‘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.

Amber Enterprises India Limited IPO Review and GMP

Punjab based Amber Enterprises India Limited (Incorporated in 1990) is manufacturer of air conditioners and its component in India. With the market share of 55.4%, Amber is the market leader in the Room Air Conditioner . The company manufactures RAC’s for 8 out of the 10 top RAC brands in India including Daikin, Hitachi, LG, Panasonic, Voltas and Whirlpool. These 8 brands have over 75% of market share in India.The Company has 10 manufacturing facilities across seven locations in India.

Super anchor book! Sold 20.8 lakh equity shares to 15 anchor investors for Rs. 178.71 crore

Abu Dhabi Investment Authority
Blackrock India Equities Mauritius Limited
Goldman Sachs India Limited
Kuwait Investment Authority Fund
ICICI Prudential Business Cycle Fund Series 2
ICICI Prudential Value Fund – Series 10
HDFC Small Cap Fund
SBI Magnum Multicap Fund
Reliance Small Cap Fund
Aditya Birla Sun Life

List of Anchor Investors :

Download (PDF, 283KB)

 

amber11111

The Product portfolio includes :

1. Room Air Conditioners : This includes window air conditioners and indoor units and outdoor units of split air conditioners.

2. RAC Components : Critical components such as heat exchangers, motors and multi-flow condensers.

3. Other Components : Other related components including case liners for refrigerator, plastic extrusion sheets for consumer durables and automobile industry, sheet metal components for microwave, washing machine tub assemblies and for automobiles and metal ceiling industries.

The Company has a dedicated R&D centre at its Rajpura facility which is equipped and is accredited by National Accreditation Board for Testing and Calibration Laboratories (NABL) with ISO/IEC 17025:2005 certification and facilities for 3D modelling, quality and product testing.

IPO Particulars:

IPO Opens on : 17th Janaury 2018
IPO Closes on : 19th January 2018
Issue Type: Book Built Issue IPO
Issue Size:[.] Equity Shares of Rs 10 aggregating up to INR 600.00 Cr
#Fresh Issue of [.] Equity Shares of Rs 10 aggregating up to INR475.00 Cr
#Offer for Sale of [.] Equity Shares of Rs 10 aggregating up to INR 125.00 Cr
Face Value: INR 10 per Share
Price Band: INR 855-859 Per Equity Share
Minimum Order Quantity:17 Shares
Listing will at: NSE,BSE

Tentative Timetable:

Finalisation of Allotment : 24 January 2018
Refund : 25 January 2018
Transfer of Shares to Demat A/c:29 January 2018
Listing Expected on 30 January 2018

Objects Of The Issue:-

  • Prepayment or repayment of all or a portion of certain borrowings – INR400 crore
  • General Corporate purposes – remaining amount

Lead Managers:

Edelweiss Financial Services Limited
IDFC Bank Limited
SBI Capital Markets Limited
BNP Paribas

Registrar to the IPO:

Karvy ComputerShare Private Ltd

Promoters Of the Company:-

  1. Jasbir Singh
  2. Daljit Singh

Global Air Conditioner Market Split by Segments

amber 2

Global RAC Volume Market Size and Forecast (Million Units)

amber3

RAC Market Penetration – Select Asian Countries and Global

amber4

Competitive Strengths

1. Market leadership in the RAC OEM/ODM industry in India.

2. One stop solutions provider for the RAC industry with high degree of backward integration.

3. Strong customer relationships with the majority of leading RAC brands in India.

4. R&D and product design capabilities leading to high proportion of ODM business.

5. Track record of financial performance.

6. Economies of Scale.

7. Culture of innovation and highly experienced management.

Market Penetration of Consumer Durables, India vs. Global (%), Fiscal 2015

amber5

Evolution of Room Air Conditioners in India

amber6

Financial Highlights

  • Amber Enterprises net worth, as of Sept. 30, was close to Rs 363 crore, translating into book value of Rs 115 a share after fresh issuance.
  • Its revenue has been growing at an annualised rate of 17 percent, while net profit rose at 9 percent in five years to March 2017.
  • For the first half ended September, revenue and net profit stood at Rs 938 crore and Rs 27 crore, respectively.
  • Earnings before interest, tax and depreciation and amortisation grew at a CAGR of 23.5 percent, while Ebitda margins expanded 150 basis points in the last five years to 7.8 percent.
  • For the first half ended September, Ebitda and margins stood at Rs 84 crore and 9 percent, respectively.
  • The company has a total debt of close to Rs 554 crore, which would fall it looks to use Rs 400 crore from the IPO proceeds to pare debt.

Market Structure RAC

amber7

Market Share Analysis RAC

amber 8

Key Strategies

Expansion of existing product portfolio with a focus on ODM.

Expand domestic customer base and grow export sales.

Continuing innovation and strengthening the R&D capacity.

Pursue selective acquisitions, partnership opportunities and inorganic growth.

Continue to focus on increasing efficiency and profitability.

Reliance Nippon Life Asset Management ( First MF ) IPO Review

Negative

Amber’s business is dependent on certain principal customers and the loss of, or a significant reduction in purchases by, such customers could adversely affect its business, financial condition, results of operations and future prospects.

If its customers do not continue to outsource manufacturing, or if there is a downward trend in OEM/ODM business, its sales could be adversely affected.

Any slowdown in the RAC industry may adversely impact its business, results of operations, financial condition and cash flows.

Amber’s inability to identify and understand evolving industry trends, technological advancements, customer preferences and develop new products to meet its customers’ demands may adversely affect its business.

Amber do not have firm commitment agreements with its customers. If its customers choose not to source their requirements from us, its business and results of operations may be adversely affected.

Amber have experienced growth in the past few years and if company are unable to sustain or manage its growth, its business and results of operations may be adversely affected.

Amber failure to compete effectively in the highly competitive RAC and equipment manufacturing industry could result in the loss of customers, which could have an adverse effect on its business, results of operations, financial condition and future prospects.

Pricing pressure from customers may adversely affect its gross margin, profitability and ability to increase our prices.

Amber manufacturing capacity may not correspond precisely to customers’ demands which may affect its results of operations.

Amber Enterprises and its Subsidiaries are involved in certain legal proceedings, which, if determined against us could have a material adverse effect on its financial condition, results of operations and its reputation.

Amber have undertaken and may continue to undertake strategic investments and alliances, acquisitions and mergers in the future, which may be difficult to integrate and manage. These may expose us to uncertainties and risks, any of which could adversely affect its business, financial condition and result of operations.

Dixon Technologies IPO – Review

Peer Comparison

Amber Enterprises has no listed competitors. Dixon Technologies Ltd. has a similar business model but caters to a different market—an equipment vendor for makers of washing machines, LED televisions, lighting products and mobile phones.

Valuations

“At the higher end of the price band of Rs 859, the issue is valued at 96.8 times price to earnings (PE) on FY17 basis (post dilution) and 49.4 times on first half of FY18 (annualized) basis. While the company holds leadership position , it is difficult to justify its valuation due to lack of clarity of the growth trend in the financial performance.

“Single digit earnings before interest, taxes, depreciation, and amortization (EBITDA) margin, average of 8% for last 5 years and return on equity is 10%.

Grey market premium

GMP is 575, Kostak is 550, Subject to Rs. 6000/-

Conclusion

Investors may consider for short to medium term gain.

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 Small cap Funds beat Nifty : A complete analysis of Different charts and Fact sheet

1. Cumulative Performance Chart (%)
 
2. Discrete Bar Chart
 
3. FACT SHEET OF SMALL CAP INDEX
 
4. Interactive Performance chart
 
5. Distribution Chart Period Type 3 years
 
6. Ratio Table
 
7. Rolling Bar Chart
 
8. Systematic Investment plan ( SIP ) Chart for last 5 Years SIP of Rs. 50000/- p.m.
 
9. Regular Withdrawal chart

Initial Investment: 10000000.00

Data Frequency: Monthly

Withdrawals Date: 10th of the Month

Withdrawals Amount: 100000.00 Monthly For 5 years

Data Frequency: Monthly

Withdrawals Date: 10th of the Month

Withdrawals Amount: 100000.00 Monthly For 5 years

10. Static Scatter Chart
 

Cumulative Performance Chart  (%)

Cumulative Performance (%) Cumulative PerformanceDiscrete Bar Chart

Discrete Bar Chart

FACT SHEET OF SMALL CAP INDEX

Download (PDF, 172KB)

What are Dynamic Funds? ( Video )

Interactive Performance chartInteractive Performance chart 1Distribution Chart Period Type 3 years

Distribution Chart Period Type 3 years

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

Ratio TableRatio TableRolling Bar Chart

Rolling Bar Chart

Do Not Compare Yourself with Other Investors While Making Investment

Systematic Investment plan ( SIP ) Chart for last 5 Years SIP of Rs. 50000/- p.m.

SIP CHART 4Regular Withdrawal chart

Initial Investment: 10000000.00

Data Frequency: Monthly

Withdrawals Date: 10th of the Month

Withdrawals Amount: 100000.00 Monthly For 5 years

Data Frequency: Monthly

Withdrawals Date: 10th of the Month

Withdrawals Amount: 100000.00 Monthly For 5 years

 

Regular withdrwal chart 2Static Scatter Chart

Static Scatter Chart

DISCLAIMER

Past performance of fund does not guarantee the future returns

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.

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.