Prajna Capital - An Investment Guide

HDFC Mutual Fund has announced the launch of new fund offer (NFO) of HDFC FMP 92D November 2011 (1) & HDFC FMP 370D November 2011 (2). The schemes will open for subscription on November 17, 2011 and close on November 21 & November 22, 2011 for 92 days and 370 days, respectively. These schemes will be listed on National Stock Exchange. ----------------------------------------------------------------- Also, know how to buy mutual funds online: Invest in DSP BlackRock Mutual Funds Online Invest in Reliance Mutual Funds Online Invest in HDFC Mutual Funds Online Invest in Sundaram Mutual Funds Online Invest in Birla Sunlife Mutual Funds Online Invest in IDFC Mutual Funds Online Invest in UTI Mutual Funds Online Invest in SBI Mutual Funds Online Invest in L&T Mutual Funds Online Invest in Edelweiss Mutual Funds Online

In the current financial turmoil, lets take a look at different investment options for NRIs The financial turmoil in the West has resulted in the 34-yearold non-resident Indian ( NRI ) losing more than $1 million in investments in the last six months. A financial consultant by profession, Sharma has now decided to change his asset allocation to diversify its portfolio. Keen to make investments in India, he is unsure of which asset class to park his funds with. Sharma isn’t alone. There are many NRIs who are now wondering what they can do in the current scenario. Here’s an insight into investment avenues for NRIs in the present market situation. FIXED INCOME For risk-averse investors, traditional fixed income products such as Foreign Currency Non Resident ( FCNR ) fixed deposits and Non Resident External ( NRE ) fixed deposits are the safest bet. While FCNR account can be opened in foreign currency, the NRE deposit account is maintained only in Indian rupee. It is advisable to inv...

What does the retail investor do in choppy markets being seen now? YES, the current markets are in a bearish phase on account of several global and domestic factors. High crude prices are, however, the single biggest factor for the meltdown. It is hard to predict when the markets will stabilise. Investors who invested in equity markets at the peak time are anxious to know how they can protect their investments. Also, there are several investors who are interested in entering the markets and are keen to understand what should be their strategy. Firstly, let us understand that the current behaviour of the stock markets is not unprecedented. If you go back in history, both domestically and globally, the stock markets have moved in various directions over a short period of time. So do not panic. Let us assume that there are two investors: investor A and investor B. Investor A invested in equity mutual funds at the peak of the markets in January 2008 and has now witnessed erosion of ...

The stock market is on a down hilll trek & the sentiment is gloomy. You may be looking for better options, but there are some segments you should steer clear from at the moment AVOIDING bad investments is as important as finding good ones. Post market crash, portfolio’s worth toady is not even a third of investments. With some genuine advise, people could have saved from investing at a wrong time. To make sure that you don’t fall into the same trap, we prepare a list of five segments you should refrain from investing in right now. REALTY & TECH STOCKS Stock market is a place where people with experience get money and people with money get experience. Words of wisdom, undoubtedly. But what should be your approach when it comes to where not to invest on Dalal Street? If analysts are to be believed, realty and technology sector stocks should be treated with extreme caution. The key to investing in the stock market is to avoid relying on hearsay. Given the volatility in the rupe...

In a volatile stock market, choosing a potential scheme is more challenging. Investors need to look beyond short-term returns There has been plenty of talk about the falling returns from mutual funds with most funds posting negative returns for one year duration. In the case of systematic investment plans ( SIP ), the picture is no different, though investor gets to invest over different market periods. However, the negative returns from SIPs can't be blamed as they generally tend to offer handsome returns over the long run. On the other hand, in a booming market environment, even SIPs tend to give excellent returns. Needless to say, many investors were used to such whopping profits from SIPs even over the short term, and hence, the current market environment has been a cause for worry. In the present market scenario, choosing the right mutual fund has become more challenging as no scheme has managed to hold on to its leadership status beyond a few weeks. So, the time has come for...

THE LAST few months have seen tumultous movement in the stock exchanges forcing eager investors to play it safe. With interest rates from banks slipping, investors are prone to look at alternatives. In recent times, especially over the last few days, some banks have also taken the decision to hike interest rates with some offering as much as 9% for a one-year fixed deposit ( FD ). This move (of hiking interest rate) has happened due to a 0.25% hike in repo rate by the RBI (the repo rate is the rate at which banks borrow from the RBI). So is investing in a one-year bank FD the best way to earn some secure return? Not necessarily, aver investment experts. The product which many investors, be it high-networth individuals ( HNIs ) or retail investors could look at is the fixed maturity plan ( FMP ). FMPs are offered by mutual funds. “FMPs have come of age during the last fiscal. It has moved from a product being sold to corporate with even HNIs jumping into the bandwagon,” says the region...

Looking for an investment avenue when the stock markets are choppy? A fixed maturity plan not only guards against the unforeseen but also gives good returns. STOCK market opportunities may look like a mirage in a desert. In fact, what may look like a lifetime opportunity can turn into a black hole, and swallow your hard-earned money. But it shouldn’t deter you to make a foray on Dalal Street. A smart investor is one who holds his fort secure while keeping an open eye for better avenues. Fixed maturity plan ( FMP ) is one such investment that guards your portfolio against unforeseen risks and gives the good returns on your investments. Here’s a low down on what you need to know before taking an exposure in FMPs. MATURE OUTLOOK Financial planners say that FMPs, which have been offering high yields during the last couple of years, have become an important investment avenue. Though all segments of investors can benefit from them, this investment option is especially advantageous to those w...

It's like having two AMCs under one roof; a large, well-run fixed income one and an average equity one. The fund house has been quite aggressive in its product launches. In the equity segment itself it came out with three schemes this year. By and large, it offers a lot of variety to investors. Unfortunately, its performance in equity does not match up to its debt funds. From its inception a decade ago, it has created history in the fund management industry. It followed a path of aggressive growth and reached the number two position in just five years. But ICICI Prudential is more dependent on institutional investors and debt assets. Out of its asset base of Rs 49371.12 crore, around 28 per cent comes from cash funds and almost 20 per cent from Fixed Maturity Plans ( FMPs ). The fund house is credited with running the largest ultra short-term fund and floating rate short-term fund. ICICI Mutual Fund was promoted by ICICI and later US-based investment bank JP Morgan acquired a stake...

Debt funds including Fixed Maturity Plans ( FMPs ) and liquid funds when sold after 365 days from the date of purchase; then any capital gains/loss made on it would be treated as Long-Term in nature and the investor would be liable to pay Long-term Capital Gains Tax at the time of the redemption of units. For Long-term investment in Liquid fund we can clearly see that the investors in the growth option would be better-off than the Dividend option. Tax calculation for Long term capital gains for both dividend as well as growth options are as follows:

In the stock market, the bulls are constrained by concerns over the macro-economic scenario domestically, the grim global scenario, persistent Foreign Institutional Investor (FII) outflows and the possibility of another round of monetary tightening. That does not mean the bears have a free hand. The correction in commodities, especially crude, provides ample ammunition for the bulls to conduct a short-term rally. Investors who flocked to gold as the 'safe asset' were disappointed at the way the price dropped in August. Real estate rates too have dropped and by all indications will continue to fall. No asset seems to be a safe haven anymore. The only asset that beckons is debt with interest rates rising. But would it make sense for an investor to move into debt? While this is a good time to reassess one's portfolio, it would not be wise to simply rush to income funds, Fixed Maturity Plans ( FMPs ) or fixed deposits. Read on to figure out how to make the best in such a bleak ...

SECURITIES market regulator Sebi is in the process of firming up a policy to push retail participation in mutual funds in an effort aimed at neutralising or lowering the impact of large outflows by corporate or institutional investors as happened recently. The regulator is now weighing the option of segregating the investments of corporate and retail investments so that retail investors are not impacted if corporate investors exit from schemes early, a source said. What this could mean is that fund houses would be told to float separate schemes targeting institutional and retail investors, a practice which is prevalent overseas. “In such a scenario, if a large corporate investor pulls out money from a scheme, then the other corporate investors need to worry and not retail investors as is the case now,” said a person associated with the proposed changes that are underway. Sebi is already in talks with the industry as the regulator and the government look at addressing the issue, whic...

The Securities and Exchange Board of India in its board meeting decided to fix the structural flaw in fixed maturity plans. It was decided that no early exit will be allowed in any scheme of mutual fund in the nature of a closed-end scheme. The schemes which have been approved earlier but not yet launched will also have to be amended accordingly. It will be obligatory for the asset management company to list the close ended schemes. The board also decided that for such close ended schemes the underlying assets will not have a maturity beyond the date on which the scheme expires. This regulatory obligation will save fund managers from distress sale if investors decide to redeem their money before maturity. This is with an intent to guard the interest of the remaining investors. The order will also drive fund managers to be disciplined in building their portfolio as fund have been debarred from buying bonds of longer maturity than their own. For investors, the order will mean a comprom...