IDBI Mutual Fund announces the launch of IDBI Gold ETF, an open ended Gold Exchange Traded Fund.

IDBI Mutual Fund

The New Fund Offer (NFO) will open for subscription on October 19, 2011 and close on November 2, 2011. The date of allotment of units under the Fund would be November 10, 2011. The minimum application amount during NFO will be Rs 10000 and in multiples of Re 1 thereafter for all investors directly with the Mutual Fund.

The Fund will invest in physical gold and track gold prices. The benchmark for the fund would be domestic price of gold. The investment objective of the Fund is to replicate the performance of gold. It will seek to achieve the investment objective by minimizing the tracking error.

Key Features of IDBI Gold ETF:

• Pure and Secure: Each unit of IDBI Gold ETF will be backed by gold of 99.5% purity to be held by a custodian.
• Affordable: Ideal for small retail investors.
• Minimum investment: Rs. 10000 and in multiples of Re. 1 thereafter.
• High Liquidity: Listing at NSE &BSE. Post listing, IDBI Gold ETF units can be easily bought / sold on the stock exchange during market hours at real-time prices.
• Tax efficient: No wealth Tax. Long Term Capital Gains tax applicable after one year from the date of investment
• Mode of holding: D- Mat account

What’s your take on this? Comment!

Reliance Growth Fund,  a equity fund one of the oldest funds in the equity oriented schemes  was launched on September 1995. It is being managed by the most proficient fund manager Mr. Sunil Singhania who is one of the best fund managers in the country having rich work experience. The Reliance Mutual fund is further backed by Mr. Madhu Kela who has over 19 years of experience in the mutual fund and other assest management business.

Performance of Reliance Growth Fund

Though the fund has not performed well in the short term because of current volatile conditions, but looking at the returns since inception, for any fund the NAV on day of inception is Rs 10 & currently it is at 444. It means the mutual fund has given 43.4 times the return since inception in Sept 1995. For the reader’s information, its takes 30 years for Fixed Deposits or PPF to make money 10 times the money invested assuming rate of FD being 8%

Top 10 Holdings of Reliance Growth Fund

The fund seems to be adequately diversified with majority of its holdings in banking sector & pharma which is considered to be a defensive sector. The fund is holding around 80-85% of its holdings in equity & rest of it is in cash & other debt products.

Competition

The fund faces competition from its peers like HDFC Top 200 Fund, HDFC Equity Fund & IDFC Premier Equity Fund.

Mayank Gupta would recommend a buy rating on the fund with a investor expectation of 18% CAGR return in the next 5 years & with 18% CAGR return, one can make his money double in 4 years because  of power of compounding. We would also recommend retail investors to start up SIP in Mutual funds in the above mentioned fund by which can ideally help them in their various financial goals like Retirement planning & child education

This article is written by Mr. Mayank Gupta, financial planner, who runs a wealth management company http://www.wealthbazaar.in/

Reliance has come up with a unique way to invest in GOLD.
Invest in GOLD via SIP now just by – Reliance GOLD Savings Fund.

NFO open’s 14th Feb to 28th Feb.

To know More Details visit : Reliance Gold Savings Fund [1] & Reliance Gold Savings Fund [2]

A long-term track record of good performance, proven ability to ride out corrections better than most peer funds and benchmark, and a focussed exposure to blue-chip equities makes Birla Sun Life Frontline Equity Fund an apt investment option.That the fund is among the select few funds to have bettered their respective benchmarks each year in the last five years also adds to its appeal.

The fund’s consistent performance not only lends credence to its ability to spot investment themes on time, it also puts in better light its ability to address downside risks. Over a five-year period, the fund has delivered a compounded annual return of over 26 per cent, which places it among the top few funds in the diversified category.

Suitability: While the fund’s consistent track record makes it a good addition to the core portfolio of MF investors, its typically large-cap intensive portfolio could also restrain its participation in secular rallies. The fund therefore may be best suited for low-risk appetite investors looking for steady returns.

Performance: BSL Frontline Equity Fund’s compounded return of over 90 per cent and 13 per cent over one-year and three-year period puts it above peer funds such as Franklin India Bluechip, Reliance Vision and Sundaram BNP Paribas Select Focus in the returns chart. But what adds more sheen is its ability to arrest downsides.

The fund has consistently performed better than its benchmark, BSE-200 during market corrections.

For instance, be it the brief corrective phases seen in 2004 and 2006 or the long-drawn-out one seen in 2008, the fund’s returns have been better or at par with its benchmark. This particular trait holds higher importance now, what with the markets seen buckling under selling pressure.

The fund’s performance during market upswings however has been a mixed bag of sorts. Attributable mainly to its large-cap focus, the extent of its participation has been limited by its inability to benefit from rallies led by mid-cap stocks – such as the one seen towards the later half of 2007. That said, the fund’s ability to quickly change tack, and in sync with market trends, provides a higher salve. For instance, while most equity funds struggled to mirror market returns in 2009, BSL Frontline despite sporting high cash exposure in the first few months of the year was quick enough to up its equity ante.

Portfolio: More than three-fourth of its portfolio is invested in companies with market capitalisation of more than Rs 7,500 crore. While little under 10 per cent is invested in cash and equivalents, the rest is spread out among select mid and small-cap stocks.

This, however, doesn’t add to the fund’s risk element as no individual stock in this space enjoys a significant exposure. In terms of sector exposure, the top three — energy, financials and IT — make up over 44 per cent of its latest available portfolio (December 2009). HBL

A compounded annualised return of less than 3per cent since inception in March 2006 does not augur well for investors holding Kotak Lifestyle Fund in their portfolio. The fund’s unimpressive performance compared with its benchmark, CNX 500, over different time periods since inception warrants a re-look from investors to possibly switch to some of the top-performing diversified large-cap funds such as HDFC Top 200 and DSPBR Top 100 Equity.

The fund was launched with a view that it would benefit from an upward economic cycle with the consumerism expanding substantially. But the timing may have been a tad late. The fund’s investment objective is to invest across companies that are likely to benefit from changing lifestyle and rising consumerism.

Performance: The fund, since inception, has failed to contain losses during market correction and has limited participation during market rallies as well. Having been fully invested for at least two-thirds of 2008, Kotak Lifestyle bore the brunt of market corrections. Moving one-fourth of its assets to cash in the latter part of that year did not help.Similarly, during the recovery in 2009, despite moving its assets into equity, the fund failed to participate fully in the market rally. Over a one-year period, the fund has clocked an absolute return of 66 per cent and has trailed the CNX 500 by 22 percentage points. Kotak Lifestyle’s under-performance can be attributed to its sector selection.

When the valuation of software and pharma was compelling in the early part of 2009 both these sectors failed to find a place in the portfolio. The fund has the propensity to take concentrated calls on some sectors , which increases its risk profile. Over a three-year period, its NAV returns trailed its benchmark’s by 10 percentage points.

Portfolio Overview: The fund’s December portfolio shows that the top three preferred sectors were banks, consumer non-durables and auto, accounting for more than 50 per cent of the assets. Among the Kotak funds, Lifestyle has lower portfolio turnover and it implies that the fund, by and large, prefers to adopt a buy and hold strategy. The stocks in the latest portfolio have a tilt towards large-cap stocks.. HBL

Wish you had an investment option that managed a decent absolute return without your having to time the equity or debt markets? HDFC Multiple Yield Fund has precisely this objective. With a 9 per cent annualised return over five years and a 9.9 per cent return over three years, it has turned in a reasonable showing over the long term.

The market fancy for dividend yield (essentially value) stocks over the past year has lifted this fund’s one-year return to an unusually high 21.7 per cent. While this return level may not be sustainable, the fund remains a good option for investors who would like to go defensive.

With its Monthly Income Plan-like structure, the Fund is suitable for conservative investors who seek better-than-debt returns. It differs from an MIP mainly in the way its debt and equity portfolios are managed.

The fund’s debt portion, which can be 85-95 per cent of the portfolio, is invested mainly in corporate instruments with a 15-month term. The fund follows a buy-and-hold strategy here, akin to a fixed maturity plan, to sidestep interest rate risk. In the equity portion, which can form 15-25 per cent of the assets, the fund takes a defensive tack, seeking out stocks with high dividend yield. A minimum two-year holding period is essential for investors seeking to make the best of this fund.

In its latest November portfolio, HDFC Multiple Yield leaned towards short-term instruments in the debt portion. 55 per cent of the assets were in commercial paper/CDs with another 22 per cent in securitized debt/credit exposures. The equity exposure was closer to the higher end of the allocation at 21 per cent. In line with its objectives, the fund’s debt portfolio hasn’t changed much over the past year or so. The only change appears to be the addition of commercial paper exposures to the existing portfolio of certificates of deposit and securitised debt.

The equity portfolio, which has run up from about 15 per cent of assets to 20 per cent in a year with the market rally, appears to have been rebalanced at regular intervals. The fund’s choice of dividend yield candidates has been offbeat. Staying away from the conventional oil and PSU majors, the portfolio features mid-cap yet low Beta choices. HBL

Wish you had an investment option that managed a decent absolute return without your having to time the equity or debt markets? HDFC Multiple Yield Fund has precisely this objective. With a 9 per cent annualised return over five years and a 9.9 per cent return over three years, it has turned in a reasonable showing over the long term.

The market fancy for dividend yield (essentially value) stocks over the past year has lifted this fund’s one-year return to an unusually high 21.7 per cent. While this return level may not be sustainable, the fund remains a good option for investors who would like to go defensive.

With its Monthly Income Plan-like structure, the Fund is suitable for conservative investors who seek better-than-debt returns. It differs from an MIP mainly in the way its debt and equity portfolios are managed.

The fund’s debt portion, which can be 85-95 per cent of the portfolio, is invested mainly in corporate instruments with a 15-month term. The fund follows a buy-and-hold strategy here, akin to a fixed maturity plan, to sidestep interest rate risk. In the equity portion, which can form 15-25 per cent of the assets, the fund takes a defensive tack, seeking out stocks with high dividend yield. A minimum two-year holding period is essential for investors seeking to make the best of this fund.

In its latest November portfolio, HDFC Multiple Yield leaned towards short-term instruments in the debt portion. 55 per cent of the assets were in commercial paper/CDs with another 22 per cent in securitized debt/credit exposures. The equity exposure was closer to the higher end of the allocation at 21 per cent. In line with its objectives, the fund’s debt portfolio hasn’t changed much over the past year or so. The only change appears to be the addition of commercial paper exposures to the existing portfolio of certificates of deposit and securitised debt.

The equity portfolio, which has run up from about 15 per cent of assets to 20 per cent in a year with the market rally, appears to have been rebalanced at regular intervals. The fund’s choice of dividend yield candidates has been offbeat. Staying away from the conventional oil and PSU majors, the portfolio features mid-cap yet low Beta choices. HBL

Reliance Pharma Fund Invest

The increasing interest of global pharma majors in the Indian generics space, strong growth in the domestic market besides the pro-generic healthcare reforms likely in key markets of the US, Europe and Japan make a strong case for investing in the pharmaceuticals sector now.

Investors with a long-term perspective can consider buying the units of Reliance Pharma Fund, given its diversified pharmaceutical exposure. Taking the mutual fund route would also save investors the trouble of unravelling the complex workings of the industry, where prospects are subject to regulatory intervention, M&A and litigation as well.

Investors, however, can consider investing in the dividend option of the fund, given the high-risk profile of sector funds.

Benchmarked against the BSE Healthcare Index, Reliance Pharma Fund has consistently delivered superior returns relative to the index as well as its peer funds. It has also in the five years of its existence outpaced market indices such as BSE Sensex and S&P CNX Nifty. The fund’s portfolio offers a one-stop exposure to all the promising segments of the sector – companies with a strong footing in domestic formulations, complex generics, CRAMS, bio-generics as well as the healthcare space.

Shrinking product pipeline, increasing R&D expenditure and generic incursion have forced the global pharma companies to look at emerging markets such as India for growth.

Not only has this led to increased buyouts of Indian pharma assets — be it Ranbaxy-Daiichi, Dabur Pharma-Fresenius Kabi, Shantha Biotech- Sanofi Aventis or the more recent Orchid Chemicals-Hospira deal — but has also made global pharma companies forge alliances with Indian generics or increase stakes in their Indian subsidiaries. Given the latter, the fund’s significant exposure to the subsidiaries of MNC pharma holds potential.

Indian pharmaceutical companies also stand to gain considerably from their US market presence if the US Healthcare Bill that is approaching its climactic vote next week gets cleared. The Bill, which seeks to expand healthcare coverage to a larger majority of its citizens, would further open up the lucrative US market for Indian generics, which enjoy a competitive edge over global peers in terms of product pricing and operational costs. While the final contours of the Bill are not yet known, a generic push appears inevitable. Further, the number of authorised generics is expected to grow even in the key markets of Europe and Japan, led again by the healthcare reforms of their respective governments. The fund’s portfolio has a fair representation from companies that would benefit from the shift to generics in these markets as well.

Fund details: The fund’s portfolio has a reasonable sprinkling of stocks from all market capitalisation categories. Its top holdings include Ranbaxy Laboratories, Zydus Wellness, Indoco Remedies, Aventis Pharma and Divis Laboratories and the NAV per unit under the dividend option is Rs 32. Source – HBL

UTI-Mahila Unit Scheme: Invest

Women investors looking at debt-oriented funds that yield returns superior to traditional debt options can consider investing in UTI Mahila Unit Scheme, a balanced fund that seeks to hold a 70:30 debt-equity allocation.

The fund’s five-year returns of 18 per cent places it among the top performing funds in the debt category. A dynamic debt portfolio and quality stocks from the equity market have enabled the fund to maintain a good track record since its launch in April 2001.

Suitability: The fund is not a good fit for completely risk-averse investors, given its equity exposure. A one-third exposure to equity is the key to providing superior returns over the long term. Besides, its exposure to a combination of AA and AA+ debt instruments, suggests that while quality is not compromised, potential for higher yield comes at a slightly higher risk.

Performance: UTI Mahila’s one-year return of 25 per cent is marginally higher than its benchmark Crisil Debt Hybrid as well as its category average. Among other debt funds, a few monthly income plans such as HDFC MIP have beaten it as a result of their slightly aggressive equity exposure.

However, over a longer time frame of five years UTI Mahila has beaten top MIPs. Note that MIPs normally restrict their equity exposure to about 15 per cent. Those that recorded superior returns in this category did so by increasing their equity exposure to 20-25 per cent.

UTI Mahila has a good record of containing downside better than similarly positioned funds. For instance, FT India Life Stage FoF, another debt-oriented fund, lost as much as 22 per cent during its worst one-year period ending December 2008. UTI Mahila contained losses around the similar period to about 10 per cent.

In fact, the fund has even bettered it in-house peer UTI CRTS 81, in containing downside in the last downturn. Surprisingly the fund did not use the asset allocation strategy of drastically reducing its equity holding during the market crash. It instead, tactfully changed its debt portfolio maturity.

For instance, when interest rates were on the rise from late 2007, the fund reduced its portfolio maturity period to little over a year. A year later, in December 2008, when the bond rally was on, driven by declining interest rates, it increased the portfolio maturity to 4-5 years. Thus, it capitalised on the bond price rally, rather than shield equity losses.

The fund has once again reduced its average maturity to about two years in November 2009, clearly gearing for rate hikes.

Portfolio: The fund’s equity portfolio is laden with large and mid-cap stocks that gained significantly from their lows of 2009. Its exposure to individual stocks is, however, restricted to less than 2 per cent, as a result of which the fund holds as many as 50 stocks in its portfolio. Financial services, engineering and consumer goods are among its favourite sectors.

Among its debt holdings, debentures issued by non-banking finance companies are prominent. Government bonds account for less than 12 per cent of the portfolio, while a small proportion (about 4 per cent) is exposed to securitised debt; the latter typically held to maturity and to enhance portfolio yield.

Tata Opportunities Fund : HOLD

Investors with high risk tolerance can consider holding their units in Tata Opportunities Fund based on its performance over a five-year period. The fund has not sufficiently compensated investors for the risk assumed. “Opportunities” as a theme requires identifying right calls ahead of the market rally to generate returns higher than the benchmark.

For instance, over a five-year period, it has generated a compounded annualised return of 23.7 per cent, which is 2 per cent above its benchmark BSE Sensex. However, over a two-year period the fund trailed its benchmark by five percentage points and a more volatile S&P CNX Midcap by three percentage points.

Having said that, it has proved its grit over a ten-year period and outpaced its benchmark by good 10 percentage points. Hence, the opportunity theme of the fund appears to be a long-drawn one. Investors with a long-term perspective can consider holding Tata Opportunities.

Performance: The fund’s NAV has grown by 85 per cent over a one-year period — 20 percentage points higher than its benchmark. Among its peers it was at a distant second to Reliance Opportunities, the top performer in the category with a return of 101 per cent.

The fund is vulnerable to market volatility; during the market corrections in 2006 and 2008 it lost more value than its benchmark as a result of holding mid-cap stocks. But it s managed to contain losses during the market crash in October 2008 with a 20 per cent cash position. However, it failed to bounce back during the subsequent marketrally and even trailed its benchmark.

Portfolio Overview: The fund’s November portfolio consists of 47 stocks invested across 20 sectors. In the latest portfolio, the fund has invested 47 per cent of the assets in midcap stocks with market capitalisation of less than Rs 7,500 crore. The fund’s top three preferred sectors were software, consumer non-durables and construction, which together accounted for 38 per cent of the assets.

The fund portfolio turnover statistics confirms that it largely adopts a buy and hold strategy. But the fund has timed sector calls well. For instance, it has reduced its holding in banking sector as it started to lose steam. In May, banking accounted for 13 per cent of the fund’s portfolio but this was gradually reduced it to 3.3 per cent in its latest portfolio. Source : HBL