned as a percentage to the Net Assets means Gross Notional Exposure.

Cash or cash equivalents with residual maturity of less than 91 days will be treated as not creating any exposure.

Portfolio Re balancing.

Investment in CBLO before the closure of NFO.

IPO

Where will the scheme invest?

The corpus of the Plan under the Scheme shall be invested in any (but not exclusively) of the following securities:

1) Equity and Equity related instruments

  • Equity shares
  • Equity related instruments: convertible bonds, convertible debentures, equity warrants, convertible preference shares, etc.
  • Equity Derivatives
  • ADR, GDR, Foreign equity and Equity related instrument as may be permitted by SEBI/RBI from time to time.
  • Any other securities permitted by SEBI from time to time.

2) Debt securities:

Each Series under the Scheme will retain the flexibility to invest in the entire range of debt instruments and money market instruments. These instruments are more specifically highlighted below:

Debt instruments (in the form of non-convertible debentures, bonds, secured premium notes, zero interest bonds, deep discount bonds, floating rate bond / notes and any other domestic fixed income securities) include, but are not limited to:

1) Debt issuances of the Government of India, State and local Governments, Government Agencies and statutory bodies (which may or may not carry a state / central government guarantee),

2) Debt instruments that have been guaranteed by Government of India and State Governments,

3) Debt instruments issued by Corporate Entities (Public / Private sector undertakings),

4) Debt instruments issued by Public / Private sector banks and development financial institutions.

Rs. 4 Lakh In Reliance Banking Fund Turns Over Rs. 1 Crore In Less Than 15 Years

Money Market Instruments include:

1) Commercial papers, 2) Commercial bills, 3) Treasury bills, 4) Government,securities having an unexpired maturity upto one year, 5) Collaterlised Borrowing & Lending Obligation (CBLO), 6) Certificate of deposit,7) Usance bills, 8) Permitted securities under a repo / reverse repo agreement (other than Corporate Debt Securities), 9) Any other like instruments as may be permitted by RBI / SEBI from time to time.

Pending deployment within reasonable time period and towards the maturity of the Series:

The monies may be kept in cash and cash equivalents viz. overnight investment in CBLO, reverse repo, money market instruments, liquid and money market mutual fund schemes.

The AMC may park the funds of the Plan in short term deposits of scheduled commercial banks, subject to the guidelines issued by SEBI vide its circular dated April 16, 2007, as amended from time to time.

Investment in Securitised Debt.

The investments in Securitised debt papers including Pass through Certificates (PT/Cs) may be made upto 35% of the net assets of the Scheme. Securitization is a structured finance process, which involves pooling and repackaging of cash-flow producing financial assets into securities that are then sold to investors.

  • Auto Loans (cars / commercial vehicles /two wheelers)
  • Residential Mortgages or Housing Loans
  • Consumer Durable Loans
  • Corporate Loans

Personal Loans Pass Through Certificates

Investments in the Schemes of Mutual Fund

Setting up a goal: First step to Financial Planning ( Video )

Strategy and Approach:

The Scheme will be a diversified equity fund which will invest in equity and equity related securities of the companies that are new in the sector, early in their growth phase and are likely to benefit in the long term from the macro and demographic aspects of the Indian economy.

The Fund will invest in a diversified basket of equity stocks spanning the entire market capitalization spectrum and across multiple sectors with special focus on companies that are newly introduced in the market and are unique businesses The Fund would identify companies for investment, based on the following criteria amongst others:

  1. Track record of the company
  2. Potential for future growth
  3. Industry economic scenario & its outlook

The fund manager proposes to concentrate on business and economic fundamentals driven by in-depth research techniques and employing the potential of the research team at the AMC.

Key to the manager’s investment strategy is the identification of triggers for potential appreciation of stocks in the universe over the medium to long term time frame. As and when the fund manager is of the view that a specific investment has met its desired objective, the investment maybe liquidated.

The Scheme may also use various derivatives and hedging products from time to time, as would be available and permitted by SEBI, or in an attempt to limit the downside risk of the portfolio.

The Scheme may invest in other schemes managed by the AMC or in the schemes of any other Mutual Funds, provided it is in conformity with the investment objective of the Scheme and in terms of the prevailing Regulations. As per the Regulations, no investment management fees will be charged for such investments. As per the SEBI Regulations, such inter-scheme investments shall not exceed 5% of the Net Asset Value of the Fund.

Derivative & Arbitrage Strategies

Derivatives are financial contracts of pre-determined fixed duration, whose values are derived from the value of an underlying primary financial instrument, or index, such as: interest rates, exchange rates, and equities.

Cash Future Arbitrage.

Illustrations

Buy 100 shares of Company A at Rs 100 and sell the same quantity of stock’s future of the Company A at Rs 101.

  1. Market goes up and the stock end at Rs 200.

At the end of the month (expiry day) the future expires automatically:

Settlement price of future = closing spot price = Rs 200

Gain on stock is 100*(200-100) = Rs 10,000

Loss on future is 100*(101-200) = Rs – 9,900

Net gain is 10,000 – 9,900 = Rs 100

  1. Market goes down and the stock end at Rs 50.

At the end of the month (expiry day) the future expires automatically:

Settlement price of future = closing spot price = Rs 50

Loss on stock is 100*(50-100) = Rs – 5,000

Gain on future is 100*(101-50) = Rs 5,100

Net gain is 5,100 – 5,000 = Rs 100

Index Arbitrage.INDEX ARBPortfolio Protection/ Hedging.

Interest Rate Swaps (IRS) and Forward Rate Agreements (FRA).

Stock Lending.

Investment in debt/ money market instruments.

Investment in Mutual Fund Units.

Risk Control.

Portfolio Turnover

 

Mutual Fund Investment are Subjected to Market Risks,Read all Scheme Related Document Carefully.Return Expectation just assume may varies.

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.

Aditya birla banking and financial services fund : Review

Complete analysis of Aditya birla banking and financial services fund.

Investment Objective:

The primary investment objective of the scheme is to generate long term capital appreciation to unit holders from a portfolio that is invested predominantly in equity and equity related securities of companies engaged in banking and financial services.

The scheme does not guarantee/indicate any returns. There can be no assurance that the schemes objectives will be achieved.

Investments Strategy:

Fund proposes to adopt a disciplined flexible long term approach to investing with a focus of generating long term capital appreciation by investing in the Banking and Financial Services sector.

Banking and Financial Services includes, Banks, Broking Cos, Wealth Management Cos, Insurance Cos, NBFCs, Investment Banking Cos, Rating Agencies, Micro Finance Cos, Housing Finance Cos, etc.

Fund manager intends to broadly analyse macro situation as Banking sector is largely correlated with macro variables.

banking fund

Fund will follow the four steps in search of investment ideas.

1.Evaluating Business,Focus on Management,Valuations,Capital Efficiency will be on focus.

2.Fund will adopt an active management style to optimize returns.

3. Fund will follow a bottom up approach to identify bargain stocks with the flexibility to invest across the market capitalization.

4. Fund will do periodically review on the companies which is in portfolio.

EMI VS SIP ( Be controlled or take control )

Download the current Fact sheet

Download (PDF, 141KB)

Fund Management

Mr. Satyabrata Mohanty

Total Experience : 16 years

Mr. Satyabrata Mohanty is a CA, CFA. He has been part of Birla group since last 17 years. He has over 12 years of experience in Finance and Research. He has handled responsibilities across Fund Management (Equity & Debt), Trading and Credit Research functions. Prior to joining BSLAMC, he has worked with Aditya Birla Management Corporation Ltd & joined ABG as a management Trainee.

Mr. Dhaval Gala

Total Experience : 9 years

Mr. Dhaval Gala has an overall experience of around 9 years in financial markets. He has over 8 years of experience in doing investment research and analysis in Banking & Financial Services sector. He joined BSLAMC in February 2011, since then he has been a part of the research team. Prior to joining BSLAMC, he has worked with B&K Securities (January 2008 – February 2011) and J. P. Morgan Chase India Private Ltd (May 2005 – July 2006).

Some chart to Understand the performance

Performance Line Chart

TECHNICAL

Cumulative Performance (%) and Discrete Performance (%)

CHART

Static Scatter Chart

STATIC CHART

Rolling Bar Chart ( Excess return )

excess return

Regular withdrawal Chart

swp

Amount Invested Lump sum Rs.1000000/-

Withdrawal Amount Rs. 10000/- ( Monthly )

Scheme Withdrawal Period No of Monthly Installments Total Withdrawal Amount Current Value Return (%)
Aditya Birla Sun Life Banking and Financial Services Fund  01-01-2014 to 24-01-2018 49 490,000 2,00,7891 30.04

Regular Saving Chart

SIP

Ratio Table ( Most Important )

ratio

Banking on New Opportunities:

Fortunes of the banking and financial services sector are typically linked with economic growth. There are numerous factors that work in favour of the banking and financial services sector.

Rs. 4 Lakh In Reliance Banking Fund Turns Over Rs. 1 Crore In Less Than 15 Years

Some of the key factors are:

Robust demand from middle class, rural penetration and technology-enabled services. According to a report by the National Council for Applied Economic Research’s (NCAER) Centre for Macro Consumer Research, by 2015-16, India will be a country of 53.3 million middle class households, translating into 267 million people. Characteristics of the rising middle class include higher purchasing power and also the ability take on extra debt to meet their aspiring lifestyle. Similarly with the advent of technology, the reach of banks has extended to envelope the rural population that was previously unbankable. As a result, the banking and financial services sector has been able to deliver better returns.

Portfolio Characteristics

Total Stocks                        32

Avg Mkt Cap (Rs.Cr)          50303

Portfolio P/B Ratio             2.98

Portfolio P/E Ratio            27.73

3Y Earnings Growth (%)   4.64

Download the Full Portfolio Listings

Download (PDF, 88KB)

Discipline:

As a Sector fund, the portfolio will concentrate on the companies engaged in Banking and Financial Services. The portfolio manager will adopt an active management style to optimize returns. The scheme would invest in Banks as well as Non-banking Financial Services companies, Insurance companies, Rating agencies, Broking companies, Micro finance companies, Housing Finance companies, Wealth Management companies, etc . The scheme may also invest in IPOs of companies which could be classified under Financial Services sector.

Download the Full Portfolio Holding

Download (PDF, 83KB)

SCHEME SPECIFIC RISK FACTORS:

Investing in a Sectoral fund is based on the premise that the Fund will seek to invest in companies belonging to a specific sector. This will limit the capability of the Fund to invest in other sectors.

The scheme being sector specific will be affected by the risks associated with the Banking Sector and investments in Financial services companies which provide non banking financial services like housing finance, stock broking, wealth management, insurance companies and holding companies of insurance companies and hence concentration risk is expected to be high.

Also, as with all equity investing, there is the risk that companies in that specific sector will not achieve its expected earnings results, or that an unexpected change in the market or within the company may occur, both of which may adversely affect investment results. Thus investing in a sector specific fund could involve potentially greater volatility and risk.

Risk Factors associated with investments in Fixed Income Securities.

Price Risk or Interest Rate Risk, Credit Risk, Liquidity or Marketability Risk, Reinvestment Risk, Pre payment Risk, The Scheme shall not invest in Foreign Securities.

Risk Factors associated with investments in Derivatives.

The risks associated with the use of derivatives are different from or possibly greater than, the risks associated with investing directly in securities and other traditional investments.

Risks associated with investments in Securitised Debt.

Limited Recourse and Credit Risk,Bankruptcy Risk,Risk of Coingling, Prepayment Risk, Credit Risk, Liquidity Risk, Conversion risk.

Risks associated with Asset Backed Securities (ABS) Auto Loans,Prepayment Risk,Credit Risk,Liquidity Risk,Risks associated with Asset Backed Securities (ABS) Corporate Loans,Credit Risk,Prepayment Risk,Limited Liquidity and Price Risk.

Who should invest in such funds? Do sector funds carry a higher risk?

We believe sectoral funds carry higher risk than diversified equity mutual funds. Hence these funds are appropriate investment tools for investors believing that a particular group of stocks will perform better than market indices. At times, they may find favour with a regular equity investor who has a higher risk appetite.

For example, if you believe there will be a series of rate cuts and banks would benefit due to that, banking sector funds will be big beneficiary. Sector funds tend to be riskier and more volatile than the broad market because they are less diversified, although risk levels depend on the specific sector.

Note : Past performance of fund does not guarantee the future returns.

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 prior to making any actual investment decisions, based on information published here.

How to choose the best mutual fund for your portfolio

Selecting Right Mutual Fund is like selecting Right Life Partner. Any wrong decision can wipe out your personal wealth. What makes it more difficult is volatility in performance of mutual fund. Some people select Mutual Fund only on the basis on their rankings.

If mutual fund rankings  are 100% correct then all portals or financial advisers should suggest same set of mutual funds to their clients or readers. You will find large variation in the rankings of Mutual Funds.

Second problem is volatility in performance. A star performer fund this year might be worst performing fund next year. It is advisable to review the investment portfolio every 6 to 12 months. In short, undertake the exercise of selecting right mutual fund every 6 to 12 months. Third problem with Indian investor is that they invest without evaluating the investment objective. Reason being investment objective help to decide in which mutual fund class the investor should invest.

Lastly, it is absolutely necessary to understand in which direction economy will move in next 12 months.

Choosing a scheme from thousands of mutual fund schemes available in the market is not easy for many investors. Opting for the right mutual fund scheme is one of the biggest hurdles faced by many new investors. However, you would be fine if you are ready to follow some broad guidelines.

Alpha

A measure of a scheme’s over- or under-performance by comparison to its benchmark. It represents the return of the scheme when the benchmark is assumed to have a return of zero, and thus indicates the extra value that the manager’s activities have contributed.

Beta

Beta is a statistical estimate of a scheme’s volatility by comparison to that of its benchmark, i.e. how sensitive the scheme is to movements in the section of the market that comprises the benchmark. Beta close to 1 means a scheme is likely to move in line with its benchmark, greater than 1 and the scheme is more volatile than the benchmark.

r 2

The R-Squared measure is an indication of how closely correlated a scheme is to an index or a benchmark. It uses an R-Squared range between 0 and 1, with 0 indicating no correlation at all, and 1 showing a perfect match. Values upwards of 0.7 suggest that the scheme’s behaviour is increasingly closely linked to its benchmark, whereas the relevance begins to diminish below that.

Sharpe

Sharpe calculates the level of a scheme’s return against the return of a notional risk-free investment, such as cash or Government bonds. The difference in returns is then divided by the scheme’s standard deviation – its volatility, or risk measurement. The resulting ratio is an indication of the amount of excess return generated per unit of risk. Therefore, a negative Sharpe usually suggests investments would have been better off in risk-free government securities. When analysing similar investments, the one with the highest Sharpe has achieved more return while taking on no more risk than its fellows – or, conversely, has achieved a similar return with less risk.

riskVolatility

Volatility is calculated using standard deviation, a statistical measurement which, when applied to an investment scheme, expresses its volatility, or risk. Volatility shows how widely a range of returns varied from the scheme’s average return over a particular period.

Lower volatility means that the holding’s value changes at a steady pace over time.

Higher volatility means that the holding’s value fluctuates over short time periods.

Discrete Performance

The aggregate amount that the investment has gained or lost between two specified time periods.

Distribution of Returns

Distribution analysis looks at the distribution of returns over a given time period. The X axis shows all the possible returns with the theoretical range of -100% to + infinity.

The Y axis shows the frequency with which these returns occur. The purpose of this sort of analysis is to look past the scheme’s average return and determine whether it is the most likely return. This is done by looking at the bell curve and measuring the distributions skew and kurtosis.

Do Not Compare Yourself with Other Investors While Making Investment

Simple Annualised Performance

The absolute increase or decrease in value of an investment over a given period of time, expressed as a percentage per year.

Dividend Yield

The return on an investment by means of interest or dividends received from the holdings. Dividend Yield within fact sheets is supplied by the Scheme Manager on a regular basis, who is under no obligation to define the type of dividend yield supplied i.e. Gross/Net or Running/Redemption.

Tax treatment of dividends

Dividends received from all mutual funds are tax free in the hands of the investors.

However, in the case of debt funds the fund house pays a dividend distribution tax of 28.84% which includes surcharge and cess. In an equity mutual fund there is no dividend distribution tax.

Absolute Performance

This measure looks at the appreciation or depreciation that an asset achieves over a given period of time.Unlike Relative performance, which is compared to another measure or benchmark.

Calendar Year Performance

The aggregate amount that the investment has gained or lost between the dates 1st January to the 31st December for the specified year.

Compound Annualised Performance

The rate of return which represents the cumulative effect that a series of gains or losses have on an original amount of capital over a given period of time, typically one year and above, expressed on annual basis or return per year.

Note : Past performance of fund does not guarantee the future returns.

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 prior to making any actual investment decisions, based on information published here.