Tuesday, April 20, 2010


Religare Mutual Fund which has been coming up with Innovative Funds has come out with another curious Fund, Religare Monthly Income Plan (MIP) Plus.

The fund is 'plus' in the sense that it will have an exposure to Gold through Gold ETF in addition to Fixed Income instruments and Equities.

GOLD impact :

Gold has negative correlation with Equities and is considered a good hedge against Inflation. In normal MIPs, the Fund Manager did not have the flexibility to tilt his allocation towards Gold, but the Religare MIP Plus has this option, which can be used by the Fund Manager to improve diversification and enhance performance.

Gold's inverse correlation will stabilize the risk/return profile of the Fund.

The Fund Manager indicated that he would ideally look at

70% Debt

15-20% Equity

10-15% Gold Etf

DEBT : The Fund would like to be more inclined towards 'short term' papers around 1 year maturity. The Fund would prefer to invest in Corporate Bonds rather than Govt Papers.

EQUITIES: The Equity portion would be tilted towards Large Cap, sources at the Religare MF said.

GOLD : Gold investment would be in the form of investment into the units of Religare Gold ETF. The Fund has an option to look at other ETFs as well.


Pure Gold ETF is not an easy investment option due to the volatile currency situation which can test your skill.

Pure Equity will always carry the 'volatility risk' and test your patience as well.

Here's where a Fund Manager's skill will come into play. He will tilt his investment towards the Best Asset Class depending on the situation and with Gold too as an option, Religare MIP Plus is a "good investment choice" for the equity-averse investor, as this Fund has the potential to add value in varying market conditions.

The Fund is now open for subscription and will close on May 11, 2010.

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Sunday, April 18, 2010


SEBI has at last woken up to stop the DAY LOOT carried by Insurance Companies through ULIPs. They were literally looting the hard earned money of the gullible public by the open misselling.

Since the day I have started this blog, I have been telling, asking , requesting, begging people to avoid ULIPs and those who have taken my advise will be surely glad that they have followed my advise.

ULIP's real avatar :
ULIP is saving-cum-investment product that offers the option of life cover along with market liked returns.
Very few people know that ULIP is a long term product and gives decent return only if the holding period is a minimum of 10 years. However the sales persons were selling (mis-selling) ULIP as three year products (after October 2009 as 5 year products).
In a ULIP, the insurance component is very very low and does NOT serve the purpose of Family Protection. Due to the many hidden charges like Policy Admin Charges, Allocation Charges, Fund Management Charges, and all types of atrocious charges, ULIPs are designed to ensure maximum benefit for the Insurance Companies and Insurance Agents and NOT THE INVESTOR!!!! The commission is as high as 40%. This commission is paid by YOU and taken from YOUR pocket.

ULIPs are sold mostly as a 'only 3 year' premium paying product. Investors are not educated that the first three years are the costliest in terms of various charges that the investor pays. To cover this loss, the investor must remain invested for the full term of the ULIP. Calculations show that it is only after 10 years or so that this loss of income (by the way of high front end charges) is covered. The figure of 10 years also alignes well with the concept that any equity investment must be held for atleast a full equity cycle(typically 10 years).

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IRDA'S idiotic behaviour :
IRDA (Insurance Regulator Development Authority), instead of clearing the air has published idiotic advertisement inducing the Public to buy ULIPs and continue being conned.
IRDA's behaviour is so low, that people have started calling it as Indecent Regulator Disobeying Authority).
IRDA is functioning NOT as a Regulator with the interest of Investors in mind, but as a Front for the Insurance Companies.

SEBI needs to do more :
Firstly, SEBI needs to clarify what it was doing all these years. ULIPs are being mis-sold for more than a decade.
Why has the LIC ULIP not stopped by SEBI?. A clear case of double standards. Just like Mutual Funds, SEBI should remove the entire 'commission based structure' in the Insurance too and also allow investors to 'Directly' take the Insurance products themselves.

Do you know that for a Cover of Rs.20 lakhs (for a 30 year old), the ULIP cost would come to Rs.2 Lakhs per year whereas a Pure Term Policy would cost him only Rs.5000/-!!!!!!!!!! You are saving Rs.1,95,000. You can easily invest this amount in Mutual Funds and earn much much higher returns.
This way he is adequately insured and most importantly, getting higher returns.

Take only Term Insurance. They are the cheapest and best way to insurance yourself.
Balance invest in Mutual Funds.

Let me be very clear here. I sell Insurance also. But I have never ever sold any ULIP and I also request you to avoid ULIPs at all costs.

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Saturday, April 10, 2010


My First Follower Mr.Akhil sharma from Delhi wrote :
Hello Sir
I hope this mail finds you and your loved ones in the pink of health.
I have as promised earlier two ongoing SIPs in Fidelity Equity Fund and Sundaram Select Focus Fund.(Rs.500 each)

I am planning to start one more SIP for the amount of Rs.1000 per month.
I'm not so sure about the funds though.

I have in mind HDFC TOP 200 Fund and DSP Top 100 Fund.

Please advise where should i put my money.Suggest any other fund apart from these two if necessary.

P.S : I'm planning to invest for a long term.


Dear Akhil sharma,
Thank you for your kind words. I heartily reciprocate your feelings and hope the same there.
Do continue your Ongoing Sips in Fidelity Equity Fund and Sundaram Select Focus Fund.
I am very happy about you starting another sip of 1000pm.
Both the Funds you have selected i.e., HDFC Top 200 Fund and DSPBR Top 100 Fund are very good. You can choose any of them. Both these funds are a 'must have' in any portfolio.
Whereas your two existing Funds are both Diversified Funds with No Sector or Cap bais, it is prudent to have a Large Cap Fund and you are on the Right Track.
My Personal Choice among the two would be HDFC Top 200 Fund. The Fund is not very sexy in terms of its Presentation, but it does its job quitely and has been very very consistent since its inception and boasts of a Great Track Record.

Do evaluate your portfolio every 6 months or so and take appropriate action.

Read this http://goodfundsadvisor.blogspot.com/2010/03/use-8th-wonder-of-world.html

And also this post http://goodfundsadvisor.blogspot.com/2010/03/best-funds-for-new-investor.html

These two articles will help you in your decision making.

Srikanth Matrubai,

If you are going for HDFC Top 200 fund, go for a Rs.500 sip on two Different Dates to take advantage of NAV Volatility and in the process earn more.

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