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com/wealth | Ahmedabad, Bengaluru, Chennai, Hyderabad, Kolkata, Mumbai, New Delhi, Pune | March 12-18, 2018 | 32 pages | `8

THE ECONOMIC TIMES

FINISH THESE
TASKS...
...IN
30 DAYS
These must-do tasks will help
you start the financial year
on a secure footing.

PLUS
FINANCIAL PLANNING / Q&A / CAREER / AND MORE...
 cover story
02 The Economic Times Wealth March 12-18, 2018
FINANCIAL
TASKS
TO DO
NOW
These must-do tasks will
help you start the financial
year on a secure footing.
By Narendra Nathan
A
re you among the
people who leave
tax planning to the
last moment and end
up investing in the
wrong instruments because of
the year-end rush? Do you regu-
larly review your portfolio? The
start of the financial year can
be the best time to take stock of
your holdings.
Do you have a clear idea about
your capital gains tax liability?
Would you like to ensure that
your bank does not deduct TDS
incorrectly on your interest in-
come from fixed and recurring
deposits? What do you do with
your annual bonus? There are
better ways to use it than squan-
dering it away.
To help you start the finan-
cial year on a secure footing,
we have compiled a list of eight
must-do financial tasks. From
signing up with a portfolio
tracker to booking profits for
the current financial year,
and reviewing your portfolio
to making tax-related invest-
ments, the list covers the impor-
tant financial tasks you need to
get done quickly. As the adage
goes, well begun is half done.
Sign up with a portfolio tracker
that calculates your LTCG
WHEN TO DO: AS EARLY AS POSSIBLE
While the grandfathering clause in the
Budget reduced the pain of the proposed long-
term capital gains (LTCG) tax on equities,
it has complicated the LTCG calculations.
Investors will now have to remember the
price of their stocks—NAVs in case of mutual
funds—as on 31 January 2018 to compute
LTCG. You can choose to maintain this data
in an Excel sheet, but signing up with free
portfolio trackers, such as the one provided
by Value Research, is a better option. Other
IMAGESBAZAAR
investment service providers are also looking
to offer similar tools. “Most mutual fund NAVs
are now below their 31 January level and,
therefore, it is not a big concern right now. So,
we will be introducing this facility a little later
in our portfolio tracker,” says Amol Joshi,
Founder, PlanRupee Investment Services.
Signing up with a portfolio tracker will
make it much easier to calculate your capital
gains than keeping track of the relevant
information and doing the math yourself.
 cover story
The Economic Times Wealth March 12-18, 2018 03

Book long-term gain from equities
trading above 31 Jan prices
WHEN TO DO BEFORE 31 MARCH
Since LTCG tax at 10% will be applicable
only from 1 April 2018, tax experts say that
it makes sense to book profits before 31
March. However, you must do so only if the
gains are substantial. “Since LTCG tax will
be applicable only on gains that exceed the
`1 lakh per annum threshold, the inves-
tors whose gain is less don’t need to take
any action,” says Asrujit Mandal, Partner,
BDO India. If you want to keep some of the
well-performing stocks in your portfolio,
you can book profit by selling them now and
then buying back after a gap of a few days.
You should not sell stocks that have done
well, but are currently trading below their
31 January prices. Tax authorities won’t
treat the fall since 31 January as a short-
term capital loss. But, if the stocks that you
have held for long are trading below their
purchase price, you should sell them only
after 1 April. “You can’t set off these losses
against other long-term capital gains. So it
is better to wait till 1 April,” says Vishvajit
Sonagara, Founder, Quicko.com.
File tax returns for previous
years before the deadline
WHEN TO DO BEFORE 31 MARCH
The facility of filing income tax re-
turns for two financial years is no long-
er available. “From this financial year,
you need to file the tax return in the
assessment year itself. This means 31
March is the deadline for filing returns
for 2015-16 and 2016-17,” points out
Sonagara. Though you can file tax re-
turn till 31 March, don’t make late tax
filing a habit as it comes at a cost (see
table). Even if you have doubts about
tax filing, it is best that you file it by 31
July. “It makes sense to file the tax re-
turn by 31 July and, if needed, you can
file a revised return before 31 March.
This way, you will avoid the penalty,”
says Sonagara. Another problem with
late filing is the treatment of losses. “If
you have incurred any loss (business
loss, short- or long-term capital loss,
etc.), you need to file the tax return on
time. Otherwise, you won’t get the ben-
efit of carrying forward the loss to the
next financial year,” says Mandal.

BSE 500 stocks trading higher than 31 Jan level Penalty for filing late tax returns
To avoid long-term capital gains tax, book pro�ts before 31 March. Besides the �ne, late �lers cannot carry forward losses to the next year.
Stock 31 Jan Gain (%) Assessment Taxable
Company Industry Deadline Penalty Comments
price ` price ` since 31 Jan year income
Venky’s (I) Aquaculture & Hatcheries 3,962.40 2,713.25 46 `10,000 penalty because income is
2017-18 31 July 2017 `6 lakh `10,000 above `5 lakh.
IDBI Bank Banks 82.50 60.35 37
`1,000 penalty because income is
Firstsource Solutions Infotech 51.85 41.05 26 2017-18 31 July 2017 `4 lakh `1,000 below `5 lakh.
FDC Pharmaceuticals 288.20 232.20 24 Up to `5,000. Exact sum will be
2016-17 31 July 2016 `4 lakh `5,000 decided by the assessment of�cer.
V-Mart Retail Retail 1,829.55 1,496 22
DATA AS ON 6 MARCH. COMPILED BY ETIG DATABASE DATA AS ON 6 MARCH. COMPILED BY ETIG DATABASE
 cover story
04 The Economic Times Wealth March 12-18, 2018
Review your investment portfolio
WHEN TO DO FIRST WEEK OF APRIL
You must review your portfolio on
an yearly or a half-yearly basis and
the start of the financial year is a
good time to take stock, say experts.
“Portfolio needs to be reviewed at
least once a year and the new finan-
cial year is a good time to do this,”
says Suresh Sadagopan, Founder,
Ladder7 Financial Advisories. The
reintroduction of LTCG tax on equi-
ties makes it particularly important
that you review your portfolio now.
A review, however, does not neces-
sarily entail a change in your port-
folio. “‘Review’ is the key word and
you make changes only if they are
required,” says Joshi of PlanRupee
Investment Services.
The review needs to be done at
several levels. First, you should
check if your asset allocation is
correct. “Equity has done well in the
past few years and portfolios may
have got skewed in favour of equities.
So, investors need to realign their
asset allocation to their original
levels,” says Joshi. Second, you
need to see what has worked well
in your portfolio and review your
Start tax-saving investments
WHEN TO DO FIRST WEEK OF APRIL
Most people think about tax-saving
investments only at the close of the
financial year and, therefore, often end
up investing in the wrong products—
traditional insurance plans or high-cost
unit-linked insurance plans (Ulips), etc.
Tax planning at the start of the year will
help you avoid making hasty decisions.
As a first step, assess the amount to be
invested for saving tax. Consider all
Section 80C tax deductible expenses—
tuition fee of kids, principal component
from housing loan EMI, annual premium
on existing insurance policy, etc. “Once
you decide the amount to be invested
under Section 80C, fix allocation to
equity and debt instruments. For equity
investments, starting an SIP in an
ELSS fund is the best strategy,” says
Invest lump sum in PPF in April
If you don’t have a lump sum, monthly investments will
earn you more if done before �fth of every month.
`60,000
invested
lump sum
in April
Final
corpus `15.79 lakh `14.78 lakh
Besides an annual Annual portfolio review is a must
review, events such Review does not mean tinkering with your portfolio. Only serious variation
as marriage, child in asset allocation or performance of schemes warrants a change.
birth, sharp jump in
salary or overseas
job assignment, do EQUITY
OTHERS
warrant a review.
RAMAN SITA KRISHNAN VASU
mutual fund and stock holdings. It 55 years 40 years 30 years 65 years
is normal for some of your funds to
ORIGINAL ALLOCATION
have underperformed. Should you
throw them out? No, say experts. 50 65 75 30
Exiting a mutual fund based on its
50 55 25 70
one-year performance is a bad idea.
Instead, find out the reason for its CURRENT ALLOCATION
underperformance. “Usually, value
funds underperform in a bull market 70 69 80 44
and it will be a mistake to throw 30 31 20 56
them out for this reason,” says Kunal
Bajaj, Founder and CEO, Clearfunds.
So, if you are a risk-averse investor,
you should hold on to these funds Shift from Hold since Hold Shift from
equity to the variation since the equity to
because they usually fall much
debt is small variation is debt
less compared to aggressive funds small
during a market downturn.
Give mandate for
Sadagopan.
Voluntary Provident Fund
If your asset allocation suggests that WHEN TO DO FIRST WEEK OF APRIL
you should opt for debt instruments,
experts advise making lump-sum invest- Despite the recent reduction in
ments. “If cash flow allows, you should interest rates, Employees’ Provident
make your investments in products Fund (EPF) offers the highest interest Salaried employees
like the PPF before 5 April, so that you among debt investment products. There
get the full benefits of compounding,” is a substantial gap in the EPF and can earn better
says Melvin Joseph, Founder, Finvin
Financial Planners. Annual bonus or
PPF returns and experts feel that this
difference will remain in the future as
returns via VPF
other lump sums can be utilised for this well. “Due to political reasons, the EPF Since EPF rates will remain high, park
one-time investment. Financial plan- will always generate a better return than debt part of retirement corpus in VPF.
ners insist that you invest before 5 April competing debt products,” says Joseph.
because it will allow you to earn the EPF subscribers are allowed to contribute
interest for the month of April. Investors more to the scheme via the Voluntary
who don’t have ready cash and want to Provident Fund (VPF) route and there
stagger their investment on a monthly is no restriction on the quantum of
8.55%
EPF 8.5%
basis should also make their investments contribution as is the case with the PPF—
before the fifth of every month. capped at `1.5 lakh per annum.
Most companies allow this option
only at the start of the financial year. So PPF 8%
you need to act fast and ask your human
resources or accounts department to 7.78%
deduct a fixed amount for VPF at the
beginning of April itself. 2007-08 2017-18
Though the EPF allows for withdrawals * SINCE RATES ARE CHANGED ON QUARTERLY
`5,000 ` during emergencies, its long lock-in is the
invested BASIS NOW, AVERAGE USED FOR PPF.
`5,000 COMPILED BY ETIG DATABASE
before �fth main factor you need to consider before
invested
of every investing more in the scheme via the VPF
after �fth
month
of every facility. “In theory, the EPF and VPF are products, such as VPF, in their middle
month
available only at the time of retirement age. “Since there is no restriction, the
CALCULATED
and, therefore, you should only park the VPF will be handy for people above 45,
FOR 15 retirement corpus there. The PPF, on the who want to reduce their equity exposure.
FINANCIAL other hand, is more flexible,” says Joshi. They can increase their debt allocation
YEARS BASED
ON CURRENT
Experts suggest that investors should by diverting new investments to the VPF
opt for equity-oriented growth products instead of shifting from equity to debt
`14.69 lakh RATE OF 7.6%
when young and switch to debt-oriented investment,” says Joseph.

Make an investment plan
for your annual bonus
WHEN TO DO MAKE THE PLAN NOW, INVEST
WHEN YOU GET THE BONUS
Though most people get annual
bonuses in March or April, only
a few have a clear plan on how
to invest it. People tend to spend
their extra cash impulsively. “You
have worked hard over the past 12
months to get that bonus. It should
be treated as a deferred salary, not
as free money,” says Joshi. There
is no standard formula on how
to utilise the bonu, but there can
be some standard rules. “If you
have a high-cost loan, outstand-
ing credit card debt, etc., first pay
off that debt. Paying 3% interest
per month is insane,” says Bajaj of
Clearfunds. The remaining part
can be split between consumption
and investment. “A bigger portion
can be used for spending if all goals
are comfortably placed. However,
if there are not enough savings to
meet your goals, you need to keep a
bigger chunk of the annual bonus
for savings,” says Joseph.
Annual bonus is a
one-time receipt.
It is best not to use
this amount to make
lifestyle-related
changes, especially for
things that demand
recurring spends.
Another point to remember is
that you may or may not get the
bonus in the future, so these need to
be utilised carefully. “Bonus spend-
ing should be more on a good family
experience and not, say, on a high-
cost car which will increase your
recurring expenses for the coming
years,” says Bajaj. You must not
increase your regular lifestyle
expenses because of the one-time
receipt of a bonus.
cover story
The Economic Times Wealth March 12-18, 2018 05
Submit Forms 15G, 15H to avoid TDS
WHEN TO DO FIRST WEEK OF APRIL
Tax deducted at source (TDS) is a major worry However, you need to be careful. “People
for fixed and recurring deposit investors. who have taxable income are not eligible to file
Currently, banks deduct TDS if the total inter- 15G and 15H forms. If you file it illegally, the IT
est earned is more than `10,000 in a year. The Department can take action against you,” says
only way to avoid it is to submit the Form 15G or Mandal of BDO India.
15H on time. Form 15H is for senior citizens and The government has provided a big relief to
15G for those below 60. Since banks consider
the total interest payable in a year and not total
senior citizens in its latest Budget, raising tax-
free interest from `10,000 to `50,000. So, senior
interest paid in a year for computing TDS, the citizens earning interest up to `50,000 can
deduction is made at the beginning of the finan-
cial year. So, it is best to hurry and submit the
submit Form 15H and avoid TDS. Note that this
new `50,000 limit under Section 80TTB is for
relevant forms in the first week of April itself. deposits across all banks and post offices.
Are you eligible to submit Forms 15G, 15H?
Avoiding TDS by submitting forms 15G and 15H illegally can lead to action by the taxman.
Interest Other Total
Name Age Eligibility Comments
Income Income Income*
Not eligible because the total
Soman 53 `45,000 `6 lakh `6.45 lakh No income is taxable
Eligible because the total
Preetha 45 `90,000 `1.5 lakh `2.40 lakh Yes income is below tax slab
No need because the interest is
Venu 25 `9,000 `6 lakh `6.09 lakh NA below `10,000
For senior citizens, the tax-free
Madan 61 `45,000 `3 lakh `3.45 lakh NA cut off is `50,000 now
*TOTAL INCOME BEFORE AVAILING OF SECTION 80C DEDUCTIONS
 mutual funds
06 The Economic Times Wealth March 12-18, 2018

GETTY IMAGES
FMPs
Invest in
FMP
for tax
s FDs

advantage
The market is flooded with schemes
that will mature in April 2021. FMPs you
can invest in
by Avneet Kaur four years’ indexation even though his Capital. Portfolios with a higher allocation
money stayed invested for only three years. to AA rated bonds could earn 8%, while Fixed maturity Duration
Open till
plan (days)
utual fund advisers are FMPs are closed-ended funds which in- those with only AAA rated paper could

M recommending three-
year fixed maturity plans
(FMPs) to investors. They
say investing in FMPs of
slightly longer duration than three years
makes a lot of sense at the end of the finan-
cial year. The investor gets the benefit of
vest in bonds and other securities. Though
they don’t give assured returns, these usu-
ally match the yields of the bonds in their
portfolios. “Given the type of bonds in the
portfolio, investors could earn anywhere
between 7.25% and 8%,” says Rupesh
Bhansali, Head (Distribution), GEPL
earn 7.25-7.5%.
The big benefit is the lower tax rate on
the income from FMPs longer than three
years. While the interest earned on fixed
deposits is added to the income of the
investor and taxed at normal rates, the re-
turns earned from FMPs longer than three
Aditya Birla Sun
Life Fixed Term
Plan - Series PJ
Aditya Birla Sun
Life Fixed Term
Plan - Series PK
Aditya Birla Sun
1,135

1,132
12 Mar

14 Mar

years are treated as long-term capital Life Fixed Term 1,141 19 Mar
gains and taxed at 20% with indexation. Plan - Series PM

How FMPs attract lower tax “If you invest in a 1,140-day FMP before
31 March, you will actually be holding it
DHFL Pramerica
Fixed Duration 1,140 12 Mar
Indexation reduces the tax on long-term capital gains for slightly longer than three years but Fund Series AR
will be eligible to claim the indexation ben- DHFL Pramerica
efit for four years,” says Prashant Maurya, Fixed Duration 1,134 12 Mar
Partner, Citrine Financial Advisors. The Fund Series AS
market is flooded with FMPs with tenures DHFL Pramerica
slightly longer than 1095 days. “There is a Fixed Duration 1,133 19 Mar
rush among HNIs to lock into these FMPs Fund Series AT
Investment Duration Returns Inflation before 31 March,” says Ashish Shankar,
DSP BlackRock

`1 lakh 1,140
1,170 13 Mar
days
(matures in
7.5% 5% Head Investment Advisory, Motilal Oswal
Wealth Management.
FMP Series 224
Franklin India FMP
(in March 2018) (annualised) per year Since the investment is made in 2017-18, 1,132 13 Mar
Apr 2021) Series 3 Plan C
but matures in 2021-22, the investor would
be eligible for four years of indexation HDFC FMP 1,143 12 Mar
would be the value of investment three years
`1.24 lakh later (in April 2021).
though his money remained invested for a
little over three years.
ICICI Prudential
FMP - Series 82
1,136 21 Mar
However, FMPs are not without risks.
would be the capital gain from FMPs and ICICI Prudential
`24,000 interest earned on fixed deposit.
They lack liquidity and getting out can be
difficult. “Investors may sell these on the
FMP - Series 82
1,175 13 Mar

IDFC Fixed Term

would be the indexed cost of acquisition stock exchanges before the lock-in period
Plan Series 142
1,139 13 Mar

`1.21 lakh because FMPs are eligible for indexation that

adjusts for inflation during the holding period.
ends, but usually these are either thinly
traded or are traded at deep discounts,” IDFC Fixed Term
Plan Series 143
1,133 19 Mar
says Maurya.
would be the capital gains after indexation. FMPs also have credit risk. “FMP re- Invesco India FMP
1,150 12 Mar
`3,000 The 20% long-term capital gains tax would be
`600 (plus 4% cess).
turns will be hit if any security held in its
portfolio faces a downgrade,” says Ankita
Series 31 - Plan A
SOURCE: VALUE RESEARCH
Tanna Narse, founder, Oaktree Financial
(plus 4% cess) would be the tax on income Advisors. Also, if interest rate starts go- gauge the portfolio quality. Study the
from fixed deposits for invetsors in highest
`7,200 tax bracket. Interest income is fully taxable
ing up, the investor who has locked in his
or her money in an FMP might lose on the
indicative investment pattern and qual-
ity of portfolio before you choose one. It
and there is no indexation benefit. opportunity to earn a higher interest on is mentioned in the Scheme Information
investments. Document,” says Narse.
Post- Advisers ask investors to understand
tax
returns
FMPs 7.33% FDs 5.27% the indicative portfolio holdings and
investment pattern of an FMP before Please send your feedback to
investing in it. “It is not very difficult to etwealth@timesgroup.com
 guest column
The Economic Times Wealth March 12-18, 2018 07

PAY OFF A `50 LAKH

How to earn 20-YEAR

LOAN
IN LESS
`40 LAKH

`30 LAKH
KEEP EMI
CONSTANT

8.5% assured THAN 10

YEARS
Hiking the EMI
`20 LAKH

`10 LAKH
INCREASE
EMI BY 10%
PER YEAR
Loan
ends in 9
years and
6 months
Loan
ends in 12
years and
2 months
INCREASE
EMI BY 5%
PER YEAR
Loan
ends in
20 years

‘returns’ every year

reduces the
tenure drastically.
0
YEAR 0 2 4 6 8 10 12 14 16 18 20

Prepaying your home loan can earn

the best returns in the current
scenario by lowering interest outgo.
ajor banks and housing finance companies

M have raised their lending rates. Whenever

home loan rates are hiked, borrowers want to
know whether they should prepay their loans
to save on interest. In the past, there was no
clear answer because there were several investment op-
portunities that could yield better returns than the interest
paid on the home loan.
Not any longer. Stock markets are looking jittery, fixed de-
posits are tax-inefficient and debt funds are giving poor re-
turns. If a penny saved is a penny earned, prepaying a home
loan may be the best investment option available. Where
else can you get 8.5% assured ‘returns’ on the surplus cash?
Another compelling reason to rework the math and at least
partially repay your home loan is the new tax rule that caps
the deduction on home loans at `2 lakh a year. If you have a
large home loan running, you would do well to make partial
prepayments as soon as you can.
There are some obvious benefits of foreclosing a long-term
loan. The longer the tenure, the higher is the interest outgo.
Just like long-term investments build wealth for you, long-
term debt burdens you with high interest. Yet, a long-term
loan may be unavoidable in some circumstances. A young
person who has just started working may not be able to af-
ford a large EMI. The loan tenure would have to be increased
so that the EMI fits his pocket.
In such situations, borrowers are advised to go for a bal-
looning repayment, where the EMI increases every year in
line with an increase in the income. This can have a dramat-
ic impact on the loan tenure. If you take a home loan of `50
lakh at 8.5% for 20 years, the EMI will be `43,391. But a 5%
increase in the EMI every year will end the loan in 12 years
and two months. If you tighten your belt a bit and increase
the EMI by 10% every year, you can become debt-free in less
than 10 years (see graphic)
Contrary to what T.S. Eliot said, April is not the cruellest
month. Any salaried individual will vouch for this. While
annual increments are something to celebrate, people with
large outstanding debts should also try and increase their
EMIs in line with the increase in income. In a few weeks,
they will also get their annual bonuses. At least some of that
should be used to prepay the home loan.
Reducing your outstanding debt or closing the loan is nat-
urally a psychological boost. It gives the individual a sense
of financial freedom.
Some people argue that prepaying the home loan robs the
individual of liquidity. That’s not correct. Several banks of-
fer home loans with an overdraft facility that allows the bor-
rower to withdraw money as and when he needs it. Though
overdraft facilities normally entail annual maintenance
charges, home loan overdraft facilities are exempt from this
charge. It’s also a good idea to use a loan against property to
repay other costlier loans. For instance, an unsecured per-
sonal loan that charges 18-20% can be replaced with a loan
against property that costs 8.5%.

R AJ KHOSL A
FOUNDER AND MANAGING DIREC TOR,
MYMONE YMANTR A.COM
 financial planning
08 The Economic Times Wealth March 12-18, 2018
Women, don’t be afraid to...
If you are a homemaker and don’t have an independent income, safeguard your financial
future by asking your spouse to do the following, says Riju Mehta.
...ask for personal
monetary compensation
If you are a homemaker, your spouse typical-
ly offers a lump sum every month to manage
household expenses. Make sure it does not
include the amount for your personal needs
and wants. This amount is rightfully yours
for all the household work you perform with-
out being paid. According to a 2011 study by
the Organisation for Economic Cooperation
and Development, the average Indian wom-
an spends nearly six hours a day doing un-
paid work. We estimate that a homemaker
in an average, urban, middle-class family
deserves at least `45,000 a month. It doesn’t
have to be this exact amount, but you should
get it as your right, not a favour.
...demand health
insurance for yourself
Do not hesitate to ask your spouse to
buy a family floater plan, which is a
health plan to cover the entire family,
including you. If you live in a metro,
the cover should be `5-10 lakh. As you
grow older, nearing 40, you will also
need a critical illness plan besides
the basic medical plan. This is due
to the rise in lifestyle diseases and
soaring medical inflation. The cover
should be `20-25 lakh and can be
bought for both you and your spouse.
...ask the spouse to
buy life insurance
for himself
If you don’t have any
income, but have kids
and the husband has
taken loans, insist that the
spouse buy life insurance for
himself. A term plan will take
care of your immediate and
future financial needs in case
your husband passes away un-
expectedly. The cover should
be 4-5 times the annual income,
and more if there are loans.
Make sure these are not the
traditional endowment or mon-
eyback plans, but term plans
which exclusively cover life
without offering any returns.
IMAGESBAZAAR
...confirm if you are the
nominee in investments
Try not to shy away from financial plan-
ning, leaving all the investments to your
spouse. If you are not too keen about
handling these yourself, at least make
sure you are aware of the instruments in
which the money has been invested and
where the financial documents are stored.
Another important detail to check is that
you have been named the nominee or
joint holder in all the accounts and invest-
ments. This will translate to ease of opera-
tion and transfer of financial benefits in
case of your spouse’s untimely death.
...retain your bank account
after marriage
In the first few years of marriage, whether
or not you take up employment, do not close
the existing bank accounts or investments
in your name. Even if the spouse suggests
replacing these with a joint account, do not do
so. Open the joint account, but continue with
the single account as well. This will ensure
that you retain financial independence. More
importantly, if the marriage does not work
out, you will still have access to your money.
...calculate retirement
corpus correctly
On an average, women tend to live 5-7 years
longer than men, which means that you will
need the retirement funds to be available to
you if you outlive your spouse. So convey to the
spouse that the longevity of the retirement kitty
should be linked to your life expectancy, not his.
Only if the age difference between the two of you
takes care of the life expectancy gap, should the
spouse make calculations based on his age.
...learn about online
financial dealings
If you have learnt to operate your
smartphone and can conduct
online shopping, you can surely
learn how to carry out mobile
or Net banking, keep tabs on
online investments, or verify
the Aadhaar card details. This
will not only help you gain con-
fidence, but also ensure that you
are in the know about financial
dealings and don’t have to depend
on the spouse for everything.
INVESTOR CONNECT INITIATIVE THE ECONOMIC TIMES WEALTH, MARCH 12-18, 2018 >> pg 09

MFs EYE OPPORTUNITIES RESURGENCE

OF RURAL
INDIA

IN GOVT’S RURAL PUSH Companies focussed on this sector expected to attract investor interest
> Shyam Sekhar
Registered Investment
Advisor Chennai

ately, the basic thrust

L of the government
has been to increase

I
t was in 2006 when management guru C K Prahalad coined the
INDUSTRIES TO the disposable income in the
term ‘Bottom of the Pyramid’ which pointed towards the billions
GAIN MOST rural sector. In other way, the
of people disadvantaged at the socio-economic strata, where
FROM RURAL government has been trying
lies a huge opportunity for growth and development.
PUSH INFRASTRUCTURE: PHYSICAL AS WELL to put more money in the
With the government and a large number of
AS SOCIAL LIKE ROADS, RAILWAYS, hands of the farmers. The
companies targeting to bridge this
EDUCATIONAL INSTITUTIONS, decision to increase the
socio-economic gap, mutual funds HEALTHCARE FACILITIES minimum support price by
also see some opportunities for
up to 50% for some crops,
investors. There are several
encourage farmers to grow
industries that have a TWO WHEELERS, new crops, usage of high
strong rural focus and PASSENGER CARS AND SUVS yield seeds for growing
offer immense scope
mustard, soya etc. so that
for growth. These FAST MOVING
India can meet most of its
companies also CONSUMER GOODS
AND WHITE GOODS edible oil demand,
offer the
compensating sugarcane
chance for
TRACTORS AND farmers adequately, more
wealth
AGRO EQUIPMENT mechanisation in the agri
creation in
sector are all aimed at the
the long
same objective.
term.
FERTILISERS The idea is that if farmers
AND PESTICIDES have more income, their
level of consumption will
CEMENT, also increase which will lead
STEEL AND to more demand for
CONSTRUCTION consumer durables as well
EQUIPMENT as consumer non-durables.
A successful
implementation of the
government’s Pradhan
Mantri Awas Yojana –
Gramin would lead to more
consumption of electricity
and gas. This in turn would
lead to a chain of
With a series of consumption demand in 5-7
state polls years. So I believe in some
culminating into years from now, the
next year’s Lok
government’s rural push
Sabha elections,
the government would be a game changer.
is expected to SCAN THIS QR And I won’t even be
spend heavily to CODE TO KNOW surprised if the urbanisation
AR

that we have seen in the last

DK

create rural jobs IF YOU HAVE

RA
VA

and to boost THE RIGHT 20-25 years, starts

IN
CH

sagging agro reversing after a few years

SA

MUTUAL FUND
:
ON

I from now.
prices R AT
STEPS TO
U ST So I believe some part of
ILL DOWNLOAD AND
Rural infrastructure & SCAN A QR CODE an investor’s portfolio should
construction, irrigation, fertilisers ● Download QR
be targeted at the
expected to attract investments code app on your
resurgence of the rural
phone
● Run app and India. However, since these
Companies focussed
Better subsidy delivery mechanism for on the rural sector
scan the QR code are thematic funds and the
Rural consumption, two wheelers, tractors, ● Your smartphone
farmers, better price realization and expected to attract market is at a high,
small cars expected to see good demand will read the code
improved crop insurance scheme expected investor interest & navigate to the investments should be
destination spaced out over a year.
 review preview
10 The Economic Times Wealth March 12-18, 2018
Equity fund investors not
deterred by LTCG tax
February saw healthy inflows of over `21,000 crore to equity-oriented funds.
Investors continued to pour money into
equity-oriented schemes in February,
undeterred by the sharp volatility in the
stock market during the month and the
proposed long-term capital gains tax in
the Union Budget.
Equity-oriented (equity, equity sav-
ings and arbitrage), balanced and ELSS
schemes saw net inflows of `21,294 crore
in February as against `23,055 crore
in January, according to data from the
Association of Mutual Funds of India
(AMFI). In all, the industry lost `21,000
crore, with the AUM dipping to `22.2 lakh
crore in February, from `22.41 lakh crore
in January, due to outflows from the debt
funds.
Institutional brokerage CLSA said that
the impact of the LTCG tax on the sustain-
ability of equity mutual fund flows will
possibly be best gauged after another one
or two months of data. Still, the February
data is promising.
AMFI CEO N.S. Venkatesh said,
“Despite the Nifty losing 4.85% in
February, flows from investors continue
to be robust. The industry added 16 lakh
folios in the month, taking the total num-
QUOTE OF THE WEEK
‘‘Private sector
too has to focus
on creating jobs.
It’s not the job of
the govt alone.’’
UDAY KOTAK,
MD, KOTAK MAHINDR A BANK
Wheat products to cost
more due to low output
Get ready to pay more for
bread, biscuits and cakes.
A senior official of ITC says
customers will have to pay
higher prices for wheat-
based products owing to
lower wheat output expected
this yearand higher minimum
support price (MSP) an-
nounced by the government.
As per the second advance
estimate, wheat output in
the crop year ending June
2018 is pegged at 97.11 million tonne, a decrease of 1.42%
over the previous year. The government has set a target to
procure 32 million tonnes of wheat and the private sector
is expected to procure a similar amount. ITC procures close
to 2 million tonne wheat per season for its own brand and
for commodity trading.
“This was the first correction after a
long time. Many investors used this as a
chance to increase their allocation,” said
Sundeep Sikka, CEO, Reliance Nippon
Asset Management.
Some wealth managers believe that
several HNIs booked profits early in
December and January, anticipating a
harsh long-term capital gains tax. “With
tax uncertainty behind us after the
Budget, the investors have put back mon-
ey in equities,” said Aashish Somaiya,
CEO, Motilal Oswal Mutual Fund.
Distributors believe that over the years
GETTY IMAGES
financial literacy programmes by them
and fund houses have helped inculcate
the habit of long-term investing among in-
vestors. “Mutual funds have become one
ber of folios to 6.99 crore, which shows of the ways for investing. Investors are in-
that there is interest among investors to creasingly resorting to SIPs with a long-
participate in wealth creation.” term vision,” said A. Balasubramanian,
Many investors who were waiting for CEO, Aditya Birla Sun Life Mutual Fund.
a correction used the recent fall as an A volatile bond market led to investors
opportunity. “Closed-ended mutual fund shifting from long-term income and gilt
offers also saw the industry mopping up funds to shorter tenure funds and liquid
`2,100 crore in February, while arbitrage funds. This led to income and gilt funds
funds saw some outflows,” said the prod- seeing outflows of `9,799 crore and `1,621
uct head of a large fund house. crore, respectively. — Prashant Mahesh
`3,200 cr TDS scam unearthed
The Income Tax Department has unearthed a
` 3,200 crore scam, where 447 companies
deducted tax from the salaries of their
employees, but did not deposit it with
the government. Prosecution has been
initiated against these firms and, in
some cases, warrants have been issued,
sources said.
The offenders mainly include builders. A
top politically connected builder reportedly
diverted `100 crore collected from employees
for business purposes. The other offenders are from
various sectors, including movie production houses, infrastructure
companies, start-ups and fly-by-night operators. An infrastructure
company, part of port development, has diverted `14 crore, sources
said. An IT company has not deposited `11 crore. Companies are
required to deduct TDS on behalf of the government and deposit it
within a prescribed time frame.
DOMESTICCALENDAR
Monday Wednesday Wednesday
MAR MAR MAR
12 13 14
Industrial production Manpower Wholesale prices
year-on-year Survey year-on-year
— Madhvi Sally
figures results figures
Govt employees
to get higher DA
The government has increased the
dearness allowance (DA) for its 11
million employees and pensioners
from 5% to 7% with effect from 1
January 2018.
“The Union Cabinet has given its
approval to release an additional
instalment of dearness allowance to
central government employees and
dearness relief (DR) to pensioners
from 1 January 2018, representing an
increase of 2% over the existing rate
of 5% of the basic pay/pension, to com-
pensate for the price rise,” an official
statement said.
According to the statement, the
hike will benefit about 48.41 lakh
central government employees and
61.17 lakh pensioners. The combined
impact on the exchequer on account
of both DA and DR would be `6,078
crore per annum, and `7,091 crore in
2018-19 (for a period of 14 months from
1 January 2018 to February 2019).
87.79 cr
bank accounts and 16.65
crore PAN cards have
been linked to biometric
identi�er Aadhaar as on
5 March. The government
has mandated submission
of the 12-digit unique
identity number Aadhaar
by every bank account
holder by 31 March 2018.
PAN cards also have to be
linked to Aadhaar.

Fund houses giving fat
dividends before 31 March
Ploy to beat proposed dividend distribution tax that comes into effect from 1 April
It’s raining dividends at mutual funds. Asset
management companies are doling out
liberal dividends in equity mutual fund
schemes before the new tax rules making
dividends less lucrative come into effect
from 1 April. The Union Budget has pro-
posed a 10% dividend distribution tax on
equity-oriented mutual funds.
DSP BlackRock Equity Fund has de-
clared a dividend of `16. On an NAV of
`62.38, the dividend yield works out to
25.64%. SBI Small and Midcap Fund has
declared a dividend of `9.1 per unit. On an
NAV of `42.54 on March 7, its yield works
out to 21.4%.
Distributors said many fund houses
are likely to come up with high dividend
payouts in the coming days. Several mu-
tual funds have unofficially sounded out
top distributors that dividend payouts are
likely. Reliance Mutual Fund and Essel
Mutual Fund, among others, are likely
to announce dividends later this month
where yields will be upwards of 15%.
“Payouts for the quarter are not yet de-
Cheaper study
loans for girls
ZAHID ALI
Avanse Financial Services, the NBFC arm
of Wadhawan Global Capital, is celebrat-
ing Women’s Day by offering education
loans to girls for higher education at a low-
er rate and easier repayment terms. The
interest rate will be 100 basis points (1%)
lower than the normal rate and the repay-
ment period will be 12 years compared
with the existing 10-year term. There is
also a 25% discount on the processing fee.
The limited period offer is available till
31 March 2018.
“This offer reinforces Avanse’s objec-
tive of making quality education afford-
able to deserving students,” said Amit
Gainda, CEO, Avanse Financial Services,
that lends to students and educational
institutions. With a workforce of over
200 employees across India, Avanse has
funded over 10,000 students across 6,000
courses in 1,900 institutes in India and 45
countries.
cided. We are collecting feedback from the
market and will make an official recom-
mendation to the board and trustees,” says
Rajiv Shastri, CEO, Essel Mutual Fund.
A spokesperson from Reliance Mutual
Fund declined to comment. Sebi rules say
the record date should be at least five days
after the day on which the dividend is an-
nounced. But fund houses are known to
unofficially inform distributors about the
likely dividend about 15-20 days earlier as
AND ELSEWHERE
Bitcoin prices crash 20%,
settle below $10,000
Bitcoin prices are once again headed
downwards. The cryptocurrency
fell below the $10,000 mark last week.
Bitcoin prices had fallen below $8,000 in
January and February but were able to
get back above $10,000 each time.
Bitcoin slumped more than 20% last
week amid increased regulatory scru-
tiny in the US and Japan, an attempted
theft at one of the biggest trading venues,
and news that the bankruptcy trustee
for Mt. Gox had started selling the now-
defunct exchange’s holdings to repay
creditors.
“The screen is flashing red today and
people are getting fearful,” said Caleb
Yap, Co-founder of Singapore Bitcoin
Club. “Weak hands are definitely want-
ing to sell. If Mt. Gox can dump $400 mil-
lion of Bitcoin just like that and there’s
still billions left, the fear is about when
the big drop is coming.”
Mt. Gox’s bankruptcy trustee,
Nobuaki Kobayashi, disclosed on
Wednesday in Tokyo that he had sold
about $400 million of Bitcoin and Bitcoin
Cash since late September, part of the
hoard left behind when the exchange
collapsed four years ago. Kobayashi is
studying further sales of the $1.8 billion
remaining bitcoins.
The sale might be “the largest ever
liquidation of crypto to fiat,” according
review preview
The Economic Times Wealth March 12-18, 2018
it helps them sell such schemes.
While dividend payouts help attract
fresh money, investors put money in such
schemes to book losses. For instance, an
investor buys a fund with an NAV of `30
today and the fund declares a dividend of
`5 on March 20. The investor earns `5 as
tax-free dividend, and after the dividend
payment, the NAV drops to `25. As per tax
laws, an investor can claim a notional loss
on the NAV due to dividend if units were
bought three months before the record date
or were held for at least nine months after
the dividend is paid. So, if an investor holds
the units till 20 December after a dividend
is declared on 20 March, and the NAV of the
scheme does not go above `30, the investor
can redeem the units and book the differ-
ence in amount as short-term capital loss.
“Investors are attracted to huge divi-
dends as they get cash back in their hands
with a possibility of booking a loss later.
Fund houses use it to garner assets,” said
Rupesh Bhansali, Head (Distribution),
GEPL Capital. — Prashant Mahesh
to Thomas Lee, Head of Research at
Fundstrat Global Advisors. In a report,
he said that the firm’s ‘bitcoin misery in-
dex’, a gauge of how investors feel about
prices, is currently at 19, the lowest level
since 2011. Still, the Bitcoin bull reiter-
ated his view that the digital coin will
reach $25,000 by the end of 2018.
Signs of growing regulatory scru-
tiny have added to investor jitters. On
8 March, Japan’s Financial Services
Agency ordered two exchanges to halt
operations for a month and penalised
four others. The announcement came
just hours after a warning from the U.S.
Securities and Exchange Commission
that many online trading platforms
should register with the agency.
—Bloomberg
11
Borrowers may
have to submit
passport details
The Finance Ministry may ask state-run
lenders to seek the certified passport
details of borrowers with an exposure
of `50 crore and above to help prevent
them fleeing the country in case of
default or wrongdoing of any kind, a
senior government official said.
This comes as the government is ex-
pected to table the Fugitive Economic
Offenders bill in the ongoing session of
parliament. The idea is under delibera-
tion, the official said. “We are trying
to ensure more effective coordination
among banks, intelligence agencies
and other government departments,”
he said. “In cases where banks feel that
there is some fraudulent activity in a
particular account, they can inform
the agencies in advance.”
The government believes that such
information sharing may help prevent
defaulters and fraudsters from leaving
the country to evade banks and investi-
gating agencies. Jewellers Nirav Modi
and Mehul Choksi, at the centre of the
`12,622-crore Punjab National Bank
fraud, are said to have left the country
before it became public.
product
launches
:: Mutual Fund
IDFC Mutual Fund has launched
IDFC Equity Opportunity Series 5.
The closed-ended scheme will
invest in stocks across market
caps. It has a fixed tenure of
1,080 days. The minimum applica-
tion amount is `5,000. The NFO
will close on 14 March.
SBI Mutual Fund has launched SBI
Dual Advantage Fund Series XXVII.
The closed-ended hybrid scheme
will invest in a mix of bonds and
stocks. It has a fixed tenure of
1,111 days. The minimum applica-
tion amount is `5,000. The NFO is
open till 16 March.
Reliance Mutual Fund will launch
Reliance Capital Builder Fund
IV Series E. The closed-ended
scheme will invest in stocks
across market caps. It has a fixed
tenure of 1,188 days. The mini-
mum application amount is `5,000.
The NFO opens on 13 March and
will close on 27 March.
:: Insurance
Aditya Birla Sun Life Insurance has
launched ABSLI Life Shield Plan,
a term insurance plan with eight
options. Each of the eight options
is designed to cater to specific
needs of buyers.
 stocks
12 The Economic Times Wealth March 12-18, 2018
How US tariff
war will impact
Indian firms
Currently, India is not affected by the US
threats and action, but the likely
spillover effects
could put the
domestic
markets
under
pressure.
by Sanket Dhanorkar
S President Donald Trump
U has put the global market
on tenterhooks with his ag-
gressive rhetoric on import
tariffs. Highlighting the skew
in trade balance, Trump has threatened
reciprocal taxes on goods imported from
countries that impose ‘unfair’ duties
on US exports. While his ire is mainly
directed towards large trading partners
like Europe, China, Canada and Mexico,
India is also in his crosshairs. How will
a full-blown tariff war impact India Inc.
and what will be its effect on the stock
market?
In a series of tweets, the US President
recently pointed out that the US had lost
$800 billion in yearly trade deficit be-
cause of its ‘very stupid’ trade deals and
policies. US jobs and wealth are being
given to other countries and they have
taken advantage of the US for years, said
Trump, warning that he would not allow
it anymore. Sounding confident of com-
ing out on top, Trump has effectively let
out a war cry: “When a country (US) is los-
ing many billions of dollars on trade with
virtually every country it does business
with, trade wars are good, and easy to
win,” he says. He has already set his plan
into motion, proposing 25% tariff on steel
imports and 10% on aluminium. These in-
creasingly protectionist measures by the
US, however, threaten to derail the global
economic growth engine, warn analysts.
Trump’s rhetoric has prompted other
countries to threaten retaliatory tar-
TY I
MA GES
E T
G
iffs, followed by
counter-threats
by the US, raising
concerns of tit-for-tat
protectionist measures
that were a feature of the
Great Depression in the
1930s. Ambareesh Baliga, an
independent market expert, feels an
all-out trade war will prove detrimental
to global markets. “Global economic
growth hinges on the free movement of
goods. If we revert to large-scale national-
ism, it could set growth back by a couple
of decades,” he says. If this plays out, capi-
tal markets will feel the heat.
India is ninth in the list of US' trading
partners that have a trade surplus. Trade
surplus means that we export more to
the US than we import from the country.
India's exports account for a hefty 15%
of US' aggregate trade with the world.
Gems and diamonds are India’s biggest
Why the US is itching
for a trade war
The country has been running a trade
de�cit with India for several years.
Exports Imports
70
68
40
37
-31 -30
2014 2015
FIGURES ARE IN $ BILLION
goods exports to
the US, followed by
pharmaceuticals, textiles, fish and petro-
leum products. As of now, these exports
are not on the radar of the US, but there
is a risk of retaliatory tariffs on these
goods. Trump’s clamp-down on steel and
aluminium imports will not impact India
much as just about 4% of the steel ex-
ports flow into the US, while aluminium
exports constitute 2% of total US alu-
minium imports. While the direct impact
of higher metal tariffs on Indian firms
will be limited, there is a possibility that
muted metals demand, owing to cooling
off in global trade, will put pressure on
prices of these metals. Further, there is a
chance that unabsorbed steel and alumin-
ium exports from other countries may be
rerouted and dumped on Indian shores.
This incremental supply in the domestic
market is likely to put metal prices under
pressure, hurting the operating profits
Most vulnerable
Indian exports
Diamonds and pharma top
Indian exports to the US.
Balance
Amount
Goods
73 ($ bn)
Precious metals
& stones 11
42
Pharmaceuticals 7.4
Mineral fuels 2.4
Textile items 2.3
-31
2016 Machinery 2.1
SOURCE: THE OFFICE OF THE U.S.
TRADE REPRESENTATIVE �USTR�
of Indian metals and
mining firms, such as
Tata Steel, SAIL and
Hindalco, among others.
“The US trade protection
measures will lead to a
temporary disruption in a
few regional markets as new
trade channels open up to cater to
supplies left behind from reduced US
exports,” says Abhishek Poddar, Analyst,
Kotak Securities. However, the poten-
tial steel mill and aluminium smelter
restarts in the US will not significantly
weaken the outlook on global aluminium
and steel. Especially, given supply side
reforms in China in these industries,
says Poddar.
Trump has also come down heavily on
higher import duty on US-made Harley
Davidson motorbikes. He previously
threatened to slap retaliatory taxes on
motorcycles coming into the US from
India. While the Indian government
responded by slashing customs duty on
imported high-end motorcycles to 75%
from the earlier 100%, and eventually cut
it down to 50%, the US President was left
unimpressed and made it clear that the
cuts were not enough. If the US decides to
levy equivalent duties, it could affect US-
bound exports of two leading Indian two-
wheeler manufacturers—Eicher Motors
and Bajaj Auto. The former exports its
Royal Enfield range of motorbikes, while
Bajaj Auto ships the KTM brand to the
US. However, the volumes are limited to
a few thousand units, with the total value
of Indian motorcycle exports to the US at
just about $6 million (`40 crore) in 2016-17.
As such, tariffs are not likely to create a
visible dent on these firms’ profitability,
which enjoy a strong domestic demand.
India’s IT services firms have been
exposed to Trump’s protectionist poli-
cies for a while. Tighter immigration
laws have affected how these firms hire
local talent in the US and has restricted
the flow of skilled personnel to the US.
As things stand, India is not directly af-
fected by the US actions, but the likely
spillover effects could bring the domestic
markets under pressure.
Please send your feedback to
etwealth@timesgroup.com
 insurance
The Economic Times Wealth March 12-18, 2018 13

Don’t fall into these Ulip traps

The 31 March deadline for tax-saving investment is approaching and insurance distributors are busy luring
buyers with tall promises. Sunil Dhawan looks at five tricks that Ulip sellers use to trap buyers.
The sales pitch
Ulips work just like bank deposits and since they have
“Switch to a new “Ulip is similar to an insurance cover as well, they are better than FDs. As

and better Ulip” bank FD” per regulatory guidelines, illustration benefits of Ulips
can be prepared assuming 4% and 8% returns. Since FD
interest is fully taxable and Ulip returns are tax-free,
Ulip is a better option than a fixed deposit.

The truth
The sales pitch Ulips are market-linked products and do not guarantee
The NAV of the fund in your existing Ulip has already returns. Bank FDs, on the other hand, offer assured
touched a high level and there are remote chances for returns and are suitable for a relatively short-term
further growth. The insurance company has launched goal with capital preservation as the main objective.
a Ulip with new fund options at a lower NAV. This new Identify your need and invest accordingly.
Ulip comes with unique features and, therefore,
it's better to switch to the new plan.

The truth
There is no provision to switch from one
Ulip to another. The uninformed buyer
will be asked to fill up new forms—
one for surrendering the existing
Ulip and another for the new policy.
However, the agent will not submit
the surrender form and the buyer
will end up with two policies. Even if
the existing policy is surrendered, there is
no advantage in buying a new Ulip. The charges
on Ulips are very high in the initial years, so agents
want you to buy the new policies only to earn higher
commissions on the new sale.

“Ulip is a 5-year “Your money

tax-saving product”
The sales pitch
Ulips have a five-year lock-in period after which
the buyer can exit the policy. This makes the Ulip
an ideal way to save tax because your funds are
locked in for a short duration.
The truth
Ulips have a lock-in period of five years, but this
doesn't mean one should exit once this period is
over. As costs are front-loaded in Ulips, a large
chunk of the charges are levied in the initial
five years. Ulips are meant to be long-term
investments and should be held for at least 15
years to earn decent returns. Make an informed
decision rather than treating Ulip as a short-term
tax-saving product.
can double
very soon”
The sales pitch
In the past few years, equity funds of Ulips
have given annualised returns of 18-20%.
Invest in a Ulip and your money will double
in 4-5 years.
The truth
There is no guarantee of returns from a
market-linked instrument. An equity fund
gives high returns when the markets are
doing well. It is incorrect to assume that the
past performance can be replicated in the
future as well. If the market rises, so will the
fund value, and vice versa. Therefore, do not
fall for claims of guaranteed returns.
“Pay a one-time
premium only”
The sales pitch
Pay only once and reap the benefits over the long term. You
will not be required to pay any further premiums but the
insurance cover will continue for the entire term.
The truth
The single premium bait is often used to lure unsuspecting
buyers. The buyer thinks he is investing in a single-premium
policy, but is actually sold a regular policy and has to pay
the premium every year for the next 10-15 years. There
are single-premium Ulips as well, but the commissions are
lower, so agents are not interested in pushing these plans.

Return policy within 15 days
If you are There is a 15-day free-look
period within which a policy
mis-sold can be returned. Only mortality
Discontinue the plan Surrender after five years
If the 15-day free-look period is over,
you can still close the policy. However,
If you don’t want to pay
the surrender charges,
there will be surrender charges. Also, hold the policy for the

a Ulip… charges for the covered period, stamp

duty and medical test costs are deducted.
you will get the money back only after five
years. During this period, it will earn 4% interest.
minimum period of five years and
then close it.
 guest column
14 The Economic Times Wealth March 12-18, 2018

Don’t get pulled into

the sectoral carousel
Some sectors might be doing well when equities fall, but investing in them is a mistake.
his is the kind of period in time that

DHIRENDR A KUMAR
CEO, VALUE RESE ARCH
T is an essential part of an investor’s
education. Equity fund investors
across the board are learning a
lesson in facing volatility with for-
titude. At the same time, there are some false
takeaways that you need to avoid. Probably, the
worst lesson that can be learnt is that when the
money markets are down, some sectors still do well

mysteries and the best approach is to identify the correct

Let the investment
manager of a diversi�ed
equity fund make the
choice. The main reason
for investing in mutual
funds is to get the
services of an investment
manager who does the
research and makes
the choices for you. If
you have to track the
markets yourself, what is
the point of investing in
mutual funds?
sectoral funds.
Right now, if you go to Value Research Online
and look at the returns of different fund catego-
ries over various periods, you would come to
one of two very different conclusions. You could
either infer that it is a volatile period and as
equity investors you just have to weather occa-
sional bouts of unpredictability. Or, you could
surmise that technology (and possibly FMCG)
sector funds are doing well, and that if you had
known this secret, you would have invested
only in these funds.
Whenever a particular type of stock is
doing well, a number of supposedly profes-
sional advisers decide to tell investors that this
is where they should make their investments.
Sellers start pushing funds that focus on that
sector, seeing a clear opportunity if the trend
continues.
For some time, the trend does hold. At this
point, it investing in a diversified way seems
like an inferior option. The difficult thing to

Whenever a particular
type of stock is doing well,
a number of supposedly
professional advisers decide
to tell investors that this is
where they should make their
investments.
GETTY IMAGES

understand is that this is actually happening

almost constantly. The equity market, as a
whole, is always a composite of sectors that are
facing varying fortunes. Whether the markets
are stable or volatile, rising or falling, one sec-
tor or the other is always certain to be doing
better than average. This makes it highly likely
that a diversified mutual fund portfolio will
always look like a sub-optimal choice.
However, the law of averages inevitably as-
serts itself and the sector(s) that were doing
well start performing below average, and their
returns revert to the mean. Those who jumped
on to the bandwagon late are left with the worst
results. In fact, the math is generally even
harsher. The reversion to mean often results in
the formerly best sectors falling to the absolute
bottom. This creates losses even when the rest
of the market is booming. Former cheerleaders
of the tech, infra and many other sectors have
learnt this the hard way. However, if you see
the excitement today, it becomes obvious that
these lessons have been unlearned by many.
Does this mean that investors should avoid
sectors that are doing well? That is also a reci-
pe for low returns. In either case, investing on
the basis of momentum is not the smart thing
to do. What is the alternative?
The simple answer is that investors should
let the investment manager of a diversified eq-
uity fund make the choice. After all, the main
reason for investing in mutual funds is to get
the services of an investment manager who
does the research and makes the choices for
you. If you have to track the markets yourself,
what is the point of investing in mutual funds?
As I’ve discussed earlier in this column,
volatility is a part and parcel of investing in
any equity-based product. It is pointless to
over-analyse a particular period of volatil-
ity. Today, it is interest rates and Trump’s
impending trade war, tomorrow it could be
something else. It doesn’t matter. Periodically,
something or the other will inevitably come
up. The best course of action is to identify this
issue as the non-issue that it is.
Please send your feedback to
etwealth@timesgroup.com
 family
The Economic Times Wealth March 12-18, 2018 15

Retiring early PANKAJ SOOD, 43, SALARIED, BENGALURU

not an option How to invest for goals

GOAL
FUTURE COST (`) / RESOURCES
INVESTMENT
NEEDED
Bengaluru-based Sood doesn’t have enough assets or TIME TO ACHIEVE USED
(`/MONTH)

savings to meet all the goals in the next few years.

Emergency fund 3.9 lakh Cash -

by Riju Mehta
Cash, stocks,
ankaj Sood, 43, is a chartered Portfolio Children’s education 39.9 lakh / 3 yrs
mutual funds
36,809

P accountant in private service

and earns `2 lakh a month. His
family includes his homemaker
wife, and two children, aged
15 and nine. He stays in a rented house in
Bengaluru, but has bought his own house
worth `55 lakh with a loan of `20 lakh, for
ASSET

Real estate

Cash
CURRENT
VALUE (`)

55 lakh

15.5 lakh
Children’s weddings

Retirement
80 lakh / 12 yrs

3.23 crore / 17 yrs

-

PPF, EPF,
mutual funds
10,000*

24,000*
which he is paying an EMI of `30,000. He Debt
also gets a rental of `9,000 and is paying a Investible surplus
70,809
rent of `25,000 amonth. He has high house- EPF 25 lakh needed
hold expenses of `50,000, besides `25,000
PPF 5 lakh * INVESTMENT OF `36,124 AND `28,868 IS NEEDED FOR WEDDING AND RETIREMENT GOALS, BUT DUE TO
for children’s education, insurance pre- LACK OF SURPLUS, HE CAN BEGIN WITH `10,000 AND `24,000, RESPECTIVELY, AND R AISE THE AMOUNT
mium of `2,833, and `61,000 as investment AFTER THREE YEARS. INVESTMENT INCLUDES `500 IN PPF.
in the PPF and mutual funds. His surplus Equity ANNUAL RETURN ASSUMED TO BE 12% FOR EQUIT Y. INFLATION ASSUMED TO BE 6%.
is `15,167 and the goals include building a
contingency corpus, buying a car, taking
Stocks 6.35 lakh
Insurance portfolio
a vacation, saving for the education and Mutual funds 5.31 lakh
weddings of his children, and retirement. EXISTING SUGGESTED
EXISTING MONTHLY MONTHLY
Due to lack of surplus, he will have to forgo Total 1.12 crore INSURANCE SUGGESTIONS
COVER (`) PREMIUM PREMIUM
the goals of car and vacation for now and (`) (`)
stagger the investment for other goals. Liabilities Current value (`)
Fincart’s financial planning team Life insurance
suggests that Sood start by building an
Home loan 20 lakh
emergency corpus of `3.9 lakh by allocat- Total liability 20 lakh Buy another `1.8 3,166 +
Term plan (1) 1 crore 1,500
ing a portion of his cash to this goal and crore term plan 1,500
investing it an an ultra short-term fund. Net worth (approx) `92.1 lakh
For both his children’s education, Sood Traditional plan - - - -
wants to amass an aggregate sum of near-
ly `40 lakh in three years. He will have Ulip - - - -
to assign the remaining cash, stocks and
corpus of three mutual funds. Besides, he Cash flow TOTAL 1 crore 1,500 `2.8 crore 4,666
will have to start an SIP of `36,809 in bal-
anced funds. As for the weddings, Sood EXISTING SUGGESTED
wants to collect `80 lakh in 12 years for (`) (`) Health insurance
both the kids. To achieve this, he will need
to start SIPs of `36,124 in equity funds. Income 2.09 lakh 2.09 lakh Employer’s 5 lakh - - -
Due to lack of surplus, he can start with
the existing SIP of `10,000 and put in the Close existing plan;
Outflow
rest after three years when the education buy `5 lakh family
Own 6.8 lakh 1,333 312 + 1,475
goal is completed. As for retirement, Sood floater + `20 lakh
Household 75,000 75,000
cannot quit work in seven years as he had expenses top-up plans
planned and will have to continue for 17
TOTAL 11.8 lakh 1,333 `30 lakh 1,787
years. He needs `3.23 crore and can assign House rent 25,000 25,000
his PPF, EPF and remaining mutual fund
Critical illness
corpus to the goal. Besides, he will have Home loan 30,000 30,000 & accident - - - -
to start an SIP of `28,868, of which he can EMI disability
start with `24,000 for now and add `4,868
after three years. Insurance 2,833 6,453
premium TOTAL - - - -
Sood’s life insurance comprises a `1
crore term plan, but Fincart suggests he
buy another `1.8 crore plan for `3,166 a Investment 61,000 71,309 Insurance cost - 2,833 - 6,453
month. As for health insurance, he has
Total PREMIUMS ARE INDICATIVE AND COULD VARY FOR DIFFERENT INSURERS.
a `5 lakh family plan from his employer
outflow 1.93 lakh 2.07 lakh
and another `6.8 lakh independent cover.
Fincart suggests he close the existing Surplus 15,167 1,238
cover and buy a family floater plan of `5 Write to us Looking for a professional to analyse your investment
portfolio? Write to us at etwealth@timesgroup.com with
lakh and a top-up plan of `20 lakh, which for expert ‘Family Finances’ as the subject. Our experts will study
your portfolio and offer objective advice on where and
will come at a cost of `1,787 a month. This
will take care of his insurance needs.
Financial plan by FINCART
advice how much you need to invest to reach your goals.
 learn & keep
16 The Economic Times Wealth March 12-18, 2018

Over the years, your investment portfolio

If you secured a job promotion and a 5
1 healthy increment, what will you do?
has become cluttered and unwieldy, and
you don’t have a clue if you are on the right
� Prioritise the much-deserved vacation or pocket track. How will you get back in control?
the smartphone you crave.
� Seek advice from a financial planner and make
� Increase your investment by a matching amount,
changes to the portfolio accordingly.
and then spend the remaining amount.
� Research on my own, exit unprofitable
investments and shift to better alternatives.
Women tend to put away a higher portion of income
as savings even if their wages are comparatively
lower than those of their male counterparts. They Women are typically more receptive to �nancial research
also tend to be more budget-conscious, keeping and advice. Men prefer a do-it-yourself approach rather
expenses on a tight leash. Higher savings will allow than seek �nancial help. Sometimes, external help is
for a bigger corpus when required.

Do you think essential to get an unbiased view of �nancial affairs.

man
Your retirement is
2 more than 15 years In general, men
6
The stock market falls Women tend to
by over 20% in a matter

like a or
are more focused exhibit more
away but your savings on wealth of weeks and the equity patience with
are not enough. How accumulation, while funds in your portfolio investments,
will you build the women are inclined take a beating. What while men can be
impulsive in nature.

woman?
corpus in the towards wealth
will you do?
remaining years? preservation. The �rst approach
However, taking � Continue with regular SIPs suits long-term
� Deploy incremental too little risk can but monitor fund wealth creation
savings in equity- hurt investment performance. better. Avoid taking
oriented mutual funds. goals, leaving you rash decisions and
� Immediately stop the SIPs
� Put large chunk of the with a shortfall. reacting to the
and exit funds. Wait for
money in safer bank market vagaries.
the market to bounce back.
fixed deposits. When it comes to financial behaviour, be it saving,
spending, investing or planning, men and women tend
You are about to get married and the
to act differently. Take this quiz to find out which Your friends invite you to join them
3 finances for the wedding arrangements gender you are more inclined towards, 7 for a weeklong foreign vacation.
need to be finalised. What do you do? You realise that you are falling
says Sanket Dhanorkar. short of money. What do you do?
� Play an active part in putting together the
finances with your family. � Request friends to postpone the trip till
you accumulate enough savings.
� Leave it to parents or your partner to steer
the ship as it is not your cup of tea. � Dip into your accumulated retirement
savings to fund the shortfall.

Women typically feel less competent in money Women tend to be more disciplined and stay committed
matters, leading many to stay away from key to their investments, while men are more likely to dip into
�nancial decisions. This lack of con�dence can savings for other needs. It is critical that investors do not
make them excessively dependent on others. stray from the intended path to reach the desired goals.

QUIZ KEY
For questions 1-4
1st option: 1 point
The large-cap mutual fund you specifically
4 bought for your daughter’s higher Men are more focused on 2nd option: 2 points
8 Over a year ago, you bought some shares of Men are least likely to
accept their investing
generating higher return For questions 5-8 a company based on strong conviction.
education is generating impressive returns, on investment while
mistakes and make
1st option: 2 points Later, the company took high debt, foraying timely amends, and
but has done so by taking higher exposure women tend to be more 2nd option: 1 point into unrelated businesses and leading to a this can come at a huge
to the midcap segment. What will you do? goal-oriented. Being
�xated on returns may
If you score 14 or more, your investing acumen is fall in its share price. What do you do? costs. While investing,
� Continue and invest more in the fund as its return tilted towards the female brain.
� Exit the investment, cut your losses and move on. it is important to learn
profile is stronger than those of other funds. lead to wrong choices,
If you score up to 10, your money choices reflect male from one's errors and
straying away from the � Continue holding on to the shares hoping for a
� Shift money to a true-to-label large-cap fund that sensibilities. rework the approach,
right investing path. turnaround in the company.
is more suited to your goal. If you score between 10 and 14, your financial if required.
decisions exhibit a mix of male and female attributes.
GETTY IMAGES
 your
QA
18 The Economic Times Wealth March 6-12, 2018
I have a lump sum of `12
lakh. Please suggest
where I can invest this for
at least five years. I
already invest 15% of my Equity outperforms
monthly salary in mutual other asset classes for
funds via SIPs. investment horizons
of five years or more.
So, it is advisable that
you invest 50% of your surplus in large-cap
funds and divide the remaining 50% equally
among multi-cap and balanced funds.
Distribute your large-cap investments
between any two of the following funds:
ICICI Prudential Focused Bluechip Equity,
Reliance Top 200 and Franklin India
Bluechip. For multi-cap investment, you can
choose any two of these multi-cap funds:
Aditya Birla Sun Life Equity Fund, DSP
BlackRock Opportunities Fund and Franklin
India High Growth Companies Fund. The
balanced component can be
distributed equally in ICICI
Prudential Balanced
Advantage and Aditya Birla
Sun Life Balanced Advantage.
Naveen Kukreja
CEO and Co-founder,
Paisabazaar.com
I have been living in the UAE for
the past five years. I want to
invest in mutual funds in India to
build an education corpus for my You need to
child in 13 years and a assess the
retirement corpus in 20 years. I amount you
can invest `40,000 per month for want for each
these goals. Please suggest the
of these goals,
schemes to invest in. so that you
know how
much to save
for each. For your child’s education, you
may consider a 75:25 equity-debt mix with
HDFC Balanced (40%), Mirae Asset India
Opportunities (40%) and SBI Magnum MIP
Floater (20%) funds. For building the
retirement corpus, you may consider a
similar allocation with L&T India Prudence
(40%), Franklin India Prima Plus (30%), ICICI
Pru Focused Bluechip Equity (15%) and
DSP BR Income Opportunities (15%)
funds. Review your investments
annually and continue the SIPs
through the market highs and
lows.
C.R. Chandrasekar
CEO and Co-Founder,
FundsIndia.com
I had a demat account with HSBC
InvestDirect. The company folded operations
some years ago and I have been unable to
get in touch with it. How can I transfer my
stock holdings from HSBC InvestDirect’s It’s a very simple and straightforward process. You will have to visit
demat account to an active demat account.
the local registrar office of HSBC InvestDirect and submit the client-
master details of your currently active demat account. HSBC
InvestDirect will then transfer all your stock holdings to your active demat account. The above process
should take between four and seven working days.
& I have a surplus of `50
Our panel of experts will
answer questions related to
any aspect of personal
finance. If you have a query,
mail it to us right away.
QUESTION OF THE WEEK
I have invested `20 lakh in ICICI
Balanced Advantage Fund and
another `5 lakh in ICICI Prudential
Balanced Fund. Will the monthly
dividend credited into my account
be taxable at 10% now? Also, if I
exit the funds, will all my long-term
capital gains made over the years
be taxed at 10%?
The tax on dividend will be paid
by the mutual fund house and not
by you. The dividend income
continues to be exempt in your
hands. However, the 10% tax on
dividend will reduce the dividend
amount received by you. Any sale
of units of these mutual funds
after 1 April 2018 will attract
long-term capital gains tax, if
these have been held for more
than 12 months. But, remember,
you do not have to pay tax on
long-term capital gains from the
sale of these equity-oriented
mutual funds if the gains are less
than `1 lakh in a financial year.
Also, while calculating capital
gains, the cost of acquisition of
mutual fund units will be their
NAV as on 31 January 2018 or the
price at which they were bought,
whichever is higher. This will
bring down your capital
gains and, thus, your
tax liability.
Archit Gupta
CEO, ClearTax
Raj Khosla
Founder and Managing Director,
Mymoneymantra.com
lakh and want to invest
in mutual funds for more
than five years. I already
have a portfolio of We are assuming that you
diversified mutual funds are an aggressive
worth `1.5 crore. Please investor. At a time when
suggest where should I valuations are expensive,
invest this additional corporate bond yields
sum—equity savings,
have become attractive
debt or balanced funds?
and volatility is likely to
remain high, a portfolio of
dynamic equity funds and balanced funds can
help you get better risk-adjusted returns over
your chosen investment horizon. Dynamic
equity funds are dynamic asset allocation
funds, wherein the fund manager shifts the net
equity allocation between 30% and 100%,
depending on the market outlook. The net
equity allocation is managed using arbitrage
strategies or derivative hedges to ensure that
the funds continue to get taxation benefits as
pure equity funds. Dynamic equity funds tend
to reduce downside risk and give better risk-
adjusted returns, compared to pure equity
funds, over medium to long term. Some popular
funds in this category are Motilal Oswal MOSt
Focused Dynamic Equity Fund and Invesco
Dynamic Equity Fund.
Balanced funds generally allocate 65-75% to
equities and invest the rest in fixed income
instruments. These funds will reduce your
risk, offer favourable equity tax
treatment and allow you to
benefit from any upside in
equities.
Rahul Parikh
CEO, Bajaj Capital
My son and I have jointly purchased
a house. While I invested the long-
term capital gains from the sale of an
older property, my son took a bank
loan to fund the purchase. I am
retired, do not have taxable income,
and do not live in the newly No, your son
purchased flat. It’s occupied by my will not be able
son. If he pays rent to me (I own 50% to claim the
of the flat), will he be able to claim HRA benefit.
the HRA benefit?
Though you do
not stay in the
newly
purchased flat, it is jointly owned by you and
your son, and HRA exemption is not available if
the property is owned by the person seeking the
exemption. In fact, there have
been rulings which state that
exemption for HRA shall not
be allowed in such cases.
Amit Maheshwari
Partner, Ashok Maheshwary
& Associates
Ask our experts
Have a question for the experts?
etwealth@timesgroup.com

Time for an overhaul in the
Indian banking sector
While it translates to anxiety for customers, drastic remedial action can only be sparked by such shocks.
he problems in the Indian
T banking sector are not new.
When the government decided
to nationalise banks in 1969, it
created an environment of enti-
tlement among borrowers and employees.
It limited the autonomy of bankers and
also ended their accountability, while it
started to meddle with the decisions of the
banks to serve broader political interests.
The weaknesses created by this structure
enabled several opportunistic borrowers
to take advantage of the system, leading to
the piling up of NPAs. It is a wonder that
we do not have a full blown crisis on our
hands yet.
The banking system is built on the sim-
ple principle of credit, where one can use
other people’s money for a cost, provided
one returns it with interest. The bank
performs the role of being the primary
borrower of other people’s money, keeping
these as deposits. The system is robust only
if the credit at both levels is of good quality.
We are at a point where credit quality has
been seriously eroded in the system, and
are still considering gradual steps to stabi-
lise a crumbling edifice.
Consider the early years of nationalisa-
tion. The primary objectives were to spread
out geographically, and direct credit at in-
terest rates fixed by the government to sec-
tors that the government chose. Banks also
Credit quality has been
seriously eroded in the
system and we are taking
gradual steps to stabilise a
crumbling edifice.
funded the government substantially, a
good portion of deposits being pre-empted
for investment in government securities.
The large-scale branch expansion that
followed created the workforce that is un-
ionised and effectively stalls measures that
require the merging, closure or reorgani-
sation of banks. Since the earlier objectives
were motivated by welfare economics, dia-
logues with employee unions fail.
The directed lending system meant that
as long as banks lent to those that the gov-
ernment wanted to favour, they would be
bailed out. This attitude is well entrenched,
even if the beneficiaries have changed
from credit-starved farmers to cash-rich
crony capitalists. Before the 1990s, the
interest rates were regulated. Today,
banks are free to lend to whomsoever they
choose, at rates that their boards decide,
but accountability for bad debt is low. Even
as NPAs pile up, arguments to keep PSU
banks alive and capitalised are louder than
the more effective decision to simply wind
them up.
The Narasimham Committee in the
1990s recommended that there should be
three tiers for banks. Three to four large
banks that compete internationally; a few
banks that operate nationally, and several
smaller regional banks that operate with
special knowledge of the areas they work
in. It asked for interest rates to be free, gov-
ernment ownership to be phased out, com-
petition to be introduced, government bor-
rowings to be from the marketplace, and
bank boards to be revamped. Employee
unions opposed the recommendations and
they were only partially implemented.
But 1990s was also the time when the
economy opened up. Developmental finan-
cial institutions ceased to exist, and the
primary sources of public finance were
banks and stock markets. We have seen a
groundswell of crony capitalists that have
taken advantage of our weak financial sec-
tor. Public sector banks, cooperative banks
and regional rural banks have been prime
targets. Since it is easy to set up businesses
and raise money from the markets through
dubious disclosures, several low quality
financial planning
businesses simply accessed capital from
the system.
A weak lending system does not have the
wherewithal to hold back credit or monitor
and insist on repayment. Business plans
that are built with high ambition and a
primary dependence on favourable govern-
ment policy, fall apart when winds change.
The culture of accessing public funds
in the banking system and wasting it on
poor quality projects has been a problem
for a long time. As long as supporting politi-
cians and their constituencies also benefit
from the pay-off, the process continues.
But credit is a creature that grows. As
money is funnelled into a venture, it spi-
rals into larger amounts of loan, recycled
for various uses and returning to the sys-
tem as increased flow and demand. The
banking systems strength and fragility
stem from its ability to create money.
As one scam after another is uncovered,
where public funds that were lent to banks
have been sunk into NPAs, built up and
actively hidden by clever accounting and
provisioning norms, it becomes obvious
that a deep and intensive clean-up is need-
ed. Every time there is a scandal, too much
The Economic Times Wealth March 12-18, 2018 19
attention is focused on the details of the
drama and the blame game that follows.
There is too little energy spent on remedial
action, leading to a slow bleed of the affect-
ed organisation and the quickly spreading
rot. As they say, we cannot waste a crisis.
There are a few basic things to fix. First,
banks should not be owned and run by the
government if such a structure leads to
poor accountability for credit. Except SBI,
which is too big to fail, other PSU banks
should be wound down. Weak banks should
not be merged with strong banks to create
The culture of accessing
public funds in the banking
system and wasting it on
poor quality projects has
been a problem for a very
long time.
further weakness. Second, there should be
strict provisioning and disclosure norms
for NPAs so that the clean-up of books is
complete. Third, Asser Reconstruction
Companies should be built to take over the
debt, strengthen bankruptcy code, recover
whatever is possible and enable banks
to start afresh. Fourth, banks should be
enabled to come together as a consortium
not only to lend, but also to stand up to poor
quality borrowers, share information and
effectively present an alternate front of
lenders against exploitative borrowers.
The funds held by the banking system be-
long to the public who make deposits with
the faith that it will be safe. The on-lending
of this money is definitely risky, and, there-
fore, has to happen within a clearly defined
framework of sound lending principles,
accountability and disclosure, fine-tuned
by the market forces of pricing, choice and
competition.
What we have now is a muddled system,
where public funds can be directed towards
unviable and poor quality projects; manag-
ers and employees can circumvent the pro-
cess for personal gains; unscrupulous op-
erators can game the system; bad debts can
be hidden from public view, and everyone
can fight about why a failing bank has to
be kept alive. We cannot afford the drama
and damage of a bank that will go bust, but
maybe drastic remedial action needs that
kind of shock.
UMA SHASHIK ANT
CHAIRPER SON, CENTRE
FOR INVES TMENT
EDUC ATION AND
LE ARNING
 financial planning
20 The Economic Times Wealth March 12-18, 2018
Managing credit cards
Having fewer cards, automated bill payments and alerts can make it easier.
Nikita Singh is a 35-year old
software consultant based in
Mumbai. While she and her
family are conscious about the
need to spend within the limits
of their income, they love to in-
dulge in shopping sprees, movie
outings, eating out and taking
trips. Nikita also travels a lot for
work. Lately, she has been hav-
ing trouble managing her credit
cards. She has missed payments
on some of her cards, which
have gone into revolving credit.
In some cases, she has not been
using the cards at all and still
ends up paying the annual fee.
This is not only cumbersome,
but is adversely affecting her
credit score. Nikita realises that
she has to streamline her card
usage and take stock of all the
credit card services she has sub-
scribed to. How should she go
about doing this?
smart things to know
1
In a De�ned
Contribution
(DC) retirement
plan, the pension
amount or value
of retirement
bene�t is
not known
beforehand.
PAPER WORK
:: Complaining against
insurance companies
The Insurance Regulatory and
Development Authority of India
(IRDAI) has a mechanism in place for
registering policyholders’ complaints
against Insurance companies. Here’s
how to go about having your griev-
ance redressed.
GETTY IMAGES
Complain to the
insurance company
You can �rst approach
the Grievance Redressal
Of�cer (GRO) of the insur-
ance company by �ling
a written complaint. The GRO is
expected to resolve the complaint
in a reasonable period time. If
there is no satisfactory reply from
the GRO within 15 working days,
you can approach the IRDAI.
irst, Nikita has to address the one for work-related expenses should
F question of whether she needs
multiple credit cards, and, if
so, how many. Having more than one
suffice for her needs.
While streamlining the number
of cards she has is important, Nikita
Escalate to IRDAI
To escalate the complaint
to IRDAI, you can:
� Contact IRDAI’s Griev-
card is useful in an emergency, when should consider retaining older credit
a large payment has to be made or cards with good credit history since ance Redressal Cell on
the toll-free number 155255.
when a particular card cannot be used. they would have a positive impact on
� Send an e-mail to complaints@
Ideally, the cards should have different her credit score. The factors she needs
irdai.gov.in with any required
affiliations likeMastercard and visa to take into account in this respect
documentary proof attached.
include the acceptance of the card,
� Mail a written complaint to the
authorised limits, billing cycles and
Two credit cards, associated costs. Store- or product-
IRDAI Grievance Redressal Cell.
Gachibowli, Hyderabad 500032.
or three at most, for linked cards add very little value and � Register a complaint on IRDAI’s
may even encourage spending. These
personal use, and should be the first to be closed.
online portal, IGMS.
one for work-related Nikita should set up an online
payment process for her cards, so she Processing
expenses should suffice is able to pay the bills from her bank Complaints registered
for her needs. account using the internet or mobile with IRDAI through any
banking services. Having a place to of the above modes are
cards. It is also a good idea for Nikita keep credit card slips will make it easy forwarded to the insur-
to dedicate one card for official use so to access them for checking against ance company to issue a suitable
that there is no confusion on claiming card statements. She should also sign response to the policyholder within
reimbursement for payments made. up for online or mobile reminders the stipulated time.
Since her job involves a good deal of of due dates, online statements and
travel, using a card linked to an airline payment facility. These will allow her
for official use will let her get better to continue enjoying credit facilities Further escalation
deals and earn points. Two cards, or without being overwhelmed by cards. If you are not satis�ed
three at most, for personal use and with the resolution
offered by the insurance
The content on this page is courtesy Centre for Investment Education and Learning (CIEL). company, the complaint can be
Contributions by Girija Gadre, Arti Bhargava and Labdhi Mehta. escalated further to the Insurance
ombudsman if it falls within the
purview of the ombudsman.
DC retirement plans
:: Points to note
2 4
1. It is important to get a written
A de�ned amount acknowledgement or reference
is contributed by New pension number pertaining to the regis-
The value of the employee, the Decisions about products and tered complaint, to be used for
retirement corpus employer or both, allocation of funds to Provident further correspondence.
3 5
depends on over a period, various options like Funds are 2. Registering a complaint through
both the value and is invested. equity or debt, and examples the IGMS allows easy tracking of
of contributions The �nal corpus periodic reallocation of of DC its status till it is resolved.
made and returns determines funds, is usually taken Retirement
generated through the retirement by the contributing Plans.
their investment. bene�t. individual or party.
SMART STATS The Economic Times Wealth March 12-18, 2018

In This Section
MUTUAL FUNDS � P22
LOANS AND DEPOSITS � P25

ET WEALTH TOP 50 STOCKS ALTERNATE INVESTMENTS � P26

Every week we put about 3,000 stocks through four key filters and rate them on a mix of factors. The end result
of this is the listing of the top 50 stocks based on the composite rating to help ease your fortune hunt.
RANK PRICE ` GROWTH%* VA LUAT I O N R AT I O S RISK R AT I N G
Current Previous Stock Revenue Net Div Downside Bear No. of Consensus
Rank Rank Price Profit PE PB Yield PEG Risk Beta Analysts Rating

Vedanta 1 1 308 40.00 139.00 16.54 1.89 5.72 0.18 1.36 1.22 24 5.00
1 Fast growing stocks
ONGC 2 2 180 34.00 41.00 11.27 1.04 3.33 0.27 0.96 0.97 37 4.54
Top 5 stocks with the highest
PGCIL 3 3 195 34.00 39.00 13.72 2.05 3.00 0.34 0.72 0.57 38 4.53 expected revenue % growth
Petronet LNG 4 4 235 84.00 66.00 20.48 4.32 1.06 0.12 1.13 1.17 41 4.05 over the previous year
Apollo Tyres 5 5 260 23.00 381.00 12.05 1.82 1.18 0.04 1.34 1.97 25 4.48
Oberoi Realty 163
GAIL India 6 6 436 32.00 59.00 21.94 1.88 2.35 0.38 1.05 1.05 39 3.95
Petronet LNG 84
GSPL 7 9 200 50.00 90.00 20.90 2.53 0.75 0.23 1.31 1.14 31 3.93
Hindalco Industries 8 8 223 21.00 185.00 24.14 1.08 0.49 0.15 1.31 1.74 30 4.73 Engineers India 72
JK Cement 9 7 1,014 34.00 76.00 32.11 4.13 0.79 0.36 0.95 0.62 26 4.61 Motherson Sumi 58
NMDC 10 11 124 33.00 63.00 15.45 1.74 4.16 0.18 1.32 1.93 23 3.39 Systems

ACC 11 13 1,545 36.00 102.00 31.38 3.10 1.08 0.33 0.95 1.32 42 3.21 Havells India 58

CESC 12 12 984 23.00 51.00 18.94 1.29 1.03 0.20 1.37 1.83 24 4.42
VA Tech Wabag 13 14 478 25.00 91.00 25.51 2.63 0.84 0.28 1.36 1.55 22 4.59
2 Least expensive stocks
Hindustan Zinc 14 16 314 32.00 38.00 15.89 4.29 9.55 0.44 1.20 1.11 30 4.03
Top 5 stocks with the lowest
JSW Steel 15 17 289 30.00 58.00 19.76 3.07 0.78 0.34 1.33 1.55 35 4.14 price-earnings ratio
Mahindra & Mahindra 16 15 727 3.00 49.00 21.22 2.64 0.92 0.57 0.83 0.97 44 4.73
PTC India 6.53
Engineers India 17 19 162 72.00 47.00 33.30 3.86 1.85 0.60 1.21 1.06 18 4.50
IRB
Oberoi Realty 18 22 498 163.00 208.00 44.29 2.93 0.42 0.21 1.48 1.54 24 3.96 Infrastructure 10.59

Cyient 19 18 620 23.00 36.00 20.30 3.30 2.23 0.57 1.23 1.03 28 4.64 11.27
ONGC
Reliance Industries 20 21 911 40.00 38.00 17.99 2.04 0.62 0.54 0.97 1.88 41 4.10
Apollo Tyres 12.05
JK Lakshmi Cement 21 23 414 44.00 179.00 56.24 3.44 0.18 0.33 1.10 0.89 28 4.18
HT Media 12.07
Natco Pharma 22 27 716 31.00 71.00 25.66 7.56 1.94 0.40 1.76 1.10 19 4.53
Oil India 23 26 327 25.00 25.00 16.41 0.89 5.55 0.53 1.03 0.54 31 3.74
Cholamandalam Invest 24 25 1,425 51.00 64.00 30.94 5.15 0.46 0.52 1.20 1.30 25 4.60
3 Best PEGs
Jubilant Life Sciences 25 29 800 50.00 59.00 21.69 3.71 0.38 0.38 1.58 1.13 15 4.60 Top 5 stocks with the least
NTPC 26 24 165 21.00 19.00 12.68 1.39 3.00 0.57 0.75 0.78 33 4.45 price-earnings to growth ratio
InterGlobe Aviation 27 20 1,289 45.00 68.00 27.90 12.26 2.66 0.48 1.21 1.41 20 4.45 Petronet LNG Vedanta

Tata Power Co 28 30 80 13.00 147.00 34.12 1.63 1.64 0.18 1.03 1.43 25 3.24
BHEL 29 31 86 21.00 213.00 69.44 0.98 1.54 0.33 1.34 2.08 42 2.29 0.04 0.12 0.15 0.18 0.18

Exide Industries 30 32 209 27.00 36.00 22.16 3.53 1.17 0.63 1.09 1.05 34 4.32
IRB Infrastructure 31 37 216 31.00 29.00 10.59 1.44 3.72 0.36 1.44 2.45 21 3.90 Apollo Tyres Hindalco NMDC
Industries
Kalpataru Power 32 34 463 23.00 103.00 38.28 2.95 0.43 0.26 1.33 1.75 25 4.52
Dalmia Bharat 33 33 2,725 32.00 165.00 70.19 4.88 0.08 0.43 1.14 0.95 27 4.59
4 Income generators
PTC India 34 10 91 56.00 15.00 6.53 0.70 3.22 0.48 1.38 2.45 10 4.70
Cipla 35 35 578 24.00 105.00 46.24 3.72 0.34 0.43 1.04 0.89 43 3.95
Top 5 stocks with the highest
dividend yield.
HeidelbergCement 36 38 151 7.00 139.00 44.91 3.54 1.31 0.32 1.43 1.36 11 4.82
Hindustan Zinc 9.55
Cadila Healthcare 37 36 389 37.00 41.00 26.80 5.73 0.84 0.65 1.26 1.06 41 4.02
Vedanta 5.72
KEI Industries 38 40 358 52.00 88.00 28.25 5.88 0.17 0.32 1.63 2.07 12 4.75 Oil India 5.55
Bharat Electronics 39 41 147 43.00 28.00 24.81 4.68 2.27 0.63 1.23 1.72 25 4.08 NMDC 4.16
IRB 3.72
KEC International 40 43 411 28.00 66.00 34.45 6.62 0.40 0.51 1.53 1.25 32 4.53 Infrastructure
KNR Constructions 41 39 296 45.00 75.00 36.16 5.10 0.17 0.49 1.17 1.19 24 4.21
Motherson Sumi Systems 42 42 316 58.00 25.00 41.72 8.05 0.65 0.57 1.13 0.84 37 4.32
5 Least risky
HT Media 43 47 88 3.00 64.00 12.07 0.92 0.46 0.19 1.22 1.02 13 3.77
Top 5 stocks with the lowest
Dr Reddy's Lab 44 48 2,143 15.00 50.00 29.72 2.87 0.93 0.59 1.27 0.69 44 3.32 downside risk
Havells India 45 44 503 58.00 95.00 65.12 9.59 0.70 0.65 1.28 1.02 41 3.73 JK Cement
NTPC
Persistent Systems 46 49 834 15.00 25.00 20.65 3.15 1.20 0.86 1.01 0.12 37 4.35
UPL 47 45 711 18.00 36.00 20.90 4.93 1.00 0.57 1.12 1.50 29 4.52 0.72 0.75 0.83 0.95 0.95
Container Corp Of India 48 46 1,251 26.00 43.00 44.51 3.46 1.36 0.52 1.08 1.61 32 3.63
Arvind 49 NR 397 29.00 58.00 32.67 2.87 0.62 0.57 1.33 1.96 18 4.33 PGCIL Mahindra & ACC
Gujarat Gas 50 50 873 45.00 121.00 54.62 7.24 0.34 0.43 1.06 0.28 23 3.70 Mahindra

SEE DOWNSIDE RISK AND BEAR BETA COLUMNS

* THE FIGURES UNDER THIS HEAD ARE FOR EXPECTED GROWTH. NR: NOT IN THE RANKING. DATA AS ON 8 MAR 2018. SOURCE: BLOOMBERG IN THE ADJACENT TABLE.
 smart stats
22 The Economic Times Wealth March 12-18, 2018

ETW FUNDS 100

BEST FUNDS TO BUILD YOUR PORTFOLIO
LAGGARDS & LEADERS
Taking a long-term view of fund returns, here is a list of 10
funds in each category—five leaders (worth investing) and
five laggards (that may be a drag on your portfolio).

LAGGARDS LEADERS
ET Wealth collaborates with Value Research to identify the top-performing
100 funds across 10 categories. Equity funds and equity-oriented hybrid Equity: Large-cap 5-year returns
funds are ranked on 3-year returns while debt-oriented hybrid and income 10.03 20.3
funds are ranked on 1-year returns. HDFC Large Cap Fund ICICI Prudential Value Discovery Fund

VALUATION RATIOS 10.44 20

Value Research Net Assets Expense
Fund Rating (` Cr) 3-Month 6-Month 1-Year 3-Year 5-Year Ratio Taurus Bonanza Fund Mirae Asset India Equity Fund
10.69 19.82
EQUITY: LARGE�CAP 10.7% HSBC Dynamic Fund Kotak Select Focus Fund
JM Core 11 Fund ���� 35.53 -3.69 -4.11 17.69 10.72 17.52 — THE 3�YEAR
RETURN OF
10.9 18.12
Mirae Asset India Equity Fund ����� 6,612.19 -2.75 0.78 17.16 10.24 20 2.39
JM CORE 11 LIC MF Index-Sensex Plan JM Multi Strategy Fund
Kotak Select Focus Fund ����� 17,842.85 -2.96 -1.33 13.62 9.9 19.82 1.97
IS THE HIGH� 11.09 18.1
Invesco India Growth Fund ����� 299.80 -0.41 4.12 22.36 8.82 18.1 2.54 EST IN ITS
JM Multi Strategy Fund ���� 152.88 -3.13 -5.36 14.85 8.65 18.12 — CATEGORY. IDBI Nifty Index Fund Invesco India Growth Fund
SBI Bluechip Fund ����� 18,151.49 -1.94 -0.14 13.25 8.04 17.16 1.97
ICICI Prudential Focused Bluechip Equity Fund ���� 16,739.15 -2.53 2.04 15.03 7.68 16.06 2.17
Kotak Classic Equity Regular Plan ���� 160.09 -1.26 1.5 18.42 7.34 14.79 2.62 Equity: Multi-cap 5-year returns
Reliance Top 200 Fund - Retail Plan ���� 8,108.81 -2.67 3.61 17.73 7.23 17.3 1.98
Invesco India Dynamic Equity Fund ���� 835.91 -2.26 -1.74 14.43 7.13 14.78 2.33 10.12 22.76
Edelweiss Equity Opportunities Fund ���� 273.42 -0.76 4.15 20.71 6.96 16.21 2.19 LIC MF Equity Fund Tata Equity PE Fund
Aditya Birla Sun Life Top 100 Fund ���� 4,050.35 -3.17 -2.1 11.16 6.89 16.84 2.31 12.95 22.06
Aditya Birla Sun Life Frontline Equity Fund ���� 20,530.67 -2.35 -1.45 12.02 6.88 16.35 2.13 Aditya Birla Sun Life International Equity Fund Invesco India Contra Fund
Motilal Oswal MOSt Focused 25 Fund ���� 1,017.18 -1.33 -2.21 15.36 6.77 — 2.5
13.03 21.63
DSP BlackRock Focus 25 Fund ���� 3,111.27 -1.69 -1.43 12.24 6.25 15.75 2.45
Essel Equity Fund Franklin India High Growth Companies
Franklin India Flexi Cap Fund ���� 3,010.56 -2.8 1.41 11.66 6.25 17.17 2.32
����
13.05 21.44
Invesco India Business Leaders Fund 139.69 0.04 2.89 15.12 6.1 15.18 2.63
UTI Dividend Yield Fund Aditya Birla Sun Life Advantage Fund
ICICI Prudential Value Discovery Fund ���� 17,421.63 -0.28 3.33 9.57 5.64 20.3 2.13
Reliance Vision Fund ���� 3,720.65 -8.33 -0.97 14.59 5 16.86 2.02 14.15 20.99
Franklin India Life Stage Fund Aditya Birla Sun Life Equity Fund
EQUITY: MULTI�CAP 13.9% of Funds 20s
Motilal Oswal MOSt Focused Multicap 35 Fund ����� 11,938.34 -1.84 -2.09 20.5 13.95 — 2.2 THE 3�YEAR
Tata Equity PE Fund ���� 2,712.82 -0.92 0.51 19.32 13.02 22.76 2.19 RETURN OF
MOTILAL Equity: Mid-cap 3-year returns
Reliance ETF Junior BeES ���� 264.19 -4.51 -0.58 18.05 12.87 19.72 0.19 OS WAL MOST
ICICI Prudential Nifty Next 50 Index Fund ���� 170.10 -4.61 -0.96 17.64 12.6 19.4 0.81 FOCUS. IS THE 3.24 16.45
Principal Growth Fund ���� 611.27 -4.4 3.83 23.24 11.94 20.65 2.54 HIGHEST IN
ITS CATEGORY. Baroda Pioneer Midcap Fund Mirae Asset Emerging Bluechip Fund
IDBI Nifty Junior Index Fund ���� 50.79 -4.8 -1.69 16.04 11.67 18.52 1.97
����
5.06 16.41
DSP BlackRock Opportunities Fund 4,876.24 -4.98 0.3 14.79 11.42 19.22 2.49
Aditya Birla Sun Life Dividend Yield Plus Fund L&T Midcap Fund
Invesco India Contra Fund ���� 1,017.89 -1.28 8.24 23.41 11.35 22.06 2.26
Tata Retirement Savings Fund ���� 389.34 -2.96 -1.35 20.8 11.34 18.87 2.71 5.93 16.04
Parag Parikh Long Term Equity Fund ���� 1,024.16 1 7.42 19.53 11.26 — 2.15 IDBI Diversified Equity Fund Aditya Birla Sun Life Pure Value Fund
SBI Magnum Multicap Fund ����� 4,435.99 -2.61 0.73 16.31 11.25 20.14 2.02 6.21 14.7
HDFC Capital Builder Fund ���� 2,541.22 -1.3 7.93 20.94 11.23 19.79 2.37 DHFL Pramerica Midcap Opportunities Fund Canara Robeco Emerging Equities
Aditya Birla Sun Life Equity Fund ���� 8,734.63 -2.12 -1.16 13.64 10.87 20.99 2.24 6.38 14.25
Aditya Birla Sun Life Special Situations Fund ���� 181.08 -2.17 0.83 17.84 10.86 20.54 2.64 Motilal Oswal MOSt Focused Midcap 30 Fund Principal Emerging Bluechip Fund
Aditya Birla Sun Life Advantage Fund ���� 5,965.70 -6.76 -6.54 13.53 9.85 21.44 2.3
SBI Magnum Multiplier Fund ���� 2,284.18 -3.8 3.09 15.91 8.74 19.42 2.08
Franklin India High Growth Companies Fund ���� 8,023.30 -6.16 3.87 12.74 7.68 21.63 2.34
Equity: Small-cap 3-year returns
EQUITY: MID�CAP 16.5%
Mirae Asset Emerging Bluechip Fund ����� 5,301.61 -5.04 0.57 18.19 16.45 29.6 2.46 THE 3�YEAR 7.91 23.35
RETURN OF Union Small Cap Fund SBI Small & Midcap Fund
L&T Midcap Fund ����� 2,221.91 -3.95 2.12 24.84 16.41 28.8 2.17 MIRAE AS�
Aditya Birla Sun Life Pure Value Fund ���� 3,078.94 -3.67 3.28 24.37 16.04 28.62 2.35 SET EMERG. 11.73 21.78
BLUECHIP IS Sundaram S.M.I.L.E. Fund L&T Emerging Businesses Fund
Canara Robeco Emerging Equities Fund ���� 3,207.94 -2.43 2.02 23.05 14.7 28.93 2.29
THE HIGH�
Principal Emerging Bluechip Fund ���� 1,668.55 -3.98 1.56 22.94 14.25 26.46 2.37 EST IN ITS 13.94 20.61
CATEGORY.
Escorts High Yield Equity Fund ���� 8.17 -4.46 -0.29 10.7 14.23 23.19 — HSBC Midcap Equity Fund Reliance Small Cap Fund
HDFC Mid-Cap Opportunities Fund ���� 20,278.15 -3.07 3.67 17.23 13.5 25.59 2.26 14.56 19.11
L&T India Value Fund ���� 7,404.43 -2.43 0.4 16.26 13.49 24.81 2 Franklin India Smaller Companies Fund HDFC Small Cap Fund
Edelweiss Mid and Small Cap Fund ���� 640.18 -1.65 8.34 29.39 12.64 26.68 2.28 17.04 17.84
DSP BlackRock Micro Cap Fund Aditya Birla Sun Life Small & Midcap
EQUITY: SMALL�CAP
SBI Small & Midcap Fund ����� 907.87 -3.77 17.87 44.15 23.35 35.29 2.26
L&T Emerging Businesses Fund
Franklin India Smaller Companies Fund
����
����
4,030.87
7,280.11
-0.91
-2.8
7.81
4.55
35.47
21.24
21.78
14.56
—
29.22
2.1
2.42
Hybrid: Equity-oriented 3-year returns
EQUITY: TAX�SAVING 16.8% 7.02 19.53
Motilal Oswal MOSt Focused Long Term Fund ����� 837.53 1.01 1.46 26.2 16.83 — 2.64 THE 3�YEAR Principal Equity Savings Fund Tata Retirement Savings Fund
Principal Tax Savings Fund ���� 397.90 -4.57 3.68 22.79 11.77 20.58 2.6 RETURN OF 7.19 18.49
MOTILAL
L&T Tax Advantage Fund ���� 3,032.61 -1.52 2.66 21.11 11.73 18.92 2.06
OSWAL MOST Tata Regular Saving Equity Fund HDFC Balanced Fund
Tata India Tax Savings Fund ����� 1,187.77 -4.52 -0.71 19.38 11.11 19.91 2.37 IS THE HIGH� 9.17 17.94
IDFC Tax Advantage Fund ���� 1,012.20 -1.11 5.25 27.97 11.02 20.72 2.26 EST IN ITS
CATEGORY. L&T Equity Savings Fund L&T India Prudence Fund
Aditya Birla Sun Life Tax Relief 96 ����� 4,949.08 -1.63 6.34 24.49 10.6 21.9 2.31 9.41 17.58
Aditya Birla Sun Life Tax Savings Fund ���� 27.29 -1.83 6.01 24 10.33 18.37 2.7 DHFL Pramerica Equity Income Fund ICICI Prudential Balanced Fund
DSP BlackRock Tax Saver Fund ���� 3,982.50 -4.41 -1.39 13.08 10.14 19.49 2.5
9.69 17.2
Aditya Birla Sun Life Tax Plan ���� 695.33 -1.78 6.12 24.1 10.08 21.11 2.6
LIC MF Balanced Fund Principal Balanced Fund
Axis Long Term Equity Fund ���� 16,516.68 0 2.36 22.36 7.48 22.55 1.97
ANNUALISED RETURNS IN % AS ON 7 MAR 2018.
 smart
The Economic Times Wealth March 12-18, 2018 23

ETW FUNDS 100 Top 5 SIPs

Value Research
Fund Rating
Net Assets
(` Cr) 3-Month
VALUATION RATIOS
6-Month 1-Year 3-Year 5-Year
Expense
Ratio 1 Top 5 equity schemes based
HYBRID: EQUITY�ORIENTED 12.1% on 10-year SIP returns
Principal Balanced Fund ���� 1,018.49 -2.07 3.54 21.85 12.07 17.2 2.54 THE 3�YEAR
Tata Retirement Savings Fund ����� 501.57 -2.23 -0.88 17.02 10.34 19.53 2.69 RETURN OF DSP BlackRock Micro Cap Fund
PRINCIPAL
ICICI Prudential Balanced Fund ���� 27,839.98 -1.72 3.59 11.51 9.69 17.58 2.19
BALANCED
25.81
HDFC Balanced Fund ���� 20,080.76 -1.29 2.25 14.58 9.58 18.49 1.95 FUND IS THE Canara Robeco Emerging Equities Fund
L&T India Prudence Fund ���� 9,578.00 -1.39 0.13 13.26 8.79 17.94 1.99 HIGHEST IN
ITS CATEGORY. 24.60
SBI Magnum Balanced Fund ���� 21,024.27 -2.66 3.17 14.87 7.94 16.8 1.96
Franklin India Smaller Companies Fund
HYBRID: DEBT�ORIENTED CONSERVATIVE
24.21
BOI AXA Regular Return Fund ���� 188.82 0.2 2.61 10.48 8.55 9.96 2
UTI MIS Advantage Fund ���� 1,200.44 -0.48 0.56 8.44 7.56 10.79 1.6
HDFC Mid-Cap Opportunities Fund
SBI Magnum Monthly Income Plan ����� 344.78 0.23 2.92 7.54 8.48 10.6 2.27 22.59
ICICI Prudential Regular Income Fund ���� 2,144.48 1.4 2.68 6.81 8.43 8.7 1.35 L&T Midcap Fund
SBI Magnum Monthly Income Plan ���� 1,638.73 -1.88 -1.46 5.13 7.71 9.55 1.88
22.43
DEBT: INCOME 7.6% SIP: SYSTEMATIC % ANNUALISED
���� INVESTMENT PLAN RETURNS
Axis Regular Savings Fund 1,223.51 0.76 2.04 7.58 7.99 8.84 1 THE 1�YEAR
RETURN OF AS ON 7 MAR 2018
Franklin India Income Builder Fund ���� 903.02 1.06 2.22 7.25 7.9 9.02 0.92
AXIS REGU�
Top 5 MIPs
UTI Medium Term Fund ���� 187.17 0.65 1.83 6.93 — — 1.24
SBI Regular Savings Fund
Invesco India Medium Term Bond Fund
�����
����
1,614.21
1,290.36
0.42
1.32
1.26
2.78
6.88
6.85
8.3
7.78
9.66
8.1
1.2
0.9
LAR SAVINGS
FUND IS THE
HIGHEST IN
2 Top 5 MIP schemes based on
����
ITS CATEGORY.
Kotak Corporate Bond Fund 1,213.89 1.23 2.54 6.6 7.92 8.3 0.54
3-year SWP returns
Aditya Birla Sun Life Treasury Optimizer Fund ���� 7,644.39 0.37 1.09 6.53 8.2 9.45 0.89
ICICI Prudential Banking & PSU Debt Fund ���� 6,819.34 0.43 0.77 6.51 8.5 8.96 — SBI Magnum Monthly Income Plan
BNP Paribas Corporate Bond Fund ���� 58.90 0.66 1.71 6.42 7.77 8.31 0.76 8.46
Kotak Medium Term Fund ���� 4,816.97 0.41 1.7 6.42 8.49 — 1.7 Aditya Birla Sun Life MIP II Savings 5 Plan
HDFC Medium Term Opportunities Fund ���� 13,250.82 0.41 1.34 6.31 8.14 8.66 0.36
8.18
DHFL Pramerica Medium Term Income Fund ���� 481.60 0.07 0.44 6.01 7.97 — 1.03
SBI Magnum Income Fund ���� 2,165.73 -0.47 -0.22 5.72 7.4 7.69 1.45 Kotak Monthly Income Plan
8.02
DEBT: SHORT�TERM 8%
Franklin India Short Term Income Plan ����� 9,412.32 1.12 2.51 8.01 8.32 9.23 1.57 THE 1�YEAR
SBI Magnum Monthly Income Plan
Franklin India Low Duration Fund ����� 5,692.09 1.4 2.98 7.8 9.05 9.43 0.78 RETURN OF 7.99
FRANKLIN
Baroda Pioneer Short Term Bond Fund ����� 361.31 1.03 2.4 6.7 8.27 8.53 1.3 Aditya Birla Sun Life Monthly Income
INDIA SHORT
DHFL Pramerica Short Maturity Fund ���� 1,657.47 0.67 1.65 6.53 7.97 8.6 1.3 TERM IS THE
7.97
Reliance Medium Term Fund ���� 11,794.09 1.15 2.49 6.48 7.99 8.38 0.51 HIGHEST IN
ITS CATEGORY. SWP: SYSTEMATIC % ANNUALISED RETURNS
UTI Banking & PSU Debt Fund ���� 1,197.15 0.68 2.03 6.37 8.59 — 0.3
WITHDR AWAL PLAN AS ON 7 MAR 2018
HDFC Short Term Opportunities Fund ���� 10,174.20 0.97 2.15 6.28 7.87 8.56 0.37
HDFC Regular Savings Fund ���� 5,433.30 0.77 1.75 5.95 8.28 8.74 1.59

DEBT: ULTRA SHORT�TERM 3 Multi-cap

BOI AXA Treasury Advantage Fund ����� 1,003.77 1.55 3.26 7.46 8.49 8.77 0.55 Cash holdings
JM Floater Long Term Fund ���� 240.33 1.72 3.45 7.36 8.17 8.36 — 7.5%
L&T Floating Rate Fund ����� 701.90 1.57 3.15 7.34 8.26 8.48 0.68 THE 1�YEAR
RETURN OF 33.95
Baroda Pioneer Treasury Advantage Fund ���� 1,820.61 1.42 2.93 7.11 8.44 8.81 0.81
BOI AXA
Indiabulls Ultra Short Term Fund ���� 1,735.10 1.45 2.94 6.81 8.01 8.45 0.67 27.69
TREASURY
Kotak Low Duration Fund ���� 5,649.02 1.31 2.83 6.81 8.21 8.33 1 ADVANTAGE
DHFL Pramerica Low Duration Fund ���� 1,025.38 1.4 2.86 6.74 8.28 8.71 1.13 IS THE HIGH�
EST IN ITS
DEBT: DYNAMIC BOND CATEGORY.
ICICI Prudential Long Term Fund ���� 3,489.53 -0.13 -0.78 6.79 8.19 10.95 1.36 9.38
7.76 7.54
Baroda Pioneer Dynamic Bond Fund ���� 20.81 -0.64 -0.09 4.95 7.36 8.59 1.62
UTI Dynamic Bond Fund ���� 1,538.82 -1.33 -1.73 4.13 7.65 9.11 1.58 EXPENSE AS ON 31 JAN 2018
RETURNS AS ON 7 MAR 2018
ALL EQUITY FUNDS SORTED ON 3�YEAR RETURNS; DEBT FUNDS ASSETS AS ON 31 JAN 2018 ICICI Pru- Axis Franklin Sundaram Franklin
RANKED ON 1�YEAR RETURNS RATING AS ON 28 FEB 2018 dential Multicap India Equity India Op-
Dynamic Fund High Multiplier portuni-
Did not find your fund here? Plan Growth Fund ties Fund
Log on to www.wealth.economictimes.com for an exhaustive list. Co. Fund
% AS ON 31 JAN 2018

Methodology EQUITIES (figures over the past one year)

The Top 100 includes only those funds that have a 5- or
4-star rating from Value Research. The rating is determined
Large-cap: Mostly invested in large-cap companies.
FUND 4 Debt: Dynamic bond
Multi-cap: Mostly invested in large- and mid-cap
by subtracting a fund’s risk score from its return score.
The result is assigned stars according to the following
distribution:
companies.
Mid-cap: Mostly invested in mid-cap companies.
RAISER 1.30
1.33 1.34

����� Top 10% Small-cap: Mostly invested in small-cap companies.

21,000
1.01
���� Next 22.5% Tax planning: Offer tax rebate under Section 80C.
(Not covered
��� Middle 35% in ETW Funds International: More than 65% of assets invested abroad. 0.69
��� Next 22.5% 100 listing) Income: Average maturity varies according to objective. CRORE
� � Bottom 10% Gilt: Medium- and long-term; invest in gilt securities. Was the decline in the
Fixed-income funds less than 18 months old and equity funds Equity-oriented: Average equity exposure more asset under manage-
less than three years old have been excluded. This ensures than 60%.
that all the funds have existed long enough to be tracked for
ment of mutual funds
Debt-oriented aggressive: Average equity exposure Quantum Taurus Axis IIFL ICICI Pru
consistency of performance. Given the focus on long-term between 25-60%.
in February, mainly Dynamic Dynamic Dynamic Dynamic Dynamic
investing, liquid funds, short-term funds and FMPs are not due to the outflows Bond Income Bond Bond Bond
part of the list. For the same reason, we have considered only Debt-oriented conservative: Average equity exposure
less than 25%. from debt segment, Fund Fund Fund Fund Fund
the growth option of funds that reinvest returns instead of
offering dividends that increase the NAV of funds. Arbitrage: Seek arbitrage opportunities between equity according to data from
% AS ON 31 JAN 2018
Despite these rigorous filters, the list includes 2/3 funds of and derivatives. industry body AMFI.
% EXPENSE RATIO IS CHARGED ANNUALLY.
each category to maximise choice from the best funds. Asset allocation: Invest fully in equity or debt as per METHODOLOGY OF TOP 100 FUNDS ON
The fund categories are: market conditions. WWW.WEALTH.ECONOMICTIMES.COM
 mutual funds
24 The Economic Times Wealth March 12-18, 2018

ICICI PRU DYNAMIC FUND

HEALTHY LONG-TERM TRACK RECORD

ET Wealth collaborates with Value Research to analyse top mutual funds. We examine the key fundamentals
of the fund, its portfolio and performance to help you make an informed investment decision.

HOW HAS THE FUND PERFORMED? BASIC WHERE DOES THE

With a 10-year return of 12.91%, the fund has outperformed the
category (11.01%) and the index (8.87%) by a good margin.
FACTS FUND INVEST?
DATE OF LAUNCH
Growth of `10,000 vis-a-vis FUND 31 DEC 2002 Portfolio Asset Fund
category and benchmark `33,676 CATEGORY Allocation Style Box
EQUITY Equity 66.05% Growth Blend Value
CATEGORY Large-cap

Small Medium Large

CAPITALISATION
TYPE
`28,420 77.98%
MULTI�CAP Mid-cap
AVERAGE AUM 17.26%
`10,814.79 CR Small-cap4.76%
Debt & Cash
BENCHMARK 33.95% INVESTMENT STYLE
NIFTY 50 TOTAL RETURN
The fund is currently tilted
in favour of large-caps.
WHAT IT
MAR 2008 MAR 2011
The fund has outperformed both the index and
MAR 2015 MAR 2018
AS ON 6 MAR 2018 COSTS Top 5 Sectors In Portfolio (%)
Financial 14.05
the category average over the past decade. NAVs*
GROWTH OPTION Energy 12.01
`255
Technology 6.43
DIVIDEND OPTION
Annualised performance (%) `23
Automobile 5.89
FUND INDEX CATEGORY AVER AGE MINIMUM INVESTMENT
`5,000 FMCG 5.23
MINIMUM SIP AMOUNT
17.88 17.90 `1,000 The fund's contrarian bias is
15.88 17.12 reflected in its sector bets.
13.37 EXPENSE RATIO �%�
12.54 2.28 Top 5 Stocks In Portfolio (%)
9.08 9.39 EXIT LOAD
ICICI Bank 5.61
6.46 5.98 For units in excess of 10%
3.74 3.13
of the investment,1% will Infosys 4.23
be charged for redemption
6 MONTH 1 YEAR 3 YEAR 5 YEAR within 365 days. NTPC 3.84
AS ON 6 MAR 2018
The fund has marginally underperformed *AS ON 6 MAR 2018
ITC 3.78
peers over 3- and 5-year periods.
Larsen &
Toubro 3.70

The fund has raised

Yearly performance (%) exposure to large-caps.
FUND INDEX CATEGORY AVER AGE

How risky is it?

48.07
Fund Category Index
37.05 32.90 30.27 38.28
28.15 Standard Deviation 12.62 14.25 13.66

Sharpe Ratio 0.58 0.60 0.35

12.50
4.39 5.09
-1.41 -3.01 2.34 FUND Mean Return 10.33 11.44 7.68

2014 2015 2016 2017

MANAGER BASED ON 3�YEAR PERFORMANCE. DATA AS ON 28 FEB 2018

The fund is less volatile compared

SANKARAN NAREN
The fund's performance has been TENURE: 6 YEARS
to many of its peers.
inconsistent in recent years. EDUCATION: B.TECH, MBA
WHEREVER NOT SPECIFIED, DATA AS ON 31 JAN 2018. SOURCE: VALUE RESEARCH

Should ?
This fund tweaks equity
exposure aggressively based
no market-cap bias, it is currently
tilted towards large-caps, having
the portfolio. Having grown in
size, the portfolio is now more
a cushion during a market
downturn. The fund is designed

You ? ?? ?
on market valuations and also cut exposure to mid-caps over diversified. The fund’s value for investors willing to stay
switches within equities, taking a past few years. It has cut equity bias often results in bouts of invested across market cycles,

Buy contrarian approach to sector and

stock selection. While it carries
exposure sharply, with its bonds
allocation now forming 30% of
underperformance, as exhibited
in recent years, but it acts as
and its long-term track record
provides comfort
 loans and
The Economic Times Wealth March 12-18, 2018 25

LOANS & DEPOSITS

ET WEALTH collaborates with ETIG to provide a comprehensive ready reckoner of loans and �xed-income
instruments. Don’t miss the information on investments for senior citizens and a simpli�ed EMI calculator.

Top five bank FDs

Top banks for 2 years
TENURE: 1 YEAR
Lakshmi Vilas Bank
Interest rate (%)
compounded qtrly
7.20
What `10,000
will grow to
10,740
BANK BANK NAME MCLR �%� WITH EFFECT FROM
RBL Bank
City Union Bank
Karnataka Bank
7.15
7.10
7.10
10,734
10,729
10,729
MCLR State Bank Of India
Union Bank Of India
8.25
8.25
1 March 2018
1 March 2018
DCB Bank 7.00 10,719 Allahabad Bank 8.45 1 DECEMBER 2017
TENURE: 2 YEARS
Marginal Cost of funds-based Lending
Rate (MCLR) is the new benchmark lending Axis Bank 8.45 17 February 2018
DCB Bank 7.25 11,545
IDFC Bank 7.25 11,545 rate designated by RBI and will replace the HDFC Bank 8.45 7 March 2018
Lakshmi Vilas Bank 7.20 11,534 base rate for new borrowers.
RBL Bank 7.20 11,534
City Union Bank 7.10 11,511 Top banks for 6 months Top banks for 3 years
TENURE: 3 YEARS
BANK NAME MCLR �%� WITH EFFECT FROM
DCB Bank 7.25 12,405 BANK NAME MCLR �%� WITH EFFECT FROM
IDFC Bank 7.20 12,387 State Bank Of India 8.00 1 MARCH 2018
Union Bank Of India 8.30 1 March 2018
Lakshmi Vilas Bank 7.15 12,369
Union Bank Of India 8.05 1 MARCH 2018
City Union Bank 7.10 12,351 State Bank Of India 8.35 1 March 2018
RBL Bank 7.10 12,351 Punjab & Sind Bank 8.10 7 MARCH 2018
Indian Bank 8.45 12 February 2018
TENURE: 5 YEARS Allahabad Bank 8.15 1 DECEMBER 2017
Punjab National Bank 8.45 1 March 2018
DCB Bank 7.25 14,323 Bank Of Baroda * 8.15 7 MARCH 2018
IDFC Bank 7.20 14,287 Allahabad Bank 8.50 1 December 2017
Lakshmi Vilas Bank 7.15 14,252
RBL Bank
Karur Vysya Bank
7.10
7.00
14,217
14,148
Top banks for 1 year
BANK NAME MCLR �%� WITH EFFECT FROM Top banks for 5 years
State Bank Of India 8.15 1 March 2018 BANK NAME MCLR �%� WITH EFFECT FROM
Top five senior citizen bank FDs Union Bank Of India 8.20 1 March 2018 Punjab National Bank 8.60 1 March 2018
Interest rate (%) What `10,000
TENURE: 1 YEAR compounded qtrly will grow to
8.25
Allahabad Bank 1 December 2017 Indian Bank 8.70 12 February 2018
Lakshmi Vilas Bank 7.80 10,803
RBL Bank 7.65 10,787 Indian Bank 8.25 12 February 2018 Karur Vysya Bank 9.00 7 March 2018
Karnataka Bank 7.60 10,782 Bank Of Baroda * 8.30 7 March 2018
DCB Bank 7.50 10,771
Indusind Bank 7.50 10,771 * STRATEGIC PREMIUM OF 0.25%. # BUSINESS STRATEGY SPREAD OF 0.30%. FOR ANY CHANGES IN MCLR RATES,
PLEASE EMAIL US AT ETIGDB@TIMESGROUP.COM
TENURE: 2 YEARS
Lakshmi Vilas Bank 7.80 11,671
DCB Bank 7.75 11,659
IDFC Bank 7.75 11,659
Your EMI for a loan Of `1 lakh
RBL Bank 7.70 11,648 TENURE 5 YEARS 10 YEARS 15 YEARS 20 YEARS 25 YEARS
Karnataka Bank 7.60 11,625
@ 8% 2,028 1,213 956 836 772
TENURE: 3 YEARS
@ 10% 2,125 1,322 1,075 965 909
DCB Bank 7.75 12,589
Lakshmi Vilas Bank 7.75 12,589 @ 12% 2,224 1,435 1,200 1,101 1,053
IDFC Bank 7.70 12,571 @ 15% 2,379 1,613 1,400 1,317 1,281
RBL Bank 7.60 12,534
FIGURES ARE IN `. USE THIS CALCULATOR TO CHECK YOUR LOAN AFFORDABILITY.
Karur Vysya Bank 7.50 12,497 FOR EXAMPLE, A `5 LAKH LOAN AT 12% FOR 10 YEARS WILL TR ANSLATE INTO AN EMI OF `1,435 X 5 = `7,175

TENURE: 5 YEARS
DCB Bank 7.75 14,678 Post office deposits Interest (%)
Minimum
invt. (`)
Maximum investment (`) Features
Tax
benefits
Lakshmi Vilas Bank 7.75 14,678
IDFC Bank 7.70 14,642 Senior Citizens’ Saving Scheme 8.3 1,000 15 lakh 5-year tenure, minimum age 60 80C
RBL Bank 7.60 14,571 Sukanya Samriddhi Account 8.1 1,000 1.5 lakh per year One account per girl child 80C
Karur Vysya Bank 7.50 14,499
Public Provident Fund 7.6 500 1.5 lakh per year 15-year term, tax-free returns 80C

Top five tax-saving bank FDs 5-year NSC VIII Issue 7.6 100 No limit No TDS 80C
Interest What `10,000 Time deposit 6.6-7.4 200 No limit Available in 1, 2, 3, 5 years 80C #
TENURE: 5 YEARS AND ABOVE rate (%) will grow to
DCB Bank 7.25 14,323 Post Office Monthly Income Single 4.5 lakh 5-year tenure, monthly returns Nil
7.3 1,500
IDFC Bank 7.20 14,287 Scheme Joint 9 lakh 5-year tenure, monthly returns Nil
Lakshmi Vilas Bank 7.15 14,252
Kisan Vikas Patra 7.3 1,000 No limit Can be encashed after 2.5 years. Nil
RBL Bank 7.10 14,217
Recurring deposits 6.9 10 No limit 5-year tenure Nil
Karur Vysya Bank 7.00 14,148
Saving account 4 50 No limit `10,000 interest tax free Nil
ALL DATA SOURCED FROM ECONOMIC TIMES INTELLIGENCE GROUP
�ETIGDATABASE@TIMESGROUP.COM� DATA AS ON 8 FEB 2018 # BENEFIT AVAILABLE ONLY FOR 5�YEAR DEPOSIT
 non-traditional investments
26 The Economic Times Wealth March 12-18, 2018

ALTERNATIVE INVESTMENT
RETURNS MONITOR
The scope and attractiveness of alternative investments is increasing. Here’s a weekly tracker of returns from such investments. But don’t
compare these with returns from traditional investments since the proportion and purpose of alternative investments is vastly different.

Diamond Index Precious Metals Index Wine Index Coin Index

117.55 7 MAR 2017 1,732.73 341.12 7 MAR 2017 353.87 17,190
118.84 1,612.7 7 MAR 2018
16,850 7 MAR 2018
7 MAR 2018 7 MAR 2017 7 MAR 2018 7 MAR 2017

CHANGE
� I WEEK 0.49% I WEEK 0.79% I WEEK -0.1% I WEEK 7.1%
� I YEAR 1.1% I YEAR 7.44% I YEAR 3.74% I YEAR 2.02%
Overall Diamond Index is based on The S&P GSCI Precious Metals Index The Liv-ex Fine Wine 50 Index tracks The Krugerrand Coin index represents
actual transactions from 20 different comprises gold (91.33%) & silver (8.67%) daily price movement of the most the denomination of a 22 carat gold
market players and reflects price & provides a benchmark for investment heavily traded commodities in the wine bullion coin weighing one troy ounce
movements in the global diamond performance in the precious metals market. It includes only the 10 most that is listed for trading on the
market. The index is updated daily. commodity markets. It is updated daily. recent vintages and is updated daily. Johannesburg Stock Exchange.

PENNY STOCKS UPDATE

Penny stocks as a recommended non-traditional investment? Not exactly. ET WEALTH
neither has the expertise nor does it recommend investing in such stocks. But since the
relatively ‘low’ cost of investment attracts some investors to penny stocks, we provide
a weekly snapshot of this most volatile and uncertain type of stock investing.

Top Price Gainers Top Volume Gainers

MARKET 1-WEEK (%) 1-MTH (%) 1-MONTH AVG 1-MONTH AVG MKT CAP MARKET 1-WEEK (%) 1-MTH (%) 1-MTH AVG 1-MONTH AVG MKT CAP
STOCK PRICE (`) CHANGE CHANGE VOL (LAKH) VOL CHG (%) (`CR) STOCK PRICE (`) CHANGE CHANGE VOL (LAKH) VOL CHG (%) (`CR)

Zenith Birla (India) 1.85 20.13 143.42 0.38 978.61 24.29 Alchemist Realty 1.99 -17.77 -35.81 2.25 2,871.09 14.75
FCS Software Solutions 0.46 17.95 100.00 2.47 -74.60 78.64 J.Taparia Projects 7.70 -4.82 -4.82 0.22 2,331.95 12.47
SAL Steel 7.92 -0.25 28.99 0.64 70.05 67.30 Monotype India 2.20 0.00 -42.86 0.86 1,809.40 154.68
Sezal Glass 4.90 -2.00 22.50 0.07 19.09 16.44 Titan Securities 5.10 -4.14 -12.22 0.79 992.74 12.76
Dhanada Corporation 4.68 9.86 21.24 0.01 -28.72 26.16 Zenith Birla (India) 1.85 20.13 143.42 0.38 978.61 24.29
Transgene Biotek 2.59 3.60 18.81 0.18 -38.86 19.62 Mangalam Ind. Finance 1.35 0.00 -20.59 3.70 865.61 129.82
Bharati Defence 6.95 4.20 18.40 0.51 -23.01 34.96 Shantanu Sheorey 4.11 -1.91 -42.84 0.39 860.00 14.34
SE Power 9.67 7.80 17.21 0.02 -19.92 39.27 Shyam Century Ferrous 9.78 -4.68 -5.96 2.66 336.15 217.31
Unishire Urban Infra 9.26 0.54 16.77 2.10 -13.10 22.56 Avance Technologies 1.12 -5.88 -7.44 3.73 307.59 22.20
GV Films 0.77 0.00 16.67 2.14 -16.67 28.38 Ferro Alloys Corp 8.41 -10.91 -29.80 4.46 294.46 155.84

Top Price Losers Top Volume Losers

Bil Energy Systems 0.91 -16.51 -53.33 2.30 -81.18 19.24 Gujarat Hy-Spin 8.66 -13.40 -19.89 3.76 -100.00 14.51
Pincon Lifestyle 6.52 -8.56 -50.04 1.26 -39.96 19.72 Indosolar 6.89 -13.22 -25.11 1.01 -89.59 256.36
Sunstar Realty Dev. 6.06 -6.48 -49.92 2.72 -87.59 143.14 Stampede Capital 9.62 -18.47 -32.25 2.04 -89.01 275.42
Virtual Global Education 1.05 -17.32 -46.43 7.33 -48.13 44.49 IKF Technologies 0.64 -1.54 -43.86 1.76 -87.82 27.56
Urja Global 4.68 -18.18 -46.02 8.35 -76.05 237.37 Sunstar Realty Devel. 6.06 -6.48 -49.92 2.72 -87.59 143.14
IKF Technologies 0.64 -1.54 -43.86 1.76 -87.82 27.56 Cranes Softwares Intern. 3.48 -11.90 -24.68 1.02 -82.90 40.98
Sterling International 1.30 -6.47 -41.18 1.30 -34.21 35.28 Bil Energy Systems 0.91 -16.51 -53.33 2.30 -81.18 19.24
KSK Energy Ventures 8.94 -18.36 -38.13 3.50 -42.55 379.05 Lanco Infratech 1.14 -10.24 -19.72 15.97 -78.77 377.81
Electrosteel Steels 2.79 -18.18 -37.02 67.90 41.17 672.18 Nu Tek India 0.83 -16.16 -24.55 1.13 -78.76 12.83
Alchemist Realty 1.99 -17.77 -35.81 2.25 2,871.09 14.75 Prakash Constrowell 6.24 -10.09 -9.30 1.40 -76.89 78.44

THE STOCKS HAVE BEEN SELECTED USING THE FOLLOWING FILTERS: PRICE LESS THAN `10, ONE�MONTH AVERAGE VOLUME GREATER THAN OR EQUAL TO 1 LAKH
AND MARKET�CAPITALISATION GREATER THAN OR EQUAL TO `10 CRORE. DATA AS ON 7 MARCH 2018. SOURCE: ETIG DATABASE AND BLOOMBERG.
 pick of the
The Economic Times Wealth March 12-18, 2018 27

Gateway: Will ride rise in trade volumes

The current bullishness in the counter is mostly due to its cheaper valuation compared to peers.
he operating performance of logistics company missioned CFS facility at Krishnapatnam Port in Andhra

T Gateway Distriparks has been under pressure

for the past few years and it reported lacklustre
results for the third quarter of 2017-18 as well. Its
standalone revenue declined 3% year on year (y-
o-y), falling from `83.19 crore to `80.37 crore, and net profit
tanked 34%, falling from `15.57 crore a year ago to `10.24
crore. Though Gateway Distriparks has been able to maintain
Pradesh is also doing reasonably well and is now operating
at Ebitda breakeven levels of around 50% capacity. It is now
operating around 1,500 TEUs per month and the volumes are
expected to improve in the coming months. Ramping-up of op-
erations in Viramgram, Gujarat, helped Gateway Distriparks
to partly offset the negative impact from other centres in the
third quarter. The company will set up a full-fledged ICD
Fundamentals

Revenue (` cr)
EBITDA (` cr)
ACTUAL

2015-16
387.91
101.89
2016-17
393.40
91.09
CONSENSUS

2017-18
402.92
200.96
ESTIMATE
2018-19
439.63
178.69
Net profit (` cr) 123.23 74.36 78.85 111.46
its market share, the fall in volumes have hit the company. there by acquiring additional land for around `100 crore.
EPS (`) 11.34 6.84 8.03 10.49
The intermittent rise in India’s trade Gateway Distriparks is also taking
imbalance—imports growing faster steps to improve its segmental perfor-
than exports—is another factor that Analysts’ views mance. Its Gateway Rail Freight joint Valuation PBV PE
DIVIDEND
YIELD (%)
is adversely impacting logistics op- venture recently hiked rates by `1,000 Gateway Distriparks 2.14 19.83 3.50
erators such as Gateway Distriparks. 1 per TEU. However, the hike will impact Container Corporation of India 3.45 27.88 1.10
The company’s share price has Sell just 50% of its customers as the compa- Aegis Logistics 8.89 46.56 0.43
underperformed benchmark indi- ny is into long-term agreements with
Allcargo Logistics 2.08 18.41 1.24
ces such as the Sensex (see Relative the others. Snowman Logistics, its
VRL Logistics 6.19 41.49 0.99
performance chart). This underper-
4 16 listed subsidiary, has also shown bet-
formance has brought down valua- ter performance in the third quarter,
tions because of which analysts are
Hold Buy
reporting a small net profit of `27 lakh, Latest brokerage calls TARGET
getting bullish on this counter. The compared to a loss of `2.02 crore for the RECO DATE RESEARCH HOUSE ADVICE PRICE (`)

recent decision by the promoters to same period a year ago. 5 Mar ’18 Kotak Securities Buy 270
increase their stake in the company 20 Feb ’18 Phillip Securities Buy 280
has also added to analysts’ bullish- Selection Methodology: We pick the 19 Feb ’18 ICICI Securities Buy 300
ness. They believe that Gateway stock that has shown the maximum in- 16 Feb ’18 Asian Mkt. Securities Buy 270
Distriparks will be on a growth track crease in ‘consensus analyst rating’ in 16 Feb ’18 Axis Capital Limited Buy 252
once there is sustainable recovery in Huge underperformance has made valuations the past one month. Consensus rating
attractive. Steps to improve performance across
India’s export-import volumes.
Gateway Distriparks’ blended
segments and improving Ebitda margin has made
Gateway Distriparks anlaysts’ favourite.
is arrived at by averaging all analyst
recommendations after attributing
Relative performance 115.40
MARKET PRICE: `199.50
Ebitda margin from container weights to each of them (5 for strong
100
freight stations (CFS) has improved buy, 4 for buy, 3 for hold, 2 for sell and
a bit on quarter-on-quarter basis to `2,226 per TEU. (It is still 1 for strong sell) and any improvement in consensus analyst
way below the company’s peak rate of around `4,000 per TEU rating indicates that the analysts are getting more bullish 78.95
during 2012-13). Twenty-foot equivalent unit or TEU is used on the stock. To make sure that we pick only companies with
to measure a ship’s cargo carrying capacity. Ebitda stands for decent analyst coverage, this search is restricted to stocks
earnings before interest, tax, depreciation and amortisation. that are covered by at least 10 analysts. You can see similar
Despite rising competition, the company’s Faridabad in- consensus analyst rating changes during the past week in 28 FEB 2017 SENSEX GATEWAY 28 FEB 2018
land container depot (ICD) continues to do well and has in- the ETW 50 table. PERFORMANCE OF GATEWAY COMPARED WITH THE SENSEX. STOCK PRICE AND INDEX
VALUES NORMALISED TO A BASE OF 100. SOURCE: ETIG DATABASE & BLOOMBERG
creased its volume to 3,000 TEUs per month. Its recently com- —Narendra Nathan

WHAT EXPERTS ADVISE

BUY
RESEARCH MARKET 1-YEAR TARGET POTENTIAL
STOCK ADVICE COMMENT
HOUSE PRICE* (`) PRICE (`) UPSIDE (%)

Maintain 'buy'. Due to growth visibility, it’s an ideal case for re-rating. With 14% market share, it is
Swaraj Engines HDFC Securities Buy 1,915 2,468 29 one of the biggest tractor engine makers. Once capex cycle is over, it may come out with buybacks.
Initiate 'buy'. Trading at 22% discount to peers. The valuation gap will narrow among Akzo and
Akzo Nobel Kotak Securities Buy 1,770 2,250 27 other players and this will be one of the key triggers for the stock.
Initiate 'buy'. Unlike peers, Ipca completed exhaustive remediation work, including re-modelling of
Ipca Laboratories Prabhudas Lilladher Buy 666 837 26 facilities. So expect re-approval of the facilities by the US FDA in 2018-19.
Initiate 'buy'. Recent stock price weakness, led by weak inflows and earnings miss in the December
Bharat Electronics J.P. Morgan Overweight 148 185 25 quarter makes it a buying opportunity.
Initiate 'buy'. Despite the jump in market-cap over the past decade, there is upside potential as it’s a
Aegis Logistics Motilal Oswal Buy 245 303 24 structural growth story with a clear focus, execution in a niche market and planned expansions.
Initiate 'buy'. Increasing demand for Indian shrimp in the US and EU, commissioning new capacities,
Apex Frozen Foods Reliance Securities Buy 664 818 23 improved product mix and high operating leverage will be key growth drivers for the company.

SELL *MARKET PRICE AS ON 8 MAR

RESEARCH MARKET 1-YEAR TARGET POTENTIAL
STOCK ADVICE COMMENT
HOUSE PRICE* (`) PRICE (`) DOWNSIDE (%)

Downgrade to 'reduce'. Downgraded earnings per share estimate on account of ongoing challenges
Sun Pharma IIFL Reduce 515 500 3 in the US business, risk to Levulan’s profits and continued investments in the specialty business.
 tax optimiser
28 The Economic Times Wealth March 12-18, 2018

No HRA, but rent can save tax

Sudhir Kaushik of Taxspanner.com tells readers how they can optimise
their tax by rejigging their income and investments.

ramod K. is a medical

P consultant and gets

a consolidated sal-
ary of `1 lakh a month
without perks or al-
lowances. His employer deducts
10% tax at source (TDS), though
he will have to pay an additional
tax of `64,000 if he does not claim
the deductions available to him.
Taxspanner estimates that his
tax can be reduced to less than
`80,000 if he claims exemption for
house rent, if his company offers Income from employer
the NPS benefit, and he invests INCOME EXISTING SUGGESTED ACTIONS
under Section 80C to save tax. HEAD (`) (`) TO TAKE
Pramod does not get HRA,
Consolidated salary 12,00,000 10,91,000 Gets
but under Section 80GG, he
House rent allowance 0 0 consolidated
can claim exemption for it. The salary.
exemption is the lowest of the fol- Special allowance 0 0
lowing: `5,000 per month, 25% of Transport allowance 0 0
net taxable income (after deduc- Salary structure
Medical allowance 0 0 does not have
tions), and actual rent paid, less
Conveyance any tax-free
10% of net taxable income. The 0 0
reimbursements perks or
first option applies in his case. allowances.
Telephone reimbursements 0 0
An exemption of `60,000 can save
him `18,500 in tax. Newspaper and magazines 0 0
It is Pramod’s first job and he Contribution to NPS under 10% of salary
has not started investing under 0 1,09,000
Section 80CCD(2d) put in NPS is tax-
Section 80C. He should open a TOTAL 12,00,000 12,00,000 deductible.
PPF account and invest in it,
besides starting SIPs of `5,000 in
an ELSS fund. More importantly, INCOME FROM OTHER SOURCES
he should buy a term insurance
Interest income 15,000 0
cover of `1 crore. If he uses the en-
tire `1.5 lakh limit under Section Long-term capital gains 0 0
80C, his tax will be slashed by Rental income 0 0
almost `30,600. Next, he should TOTAL 15,000 0
ask his company to put 10% of his
All �gures are in `
salary in the NPS under Section
80CCD(2d). This will reduce his
tax by `22,500. Another `10,300
can be saved if Pramod invests
`50,000 in the NPS on his own
under Section 80CCD(1b).

Tax-saving investments
INCOME CURRENT SUGGESTED
HEAD (`) (`) Open PPF account and
start investing.
PPF 0 80,000
Start SIP of `5,000 in
K. Pramod’s tax
ELSS 0 60,000 ELSS fund. TOTAL TAX SAVED WRITE
TAX ON TAX ON
TO US
Life insurance

NPS under Sec 80CCD(1b)

0

0
10,000

50,000
Buy term insurance
cover of `1 crore.
TAX ON
SALARY
OTHER
INCOME

CURRENT
CAPITAL
GAINS
`1,00,013 FOR HELP
TOTAL admissible 0 2,00,000
Open NPS account and PER YEAR Paying too much
start SIP of `5,000. tax? Write to us
`1,73,967 `4,635 Nil at etwealth@
Other deductions `1,78,602 TAX RATIO
(Total tax as % of annual income)
timesgroup.com with
‘Optimise my tax’
INCOME CURRENT SUGGESTED as the subject. Our
HEAD (`) (`) experts will tell you
SUGGESTED EXISTING
(`)
SUGGESTED
(`)
HRA 0 60,000 how to reduce your
Can claim exemption Nil Nil tax by rejigging your
Medical insurance under even if not getting HRA.
`78,589 14.7% 6.5% pay and investments.
12,000 12,000
Section 80D `78,589
TOTAL admissible 12,000 72,000 Avoid tax-inefficient FDs. Shift to debt funds to cut tax.
 mutual
The Economic Times Wealth March 12-18, 2018 29

Increase equity exposure PORTFOLIO

DOCTOR
and defer retirement date
B. Sudheendra invests `1.25 lakh a month for multiple goals. Here’s what the doctor advises:
PORTFOLIO BUYING A CAR CONSTRUCTING HOUSE DAUGHTER’S EDUCATION
CHECK�UP
GOALS

18 months 3 years 12 years

Investing in a mix of PRESENT COST: `15 lakh PRESENT COST: `36 lakh CURRENT NEED: `8 lakh
debt, equity and FUTURE COST: `16.5 lakh FUTURE COST: `45 lakh CORPUS REQUIRED: `25 lakh
gold funds.

Equity exposure is SON’S EDUCATION DAUGHTER’S MARRIAGE SON’S MARRIAGE RETIREMENT

less than 25%. Needs 15 months 19 years 23 years 15 years
to hike it to 40%. PRESENT COST: `8 lakh PRESENT COST: `30 lakh PRESENT COST: `30 lakh PRESENT COST: `75,000 (pm)
Also holds stocks. FUTURE COST: `33.4 lakh FUTURE COST: `1.3 crore FUTURE COST: `1.76 crore FUTURE COST: `4.3 crore
Should avoid direct
investment. INVESTOR’S EXISTING PORTFOLIO

ARINDAM
Money idling in AMOUNT EXISTING NEW SIP
FUND NAME RECOMMENDED ACTION
INVESTED �`� SIP �`� �`�

AR
bank account can
earn more with Opt for sweep-in account where excess money
Savings bank account 10,00,000 0 flows into FDs. 0
sweep-in account.
ICICI Pru Savings   59,869 0 0
Too much allocated Not many investors
ICICI Pru Flexible Income Plan  1,14,515 0 Ultra short-term funds and money market 0
to ultra short-term
debt funds. ICICI Pru Money Market   9,547 0
schemes give very low returns. Switch to a
0
know whether they have
short-term income fund, such as Franklin India
61,808 0 Short Term Income Plan, for better returns. 0 invested in the right
Increase SIPs by 10% ICICI Pru Regular Gold Savings  
every year in line MOSt Ultra Short-term Bond 2,57,841 0 0 funds and if their fund
with rise in income.
ICICI Pru Balanced Advantage   6,36,199 32,500 Continue SIPs in this fund. 32,500 portfolio is on track. The
May have to defer Kotak Banking and PSU Debt   1,97,166 0 Shift to Kotak Medium Term Fund. Portfolio Doctor assesses
retirement goal by
4-5 years.
Franklin India Ultra Short Bond
8,07,422 32,500
Stop SIP and switch to Franklin Short Term
32,500 the health of the fund
-Super Inst  Income Plan.
portfolio, examines the
Note from SBI Pharma 86,724 22,500 Reduce SIP and switch to SBI Bluechip Fund. 7,000
the doctor schemes and their
Aditya Birla SL Equity Savings 2,80,876 22,500 Hold but reduce SIP in fund. 4,000
Avoid investing in ICICI Pru Focused Bluechip
suitability with regard to
gold funds. Returns 3,35,420 0 Hold this outperformer and start SIP of `5,000. 5,000
Equity   the goals and, if required,
are very poor.
Kotak Treasury Advantage   2,61,702 0
Switch to Kotak Select Focus and start SIP of
`5,000. 5,000 recommends corrective
Review investments
and rebalance at Start SIP of `4,000 in a large-cap equity measures. The advice
Stocks portfolio 9,00,000 0 diversified fund. 4,000
least once a year. given is based on the
Start SIP of `40,000 after house goal has been
Reduce risk when MOSt Focused Multicap 35 1,33,742 0 met. Increase SIP by 10% every year. 40,000 performance of the
goal is near so that
you don’t miss the Provident Fund 25,00,000 15,000
Continue contributing and don't withdraw
15,000 funds, the risk profile of
prematurely.
target.
TOTAL The goals can be reached using the mutual the investor as well as his
`76,42,831 `1,25,000 funds marked in the same colour.
`1,45,000
financial goals.

ELSS funds can help reach all goals

PORTFOLIOS
ANALYSED BY

RAJ KHOSLA,
Tamal Guha saves for his son’s education and marriage, and his retirement. Here’s what the doctor advises: Managing Director
and Dounder,
SON’S EDUCATION SON’S MARRIAGE RETIREMENT PORTFOLIO MyMoneyMantra
GOALS

16 months 26 years 28 years CHECK-UP

PRESENT COST: `8 lakh PRESENT COST: `10 lakh CURRENT NEED: `75,000 (per month) All funds in portfolio WRITE
are ELSS schemes.
FUTURE COST: `36.75 lakh FUTURE COST: `74 lakh CORPUS REQUIRED: `9.6 crore TO US
AMOUNT EXISTING
Plans to increase SIPs FOR HELP
FUND NAME RECOMMENDED ACTION by 7% every year. If you want your portfolio examined,
INVESTED �`� SIPs �`�
write to etwealth@timesgroup.com
Reliance Tax Saver 42,845 3,500 Continue SIP and increase by 7% every year. Early start means all with “Portfolio Doctor” as the subject.
IDFC Tax Advantage 28,210 0 goals can be reached. Mention the following information:
Hold these well-performing ELSS funds for the � Names of the funds you hold.
Axis Long Term Equity 20,406 0 Reduce risk as goals
long term. � Current value of the investment.
Franklin India Tax Shield 16,864 0 approach by cutting � If you have SIPs running in any
HDFC Tax Saver 51,224 3,000 Continue SIPs in this outperforming fund. equity exposure. of them.
� The financial goals for which you
Aditya Birla SL Tax Savings 30,624 3,500 To reach goal, increase SIP by 20% every year. invested.
For long-term goals,
Continue investing the minimum amount in this � How much you need for each
PPF 1,20,000 500* review progress at financial goal.
scheme.
least once a year. � How far away is each goal.
TOTAL `3,10,173 `10,040 *Per year
 career strategy
30 The Economic Times Wealth March 12-18, 2018
A
ccording to Maslow’s
hierarchy, your
needs should be
satisfied sequentially.
First come the sur-
vival needs of food, water and shel-
ter, followed by emotional needs
of safety, love, belonging to a group
and self-esteem. Going to work
earns you money for basic needs
and surrounds you with people,
thus partially providing for emo-
tional needs. The next category con-
stitutes mental and creative needs
for knowledge, beauty and achieving
one’s full potential. Only a well-
planned lifestyle with adequate
personal time can fulfil these.
Working round the clock causes
stress, poor health and burnout.
Instead, try to achieve a better
work-life balance. Here’s how.
Choose three
Randi Zuckerberg – the sibling
of Facebook’s founder – says that
one can pick only three things
out of work, sleep, family, friends
and fitness. It is important to know what
really matters to you and to prioritise it.
Define the parameters of success in each
area you choose and consciously distrib-
ute time among multiple goals. Learn to
say 'no' to people and activities that dis-
tract you from your priorities.
Draw your clock
Use a diary to track how you spend the
hours of your workday as well as on a holi-
day. Put those hours in different buckets –
work, family, chores, fun – and categorise
each task into urgent/not urgent and im-
portant/not important. Draw a circle with
different segments representing each
bucket. This is your current life. Now
draw new circles to represent your ideal
workday and holiday and mark out your
desired segments. Work on moving from
your current to your ideal clock. Focus on
eliminating unimportant tasks and com-
pleting important tasks on time.
Look for change
Do not assume that your lifestyle has no
scope for improvement. Ask yourself what
changes to your routine would improve
your balance. Can you schedule client
meetings in off-peak hours, so you spend
less time in traffic? Can you order grocer-
ies online instead of spending an hour
in the market? Create habits that ensure
good nutrition, sleep and exercise. Build
support systems within your family and
team that help you out when you need it
and enable better time utilisation.
Small steps
Do not make more than two small changes
a week and give yourself time to settle into
10
TIPS FOR
BETTER
WORK-LIFE 2
BALANCE
Reorganise your routine to establish
a balance and boost productivity,
says Devashish Chakravarty.
new routines. Sudden major changes die
out quickly. Start with baby steps. Keep
at it consistently for three weeks and you
have formed a new habit.
Mind and body
If you are constantly stressed, your work-
life balance needs fixing. The best way
to de-stress is to focus on your body and
mind. Daily physical exercise triggers
the release of endorphins, which relieve
stress. Similarly, meditation, music, a
hobby or enjoyable companionship can
enable your mind to disengage from
stressful thoughts, at least temporarily.
Unplug
Designate a certain amount of time
to ‘unplug’ yourself from your mobile
phone and the Internet. These two either
keep you hooked to work or to useless ac-
tivities that prevent you from important
activities like getting enough rest, spend-
ing quality time with people you connect
with, and engaging in things that make
you happy and help you relax.
Take 5
To maximise productivity, add both
short and long breaks to your routine.
Take five-minute breaks every couple of
hours at work or while switching from
one task to another. This helps you shift
focus and increases your output. Every
few months, take a vacation of at least five
working days, clubbed with weekends, to
rejuvenate yourself.
Understand face-time
Face-time at work means the time you
IMAGESBAZAAR
spend in direct interactions with or in
sight of your manager. As a junior person,
schedule daily or weekly interactions
with your manager. Use this to give an
update on your work and receive instruc-
tions. This allows you greater freedom for
the rest of the week. If you are the boss,
minimise the requirement of face-time
for your team members to improve their
work-life balance and productivity.
Don't multi-task
Say ‘no’ to multi-tasking. This can dra-
matically reduce stress and improve out-
comes at work and in your personal life.
4 DENIED DEPRESSION
Draw a rigid boundary around anything
that you are currently doing. If you are
having dinner with your family switch
off all distractions and be there for them.
If you are in a team meeting do not look
at your cell phone to read e-mails. If your
mind is constantly wandering, maybe you
should not be on the current task.
One hour a day
Finally, respect yourself. Set aside an
hour every day for yourself and respect
that time as much as you would respect
your manager’s time. Use that hour to
build a habit of your choice. This is your
daily down time which is sacrosanct, ex-
cept during emergencies. This time will
help you recharge and restore balance.
DEVASHISH CHAKR AVART Y
THE WRITER IS DIREC TOR
AT HE ADHONCHOS.COM AND
QUEZX.COM
1
CAUSES OF
IMBALANCE
SOCIETAL
EXPECTATIONS
Society sets unrealistic
targets for us, which causes
unnecessary stress. As a result,
you might experience distress
on getting average marks in
an exam, not earning enough
or failing to fulfil family
obligations. To avoid this, learn
to distinguish between social
conditioning and your priorities.
EXTREME AMBITION
Single-minded ambition
regarding work comes from
internal triggers or from a
need for social recognition and
success. However, it inevitably
leads to hiding failures, avoiding
people and ultimately becoming
cynical and unhappy. Substitute
it with moderated ambition
aimed at achieving multiple
parallel work and life goals.
DESPERATE FOR
3 PERFECTION
Social media platforms like
Instagram and Facebook
show us a false image of the
glamorous lives that other
people lead. Their lives seem full
of impeccable fashion, family,
friends, food and fun. If you are
seeking total perfection in any
area of life, know that it takes
time away from other things,
leading to greater imbalance and
unhappiness.
Depression and burnout
are socially unacceptable
weaknesses. As a result of this
taboo, these issues are ignored
and rarely shared with others.
This leads to rapid deterioration
without any attempt to address
the causes. Recognise them
as mental ailments in both
yourself and loved ones, and
seek therapy or make lifestyle
changes as needed.
5 ONE SIZE FITS ALL
In a crowded and competitive
world, uniform rules are applied
to everyone for the sake of
'fairness'. In schools everyone
studies all subjects at the same
pace. Fixed policies at work
leave little room for you to
control your life. Try to choose
a career and employers that fit
your life, not someone else’s.
 your feedback
The Economic Times Wealth March 12-18, 2018 31

Readers’ response, online and in print, to ETWealth stories has been enlightening. We pick
some that add information and perspective to our articles from previous issues.
This refers to the column, ‘Unexpected There are certain drawbacks to
lessons offered by Buffett’s bets’. The main renting a home. House owners are
difference between Warren Buffett and
retail investors like me is that he has direct
NPA worries often unwilling to rent out property
to retired and senior citizens. Paying
access to the management and promoters
of companies whose shares he holds. He
remain for banks rent every month will not make you
the owner of an asset. However, the
can talk to the movers and shakers and find This is with reference to the cover story, same amount spent on an EMI
out what is actually going on. By virtue of ‘The best gifts for your loved ones’. All makes you the owner of a property
holding a substantial number of shares in the stocks mentioned in the section, and helps you get tax benefits too.
a company, he has the authority to seek and ‘Stocks to buy for your grandkids’, were There is always a possibility that
get all information. Unfortunately, retail good. However, one should keep NPAs in property prices will appreciate. Your
investors can only guess the real state of af- mind when it comes to banking stocks. rent will increase in tandem.
fairs based on nuggets of information that Hopefully, private banks have less of a True Indian
are available in the public domain. problem than public sector bank which
Bsrahmd resorted to reckless lending. The article, ‘5 handy websites
Ram to bookmark’, was informative.
I agree with the column, ‘You don’t have to Creating disposable e-mail ad-
own a house to enjoy living in it’. It’s the dresses is the way to go for random
same with a car. Owning a car and driving website sign-ups but if you really
can be stressful, especially in big cities. It An ideal portfolio should have a mix of Instead, invest in financial instruments. want to receive and read the newslet-
makes much more sense to hire a cab. The stocks, real estate, gold, fixed income, etc. If chosen carefully, they can yield huge ters and still avoid getting them in
choices are many. Investment in real estate and, to some returns, far outweighing those from real es- your personal e-mail box, you could
Vikas extent, in gold acts as a hedge against tate. As someone once said, all kinds of goods try the SpamBox app. It lets you cre-
inflation. Stocks are not an option for the and services are required in society, so buy ate unlimited e-mail boxes that can
My parents have their own house and risk-averse and fixed income options are the shares of the best and the second best be retained forever. You can create
though it is an asset, it is also a huge liabil- not insulated against inflation. company in every sector, and you cannot go separate e-mail boxes for different
ity for the elderly. Taking care of property A. Rathi wrong. The returns can be phenomenal. Our topics and get all the interesting
can be tedious, especially when you are old. obsession with real estate has to end. newsletters organised.
Cyboy It makes a lot of sense to not own property. S.R. Ketepalle E-mail

Indian women earn 20% less Gender pay gap increases

with work experience

than their male counterparts

MSI data suggests that the gender pay gap in
India increases with work experience. While
men with 0-2 years of experience, earned 7.8%
higher median wages than women, this gap
While the gender pay gap is narrowing, there’s still a long increased to 25% for those with experience of
11 or more years.
way to go for women at the workplace, reveals a survey by
Monster Salary Index (MSI) and Women of India Inc. `113 `577
`433
`104 `341
The gender Men earned a `183 `289
pay gap has median gross `185
narrowed from hourly salary
24.8% of `231.
in 2016 to Women 0-2 3-5 6-10 11+
20% earned only years years years years
at present. `184.8.

69% employees Biggest challenge faced by women

of India Inc. feel
that gender 41% Inadequate travel and transport facilities
parity needs to
be a top priority.
33% Attitude of clients, vendors, colleagues

Why do women work? 32% Societal perception of women who work long hours
32% Not being considered for top management roles
29% Not being given responsibilities or promotions
36% 27% 18% 18%
In order to Why is this I need the I work 27% Getting paid less for the same amount of work
contribute question money as for my SOURCE: DATA FROM WAGEINDICATOR FOUNDATION. THE DATA
to family asked to I support personal
income. women? myself. fulfilment.
WAS COLLECTED BETWEEN JANUARY 2015 AND DECEMBER 2017
FROM 20,994 RESPONDENTS.
20% Lack of proper childcare facilities
The Economic Times Wealth is available at an invitation price of `8/issue. To book your copy, contact your newspaper vendor or call 011 - 39898090; Email: crm.delhi@timesgroup.com; SMS ETWS to 58888

The Economic Times Wealth, published by Bennett, Coleman & Co. Ltd. exercises due care and caution in collecting the data before publication. In spite
of this, if any omission, inaccuracy or printing errors occur with regard to the data contained in this newspaper, The Economic Times Wealth will not be
held responsible or liable. The content hereof does not constitute any form of advice, recommendation or arrangement by the newspaper. The Eco-
nomic Times Wealth will not be liable for any direct or indirect losses caused because of readers’ reliance on the same in making any specific or other
decisions. Readers are recommended to make appropriate enquiries and seek appropriate advice before making any specific or other decisions.
PUBLISHED FOR THE PROPRIETORS, Bennett, Coleman & Co. Ltd. by Rajeev Yadav at Times House, 7, Bahadur Shah Zafar Marg, New Delhi-110
002, Phone: 011-23322000, Fax: 011-23323346 and printed by him at The Times of India Press, 13 & 15/1, Site IV, Industrial Area, Sahibabad, UP.
Regd. Office: Dr Dadabhai Naoroji Road, Mumbai 400 001. EDITOR: Babar Zaidi (Responsible for selection of news under PRB Act). © Reproduc-
tion in whole or in part without written permission of the publisher is prohibited. All rights reserved.
RNI NO. DELENG/2011/37994. MADE IN NEW DELHI VOLUME 08 NO. 11
 and finally
32 The Economic Times Wealth March 12-18, 2018

Now, a home loan

FINANCIAL FABLES

Beware of sweet talkers

with interest rate The sly Fox flattered the Crow and made him part with his money.
By Nilanjana Chakraborty and Anirban Bora
When the Crow got a large bonus, the sly you
Of course oubt
In fact, this is quite

linked to t-bills
apparent from your
Fox hatched a plan to grab some of it. on’t d
do, sir! I d ou are �nancial status. You
Y
Hello, I see you have this at all. t bird earn well, have built
en
surplus cash. Buying an an intellig ood a good nest in a prime
g
insurance plan is the best and have ut location, and have
n o w ledge abo
Citibank intends to win customers from local banks way to use it. I can see what
you’re getting at.
k
investmen
t deployed money
across different asset
options.
with the variable interest rate mortgage product. No, thanks! I know
perfectly well
classes. Who would
know where to invest
where to invest this money
my money. better
than you?

The Fox had succeeded.

Good, now
d give me the
st sign here... an premium
Ju
Go on… d here.
here... an cheque.
GETTY IMAGES

Everybody says you

have the knack of
spotting investment
opportunities.
by Joel Rebello Citi’s latest mortgage product is similar
to such products it already has in the US, Flattered by the praise, the Crow decided
to buy the life insurance policy.

C
itibank, India’s most profitable
foreign lender, has launched
a new variable interest rate
mortgage product, which will be linked
to the 90-day treasury bills and change
every quarter. The New York-based
bank hopes to wean customers away
from larger local lenders and expand its
portfolio from the current `9,000 crore.
The bank will charge a spread above
the 90-day treasury bill rate depending
on the borrower’s profile. Changes
in the rates will be effected once
every quarter, on 1 March, 1 June, 1
September, and 1 December.
To arrive at the benchmark rate,
the bank will take the t-bill rate on 12
February, 12 May, 12 August and 12
November from the newly formed RBI-
backed Financial Benchmarks India.
“We think our customers are more
financially aware. More than 80% of
our customers log in at least five times
a month to do digital banking. They
are salaried people and have been good
borrowers, so we think this is the best
time to launch a product like this,”
says Shinjini Kumar, country business
manager, global consumer bank, at
Citibank.
According to Kumar, Citibank’s
NPAs from these loans are about 0.05%.
The US-based lender’s net advances
stood at `57,000 crore, half of which
are loans to consumers. Its home loan
portfolio stands at `9,000 crore, or about
15% of the bank’s loans in India.
Taiwan, Singapore and the UK, which are When the documents What? This can’t
linked to interest rates. arrived... be true.
You’ll get the documents in Fox didn’t
Badri Nivas, Country Treasurer,
a few days. Good day, Sir, say this.
Citibank, explained that the bank chose and thank you very much
90-day treasury bills because its gives a for your time. Let me
more accurate description of local rates. look at
the �ne
“This rate hugs the benchmark repo rate print.
closely and also reflects the liquidity
situation of the market, which may impact
rates. To link it to government securities
with longer tenures would have exposed
it to the demand and supply, and other
volatilities in the bond market,” he says.
He added that resetting the rates every
quarter will also ensure that they reflect The next day
the market reality. The 91-day treasury is
currently quoting at 6.35%. Kumar says
that the bank is also looking at partner-
ships to reach more consumers in India
using the digital medium and intends to
lend to sections like micro-finance. Sir! You Yes I did. After I read the
Results released in July 2017 showed cancelled the terms of the policy I realised
policy! Why it had very high charges and
that Citibank had almost doubled its
did you gave poor returns. You didn’t
lending to agriculture, affordable do that? tell me all that. So I have
housing, weaker sections and micro opted out of the policy.
The sly Fox tried to
and small enterprises to `13,700 crore, Oh, don’t worry. I
dissuade the Crow
from `7,789 crore in fiscal year 2016. am entitled to a full refund MORAL: Don’t
But you will lose if the policy is returned within get sweet-talked
With 44 branches, Citibank is one of the 15 days. Like you said, a
money if you cancel into buying bad
three big foreign banks in India. It has the policy now. smart investor like me investments. Do your
2.5 million retail customers, 1.2 million knows exactly what research and trust
bank accounts and 2.4 million cards in the to do. your judgement.
country.
Please send your feedback to
etwealth@timesgroup.com