SEBI has opened a new window of opportunity for the mutual fund industry by allowing online transactions in mutual fund units through stock exchanges. This has enabled investors to invest in mutual funds in a cost-effective and convenient way.
The electronic mutual fund transaction platforms available are:
• Mutual Fund Service System (MFSS) on National Stock Exchange (NSE)
• Star MF Platform on Bombay Stock Exchange (BSE)
How to use the stock exchange platform for MF?
The mutual fund platform is based on Electronic Order Collection facility, through which investors can place an order to buy or sell mutual fund units. The units purchased through this platform are in dematerialized form.
Investors can also convert their existing mutual fund units in dematerialized form by submitting Conversion Request Form (CRF) to the AMC/RTA along with a copy of Client Master Report (CMR) or transaction statement issued by its Depository Participant to such centers of AMC/RTA.
Why invest through stock market platform?
• Investment in mutual fund through stock market platform eliminates the need of paper work. There is no need to fill out physical application form.
• Transacting in mutual funds through the stock market platform will result in faster execution of orders.
• As there is no paperwork and manual submission of applications to the collection centers, it is more convenient for the investor.
• Investor can transact in mutual funds as well as shares through the same demat account.
Tuesday, April 27, 2010
Sunday, April 18, 2010
Religare Monthly Income Plan (MIP) Plus NFO Analysis
NFO Period: 12th April - 11th May 2010
Investment Objective: To generate regular income through a portfolio of fixed income securities, Gold ETFs and equity & equity related instruments.
Type of Scheme: Open-ended Income scheme
Benchmark: 65% - CRISIL MIP Blended Fund Index and 35% - price of gold
Options Investment & Minimum amount:
Growth option: Rs. 5,000/- and in multiples of Re. 1/- thereafter.
Dividend option: Rs. 25,000/- and in multiples of Re. 1/- thereafter. (Under dividend option, only monthly dividend facility is available)
NFO on Stock Exchanges: NFO is Available on BSE STAR Platform for subscription.
Exit Load: 1% is payable if units are redeemed/ switched-out on or before 1 year from the date of allotment.
Fund Managers: Mr. Ashish Nigam (for debt and Gold ETF investments)
Mr. Vetri Subramaniam (for equity investments)
Asset Allocation:
Debt* and Money Market Instruments 65 – 90%
Equity and Equity Related Instruments and/ or Units of equity mutual fund schemes 0 – 25%
Gold ETFs 10 – 35%
Ideal for Investors
· Looking for exposure to 3 major asset classes in a single fund.
· Conservative Investors who want an investment with the potential to add value in varying market conditions.
· Looking forward to enhancing returns, from their portfolio, to beat inflation.
· Retired persons looking for a flexible and regular income stream.
Investment Rationale
· Debt Exposure will be in short term, low to medium risk profile and high credit quality dent instruments.
· Gold Exposure through gold exchange traded funds only and tactical buying ahead of peak season demand.
· Equity Exposure the fund manager will adopt the bottom up investment approach to select stocks. Actively managed, outperformance or alpha is expected to come in from asset allocation decisions, further enhanced by alpha from stock selection.
USPs of the Fund
· Multi-Asset diversification - Across different asset classes with low correlation.
· Debt provides regular income and overall stability.
· Equity could provide an overall kicker to the portfolio for higher returns.
· Gold preserves purchasing power.
· Combines income and capital growth
· A hedge against inflation
· Built to perform in varying market conditions.
Monday, April 12, 2010
DWS Global Agribusiness Offshore Fund - NFO Analysis
NFO Period: 6th April - 30th April 2010
Fund Features
Scheme Objective: To generate long-term capital growth by investing predominantly in units of overseas mutual funds, focusing on agriculture and/or would be direct and indirect beneficiaries of the anticipated growth in the agriculture and/or affiliated/allied sectors.
Type of Scheme: Open Ended Overseas Fund of Funds
Benchmark Index: MSCI World Index
Options for Investment: Dividend (Payout and Reinvestment) and Growth
Minimum Investment: Rs. 5,000/- and in multiples of Re. 1/- thereafter
Additional Investment & Minimum Repurchase: Rs. 1,000/- and in multiples of Re. 1/- thereafter
Entry Load: Nil
Exit Load: 1% if exited within 1 year of allotment.
SIP, STP & SWP during ongoing offer: Minimum amount of Rs. 12,000/- divided into 12 installments of Rs. 1000/- each for 12 months or 6 installments of Rs. 2000/- each for 6 months or 4 installments of Rs. 3000/- each for 3 months.
Asset Allocation:
Units / securities issued by overseas mutual funds or unit trusts - 80-100%
Debt Instruments including Government Securities, Corporate Debt, Money Market Instruments, (including cash and units of domestic money market mutual funds) - 0-20%
Investment Rationale
• Opportunities in agribusiness due to soaring global population. Strongest population growth in Asia, urbanization & increase in Life expectancy.
• Rising incomes in the developing world.
• Increased demand for high protein food and healthy quality food.
• Land & Water scarcity.
• Increase in demand for Bio-Fuels.
• Climate change and increase in pollution.
• Strong bottom-up stock selection focus embedded in overwriting agribusiness sub-sector trends (for example weather conditions impacting global harvest).
• Active, fundamentally driven investment management approach.
• Strong market position in their specific area of activity.
• Favorable balance sheet ratios.
• Above-average quality of management, focused on generating strong and sustainable earnings.
• Clearly formulated corporate strategy with good prospects for success.
• Transparent and shareholder-friendly information policy with good corporate governance.
How will this fund work?
• The Fund will invest predominantly in units of DWS Invest Global Agribusiness Fund (Underlying Fund) - registered in Luxembourg.
• The underlying fund is managed by Deutsche Investment Management, Americas Inc.
• The underlying fund will offer investors the opportunity to capture value at various points of the 'food chain'.
Why invest in this fund?
• Get a healthy serve of agribusiness, one of the fastest growing global markets.
• Potential reduction of your portion of risk with the fund's broad scope.
• A unique investment idea to add to your portfolio.
• Benefit from a global 'Top Ten'* manager with an international network of investment professionals.
Fund Features
Scheme Objective: To generate long-term capital growth by investing predominantly in units of overseas mutual funds, focusing on agriculture and/or would be direct and indirect beneficiaries of the anticipated growth in the agriculture and/or affiliated/allied sectors.
Type of Scheme: Open Ended Overseas Fund of Funds
Benchmark Index: MSCI World Index
Options for Investment: Dividend (Payout and Reinvestment) and Growth
Minimum Investment: Rs. 5,000/- and in multiples of Re. 1/- thereafter
Additional Investment & Minimum Repurchase: Rs. 1,000/- and in multiples of Re. 1/- thereafter
Entry Load: Nil
Exit Load: 1% if exited within 1 year of allotment.
SIP, STP & SWP during ongoing offer: Minimum amount of Rs. 12,000/- divided into 12 installments of Rs. 1000/- each for 12 months or 6 installments of Rs. 2000/- each for 6 months or 4 installments of Rs. 3000/- each for 3 months.
Asset Allocation:
Units / securities issued by overseas mutual funds or unit trusts - 80-100%
Debt Instruments including Government Securities, Corporate Debt, Money Market Instruments, (including cash and units of domestic money market mutual funds) - 0-20%
Investment Rationale
• Opportunities in agribusiness due to soaring global population. Strongest population growth in Asia, urbanization & increase in Life expectancy.
• Rising incomes in the developing world.
• Increased demand for high protein food and healthy quality food.
• Land & Water scarcity.
• Increase in demand for Bio-Fuels.
• Climate change and increase in pollution.
• Strong bottom-up stock selection focus embedded in overwriting agribusiness sub-sector trends (for example weather conditions impacting global harvest).
• Active, fundamentally driven investment management approach.
• Strong market position in their specific area of activity.
• Favorable balance sheet ratios.
• Above-average quality of management, focused on generating strong and sustainable earnings.
• Clearly formulated corporate strategy with good prospects for success.
• Transparent and shareholder-friendly information policy with good corporate governance.
How will this fund work?
• The Fund will invest predominantly in units of DWS Invest Global Agribusiness Fund (Underlying Fund) - registered in Luxembourg.
• The underlying fund is managed by Deutsche Investment Management, Americas Inc.
• The underlying fund will offer investors the opportunity to capture value at various points of the 'food chain'.
Why invest in this fund?
• Get a healthy serve of agribusiness, one of the fastest growing global markets.
• Potential reduction of your portion of risk with the fund's broad scope.
• A unique investment idea to add to your portfolio.
• Benefit from a global 'Top Ten'* manager with an international network of investment professionals.
Monday, April 5, 2010
Monthly Income Plan (MIP)
• Monthly Income Plan is a category of Debt Mutual Fund but a Hybrid Investment Plan.
• The difference between a debt fund and an MIP is that a debt fund is fully invested in debt securities, whereas in general MIP has the flexibility of investing in equity - up to 25 per cent.
• MIP is launched with the objective -to provide investors with a regular income.
Features
Objective: Regular Income and Capital Protection
Risk: Low
Investment Portfolio: In General not more than 20% of the portfolio in equity and the balance in Debt
Who Should Invest: Moderate/Conservative Investors
Investment Horizon: More than 1 year
Tax Implication (2009-2010): Dividends Tax Free.
Short Term Capital Gains: 30.90%.
Long Term Capital Gains Tax: 10.30% without Indexation & 20.60% With Indexation.
Benefits of investing in MIPs
• MIPs come with highly rated debt papers and flexibility in managing the modified duration which will be quite useful in the current interest rate scenario.
• MIPs come with relatively low Standard Deviation as compared to gilt funds and almost at par with income funds. This gives them the ability to earn better risk adjusted returns.
• Possibility of stable & regular income: MIPs declare dividends on a periodical basis, whenever they have distributable surplus.
• Tax Benefits: Investors in the higher tax bracket get the benefit of lower taxation of debt in 1 year and above period as he gets the indexation benefits.
Diversify your portfolio with MIPs
It is very difficult to choose asset classes that will outperform in this kind of a scenario as the change in leadership has been pretty quick and unpredictable.
Sticking to any one particular asset class over this period (other than Gold in general) would have led to severe underperformance either absolute or relative.
Hence, the situation demands that your portfolio be a judicious mix of asset classes in order to consistently deliver above average returns. But a general investor cannot be expected to be able to build and manage such a diversified portfolio.
This is where MIPs, is considered as a good investment option.
Ideal Investors:
• MIPs are suited for investors with a low to moderate risk appetite.
• MIPs' target segment includes retired people or those nearing retirement.
• Investors who want to diversify their portfolio.
• MIPs also appeal to investors in higher tax brackets for their ability to deliver more competitive post-tax returns vis-à-vis avenues like fixed deposits.
• The difference between a debt fund and an MIP is that a debt fund is fully invested in debt securities, whereas in general MIP has the flexibility of investing in equity - up to 25 per cent.
• MIP is launched with the objective -to provide investors with a regular income.
Features
Objective: Regular Income and Capital Protection
Risk: Low
Investment Portfolio: In General not more than 20% of the portfolio in equity and the balance in Debt
Who Should Invest: Moderate/Conservative Investors
Investment Horizon: More than 1 year
Tax Implication (2009-2010): Dividends Tax Free.
Short Term Capital Gains: 30.90%.
Long Term Capital Gains Tax: 10.30% without Indexation & 20.60% With Indexation.
Benefits of investing in MIPs
• MIPs come with highly rated debt papers and flexibility in managing the modified duration which will be quite useful in the current interest rate scenario.
• MIPs come with relatively low Standard Deviation as compared to gilt funds and almost at par with income funds. This gives them the ability to earn better risk adjusted returns.
• Possibility of stable & regular income: MIPs declare dividends on a periodical basis, whenever they have distributable surplus.
• Tax Benefits: Investors in the higher tax bracket get the benefit of lower taxation of debt in 1 year and above period as he gets the indexation benefits.
Diversify your portfolio with MIPs
It is very difficult to choose asset classes that will outperform in this kind of a scenario as the change in leadership has been pretty quick and unpredictable.
Sticking to any one particular asset class over this period (other than Gold in general) would have led to severe underperformance either absolute or relative.
Hence, the situation demands that your portfolio be a judicious mix of asset classes in order to consistently deliver above average returns. But a general investor cannot be expected to be able to build and manage such a diversified portfolio.
This is where MIPs, is considered as a good investment option.
Ideal Investors:
• MIPs are suited for investors with a low to moderate risk appetite.
• MIPs' target segment includes retired people or those nearing retirement.
• Investors who want to diversify their portfolio.
• MIPs also appeal to investors in higher tax brackets for their ability to deliver more competitive post-tax returns vis-à-vis avenues like fixed deposits.
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