Tuesday, August 30, 2011


SBI has come with SBI Gold Fund.
You can invest if you are under exposed to Gold.

SBI has launched SBI Gold Fund – its FoF that feeds into its gold ETF.
The SBI Gold Fund is very similar to Reliance Gold Savings Fund and hence
the working of the fund is known to most of you, my clients.
If you have not yet understood its working…please read…

This fund will be investing in the gold exchange traded fund (ETF) as an
underlying. So this method is very convenient to those investors who are
not very comfortable with buying the gold ETF through the stock
SBI Gold  fund will enjoy the same tax benefits as any exchange traded gold
There will no limits on investment.

Gold has been a star performer for the past 4 years.
Being seen as a safe haven across universe, Gold has been chased by all
types of investors. The recent Economic upheavel across the World has
pushed up the Gold prices and there is no reason why Gold should not do
Gold, as we know, has been a star performer for the past couple of years.
Gold is a counter cyclical in nature and hence an ideal asset tool in
Gold should be looked at as a diversification, as a hedge in your portfolio.
Even if everything else goes wrong, this is one asset that would do well,
particularly in times of uncertainty. So it should be looked at from an asset
allocation or diversification point of view, rather than taking a view on the
price where it is trading today.

Why invest in SBI Gold Fund??

There are 6 reasons for you to invest in a Gold Saving Fund and SBI Gold
Fund in particular…
In Gold ETF space, SBI Gold has been a outperformer because the Fund has
been fully invested and has minimal tracking error.
2. The SIP option gives you the advantage of buying Gold in as small
quantity of Rs.100/- which is not possible with a Gold ETF.
3. Yes, being a Fof, there is no Compulsion of Demat Account.
4. Excellent way to accumulate Gold without being concerned about the
Secuirty, Purity, making charges, etc.
5. Taxation laws enable you to take the benefit of Long Term Capital Gains
after just period of one year of its holding which is not so in case of Physical
6. The Biggest plus point for the Gold Saving Fund according to me, going
forward, Gold is going to be more and more volatile, hence will benefit SIP
investors immensely.
SIP in SBI Gold Fund NFO is likely to generate higher Returns than GOLD
ETF, with the assumption that Gold Prices may continue to be VOLATILE by
5-10% . Investor will be invest in this Fund during Declines in Gold
Prices(via SIP of course). This is likely to Reduce the Cost of Purchase of GOLD UNITS in Fund
of Funds.

Gold recent sharp rise will see it going periodic price correction which will
help SIP investors average their cost.
For someone, who has no exposure to Gold at all, this Fund is an excellent
way to get an exposure and set his Asset Allocation right.
If you are investing through Sips, YES go for SBI Gold Fund…otherwise it is a
Strong NO!!!
Best of luck,
Srikanth Matrubai

Also visit

Tuesday, August 23, 2011


Hi Sir,

I have an ongoing sip in HDFC Top 200 fund.
I am thinking of going for a sip in IDFC Premier Equity Fund and DSP Top 100 Equity Fund.
I am 30 years old. My horizon is 25 years.
I want to have a Huge Retirement Kitty.

Please give me your valuable suggestion.


Hi, Sreenath,

It is always better if you have a amount in your mind when you start planning.

The best way for this is to calculate your Retirement Corpus

You can find the retirement calculator in many financial websites.

I had written a rather long article on retirement and you can find the same here...


The fact that you are investing through sips itself shows that you are on the right path.

However, your choice of funds need to be changed.

HDFC top 200 can be continued.
In Mid cap, go for IDFC Premier Equity Fund.
But, I do not see any reason for another Large Cap fund when you already have a sip in Hdfc top 200 fund.
I suggest you rather go for a Diversified Equity Fund like the Fidelity Equity Fund or the DSP BR Equity Fund.
More so, since your horizon is 25 years...quite a good time to ride over the volatility.
My personal favourite would be the Pramerica Dynamic Fund.
Also please take care to switch your equity gains steadily into balance funds and then further to debt funds as you near your goal.
Another caveat....
do not stick with 1 fund throughout....keep an eagle eye over developments like the Change in Fund Manager, Change in Investment Mandate, Continuous slip up in performance....
If such thing is noticed, do not hesitate to switch from the fund and consider moving to a better promising fund.

Best of luck,
Srikanth Matrubai

Also visit http://equityadvise.blogspot.com

Wednesday, August 17, 2011


 Had an opportunity to have a chit chat with Sunil Singhania, the soft spoken Head of Equities, Reliance Mutual Fund.

He was positive about the markets going forward.

He said "the recent sell off will now encourage fence sitters to get into the markets now, especially the Long Term Money may not get such cheap valuations."
"The repeat of 2008 market crash is unlikely. Things were different then...the situation is much much better now. There is absolutely no need to panic and I would rather look at this sell off as a BUYING OPPORTUNITY"
On Economy he revealed "India growing at 7% compared to 8% last year is a slowdown, but India normally takes 3 forward steps and 1 backward step, and I would say that the 1 backward step has been taken and the future looks only rosier and India is a good bet for Global investors.
Inflation is showing definite signs of cooling off which should ensure that Interest Rate hike is done away with"

On Reliance Banking Fund : "Banks tend to grow 150% more than the GDP and the fact that the Indian economy is under banked, the Sector is very attractive. The interest too is near its peak, if not peaked already, the Reliance Banking Fund is the Fund for not just the Aggressive investors even for the average investor, especially if he is investing through SIPs".

On Reliance Pharma Fund : "Pharma as a sector has done tremondously well in the past. While valuations are looking stretched, you should remember that growing health consciousness and India as a Medical destination getting attention will hold the Pharma sector in focus".

On Reliance Infra Fund : "yes, the fund has disappointed many investors. But the peaking of interest rates angurs well for the sector. And moreover, if you have observed, many companies have been shedding excess baggage by way of diluting stake and in some cases, selling off the unrelated business which increases their focus on their Primary business. We are looking at companies which have a sustainable business model and the revenue is visible and we strongly believe that this Fund has a huge potential above average return to Long Term investors".

On Reliance Gold Fund : "Gold was in a different orbit for the past 2-3 years and would find extremely difficult to replicate the same kind of returns. Look at Gold more as a hedge and a defensive bet rather than as an investment avenue which will fetch you huge returns"

Finally, when asked for 1 single advise he would like to give investors, he said : “Do not let the short term movements affect your long term asset allocation. Stay invested in weak markets, you will make loads of money’..

Srikanth Matrubai

Also visit http://equityadvise.blogspot.com