Skip to main content

Time to Review your Portfolio

Invest In Tax Saving Mutual Funds Online

Call 0 94 8300 8300 (India)

 



Several things have happened in the past few days and weeks that changed the investment climate significantly for the retail investor. Firstly, the US Fed has announced a tapering of its bond buying programme which could see risk- assets being impacted. Secondly, the bond market has seen its biggest turmoil in years, especially when liquid funds gave negative returns for a week, showing that theres no free lunch even in simple debt investments. Thirdly, equity markets have hit all- time highs, even in a slowing economy, thereby surprising experts.

 

Not surprisingly, many retail portfolios may have not moved as planned. But whether you had a good year or not, the way forward is to review what went right or wrong with your portfolio, and then rejig your portfolio to make the best of 2014.

The on set of tax- free bonds and soon- to- happen launch of inflationlinked bonds are other good triggers to revisit your portfolio. A tax- free yield of more than 8.5 per cent a year is mouth- watering. This is even better than the Public Provident Fund, or POMIS for that matter. These have risks attached, though they are low. The two issues of tax- free bonds currently available are of The Housing and Urban Development Corp (Hudco) and India Infrastructure Finance (IIFCL). Both have interest coupons ranging from 8.6 to 9 per cent. Although tax- free bonds are a good investment option for high returns, there is no easy way to redeem them as they are low on liquidity.

Though investments such as these are tempting, one should keep the liquidity disadvantage in mind before investing in them for longer periods.

Real estate has been going through a dull phase for quite some time now. Across the country distress sales are the norm in the real estate market. Delivery delays and correction in property rates are prevalent across several micro- markets.

Investors are neither seeing capital appreciation nor rental yields as delivery delays have impacted the under- construction property market. Ready properties have lower yields.

A recent study showed that many people who invested in debt markets because of its good performance in the last few years have lately not seen apositive real rate of return given the high degree of inflation in the country.

Equity funds on the other hand have shown greater potential and given good returns this year.

Given so many triggers to review one’s investments, how can one best utilise the present moment to stay on course amidst volatility? One proven technique is portfolio rebalancing. This involves reviewing and revising the composition of a portfolio, that is, one’s asset mix. One of the approaches to rebalancing a portfolio is called the constant- mix approach. This calls for maintaining the proportions of one’s investments with their target/ set figures.

Let’s say after working with your financial advisor you have chosen to keep 30 per cent in diversified equity funds, 40 per cent in fixed income assets, 10 per cent in gold ETFs, and 20 per cent in cash. The reasons for arriving at these figures may be several, but assume the proportions are determined according to the investment approach designed together with your financial advisor. If the markets show upward or downward movements, an investor has to periodically rebalance a portfolio to restore the target proportion (asset mix).

If one’s equity investments to purchase An a ‘contrarian’. Rebalancing leads to capitalising opportunities and cutting your losses, as well. For example, tax- free bonds are a good opportunity for investors looking to invest and save tax on the interest they earn. Senior citizens looking for regular income during retirement may allocate adecent portion to them.

One must realise that certain costs come with rebalancing a portfolio.

Every time one rebalances, one has not only to pay transaction charges but also taxes. Portfolio rebalancing should only be done when an investor feels that the market situation has altered. One can also decide on time- based rebalancing where an investor conducts the rebalancing exercise after a set interval.

A financial advisor is the best person to guide you on rebalancing your portfolio as s/ he would have good knowledge of market volatility, upcoming products, taxable gains and macroeconomic indicators likely to impact one’s portfolio

Happy Investing!!

We can help. Call 0 94 8300 8300 (India)

Leave your comment with mail ID and we will answer them

OR

You can write back to us at PrajnaCapital [at] Gmail [dot] Com

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

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

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

Best Performing Mutual Funds

    1. Largecap Funds Invest Online
      1. DSP BlackRock Top 100 Fund
      2. ICICI Prudential Focused Blue Chip Fund
      3. Birla Sun Life Front Line Equity Fund
    2. Large and Midcap Funds Invest Online
      1. ICICI Prudential Dynamic Plan
      2. HDFC Top 200 Fund
      3. UTI Dividend Yield Fund
    1. Mid and SmallCap Funds Invest Online
      1. Reliance Equity Opportunities Fund
      2. DSP BlackRock Small & Midcap Fund
      3. Sundaram Select Midcap
      4. IDFC Premier Equity Fund
    1. Small and MicroCap Funds Invest Online
      1. DSP BlackRock MicroCap Fund
    1. Sector Funds Invest Online
      1. Reliance Banking Fund
      2. Reliance Banking Fund
    1. Tax Saver MutualFunds Invest Online
      1. ICICI Prudential Tax Plan
      2. HDFC Taxsaver
      3. DSP BlackRock Tax Saver Fund
      4. Reliance Tax Saver (ELSS) Fund
    2. Gold Mutual Funds Invest Online
      1. Relaince Gold Savings Fund
      2. ICICI Prudential Regular Gold Savings Fund
      3. HDFC Gold Fund

Popular posts from this blog

Birla SunLife Manufacturing Equity Fund

The Make in India program was launched by Prime Minister Naredra Modi in September 2014 as part of a wider set of nation-building initiatives. It was devised to transform India into a global design and manufacturing hub. The primary motive of the campaign is to encourage multinational as well domestic companies to manufacture their products in India. This would create more job opportunities, bring high-quality standards and attract capital along with technological investment to bring more foreign direct investment (FDI) in the country.   Why India as the next manufacturing destination?   The rising demand in India along with the multinational's desire to diversify their production to include low-cost plants in countries other than China, can help India's manufacturing sector to grow and create millions of jobs. In the words of our Honourable Prime Minister- Mr. Narendra Modi, India offers the 3 'Ds' for business to thrive— democracy,...
Read more

Total Returns Index brings out real Equity Funds Performers

From February, equity mutual funds have to change their benchmarks to account for dividend payments. Until now, funds used price-based benchmarks alone. TRI or total return indices assume that dividend payouts are reinvested back into the index. What this does is lift the overall index returns, because dividends get compounded. For example, the Sensex TRI index will consider dividend payouts of its constituent companies while the Nifty50 TRI index will consider dividends of its constituents. Using TRI indices as benchmarks comes on the argument that an equity funds earn dividends on the stocks in its portfolio, which they use to buy more stocks. Therefore, using an index that also considers dividend reinvestment would be a more appropriate benchmark. Shrinking outperformance With a stiffer benchmark, it is obvious that the margin by which an equity fund outperforms the benchmark would shrink. Rolling one-year returns from 2013 onwards, the average margin by which largecap funds out...
Read more

Stock Review: Havells

HAVELLS India's stock performance has been muted in the past three months, in line with the weak broader market. But, given the turnaround in its overseas subsidiary and the launch of new products in its consumer durable business, the company's stock may undergo a re-rating.    Havells is India's leading consumer electrical goods company, with consolidated sales of . 5,527 crore in the past four quarters. Its wholly-owned subsidiary Sylvania, which makes lighting and fixtures, has established brands in European, Latin American and Asian markets. Sylvania repre sented nearly half of the company's consolidated revenues in the first half of FY11.    Sylvania's poor financials hit Havells' consolidated performance in FY10. But, this has changed in the cur rent fiscal. Havells has reduced fixed costs of Sylvania by exiting from unprofitable businesses and outsourcing manufacturing to low-cost locations such as India and China. In the September 2010 quarter, Sylv...
Read more

Kisan Vikas Patra - KVP

  Kisan Vikas Patra (KVP) First launched in 1988, the Kisan Vikas Patra (KVP) is one of the premier and popular saving scheme offering from the Indian Postal Department. This product has had a very chequered history- initially successful, deemed a product that could be misused and thus terminated in 2011, followed by a triumphant return to prominence and popular consumption in 2014. The salient features of KVP are as follows- The grand USP- Money invested by the applicant doubles in 100 months (8 years, 4 months). KVPs are available in the following denominations- Rs.1000, Rs.5000, Rs.10,000 and Rs.50,000. The minimum purchase value for the KVP is Rs.1000. There is no maximum limit. KVPs are available at all departmental post offices across India. These certificates can be prematurely encashed after 2 ½ years from the point of issue. KVPs can be transferred from one individual to another and from one post office to another. ----------------------------------------------------- Inve...
Read more

Mutual Fund Review: Reliance Regular Savings Equity

    Despite high churn, Reliance Regular Savings Equity has managed to fetch good returns   In its short history, this one has made its mark. Though its annual and trailing returns are amazing, the fund started off on a lousy note (last two quarters of 2005). It managed to impress in 2006 and was turning out to be pretty average in 2007, till Omprakash Kuckian took over in November 2007 and wasted no time in changing the complexion of the portfolio. Exposure to Construction shot up to 28 per cent with almost 21 per cent cornered by Pratibha Industries and Madhucon Projects . Exposure to Engineering was yanked up (18.50%) while Financial Services lost its prime slot (dropped to 6.69%) and Auto was dumped. That quarter (December 2007), he delivered 54.66 per cent (category average: 25.70%).   When the market collapsed in 2008, thankfully the fund did not plummet abysmally. But even its high cash allocations could not cushion the fall which hovered around the category average. ...
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