Managing SIPs

How to Manage SIPs

The Systematic Investment Plan is a powerful tool to create long-term wealth by starting with as little as `500. To build a sustainable corpus, one should top up these investments as income rises. However, investors must not compromise their current cash needs with too restrictive SIP commitments.

Mutual funds have tailor-made SIPs to help investors efficiently manage them.The facilities allow investors to alter SIPs according to different life situations.

Registration

An enrolment form must be filled up to register for an SIP. The scheme, SIP date, amount, start date and frequency must be added. It is a good idea to opt for the “perpetual“ option so that the SIP does not stop midway. If this option is not available, a date long enough to complete the goal may be chosen.

Step up SIP

As and when incomes rise, a step up SIP can be used to increase the SIP amount.The SIP instalment will increase at predetermined intervals to match the rise in income level of the investor. A step up SIP form needs to be filled at the time of SIP registration to use this facility. This facility is also known as top up SIP.

Pause SIP

In a cash crunch, one may not want to completely stop SIPs but put them on hold for a while till the situation eases. A pause SIP form may be used to do this. The period for pausing the SIP can be mentioned in the form. A bank mandate also needs to be filled and submitted.

Flexi SIP

Many fund houses provide flexible SIP options that allow changes in SIP amounts based on occurrence of certain events or triggers. These triggers may be based on certain pre-determined formula (eg. index level or target amount). Flexi SIP forms need to be filled with minimum and maximum SIP instalment that can be opted.

Registering an auto debit mandate ensures continuity of SIP instalments.

It is important to read instructions applicable to each of these facilities before enrolment.

Invest Rs 1,50,000 and Save Tax up to Rs 46,350 under Section 80C. Get Great Returns by Investing in Best Performing ELSS Funds. Save Tax Get Rich

For further information contact SaveTaxGetRich on 94 8300 8300

OR

You can write to us at

Invest [at] SaveTaxGetRich [dot] Com

OR

Call us on 94 8300 8300

Birla Sun Life Mutual Fund SIP Performance

Birla Sun Life Mutual Fund SIP Online

Fund Name 1 Year 3 Years 5 Years 7 Years 10 Years
Birla Sun Life Frontline Equity Fund 21.59 13.68 17.67 15.89 15.35
Birla Sun Life Top 100 Fund 22.79 13.67 17.99 16.30 15.08
Birla Sun Life Balanced ’95 Fund 20.57 15.01 18.11 16.00 15.51
Birla Sun Life Balanced Advantage Fund 22.31 15.50 15.48 13.18 11.82
Birla Sun Life Advantage Fund 24.73 18.19 22.80 18.74 15.84
Birla Sun Life Equity Fund 29.49 19.26 23.05 19.13 16.41
Birla Sun Life Mid Cap Fund 30.48 20.97 24.75 20.34 18.32
Birla Sun Life Small & Midcap Fund 39.80 26.55 28.65 23.20
Birla Sun Life Tax Relief 96 23.53 16.45 21.18 17.85 15.55
Indices
Nifty 50 Index 17.97 8.38 11.15 10.04 9.73
S&P BSE Sensex Index 16.72 7.02 10.19 9.31 9.17
Crisil Balanced Fund Aggressive Index 14.95 9.30 10.98 10.10 9.74
S&P BSE 200 Index 21.24 10.96 13.45 11.57 10.86

Invest Rs 1,50,000 and Save Tax upto Rs 46,350 under Section 80C. Get Great Returns by Investing in Best Performing ELSS Funds

Top 10 Tax Saver Mutual Funds for 2018

Best 10 ELSS Mutual Funds to invest in India for 2018

1. DSP BlackRock Tax Saver Fund

2. Invesco India Tax Plan

3. Tata India Tax Savings Fund

4. ICICI Prudential Long Term Equity Fund

5. Birla Sun Life Tax Relief 96

6. Franklin India TaxShield

7. Reliance Tax Saver (ELSS) Fund

8. BNP Paribas Long Term Equity Fund

9. Axis Tax Saver Fund

10. Birla Sun Life Tax Plan

Invest in Best Performing 2018 Tax Saver Mutual Funds Online

Invest Best Tax Saver Mutual Funds Online

Download Top Tax Saver Mutual Funds Application Forms

For further information contact SaveTaxGetRich on 94 8300 8300

CPSE ETF – Should you Invest?

While the fund promises a lucrative play on the India growth story, there are certain pitfalls.

The government is set to launch a new exchange traded fund (ETF) based on the Central Public Sec tor Enterprises (CPSE) Index.

Managed by Reliance Mutual Fund, this will be the second CPSE ETF.

The fund aims to provide investors the opportunity to invest in a diversified basket of public sector companies and benefit from the growth potential over the long term. It will mirror the performance of the CPSE Index and the portfolio will comprise shares of the 10 largest PSUs–Oil & Natural Gas Corporation (ONGC), GAIL India, Coal India, Indian Oil, Oil India, Power Finance Corporation, Rural Electrification Corporation, Container Corp, Engineers India and Bharat Electronics.

To find out if it’s a good idea to invest in the fund, it is important to consider how the first CPSE ETF has shaped up. When it was launched in March 2014, the government had offered an upfront discount of 5% on the issue price to sweeten the deal for investors.A year later, the government issued `loyalty’ units in the ratio of 15:1 to eligible retail investors who remained invested since the new fund offer, which amounted to an additional discount of around 6.66%. It is expected that the new CPSE ETF will also offer similar discounts and bonus, providing an attractive entry point to retail investors. In addition to this, the prevailing low valuations of the underlying shares make it a compelling offer-the PSU stocks that form the CPSE ETF are trading at much lower PE ratio and high dividend yields than the broader market. While CPSE Index trades at a PE multiple of 11.44 and dividend yield of 4.07%, the Nifty 50 index is available at 22 times and 1.35% respectively. A low expense ratio of 0.065% also ensures that costs do not eat into the gains made by the scheme over time.

The ETF claims to offer investors a play on the India growth story through a diversified basket of PSU stocks. But a closer inspection of the composition of the underlying index suggests that the portfolio is far from diversified. Three stocks — ONGC, Coal India and Indian Oil Corporation — together constitute around 63% of the entire portfolio. The portfolio is also skewed towards a few sectors, with energy, metals and financial services making up nearly 90% of the portfolio. This lends a higher risk element to the ETF, despite the fact that the underlying stocks are some of the biggest names in their respective sectors.

The performance of the first CPSE ETF looks impressive. Since its inception, the fund has clocked 14.5% annualised return, even as the Nifty 50 index gained 7.5% during the same period. After adjusting for loyalty units, retail investors have made a gain of 17.2%. Over the past year, the fund delivered 17.43% return, even as the Nifty 50 index clocked 2.8%. This effectively makes it the best performing large-cap fund. But this performance needs to be put in context. The fund reached its peak net asset value (NAV) within two months of being launched, supported by a combination of factors such as government oil price deregulation and tumbling crude oil prices. Investors were also of the belief that the efficiency of public sector companies would improve under the new government. The fund’s returns have since mostly been driven by the trend in commodity prices, as the index is heavily skewed towards commodity-driven businesses.

Experts are of the opinion that this is more of a speciality fund, rather than a typical diversified equity fund, and should be regarded as such. Investors should treat this as a sector or thematic fund and invest accordingly. That means it should not be a part of your core allocation. You can opt for partial allocation within the 10% tactical allocation in the portfolio.

Another factor to consider is that any changes in the policies of the promoter could have a bearing on the entire basket. “Retail investors should not over-expose their portfolio to such a concentrated bet. Adding that since the fuel price hike and deregulation is mostly behind us, there aren’t too many things the government can do to help the stock prices of these energy PSUs. Besides, while the lower valuations for the underlying PSU stocks provide some comfort on the downside, they are cheap for a reason. Most private sector businesses in the respective sectors are run far more efficiently, and are therefore awarded expensive valuations. While the likely discount and loyalty bonus makes it an attractive proposition, you should invest in the CPSE ETF only if you think the underlying businesses have growth potential and intend to hold on to it over the long run.

Franklin India Taxshield

As we enter the final quarter of the current fiscal, tax saver funds are now in focus. If you haven’t made your tax saver investment yet, you could use the next two months to invest in tax saver mutual fund schemes.

If you are looking for a fund with a consistent track record, old warhorse Franklin India Taxshield is an option to consider. Of course, equity tax saver schemes are only for those with a moderately high risk appetite and investment horizon of at least three years, since you cannot redeem your investment before that. Even though the lock-in period is three years, this fund will better suit investors with a minimum time frame of five years. Lumpsum investment may be a better option, given the lock-in period.

Launched in 1999, Franklin India Taxshield is among the most consistent performers in the equity linked saving schemes (ELSS) category. Over the last five years, the scheme’s daily one-year return has been higher than its benchmark, the Nifty 500 Index, almost 90 per cent of the time. It scores well on a risk-adjusted performance basis too, with a Sharpe ratio of 0.93. While this is a tad lower than that of peers such as Axis Long Term Equity (1.05) and Birla Sun Life Tax Relief 96 (0.97), it is higher than the average of funds in the category of 0.8.

While the fund has delivered benchmark-beating returns across three, five and ten-year time frame, its performance over a one-year period slipped due to the correction in banking and pharma stocks during September-October 2016. The fund has marginally reduced exposure to these two themes.

Strategies that worked

The fund has been able to contain downsides well during market falls and this has been on three counts.

One, higher large-cap slant compared to other funds in this category cushioned it during turbulent phases.

Second, the fund’s focus on quality stocks and strategy to stay away from momentum stocks also possibly aided performance during down cycles. Moving into defensive themes such as pharma and IT also shielded the fund from volatility.

Likewise, during recovery rallies too, the fund has managed to beat the benchmark by a considerable margin. Right sector shifts aided performance during the pull-back rallies.

Consider this — during the August 2013-March 2015 period, the fund gained nearly 110 per cent. This is higher than the 80 per cent gain for the benchmark during the same period.

Increasing exposure to cyclical themes such as financials, automobiles and industrials provided a leg-up to the fund’s performance.

The fund has managed good returns despite a relatively high expense ratio of 2.48 per cent. Peer funds such as Axis Long Term Equity (1.98 per cent), ICICI Prudential Long Term Equity (2.3 per cent) and Birla Sun Life Tax Relief 96 (2.29 per cent) have had a lower expense ratio.

Over a nine-month period, the fund has increased exposure to cyclicals such as financials, oil and gas, power and auto.

Stability in the economy post remonetisation and recovery thereafter should aid the fund’s performance. It has also reduced exposure to pharma stocks, which have been bogged down by regulatory woes.

Invesco India Contra Fund

imggallery

Invest Rs 1,50,000 and Save Tax upto Rs 46,350 under Section 80C. Get Great Returns by Investing in Best Performing ELSS Funds

Top 10 Tax Saver Mutual Funds for 2018

Best 10 ELSS Mutual Funds to invest in India for 2018

1. DSP BlackRock Tax Saver Fund

2. Invesco India Tax Plan

3. Tata India Tax Savings Fund

4. ICICI Prudential Long Term Equity Fund

5. Birla Sun Life Tax Relief 96

6. Franklin India TaxShield

7. Reliance Tax Saver (ELSS) Fund

8. BNP Paribas Long Term Equity Fund

9. Axis Tax Saver Fund

10. Birla Sun Life Tax Plan

Invest in Best Performing 2018 Tax Saver Mutual Funds Online

Invest Best Tax Saver Mutual Funds Online

Download Top Tax Saver Mutual Funds Application Forms

For further information contact SaveTaxGetRich on 94 8300 8300

Invest in ELSS Funds for Better Returns

Equity Linked Savings Scheme or ELSS Mutual Fund



Superior returns in the past, lowest lock in period amid falling interest rates a big pull

The popularity of Equity Linked Savings Scheme or ELSS mutual fund industry’s tax-saving product -is soaring among investors. In the first eight months of the current financial year, this product category has mobilised `4,121 crore as compared to `2,367 crore during the same period in the previous year.

Financial advisors said superior returns in the past, lowest lock in period and falling interest rates are prompting investors to look at ELSS.

There is a generational shift, where inflows from retail investors in equity mutual funds are rising. Since many of them, look to save tax as well, a chunk of these flows come into tax saving schemes.

These schemes delivered 17% and 16% over a 5and 10-year period respectively , which is higher than fixed income investments in the tax saving category .

Investors can invest up to `1.5 lakh in a financial year in tax savings schemes to get tax benefits under Section 80C. Investments in ELSS are locked in for a period of three years and investors can choose to either make lump sum investments, or use the systematic investment plan (SIP) route. Public Provident Fund (PPF) has a tenure of 15 years.

Distributors said falling interest rates in traditional tax saving products and fixed income products has also played a role in increasing investor interest in ELSS.

Interest rates on small savings scheme which qualify for Section 80C benefit are coming down. The fact that since Hindu Undivided Family (HUF) cannot open fresh PPF accounts and have to compulsorily withdraw money after completion of 15 years, this money is flowing into ELSS schemes.

Over the last financial year, interest rates on small savings which qualify for tax savings under Section 80C fell sharply . Public provident fund (PPF) rates were last reduced from 8.7% to 8.1%, while National Savings Certificate (NSC -5 year) were slashed to 8.1% f ro m 8 . 5 % . M o s t re c e n t ly, E m p l oye e P rov i d e n t F u n d Organisation (EPFO) rates were reduced from 8.8% to 8.65%.

What is a Dynamic Equity Fund

Dynamic Equity Funds



Equity investors usually tend to pour more money into stocks when the markets touch new highs, and stay away during downturns, which affects their overall returns. To protect investors from such miscalculations, fund houses have come up with a new scheme called dynamic equity fund.

1. What are dynamic equity funds?

As the name suggests, these funds dynamically manage their equity portfolios, investing more when markets are down and less when they are up. These funds have a mix of debt and equity in their portfolio.

They allocate less to equities when market valuations appear expen sive, and increase allocation when market valuations appear cheap.

The equity portion of the portfolio would vary depending on the meth od of calculation. Each fund house uses a different method of calcula tion, which is either based on the simple Nifty PE or an in-house proprietary model to assess valuations.

2. What are the pros and cons of a dynamic equity fund?

Since dynamic equity funds tend to hold higher cash in prolonged rallies, they may underperform during strong market conditions. Dynamic equity funds automatically rebalances portfolios and hence it is recommended for first-time equity investors with a low risk appetite. If the market was to enter a corrective mode, dynamic funds with a lower allocation to equities could see a lower erosion in their net asset value (NAV) as compared to a pure equity fund. The volatility of returns in these funds is lower than that in diversified funds and even their returns could be lower. In the current scenario, dynamic equity funds have underperformed compared to di versified equity funds over time. Dynamic equity funds may be suitable for those who are very conscious of market valuations and are wary of over-valued markets.

3. What is the tax treatment of dynamic equity funds?

A big advantage of these funds is that they are structured in such a way that they are taxed as equity funds for investors. Most funds when they lower their exposure to equities ensure that equity plus arbitrage component of the scheme is at least 65% of the corpus, which helps it qualify for equity taxation. When the fund qualifies for equity taxation, investors who hold the fund for one year, need need not pay long-term capital gains tax, making the investments tax free.

Invest Rs 1,50,000 and Save Tax up to Rs 46,350 under Section 80C. Get Great Returns by Investing in Best Performing ELSS Funds. Save Tax Get Rich

For further information contact SaveTaxGetRich on 94 8300 8300

OR

You can write to us at

Invest [at] SaveTaxGetRich [dot] Com

OR

Call us on 94 8300 8300

L&T INDIA SPECIAL SITUATIONS Fund

L&T INDIA SPECIAL SITUATIONS Fund seeks opportunities arising out of special situations that companies may find themselves in, including turnarounds, restructuring, new business streams, under-appreciated growth, asset plays and corporate actions.

The aim is to spot these ideas early and hold onto them for the right amount of time to capture their full potential. It has no market cap or sec tor bias as it seeks to tap opportunities across the spectrum. It is reasonably diversified, maintains significant exposure to stocks outside of its benchmark and takes sizeable active posi tions in the same.

L&T INDIA SPECIAL SITUATIONS Fund has outperformed both the index and peers comfortably over the long term. Investors may consider it for its differentiated strategy in the multi-cap space.

05_06_2017_123_005_003.jpg

Invest Rs 1,50,000 and Save Tax up to Rs 46,350 under Section 80C. Get Great Returns by Investing in Best Performing ELSS Funds. Save Tax Get Rich

For further information contact SaveTaxGetRich on 94 8300 8300

OR

You can write to us at

Invest [at] SaveTaxGetRich [dot] Com

OR

Call us on 94 8300 8300