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Saturday, July 30, 2011

Why Gold Prices will continue to stay high?

 

Tight supply, demand from China & India, purchase by central banks are some of the reasons why gold prices will rise


   Gold prices have been on a roll over the past few years. The precious metal has given a return of about 160% in the past five years. That is, if you had invested . 100 in gold back then, it would be worth around . 260 today. Now, compare that to the investment made in the stock market during the same period. The 50-share NSE Nifty Index, which is a broad representation of the Indian stock market, has grown by around 83%, which means that . 100 invested in the stock market five years ago would have grown to . 183 by now. The point is: return from gold has been almost double than from stocks. But that, as they say, is the past. What about the future? Will gold continue to perform as well as it has in the past? The answer is most likely yes. Gold prices will continue to rise even further in the days to come. Here are some reasons why.

CENTRAL BANKS BUYING GOLD

For many years, central banks around the world have been net sellers of gold. But in 2010, after a very long period, they became buyers again. Central banks have been net buyers of gold in 2010 for the first time in the past 21 years.


In 2010, central banks bought nearly 76 tonnes of gold. This trend further accentuated in the first quarter of 2011, when central banks were net buyers of gold to the extent of 129 tonnes. Central banks were selling gold for a while, reaching a peak sale of 674 tonnes in 2005. The current purchases are a reversal of that trend — a case of sell low, buy high (a curious recipe for gain with public money


WHY THE TURNAROUND

Over the years, the central banks have had a major portion of their reserves in US dollar, with a minor portion in other currencies like euro and yen. This trend is now changing.

 

 The rise in gold prices has caught the eye of various central banks who believe it is a welcome addition to their reserves given its status as 'store of wealth' even during periods of crisis. Thus, the central banks have indicated their preference to hold gold over a depreciating asset (read US Dollar). Most of the bigger economies around the world have been printing currency big time to revive their moribund economies and also to pay off the loads of debt they have accumulated. This has led to a threat of paper currencies collapsing and, hence, the flight to the "safety" of gold. There is concern over the major reserve currencies like the dollar, euro and yen.


The only way for the over-indebted western economies to get out of the mess is to print more money. Since gold cannot be printed or mined that fast, the value of currencies is sinking against gold. This means the price of gold is rising.

CHINA TO BUY MORE GOLD

China's foreign exchange reserves currently stand at $3 trillion and gold as a percentage of these reserves forms only a miniscule 1.8%. But this dependence on the dollar is gradually coming down. Countries like China who are amongst the largest holders of US dollars are, in fact, diversifying away from the dollar by selling dollar and buying gold.


Currently, 1.8% of China's forex reserves is in gold; if China were to bring this percentage in line with the global average of 11%, it would have to buy another 6,000 tonnes of gold, or more than two years' global mine production (of gold). Imagine what that would do to the price of gold. This is also true of other major holders of foreign exchange reserves like Japan as well as India. Japan's gold reserves stand at a miniscule 3.2% of its total foreign exchange reserves of $1.14 trillion. India's gold reserves at 8.2% are much closer to the world average of 11%.

SUPPLY LIKELY TO REMAIN TIGHT

Over the past 20-odd years, the supply of gold has been growing at the rate of 0.7%. The main reason for this has been the decline of South Africa as a major supplier. A very important driver of the slow production growth was the dramatic decline of South Africa (as a producer), which produced about 1,000 tonnes in 1970, but below 200 tonnes last year (ie, 2010).


The supply is likely to remain tight as very few large gold mines are expected to come up. Over the next five years, only seven gold mines that are capable of producing more than 500koz (1 oz =31.1 grams) are expected. Also, gold mines have a high lead time and take time to set up. As the report points out: According to a study conducted by MinEx, the average lead time for the 214 green field projects in 1970-2003 was about 5.4 years in Australia, Canada, and the US, and 8.3 years for other countries. Also, as explained above, central banks, which were major suppliers of gold, have now turned buyers. This means a lot of supply of gold will come from scrap sales. Supply mainly comes from mines and recycled scrap; there is no central bank sale happening now. The scrap supply though tends to be more price sensitive. Since the demand-supply situation remains tight, any incremental new demand for investments or from China would take the prices higher.


Due to these reasons, the supply of gold will be lower than the demand over the next five years. Even if the demand remains flat for the next five years, there is likely to be a supply deficit of 665 tonnes, the Standard Chartered report says. This clearly will lead to a higher price.

GROWING PER CAPITA INCOME IN CHINA, INDIA

The rise in the price of gold has shown an almost one-to-one correlation with the rise in incomes in China and India (as can be seen from the accompanying table). While Indians have been traditional buyers of gold, the Chinese have been fast catching up.


India and China continued to provide the bulk of the demand as they contributed to more than 1/3rd of the entire demand in the first quarter primarily on account of rising inflation. Another key statistic which came out was that the annual gold demand in 2010 from China crossed the 700-tonne mark for the first time.

WHERE ARE GOLD PRICES HEADED?

G
old has the potential to easily rise above $1,600 per ounce (or about . 23,200 per 10 grams) or more in the medium term.


Jain is more optimistic. He feels that gold prices will continue to accelerate over the next 4-5 years and will enter the last phase of bull run from 2012. After a period of consolidation and sideways movement in the $1,400-$1,500 band, gold will break out to $1,700 per ounce (. 24,600 per 10 grams) before the end of this year. Gold prices are set to surge to $2,000 per ounce (. 28,900 per 10 grams) by 2012 and $3,000 per ounce (. 43,400 per 10 grams) by 2015.

 

Mutual Fund Review: SBI Magnum Global Fund 94

Type: Open-Ended Equity Diversified
Fund Manager: Mr. Sanjay Sinha.
Inception Date: September 30, 1994
 
SBI Magnum Global Fund 94 has always been in the lime light due to its phenomenal performance across various time frames. It has been the best performing scheme within the fund house product bouquet of equity schemes. The scheme aims to provide the investors an opportunity to earn, in accordance with their requirement, through capital gains or through regular dividends, returns that would be higher than the returns offered by comparable investment avenues through investment in Indian equities, PCDs & FCDs for selected industries.
 
The scheme has been in existence since September 1994 and its fund size has grown at a CAGR of 154% in the last one year period, which shows that the scheme is still popular among the Indian investors. The scheme is currently being managed by Mr. Sanjay Sinha, which was previously managed by Mr. Sandeep Sabharwal. Mr. Sanjay Sinha also manages other equities scheme like SBI Magnum Sector Umbrella – Contra, SBI One India Fund. He also jointly manages other equity scheme of the fund house. The fund invests mainly in large cap and medium cap stocks. It has benchmarked itself against BSE 100.
 

The scheme has a significant exposure of 63% in Mid Cap stocks, 10% in Large Cap, 14% in Small Cap and 13% in other current assets. The scheme has been bullish on the mid cap stocks for quiet some time. Mid-cap space is now trading at a significant discount to their large-cap counterparts, after the sustained appreciation in the latter's prices over the past few months .This certainly makes the scheme more attractive, as it seems to have got its asset allocation strategy right. The fund manager was successful in anticipating the fall and was sitting on 19% cash in the month of May and June 2006 when the market tanked, which has helped the scheme to face the sluggish condition. The scheme has comfortably outperformed its peer and the benchmark. The scheme has invested 86.71% of its assets in equities and 13.29% in cash and equivalent as on December 06.

 

The fund has a good blend of large and mid cap stock. At present the scheme has 53 scrip's in its basket .The top 10 holding accounts for 41% of the total net asset, which indicates how well the portfolio is diversified. Shree Cement Ltd was the top holding and accounted for 6.04% of the net asset. Infotech Enterprises Limited, Ansal Properties & Industries Ltd, JaiPrakash Associates Ltd and Dishman Pharmaceuticals & Chemicals were the other top holdings.

 

The top 5 sector accounts for 50.4% of the portfolio. The Infrastructure sector alone constitutes for 15.55%. The scheme seems to be banking on the booming Infrastructure sector for quite a while, and this strategy has certainly paid rich dividends. Its average exposure to the Infrastructure sector is 15.14 % during the last one year.
 
The fund manager added Gitanjali Gems Ltd and Tanla Solutions Ltd to the current month's portfolio. It further added KEI Industries, Crompton Greaves Ltd and JaiPrakash Associates Ltd to the portfolio. Some of the existing holdings which saw further selling are KEC International Ltd, Matrix Laboratories Ltd and Kajaria Ceramics Ltd.
 

Scheme Name

1 Year

SBI Magnum Global Fund 94 – Growth

58.37

Sundaram BNP Paribas Select Midcap – Growth

58.13

Kotak Global India – Growth

33.6

Birla Mid Cap Fund – Growth

32.48

Tata Midcap Fund – Growth

27.18

ING Vysya Midcap Fund – Growth

24.32

Sahara Midcap Fund – Growth

18.65

DBS Chola Global Advantage Fund – Growth

13.55

PRINCIPAL Global Opportunities Fund – Growth

12.01

Franklin India Smaller Companies Fund – Growth

11.46

Indices

 

BSE100

44.77

 

Midcap stocks are very notorious for being in the high risk-high return category of equity investment. When mid cap stock appreciates they appreciate more than large cap stock in a bull market, but they are the one sliding down at a blitzkrieg pace in a bearish market. The time has changed and lot of investors have reposed their faith in this category. Investors, who have been pushing the market with large cap buys, are likely to find a safe haven in mid caps, which are doing well financially and are available at cheaper valuation compare to their large cap peers. The scheme seems to be banking on this factor, and hopes to put up a decent performance, investors may continue to hold on to their position in the fund.

 

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1) DSP BlackRock Mutual Funds:

http://prajnacapital.blogspot.com/2011/05/buying-dsp-blackrock-mutual-funds.html

 

2) Reliance Mutual Funds:

http://prajnacapital.blogspot.com/2011/06/buying-reliance-mutual-funds-online.html

 

3) Reliance Mutual Funds:

http://prajnacapital.blogspot.com/2011/07/buying-hdfc-mutual-funds-online.html

 

4) Sundaram Mutual Funds:

http://prajnacapital.blogspot.com/2011/07/buying-sundaram-mutual-funds-online.html

 

5) Birla Sunlife Mutual Funds:

http://prajnacapital.blogspot.com/2011/06/buying-birla-sunlife-mutual-funds.html

 

6) UTI Mutual Funds:

http://prajnacapital.blogspot.com/2011/06/buying-uti-mutual-funds-online.html

  

7) SBI Mutual Funds:

http://prajnacapital.blogspot.com/2011/06/buying-sbi-mutual-funds-online.html

 

8) Edelweiss Mutual Funds:

http://prajnacapital.blogspot.com/2011/06/buying-edelweiss-mutual-funds-online.html

 

9) IDFC Mutual Funds:

http://prajnacapital.blogspot.com/2011/06/buying-idfc-mutual-funds-online.html

 

PNB to buy 30% stake in MetLife Insurance

 

 

GOVERNMENT-RUN Punjab National Bank (PNB) will pick up 30 per cent stake in MetLife Insurance Company for an undisclosed sum. PNB had been scouting for a partner for a long time for exposure in the insurance sector.

Following close of the transaction, the insurance company will re-brand itself as PNB MetLife to leverage strengths of the two brands in the Indian market.

PNB has also agreed to enter into 10-year distribution tie-up with MetLife India. At present, PNB is one of the bancassurance partners of Life Insurance Corporation of India (LIC).

When the MetLife deal is finalised, PNB will have to break its distribution tie with LIC to fall in line with regulatory norms.

PNB had short-listed 10 companies in March 2011 and narrowed the list to three firms, Aviva Life, MetLife and Bharti Axa Life.

KR Kamath, CMD of PNB, said, "We have considered offers made by various companies and selected MetLife as our partner.


With 60 per cent branches in rural and semi­urban areas, PNB is positioned to take insurance to deep pockets of India. This partnership has the potential to drive the company into the top tier of Indian life insurers and more than double its market share."

William J Toppeta, president-international of MetLife, said, "Given its global significance, India is a strategic focus market. We have identified 10 strategic markets around the world and on top of that list is India. Addition of a financial institution like PNB as a shareholder and partner will enhance MetLife India's ability to move into the top tier of life companies here."
 

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Also, know how to buy mutual funds online:

 

1) DSP BlackRock Mutual Funds:

http://prajnacapital.blogspot.com/2011/05/buying-dsp-blackrock-mutual-funds.html

 

2) Reliance Mutual Funds:

http://prajnacapital.blogspot.com/2011/06/buying-reliance-mutual-funds-online.html

 

3) Reliance Mutual Funds:

http://prajnacapital.blogspot.com/2011/07/buying-hdfc-mutual-funds-online.html

 

4) Sundaram Mutual Funds:

http://prajnacapital.blogspot.com/2011/07/buying-sundaram-mutual-funds-online.html

 

5) Birla Sunlife Mutual Funds:

http://prajnacapital.blogspot.com/2011/06/buying-birla-sunlife-mutual-funds.html

 

6) UTI Mutual Funds:

http://prajnacapital.blogspot.com/2011/06/buying-uti-mutual-funds-online.html

  

7) SBI Mutual Funds:

http://prajnacapital.blogspot.com/2011/06/buying-sbi-mutual-funds-online.html

 

8) Edelweiss Mutual Funds:

http://prajnacapital.blogspot.com/2011/06/buying-edelweiss-mutual-funds-online.html

 

9) IDFC Mutual Funds:

http://prajnacapital.blogspot.com/2011/06/buying-idfc-mutual-funds-online.html

 

Mutual Fund Review: ING Vysya L.I.O.N Fund

Type: Equity Diversified
Fund Manager: Paras Adenwalla
Launch Date: 09-Dec-2005

ING Vysya L.I.O.N (large cap, intermediate cap, opportunities, new offer) Fund seeks to provide medium to long term capital appreciation by investing in stocks across the entire market capitalisation range. ING Vysya L.I.O.N fund predominantly moves across various market caps to optimize returns and currently 53% of the total corpus is into large cap stocks.

The investment mandate of the scheme states that it will invest 75-10 per cent of its assets in equities and out of which at least 20% will be invested in large cap stocks, while 0-70% will be invested in midcap scrips, and 0-40% will be in small caps.

Existing mutual fund schemes in the Indian markets, which have a flexi-cap investment strategy, have had a mixed result in the last one year in terms of performance. Some of the comparable schemes like SBI Magnum Multicap and Franklin India Flexi Cap have generated good returns, but the rest of the category has been a laggard, including ING Vysya L.I.O.N fund. Broad based index of BSE 100, appreciated by around 44% in the said period, whereas Sensex generated a return of 49.84 per cent. The last one-year has seen lot of volatility and there has been a paradigm shift in the way investments have moved around the different market cap range.

Since most of the schemes based on the multi-cap investment theme, are in their first year of operation, the category as a whole is pretty nascent, and the going had been pretty tough for the scheme. Early in 2006, when the markets were on a Bull Run, stocks from across the market capitalisation were witnessing appreciation, but the ensuing correction mid-year, hit the midcap and smallcap segment of the markets the most, and the attention shifted to large cap stocks. But, in the last couple of months, we have again seen inflows in the midcap space. In view of this volatility, schemes which have been able to identify the trends earlier than the markets have been able to generate returns for its investors.

ING Vysya L.I.O.N Fund was heavily invested into the midcap space, compared to its peers, immediately after its launch in Dec 05. Although, the scheme slowly started shifting its assets into large cap stocks, but it still had a higher midcap allocation, compared to it peers, before the market meltdown, which impacted the scheme's performance.

The use of cash component has also not been very actively utilised by the scheme, as it has sought to remain invested in equities at all times, and average allocation in the last one-year has around 94%. Although, it is generally good to remain fully invested in the markets, in times of uncertainty, a quick reallocation is also imperative and the scheme has been found wanting in that respect. Franklin India Flexi Cap, which generally allocates 5-6% in cash and equivalent instruments, had increased the allocation to around 13% in May-June 06 periods. Similarly, SBI Magnum Multi Cap had hiked its cash exposure to 11% in the same period.

In terms of month-on-month performance, the scheme was able to restrict its losses in the falling market quite well, taking into the account the higher midcap exposure, and it has been less volatile compared to its peers in the interim period.

The scheme currently manages a corpus of Rs 104.64 crores, and has seen erosion in the fund size. The scheme is adequately diversified across 36 stocks and Reliance Industries is the top holding. Since the scheme is still in its early days, and has been an average performer, existing investors can look to hold on to their positions for a while longer.

 

 

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Also, know how to buy mutual funds online:

 

1) DSP BlackRock Mutual Funds:

http://prajnacapital.blogspot.com/2011/05/buying-dsp-blackrock-mutual-funds.html

 

2) Reliance Mutual Funds:

http://prajnacapital.blogspot.com/2011/06/buying-reliance-mutual-funds-online.html

 

3) Reliance Mutual Funds:

http://prajnacapital.blogspot.com/2011/07/buying-hdfc-mutual-funds-online.html

 

4) Sundaram Mutual Funds:

http://prajnacapital.blogspot.com/2011/07/buying-sundaram-mutual-funds-online.html

 

5) Birla Sunlife Mutual Funds:

http://prajnacapital.blogspot.com/2011/06/buying-birla-sunlife-mutual-funds.html

 

6) UTI Mutual Funds:

http://prajnacapital.blogspot.com/2011/06/buying-uti-mutual-funds-online.html

  

7) SBI Mutual Funds:

http://prajnacapital.blogspot.com/2011/06/buying-sbi-mutual-funds-online.html

 

8) Edelweiss Mutual Funds:

http://prajnacapital.blogspot.com/2011/06/buying-edelweiss-mutual-funds-online.html

 

9) IDFC Mutual Funds:

http://prajnacapital.blogspot.com/2011/06/buying-idfc-mutual-funds-online.html

 

 

Mutual Fund Review: Birla Sunlife Income Fund


Type: Debt Income
Fund Manger: Navneet Munot
Launch Date: 3rd March, 1997

The current inflation rate in the Indian economy clearly signals to the over heated conditions of the markets, with the inflation touching a two year high of 6.12% in the last month, dropping back and again rising to a high of 6.11%, the market is jittery about the next policy of the Central Bank. The Reserve Bank of India also looks worried about the inflation and in a move to curb the excess liquidity in the markets; it raised the repo rate by 25 bps in its last third quarter Monetary Policy review last month, along with other measures and by this move the central bank has tried to make the money costlier in order to cut down of the excess money supply in the market.

In these times when the inflation is on a high, and there is increased interest arte volatility, investors are parking their money in the shorter –term debt schemes to earn a return over a short period of time. However certain debt products in other categories have put up some impressive performance. In the debt income category Birla Sunlife Income Fund has performed well and has given an absolute return of 2.23% over the last 3 months and 4.91% over the last 6 months. The scheme has been a consistent performer over the last one year and according to the returns over the last year it stands second in its category. The absolute return over the year was 7.75% whereas the peer group average was 5.12%. Its benchmark index, Crisil Short-Term Bond Fund Index managed to give an absolute return of 5.95% during the same period.

Birla Sunlife Income fund has been in existence since March, 1997 and since it's inception has grown at a CAGR of almost 10 %. Over a period of 5 years, the fund holds a rank of 5 in its peer group returning a CAGR of 6.83%. It manages a corpus of Rs.33.66 crore which has not seen much movement in the last one year.

A major portion of the portfolio is invested in Treasury Bills and Corporate Bonds. Treasury Bills make almost 45.79% of the portfolio whereas Corporate Bonds have a smaller portion of 22.94% in the total portfolio. 20.77% of the portfolio is in cash holdings and the rest 10.5% is invested in Securitized instruments. The scheme has invested around 28.23% of its portfolio in finance sector followed by current assets and power generation sector. The fund manager has invested the portfolio heavily into sovereign instruments and bonds with AAA ratings. Around 45.79% of the portfolio is invested in sovereign instruments whereas around 43.74% is placed in bonds with AAA bonds. The fund manager has done a major shift to the portfolio as the holding of sovereign instruments has gone up by 17.24% which were 28.55% a month ago.

Birla Mutual Fund has seen an increase in its assets under management by Rs 4135.48 crore over the month of January, 2007, and majority of this increase has come from the debt and the liquid schemes. With the kind of increase mentioned above the schemes offered by the fund house looks good for future investments. Though the corpus size Birla Sunlife Income Fund may not seem as a very lucrative fund but looking at the kind of performance of the scheme over the last few months and also a decent track record since inception the scheme looks good for future investments.

 

 

Scheme Name

1 Year

Rank as per 1 Year

DBS Chola Income Plus - Growth

24.7164

1

ABN AMRO Flexi Debt Fund - Growth

8.7544

2

Birla SunLife Income Fund - Growth

7.7483

3

Birla SunLife Income Fund - 54EB - Growth

7.7480

4

Birla SunLife Income Fund - 54EA - Growth

7.7478

5

 

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1) DSP BlackRock Mutual Funds:

http://prajnacapital.blogspot.com/2011/05/buying-dsp-blackrock-mutual-funds.html

 

2) Reliance Mutual Funds:

http://prajnacapital.blogspot.com/2011/06/buying-reliance-mutual-funds-online.html

 

3) Reliance Mutual Funds:

http://prajnacapital.blogspot.com/2011/07/buying-hdfc-mutual-funds-online.html

 

4) Sundaram Mutual Funds:

http://prajnacapital.blogspot.com/2011/07/buying-sundaram-mutual-funds-online.html

 

5) Birla Sunlife Mutual Funds:

http://prajnacapital.blogspot.com/2011/06/buying-birla-sunlife-mutual-funds.html

 

6) UTI Mutual Funds:

http://prajnacapital.blogspot.com/2011/06/buying-uti-mutual-funds-online.html

  

7) SBI Mutual Funds:

http://prajnacapital.blogspot.com/2011/06/buying-sbi-mutual-funds-online.html

 

8) Edelweiss Mutual Funds:

http://prajnacapital.blogspot.com/2011/06/buying-edelweiss-mutual-funds-online.html

 

9) IDFC Mutual Funds:

http://prajnacapital.blogspot.com/2011/06/buying-idfc-mutual-funds-online.html

 

Mutual Fund Review: HDFC MIP – LTP

Type: Open – Ended Debt – MIP
Fund Manager: Mr. Prashant Jain (Equity), Mr Shabbir Kapasi (Debt)
Inception Date: Decemebr 26, 2003

Unlike the conventional monthly income plans in the markets HDFC MIP - LTP is a balance of debt and equity instruments. It invests a minimum of 75% in debt instrument and up to 25% in equities ensuring the scheme has the stability of debt as well as the extra performance potential of equities. The equity exposure gives HDFC MIP - LTP the potential to deliver higher returns over a period of time, in comparison to pure debt scheme. The scheme has benchmarked it self against CRISIL MIP Blended Index.

The primary objective of the scheme is to generate regular returns through investment primarily in debt and money market instruments and to generate long term capital appreciation by investing a portion of the scheme's asset in equity and equity related securities. As on December 06 the fund has invested 24.86% of its asset in equity, 42.07% in debt and 33.07% in cash & equivalent. The fund manager has stuck to the aggressive asset allocation pattern of the scheme; its average asset allocation for the year 2006 has been 24.30% of the net assets in equity, 47.21% in debt and 28.50% in cash & equivalent.

 
The scheme performance across all the time frames has been phenomenal. The scheme has outperformed its peers by a mile. The aggressive nature has helped the fund to be among the top 5 schemes in the ranking across all the time frame. The fund currently manages assets worth of Rs.1141.50 crore, which has increased over 44% over last one year period.

In the equity segment the fund has invested in 29 stocks. The top three stocks in the portfolio are Infosys Technologies Ltd 2.24%, Crompton Greaves Ltd 1.87% and Bank of Baroda 1.64%. The fund has higher weightage in Auto & Ancillaries with 3.31% followed by IT sector with 2.89%. The fund manager has added Elecon Engineering Company Ltd, Oil & Natural Gas Corpn Ltd, IPCA Laboratories Ltd, Wire and Wireless India Ltd and Zee News Limited in the current month's portfolio. Infosys Technologies Ltd has been the good pick by the fund manager as the stock price has gone up by 35% within the time frame of six months. Fund manager further sold Container Corporation Of India Ltd and KEC International Ltd.

In debt segment the fund has allocated 30.01% of the portfolio in commercial papers and 38.12% in corporate bond. The scheme has highest exposure in AAA/P+ instruments and remaining 34.62% in AA/Equ, 3.94% in Sovereign and 1.7% in call and cash. The average maturity of the scheme is 456 days, where as the category average is 646 days. . The scheme having low average maturity is less vulnerable to interest rate volatility. 

MIP schemes, having higher equity allocations, have been doing well in the recent past thanks to the booming equity markets. The investors looking at steady returns from a mix of equity and debt may do well to stay put in HDFC MIP Long Term Plan.

The minimum investment of the scheme is Rs.5000. Fund charges no entry load but an exit load of 1% if redeemed before 12 months and amount is less than 5 crore. The expense ratio of the fund is 1.83. The equity portion of the fund is managed by Mr. Prashant Jain and debt by Mr Shabbir Kapasi.

Scheme Name

1 Year

HDFC MIP - LTP - Growth

12.576

Reliance MIP - Growth

12.355

Birla SunLife MIP - Growth

11.9224

HSBC MIP - Savings Plan - Growth

11.5478

LIC MIP - Cumulative

11.0379

Prudential ICICI MIP - Cumulative

10.9521

FT India MIP - Plan A - Growth

9.9405

JM MIP - Growth

9.0988

UTI Monthly Income Scheme - Growth

8.6005

DWS MIP Fund - Plan A - Growth

6.5197

Indices

 

CRISIL MIP Blended Index

8.8944

 

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Also, know how to buy mutual funds online:

 

1) DSP BlackRock Mutual Funds:

http://prajnacapital.blogspot.com/2011/05/buying-dsp-blackrock-mutual-funds.html

 

2) Reliance Mutual Funds:

http://prajnacapital.blogspot.com/2011/06/buying-reliance-mutual-funds-online.html

 

3) Reliance Mutual Funds:

http://prajnacapital.blogspot.com/2011/07/buying-hdfc-mutual-funds-online.html

 

4) Sundaram Mutual Funds:

http://prajnacapital.blogspot.com/2011/07/buying-sundaram-mutual-funds-online.html

 

5) Birla Sunlife Mutual Funds:

http://prajnacapital.blogspot.com/2011/06/buying-birla-sunlife-mutual-funds.html

 

6) UTI Mutual Funds:

http://prajnacapital.blogspot.com/2011/06/buying-uti-mutual-funds-online.html

  

7) SBI Mutual Funds:

http://prajnacapital.blogspot.com/2011/06/buying-sbi-mutual-funds-online.html

 

8) Edelweiss Mutual Funds:

http://prajnacapital.blogspot.com/2011/06/buying-edelweiss-mutual-funds-online.html

 

9) IDFC Mutual Funds:

http://prajnacapital.blogspot.com/2011/06/buying-idfc-mutual-funds-online.html

 

Friday, July 29, 2011

Investing early and for long term to buid bigger corpus

 

Systematic planning and a disciplined life have proven to be the formula for success. How can it be different with your money?



   For many young professionals, it is never an easy task to deal with money. While many find it difficult to generate surplus, those who have the luxury of extra earnings are too worried about its safety. In fact, it is only a small percentage that is willing to take the risk element and experiment to build a corpus.


   Now, why should a young professional turn young investor when he has decades ahead of him to make money?


   The answer is simple. What is begun early always ends up good. Whether it is during student life or professional life, those who plan their days and years well are likely to end up on the winning side. It is not very different with money. To begin with, young professionals who begin taking their incomes and expenses seriously are likely to end up with a bigger corpus than those who take up the task a few years later. Even a saving of Rs 1,000 a month can make an investor worth crores over a period of 30 years.


   In the whole process of investing, the decision to save is probably the easiest thing to do. The choice of investment product is much more challenging as a fresh investor is driven more by the need to protect his savings. Not surprising considering that it would be difficult for the investor to look at the long-term picture. In fact, many fresh investors would hate the thought of thinking long-term when there are so many expenditure options for the earnings in the short term. More often than not, keeping the money intact without diluting its value would be the prime criteria. In a nutshell, most young investors are likely to think the 25-year-old professional.


   While putting aside money in a fixed instrument like a fixed deposit is nothing new or wrong, young professionals can afford to look at aggressive options since they have the luxury of time on their hand. Property, commodities, and equity are some of those options which help in building wealth. While property requires a larger commitment (in terms of amount), commodities and equity are more volatile. While they pose the challenge of good understanding and risk-taking abilities, they have the potential to offer better returns over the long term.


   In this context, you should also look at the option of saving on a regular basis as wealth creation is a long term process. If the recurring deposits and monthly contributions to public provident fund were the preferred options in the 1980s and 1990s, systematic investment plans (SIPs) have been the much talked-about options in the last decade. While the former allows wealth creation without much risk, the latter has the ability to beat inflation over the long term.


   Irrespective of the choice of product, investors who think of saving and investing at an early stage in life are sure to be winners.

 

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