Category: Mutual funds

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Mutual Fund NFO – Indiabulls Equity Hybrid Fund details and review

New Fund offer by Indiabulls, let us have a look at the details of the offer.
Mutual Fund
Indiabulls Mutual Fund
Scheme Name
Indiabulls Equity Hybrid Fund
Objective of Scheme
The Scheme seeks to generate periodic return and long-term capital appreciation from a judicious mix of equity and debt instruments. However, there can be no assurance that the investment objective of the Scheme will be achieved. The Scheme does not assure or guarantee any returns.
Scheme Type
Open Ended
Scheme Category
Hybrid Scheme – Aggressive Hybrid Fund
New Fund Launch Date
22-Nov-2018
New Fund Earliest Closure Date
06-Dec-2018
New Fund Offer Closure Date
06-Dec-2018
Indicate Load Separately
Entry Load: Not Applicable Exit Load: •
Minimum Subscription Amount
Rs. 500 and in multiples of Re. 1 thereafter

Source – Amfi 
What is a Mutual Fund NFO – A new fund offer occurs when a fund is launched, allowing the firm to raise capital for purchasing securities. Mutual funds are one of the most common new fund offerings marketed by an investment company. The initial purchasing offer for a new fund varies by the fund’s structuring.
Important part of the SID Scheme Information Document
Type of scheme – An open ended hybrid scheme investing predominantly in equity and equity related instruments. Hybrid Fund would have an equity allocation of 65% – 80% & debt allocation of 20% – 35%. The scheme aims at providing dual benefit of Wealth generation through investment in equities and lower volatility through investment in debt.
Investment Objective –  To generate periodic returns and long term capital appreciation from a judicious mix of equity and debt instruments. However, there can be no assurance that the investment objective of the Scheme will be achieved. The Scheme does not assure or guarantee any returns.The scheme will offer both direct and regular opton
Where will the scheme invest?
·         In the equity segment, fund intends to invest in Automobile, Banking, Financial Services, Metals and Energy. In the defensive side, it intends to invest in FMCG, IT and Pharma.
·         In the debt segment it intends to buy AA and above rated debt papers. The portfolio allocation likely to be 20-35%
Who will manage the fund?
The fund management includes the following team members-
Fund Manager
Brief Experience
Sumit Bhatnagar
Head Equity (For Equity Segment)
Age – 40 years
Qualification – MBA (Univ. of Toronto), CFA (USA)
Mr. Sumit has 15 years of experience in Banking
& Capital Markets. Prior to joining Indiabulls, he
has worked with SEBI for close to 4.5 years in
Investment Management Department. He has also worked in Banking Industry in retail and
corporate assets. Sumit has been with Indiabulls
since February 2009.
Vikesh Gandhi
Age – 41 years
Qualification – M.Com, University of Mumbai, MBA (Finance
& Accounting), University of
Hartford, USA
Mr. Veekesh Gandhi has more than 10 years of
experience in the field of finance. He was earlier
associated with DSP Merrill Lynch Ltd, SSKI
Securities and Motilal Oswal Securities, wherein
he was responsible for tracking the BFSI sector
and research on investment ideas.
Malay Shah
Age – 39 years
Qualification – B.Com, MMS Finaance
Mr. Malay Shah has 15 years of experience in the
field of finance. He has exposure to Debt –
Dealing and Fund Management. Prior to joining
Indiabulls Mutual Fund, he was working in the
capacity of Head – Fixed Income with Peerless
Funds Management Co. Ltd, managing all the
debt Schemes.
Mymoneystreets Take –
Indiabulls Mutual Funds, is one of the fast-growing young Mutual Fund company with an AUM of about 10 thousand crore. Indiabulls Mutual Fund was launched in the year 2008. Indiabulls Mutual Fund has 4 existing equity funds and 7 debt-oriented funds in the kitty. The fund is suitable for investors with moderate to high-risk appetite with an investment outlook of 5-8 years horizon, highly recommend the SIP mode for the investment.
This category has many funds who are doing well. It is just one more addition. However, Fund managers well equipped to get good value to the investors. The view on investing this fund is neutral.

Read the SID carefully before investing, if you are a new investor, take suggestions from a financial advisor.

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NFO – Review – DSP Blackrock Healthcare Fund closing on 26th November

Mutual Fund NFO Details – DSP Blackrock Healthcare Fund 

Mutual Fund
DSP Mutual Fund
Scheme Name
DSP Healthcare Fund
Objective of Scheme
The primary investment objective of the scheme is to seek to generate consistent returns by predominantly investing in equity and equity related securities of pharmaceutical and healthcare companies. However, there can be no assurance that the investment objective of the scheme will be realized.
Scheme Type
Open Ended
Scheme Category
Equity Scheme – Sectoral/ Thematic
New Fund Launch Date
12-Nov-2018
New Fund Earliest Closure Date
26-Nov-2018
New Fund Offer Closure Date
26-Nov-2018
Indicate Load Separately
Entry Load: Not Applicable, Exit Load (as a % of Applicable NAV) Holding period from the date of allotment:<= 12 months – 1%, > 12 months – Nil. Note: No exit load shall be levied in case of switch of investment from Regular Plan to Direct Plan and vice versa.
Minimum Subscription Amount
Rs. 500/– and any amount thereafter.
For Further Details Please Visit
Website
www.dspim.com

Source – Amfi 

What is a Mutual Fund NFO – A new fund offer occurs when a fund is launched, allowing the firm to raise capital for purchasing securities. Mutual funds are one of the most common new fund offerings marketed by an investment company. The initial purchasing offer for a new fund varies by the fund’s structuring.

Did you choose your car insurance or just bought it? 

Important part of the SID Scheme Information Document


Type of scheme – An open ended equity scheme investing in healthcare and pharmaceutical sector

Investment Objective – The primary investment objective of the scheme is to seek to generate consistent returns by predominantly investing in equity and equity related securities of pharmaceutical and healthcare companies. However, there can be no assurance that the investment objective of the scheme will be realized.

Where will the scheme invest?
–          It will invest in Equity and equity related securities, government bonds, NCDs, short term deposits, InvITs, REITs
–          a sector specific Scheme, shall focus on investing in pharmaceutical, healthcare and associated companies as mentioned earlier, keeping ‘S&P BSE Healthcare Index’ comprising of 64 stocks.

Who will manage the fund?

The fund management includes the following team members-
Fund Manager
Brief Experience
Other schemes
Aditya Khemka
Age – 37 years
Qualification – B.Com, M Sc Finance, MBA from MDI (Gurgaon)
Over 11 Years of experience. October 2015 to present: Assistant Vice President – DSPIM. From February 2014 – October 2015: Pharma Analyst – Ambit Capital Private Limited.
From November 2013 to February 2014: Pharma Analyst – Antique Stock Broking From
April 2008 to November 2013: Pharma Analyst – Nomura Structured Financial Services
Nil
Vinit Sambre
Age – 43 years
Qualification – B.Com, FCA
Over 19 Years of experience from January 2010 to present: Vice President – DSPIM. From July 2007 – December 2009: Assistant Vice President – DSPIM. From November 2005 to June 2007: Assistant Vice President – Global Private Client with DSP Merrill Lynch
Co-Fund Manager – DSP Small Cap Fund and DSP Mid Cap Fund
Jay Kothari (Dedicat ed Fund Manager for overseas investments)
Age – 37 years
Qualification – Bachelor in Management Studies (BMS) Mumbai University MBA (Finance) – Mumbai University
Over 14 years of experience as detailed under: From 2010 to present – Vice President in Equity Investments and a Product Strategist at DSPIM From 2005 to 2010 – Mumbai Banking Sales Head at DSPIM From 2002 to 2003 – Priority Banking division at Standar
Fund Manager for DSP World Agriculture Fund, DSP World Mining Fund, DSP World Energy Fund and DSP World Gold Fund Co-Fund Manager for DSP Focus Fund, DSP US Flexible* Equity Fund, DSP Equity Savings Fund, DSP India T.I.G.E.R. Fund (The Infrastructure Growth and Economic Reforms Fund), DSP Regular Savings Fund, DSP Equity Opportunities Fund, DSP Global Allocation Fund, DSP Natural Resources and New Energy Fund, DSP Midcap Fund, DSP Small Cap Fund, DSP Top 100 Equity Fund.

Mymoneystreets Take –

DSP has a proven track record in India. Their funds DSP Tax Saver, DSP Midcap small cap is known best for the prudent fund management approach. However, Blackrock has sold their stake in DSP this year and we need to keep a watch on the performance. However, they have a decent asset size, moderately aggressive approach in the fund management. Additionally, Pharma sector in last 2 years has seen a bumpy ride and company with quality balance sheet and operational efficiency trading at an attractive PE. The stocks are trading 20-30% lower than their yearly high
Word of caution – This is a thematic fund, sector concentration is very high. Investors who already has existing exposure in diversified equity such as Large-cap/ Mid-cap – small cap funds and balanced funds can look for an extra exposure. Other than market related risks, the sector funds are cyclical in nature and gives a volatile return, ideal for 3- 7 years exposure and in SIP format.  Also, diversification is a key to good healthy portfolio.

Take on Fund manager

The fund is managed by first time fund manager Aditya Khemka, supported by Vinit Sambre with 20 years of experience, also fund-manager for the star fund – DSP Small cap fund.  The third manager has a big portfolio of many funds as well as dedicated fund manager for overseas investments.

Read the SID carefully before investing.
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Systematic Withdrawal Plan will be the instrument to fight Long Term Capital Gain Tax

Its been about a week that our finance minister read out the budget to the nation, but I still cant get out of the angst of levying 10% tax on #long term capital gain on equity and mutual funds investments. 
Though the markets have reacted in the expected lines by shading about 500 points on Nifty, I expect it to settle at some point in about few months depending on the course of action decided by the large institutional investors. The sudden shock of introducing #LTCG after 14 years on Equity will be hardest on the small investors, who have been told continuously over the years that equity is the best investment option and investing through #SIP in Mutual Funds is the best option.

What is long term capital gain tax on equity – When an investor buys and keep his equity investment over a year and withdraws, the profit generated on the investment is subject to taxation if it is above Rs. 1 lakh. This is applicable to all investors including individual, HUF, FPI. Mutual Funds have been exempted for this, as this is taxable in the hands of Investors.

Also, Mutual Funds will levy 10% dividend distribution tax on dividend options under various equity schemes.

(Short term tax on equity and equity based mutual funds stand at 15%)

#SWP Calculator
Things were different until 5 days back, when capital gain tax was zero over 1 year, but now we have to learn and adjust to the new normal. What we understand basis the announcement is if we make profit over 1 lakh in a financial year on equity or equity based mutual funds, we have to pay tax on the money over 1 lakh on the long term capital gain (over 1 year). Refering to the chart below on illustration, the tax is applicable to the profit generated over and above 1 lakh. Also, as the budget will only come into effect from April 1, returns above 1 lakh wont be taxed.
Long term capital gain calculation sheet
Investment
Investment amount
Entry date
Exit date
Gain = Amount – Investment
(Hypothetical)
Tax applicable
Net Profit
Stocks
1,00,000
1st Jan 12
1st Mar 18
3,00,000
None
3 lakh
Stocks
1,00,000
1st Jan 12
1st Mar 22
6,00,000
10% of 5 lakh
= 50 thousand
5.5 lakh
Equity MF
1,00,000
1st Jan 12
1st Mar 18
2,50,000
None
2.5 lakh
Equity MF
1,00,000
1st Jan 12
1st Mar 22
5,00,000
10% of 4 lakh = 40,000
4.6 lakh

Incase of #SWP,  profit will be spread per unit basis. Spreading out the withdrawal over a period will be beneficial for tax saving.

What is SWP?


SWP Is a disciplined approach towards investments withdrawal. From a mutual fund scheme investor can chose to withdraw a fixed sum of money or pre-decided number of units of units every month. (This is not dividend scheme). This is nothing but selling investments, booking profit but just in staggered manner.

Recommend highly as post-retirement earning or for people on sabbatical. It also work out well for second income generation. To illustrate the benefits on a table, I have taken a hypothetical investment of Rs. 5 lakh in 2013, in an equity scheme. 

I have made an illustration on SWP for better understanding on the same. The table is drawn with an assumption that the fund value has grown to Rs. 10 lakh. The sum of Rs. 15 thousand to be withdrawn from the period of April 2018 to March 2019. 

In the above case, the investor have to pay any tax on 10% Tax on three thousand eighty three that is Rs. Three hundred and eight only on his withdrawal.  

By no mean I am portraying tgat you can escape LTCG Tax completely by following this method. It can be used as a method if you dont require the money at one go. It can work like a pension and can be withdrawn to be tax efficient. One may also consider having other pension options which are tax efficient in nature. 
The benefits of SIP have been spoken about a lot. It is about time that we start taking a view on SWP as a tool for withdrawal to make most of the mutual funds investments. SWP Mutual Funds reminds us time and again about discipline. It can beautifully work as a pension or work like extended salary in time of need. It is not required to be a market specialist to invest in it. Choose an equity fund and keep investing for the long term.
This is only applicable to open ended equity and equity based hybrid mutual funds.
systematic withdrawal plan, SWP Calculator, 
Keep investing!!  
Tweet me at debashree_ad for any clarification.
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Top 5 tax saving mutual fund schemes (ELSS) for 2017

As we approach year end, our search for the best tax saving instrument under 80c ends at tax saving #ELSS mutual fund schemes. By far the best investment tool with triple exemption benefit (no tax to be paid for buying, accumulation, redemption) with the lowest lock-in period of 3 years and maximum exposure to the capital market for young professionals or anyone who wishes to focus on long-term wealth creation through equity market. For the beginners, ELSS is an actively managed equity fund by an experienced fund managers with an equally equipped equity research team. Over last 5 years, ELSS category has given over 12% tax-free annualised return on an average which is way higher than any other tax saving tools. Hence, it is my favourite tax saving instrument.
Top 10 reasons to invest in ELSS schemes –
  1.  Minimum investment for a monthly investment is Rs. 500
  2.  No obligation of repeat investment in the same fund every year
  3.  No maturity/redemption obligation on completion of 3 years (unless specified by the   fund/scheme), can withdraw anytime once the lock-in period is over
  4.  It can be held as long as the investor wants, giving it a chance to build long-term wealth
  5.  The fund is managed by able fund management teams
  6.  Low fee structure and expenses, about 2-2.5% yearly
  7.  No long term capital gain tax
  8.  Investor has an option to chose between dividend or growth fund
  9.  The dividend earned on these funds are tax-free
  10.  SIP method of investing would help in cost averaging

Some point of concerns –
As it is a pure equity investment, it carries market risks, highly volatile

The SIP mode of investment signifies each purchase will have a separate lock-in period of 3 years


Top 5 #Taxsaver #ELSS schemes for 2017

ELSS Schemes
AUM in crore
Returns for 3 Years
Returns for 5 years
Ratings
#DSP-BR Tax Saver Fund
1420
25.5
20.8
5star
#Reliance Tax Saver
5579
29.2
21.3
3star
#Axis Long Term Equity Fund
9956
24.1
21.6
3 star
#Birla SL Tax Relief 96
2308
24.1
19.8
4star
#Franklin India Tax Shield
2196
22.9
17.9
3 star

I have listed 5 top ELSS scheme based on 5 parameters–
1. Funds with over 7 years existence
2. AUM over Rs. 1000 crore
3. Among top 10 fund house
4. Return analysis over 5 years
5. Rating consistency by CRISIL/ Value Research

This fund is out an out consistent over last 10 years. It has consistently beaten the index over 1 year, 3 year, 5 years return. This fund has out ranked most other funds in ELSS category in the period. Investment details – The fund aims to generate medium to long-term return on majority investment in equity and equity related instruments. The fund has over 20% exposure in banking and finance sector however invested mostly in private sector banks, so less chance of getting affected by NPA. It has some quality cyclic stocks.

#Reliance Tax Saver Fund

ELSS fund with over 10 years existence, AUM over 5.5 thousand crore comes from a good pedigree. Rated 3 stars by CRISIL, the fund has beaten indices over 3 years and  5-year trailing returns. In the 1 and 2 year category, has been below the indices in many cases. It is a good investment with high-risk appetite. It has also given the highest return in the SIP for 10 years category. Investment details – This is a mid-cap, small-cap heavy fund, aims to generate wealth over long term. Fund manager looks for value buy of stocks with bottom-up stocks picking approach. The portfolio is well-diversified and spread across sectors. 
#Axis Long Term Equity Fund

With an AUM over 9,900 crores as of 20th Jan 2017, it leads the ELSS scheme in the top position. It has lagged in last 1 year in comparison to its peers and indices, but over 3 years, 5 years returns it is in the top 5 ranks. 
Investment details – The scheme aims to generate regular long-term capital growth from a diversified portfolio of equity and related securities. It invests in companies with strong growth and sustainable business model. It has equity exposure up to 95%, given some trailing returns in the short-term but expected to even out over long term. It is still a good choice. It avoids buying companies which have excessive business uncertainty on account of cyclical, regulatory, political risks.

#Birla Sunlife TaxRelief 96   

A fund with good pedigree has a defined track history over20 years has a AUM of 2.3 thousand crore belong to good fund pedigree. In last 1year, it is trailing the index. While in 2, 3, 5 years returns, it has beaten indices return with significant margin. It has generated over 100% return over years. Investment details– It is a multicap fund with well-diversified portfolio. However, fund has a cyclical stock bias, which has its own effect on return cycles. Well diversified in its approach, the top 5 holdings only account for 26% of the portfolio.

#Franklin India Tax Shield
A fund with a track record over 7 years has been at par with index returns for 1 year and for over 2,3 and 5 years it has performed well above indices. This fund tends to be less volatile compared to its peers. Investment details– The process of the fund house is robust. This fund is known for having conservative approach, bottom-up style of stock picking and having growth style of investing. The fund with a large-cap bias which accounts for almost 60% of the portfolio has a 25% exposure in mid-cap, small-cap category.  Well diversified in portfolio construction, the top 5 holdings accounts for only 26% of the portfolio. 
Don’t break your head over minute investment return details, it is a game of sector allocation, Mkt-cap of companies and economic cycles. Choose a fund with a basic research and your investment style as criteria. #ELSS is nothing but an equity mutual fund and over long-term it is expected to give good returns, which also provide #tax benefits under income tax act, section 80C. However, it is advised to consult a professional financial planner before investing.
http://www.mymoneystreets.com/2016/11/include-dynamic-asset-allocation-funds.html
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Direct Plan Vs. Regular plans which mutual fund plan to buy?

Direct plan or Regular plan
Amidst the volatile markets and global economic conditions, Indian #mutual fund industry has seen a steady upsurge in investments in last decade. Globally, India has established its position as an investment destination. Though Mutual Funds industry existed in India for last 30 years, its only last decade that individual investors warmed upto this investment tool.
SEBI, the regulatory authorities for equity markets in India has played a major role revamping the mutual fund industry with series of reforms and making mutual funds a transparent, low cost and high yielding instrument for individual investors. I can write a full article on the reformative steps of SEBI for the mutual fund industry which irks the players but it has only helped retail investors in gaining confidence on the investment tool.
But, in this article I would like to focus on the specific reform of splitting schemes in regular and direct plans. The move not only made a lot of news, it opened a new era low cost investing where equity direct plans cost up to 0.5 -1% less than the regular funds and 0.2% on debt funds.
What is a #direct plan and regular plan
Beginning Jan 1, 2013, all the #mutual funds mandatorily split its existing and new schemes into two with different NAVs (Unit price). The funds, when sold by the distributors were put into ‘Regular’ category, which included the upfront/trailing fee and transaction costs for the service of the broker/distributor. This is aimed at rationalizing broker’s cost for rendering his service.
‘Direct’ category for each scheme was created for investors who don’t take service of any distributor/advisor for mutual funds investment and buys from mutual fund office/online/ CAMS/KARVY App. They don’t need to pay for the extra upfront/trailing charges for the services.
Direct Vs. Regular plan
Though over time process of investing in mutual fund has become easy, but selecting the right products requires planning. Every mutual fund scheme has an investment objective and style. It is investor’s prerogative to choose right schemes based on his financial goals. However, brokers are often tempted by the upfront or trailing fee structure while suggesting funds. 
The distributors and advisors played an important role here in choosing right product mix for their clients. However, an informed investor need not require assistance on investing. Hence, SEBI proposed separate NAV for Direct funds deducting the distributor related costs.     

  
Illustration on how Rs. 10,000 grew from Jan 1, 2013 to Dc 2016 in direct Vis-à-vis regular plans
 Schemes – Largecap equity mutual fund                                               
Birla Sunlife Frontline Equity – Growth
Percentage return in 3 years
Total return
Direct plan
20.11
17624
Growth Plan
19
17014
ICICI Value Discovery  Midcap-smallcap fund
ICICI Pru Value Discovery – Growth
Percentage return in 3 years
Total return
Direct plan
18.23
17278
Growth Plan
17.19
16736
HDFC Income Fund – Debt oriented
HDFC Income Fund
Percentage return in 3 years
Total return
Direct plan
12.62
14694
Growth Plan
11.58
14188
Who should buy direct plan?
An informed investor should choose direct plans, as over 5 years the direct plans can give about 3-4 % extra return.
Alternative options?
If you are not financially savvy, take professional help on financial planning from certified advisors for a fee, and then buy mutual funds direct plans. But if you still require assistance in buying and managing your investments, you should buy with help of broker/distributor and choose ‘Regular’ plans. 
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Things you need to know about your Leave Travel Allowance (LTA)

There are dual benefits for Indian employees about traveling. While you take an official break for traveling any destination in India with your family, you also save tax on your travel expenses with LTA, which is provided by employer. It is only smart to make most of this benefit. This post aims to elaborate on certain features of LTA as a savings tool.  

What is LTA?
  • ·         #Leave Travel Allowance is an allowance provided by employers for domestic travel for the employee and immediate family
  •         It covers only the travel expense by air, train incurred during the travel, it also covers taxi and auto rickshaw only if train route is absent
  •      It covers the travel expenses incurred by the individual and their immediate family. Other family members are excluded from availing Leave Travel Allowance
  •         One can make a claim only twice in a block of four years, the present block is Jan 2014 – Dec 2017
  •      #LTA also can be carried to the next block if it is not utilised, if under utilised the balance amount can be added
  •          International travel expense cannot be claimed under LTA
  •          You can claim your Leave Travel Allowance if you haven’t travelled, but the amount will come under taxable income
  •         LTA is fully tax exempted under Section 10(5) of the Income-Tax Act, 1961, Rule 2B

Limitation of LTA
Like any other exemption rules, LTA also has its limitations. The companies have certain eligibility criteria for LTA.  If the allowance of the previous block is not exhausted, then one journey can be carried forward to the next block. However, the balance has to be exhausted within the first year of the next block. The allowance is capped by employers; the claims above the exemption limit will not be processed. LTA can only be claimed if the employee is part of the travel, family including spouse, children, brother and sister if they are dependants.
How you make most of LTA
As you can only claim twice in 4 year block, planning in advance helps. Ensure, you are taking prior written permission from the employer. Though air travel is allowed, it covers the minimum airfare of economy class. The road travel exemption is limited to the AC1 rail fare by the shortest route.
You need to keep the proof of your travel, tickets and copy of e-tickets in place.
Innovations in claiming LTA online – to help HR professionals an employers
Zeta, a Fintech startup, recently launched fully digital Leave Travel Allowance (LTA) solution, #Optima LTA Card, to help organisations manage employees’ leave travel allowance claims/ reimbursements digitally and enable employees to submit claims instantly. Built on digital platform, is designed to process LTA claims the paperless way. Employees are now empowered to submit their travel claims digitally and thereby avoid extensive paperwork. It is compliant with all legal mandates set by the Income Tax Department. Zeta team at the back-end tracks the shortest distance between two destinations using a government-approved database and thereby enable accurate assessment.

Organisations can be free of verifying paper bills manually since all verifications will be handled by Zeta Optima at the back end. Human Resource professionals can use this platform to digitally store bills for over seven years and can track LTA bills and claims online.

Happy traveling 🙂 

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Breath-taking panoramic view from the balconies of ultra luxury residences amidst the buzzing city recreated at Malabar Hills of Thane

Nestled in the lap of mother nature, Malabar Hills, a hillock right on the coast of Arabian Sea have been a envied place for many of us. Quite close to the busiest roads of Mumbai, it lives in an eternal peace, where chirping of birds, thick woods coexist with the architectural marvels belonging to the who’s who of the country. 
Malabar Hills is a place one doesn’t cross by chance, it is a destination in itself, a place which is in the centre of the buzzing city, yet a world of nature’s very own. With view of beautiful sea coast your senses travels beyond your imaginations.
A similar destination in making is Pokhran road 2, located in Thane. Rightly popular as #MalabarHillsOfThane, surrounded by Yeoor Hills, next to Upavan lake it’s a destination which is treat to the eyes. The green location blends elegantly with the stylish upmarket residential destination.
Easily accessible from the highway, #MalabarHillsOfThane reminds me of Malabar Hills of Mumbai, the similarity of being attached to the city, yet a different world of serenity and class! The purity of nature has blessed the select few affluent nature loving residents. The unaffected greenery of Sanjay Gandhi National Park, just next to the buzzing city promises wellness to your body, senses and soul. The Malabar Hills of Thane, true to its name beautifully balances the purity of its location with the needs of residents of affluent society with super connectivity and fabulous social infrastructure.
The pride is in the address. Tata Housing’s newest project Serein on Pokhran Road 2, is an amalgamation of  ultimate luxury and nature’s beauty. Serein doesn’t only boasts of visual pleasure, the project is committed to holistic wellness of its residents. Located in the lap of Yeoor Hills, adored by the Upavan Lake, Serein perfectly justifies it’s name. The residential project by Tata Housing is an exclusively designed luxurious marvel keeping the nature’s elements intact with theme of outdoor living spaces, having abundant sunlight and natural ventilation.
True to it’s name and theme, every home is designed to increase the wellness quotient of its residents. Be it the vitamin C infused shower which soothes skin, hair and nails or the VOC paints for reducing health hazards, or the high quality glass, which significantly reduced the noise is designed to overall contribute to the wellness of its esteemed residents.
The outdoors of the project is designed carefully keeping with the nature. A pet park, nature trail, lotus pond, sand pit and organic farm are few of its many amenities adorning the location.
Over all, I am smitten by the beauty of the location and impressed with the project plan. I am eagerly waiting to see the Malabar Hills Of Thane full bloomed as a destination with the completion of the much anticipated project ‘Serein’ by Tata Housing.
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10 reasons Why we are obsessed about ELSS mutual funds

#ELSS is a clear winner amongst the Tax saving instruments in India 
Under section #80c of the Income tax act, there are many instruments one can opt for to save tax and create a wealth kitty. In the last post on Tax saving instruments under section 80C, I have listed down all the options of investments, insurance and expenditures. Here, I would like to elaborate on the specific product “Equity Linked savings scheme” Mutual Funds, and a basic comparison with the other options in terms of liquidity, lock-in, potential return etc.
Let me begin with the table of popular investment tools under 80C and their features.
Instrument
Maximum investment amount
Lock-in
Potential return
Actual tax benefits
#PPF
Rs. 1,50,000
15 years.
8-9% per annum, compound interest
Triple exemption benefit
Sukanya Samrudhi Yojana
Rs. 1,50,000
Only for daughters, the lock in depends on the daughters age
8-9%, compound interest
Triple exemption benefit
NSC
Rs. 1,50,000
5 years
8-9% per annum, compound interest
Returns are taxed as per laws
#Tax saver Deposits
Rs. 1,50,000
5 years
7-9% per annum, compound interest
Returns are taxed as per laws
#ULIP
Rs. 1,50,000
10 years onwards.
As per equity market movement. After deducting various charges
Triple exemption benefit
#ELSS mutual funds
Rs. 1,50,000
3 years
As per equity market movement.
Triple exemption benefit
#RGESS
Rs. 50,000
3 years
As per equity market movement.
50% tax relief on returns
1. The mutual fund has minimum #lock-in period of 3 years amongst the tax saving instruments.
2. Though it has a lock-in period, the open ended #ELSS funds, don’t have a maturity date.
3. The funds come with multiple options of growth, dividend option (dividend reinvestment is currently discouraged by the regulator in recent times, hence getting discontinued for the new investment options, because of its complex nature of 3 year llock-in for every purchase)
4. The ELSS schemes enjoy triple tax exemption benefits on redemption
5. Unlike PPF, ULIP, ELSS mutual funds don’t carry an obligation of investment amounts, hence it could be an one time investment or repeat depending on investor’s wish.
6. Unlike insurance plan, investor can buy different plans basis his research and recommendations
7. Minimum investment is as low as Rs. 500/-
8. The dividend earnings are tax-free in the hands of the receivers
9. It can be held as long as the investor wants; hence, the potential of high returns of 12-15% can be easily achieved in long-term, 5-7 years period.
10. The cost of investment is very low compared to the endowment insurance products, which doesn’t reflect  too much as the returns on the investment over a long term compensate well beyond the cost implications and inflation.
A hypothetical return graph of tax saving instruments over 3, 5, 7.10 year period
initial investment
3 YEARS
5 YEARS
7 YEARS
10 YEARS
PPF
1,00,000
130864
156568
187320
245135
NSC
1,00,000
127023
148984
174742
221964
ELSS
1,00,000
156394
210718
283911
444021
Assuming a 15% return on ELSS for the period
Top 5 #ELSS Mutual funds for reference purpose –
Scheme name
1 year
2years  
3 years
5 years
ICICI Pru RIGHT Fund (G)
10.9
7.2
24.4
21.2
Axis Long Term Equity Fund (G)
8.8
9.2
26.5
21.0
Reliance Tax Saver (ELSS) (G)
13.9
6.2
29.9
20.4
DSP-BRTax Saver Fund (G)
20.1
12.7
25.5
19.7
Birla Sun Life Tax Plan (G)
12.6
12.3
24.5
18.1
Suggestion for the young investors would be to buy ELSS fund, and treat it like  a PPF account, invest regularly, preferably through SIP, for 15 years and stay invested through the term. You will end up saving a big amount for yourself. 🙂 Happy investing. Happy Saving!
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Is it Indian PSU banks, who will bleed the streets? Just a thought!

 #Banking in India will be the next Boom n Bust story??

#Stock market fall is an effect and not a cause! What happens when there is too much of excitement and attention to one sector/industry/company/ business idea? everybody starts appreciating, following, taking extra effort to get into the scheme of things etc.. untill there is a there is a peak and BOOM! And a sharp slope slides down n BUST! and a parallel line leveling the fields and world moves on towards a new exciting subject. In financial market or the larger context of economy, it is extremely evident.

Strangely we all keep looking back at history all the time, yet fail to gauge the impending risks. Time and again it repeats itself, we all educated investors close our eyes and follow whatever the markets leads us to.

In the world history of economic crisis, since 13th century, 2/3rd of the crisis started at bank failures or debt crisis, barring a few which were due to trade deficits, industrial revolutions and a few wars. The amazing fact remains that though there were so many debt driven crisis in last 8 centuries, we just don’t stop repeating ourselves.

Yes we do try. By creating central banks, but, sovereign debts fail too. We have credit rating agencies, then happens the SUBPRIME CRISIS.

Then come more regulations, more tightening by the central banks! Banks seem to become victims of these regulations and the business targets and margins as well. Then the greed takes over bankers race to aggresive lending to stretch the balance sheets.

The recent developments in the Indian Banking sector is alarming, a little better than what it was two years back though. Two important parameters of performance is leaving the especially the PSU banks high and dry! would they survive?

1. The Basel III norms – a very difficult set of guidelines set by the central bank on capital adequacy to brace for crisis, is an extreme stressful for banks. Banks of India have been issuing the Perpetual Bonds to meet tier I capitalas per Basel norms. coupon rrates of few bonds have been as high as 11%. With no maturity dates ateacher on thad a bones,  could easily become a excess burden of interest payout as interest rate continues to fall.

2. Greed of bankers to inflate the balance sheets – Mounting NPAs caused by disbursing loans to less credit worthy entities is showing signs of failures, unending restructure and failure to get adequate risk cover through collateral.

Thanks to the watchdogs of Indian financial sector, it may not just do a Boom n bust and averted a crisis just in time! but an area to trade carefully. just a thought!

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Include Dynamic Asset Allocation Funds in your portfolio to create wealth and cushion against equity market volatility

Ideal for moderately conservative investors who wish to have some equity exposure, can build a retirement kitty with mutual fund using #SIP to invest and Systematic withdrawal plan to get a monthly income) reap maximum benefit of this fund category.
In my previous posts I have written about #debt and #equity mutual funds and the advantages of investing in #mutual funds. In this post I would like to share some insight about the equity oriented hybrid funds which offers best of both worlds. These equity oriented balanced funds/ hybrid funds/ dynamic allocation funds should be part of core investment portfolio of an individual investor of any age

What investors can expect from these funds?
1. Tax free returns after 12 months, and exit load free after 12-18 months depending on the fund house
2. Much higher return than Bank FD with lower downside risk compared to pure equity funds, mostly matching index returns over long term
3. Doesn’t matter you are 22 or 42, Ideal as long term wealth creation with moderate risk, can build a retirement kitty with SIP and use SWP (Systematic withdrawal plan) to reap maximum benefit of this fund
4. Even the worst fund in the category has given 10% return in five years. The top 5 have averaged return over 15%
5. This category is expected to deliver less volatility with consistency compared to the equity market
What investors should not do?
1. Not compare it with a largecap/ midcap/ thematic funds, they may swing higher both sides and have a different investment approach and objective
2. Do not consider hybrid funds to be risk-free, all investment instruments come with own share of risks, however, due to its diversification between asset class, it generally experiences less downside compared to benchmark. Not to get lured by past performance and very high returns, it is possible that fund management is taking higher risk than the fund mandate and may expose you to risks you do not wish in this category
What are #dynamic allocation/#balanced funds?
Here, I am focusing on equity oriented balanced funds. These funds have about 65% exposure in equity and rest in debt and cash. Thumb rule good investment practice, buy at low and sell at high is automatically adhered to because of its scheme mandate, mitigating risk for the investor. And during low phases it adjust its portfolio with higher equity buy and lower exposure in debt. The USP of the product category is capturing the downside risk. The chart defines how it actually benefits the investors.
Debt oriented balanced/hybrid funds also part of the hybrid funds category which is ideal for conservative and retired investors. These funds are treated as debt instrument for taxation purpose.
Who should buy equity oriented dynamic allocation funds (#balanced funds)?
The category is for everyone. This carries lower risk compared to pure equity plays, still enjoys tax free returns as any #equity fund. The investment philosophy is simple but extremely effective “buy low and sell high”, as the equity market sees a upswing, fund managers book profits to rebalance the portfolio and vice versa when market falls. This is much easier said than done but the investment mandate is such, that automatically fund managers follow the rules and avoid temptation of exposing the fund into higher risk area.
ICICI Prudential balanced advantage fund, the fund with the largest AUM in the category has beaten the category average and nifty 50 returns in the past 5 years and given return of 16% annualised return.
Portfolio allocation of ICICI Prudential Balanced Advantage Fund shows higher commitment towards protecting the investor’s money along with generating surplus return. The equity portfolio is dominated by largecap companies and debt category has maximum exposure in govt securities of about 12% of the portfolio, most debt investments are in high credit score category of AA and above.
The graph of 5 years return of a hypothetical investment of Rs. 10,000 in balanced funds of the top 5 mutual fund companies viz-a-viz Nifty

Graph source – Moneycontrol.com


Disclaimer – Mutual Fund investments are subject to market risks, read all scheme related documents carefully


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