Sunday, June 17, 2018


Even though an Hindu, I keep reading Holy Books from other religions be it the Bible, the Quran, Holy Granth, etc
And I especially like the Episodes and Stories there.
Recently, while glancing through the Bible, I read a pretty interesting episode about the Pharaoh’s Dream and its interpretation by Joseph.
I could immediately connect the Episode with my Profession of Financial Planning!!
Once Pharaoh had a Dream, 2 dreams in fact and it left him worried.
In the 1st dream, he was standing by the river Nile and sees 7 Fat handsome COWS grazing around and suddenly, from the same river, another set of 7 cows came but these were lean & bony, sick to look at and shockingly, they ATE up the 7 Healthy Cows!
  In the 2nd dream, the Pharaoh saw that 7 Heads of Full, Ripe & Healthy Grain.
He saw another set of 7 Heads of Grain which were however thin and dried out.


With a gush of Wind, these Thin and Dried grains swallowed up the 7 Good healthy Grains.
The Pharaoh was highly disturbed by these nightmares.
He called his Wise men and asked for its interpretation but no one was able to answer.
Then, Joseph who was acclaimed for his accurate interpretation of dreams, and who was in Jail, was brought to the Pharaoh (after a shave, a bath and a good set of new clothes to wear).
When the Pharaoh recalled his dream to Joseph, the smiling Joseph said “Both the dreams have the same meaning.
The dreams indicate there will be 7 Years of Great Fortune with Good Crops, overflowing rivers and plenty of Food.
Sadly, it will be followed by 7 years of Famine, so severe that all the 7 years of Good Fortune will be wiped off in a jiffy.
It will be so bad that people will forget the 7 Good years completely””

Joseph continued and advised
“During the 1st 7 years of Good Fortune and Harvest, save and store as much as Grain as possible and keep in a reserve so that when the 7 years of Famine strikes, the Egyptians will have something to eat and survive”.

Not only Joseph interpreted the Dreams but also gave the solution to the Pharaoh and the thankful Pharaoh had Joseph not only released from Prison but also appointed him as No.2 in the Kingdom.

This story is in Bible.
Do read it whenever possible.

Now, the reason for me sharing this story in this Finance Blog is because I could connect the story to our FINANCIAL PLAN.

Just like Good Years of Fortune and Bumper crop was followed by Famine,
1. We too could have Income stopped
And most importantly,
2. Booming years of Stock Market could be followed by years of Bear Markets

And Exactly like in the story, people easily lose whatever they have gained in Bull Markets very quickly in Bear Markets.

And taking a cue from Joseph’s advise, we too should learn to SAVE our EARNINGs and keep it in reserve for our Famine years (the Emergency years, the Retirement Years).
So, when the going is not not splurge on LUXURY.
Firstly, ensure that your necessities are taken care of...followed by Comforts and then by Provision for FAMINE years

Are you financially ready for 7 years of No Income??
Okay...7 years could be too about a measly 12 months....
Can you maintain your current lifestyle for the next 12 months with absolute ZERO INCOME??

You need to rein in the LIFESTYLE INFLATION.
This is exactly we have been emphasising in our posts be it our blog, facebook page, twitter and all over the Social Media. 

(an ENEMY who acts as a Friend but is actually plotting your downfall)!!

The Biggest reason why LifeStyle Inflation happens is because YOU “COULD” and not because you “NEED” TO!!!”

WE have this bad bad habit of comparing ourselves with our neighbours, our cousins and want to match upto their lifestyle even if our Income does not allow the same. 

This habit has to be nipped in the bud. 
Need to create WEALTHY HABITS if we have to become truly WEALTHY.
We need to realise that our goal is COMFORTABLE LIFESTYLE throughout our life and not just during our working years and for that, we need to have a balanced Lifestyle and avoid splurging. 

Of course, we are not asking you to be STINGY but first ensure that you have adequately provided all that is required for...
Check with your Advisor that your Retirement Corpus is on target.
Get a JOSEPH (A Good Advisor) and make your life a JOURNEY TO REMEMBER. 

Then, who knows you could well 
go ahead and enjoy the WORLD TOUR....hop onto that dream MERCEDES Car, buy that latest Apple Product, show off that ROLEX....


Thursday, June 14, 2018


There has been a sharp sudden spate of interest in Pharma Sector.
NFOs dedicated exclusively to Pharma are being launched by Asset Management Schemes.

Mirae Asset and ICICI have launched their New Fund Offers in Pharma Space and Aditya Birla sunlife has applied with SEBI for their Pharma Fund. 

What is the reason behind this re-discovery of love towards Pharma?
Is it sustainable?
Is it the right time?

Our Mutual Fund Expert
SRIKANTH MATRUBAI joins us in analysing the pros and cons.

 Why Pharma Sector??
Pharma Sector is something which is in demand whatever be the position of Economy, whoever be in the Government.
The Medical Inflation is growing at a pace MORE than normal inflation and this trend is here to stay.
The cost of Medicines, treatments is only expected to keep increasing.
The BEST way to participate in such a Sector is to INVEST in Pharma stocks and what’s better than a MUTUAL FUND way to do so.
By investing in Pharma Fund, investors will eventually be participating in the Pharma Sector Growth.

Why Pharma NOW??

The BAD TIMES seem to be over for PHARMA. The Downside seems to have be limited.

The Pricing pressure and frequent regulatory changes have all been taken in stride and the sector seems to have swallowed the Bitter Pill and seems to have emerged healtier.
Every Sector goes through a Cycle and Pharma Sector seems to have turned around the Corner.
Investing in a Sector Fund when it is ripe for Uptick can result in Substianal Gains.

The Risk-Reward Ratio looks to be in favour of Investing in Pharma Funds at this point of time.

Pharma Sector does not mean Drug Companies alone. It also has such diverse and non-US dependent sub-sectors like the Hospitals, Diagnostic Centres, Fitness Centres,

After its huge underperformance for the past 2 years, Many Experts are starting to sound Bullish on the Pharma Sector

Experts Views on Pharma:

a)     Kunj Bansal, ED and CIO, Centrum Wealth, says the pharma sector can be a contrarian bet and suggests investors gradually increase their exposure to them: “Instead of riding solely on the tech sector, investors should consider investing in a pharma fund in a phased manner over the next few quarters.”

b)    Sailesh Raj Bhan, Deputy CIO, Reliance Mutual Fund, says the pharma sector has bottomed out and provides strong upside potential now:

“The challenges for pharma companies are reducing materially. Here onwards, even a small uptick in earnings will lead to substantial re-rating of stocks as valuations are rational.” Given the improvement in outlook for earnings and medium term growth prospects and valuations correction of the last three years, the sector provides a good long term opportunity. 

c)      Sonam Udeshi, Fund Manager, TATA Pharma Fund says
“I see value in Pharma at this point of time.

d)     Neelesh Surana, Mirae Asset says

Most Indian companies have proved that they have the capability to address current challenges. For example, they have been moving up the value chain by developing speciality products. In the current scenario where valuation in certain sectors are starting to look a little stretched, these companies are reasonably cheap.” He further says “The healthcare opportunity is secular and large, and the valuations are reasonable owing to consolidation in the recent past"

e)     George Joseph, Fund Manager, ICICI Prudential MF says
Pharma and healthcare are structurally good sectors to invest in. In recent times, because of FDA related issues, earnings and consequently their stock valuation have been impacted. Given the attractive stock valuation, we see good opportunity to enter certain companies at attractive valuation with an aim to make absolute returns, on a 3-5 year basis.

f)     Shankar Naren of ICICI Mutual Fund says
The sustained Underperformance has made PHARMA Sector valuations Attractive and has become a good Entry Point”

g)     V Srivatsa, fund manager of UTI Pharma Fund says
we believe that Indian pharma is out of the woods now. Overall I think pharma is an ideal 10-15 per cent growth sector. 

a)     “As incomes go up, people tend to spend more on healthcare and diagnostics, making this a secular theme to invest for the next many years,” said Vrijesh Kasera, Fund Manager, Mirae Asset Management. 

Economic Times in its recent article says
“Analysts do not rule out the possibility of re-rating of pharma companies in the coming quarters to justify superior earnings growth in the next two to three years, even though their present valuations may reflect their near-term earnings estimates.”

BUSINESSWORLD in its article says 
"In range-bound markets such as these, a “dose” of Healthcare may be just what your portfolio needs. Consider making a judicious allocation of no more than 10% of your overall equity portfolio to it though  - sectoral funds can be extremely volatile and unpredictable in the short term."

ADVANTAGES of investing in PHARMA FUND :
1. Possibility of beating Medical Inflation
2. Pharma Sector has been underperforming for the past 2 years and the downside seems to be highly limited.
3. A Dedicated Sector Fund like the Pharma Fund has potential to deliver HUGE returns for well informed – well advised investors.

1. Invest for LONG TERM. Short Term could be very volatile
2. Always have a basked of funds and Pharma Sector should only be a PART of your Portfolio
3. Preferably do NOT have more than 5% of exposure in a Sector Fund
4. The Fall in Sector Funds is normally MORE than Diversified Funds as the Cushion for Diversification is limited.

What to do ?
1. Preferably invest via the SIP mode to ensure that your purchase is evened out
2. Have a upper ceiling of 10% of your overall portfolio
3. Take Services of a Mutual Fund Distributor
You need to know when to get in and when to get out of a Sector Fund and a MFD / Advisor would definitely be in a better position to suggest you the same.

Aggressive investors can look at investing in Lumpsum and maybe also consider high value SIP

There are quite a number of funds in Pharma space as of now namely
Reliance Pharma Fund
SBI Pharma Fund
UTI Healthcare fund

And 2 NEW funds are getting launched now namely
ICICI PHD FUND (opening on 25th June)
MIRAE ASSET HEALTHCARE FUND (already open and will close on 25th June)

I am more inclined towards Mirae Asset Healthcare Fund NFO, due to  their extremely superior performance in equity space and for their sheer consistency.

The New Fund Offer (NFO) of the scheme, Mirae Asset Healthcare Fund, will open for subscription on 11 June, and close on 25 June. The scheme will be managed by Vrijesh Kasera. 
Scheme at a glance:
Name: Mirae Asset Healthcare Fund 
Type of the scheme: Sector fund 
Plans & options: Regular and direct 
Benchmark: S&P BSE Healthcare Index 
Minimum application amount: Rs 5,000 
Exit load: 1 per cent (if redeemed within one year from the date of allotment) 

Mirae Asset Healthcare Fund would be investing in Health Care, Hospitals, Diagnostics, Medical Equipment companies, Health Insurance companies, etc

If you are investing, invest with a view of at least 5 years and follow your Advisors advise.

I have my own SIP in RELIANCE Pharma Fund, and that’s purpose is to create a LONG TERM MEDICAL EMERGENCY CORPUS and I intend to Increase my SIP in Pharma fund

I am empanelled with Mirae Asset Mutual Fund and I distribute their funds and my views regarding Mirae Asset Funds could be biased.
Do contact your advisor before investing.

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