Skip to main content

Mutual Fund Review: Religare Tax Plan

This one has made its mark in a short period of time. The fund's ability to provide good downside protection capabilities accompanied with decent returns during markets rallies will reward investors over the long run.

 

Strategy


The fund will invest across market capitalisation and sectors utilising a bottom-up approach. It will spread its assets over 20 to 50 stocks without being overly diversified.

 

Fund Insight


With an allocation of over 60 per cent to mid and small caps and a tightly packed portfolio of around 35 stocks, one would have expected the fund to be thrashed in the market downturn of 2008. But its fall of around 50 per cent was 6 per cent below the category average (fourth lowest in the category) and 5 per cent less than the BSE 100, that too without a high cash exposure.


It was the stock picking that made the difference. Out of the 38 stocks which appeared for six months or more in the fund's portfolio in 2008, 16 (around half the fund's portfolio) experienced a fall lower than Sensex.


The fund's focus on bottom-up stock picking leads to quality picks. The mid-cap picks are biased in favour of growth, quality of balance sheet and strength of underlying cash flow rather than sheer undervaluation plays. Momentum and cyclical plays are avoided, which may result in subdued returns during market rallies. In 2009, the fund stayed away from Metals which had a superb run that year. The late entry into Technology also hit performance.
Selective (and unusual) stock picking is the strategy of the fund. Though one may have to wait a while for the bets to play out.

 

Portfolio Insight


The fund follows a multi-cap strategy. Although benchmarked against BSE 100, the base universe is the BSE 200, to which stocks in the CNX Midcap index are added. Also, a few handpicked companies from the BSE Small Cap and BSE PSU indices are considered. This universe is reviewed every quarter. The fund is well diversified with around 52 stocks. Under normal circumstances, allocation to a single stock is restricted to 6 per cent.

 

Risks


Aggressive sector bets are not unusual. For instance, in December 2008, Financial Services and Petroleum together accounted for almost 50 per cent of the fund's portfolio. Such positions could impact the fund's performance if they do not play out.

 

Popular posts from this blog

Real Returns in Investing

Download Tax Saving Mutual Fund Application Forms Invest In Tax Saving Mutual Funds Online Buy Gold Mutual Funds Leave a missed Call on 94 8300 8300 Real Returns in Investing     A Anil Singh (name changed), 44, works with a private company and believes in investing his entire savings in fixed deposits. His financials from the year 2000 till date is given in the table. Anil's savings in FDs gave him an average return of around 8%. The total amount saved over the 174 months (From January 2000 to June 2014) is Rs 49.80 lakh. The value of his investment today is around Rs 66.71 lakh. Naveen Singh (name changed), 44, works in a similar profile like Anil. However his expenses were on the higher side. His financials are as in the table. Naveen invested only in equities. The total amount saved over the 174 months (From January 2000 to June 2014) is Rs 38.40 lakh. The v...

Budget 2014 Highlights for Saving

Download Tax Saving Mutual Fund Application Forms Invest In Tax Saving Mutual Funds Online Buy Gold Mutual Funds Leave a missed Call on 94 8300 8300   The new finance minister Arun Jaitley has just presented his first budget. What measures does the budget contain that will specifically impact savers and investors? Here they are: 1. Housing loans exemption for self-occupied properties increased to Rs2 lakh: Earlier this amount was Rs1.5 lakhs. This move barely keeps pace with the inflation in asset values.   2. Investment limit under 80 (C) increased to Rs1.5 lakh: This is a good move again and offers some relief to taxpayers.   3. IT exemption increased to Rs2.5 lakh, Rs3 lakh for senior citizens. This comes as a minor relief for taxpayers.   4. Annual PPF ceiling to be enhanced to Rs1.5 lakh, from Rs1 lakh: This is in tune with the change in 80C.   5. Long term capital gains tax for debt funds has been rai...

ICICI Prudential MIP 25 - Invest Online

Download Tax Saving Mutual Fund Application Forms Invest In Tax Saving Mutual Funds Online Buy Gold Mutual Funds Leave a missed Call on 94 8300 8300   ICICI Prudential MIP 25     (CRISIL Rank 2)   This scheme was launched March 2004. Please see the chart below for the one, two, three and five years annualized returns from this scheme. The minimum investment in the scheme is Rs 5,000. The asset allocation of the portfolio is 24% equity, 72% debt and 4% cash equivalent and others. Please see the chart below for the monthly dividends declared by the scheme, on a per unit basis, over the last 5 years.   For further information contact Prajna Capital on 94 8300 8300 by leaving a missed call Leave a missed Call on 94 8300 8300 Leave your comment with mai...

Franklin India Smaller Companies Fund - Invest Online

Download Tax Saving Mutual Fund Application Forms Invest In Tax Saving Mutual Funds Online Buy Gold Mutual Funds Leave a missed Call on 94 8300 8300   Franklin India Smaller Companies Fund   While the universe of small-cap stocks in India is vast, there are very few equity funds which take on the task of sifting through this space for good long-term bets. Franklin India Smaller Companies Fund has managed this with aplomb. What we like about this fund is its significant out-performance of its category and benchmark over the last four years, and its ability to moderate portfolio risk despite investing in the riskiest segment of the equity market. This fund's stock selection strategy, like that of Franklin India Prima Fund is focused on finding companies that generate positive cash flows across business cycles. High return on investment and manageable leverage are also filtering criteria. Says R. Janakiraman, fund ma...

How to open a Capital Gains Account?

Download Tax Saving Mutual Fund Application Forms Invest In Tax Saving Mutual Funds Online Buy Gold Mutual Funds Leave a missed Call on 94 8300 8300   How to open a Capital Gains Account? You can open a capital gains account in an authorized bank. The Government has notified 28 banks which can open the Capital Gains Account on behalf of the Government. You have to apply for opening the account by filling out the required application form (Form A) and submit proof of address, PAN card and photograph. You cannot withdraw funds from a capital gains account using a cheque book or ATM, like you do in your normal savings bank account. There are procedures to be followed to withdraw funds from the capital gains account. Investment in Specified Bonds Section 54EC of Income Act provide that if the seller invests whole or part of capital gains arising from the sale of asset in specified Capital Gains, within a period of six months of the ...
Related Posts Plugin for WordPress, Blogger...
Invest in Tax Saving Mutual Funds Download Any Applications
Transact Mutual Funds Online Invest Online
Buy Gold Mutual Funds Invest Now