Tuesday, September 22, 2009

ICICI RIGHT FUND - RIGHT OR WRONG??


FOR PASSIVE TAX SAVING INVESTORS





ICICI Prudential Right Fund is a 10 year Close Ended ELSS (Tax Saving ) Fund.
The Fund closed for subscription on 09 September.
I sent the following advise on the Fund to my clients.

Read on...........

ICICI Prudential Mutual Fund has lauched a New Fund ICICI Prudential Right Fund. The Fund is a 10 year Close ended ELSS that seeks to generate Long Term Capital Appreciaton.

The Minimum Subscription is Rs.500 and in multiples of Rs.500 thereof.
The scheme will charge an entry Load of 2.25%.
Prashant Kothari will be the fund manager of the scheme. Mr.Prashanth Kothari has over 5 years of experience as Equity analyst and Fund Manager. He is presently managing ICICI Equity & Derivative Fund, ICICI FMCG Fund, ICICI Focussed Equity Fund

ANALYSIS AND RECOMMENDATION :
What is this RIGHT Fund?. RIGHT is an acronym for 'Rewards of Investing and Generation of Healthy Tax Savings'.
The Fund seeks to invest a major part of its portfolio in Large Caps and is thus is 'Safer' compared to other ELSS funds. This is especially more pronounced when you consider that almost all Tax Saving Funds invest in 'Growth' Stocks which are mostly Mid-caps and thus volatile.

PROS :
1. With its Large Cap Focus, the Fund will have reduced volatilty.
2. Most Tax Funds have consistently delivered Better returns than both Nifty and Sensex.
3. The Fund aims to invest 85% in Top 100 Companies by Market Cap which should protect the Fund during Bear Markets.
4. Minimum Investment is only Rs.500.

CONS :
1. Since the Fund aims to invest mostly in Large Caps, the fund may fail to deliver superior returns during market rallies.
2. The Fund has an entry load of 2.25%.
3. Being a Close-ended Fund, you cannot take the 'SIP' route to investing in this fund.

If you are investing purely for Tax Saving purpose, then you need not look at this Fund. However, if you are looking both for Tax Saving as well as Long Term investment, then this Fund should be in your portfolio.

Best of luck,

Srikanth Shankar Matrubai



Also visit

http://equityadvise.blogspot.com

Friday, September 18, 2009

HELP ME ACCUMULATE LONG TERM GAINS

Want to accumulate Long Term Gains???... Then read on..

Niranjan Kumar Boora wrote :

Hi,
I am considering to accumulate long term gains, I have started SIP in mutual funds. My question is did I selected the proper portfolio.
I happened to read your blog today.

I started investing in mutual fund through SIP route Rs2000pm for 1 year starting Nov 2008 in the following funds.

Can you please analyze my portfolio.

1. HSBC Equity Fund - Growth (You suggested to few people to buy Fidelity Equity, what to do?)
2. IDFC Premier Equity Fund - Growth
3. DWS Tax Saving Fund - Growth

Apart from these, I have investments in the following funds (planning to switch from these to some HSBC Equity or some other fund you suggest, should I do?)


4. Sundaram CAPEX Fund - Growth (20K)
5. SBI Multicap Fund - Growth (10K)
6 UTI Mahila Unit Scheme - Growth (20K)
7. SBI Infrastructure Fund (20K)

Thanks,
Niranjan


SRIKANTH SHANKAR MATRUBAI advised :
Dear Niranjan,
Your existing SIP are going into very Good Funds and I do not see the need for change in funds. Yes, I have been recommending Fidelity Equity, but HSBC Equity too has been performing well and should continue to do so. So, in conclusion, your existing sips need not be tinkered with.
However, your lumpsum investments do need a overhaul.
Sundaram CAPEX Fund - Growth (20K) - Switch to the more promising and better performing Sundaram Select Focus Fund

SBI Multicap Fund - Growth (10K) - Better redeem and invest in a Good Large Cap Fund like the HDFC Top 200 Fund

UTI Mahila Unit Scheme - Growth (20K) - continue

SBI Infrastructure Fund (20K) - Switch to SBI Bluechip fund.

If possible reduce the existing sip from 2000 to 1000 in each of the existing sips or increase the sip investments by another 3000 and invest in the following funds to give your fund a Balanced Look.
DSPBR Top 100 Fund
Fidelity Equity Fund
HDFC Prudence Fund


Regards,
Srikanth Shankar Matrubai

http://goodfundsadvisor.blogspot.com


Mr.Niranajan wrote back :
Thank you sir..
I will do what you have suggested for a balanced portfolio. I really thank you for taking time to analyze my portfolio and suggesting the changes.

Thanks
Niranjan


Also visit

http://equityadvise.blogspot.com

Thursday, September 3, 2009

L&T FINANCE NCD - INVEST


SAFE, SECURE AND LIQUID TOO

L&T Finance is offering its First Ever NCD.

Srikanth Shankar Matrubai







L&T Finance is a 100% subsidiary of L&T. The Company has a good Track record. The Company's Capital Adequacy is very good at 16%.
The NCD is secured and the Company is also setting up a Debenture Redemption Reserve by setting aside 50% of the Capital raised in the NCD.

Net NPA is only 2.04% as on 31/3/09 and that too due to Economic downturn and prudent Accounting norms.

L&T Finance has NEVER been downgraded!!.

COMMENTS AND RECOMMENDATION :
The better return is the biggest attraction. Banks like the SBI is offering around 8% return on a 5 year FD and here L&T Finance is offering 9.5% with a better liquidity.
Good Rating from both CARE and ICRA. CARE has given a AA+ and ICRA has rated the issue LAA+ indicating LOW RISK.

Definitely better than any Fixed Deposit because of its better liquidity and Tax Benefits.

There is even a chance of Capital Gain because of its listing in Stock Markets and the greater interest in Retail Bond Market growing everyday. Any major fall in yields of Debt instruments would present L&T NCD investor with an opportunity to Cash out by selling in the Stock Markets.
The Company has also indicated that it may consider Buyback of the NCD and also consider giving loans to the holders of the NCD, in future.
INVEST preferably in the 10 year option and lock in the higher interest rates offered.



Also visit

http://equityadvise.blogspot.com

Wednesday, September 2, 2009

SHINSEI INDUSTRY LEADERS FUND - INVEST

Focusses on Quality Stocks


Srikanth Shankar Matrubai

One can consider investing in Shinsei Industry Leaders Fund.





Shinsei Mutual Fund promoted by Shinsei Bank, Japan and Rakesh Jhunjhunwala have come out with their First Equity NFO with the name of Shinsei Industry Leaders Fund.

WHERE WILL THE FUND INVEST ?
The Fund aims to invest in "Leaders" who not only have Largest Market Share but also includes companies who have Highest Growth in sales and Highest Profitabliity. While AMFi has classifed companies into 43 sectors, the Fund aims to identify about 3-5 companies in each sector and further filter them and ultimately aim to have a portfolio of 25-35 stocks.
The Fund aims to have 60-70% in large cap and about 30-40% in Mid cap.


FUND MANAGER :
David Pezarkar is the Fund Manager of this Scheme. He had earlier managed SBI Magnum Tax Gain 93 and had also worked with UTI Mutual Fund, Way2Wealth Brokers, and Bajaj Allianz Life Insurance as a Equity Head.

COMMENTS AND RECOMMENDATIONS :

Though a New Fund from a New AMC, the persons behind the AMC like Mr.Rakesh Jhunjhunwala and Shinsei Bank do inspire confidence. Also, note that the Fund's investment philosophy is a no-brainer and should form a part of all Risk Averse Investors.
Investors can hope to get a Portfolio comprising of Leading Companies giving Good Market Relative Returns. The portfolio of the scheme has the potential to offer steady relative returns to investors across various market conditions because of its focus on Quality Stocks.
Industry Leaders does not necessarily mean Large Cap Companies.
The Backtesting of the Model that Shinsei proposes to use has shown that the Fund has given an Alpha Return of 10% above its Benchmark of BSE-100 with a Sharpe Ratio of the Fund is 2.06%
the Fund will NOT invest in Small Caps and Micro Caps


Also visit

http://equityadvise.blogspot.com

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