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Saturday, August 31, 2013

What is contrarian investing?

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This basically implies sailing against the tide while investing. For example, if a sector is not doing well and the market is taking a bearish view of it, some fund manager still decides to invest in the sector since according to him/ her it has long-term potential for growth and the current valuations look cheap. Such an investing style is called a contrarian style. It's an extremely risky style but at times such investments have rewarded investors with gains accruing in multiples

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
Posted by at 6:28 PM 0 comments

Use accrual strategy in debt markets

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Call 0 94 8300 8300 (India)

 

Accrual strategy is to buy a bond & hold it till maturity and earn interest income

While investing in bonds, investors can make money either through capital appreciation that is buying and selling, or through interest pay out

To beat volatility in equities, the recommended strategy is systematic investment plans or buy when the market falls to average out costs. Similarly, in the debt market, following the accrual strategy can help you beat the volatility of the debt market. While investing in bonds, investors can make money either through capital appreciation that is buying and selling, or through interest payout. The latter strategy is accrual, that is, to buy a bond and hold it till maturity and earn from the accruing of interest.

Since the Reserve Bank of India (RBI) started tightening liquidity, debt markets have turned volatile. This has made investors risk averse. It has become difficult to gauge how long this volatility will continue. Such investors can look at funds which follow the accrual strategy, where the income gets accrued, such as an ultra short fund. These are less volatile than an income fund or a bond fund. While investing in such funds one should look for funds which have lower expenses and are highly rated, rather than returns, because the returns are likely to fluctuate. Usually funds which have a lower expense ratio, tend to give higher returns. These are already built into the net asset value.

For an accrual strategy, make sure the modified duration of the debt fund should be less than two years, since it is a foreseeable future says Feroze Azeez, Indiadirector and head, investment products, at Anand Rathi Private Wealth Management. Also, make sure the exit load of the fund has some co- relation to the average duration of the bonds that the fund invests in or the exit loads are steep to deter investors from redeeming these before maturity.

For instance, if the fund buys bonds with an average life of three years, then according to the accrual strategy, the fund manager should hold the fund till maturity. But if the exit load is applicable for only six months, there could be investors who want to redeem after this holding period. So, the fund manager will be forced to sell the bonds and this will be contrary to the investment strategy.

These funds don't invest in government securities. They invest in corporate bonds which don't have very high liquidity.

So, if these are sold before maturity, they will not offer the right price. Since these funds invest in corporate securities, investors must look at the credit quality of the underlying papers, says, Amarendra Phatak, director- sales, private wealth, Ambit Capital.

The yield- to- maturity of these funds currently stands at about 11- 11.5 per cent. The accrual strategy is good for an investor with an investment horizon of 12– 18 months, since now the view is that there is volatility in short- term rates. Even if there is rate cut within one year, investors will get appreciation in the fund's value.

Fixed maturity plans ( FMPs) are one end of the accrual strategy, since they are closed- ended funds and the duration is usually one- two years. But even within the open platform there are specific funds that follow the accrual strategy which one can look at.

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
Posted by at 4:00 PM 0 comments

Friday, August 30, 2013

Short-term Funds Better Investment Option now

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Call 0 94 8300 8300 (India)

 

Bond market has gained volatility as the central bank and govt attempt to prop up a flagging rupee, resulting in losses for investors in debt funds


Now debt investors have started closely following the bond market. The government and the Reserve Bank of India's efforts to prop up the rupee has made the bond market extremely volatile. The benchmark 10-year 7.16% 2023 security moved up from 7.50% to 8.88% last month, leading to losses for investors in some debt funds. According to Value Research, an independent mutual fund tracking firm, short-term debt fund category is down 0.25% and income funds category is down 1.52% during the same period.


With the central bank's primary aim is to stabilise a falling rupee, the tightening measures are likely to continue for some time. This means interest rates in the near term are likely to remain high. Investors should invest in short-term bond funds.


Short-term funds generally have a portfolio consisting of certificate of deposits, commercial paper and bonds with less than one year-tomaturity.


As the investments are short term in nature, the portfolio does not carry high interest rate risk. Fund managers also invest in highlyrated securities.


Experts believe the poor performance of some debt funds may continue as there is no clarity on rupee yet. The rupee fell to an all-time low of 62.03 against the dollar on Friday.


In the near term, there is no clarity on where the rupee will stabilise. In such a scenario, tightening by the RBI is likely to continue, which will keep interest rates high.


Among the steps announced last week, the RBI reduced the limit for remittances made by resident individuals from $200,000 to $75,000 per financial year, disallowed use of liberalised remittance
scheme to buy property outside India and has reduced limit for overseas direct investment (ODI) under automatic route for all fresh ODI transactions.


These measures, along with the tightening measures taken in July, led to a sharp rise in short-term rates. Shortterm funds offer a yield-tomaturity (YTM) of anywhere between 10.25% and 10.50%%, giving investors a good entry opportunity.

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
Posted by at 2:35 PM 0 comments

Reliance Interval Fund - Monthly Interval Fund Series II

Invest In Tax Saving Mutual Funds Online

Call 0 94 8300 8300 (India)
Monthly Interval Fund Series II under Reliance Interval Fund is on 29th August and 30th August, 2013

Minimum Application : The minimum investment amount under scheme is Rs. 5,000 and in multiples of Re. 1 thereafter.
 

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
Posted by at 12:49 PM 0 comments
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