Thursday, December 31, 2015


If there is one question which is most trending in Mutual Fund space, it is SHOULD I CONTINUE WITH HDFC EQUITY FUND?

While there is no right or wrong answers simply because it depends on a number of factors like your Risk Profile, Your other investments, et al.
This article is not written to convince you to continue to hold or sell or invest afresh  (that will be done better by your Financial Advisor), I am trying to show you some data points which are very very useful and could help you in your Investment decisions.

The Fund's performance for the past 4-6 quarters has been pretty insipid and has been panned by many investors. True.
But, its long term performance continues to inspire.
And, its underperformance for some quarters is not new at all. It has this habit of underperformance for quite a while and then bouncing back in style. It has done for so many times in the past.
And, yet, we in the MF field say "Past Performance may not be repeated"!!!!
What is most astonishing some self proclaimed "experts" comparing HDFC Equity Fund's performance with FD and RD!!
Come on! You can’t compare Oranges with Apples.
If you do compare HDFC Equity with Fd and Rd...Then do not compare for 3 or 5 years, but compare for 15 years or 20 years and show me the result!!

Courtesy : Morningstar


As I analysed HDFC Equity fund's performance history....the following amazing points I noticed :

1. The Fund which was launched in January 1, 1995 at Rs.10
Was quoting its NAV as follows:

Year 1 (Jan1, 1996) - Rs.7.29
Year 2 (Jan1, 1997) - Rs.5.67
Year 3 (Jan1, 1998) - Rs.6.79
Year 4 (Jan1, 1999) - Rs.9.29

and the Fund crossed the physiological mark of Rs.10 NAV only on 19th Jan 1999, a full 4 years after its launch!!!!

And, surprise on Year 5 (Jan1, 2000) the Fund's NAV was Rs.24.91.....MORE THAN DOUBLE!!

2. Even for a SIP investor, the value of his investment would have been like this....

Till March 1998, (that is 39 sips)
Invested Amount = Rs.39, 000
Investment Value = Rs.38400/-

So, even the proponents of SIP would have got the stick

The Interesting part is, if the Investor had continued for just 1 more year
Then his
Invested Amount = Rs.51, 000
Investment Value = Rs.86, 451...


Not only he would have gained profit, it would have been a good decent appreciation.
Now, if the investor had continued for one more year

Invested Amount = Rs.63, 000
Investment Value = Rs.1, 95,000

What many would have done is...they would have started in this fund as "Long Term", bought it in the Year 2 and SOLD (!) in year 4, after all your NAV went up from 5.67 to 9.29.
Even After 4 Years NAV Is 8.22,  then, yes, one definitely needs to rethink.
But You would have also noted that the NAV Has Increased From 6.68 to 8.22. It Shows Some Positive Changes In Fund.

Second, Third & Fourth, Year Fund Is Performing.

By the way, for your information, the NAV of HDFC EQUITY FUND  is today Rs.443 and the CAGR for those who have stayed invested since the NFO is 19.78% TAX FREE!!

I am NOT (repeat, not) advocating that you should start investing in HDFC Equity or continue to stay invested... (for that, your Advisor would be in a better position).
What I am trying to say is...if you have started in a fund with a Long Term view, then please do stay invested.
The reward for just staying put is huge.

Caveat: The Fund strategy should be good and so should be the Fund Manager. (This, of course, your Financial Advisor would be able to guide).
Panning a fund for its non-performance (even for a short term) has been a fashion.
Should always compare a fund not only with the Benchmark but also its peers.
A Fund's space in your portfolio Depends on many factors like
Bench mark returns, investment objective , underlining assets where the fund has invested in , fund house, fund manager etc etc .
There are various schemes which have gone through rough patch in the initial few years. The reasons could be multiple. At the same time some schemes have fantastic start and track record and have not been doing well in the recent past.

It is important to for an investor and distributor to stay invested with conviction. Rankings are temporary.

Srikanth Matrubai
SriKavi Wealth Advisors

Tuesday, December 8, 2015


As expected, there is a mad scramble to invest in IRFC's Tax Free Bonds which opened today.
People are rushing in to invest as if there is no other alternative to this issue.

IRFC tax free bond bidding status:

Bidding @ 11.04 am

CAT I        0050.000
CAT II       0708.679
CAT III      0810.370
CAT IV      0659.285

TOTAL      2228.333

Figs in crores

Already more than 2000 crores in 1 hour flat!!

AT 1 PM:
IRFC tax free bond bidding update

Bidding @ 01.15 pm

I      0305.000  44.87%
II     1044.939 115.28%
III    1283.805 113.31%
IV    1325.228  73.10%

TOT 3958.972   87.36%

Figs in crore

And 4000 crores in 3 hours!!

Is it so good?
Are you missing something by not investing?
Lets analyse....

IRFC will be giving you max of 7.53% TAX FREE return (15 year )...meaning, the interest earned on this investment will NOT BE TAXED.

But, do not get confused, the Investment itself will NOT qualify for deduction u/s Sec80C!!!

Just today morning, I was telling a client whose Portfolio was equity heavy and there was definite space for Debt exposure and he was hell bent on investing in this Tax free Bonds.
I suggested him to rather look at Debt Funds at this stage and maybe Arbitrage Funds too.

The BIGGEST ARGUMENT IN FAVOUR OF DEBT FUNDS is that Indexation benefit is allowed but is not allowed in these Tax Free Bonds if you sell before the tenure closes.
That means, the long-term capital gains is taxed at 10%.

Now, when you are investing in a instrument for 15 years, I wonder why should anyone be happy with the paltry return of 7.53% when he can easily earn much more than that in Equity.
Yes, equity is volatile but we all that TIME IN MORE IMPORTANT IN MARKETS and over a period of time, the returns will compensate for the volatility.

If your goal is only to PRESERVE WEALTH, then sure, go ahead, invest in these Tax Free Bonds, but if you want to CREATE WEALTH, then you have to look hard and think seriously about diverting this money into EQUITY MUTUAL FUNDS.

There is absolutely no doubt that India is in a stage where it is poised to take off in a big way....and this is a given and as & when this happens, the Inflation will definitely bounce back and your returns from the Tax Free Bonds will not even match the Inflation and thus your Real Return could well be NEGATIVE.

Wherever there is GUARANTEE , you need to understand you are sacrificing wealth creation.

Never forget the monster called INFLATION................

The MOST important point for me is that TAX TREATMENT ALONE should never be the ONLY criteria for any investment and if someone is investing in Tax Free Bonds with only Tax Benefit as backdrop, he is making a huge huge mistake.

Investments should always be Goal Based

And, please contact your Financial Advisor before investing as he will be in the Best Position to guide you based on your Asset Allocation and Risk Profile.

Tuesday, October 20, 2015

Focus on Boosting your Income not just cutting expenses

Common man will remain common but also discontented only because he keeps on cribbing about rising prices.
Last month it was Onion which ruled his mind.
Since then it has come down from 100 to 30.
Likewise he used to pay in the high 70s for the petrol which has come down to below 65 levels.
And now it is the Tur Dal which is ruling his mind.
Next month, it will be the Diwali Crackers!!!!

Its in his veins to always keep finding fault and keep finding issues to crib about.

 Focus on Increasing Income too not just cutting your Expenses

I always keep telling my investors that
"there is a limit to how much you can save on expenses....
But there is NO LIMIT to how much you can EARN!

Yes, one has that feeling that Expenses is in OUR HANDS but income depends on variety of factors. Is it really? Yes, if you are salaried person, definitely income is the hands of your employer. But, still, you can do something extra to earn more isn’t it (like Working overtime, teaching, writing, you can put your whatever additional skill to earn that little extra which can take your income to higher pedestal...............who knows.........this could well become your MAIN income too).

Yes, Increasing Income takes time.......but once you are on the path, mark my words, you will be closer to your goal than you would have ever imagined.
If you triple your income 3 days in a row but keep your expenses the same, you can shorten the accumulation period to just 1 year because you'll earn 27 times your current income!
Just tripling your income for 3 days in a row means you are earning 27 times your currne tincome
And, the BIGGEST way to increase your income is to Stop putting that hard earned savings into Traditional instruments and look at Diversified Equity Funds.
What better way to earn Higher Income??!!!

Concentrate your energies and focus your expertise on Earnings.
That does not mean, be a spendthrift. Controlling expenses is the 1st step to getting your finances right. If you don’t know how to control your expense, you won’t be able to save.
Please note that I have used the word “Control” not “Cutting”.
Then, only then, you will become a Contented Man even while being a Common Man"!
Learn to Earn
Earn to Learn.
Keep on adding skills to your Portfolio.
Then you will keep on earning. 

"Be an eagle who soars above the clouds so the rain clouds don't deter him."

 Srikanth Matrubai

Also visit http:/

Thursday, October 15, 2015

Do you really need a Own Car?

As you scale up Financially, you start adding latest gizmos too..The latest i-
phone, the latest laptop and obviously the next on your radar would be the 
BRAND NEW CAR (sometimes, even a High End Second Hand Car) 

Having your own Car obviously shows to the World that YOU HAVE ARRIVED!!  

But, have you truly???

 Is it worth buying a Car just to show off? 

Is it financially prudent decision?? 

Just like buying a Smartphone brings with it loads of accompanying recurring 
expenses like Data Plan, App Service Fees, etc and thus force you to do 
research before buying one.... 

Same goes towards buying a Car too... 

Buying a Car brings with it loads of recurring expenses like Regular Servicing, 
Annual Insurance, Parking, the Regular repairs and not to forget Depreciation 


True, there are hordes of Ads all over the place luring you... 

Low Rates, Longer Warranties, Higher Mileage, Promised Buyback, etc. 


So, before heading off to purchase your New Car consider the following: 

1. Do you have any load to clear off ? (Education, etc) 
2. Do you have a Secure Job? 

3. Do you have a BIG expense coming up (your marriage, perhaps?) 

4. How many times you will be taking out the Car.... (Are you buying the car to 
show off or do you really NEED it) 


And, last but not the least...... 

Do not forget this is the era of Door Services and hence just a click of a button, 
you have a chauffeur driver Cab (Uber/Ola) on your doorsteps to serve you at 
very nominal rates. 



For your information, a recent article in revealed that 
there was a almost 30% drop in the number of cars purchased by people aged 
18 to 34 in the US! 

Remember, CAR is ultimately a Tool to travel and not an Aspiration, especially 
for those who have just started earning. 

First earn your Millions and then think of a Personal Car. 

I personally do not own one. Many of my Advisor friends are shocked and ask 
me “What will your clients think about you” 
I reply “My client comes to me for my Knowledge not to look at my Means of 


And, moreover for me, REAL VACATION is not driving for many hours, hundreds 
of miles in my car with full of stress.....I would rather relax and enjoy the 
Shatbadi Train Journey or the good old Volvo A/c Bus without having to worry about navigating the Traffic!!! 


Also visit http:/

Monday, September 28, 2015


 Be A Smart Investor and Start Investing Early to Get Compounding Benefits. 

Little Drops of Water Make A Mighty Ocean!!

 Saying to you “I will start next week” is nothing less than a disaster. This next week could well next fortnight, next month, next quarter and even next year. Time flies and the amount you need to invest will only increase. The hard truth is you just can’t afford to delay.

 It is rightly said that Time is more than money. 

Starting saving early ensures that you have the time ti ride out the stock market volatility and thus you are in a position from the '8th Wonder of the World' the "Compound" effect. The younger you are, the fewer are your financial obligations, leaving you with higher surplus to invest. 

If you start to invest from the age of 25 years Rs. 5000 a month, your total investment will be Rs. 21 Lacs till your retirement age of 60 years. Your investment value will be Rs.5.70 Crore.

If you start to invest from the age of 35 years Rs.15000 a month, your total investment will be Rs. 45 Lacs till your retirement age of 60 years. Your investments value will be Rs 4.13 Crore.
How come you invest less still get more value or you invest more still get less value ?? 
It is just because "Time is More than Money"

Start investing Early in life to create more wealth...
You will be surprised to see the enormous difference by investing just 1 month early.


Do you know that if you intend to invest Rs.2000pm and delay the same by just one(1) month, you would be losing Rs.1,90,792!!!! (Calculated @20% for 25 years). And in today's worth of money, you are losing Rs.44,454. Yes, by delaying your Rs.2000 investment by 1 month, you are losing Rs.44,454 in today's worth

Also visit http:/

Sunday, September 13, 2015

Sovereign Gold Bonds Scheme - Better than even Gold ETF

The Government with an intention to attract the Huge Quantity of Gold laying in the households of Indian Family and reduce the Demand for Physical Gold has recently approved the  approved the Sovereign
Gold Bonds Scheme, which was announced in the Budget 2015-16.

Under the Scheme, Investors can buy/deposit up to 500gms of Gold per year by way of Gold Bonds which will be issued by the Reserve Bank of India. These Bonds will not only give the same benefits of a Physical Gold but also the convenience of easy liquidity by way of listing on Stock Exchanges where you can buy/sell/trade these bonds.
These bonds can also be used as Collateral for Loans too.  The bonds will be issued in rupee. They will be issued in denominations of 5,10,50,100 grams of gold or other denominations.
The Tenor of the Bonds are not yet announced but it is expected to be about 5 years.

* Capital gains tax will be the same as for Physical gold for individual investors. This means
that short-term capital gains tax will apply if you sell within three years. The profits will be added to your income and taxed at income slab. Long term capital gains tax is 20 per cent with indexation.

Yes, if you are holding Gold purely for Investment purposes, the Scheme makes great Financial Sense.
In fact, if you are buying Gold, say for a Marriage in Family which is about 10 years away...then this Scheme definitely makes sense.
You can buy, say 100 gms and for that interest (2%, is what I hear) (again, not much, but something is better than nothing) at the end of 10 years, you will have not just 100gms but 110 Gms which makes this Scheme a Winner.

Whats more, the minimum is only 30 gms!
 And, the icing on the cake is, (not yet confirmed), the Sovereign Gold Bond Scheme could well see Capital Gains Tax Benefit  in the Next Budget!!

In fact, if you are accumulating Gold via Gold ETFs, then this scheme is all the more attractive to you. 

Ask your Financial Planner who should be able to guide on this.

No worries here. Since these are Government of India bonds, they are sovereign.

If you are buying Gold for Consumption purposes, (Jewellery for family members), then this Bonds may not work for you.

I doubt this!
Indians are too emotionally attached with Gold. No family would like to see their "beloved" Gold melted and given a Paper in lieu of it!

Quantity of Gold credited to the Depositors of Gold will depend on the Purity of Gold. Now, this could be a cause of clashes and could lead the Investors to be wary of the Scheme.

 Another negative could be the fact that the Redemption will be in the Form of Rupees. Now, this is a double edged sword. While some may argue, I can always add my cash and buy more or use this cash to buy less, sentimentally Indians have great attachment with Gold and would rather prefer Gold Bars.

Majority of Indians buy Gold with Black Money and buying these bonds is possible only with White Money!!!

And pledging Gold is the ultimate last resort of this Scheme will find it very difficult to attract its core target - the Indian Families and in that sense, this sense could well be failure.....though its intentions are very good.

Srikanth Matrubai

also visit http:/

Wednesday, August 26, 2015


The huge huge fall of 1624 points on 24th August would have smashed the spirit of even the die hard bulls to smithereens ;
 but my investors were not worried one bit.
Thats because I have ensured that every single client of mine has  a good exposure to EDELWEISS ABSOLUTE RETURN FUND and have mandated the PREPAID SIP concept.

1 day (24th Aug)

Nifty : -5.92%
ARF : -2.81%

FYTD: ( Financial Year Till Date )

Nifty : -8.03%
ARF : -2.29%

CYTD: ( Calendar Year Till date)

Nifty : -5.72%
ARF: +3.38%

1 Year:

Nifty: -1.32%
ARF: +12.38%

3 Years :

Nifty : 44.97%
ARF : 50.08%

Adversity is the true test of character. Its the challenging situations which separates Men from Boys. Our man, Mr. Absolute (Edelweiss Absolute Return Fund ) stands tall amidst all the volatility and corrections.

To know more about Prepaid SIP concept click here...

Also read

 From Jan 2010 till 30th June Edelweiss Absolute Return Fund is up 88% versus the NIFTY index that is up by 60.9% in same period.

        Tax Free quarterly dividend: History for 4 years plus uninterrupted dividends (18 quarter since 2011).

        Last FY dividend rate at 9.60% on Face Value of Rs.10. Dividend yield 7.23%.
         NO DDT (Dividend Distribution Tax) on dividends.

         NIL Long Term Capital gain Tax after 12 months.

         Low volatility and controlled downside risk leads to stable returns to the investor.

        Suitable for ‘First Time’ investors in equity, can be  substitute for MIPs (Monthly Income Plans), Regular Income plans,  Capital Protection Funds , Long term FMPs and long term Debt products.

Also read  please click 

Please consult your Financial Advisor before investing.

Also visit http:/

Monday, August 17, 2015


 Assuming 7% p.a.
Per day -  7 / 365 =0.019%.
Assuming Parking for 3 days a Week.
Total No.of Days= 52*3 =156 days.
So,  0.019 *156 =2.99%.
So,One Can gain around 3% for an Year On WEEKEND PARKING.

Parking Money during the Weekend & Having Money Ready in the Current Ac for the Business Transactions in Week Days.

Fantastic Option for Corporates & SME's.
Earning 3% p.a on Just Holidays,where the money would be idle in Current Ac.
lso visit http:/

Saturday, August 15, 2015


 What’s this “Saving for a Rainy Day” mean which you would have heard umpteenth times?

Rainy Day Fund is a Fund which you can easily access to any given point of time to handle any unforeseen unexpected expenses without an iota of remorse/guilt.
While each Financial Planner will have his own logic and reasoning for recommending any particular fund, one particular fund which EVERY single Planner will strongly recommend that you should have is the RAINY DAY FUND.
Now, this Rainy Day Fund is called by various names such as Contingency Fund, Reserve Fund, Emergency Fund, etc.
I prefer the names Rainy Day Fund and Contingency fund.
Each and every Financial Plan must compulsory with a Rainy Day Fund.
The absence of a Rainy Day Fund could rock your Financial Plan and could even land you in Debt!

We live in an era where joint family is a endangered species and thus you are left to fend for yourself even in a emergency financial situation.
In a Contingency Situation, the options for you could vary from selling your prized processions to selling your Blue chips shares/Mutual funds to taking a Credit Card loan or even borrowing from your friend or the next door moneylender.
But, this could lead to potentially rock your Financial Plan.
The presence of this Rainy day Fund thus ensures that your Assets are protected

Upgrading from a Maruti 800 to a Mercedes Benz is NOT an Emergency!!!

A sudden Medical Complication in the family fits in as the Best example of an Emergency.
True, a health Insurance will be there and should cover the bill, but Mediclaim does NOT cover everything and sometimes, during these medical emergencies, not many will have neither the patience nor the time to go through the procedure of following up the Health insurance companies.
Job losses have become a common part of our daily life.  Losing your job without a notice period is another case of an emergency.

Even a Sudden House Repair (due to Earthquake or a Huge Rainfall following which Water creeping into your home and damaging interiors)  too comes under the category of a Contingency.
So, at the cost of sounding repetitive, let me reiterate, Any Unforeseen Expense which is capable of upsetting your Financial Plan is a fit case for linking to a Contingency Fund.

And even replacing your SMARTPHONE (due to sudden breakdown/repair) is also an EMERGENCY in this age!!


Unless the situation actually occurs or arises, one can never be sure of the amount you require in a Contingency Fund.

But, to be absolutely safe and secure, Financial Planners, normally recommend that you need to have 4 to 6 months of your monthly expenses kept aside as Contingency Fund. Since, not many are comfortable with this big chunk of money kept blocked, I normally recommend anywhere between minimum of 2 to 4 months of Monthly expenses as Contingency Fund.

This amount of Contingency Fund could vary depending on our job profile, your Family structure (joint/nuclear).

The Contingency Fund should be easily accessible. It is encouraged that your Spouse/Life Partner knows about these funds and how to access these funds.

Contingency Fund could be parked in form of Savings Bank Account, Bank Overdraft facility, Liquid Funds with Mutual Funds.
The Primary purpose of a Contingency Fund is the Preservation of Capital and returns should be treated as Bonus, nothing else!

I would recommend that you split your Contingency Fund into
30% in SB Account
30% in Flexi Deposits
30% in Liquid Mutual Funds
10% in Arbitrage Fund (yes, I know, I am creating a bit of controversy here.......).

Why Arbitrage Fund?

Yes, it is quite unlikely that you will be using your entire 6 months of Contingency fund in one go.

And,  even if yes,  the Contingency could be either 1 month away or even 10 years away (or if you very lucky), could never happen!.
 And, emergencies come in all forms and there are some kind of emergencies which allows you the luxury of arranging funds after a few days.

But, do remember, having a Contingency Fund, is purely for a Contingency and if you earning anything out it, it should be treated as a Bonus only!

That’s why it is called a Rainy Day fund and not a Reserve or a Pocket Fund!

It is not that you should keep 4-6 months of your Monthly Expenses in Contingency Fund at one go. Go about it slowly. Start with 15 days of expenses, then 1 month and gradually scale up.

Keep your Contingency Fund untouched. Remember it is for CONTINGENCY and not a Reserve Fund for you to dip into every now and then.
I have seen many Investors dipping into Contingency Fund of make up for shortfall in some other goal (mostly short term), which is very unhealthy.
Contingency Fund acts as a Shock Absorber of a Financial Plan. Absence of it can make a Financial Plan turbulent

Most importantly, do not forget to have your Contingency Fund backed by Adequate Insurance.  Do remember, a Contingency Fund goes hand in hand with a Term Plan Cover and a Health and Accident Insurance Cover.

So, with a Contingency Fund in place which acts as a cushion in case of a Financial Emergency, you can now concentrate on your building your Financial Moat.
Best of luck,
Srikanth Matrubai

Also visit http:/

Friday, July 24, 2015

Anniversary of the GREATEST BUDGET

Finance Minister rose to present the Budget and said
"Insaan Woh Nahi Jo Hawa Ka Saath Badle,
Insaan Woh Hai Jo Hawa Ka Rukh Badalde"
This was the day in 1991 when India's greatest ever PM( not counting Modi) inspired the nation and its young generation with a grand budget.

1991:On this day, Dr Manmohan Singh presented a Budget which changed India.

A more apt way to remember this day-This was the day in 1991 when India's greatest ever PM- PVNR, the great-  inspired the nation and  its young generation with a grand budget, that changed the nation forever. That showed what one individual can do to change a giant, slow moving Nation. I shudder to think, what would have happened to our Nation but for this great man. A truly god send and was answer to nation's prayers.  Remember, we used to purchase Chetak scooters in Black market, the land line connection  at home was never possible without knowing a politician,   the new gas cylinder connection was possible only after waiting for 8-10 years, one could purchase a Sony TV only from smugglers. Oh, what a change. A true legend-PVNR, the great. No hesitation in saying that he was our best PM till Modi arrived.

Yes.Truly A Game Changing Period in The History of Indian Economy.🙏🙏🙏

 It was Similar to What Sourav Ganguly did for Indian Cricket,after it was really in a Mess.

He might not have achieved what MS Dhoni has in terms of Trophies.
But,he really Showed the Right Direction for Indian Cricket to go Forward with his Bold & Aggressive Leadership Skills.

The actual beneficiary from this was MS Dhoni.Who had a Experienced Team with him to Ride on the Success.
That is what a True Leader should pass on to his Successors like what Ganguly did for Indian Cricket &  PV Narasimha Rao for Indian Economy.

We should Wait & Watch,Whether Mr.Modi will do the Same as Dhoni.

Wednesday, July 8, 2015


Mirae Asset has come out with a New Fund Offer named Mirae Asset Prudence Fund.
The Fund will be investing anywhere between 65% to 80% in Large Cap Equities and the balance of 20% to 35% in Debt and Money Market.

The Fund is focussed on Large Cap unlike other Balanced funds which also take exposure to midcap and even small caps. This large cap bias will ensure that the fund will face lower volatility and is well suited to Investors whose risk profile is Moderate.

The fund has opened for subscription on July 8th and will close on 22nd July.
The Fund will managed by Neelesh Surana and Yadnesh Chavan.


Mirae has got its timing right in terms of lauching. The Markets are down by nearly 10% from the Peak and consolidation is happening.
With Greece and China disaster hitting the FIIs, they will be forced to look "more" favourably towards India.
Moreover, the EPFO money coming, the Stock Markets will get a BIG BIG boost which Mirae Prudence  Fund will be well placed to capture.
Having said that, the existing funds in the Market too will be in a similar position to capture the same growth and give returns. Hence, you may well continue to stay invested in your exisitng Balanced Fund and look at Mirae Asset Prudence Fund at a later date when it is able to show its consistency.
Mirae has done exceedingly well with its existing funds and there is no reason why it will not be able to replicate the same with the Prudence Fund.


I always ensure that all my clients have at least ONE Balance Fund in their Portfolio.
Balanced Funds have many advantages like
1. Lower Volatility
2. Diversification (Equity and Debt)
3. Tax Advantage
4. Auto re-balancing

Due to their mandate, Balanced Funds have to maintain Asset Allocation in ratio of ,say, 70:30(Equity/Debt). This automatically ensures that whenever the Equity outperforms, the ratio raises in favour of Equity and the Fund Manager has to sell
Equity to maintain the Balance.
Likewise, when Equity markets tank, the equity ratio declines and Debt raises, and thus the Fund Manager has to sell Debt and more Equity to maintain the Balance.
This automatically ensures that the Fund Manager, invariably, is selling at higher rates and buying at lower rates.
This Asset Allocation automatically ensures superior returns over Long Term (sometimes over even Pure Equity Funds).

Balanced Funds are great for investors who are getting the first taste of Mutual Funds.
And, yes, for Moderate Risk Investors who want equity exposure with limited volatility

So, if you are a Mirae Fan, go ahead.

Others, (including Novice investors), do wait. I will update you surely in the coming months.
Meanwhile, you can have a look at
1. Edelweiss Absolute Return Fund
2. ICICI Pru Bal Adv Fund
3. TATA Balanced Fund
Just a few names, but this should be sufficient.

Thursday, May 28, 2015


One fund which has absolutely floored me with its amazingly consistent performance in all types of market, especially in the last 8 quarters or so is the EDELWEISS ABSOLUTE RETURN FUND. 
I have ensured that every single client of mine has got an exposure to this fund. 
And, in fact, whatever maybe the Risk Profile of an Investor, this Fund is a MUST HAVE. 

Why am I so sold on this fund?
Whats so special about this strange sounding Absolute Return fund. 

Lets analyse.............


Edelweiss Absolute Return Fund may "sound" like a liquid fund because of the "absolute" in its name.  But, its a Equity Fund and surprisingly its benchmark is Crisil MIP Blended Index Fund!.

Edelweiss Absolute Return Fund is an ideal fund for those investors who want stable returns with low volatility. 

It stated objective to capture 60% of Nifty upside and limit to just 20% of Nifty downside

The Primary Objective of the Edelweiss Absolute Return Fund is to generate Absolute Return over a longer period of time without the accompanying volatility usually associated with Equity Funds.
Its aims to achieve this by avoiding risk and by taking hedging and arbitrage positions, special situations, Nifty Short, and also FDs (yes, you read it is Fixed Deposits!)
Special Situations, according to Edelweiss people, mean IPOs, Delistings, Equity Buy Back, Open Offers, Mergers, Acquisitions, etc.   
Special Situations aims at providing good trades which yield absolute returns over short periods.  Its Special Situations has generated returns ranging from 3% to 25% Absolute Returns. The Fund also does not shy away from taking exposure to Money Market Instruments and IPOs too.
Its hedging strategy is mostly dependent upon the basis of Corporate actions rather than on Market Valuations and this has helped  the Fund in protecting the fall in NAV during market downsides.
Since the fund's strategies of Equity Investment for Long Term, Special Situation Investments and, Hedging strategies and Derivative trading are not co-related, the volatility of the Fund drastically comes down.


Scheme Name  (25-May-2015)
Returns*- Edelweiss Absolute Return Fund
1 Month
3 Month
6 Month
1 Year
2 Year
3 Year
5 Year
Since Inception
Edelweiss Absolute Return Fund(G)

Crisil MIP Blended Index ( ARF Scheme Benchmark)
Crisil Balanced Fund Index
CNX Nifty Index


The fund has managed to beat its Benchmark quite consistently by a good margin and that too while taking less risks!
The Edelweiss Absolute Return Fund has NOT given any negative returns if the investor has stayed for more than 2 years and upside is in line with Nifty!
The Fund has participated in its stated objective of capturing 60% market upside and limiting to 20% of Nifty Downside splendidly.

Period-wise performance
Rolling 12M till 30th April 2015
CAGR       (Frm '10)
Volatility (Frm '10)
Edelweiss ARF
Crisil MIP Blended Index (Benchmark)
Crisil Balanced Fund Index
Nifty Index

The Fact the Fund has been able to beat Nifty even during market upsides is clearly captured in the data shown alongside....whenever an investor has invested in Edelweiss Absolute Return Fund at the Lowest Level of Nifty, he has made more money in this Fund than Nifty.

A Low Volatility fund

Its most unique and most attractive part is that when the Nifty/Sensex falls, the Fund's fall is closed to MIPs inspite of being an Equity Fund.

Edelweiss Absolute Return Fund has been paying regular uninterrupted Quarterly dividend since the past 18 quarters. Its been paying about 2.2% which is eqvivalant to 8.8% Tax Free Dividend.
And it even paid 3% dividend in Jan 2015. 

1. This Fund is for those who want equity risk without the accompanying volatility.
2. The Fund is especially suitable for Investors who have a lumpsum in hand and  are unsure of where to invest and could look at this fund as short to medium term alternative. 
3. Good alternative to Fixed Deposits not only in terms of Returns but Taxation too. 
4. New Investor to Equities who want to get a feel of Equity flavor. 
5. An investor who is looking for consistent and stable return. 

Please treat this Fund as a MIP rather than a Equity or a Debt fund.
If your time horizon is more than 18 months but less than 5 years, you should look at this fund.

It is one of those rare funds which has given complete satisfaction to me and my clients both in Bull and Bear Periods.

Especially their Prepaid SIP concept is something which every AMC should look at replicating.
To understand how Prepaid SIP works, please click 

When a Fund not only protects you during downside but also participates in Upside, do you need to look at anything.
If a client comes to me and wants only one fund it will be EDELWEISS ABSOLUTE RETURN FUND.

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