Akshaya Tritiya - a day for long term investments

When the whole world is talking about buying gold on akshaya tritiya, what should an investor do? Get carried away by the sentiments & make a coin purchase or just trade on the ETFs in Gold for fun? Relax. Dedicate this day to look at your personal financial plan... It is very important. Let this day be in diary for review of your Investments periodically. You need to have an appropriate proportion of Gold, Equities, Realty .. all asset classes to keep your journey worthwhile. And make an estate plan so that heirs need not go to court over quarrel about what you created with so much sweat & toil.

 You may be interested in these: 

1. Alternative Investments 

2.Gold...hold your Breath

MFs with Equity NFOs in the volatile markets

First of all, let us address the question NFO Vs. Follow on offer in Mutual Funds.

When it is closed end fund, one cannot buy the units again and again from the fund house. But in an open ended fund, we have as many follow on opportunities as we want to invest.

At NFO, one gets units at Face Value. True.In a subsequent purchase one has to pay more. Yes. But what matters end of the day, is the rate of return earned and the holding period involved. That puts to rest controversial sales push to rest in peace.

Now let us look at the themes offered one by one.The currently (as on 14.05.2010) available equity NFOs are:

1. Birla S L India Reforms Fund
2. DSP BR focus 25 Fund
3. Baroda Pioneer Infrastructure Fund
4. IDBI Nifty Index Fund

All are open ended equity schemes with no entry load and an exit load of 1% if, repurchased within an year. The commonality ceases here.

Birla S L India Reforms Fund's investment objective is to generate growth and capital appreciation by building a portfolio of companies that are expected to benefit from the economic reforms, PSU divestment and increased government spending.

Already there are two existing schemes with the same theme:

1. AIG Infrastructure and Economic Reforms Fund(January 2008); Present NAV Rs 8.96(13.05.2010)

2. DSP BR TI G E R Fund(May 2004) Present NAV Rs. 45.35(13.05.2010)

DSP BlackRock Focus 25 Fund, is an open ended equity growth scheme. The primary investment objective of the Scheme is to generate long-term capital growth from a portfolio of equity and equity-related securities including equity derivatives. The portfolio will largely cosist of companies, which are amongst the top 200 companies by market capitalisation. The portfolio will limit exposure to companies beyond the top 200 companies by market capitalization upto 20% of the net asset value. The Scheme will normally hold equity and equity-related securities including equity derivatives, of upto 25 companies. Further, the Scheme will also have at least 95% of the invested amount (excluding investments in debt securities, money market securities and cash & cash equivalents) across the top 25 holdings in the portfolio. The Scheme may also invest in debt and money market securities, for defensive considerations and/or for managing liquidity requirements.

A theme that DSP BR itself has put hands on earlier now boasts of more concentration. That way it is different from its stable!!

1. DSP BR Top 100 Equity Fund(February 2003); NAV Rs.90.84(13.05.2010)
2. Birla S L top 100 Fund(September 2005); NAV Rs 20.31(13.05.2010)
3. HDFC Top 200 Fund(September 1996); NAV Rs 185.87(13.05.2010)
4. LIC MF Top 100 Fund(December 2007);NAV Rs 7.93(13.05.2010)
5. UTI Top 100 Fund(may 2009); NAV Rs 26.40(13.05.2010)

Baroda Pioneer Infrastructure Fund, is an open ended equity scheme. The primary investment objective of the Scheme will be to generate long-term capital appreciation by investing predominantly in equity and equity-related securities of companies engaged in infrastructure and infrastructure

Welcomed by more than a dozen infrastructure funds, can claim to be new in its own stable.

IDBI Nifty Index Fund, is an open-ended passively managed equity scheme tracking the S & P CNX Nifty Index (TRI). The investment objective of the scheme is to invest only in stocks comprising the S&P CNX Nifty Index in the same weights of these stocks as in the index with the objective to replicate the performance of the Total Returns Index of S&P CNX Nifty Index. The scheme may also invest in derivatives instruments such as Futures and Options linked to stocks comprising the Index or linked to the S&P CNX Nifty Index. The scheme will adopt a passive investment strategy and will seek to achieve the investment objective by minimizing the tracking error between the S&P CNX Nifty Index (Total Returns Index) and the scheme.

A theme tested by almost all AMCs is what IDBI is betting on in its second coming. You get the twin benefits of diversification and a ready benchmark to know whether the performance is justified or not?

Any investment, your guiding principal has to be your life needs in quantum of money required and approximate time horizon when it is required super ceded by your risk-return profile.

Happy investing.

The Pharmacuetical Sector Funds

Another sectoral fund avalable is the Pharmacuetical funds that have focussed portfolio of securities issued by pharmacuetical companies and health care companies.

Medicines or health care products unlike other products people use more often.This basic need normally keeps demand growing even in the economies that suffered a slowed down like the USA or current Europe. Asian countries like India has a growing HNI class who are willing to spend for Premium Health Care products also help in demand not going down.

The budget 2010-2011 had also important push for this sector.GOI gives special attention to this sectors growth


The funds in this sector are:
1. Franklin Pharma
2. Magnum Pharma
3. Reliance Pharma
4. UTI Pharma & Health care





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The FMCG Sector Funds

Sector diversification calls you to look at the FMCG sector. What do you expect?

As an investor you would be more initerested in this FICCI survey a through & recent study of the segment.

The FMCG funds currently available are :

1. Fraklin FMCG Sector Fund
2. ICICI Pru FMCG Sector Fund
3. Magnum FMCG Sector Fund

What is the prospects for this sector?

Irrespective of the global slowdown started with subprime crisis of USA and now spilling its beans from Greece, Portugal, Spain etc.. in Europe, we have a responsible government and a central bank that try to steer ahead of times. The JNNRUM and NREGP started two budgets ahead of any government or central bank started programmes for supporting job for the lower sections in the economy to pull demand from the villages/semi-urban places.

The local demand will sustain the growth rate in the segment in spite of any thing that happening globally

It is better to read about other sectoral funds, if you are looking at completness of your diversification process.


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