HDFC Top 100 Fund

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HDFC Mutual Fund has renamed HDFC Top 200 Fund as an HDFC Top 100 Fund. The fund initially restrained its focus on stocks present in the S&P BSE 200 index or the top 200 stocks by market capitalisation. The fund’s mandate has now changed to a Large-cap Fund as defined by the regulator.

Though the multi-decade old fund did maintain a large-cap focus, SEBI’s new nomenclature demands that large-cap stocks be defined as the top 100 companies by market capitalisation. Thus the categorisation of the scheme as a large-cap fund, also led to rebranding the scheme to HDFC Top 100 Fund, for it to give a proper picture of the underlying investment objective.

HDFC Top 100 Fund is among the few schemes that boast of a track record of over two decades. The scheme has survived the odds even as the asset managers have come and gone over this period.

The scheme was launch in September 1996 by ITC Threadneedle Asset Management, and was then known as ITC Threadneedle Top 200. Three years later, the Zurich AMC acquired the assets of ITC Threadneedle and rechristened the fund to Zurich India Top 200 Fund in December 1999.

The fund’s current fund manager, Mr Prashant Jain who was associated with Zurich since July 1993, took over the reins of Zurich India Top 200 Fund from Mr Bobby Surendranath (the fund manager since inception) in June 2001.

A couple of years later, in June 2003, HDFC MF acquired the assets of Zurich AMC. Zurich India Top 200 Fund was renamed as HDFC Top 200 Fund. Mr Jain continued to manage the assets of the scheme.

For a scheme that has survived thus far, it is unsurprising to see its asset burgeon to nearly Rs 15,000 crore. It was the first equity scheme to breach the Rs 10,000-crore-mark. Unfortunately, the huge influx of assets, and a few fund manager bets that didn’t go as planned, led to a deterioration in performance over the past 3-4 years.

Its more flexible peers have delivered a stronger performance and soon began attracting assets away from HDFC Top 100 Fund.

The fund now has a new avatar and shares a common investment objective with its peers. Will ace fund manager be able to use this to his advantage? Only time will tell.

In this brief analysis, we take a close look at the features and performance of HDFC Top 100 Fund, in its previous avatar.

Investment Objective of HDFC Top 100 Fund

HDFC Top 100 Fund has an investment objective to "provide long-term capital appreciation/income by investing predominantly in Large-Cap companies."

The erstwhile investment objective was to "generate long term capital appreciation from a portfolio of equity and equity linked instruments. The investment portfolio will be primarily drawn from the companies in the S&P BSE 200 Index. Further, the Scheme may also invest in listed companies that would qualify to be in the top 200 by market capitalisation on the BSE even though they may not be listed on the BSE"

HDFC Top 100 Fund Fund Details

Fund Facts

Category Large Cap Fund Style Blend
Type Open ended Market Cap Bias Large Cap Fund
Launch Date 3-Sep-96 SI Return (CAGR) 19.97%
Corpus (Cr) Rs 14,789 Min./Add. Inv. Rs 5,000 / Rs 1,000
Expense Ratio (Dir/Reg) 1.20% / 2.04% Exit Load 1%

Portfolio Data as on May 31, 2018.
SI Return as on June 27, 2018.
From May 23, 2018, the new investment allocation of HDFC Top 100 Fund –

  • 80% – 100% to stocks of large cap companies as defined by the regulator and prepared by AMFI
  • 0% – 20% to other equity and equity related instruments
  • 0% – 20% to debt and money market instruments
  • 0% – 10% to units of REIT/InvITs
  • 0% – 10% to Non-convertible preference shares

Under normal circumstances, HDFC Top 200 Fund used to allocate-

  • 0% – 100% to Equity, Partly convertible debentures and fully convertible debentures and Bonds
  • Balance in debt and money market instruments

Growth Of Rs 10,000, If Invested In HDFC Top 100 Fund 5 Years Ago

Had you invested Rs 10,000 in HDFC Top 100 Fund five years back on June 27, 2013, it would have grown to Rs 21,122 as on June 27, 2018. This translates in to a compounded annualised growth rate of 16.12%. In comparison, a simultaneous investment of Rs 10,000 in its current benchmark – Nifty 100 – TRI index would now be worth Rs 20,933 (a CAGR of 15.91%). As can be seen in the chart alongside, the largecap fund has been struggling to generate a sustainable alpha over the benchmark. It has done well in the market rallies but has been unable to retain its momentum in volatile market periods. Hence, its long term performance against the benchmark does not generate much awe.

HDFC Top 100 Fund Performance (Year-on-Year )

HDFC Top 100 Fund has a track record of over two decades. The year-on-year performance comparison of the fund vis-à-vis its current benchmark – Nifty 100 -TRI Index shows that the fund has outperformed the benchmark in 7 out of last 10 calendar years. Bulk of the alpha was generated in the period over CY2008 to CY2010. The fund outperformed the benchmark by over 5-9 percentage points. Between 2011-13, the fund was found struggling, but managed to deliver returns in line with the benchmark. In CY 2014, with the onset of the current bull rally, HDFC Top 100 Fund, capitalised on the up move with a 11 percentage point gain over the benchmark. But this euphoria was short lived. Over the next few years, HDFC Top 100 Fund delivered a mediocre performance.

In inconsistency in the performance of HDFC Top 100 Fund is clearly visible in the different rolling periods considered above. The large-cap fund has been able to beat the benchmark in the 2-year and 5-year rolling periods, however, in the 1-year and 3-year periods, the fund trails the benchmark. Other peers have managed to deliver a respectable performance over the period considered, despite having a corpus in excess of Rs 10,000 crore.

HDFC Top 100 does not impress on the risk front either. The scheme has a higher volatility than the benchmark and other peers in the category. Due to the high risk and low return potential, the fund fails to entice investors in the form of risk-adjusted returns. Now with a new mandate in place, the fund house needs to decide a corrective course of action.

The top five mutual funds with a similar investment objective and market-cap bias in the 3-year rolling period performance include—SBI BlueChip Fund, Reliance Large Cap Fund, ICICI Prudential Bluechip Fund, and Aditya Birla SL Frontline Equity Fund.

Investment Strategy of HDFC Top 100 Fund

&The investment objective of the HDFC Top 100 Fund is to provide long-term capital appreciation by investing predominantly in Large-Cap companies. The fund will maintain a minimum exposure of 80% to Large Cap stocks. It may also invest upto 20% of AUM in debt and money market securities.

&HDFC Top 100 Fund will remain diversified across key sectors and economic variables. The fund seeks to invest in higher quality, competitive, sustainable businesses by primarily restricting the equity portfolio to large caps; this is intended to reduce risks while maintaining steady growth.

&Focuses on secular growth companies compared to cyclicals; this strategy reduces risk on one hand and improves chances of positive returns over the long term. There are primarily two sources of returns for the fund – Index returns and returns from active management; over periods of time, index returns are expected to form a large portion of total returns. The fund targets to capture a large part of index returns by maintaining around 60% of the portfolio in matched positions with index.

HDFC Top 100 Fund – Portfolio Allocation and Market Capitalisation Trends

HDFC - Portfolio AllocationHoldings (in %) as on May 31, 2018
(Source: ACEMF)

As can be seen in the chart alongside, HDFC Top 100 Fund has predominantly invested over 90% of its portfolio to large-caps. While the fund has the flexibility to include a decent exposure to midcaps, it has chosen to maintain its exposure to stable bluechip stocks. Over the past year, the large cap exposure has moved in a narrow range of 90%-95%. The exposure to mid caps, which was around 6% a year ago, has fallen to 4%. The allocation to cash has been broadly kept under 2%. However, there have been instances where the cash limits have been raised to 4% to meet certain liquidity or investment requirements.

HDFC Top 100 Fund – Top Portfolio Holdings

Top 10 Stocks

Stocks % of Assets
HDFC Bank Ltd. 7.55
Infosys Ltd. 7.33
Larsen & Toubro Ltd. 6.57
State Bank Of Indias 6.47
ICICI Bank Ltd. 6.35
Reliance Industries Ltd. 5.32
HDFC 4.73
ITC Ltd. 4.65
NTPC Ltd. 3.38
Axis Bank Ltd. 3.08
Top 5 Sectors
top-5-fund28

HDFC Bank and Infosys lead the list of stocks in the portfolio of HDFC Top 100 Fund. Both the stocks command an exposure of 7% each. Trailing closely behind are Larsen & Toubro, State Bank of India and ICICI Bank, with an exposure of 6%-7%. Reliance, HDFC and ITC are among the other index heavyweights in the portfolio of HDFC Top 100 Fund.

Though the large-cap fund has as many as 58 stocks in the portfolio, the allocation is concentrated to the top holdings, where the top 10 stocks account for 55% of the assets.

Banks dominate the portfolio with an exposure of 29%. Software stocks are the next top bets with an allocation of 13%. Industrial Capital Goods, Power and Petroleum Products are also among the top five sectors of HDFC Top 100 Fund.

Top Gainers in HDFC Top 100 Fund’s portfolio

Out of the 58 stocks in the portfolio, as many as 49 stocks have been held for 12 months or more. About 22 of these stocks generated a return in excess of 10% over the past 1 year. Among the top stocks in the portfolio with the maximum return over the past 1 year were Avenue Supermarts, Reliance Industries, Tata Consultancy Services, HDFC Bank, and Infosys. These stocks rallied 111%, 37%, 37%, 31%, and 26% over the past year.

About 16 stocks in the portfolio declined by 10% or more over the past year. Among the stocks that declined the most over the past year were Rural Electrification Corporation, Power Finance Corporation,
Tata Motors, Union Bank Of India, and Punjab National Bank. These stocks declined 39%, 40%, 41%, 42% and 44% respectively.

Suitability of HDFC Top 100 Fund

Large-cap oriented funds are better poised to handle market volatility vis-à-vis mid-and-small caps. Stable businesses, greater market share, quality of management and the sustainability prospects are factors that seem convincing to take exposure to large-caps at the current level.

Large blue chip companies with strong balance sheets and proven track-records could help ride the wave of short-term volatility to a certain extent. Therefore, diversified equity funds with a predominant large-cap allocation can offer stability to your investment portfolio.

Some large-cap funds take an opportunistic allocation to mid-caps and offer the perfect mix of stability and growth. However, HDFC Top 100 Fund is among those that maintain a pure large-cap exposure.

Given the funds exposure is heavily skewed towards index heavyweights, the returns will be broadly in line with the benchmark. However, the active management of the portfolio can lead to better stock selection and potential outperformance over the index.

The fund maintains a disciplined buy-and-hold investment strategy, which can be suitable for moderate-to-high risk investors.

However, before investing, do weigh all options and make a prudent choice.

SIPs are Best Investments as Stock Market s are move up and down. Volatile is your best friend in making Money and creating enormous Wealth, If you have patience and long term Investing orientation. Invest in Best SIP Mutual Funds and get good returns over a period of time. Know which are the Top SIP Funds to Invest Save Tax Get Rich – Best ELSS Funds

For more information on Top SIP Mutual Funds contact Save Tax Get Rich on 94 8300 8300

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Total Returns Index brings out real Equity Funds Performers

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From February, equity mutual funds have to change their benchmarks to account for dividend payments. Until now, funds used price-based benchmarks alone. TRI or total return indices assume that dividend payouts are reinvested back into the index.

What this does is lift the overall index returns, because dividends get compounded. For example, the Sensex TRI index will consider dividend payouts of its constituent companies while the Nifty50 TRI index will consider dividends of its constituents.

Using TRI indices as benchmarks comes on the argument that an equity funds earn dividends on the stocks in its portfolio, which they use to buy more stocks. Therefore, using an index that also considers dividend reinvestment would be a more appropriate benchmark.

Shrinking outperformance

With a stiffer benchmark, it is obvious that the margin by which an equity fund outperforms the benchmark would shrink. Rolling one-year returns from 2013 onwards, the average margin by which largecap funds outperformed the Nifty100 index was 2.27 percentage points. That drops to 0.76 percentage points against the Nifty100 TRI. That’s in line with the Nifty100 TRI’s 1.5 percentage point excess over the Nifty100 index.

Similarly, midcap and smallcap funds on an average outperformed the Nifty Free float Midcap100 index by a margin of 4.35 percentage points. Against the TRI version, the margin shrinks to 2.84 percentage points.

However, what needs to be looked at additionally is the consistency metric, or how often a fund is able to beat the benchmark. This figure takes a bigger blow with TRI comparisons. On an average, largecap funds were able to beat the Nifty100 index 61 per cent of the time rolling one-year returns over the last five years. But against the Nifty100 TRI, funds were able to outperform only 49 per cent of the time.

The following table shows the figures for other categories. The dip is the highest in large-cap funds given their more restrictive stock pool.

Fund snip
Based on 1-year rolling returns for the past five years, for each category on an average

Divergence within category
The good news is that fund performance within each category is starkly divergent and poor funds pull that average down. Consider the diversified or multi-cap set of funds. The biggest drop in the consistency metric (proportion of outperformance against benchmark) was a massive 23 percentage points. That is, from beating the Nifty500 index 57 per cent of the time, the fund did so just 34 per cent of the time against the Nifty500 TRI.

On the other hand, the smallest deterioration in the consistency was just about 2 percentage points. This means that the fund was equally consistent in being able to beat both the Nifty500 and the Nifty500 TRI. For largecap funds, the worst consistency deterioration was 26 percentage points. The smallest dip was 3 percentage points.

Fund performance within each category is already divergent even when considering price indices alone. This phenomenon has intensified over 2017 when the performance deviation within each category was at the highest level in three years. With a stiffer benchmark, this deviation went up further.

Going forward, funds have a tougher benchmark to beat. Coupled with a higher divergence in performance, picking the right fund assumes higher importance.

SIPs are Best Investments when Stock Market is high volatile. Invest in Best Mutual Fund SIPs and get good returns over a period of time. Know Top SIP Funds to Invest Save Tax Get Rich – Best ELSS Funds

For more information on Top SIP Mutual Funds contact Save Tax Get Rich on 94 8300 8300

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You can write to us at

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How to overcome Mutual Fund Risks

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All mutual funds come with varying degrees of risks, but that doesn’t mean you should not invest in them. The thumb rule of building wealth is: if you want returns, you have to take a bit of risk. The trick is to know the tricks to beat the risks.

Volatility
Equity mutual funds, or for that matter all equity investments, are prone to volatility. In 2016, the S&P BSE Sensex returned 1.95%. In 2017, it gave 28% returns. So far in 2018, Sensex has returned 4.8%. Mid-cap and small-cap indices-and by extension, the funds that invest in such companies-swing more wildly.

How to beat it: Two steps; if investing in equities, then avoid investing for the short run. Invest for the long term. By extending your investment tenure, you can cut out the effects of short-term volatility, which is typically severe. We recommend a minimum tenure of 5 years. The second step is to invest through a systematic investment plan (SIP). In this method, you buy less units when markets go up, but more units automatically, when markets go down.

Credit risk
When the underlying investments of debt funds fail to repay their interest and principal amounts-and worse, when their credit rating is downgraded-debt funds suffer. We have seen some such accidents in the past 3 years. The erstwhile JP Morgan Asset Management (India) Ltd suffered on account of its investments in Amtek Auto Ltd, and Taurus Asset Management Co. Ltd took a hit on some of its debt funds due to a credit ratings downgrade of one of its underlying investments.

The reality is that a credit rating downgrade (which leads to a fall in the net asset value of a mutual fund scheme) can happen swiftly, sometimes in a matter of months.

How to beat it: Earlier, it was tough for you to know which debt funds would take on credit risk, and which ones would avoid them. Now, the capital market regulator, Securities and Exchange Board of India (Sebi), has made it easier to identify such funds. Thanks to the ongoing scheme reclassification exercise that Sebi started in 2017, credit funds will now be called credit risk funds, and it has specified that such funds will invest at least 65% of their assets in securities rated AA and below. Corporate bond funds will no longer be allowed to take credit risks beyond a point; these shall invest at least 80% of assets in securities rated AA+ and above.

Uncertain Market
The future is uncertain, but we all have financial goals that must be met. What’s worse is to see our portfolio grow over time, but one big bout of volatility in the final year (or the year in which we plan to withdraw) erasing a lifetime’s worth of gains.

How to beat it: Practise asset allocation in the portfolio. Ascertain your risk profile; these days many financial advisers and distributors have sophisticated tools to capture this information. Based on your results, allocate your money in equity and debt instruments and then adhere to that allocation.

Review your risk profile and tolerance once in a year or two and keep tracking your asset allocation. That’s another way to beat volatility.

SIPs are Best Investments as Stock Market s are move up and down. Volatile is your best friend in making Money and creating enormous Wealth, If you have patience and long term Investing orientation. Invest in Best SIP Mutual Funds and get good returns over a period of time. Know which are the Top SIP Funds to Invest Save Tax Get Rich – Best ELSS Funds

For more information on Top SIP Mutual Funds contact Save Tax Get Rich on 94 8300 8300

OR

You can write to us at

Invest [at] SaveTaxGetRich [dot] Com

HDFC Retirement Savings Fund

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HDFC Retirement Savings Fund is a Long term investment vehicle targeting retirement corpus for YOU, I nvestments in the scheme qualify for benefits U/s 80 C of the Income tax Act, 1961 , Scheme provides Choice of 3 plans – Depending on age and risk profiles:

· Equity Plan- The net assets of the Investment Plan will be primarily invested in Equity and Equity related instruments. However, the Investment Plan provides for flexibility to invest in debt instruments and money market instruments.

· Hybrid Equity Plan- The net assets of the Investment Plan will be primarily invested in Equity and Equity related instruments. The AMC will also invest the net assets of the Investment Plan in Debt / Money market instruments with an objective of generating long term returns and maintaining risk under control as per the limit specified in asset allocation pattern.

· Hybrid Debt Plan- The net assets of the Investment Plan will be primarily invested in Debt and Money market instruments. The Investment Plan will retain the flexibility to invest across all the debt and money market instruments of various maturities. The AMC will strive to assess risk of the potential investment in terms of credit risk, interest rate risk and liquidity risk. The AMC would manage the investments of the Plan on a dynamic basis to exploit emerging opportunities in the investment universe and manage risks at all points in time. The AMC will also invest the net assets of the Investment Plan in Equity and Equity related instruments. This Investment Plan seeks to generate steady long term returns with relatively low levels of risk.

Lock-in: 5 yrs from investment date or Until the Unit holder attains the age of 60 years (i.e. completion of 60 years) whichever comes earlier.

SIPs are Best Investments as Stock Market s are move up and down. Volatile is your best friend in making Money and creating enormous Wealth, If you have patience and long term Investing orientation. Invest in Best SIP Mutual Funds and get good returns over a period of time. Know which are the Top SIP Funds to Invest Save Tax Get Rich – Best ELSS Funds

For more information on Top SIP Mutual Funds contact Save Tax Get Rich on 94 8300 8300

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You can write to us at

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How much tax do you pay on your equity investments?

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Equity as an asset class is an important portion of an investor’s portfolio. However, tax rules vary for different types of equity instruments. For example, capital gains tax is based on the period of holding. So for stocks and equity-oriented mutual funds, long term is defined as more than 1 year, but for Ulips this parameter doesn’t apply.

Taxes reduce the overall returns that you can get from a product. Given that different equity assets attract different tax rules, an investor must take a careful look at the suitability of an investment in terms of taxes too.

Here’s a look at what the various taxes are.

SIPs are Best Investments as Stock Market s are move up and down. Volatile is your best friend in making Money and creating enormous Wealth, If you have patience and long term Investing orientation. Invest in Best SIP Mutual Funds and get good returns over a period of time. Know which are the Top SIP Funds to Invest Save Tax Get Rich – Best ELSS Funds

For more information on Top SIP Mutual Funds contact Save Tax Get Rich on 94 8300 8300

OR

You can write to us at

Invest [at] SaveTaxGetRich [dot] Com

What are Ultra Short Term Bond Funds?

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Ultra short-term bond funds are not an investment vehicle where you expect your money to grow or build wealth

Ultra short-term bond funds are debt funds that are meant to park your money for the short term.

This is not an investment vehicle where you expect your money to grow or build wealth. It is a temporary parking space till you find a more permanent space to invest your money.

However, unlike the least risky liquid fund, this fund allows you to earn a slight return kicker, but with a little bit more risk than what a liquid fund entails. But it has boundaries. It invests in scrips in such a way that the duration of the portfolio is 3-6 months. In simple words, it is meant for investments of 3-6 months.

SIPs are Best Investments when Stock Market is high volatile. Invest in Best Mutual Fund SIPs and get good returns over a period of time. Know Top SIP Funds to Invest Save Tax Get Rich – Best ELSS Funds

For more information on Top SIP Mutual Funds contact Save Tax Get Rich on 94 8300 8300

OR

You can write to us at

Invest [at] SaveTaxGetRich [dot] Com

Save Tax while Investing – Invest in SIPs through ELSS Funds

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Tax saving is integral to efficient financial planning. And, for those looking to invest for long-term goals and also save tax at the same time, ELSS is the right choice. Let us discuss how to invest in it through SIPs:

Why invest in ELSS?

ELSS is an open-ended equity mutual fund that offers tax saving, along with an opportunity to grow your money over a period of time. It outperforms other options with lowest lock-in period and higher returns – ELSS involves a lock-in period of just 3 years, which is the lowest amongst other investment options such as PPF (15 years), Tax-saver FD, ULIP and NSC (5 years each).

It has comfortably beaten its peers in terms of returns as well, by providing up to 23% returns (5 year period). In comparison, other investment options have provided far lower returns, with PPF and NSC currently clocking 7.6%, ULIPs up to 17% (5 year) and tax saving FD providing just 6-8% returns.

Tax deductions available with ELSS

Under Section 80C of the Income Tax Act, ELSS investors are eligible to claim deductions up to Rs 1.5 lakh p.a. When you invest in ELSS through SIPs, the maximum deduction which you can claim, irrespective of the frequency of SIPs in that year, is Rs.1.5 lakh. For higher tax brackets, tax savings can even up to Rs 45,000 (for the highest tax bracket of 30%).

Keep in mind the following while availing ELSS benefits through SIPs:

1. Avoid last-minute investment:

Erratic investment and tax planning strategy increases chances of committing mistakes and at times may even lead to financial loss. Many investors commit the mistake of making last-minute investment in order to save tax. Such actions may put you at risk of not getting tax benefits owing to multiple factors such as failure to submit investment proofs on time or delay in payment clearance etc. In addition to this, you can also end up parking your money in a wrong product in a hurry.

Hence, you must always time your investment in order to make the most of the benefits offered and earn expected returns.

2. Don’t redeem as soon as the lock-in period ends

Since ELSS are equity mutual funds suitable for fulfilling long-term goals with investment horizon of at least 5 years, redeeming your money as soon as the lock-in period lapses wouldn’t allow the investment enough time to garner optimum returns. However, in case your scheme has been consistently under performing as compared to its benchmarks and peer schemes, you may consider exiting.

3. Avoid the dividend trap

This involves distribution of profit gained by the scheme amongst investors in the form of dividends. This distribution can be performed quarterly, half yearly or annually. What most investors fail to realize is that the dividend which is distributed to them is paid out of their own investment amount. Dividend option is largely suited to investors requiring periodic income. However, to achieve specific financial goals linked to your investments, you may consider opting for growth option, wherein the scheme’s profits are reinvested. Such reinvestment assists in creating wealth, since the scheme’s NAV rises upon gaining profit.

4. Tax saving should be the primary but not sole purpose of investing

Before investing in ELSS, investors must make sure they have tied specific financial goals to their investments. Failure to do so deprives your investments of a specific direction and puts their motive in jeopardy. Even though ELSS investment offers tax reliefs under Section 80C, investors must make sure tax saving isn’t the sole purpose of their investment. Tax saving should be the primary but not the sole purpose for ELSS investments, and the objective of wealth creation (for fulfillment of long term goals) should be given equal weightage. Moreover, while choosing ELSS as your tax-saving instrument, always keep in mind the risk, lock-in period, returns etc. involved. The overall benefits offered by ELSS largely outweigh those of PPFs, FDs, NSC etc.

5. Whether to invest in ELSS through SIPs or Lump sum?

Investors can either invest through Systematic investment plans (SIPs) or lump sum investments. Although the decision would rely upon factors such as investor’s financial capacity, investment horizon, market knowledge etc., the SIP mode is more popular and reliable. By choosing to invest through SIPs (whether monthly, quarterly etc.), the concept of rupee cost averaging assists in reducing the risk of market timing. This concept averages out the cost at which the mutual fund units are bought, therefore eliminating the need to time the SIPs. On the other hand, when you invest in lump sum, the risk of entering the market at the wrong time would result in erosion of your money when the markets fall sharply.

SIPs are Best Investments as Stock Market s are move up and down. Volatile is your best friend in making Money and creating enormous Wealth, If you have patience and long term Investing orientation. Invest in Best SIP Mutual Funds and get good returns over a period of time. Know which are the Top SIP Funds to Invest Save Tax Get Rich – Best ELSS Funds

For more information on Top SIP Mutual Funds contact Save Tax Get Rich on 94 8300 8300

OR

You can write to us at

Invest [at] SaveTaxGetRich [dot] Com

HDFC Children’s Gift Fund

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HDFC Children’s Gift Fund is Meant for all children below the age of 18 years, Healthy allocation towards equities which is an ideal long-term asset class coupled with debt allocation which provides stable returns, Personal accident insurance for parent/guardian of up to Rs 10 lakhs*, Investments can be made on a lump sum or SIP basis and there is no limit to the number of transactions in any given year. No maximum limit on investment, Benefit from the long term potential of equity while maintaining the stability of debt.

Who can invest: Parents, Grand Parents, Friends, and Other Relatives.

Lock-in: 5 yrs from investment date of allotment or Until the Unit holder (being the beneficiary child) attains the age of majority (i.e. completion of 18 years) whichever comes earlier.

SIPs are Best Investments as Stock Market s are move up and down. Volatile is your best friend in making Money and creating enormous Wealth, If you have patience and long term Investing orientation. Invest in Best SIP Mutual Funds and get good returns over a period of time. Know which are the Top SIP Funds to Invest Save Tax Get Rich – Best ELSS Funds

For more information on Top SIP Mutual Funds contact Save Tax Get Rich on 94 8300 8300

OR

You can write to us at

Invest [at] SaveTaxGetRich [dot] Com

ICICI Prudential Bluechip Fund

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ICICI Prudential Bluechip Fund scheme seeks to generate long term capital appreciation and income distribution to investors from a portfolio that is predominantly invested in equity and equity related securities of large cap companies.

ICICI Prudential Bluechip Fund – A top-of-mind choice in the large-cap category, this fund has beaten both the category and benchmark in eight of the nine years since launch. This has earned it a four- to five-star rating for much of the last six years. While a number of category peers have slipped behind benchmarks in the last one year, this fund has stayed ahead of its benchmark with a 1 percentage-point outperformance.

ICICI Prudential Bluechip Fund has traditionally had a higher-than-category allocation to large caps. Its mandate earlier called for a concentrated portfolio, with the stock picks drawn from the top 200 stocks by market cap. Post the SEBI reclassification, the fund is repositioned as a pure large-cap fund. It has tweaked its mandate to maintain a minimum 80 per cent exposure to the top 100 stocks by market cap. This will not materially change its risk or return profile, given that the market-cap range is practically the same. The ‘focused’ approach has been dropped from the mandate. This is in any case a positive, given that the fund’s burgeoning size (`16,100 crore by April 2018) made a very compact portfolio difficult. The changes will take effect from end-May.

The only limitation to assessing this fund is that despite its consistent show in the last nine yeas, it hasn’t seen a serious bear market since inception. In 2011 and in 2015, it managed to contain downside well relative to the market. The fund’s manager, Manish Gunwani, quit and the fund is now steered by Sankaran Naren. A good fund for conservative investors.

SIPs are Best Investments as Stock Market s are move up and down. Volatile is your best friend in making Money and creating enormous Wealth, If you have patience and long term Investing orientation. Invest in Best SIP Mutual Funds and get good returns over a period of time. Know which are the Top SIP Funds to Invest Save Tax Get Rich – Best ELSS Funds

For more information on Top SIP Mutual Funds contact Save Tax Get Rich on 94 8300 8300

OR

You can write to us at

Invest [at] SaveTaxGetRich [dot] Com

How Debt Funds Work

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Debt funds are a type of mutual fund that generate returns from their investors’ money by investing in bonds or deposits of various kinds. These terms basically mean that they lend money and earn interest on the money they have lent. This interest that they earn forms the basis for the returns that they generate for investors.

A bond is like a certificate of deposit that is issued by the borrower to the lender. Even individual investors do something similar when they do something as simple as make a fixed deposit in a bank. When you make an FD with a bank, you are basically lending money to the bank. You can also buy bonds, for example the tax-rebate bonds issued by various companies like REC and HUDCO.

This is exactly what debt funds do, except for a few differences. One, they are able to invest in many types of bonds that are not available to individuals. For example, the Government of India issues bonds. It is in fact, by far the largest borrower (and thus bond-issuer) in the country. Individuals cannot buy government bonds. Bonds are also issued by many large and medium sized businesses in the country. Mutual funds also invest in these.

A simple way of understanding debt funds is to think of them simply as a way of passing through the interest income that they receive from the bonds they invest in. There are a couple of further complexities to this.

One, unlike the FDs that individuals invest in, mutual funds invest in bonds that are tradable, just like shares are tradable. The way there’s a stock market where shares are traded, there’s also a debt market where bonds of various types are traded.

Two, on this debt market, the prices of different bonds can rise or fall, just like they do on the stock markets. If a mutual fund buys a bond and its price subsequently rises, then it can make additional money over and above what it would have made out of the interest income alone. This would result in higher return for investors. Obviously, the opposite is also true.

But why would bond prices rise or fall? There can be a number of reasons. The major one is a change in interest rates, or even the expectation of such a change. Suppose there’s a bond that pays out interest at a rate of 9 per cent a year. Then, the interest rates in the economy fall and newer bonds start getting issued at 8 per cent. Obviously, the old bond should now be worth more than earlier. After all, a given amount of money invested in it can earn more money. Its price would now rise. Mutual funds that hold it would find their holdings worth more and they could make additional profits by selling this bond. Again, obviously, the reverse could happen when interest rates rise. Despite the expectation of safety, such a situation could actually result in some losses for a bond fund