Prajna Capital - An Investment Guide

Union KBC Mutual Fund has announced the launch of its first fund -Union KBC Equity Fund. It is an open ended equity diversified scheme.   Investment Objective and Strategy: The objective of this scheme is to generate long term capital appreciation by investing substantially in a portfolio of equity and equity-related instruments. The Fund Manager has the freedom to invest 75% to 100 % in equity and equity related instruments and upto 25% in money market instruments. The investment team will follow the combination of Top down and Bottom up approach while making investments.   Fund Manager: Mr. Ashish Ranawade will be the Fund Manager of this scheme. He has over 16 years of experience in investments. He has worked with UTI MF and ING Investment management (India) Limited as head of PMS with responsibilities of portfolio performance and business strategy.   Fund house: Union KBC Asset Management is a joint-venture between Union Bank of India, a leading Nationalised Bank in Ind...

  All you need to know about educational loans The person who is seeking a student loan has to be a citizen of India The person should have got admission into a professional or technical course after taking an entrance test He/she should have secured admission into a university in India or institution overseas What is the interest rate charged for student/education loan? Standard interest rates for getting student loans in India are 12-14% pa Another provision that banks provide you with is a choice between fixed and floating interest rates Income tax benefits for educational loans Under Section 80 (e) of the Indian Income Tax Act, a person can claim the interest paid towards the education loan as tax deduction. The tax deduction can only be availed by the individual on whose name the loan has been taken. This benefit can be claimed up to 8 years after the repayment has started. DOCUMENTS REQUIRED Ø        Marksheets of the last qualifying examination for school and graduate ...

STEP 1: Log on to www.incometaxindiaefiling.gov.in and register yourself with your PAN — which acts as the user ID — and log in to your account. • STEP 2: From the 'Downloads' menu, select the ITR form applicable to you for assessment year (AY) 2010-11 and download the same. For a salaried individual with no other source of income, the relevant one is ITR-1. • STEP 3: Open the downloaded excel utility with 'macros enabled'. For example, if you are using Office 2003, then go to Tools > Macro > Security, set the security level at 'medium' and enable macros while opening the excel utility. STEP 4: Fill in the relevant details with the help of the Form 16 issued by your employer. • STEP 5: Validate all the information by clicking the 'Validate' key and proceed to generate an XML file. It will be automatically saved in your machine. • STEP 6: Upload this XML file on to the website by going to the drop down menu under the 'Submit Return' se...

Its Easy, Simple, Flexible and Convenient.   Follow Below steps to buy DSP BlackRock Mutual Funds online. There are 2 ways to do it.   1) With PIN (If you do not have PIN) 2) Without PIN ( If you have PIN already)   1) Invest Online Without PIN URL: https://dspbronline.com/iol_purchaserequestwop.aspx?distcode=ARN-74461     Follow Below Steps:   1) Enter your Existing DSP BlackRock Folio number 2) Enter PAN Number 3) Provide Bank Account Number (Any bank with Net Banking facility) 4) Select Fund that you want invest in 5) Enter the Amount 6) Make the Fund transfer with Net Banking   No PIN or User ID required   ----------------------------------------------------------------------------------------------------------------------------------------   2) Invest Online With PIN URL : https://dspbronline.com/iol_login.aspx?distcode=ARN-74461   If you already have user ID and PIN then use below link to make new/additional purchase online. ------------------------...

   The death of a loved one is the most dreaded thing that can happen to any family. It can get even more traumatic when the family realises that the deceased has not left a will behind. In such a situation, the family is usually left running from pillar to post, trying to gain access to the property which, in many cases, could be the only saviour from doom. However, according to experts, the family can still get its due even in the absence of a will, provided it can get hold of a few documents. A succession certificate and a copy of the death certificate should solve at least 95-96% of your problem. SUCCESSION CERTIFICATE Usually, a succession certificate is the key document that you need. In the absence of a will, a succession certificate will be the primary document through which the heirs can stake a claim to the assets of a deceased relative. A succession certificate, under the Indian Succession Act, is a document that gives authority to the person who obtains it, to represent th...

Investment Strategy: This fund focuses mostly on large cap stocks. In the past three years, large cap stocks on an average account for about 75% of the portfolio, midcap stocks account for about 15.5% of the portfolio, small cap stocks account for about 3.5% of the portfolio and cash holdings account for 5.0% of the portfolio. Banking, Pharmaceuticals, Information Technology, Oil Exploration and Electric Equipment are the important sectors for this portfolio. These five sectors have accounted on an average for 45.5% of the portfolio across the three year period and about 48% of the portfolio in 2010. Banking sector has never had an allocation of less than 15% in the past three years and continues to be the dominant sector in the portfolio. Exposure to the Electric Equipment sector has seen a drastic reduction in the past three years; the allocation has decreased from 13.5% of the portfolio allocation in December 2007 to 4.3% in December 2010. Asset Size: The fund's AUM is aro...

Investment Strategy: The fund invests in pharma and healthcare stocks across market capitalisation but focuses mainly on the large cap and small cap stocks. In the past three years, large cap stocks on an average account for about 46% of the portfolio, midcap stocks account for about 19% of the portfolio, small cap stocks account for about 28% of the portfolio and cash holdings account for 6% of the portfolio. Investments in Pharmaceuticals companies account for about 89% of the portfolio on an average. Asset Size: The fund's AUM is around Rs. 552 crore as at 31 March 2011. Performance: This fund is the best performing Pharma fund in India and also the best performing Pharma fund on our platform over a 5 year period (31 December 2005 to 31 December 2010). We have been recommending this fund for the past two years. As of 31 December 2010, this fund has outperformed its benchmark, the BSE Health care Index across all periods except for the 6 months and 1 year periods. Over a ...

  Stories abound of how patients have realised the virtues of buying health insurance after taking one look at their hospital bills. As the television advertisement rightly says, hospitalisation bills can at times get you down worse than any ailment can. A health insurance cover enables you to meet unexpected medical expenses with confidence. Given today's high cost of treatment, people who live without health insurance court a serious risk every day of their lives. Health insurance can shield them from penury that could be caused by prolonged illness and the expenses thereof.   Awareness about the need to buy health insurance is increasing, especially in urban areas. At least those who are financially literate no longer subscribe to the view that health insurance is only for the old or the infirm. They buy health insurance as soon as they have the means to do so, which is the right thing to do. If you wait till you are, say, in your 40s, then insurers will insist on a health c...

  Although not a very exciting offering, Fidelity Tax Advantage does provide stability & consistency… Last year's returns were commendable. But it also stands out for its large-cap bias. In fact, only two tax saving funds (out of 37) fall in the large-cap space. The outcome is that it shields investors better than its peers during market downturns. Since its launch, of the total eight quarters in which its category has been in red, the fund has outperformed its peers in all of them. On the flip side, one has to deal with middling performance during market run-ups.   Strategy The fund has no restrictions in terms of market cap, sector or thematic bias. The focus is on bottom-up stock picking approach. The selection of the stocks will be done on the basis of the core strengths of the companies. The fund will control risk through a diversified portfolio with no high allocations to a single stock.   Fund Insight   The portfolio is biased towards large caps and clearly ...

  What is Form 16? All salaried employees have to file their income tax returns by July 31, 2010. To do this, it is necessary to have the Form 16 document, issued by your employer. Form 16 gives details of tax deducted and the branch of the bank where it is deposited into the central government account. For example if a TDS of Rs 2,332 and education cess of Rs 68 are deducted from your April salary, Form 16 details the same. It does so for every month in the financial year. It is the final certificate issued by your employer giving details of the salary you have earned and the tax deducted on your behalf and paid to the government. This certificate is given to you at the end of the financial year, generally by April 30. In case there hasn't been any TDS from your salary, you just get a salary certificate and not the Form 16. What is Form 16A and how is it different from Form 16? If you are not a salaried employee and work as a professional for an organisation and earn fees, t...

When you buy a life insurance policy, the insurer levies a charge for the insurance protection upon death and to cover certain other expenses. This is known as mortality charge. It is the actual cost of insurance by the life insurance company. It is usually deducted with other charges in the policy, before investing your money. Mortality is dependent on the sum at risk (sum assured minus fund value) and should reduce as the fund value increases in the policy term. It is calculated per thousand of sum at risk. Higher the sum at risk, higher is the charge. Ideally, it should reduce as the fund value increases, but it does not. How is mortality charge calculated? It is mainly linked to the average Indian life expectancy ratio (which is about 67 years). Other factors such as gender (premium for women is 1520 per cent less than men), financial status, geography and occupation (a deep sea diver will be charged more than a teacher) are also taken into consideration. It is likely the premi...

  ENDORSING the conservative stratagem of investing, Templeton India Equity Income Fund is designed to invest in companies that have current or potentially attractive divi dend yield both in India and overseas markets. It is thus one of the few schemes in the country to give the investor a global exposure in investments. Launched in May 2006, the scheme now manages an asset base of over 1,100 crore. PERFORMANCE: Benchmarked to BSE 200 equity index, Templeton India Equity Income has so far turned out to be an outperformer in both good and bad times. The very first year of its launch — 2006 — saw the fund beat its benchmark by a neat 7% margin. The fund returned about 18% gains during the first seven months of its launch against 11% returns by the BSE 200.      While it did appear to slow in pace vis-à-vis its peers in one of the most happening years of the decade, 2007, generating about 57% returns in that year against over 60% hike recorded by the BSE 200, Templeton India Equity In...

   MAX NEW YORK Life Flexi Fortune (MNYL) is a type II Unit Linked Insurance Plan (Ulip) that offers nominees a sum of both death benefit and fund value in the case of an unfortunate event. The unique feature of this scheme is the automatic jump in the sum assured every year by 10%, starting from the second year till the end of the policy term to keep pace with growing inflation. The scheme offers seven funds — investment options — of which four are more than six years old. They have performed well in both bullish and bearish phases of the stock market. COST STRUCTURE: Flexi Fortune's cost structure is in line with most of its peers. Though the premium allocation charged by the scheme is a little high, its low policy administration charge keeps cost structure balanced. Mortality charges are very high under the plan and become more precarious for investors as sum assured increases. Mortality charges for policies with a tenure of 10 years are almost 50% higher than the usual LIC ch...

Investment Strategy: This fund focuses on the large cap, midcap and small cap stocks almost equally. This can be seen from the analysis of the holding patterns of this fund. In the past three years, large cap stocks on an average account for 30% of the portfolio, midcap stocks account for 33% of the portfolio, small cap stocks account for 29% of the portfolio and cash holdings account for 6.1% of the portfolio. The fund managers use derivatives in the portfolio quite often but the allocation to derivatives is less than 4% of the portfolio. Pharmaceuticals, Fertilizers, Electric Equipment, Information Technology and Sugar are the important sectors for this portfolio. Unlike most top performing equity funds, this fund does not have banking as one of the key sectors. These five sectors on an average account for 21.5% of the portfolio. This fund unlike HDFC Midcap Opportunities fund is invested across more sectors. Asset Size: The fund's AUM is around Rs. 1163 crore as at 31 Marc...

Investment Strategy: This fund focuses mostly on large cap stocks. In the past three years, large cap stocks on an average account for about 76% of the portfolio, midcap stocks account for about 9% of the portfolio, small cap stocks account for about 8% of the portfolio and cash holdings account for 5.2% of the portfolio. Banking, Pharmaceuticals, Information Technology, Refineries and Cigarettes are the important sectors for this portfolio. These five sectors have accounted on an average for 45% of the portfolio in 2010, and 42% across the three year period. Banking sector has never had an allocation of less than 13% in the past three years and continues to be the dominant sector in the portfolio. Exposure to the Cigarette sector has increased tremendously in the past three years, from 1.4% of the portfolio allocation in December 2007 to 4.4% in December 2010. Asset Size: The fund's AUM is around Rs. 1281 crore as at 31 March 2011. Performance: This fund is one of the bes...

  General insurers line up additional features in travel insurance OF those travelling abroad on a holiday, not more than 30% take a holiday insurance policy TRAVEL insurance policies that cover medical expenses, baggage delay and passport theft are passé. General insurance companies are trying to outdo each other in coming up with travel insurance policies with additional features such as hijack distress allowance, arrangement of doctor appointment, repatriation of mortal remains and home burglary coverage, among others. Travel insurance is still a nascent segment in the general insurance business in India. It is taken more out of compulsion, largely by people who travel abroad to visit their children or relatives. As for those travelling abroad on a holiday, people buy it if their travel agent has a tie-up with a firm, because insurance is still seen as expenditure in India rather than an investment, industry members say. Of those travelling abroad on a holiday, not more than ...

Investment Strategy: The fund manager aims to invest in equity shares that have a high dividend yield in comparison to S&P CNX Nifty at the time of investment. The fund invests in stocks across the entire market capitalisation but focuses mostly on large cap stocks. In the past three years, large cap stocks on an average account for about 68% of the portfolio, midcap stocks account for about 9% of the portfolio, small cap stocks account for about 7% of the portfolio and cash holdings account for 11% of the portfolio. The fund also invests in deposits regularly; these deposits make up 3.5% of the portfolio. Banking, Information Technology, Cement & Construction, Power and Oil Exploration are the important sectors for this portfolio. These five sectors have accounted on an average for 35% of the portfolio across the three year period and about 43% of the portfolio in 2010. Exposure to the Cement & Construction sector has seen a dramatic pickup in the past three years; the ...

Most retail investors bidding for Initial Public Offers ( IPOs ) are not using the Application Supported by Blocked Amount ( Asba ) facility, even after four years of its availability. Under Asba, an investor's money leaves his bank account only on allocation of shares; till then, it continues to earn interest. It takes at least 20 days for allotment of shares to retail investors after the issue closes for subscription. An analysis of IPOs during 2010-11 showed only about 20 per cent of applications of retail investors in the year came through this route, said Prithvi Haldia of Prime Database, which provides primary market data. According to market players, it is mainly stock brokers who are not pushing for Asba in smaller towns and cities. "In the past one year, over 80 per cent of IPOs were of small-size companies. Most of these companies are little known and take operator support to get their issue subscribed. Thus, those IPOs where operators use dummy investors to su...

Investment Strategy : ICICI Prudential Index Fund tracks the Nifty, and invested between 77% and 98% of the fund corpus in the index stocks in 2010. This fund never held more than 1% of the fund corpus as cash. However, this fund had exposure to Nifty futures in all the months of 2010. The percentage of the fund's corpus invested in Nifty futures was in excess of 14% during the first half of 2010. However, since June 2010, the fund's exposure to Nifty futures is below 10% of its corpus. Asset Size: The fund AUM is around Rs. 92 crore as at 31 March 2011. Performance: Tracking error is the performance metric for an Index fund. So, we considered the tracking error for this fund from 1 year, 3 year and 5 year perspectives. This fund has tracking errors on the positive side for all the three periods and the tracking errors for 3 and 5 year have been more than 1%. The reason for high positive tracking error is due to fund's investment into Nifty futures. Over a 1 year peri...

There is a perception among several individuals that having paid taxes via TDS, filing of returns is not important, because after all, the government's main objective is to ensure that its tax kitty is getting the revenue due to it. This is a misconception and it is essential to know that it is our constitutional obligation to file tax returns when you are required to do so. So your job does not end at paying taxes, filing returns is equally important. This brings you to the question - When does it become essential to file returns? It is essential to file returns when your income crosses/exceeds the basic exemption limit even if it means that on account of you investment planning, your tax obligation may be nil. So for FY 2009-10, filing of tax returns is essential if  Individuals have taxable income exceeding Rs.160,000 p.a. Women have taxable income exceeding Rs.190,000 p.a. Senior Citizens have taxable income exceeding Rs.240,000 p.a. Tax Evasion Income tax authorit...