Monday, January 25, 2010


With Mr.Uday Puri, the National Sales Head of Fidelity India


Fidelity has come out with a New Fund Offer named Fidelity Global Real Assets Fund, an open ended Fund of Funds scheme. The Fund will invest about 65% in Fidelity Funds - Global Real Asset Securities Fund, an offshore fund launched by Fidelity Funds. The Parent Fund will in turn aim to invest in Companies which have exposure to physical assets like Gold, Copper, Minerals, Oil, Land, etc (That is why the name REAL ASSETS FUND).

In the Fund Managers' words, the Fund aims to invest in equities which have assets which are not easily replacable and are in short supply.

It is a known fact that investing in commodities, real estate ensures that you always make more money than inflation, as commody prices are known to harden.


1. The fund can be a good geographical diversifier.

2. The Fund will benefit from Dynamic asset allocation across Real Assets.

3. Investing in this one fund will give you exposure to a wide range of commodities and real estate.

4. The Fund is well positioned to capture the growth in both Developed and developing world.

5. The biggest advantage of investing in this fund that the Fund will 'avoid' stocks which can be influenced by domestic economic pressures like telecom, financials, retail, pharma, etc. and thus give you a true Real Asset Exposure.

6. Even the currency risk is next to nil due to the fund's exposure to companies across geographies and across asset classes.

7. In its short history, the Fund has outperformed its benchmark by a massive 49% points. I would rank this fund higher than DSPBR World Mining Fund., as the DSP fund is more tilted towards Mining stocks only


1. Of course, the biggest negative will be that the fund will not enjoy 'equity' tax status and is ineligible for tax concessions available to equity funds.

2. The Fund will rely heavily on commodity and they in turn are cyclical which could make the fund highly volatile. (However, the fund is fairly diversified as, besides commodities, the fund invests in Energy, utilities as well).

3. The Feeder Fund is not very old and thus has to prove itself during bearish times.

Still as the positives outweigh the negatives, I give a SUBSCRIBE call to the Fund, especially through SIPs.

Thankfully, SIP option is available to this NFO, take the SIP route to ride the volatility which is very likely with this fund.

Best of luck,

Srikanth Matrubai

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Thursday, January 14, 2010


My regular reader Sri Divate wrote again “Your advise is absolute top class, Mr.Srikanth”. Thanks for your previous advise.

It was of immense help.

Kindly help me in rearranging my portfolio. As you know I am 50 yrs old and a Govt employee.
My present MF investment is ....
Units invest amt
Birla SL AAF -Aggrve (G)339.731 10,225
HDFC Prudence Fund (G) 83.937 10,357
HDFC Prudence Fund (G) 32.403 5,000
LIC MF Equity Fund (G)1170.026 25,000
LICMFFloMIP-PlanA(AD)2068.218 25,005
Reli Diver. Powe -RP(G) 165.751 11,000
Reli Growth Fund -RP(G) 36.108 15,000
Reli Growth Fund -RP(G) 35.648 12,000
Reli Natur Resoures (G) 977.995 10,005
Reli Vision Fund -RP(G) 93.150 17,000
SBI Mag Contra Fund (G) 400.834 25,000
SBI Mag Contra Fund (G) 438.745 25,000
SBI Mag Global Fund (D) 975.17 24,000
SBI Mag Global Fund (D)1360.750 45,000
SBI Mag Index Fund (G) 86.291 1,979
SBI Mag Insta Cash (C) 902.362 17,119
SBI Mag Tax Gain (D) 182.630 10,001
UTI VIS-Inde Linke (D)1759.201 25,000
Total 323,691

1. Whether is there any need of rearranging present folio to get better returns.
2. If some of the funds are to be rearranged then which funds.
3. I have kept about 20K in cash fund so that if market goes below NSE 3000 ? to switch to equity funds.
4. What is the Nifty target when to convert the equity funds to cash funds and vice versa.... if this has to be done.

With best wishes

Dear Divate,
Shockingly, your portfolio is concentrated in SBI Mutual Fund which accounts for 50% of your portfolio. It is never a wise to have a concentration in one Single AMC. Ensure that all your future investments go to non-SBI amc to avoid over-exposure and ensure Diversification.

Out of your present MF Investment, you can continue holding the following Funds:
HDFC Prudence Fund
LICMF Monthly Income Plan
Reliance Growth fund
Reliance Natural Resources fund
SBI Magnum Contra fund
SBI Insta Cash Fund
SBI Magnum Index Fund

You should EXIT the following funds completely
LICMF Equity Fund
Reliance Diversified Power Sector Fund
SBI Magnum Global Fund
UTI VIS Index Linked fund

You also switch the following funds
Reliance Vision fund to Reliance Regular Savings Fund (Balanced) Fund.

From the Amount received from the Exit of Funds, you invest in a Debt Fund like Birla Income Plus or HDFC Income Fund and go for Systematic Transfer Plan in a Plain Diversified Fund and you can also look at investing HDFC FlexIndex

which Transfers your Debt Fund Amount at Pre-assigned Index Levels.
Avoid Sector funds and also look at alternative assets like Corporate FDs, FMP, etc. to diversify your portfolio.
Keep a regular tab on your portfolio and make appropriate changes, if required.

Visit my blog for more details.
Best of luck,
Srikanth Shankar matrubai

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Sunday, January 10, 2010



Before going through the article, do some Financial Planning for yourself, assess your risk profile.

Most Investors invest without any specific Target/Goal in mind. They do invest in Quality Assets but sadly fail invest without any Clear Targets in Mind.
Clearly decide when and why you need the money., and how much will you need.
Prioritise your wants, needs, comforts, luxuries. Make a list of major goals which you visualise for the future, be it your car, home, child’s marriage, etc. Now, prioritise this list. Also read

It is easy for an Investment Advisor to show you the Right Assets if you specify your Target/Goal. Investing in Debt Funds for your Child’s Marriage is a foolish thing, but at the same time investing in Debt Funds for Next Year’s School Admission is a Wise Thing. Thus, it is imperative to invest with a Specific Target in Mind.
If you have more time to reach a target, then equities is the BEST avenue for you, as equities tend to give you higher retursn over the longer period
Also read

Investing your hard money just to save taxes and making some smart investments in the right assets. It is to do more with the Asset Allocation.

It is always advisable to invest in a Mix of Varied Assets like PPF, Equities, Gold, Fixed Deposits, Property, Insurance, etc. Overexposure/Underexposure to Any and All Kinds of Assets should be Avoided. For Long Term, Equities are the best avenue of Investment.
Studies have shown that getting the Right Asset Allocation contributes more than 90% to the overall Performance of a Portfolio in the Long Run while Security(Equity) Selection contributes less than 10% !!!!.
The right mix of the assets will ensure that your money works hard for you and beats inflation hands down always!!
Asset Allocation is universally acknowledged method of creating Superior Returns over Long Term.


Even Educated investors tend to invest in Insurance as their only source of Investments whereas it is well known Fact that Insurance is the Costliest way of Investment. Insurance is purely for sake of Protection if any untoward event happens to the Earning member of the Family.
The best Insurance is the Term Insurance. Agents avoid telling you about this because that Term Insurance gets them very very little Commission. ULIPs are a strict no-no. ULIPs leave you with insufficient cover and also give you below par returns. The best option would be to take a combination of Term Insurance and Mutual Funds.
Mutual Funds are the better option thatn ULIPs. Your Insurance Part should be taken care by Term Insurance and all the other features of ULIPs are taken care by the Mutual Funds which are very very cheap due to NO Entry Load., whereas ULIPs have a complex fee structure which could eat into your profits.
However, there are some ULIPs which can be looked into, but only if your investment horizon is over 15 years.

Almost Every Investor starts his Investment with Long Term Goal, but very soon as soon he sees the first profits, he becomes Greedy and forgets all about Long Term.
The problem comes when his Short Term Investment starts showing losses, the investor starts withdrawing his Long Term Investment to cover up for his Short Term Investment Losses and ends up failing to Accumulate a Sizeable Amount for his Long Term Goal.
Long Term Investment allows you the benefit of power of Compounding. Sensex, inspite 50% Drop in its value in 2008, has given a Compounded Return of 18% over a period of 30 years!!!! You would do well to read this post

. Do not get swayed by the Market Movements and change your Investment.

Thus, in conclusion, when you start Investment, take your time, do consult a Good Financial Advisor and Invest in Diversified Assets and Stay Invested for Long Term, allowing your Assets to Perform.

Finally, do review your investments at least once every year.

Best of luck,
Srikanth Matrubai