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FundsIndia on Mobile
FundsIndia
launched its first
mobile app for
Android phones
about two weeks ago. The app
has been received with much
enthusiasm by our investors and
scores
of
people
are
downloading it each day. As
always, this app has been custom
developed for the FundsIndia
platform, keeping in mind our
customers' needs and usage
patterns.
Srikanth Meenakshi
Srikanth Meenakshi
Yet, they also wish to look at how a fund house is faring across its various
funds. This is an important aspect for individual investors as well.
Of course, fund houses will not provide them the information though they
willingly produce such numbers for institutional investors. Why is this aspect
important?
Often times, one or two funds from a mutual fund do well and the rest languish
in varying degree. Over long periods if this continues, it is a discomforting
situation for an investor.
It reflects a lack of cogency in the fund houses views on the economy, markets and
what they mean for investment. It could reflect inconsistency in understanding
these trends. It could mean over-dependence on one fund manager.
More can be read into this but the short point is investors must learn to focus
on how a fund house fares across funds.
For starters, take a simple average of individual returns over different time
periods and compare fund houses. You do not need to do this every week or
month. At the end of every calendar year, ferret numbers to look at the
performance of fund houses over one, three, five and ten years.
If you do this every year, you will end up with interesting facets of fund and
fund house performance. You are almost always well off with mutual funds
that score over peers for performance across funds and over different time
periods.
S Vaidya Nathan
FundsIndia
Winner CNBC TV18 UTI Award 2013-14
National Online Advisory Services
www.fundsindia.com
Vidya Bala
We often receive queries from our investors on how we choose equity funds for our Select list
and why a particular fund, that has a five-star rating or has high one-year returns did not make
the cut. In this months article, lets see how we sift and sort hundreds of funds to arrive at the
handful that we present to you as FundsIndia Select Funds our own list of funds we deem
investment-worthy. This is offered in several categories, equity funds (moderate risk), equity
funds (high risk), tax saving funds and thematic funds. Debt funds are covered, but we will discuss
them on another occasion.
With that caveat aside, here are the key factors we look
for:
Consistency scores
Housing loans as a percentage of GDP in our country has remained quite low at around 9 per cent.
Further, the housing shortage in the urban areas was estimated, as of 2012, at 18.78 million units
and at more than 40 million units in rural areas.
R. Gandhi, Deputy Governor, Reserve Bank of India
www.fundsindia.com
Market Place
FundsIndia Blog
One of the greatest dangers to the growth of developing countries is the middle income trap,
where crony capitalism creates oligarchies that slow down growth. If the debate during the
elections is any pointer, this is a very real concern of the public in India today. To avoid this
trap, and to strengthen the independent democracy our leaders won for us sixty seven years
ago, we have to improve public services, especially those targeted at the poor. A key mechanism
to improve these services is through financial inclusion.. Financial inclusion in my view is
about getting five things right: Product, Place, Price, Protection, and Profit. If we are to draw
in the poor, we need products that address their needs; a safe place to save, a reliable way to
send and receive money, a quick way to borrow in times of need or to escape the clutches of
the moneylender, easy-to-understand accident, life and health insurance, and an avenue to
engage in saving for old age.
Dr Raghuram Rajan, Governor, Reserve Bank of India
Viewpoint
source: www.rbi.org.in
www.fundsindia.com
1 Year
5 Years
10 Years
48.0
10.8
17.9
94.7
10.5
18.1
CNX Nifty
50.5
72.1
52.4
57.1
CNX Bank
79.7
CNX Energy
35.1
CNX Infrastructure
64.0
CNX FMCG
CNX IT
12.7
11.4
10.5
16.0
17.3
18.0
17.5
16.7
21.2
1.5
12.0
-3.8
11.8
18.1
13.2
23.0
24.2
30.6
17.7
15.6
21.1
10.9
24.4
16.5
10.4
Returns (in per cent as of end August 2014) for less than one year is on an
absolute basis and for more than one year on a compounded annual basis.
Must Read
Blog Pick
2014 vs 2007
The legacy of the boom is too much debt. This debt overhang has to be reabsorbed if the basis for
a lasting, self-sustained and sound recovery is to be established. To expect credit to grow strongly
during the bust is both unrealistic and counterproductive.
Claudio Borio, Bank of International Settlements
www.fundsindia.com
6
wisdom
Spend about a decade in this mode and then you can start
prudently hiking exposures to risker asset classes, as you
would have a good base. Similarly, five years before your
retirement age, back off almost completely from riskier
asset classes. You are at a stage where you cannot afford
risk or loss of capital.
Never forget you age when you make investment plans
and decisions.
Source: www.franklintempleton.com
Being slow and steady means that you're willing to exchange the opportunity of making a killing
for the assurance of never getting killed.
Carl Richards
www.fundsindia.com
Q&A
Q
Funds are a portfolio of stocks, in which the fund manager is doing the job of profit-booking and reinvesting
in opportunities that look good. Hence, the idea of investing in a fund is to ensure that an expert does the
job of exiting and entering the right stocks with right opportunities.
If an investor believes that he/she would be able to do that better, then they should be directly into equities
and not funds?. Why? Because it is a lot tougher to know the prospects of a portfolio of 40-50 stocks and
know which fund will do better. You may be better off picking a stock or two directly.
Of the funds that gave 120 per cent returns this year - would you have entered them when their NAV had
severely fallen? Note that their 120 percent return comes after the fund was badly beaten down before that.
Do you think an investor would be able to identify a fund that may still hold good prospects although it has
a very poor track record at that point? On most occasions, it has been proved that a topper in one year does
not sustain performance in the next.
Assuming that you do not take risks with the seemingly top funds and instead go with the same steady funds,
what is the benefit from exiting and entering? The returns are not going to vary. This will make a difference
only if capital gains from equity funds are taxed some day. Today, capital gains from equity funds held for
more than one year are exempt from tax.
How will you time your entry and exit? Which is a 'good time' or 'good return' to exit? In years such as 2008,
would you have exited and re-entered when your fund lost as much as 55 per cent or would you have
anticipated timing entry on March 2009 lows?
Also, theoretically, you may be able to exit and re-enter. Would you re-enter the very next day? What if it took
a few days or weeks to reinvest and you lost key days?. Please see the link below from Franklin Templeton
(an old one but relevant) on how much you miss by not staying in the market in the best days, even if such
days are few. http://www.franklintempletonindia.com/downloadsServlet?docid=h65amj5h
End of the day it is about 'time in the market' and not timing the market, simply because timing is a lot more
difficult and even experts have struggled to do so. It is to make our lives easier in these aspects that mutual
funds act as a good vehicle for long-term investment. If one wishes to time the market, the optimal way to
do so would be through SIPs, especially if the tenure is 5 years or longer. This will afford multiple entry points
at least.
I think the biggest challenge on compliance in India is that some unacceptable practices are
sometimes a way of life here. At the end of the day, paying a traffic policeman a small sum of
money when you dont wear a seatbelt is illegal.
Steven Grubb, Global Compliance Director, Diageo
www.fundsindia.com
Technical View
Colgate Palmolive
Nifty
Tata Motors
The stock in on a long-term uptrend and we expect 810% returns from a short-term perspective. The breakout
in the Tata Motors stock past previous highs indicates that
the upside momentum is still strong. Any price weakness
may be used to buy the stock for short-term gains. As
long as the stock trades above the stop loss level of
Rs.480, we would expect the stock to rally to the target
of Rs.575-580.
B Krishna Kumar
This column is targeted at investors who are registered customers with FundsIndia for trading and investing in equity as well as prospective
investors who wish to open an equity account with FundsIndia. B Krishna Kumar hosts a weekly webinar that discusses the market outlook
for the following week. You can follow him on Livestream. If you wish to receive reminders for his webinars, go to
https://www4.gotomeeting.com/register/131985103
Disclaimer for Think FundsIndia: Mutual Fund Investments are subject to market risks. Please read the offer documents available at the website of each mutual fund carefully
before investing. Past performance does not indicate or guarantee future performance. There is risk of capital loss and uncertainty of dividend distribution. Think FundsIndia,
a monthly publication of Wealth India Financial Services, is for information purposes only. Think FundsIndia is not and should not be construed as a prospectus, scheme
information document or offer document Information in this document has been obtained from sources that are credible and reliable.
Publisher: Wealth India Financial Services
Editor: Srikanth Meenakshi
www.fundsindia.com
@fundsindia.com in August
Quiz
Recommended Book
About us: FundsIndia.com is India's leading online investment platform offering investors access, in one convenient
online location, to a wide range of options such as mutual funds, equities, corporate deposits, bonds, the National
Pension System, loans, insurance and 24 Karat gold, to name a few. FundsIndia also offers a host of value-added services
such as SIP, Alert SIP, Flexi SIP, trigger-based investing, and more that further enrich your investment experience!
"We believe in a concept of relative value. In 2007, we found significant value in consumer, pharmaceutical
and technology sectors," says Sankaran Naren, CIO, ICICI Pru. Read more Market Place, the FundsIndia Blog
at http://www.fundsindia.com/blog
www.fundsindia.com