Skip to main content

Thematic funds – Sectorial Mutual Funds

Tax Saving Mutual Funds Online

Current open Infra Bond Application form

 

 

AN INVESTOR, who is not stock market savvy or is a sceptic, usually plays the market through the mutual funds route as seen in the past many years. But, quite often, when the market is in a bullish mode, mutual fund houses try to ride the sectoral theme in order to catch the flavour of the season.

For instance, healthcare and FMCG shares were the darlings of the investors in 2011, while banking disappointed last year due to tightening of interest rate and concerns about deteriorating asset quality. Similarly, the infrastructure theme did well in 2006 and 2007, but has underperformed significantly in 2010 and 2011.


What are thematic funds?


Broadly, thematic funds operate on themes ranging from multi-sector, international/multi-economy and commodities, to name a few.

So, should one take exposure to these thematic funds at a time when volatility in the equity market continues to remain high and most of the underlying risks have not yet subsided?

In the past that thematic funds have done well when markets are on the up move. Thematic funds are a function of market cycle, function of risk and time horizon calculated by an investor. It is a high-risk, high-return investment and if an investor has an investment horizon of three-four years, these investments would fetch him decent returns.

For novice investors identifying the right theme could be a Herculean task. These investors should invest in mutual funds and ideally, they should stick to diversified equity mutual funds, said an analyst with a mutual fund house, who spoke on condition of anonymity.

Risk profile: Thematic funds by nature are more prone to risk and volatility. The performance of these funds is dependent on the performance of a particular set sector or a theme, unlike a diversified fund that moves in line with the broader markets, said the analyst.

In the past one year, Reliance Diversified Power Sector Fund gave a negative return of 11.59 per cent, while UTI Energy Fund was down 2.7 per cent. Similarly, Sundaram Entertainment Opportunities Fund Retail Growth has delivered a negative return of nearly 16 per cent and Sundaram Capex Opportunities has fallen 10 per cent in the past one year.

Some sector/themes that do well in one year may underperform in another year.
In this case, it is difficult for a retail investor to forecast which theme/sector will do well, on a consistent basis. In that case, investors are better off investing in a diversified equity fund, where they leave that call to an experienced fund manager who can, perhaps, take a better sectoral call, and over/underweight those sectors accordingly.

Options: On the other hand, returns from diversified funds and index-based funds eked out positive returns in the past one year. HDFC Mid-Cap Opportunities Fund registered positive return of 16.4 per cent, followed by Religare Mid & Small-Cap Fund (up 10.1 per cent), DSP BlackRock Top 100 Equity Fund (6.6 per cent), UTI Opportunities Fund (12.9 per cent) and HDFC Top 200 Growth Fund (3.2 per cent).

Investment in mutual funds should be more diversified, if an investor is looking at a one-year point of view. Even, if the market remains upbeat for a longer period in a year, an investor should not go for investing in a particular sector because during correction times, these theme-based funds fall in tandem with the market due to their exposure to a particular theme,.

 
 
---------------------------------------------

Invest in Tax Saving Mutual Funds ( ELSS Mutual Funds ) to upto Rs 1 lakh and Save tax under Section 80C.

 

Invest Tax Saving Mutual Funds Online

Tax Saving Mutual Funds Online

These links can be used to Purchase Mutual Funds Online that are regular also (Investment, non-tax saving)

 

Download Tax Saving Mutual Fund Application Forms from all AMCs

Download Tax Saving Mutual Fund Applications

 

These Application Forms can be used for buying regular mutual funds also

 

Some of the best Tax Saving Mutual Funds available ( ELSS Mutual Funds )

  1. HDFC TaxSaver
  2. ICICI Prudential Tax Plan
  3. DSP BlackRock Tax Saver Fund
  4. Birla Sun Life Tax Relief '96
  5. Reliance Tax Saver (ELSS) Fund
  6. IDFC Tax Advantage (ELSS) Fund
  7. SBI Magnum Tax Gain Scheme 1993
  8. Sundaram Tax Saver

Popular posts from this blog

Am you Required to E-file Tax Return?

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   Am I Required to 'E-file' My Return? Yes, under the law you are required to e-file your return if your income for the year is Rs. 500,000 or more. Even if you are not required to e-file your return, it is advisable to do so for the following benefits: i) E-filing is environment friendly. ii) E-filing ensures certain validations before the return is filed. Therefore, e-returns are more accurate than the paper returns. iii) E-returns are processed faster than the paper returns. iv) E-filing can be done from the comfort of home/office and you do not have to stand in queue to e-file. v) E-returns can be accessed anytime from the tax department's e-filing portal. For further information contact Prajna Capit...
Read more

Mutual Fund Review: HDFC Index Sensex Plus

  In terms of size, HDFC Index Sensex Plus may be one of the smallest offerings from the HDFC stable. But that has not dampened its show, which has beaten the Sensex by a mile in overall returns   HDFC Index Sensex Plus is a passively managed diversified equity scheme with Sensex as its benchmark index. The fund also invests a small proportion of its equity portfolio in non-Sensex scrips. The scheme cannot boast of an impressive size and is one of the smallest in the HDFC basket with assets under management (AUM) of less than 60 crore. PERFORMANCE: Being passively managed and portfolio aligned to that of the benchmark, the performance of the index fund is expected to follow that of the benchmark and in this respect, it has not disappointed investors. Since its launch in July 2002, the fund has outperformed Sensex in overall returns by good margins.    While every 1,000 invested in HDFC Index Sensex Plus in July 2002 is worth 6,130 now, a similar amount invested in Sensex then wo...
Read more

IDFC - Long term infrastructure bonds - Tranche 2

IDFC - Long term infrastructure bonds What are infrastructure bonds? In 2010, the government introduced a new section 80CCF under the Income Tax Act, 1961 (" Income Tax Act ") to provide for income tax deductions for subscription to long-term infrastructure bonds and pursuant to that the Central Board of Direct Taxes passed Notification No. 48/2010/F.No.149/84/2010-SO(TPL) dated July 9, 2010. These long term infrastructure bonds offer an additional window of tax deduction of investments up to Rs. 20,000 for the financial year 2010-11. This deduction is over and above the Rs 1 lakh deduction available under sections 80C, 80CCC and 80CCD read with section 80CCE of the Income Tax Act. Infrastructure bonds help in intermediating the retail investor's savings into infrastructure sector directly. Long term infrastructure Bonds by IDFC IDFC issued an earlier tranche of these long term infrastructure bonds on November 12, 2010. This is the second public issue of long-te...
Read more

ULIP Review: ProGrowth Super II

  If you are interested in a death cover that's just big enough, HDFC SL ProGrowth Super II is something worth a try. The beauty is it has something for everybody — you name the risk profile, the category is right up there. But do a SWOT analysis of the basket, and the gloss fades     HDFC SL ProGrowth Super II is a type-II unit-linked insurance plan ( ULIP ). Launched in September 2010, this is a small ticket-size scheme with multiple rider options and adequate death cover. It offers five investment options (funds) — one in each category of large-cap equity, mid-cap equity, balanced, debt and money market fund. COST STRUCTURE: ProGrowth Super II is reasonably priced, with the premium allocation charge lower than most others in the category. However, the scheme's mortality charge is almost 60% that of LIC mortality table for those investing early in life. This charge reduces with age. BENEFITS: Investors can choose a sum assured between 10-40 times the annualised premium...
Read more

Section 80CCD

Top SIP Funds Online   Income tax deduction under section 80CCD Under Income Tax, TaxPayers have the benefit of claiming several deductions. Out of the deduction avenues, Section 80CCD provides t axpayer deductions against investments made in specific sector s. Under Section 80CCD, an assessee is eligible to claim deductions against the contributions made to the National Pension Scheme or Atal Pension Yojana. Contributions made by an employer to National Pension Scheme are also eligible for deductions under the provisions of Section 80 CCD. In this article, we will take a look at the primary features of this section, the terms and conditions for claiming deductions, the eligibility to claim such deductions, and some of the commonly asked questions in this regard. There are two parts of Section 80CCD. Subsection 1 of this section refers to tax deductions for all assesses who are central government or state government employees, or self-employed or employed by any other employers. In...
Read more
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