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Best Tax Saving MF – HSBC TAX SAVER FUND

admin — Mon, 30 Jan 2012 13:48:59 +0000

HSBC TAX SAVER FUND

The HSBC Tax Saver scheme has found a place in our list of best ELSS schemes more due to its current portfolio, rather than for the returns posted in the past. However, this does nor mean that the Fund has significantly underperformed its category in the past. In the last three years, the fund has yielded returns of 17.35 per cent annually against its category returns 0f 17.66 per cent. If we consider its performance since inception (January 2007), it has provided 5.47 per cent returns against 4.66 per cent generated by the Nifty and 427 per cent by its benchmark, BSE 200. In its recent performance though, it has been well outperforming the category returns. For example, in the last three month and six month period, the fund has been down by 1.78 pet cent and 14.41 per cent respectively, compared to a fall of 4.02 per cent and 16.31 per cent witnessed by the category in the same period.

‘What explains this superior performance is its current portfolio. The top three sectors that dominate its current portfolio are Financials (17.36 per cent of the total assets), Technology (12.78 pet cent) and Energy (12.69 per cent). However, what really drives the performance is right stock picking. In Technology, the fund holds only two companies, Tata Consultancy and Infosys, which are among the best performers of 2011. In Financials too, the fund h01d5 the most stable stocks like HDFC and HDFC Bank. We believe that at least the first half 0f 2012 will remain volatile, and in such a scenario, stocks like these will help the fund post stable returns. This is further reiterated by the past standard deviation of the fund, which stands lower than its peers at 24.04 per cent. The scheme slightly concentrated and contains only 34 stocks, of which the top 10 constitute around 47 per cent. In terms of sectors, the top three sectors make up 43 per cent 0f the entire portfolio.

The investment style followed by the fund manager is biased towards Large-Caps, and mostly concentrated in growth stocks. Almost 80 per cent of the portfolio is made up of Megaand Large-Cap stocks, and the rest is shared by Small and Mid-Caps. Aditya Khemani has been managing this fund since February 2009, and during his tenure, it has consistently managed to give good returns. Khemani also manages two other schemes at HSBC along with other fund managers, and these have also done well over a longer period of rime.

Best Tax Saving MF – TATA TAX SAVING FUND

admin — Mon, 30 Jan 2012 13:46:14 +0000

TATA TAX SAVING FUND

The Tata Tax Saving Fund, headed by Pradeep Gokhale, focuses on Large- and Mid- Cap companies. The scheme seeks long-term capital growth. Investments in equity would be at least 80 per cent 0f the corpus, while allocation to debt and money market instruments can go up to 20 per cent. At present, the fund has invested almost 92 per cent of its corpus in equity and the test is in cash. The scheme has no exposure to debt instruments.

In the last five year period, the Rind has been able to beat its category in all time frames. In the last one year, it has outperformed its category by 534 basis points, and stands at negative returns 17.04 per cent as against the category returns of negative 22.38 per cent. If we compare this to its benchmark Sensex, the Rind has outperformed by 568 basis points. The Rind has been able to generate annualised returns of 3.32 per cent in the last five years, compared to 2.6 per cent generated by the category.

The current portfolio of the scheme consists of4l equity stocks. The maximum weightage has been given to the Financials sector (18.35 per cent), followed by the Energy and FMCG sectors that have a weightage of 17.68 per cent and 1215 per cent respectively. The top three sectors have a weightage of 48.18 per cent in the total while the top five sectors have a weightage of 66.2 pet cent.

The net assets under management of the scheme stand at U24 crore as on December 31, 2011. The top five companies that the scheme holds are Hindustan Unilever, ITC, Infosys Technologies, HDFC Bank” and ICICI Bank.

The fund follows an investment philosophy that seeks to provide long-term capital gains along with tax benefits to unit holders by investing in Large-Cap stocks with a growth orientation. If we 100k at the portfolio, we find that the scheme has invested a lion’s share 0f its assets in Large-Cap stocks that mainly form a part of the Sensex too, which is its benchmark, Of its total corpus, 80 per cent is invested in Mega and Large- Cap stocks. Therefore, the fund has a direct correlation with the same, and its performance is also likely to depend on the movement of the Sensex.

Best Tax Saving MF ELSS – HDFC TAX SAVER FUND

admin — Mon, 30 Jan 2012 13:43:03 +0000

HDFC TAX SAVER FUND

The HDFC Tax Saver Fund, one 0f the largest funds (in the ELSS category) from India’s largest asset management company, also happens to be one of the best performers over the years. In the last three- year, five-year and 10-year periods the fund has remained in the top quartile, outperforming its category by a huge margin. In the same time periods, the fund has generated excess returns over its category by 697, 291 and 606 basis points respectively. These returns were not generated by taking any extra risk,which is denoted by its Sharpe ratio (risk-adjusted returns) that stands at 0.83 for the last 10 years.

What also makes this fund different from others is its unconventional stock selection, which is different from that of its peers and index. For example, Reliance Industries (RIL), which forms part 0f all other portfolios, is conspicuous by its absence in the HDFC TaxSaver Fund. This may be one the reasons why the fund performed well last year, as RIL was one of the worst performers during that period, having declined by 36 per cent. Similarly, it has a cash holding of 9.61 per cent, which is higher than what its peers h0ld. Jr is also among the few hinds that have invested in the Standard Charred lDRs (Indian Depository Receipts).

In 2007, the fund underperformed its benchmark by a huge 23.07 per cent, being underweight on the Energy and Metals sectors that were star performers during that year. However, the long-term- performance of the fund gives confidence in its fund manager’s stock-picking ability. In terms of their style, they invest primarily in Large- and Mid-Cap stocks that constitute roughly 95 per cent 0f the portfolio. The fund manager, by and large, invests in growth stocks.

The current portfolio 0fth scheme is diversified well among different sectors, with a relatively higher weight- age towards defensive sectors like Healthcare and FMCG as compared to the weightage they have on the Nifty. For example, Healthcare constitutes 10.95 per cent of the portfolio as compared to 4.29 per cent on the Nifty. The largest holding that the fund has is in State Bank of India (again unconventional), and the top 10 holdings form 38.14 per cent of its total portfolio.

Considering the investment style of the fund manager and the fund’s past performance, along with a good risk- adjusted returns ratio, we recommend this fund for your core portfolio.

Tax Saving Mutual Fund Schemes – ICICI Prudential Tax Plan Fund

admin — Mon, 30 Jan 2012 13:37:56 +0000

ICICI PRUDENTIAL TAX PLAN FUND

The ICICI Prudential Tax Plan remains one 0f the oldest and the best-performing ELSS schemes. Launched in August 1999, the scheme has provided annualised returns 0f 22.17 per cent since then.

To put these returns into perspective, if you had invested ?1000 at the launch 0f the scheme, it would have become around t9000 today.

The returns have clearly helped the scheme to attract money in tonnes, and this is reflected in its assets under management (AUM), which have increased from Z72.05 crore to U 197 crore currently—i.e. by an eye-popping CAGRof 36 per cent. Barring the last six months, the scheme has been able to beat the category returns in all time frames. The best returns were recorded in 2009, when it was the top performer in its category, and yielded returns of 112 per cent, outperforming the categoflr by 23.43 per cent. The reason behind such a performance is its tactical allocation 0f hinds across sectors, stocks and market caps. This strategy was adopted by its fund manager Sankaran Naren, who has now handed over his responsibilities to other fund managers.

The new fund manager, Chinran Haria, has indicated that he will continue with a Multi-Cap strategy. Currently (as of November 30, 2011), almost 60 per cent of the fund’s portfolio constitutes of Mega- and Large- Cap stocks, while the remaining 40 per cent is in Mid- and Small-Cap stocks.

The fund selects stocks on the basis of a combination 0f both the top-down and the bottom-up approaches. Por the top-down approach, it still relies on Sankaran Naren’s insight on selecting the right sector, whereas for the bottom-up approach or for selecting stocks, it relies on analyst recommendations. This hind normally follows a growth style of investing.

In December 2011, the fund seemed to be too concentrated sectorally, as the top three sectors, viz. financials, technology and energy, together accounted for around 43 per cent of the total assets of the hind. Even at the individual level, the top three holdings (Reliance Industries, ICICI Bank, Infosys Technologies) constitute a little less than a quarter of its entire assets. The performance of these stocks will significantly impact the fund’s performance. A standard deviation of 26.21 per cent and a Sharpe ratio of 0.83 indicate that the fund has produced relatively good risk-adjusted returns with slightly lower volatility. Nonetheless, given the hind’s high concentration in a few stocks and sectors and the lesser experience 0f its current hind manager (who has been managing the hind since May 2011), we would recommend this hind only to aggressive investors.

Tax Saving Mutual Fund – Fidelity Tax Advantage Fund

admin — Mon, 30 Jan 2012 13:32:59 +0000

FIDELITY TAX ADVANTAGE FUND

The Fidelity Tax Advantage Fund serves we” for those conservative investors who are satisfied with getting lower returns rather than having their principal to vanish in no rime in a bad year

Though the fund has been mandated to invest in Multi-Cap stocks, it is biased towards Large-Caps that are supposed to do well (i.e. fall less) in a falling market. If we take an example of 2008, which was particularly bad for equity markets, this fund took a beating of 50 per cent compared to 56.5 per cent by its benchmark BSE 200, while maintaining just five per cent in cash. Even now (as 0f November 30, 2011), almost 80 per cent of the entire portfolio consists of Large- and Mega-market cap stocks.

All of this does not mean that the fund’s performance slips in a rising market. In 2009, the hind yielded returns of 87 per cent, which was marginally lower than the category performance of 88.5 per cent. If we l00k at the long-term performance 0f the Land, it has beaten its category returns by a huge margin. In the last five years, the fund has generated returns of 8.13 per cent as compared to 2.6 per cent by its category.

The credit for such performance goes to the Land manager, Sandeep Kothari, and his disciplined approach. He follows a bottom-up stock selection process, and invests in stocks across the market capitalisation range. Companies with a good business model and a strong balance-sheet, with high liquidity and good quality find their place in the portfolio. A majority of the hind’s portfolio is held for the longer term. The Land typically adopts a buy-and- hold strategy in line with the medium and long-term views on the company.
Coming back to the portfolio of the scheme, it is dominated by Financials, followed by Energy and Healthcare. The share of Financials has come down from 25.88 per cent a year ago to 22 per cent currently, compared to 24.43 per cent on the Nifty. This fall may be due to the bad performance of Financials last year. One sector on which the fund manager is quite bullish is Healthcare. This is probably due to the defensive nature of the sector, as it falls less during a market downturn. In the last one year, the weightage of this sector has increased from 9.68 per cent to 11.67 per cent, compared to 4.29 per cent on the Nifty.

In terms of stocks, ITC has replaced Reliance Industries as the top holding, and comprises 5.67 per cent of the total assets, with not a single stock holding exceeding six per cent of the portfolio. Currently, the portfolio is diversified well across 64 stocks, and the top 25 stocks accounts for 70 per cent 0f the assets.

ICICI Prudential Interval Fund II -Quarterly Interval Plan C dividend declared

admin — Fri, 18 Feb 2011 16:56:08 +0000

ICICI Prudential Asset Management Company Ltd. is a joint venture between ICICI Bank, India’s second largest commercial bank & a well-known and trusted name in the financial services in India, & Prudential Plc, one of the United Kingdom’s largest players in the financial services sectors.

Investment objective :- To generate optimal returns consistent with moderate levels of risk and liquidity by investing in debt securities and money market securities.

ICICI Prudential Mutual Fund has declared dividend under the retail and institutional options of ICICI Prudential Interval Fund II – Quarterly Interval Plan C, a close ended interval scheme.

The amount of dividend under the scheme will be Rs 0.1794 per unit for retail option and Rs 0.1833 per unit for institutional option as on the record date. The record date for dividend has been fixed as February 23, 2011.

Reliance MF To Introduce Reliance Gold Savings Fund

admin — Tue, 15 Feb 2011 04:31:21 +0000

Reliance Mutual Fund has announced a New Fund Offer (NFO) Reliance Gold Savings Fund, an open ended fund of fund scheme. The New Fund Offer (NFO) price for the scheme is Rs 10 per unit.

The scheme offers two options – growth and dividend option with the dividend option offering dividend payout and reinvestment option.

The entry load is not applicable for the scheme and the exit load charge will be 2% if redeemed or switched out on or before completion of 1 year from the date of allotment of units, and nil if redeemed or switched out after the completion of 1 year from the date of allotment of units. The fund seeks to collect a minimum target amount of Rs 1 crore during the NFO period. The fund manager for the scheme will be Hiren Chandaria.

The NFO opens for subscription on February 14, 2011 and closes on February 28, 2011.

The minimum application amount will be Rs 5,000 and in multiples of Rs 1 thereafter and the scheme endeavors to allocate up to 95% to 100% of assets in Reliance Gold Exchange Traded Fund with medium to high risk profile.

The investment objective of the scheme would be to give investors the opportunity to participate in the bullion market in a relatively cost effective and convenient way as you can directly purchase and sell the units at the AMC

MFs Stand As Net Buyers In Equities And Debt On February 03

admin — Wed, 09 Feb 2011 03:54:55 +0000

Mutual Funds (MFs) made investments worth Rs 663.40 crore and sold off Rs 525.40 crore worth of equities on February 03, 2011, according to data released by the Securities and Exchange Board of India (SEBI). Thus, MFs stood as net buyers of Rs 138 crore in equities on that day.

In the month of February, MFs have made total investments of Rs 1999 crore and sold off Rs 1618.2001 crore worth of equities, so far.

In the debt segment, MFs made investments of Rs 1964 crore and sold off Rs 1217.80 crore on February 03, as per the details available with SEBI. Thus MFs stood as net buyers of Rs 746.10 crore on that day.

Further, MFs have poured in total Rs 6942.5996 crore and have taken out Rs 3660.5999 crore in debt market for the month of February, so far.

IDBI MF Introduces IDBI Monthly Income Plan

admin — Wed, 09 Feb 2011 03:51:14 +0000

IDBI Mutual Fund has announced a New Fund Offer (NFO) IDBI Monthly Income Plan, an open-ended income scheme.

The scheme offers two options – growth and dividend options. The dividend option has two sub-options (frequency of dividend declaration) â€“ monthly dividend and quarterly dividend. While the minimum target amount under the scheme is Rs 1 crore during the NFO period.

No entry load is applicable for the scheme but an exit load of 1% is applicable if the investment amount is redeemed or switched out within 12 months from the date of allotment.

The fund managers for the scheme will be Gautam Kaul and Syed Sagheer.

The NFO will open for subscription on February 14, 2011 and close on February 28, 2011, and will be benchmarked against CRISIL MIP Blended Index.

The minimum application amount will be Rs 5,000 and in multiples of Rs 1 thereafter and the scheme endeavors to allocate up to 80% to 100% of assets in debt instruments (including floating rate debt instruments and securitized debt) and money market instruments with low to medium risk profile.

The objective of the scheme would be to provide regular income along with opportunities for capital appreciation through investments in a diversified basket of debt, equity and money market instruments.

AIG MF Declares Dividend For Its AIG India Liquid Fund

anup — Tue, 01 Feb 2011 10:53:47 +0000

AIG Mutual Fund has announced dividend under the retail daily dividend option of AIG India Liquid Fund, an open ended liquid scheme.

The amount of dividend declared is Rs 0.16500284 per unit for both retail and corporate as on January 31, 2010.

The primary investment objective of the scheme is to seek to generate a reasonable return commensurate with low risk and a high degree of liquidity, from a portfolio constituted of money market securities and short term debt securities.