Did Gold get enough?

The Gold ETFs present are:

Gold BeEs : 2007
UTI Gold ETF: April 2007
Kotak Gold ETF : July 2007
Relianc Gold ETF : November 2007
Quantum Gold ETF : February 2008
SBI gold ETF : May 2009
Religare Gold ETF: March 2010
HDFC Gold ETF : July 2010
ICICI Gold ETF : August 2010
AXIS Gold ETF : November 2010
Birla Sunlife Gold ETF : May 2011

How you should look at them?

Look at the Expense Ratio, Track record and Asset allocation into Gold and cash or money market instruments, lastly the levels of service efficiency. in indian context, almost all the Gold ETFs generated similar kind of returns, so the differentiator is the service level.

Reliance Gold Savings Fund (RGSF) was the first of the lot among the MF schemes soliciting money from investors much like any other MF scheme and then invests the proceeds into gold ETFs

Many Gold themes are also available:

Fidelity India Children's Plan brought clearly demarcated gold asset allocation in a segmented category:

• Education, Marriage and Savings Funds
• Allocation to Gold ETF in Marriage Fund aims to protect against rise in gold prices

The asset allocation of Canara Robeco InDiGo (INcome from Debt Instruments and GOld) Fund provides for investment in debt instruments and gold only.

Religare MIP Plus Fund will invest a minimum 65% of the assets in fixed income and money market instruments. A minimum of 10% and a maximum of 35% of money can be invested in units of gold ETF. The fund manager has the option to invest up to 25% of the money in equity and equity-related assets.

Taurus Monthly Income Advantage also offered some thing similar to Religare.









Even the Kanchipuram Sarees are undergoing change in specification.


Those who read this also read:

A pinch of gold in Portfolio

Freeing of Savings Bank Rates

According to a Reserve Bank of India (RBI) mandate, from April 1, 2011 banks will calculate interest paid on money kept in the savings bank account on a daily basis. This is a departure from the earlier practice of calculating interest on the lowest balance after the 10th of every month


In rising Interest Rate scenario, comes a whiff of hope in the form of freeing up of Saving Bank Account rates. RBI has mentioned that uniform rate has to be charged for deposits up to Rs. 1 lakh

It was last fixed @4.00 % p.a, to be calculated on daily product basis from 03.05.2011

Fixed deposit rates were freed in 1997; and further it has taken over 14 years to free the SB accounts rates. So next time your bank may have a deal different for you and your neighbor.

SB account is used by all & sundry. and there was a time when Interest payable half-yearly, every January and July on the minimum balance in the account, between the 10th and last day of the month. Some times, the month of payment varied, but it did n't matter because one never got a chance to earn out of the month end incomes like salaries. It has become history now. Not only your daily balances are counted, but also, you get paid the market rates. Enjoy

DBOD.Dir.BC. 41/13.03.00/2011-12

October 25, 2011

Deregulation of Savings Bank Deposit Interest Rate

In exercise of the powers conferred by Section 35A of the Banking Regulation Act, 1949 and in partial modification of its directive DBOD.Dir.BC.No.89/13.03.00/2010-11 dated May 3, 2011, the Reserve Bank of India, being satisfied that it is necessary and expedient in the public interest so to do, hereby directs that banks are free to determine their savings bank deposit interest rate for resident Indians only with immediate effect subject to two conditions. First, each bank will have to offer a uniform interest rate on savings bank deposits up to Rs.1 lakh, irrespective of the amount in the account within this limit. Second, for savings bank deposits over Rs.1 lakh, a bank may provide differential rates of interest, if it so chooses, subject to the condition that banks will not discriminate in the matter of interest paid on such deposits, between one deposit and another of similar amount, accepted on the same date, at any of its offices.

(B. Mahapatra)
Executive Director

Source : www.rbi.org.in

Alternative Investments and You

What do you understand by the term alternative investments?

If you move away from the traditional investments, whatever form it is, makes up the theme. There are some people who made it a business in itself.


SEBI has put up its version of alternative investments recently. This intends to control & develop the pre-listed capital formation in the country. So this variety will keep retail investors away and have a diluted insider trading rules.

But how much of one's portfolio can really go into these?


When you have enough funds to diversify, and got the capability to take risk, you can mature into this lot of investors happily.


If you want to keep an eye on these category, please go through annual World Wealth Report of Capgemini and Merrill Lynch Wealth Management

Infrastructure Debt Fund - the New breed

If you would have thought of Infrastructure bonds that give you addl 20,000 deduction beyond the 1,00,000 under Income Tax Act 1961 Sec 80 c, you got it wrong.


These are MF schemes exclusively for funding Infrastructure projects. Infrastructure debt fund (IDF) will invest 90% of its assets in debt securities of the sector companies. With a minimum size of Rs 1 crore and minimum investors of 5, the minimum investment is tied at Rs 10 lakhs.

The unitholder gets locked in for 5 years with the new product.

New Pension scheme - A Retirement Option

Planning up for Retirement gets a boost with NPS. But how far?

But should these uncertainties make you go without a plan?


GOI incentives you for joining the scheme.

SEBI tells you  Retirement planning is important. IRDA also gives you some pieces to look  up. One needs to piece together different products to create a financial plan that will adequately capture the retirement needs.

Those who read this also read:

1.Planning to Fail : the NPS Way
2.Goal based investing from Mutual Funds
3.Retirement Planning

Tax Planning : Mutual Funds

The DTC is waiting for April 2012

However, the global turmoils in the capital markets may hold it back or no is yet not known

A class like ELSS is expected to be lost in the clan of equity schemes. Other than that nothing much changes for Mutual Fund Investors as far as Financial Planning is concerned.





People who read this also read: 1. Tax planning
2. The Wait is over

The Case for equity - The case for financial planning

The case for equity is enhanced due to the happenings across the world.

Markets will fluctuate and it will go up and down; so do Interest Rates; Commodity prices; That underlines the need for proper financial planning.

Mutual Funds & Distributors

A pause has been made in the relationship of the IFAs and Mutual Funds with SEBI prescribing due diligence for Major distributors.


The distributors having 20 points of presence, or Rs 100 crores raised from retail or HNI etc.. will be under scanner.


Fund houses feel more needs to be one to regain the lost sales.

But what is there for you, the investors in these beyond Rs 100.00 or Rs 150 .00


Minimum investment will automatically jump to Rs 10,000.00 by default. Only SIPs will flourish below the magical entry number!!!


Financial Services needs to be delivered with adequate responsibility and sufficient earnings(Cost plus a profit to help him carry the business through).



Nevertheless, a logical service enhancement, if at all happens will be welcome.
















Those who read this also read: 1. Does Your Investment get withered Away?
2. Does your Money work for you?

Apple a Day....

“An apple a day keeps the doctor away”... probably you were proudly repeating after your teacher in the LKG classes.

Gone are the days, next time it will bring fear of loss of money in the minds of several people who put hard earned funds- Residents and NRIs alike in the hope of making an investment for that old age income, or a happy home..


The norwegian fraud is yet another story about losing money by Keralites.

Chennai-based Tycoon Empire International Ltd. and Bizarre Global Business Group has also took away good amount of money from unsuspecting investors. Tycoon Empire International had collected Rs370 crore from 50,000 investors, while Bizarre group collected Rs55 crore from depositors.

Verizon Builders and Developers Ltd and Encode Financial Services Pvt Ltd for the past three years would collect Rs6,000, including Rs5,000 as membership fee and Rs1000 as share in the business, under the pretext of real estate investment. In addition, the members were promised Rs1,000 for every pair of new joiners they brought with them.

So what are these fraud stories telling us?

There is no way to get rich quick - the old adage.

Next it is telling us about our money habit. We want to keep money secret and expect it to grow for us secretively..and in the process we lost it entirely.. it is not unique to Kerala. one can get similar stories elsewhere.

So let us plan to get rich using the formal ways of doing financing or investment, within the rules and regulations. Link investment and saving plans to one one life need. Do not get drawn by people who run the schemes, the associations they have in high places.

Planning to Fail : the NPS Way

At a time when people worry about the life after retirement, we come across the much trumpeted NPS failing!!!

The money wasn’t invested for years after 2004. The employees don’t have personal accounts with the NPS’s CRA (central record-keeping agency). They don’t have any first-hand information of how the investments done in their name is being managed. They don’t know what is being earned, they don’t know which fund manager is doing better and which worse.


But are you ready, when all the mess is cleaned up by the authorities.. Be on your toes not to loose sight and stop planning for retirement. Keep your documents intact. When the govt is ready with theirs, you should have your claims intact.

Goal based investing from Mutual Funds

What is goal based investing?

An investor is deciding the holding period at the time of investment equivalent to an upcoming expense event like children's college education, a foreign trip with family, own retirement etc..
The holding period in the case of children's education may be 15-20 years at what age the investment is initiated whereas that for a foreign trip may be 10-15 years and that for retirement planning may be 25-30 years depending on what age one gets the first earnings.


Indian Mutual Funds used to offer goal based investment products in the 1990s; But later withered to the asset class based investing as competition increased. In 2011, it appeared a going back to basics approach with Fidelity offering its Fidelity India Children Plan (Jan 2011) followed by Peerless MF Child Plan (March 2011).

Those who came earlier are:

UTI Children's career Plan (1993)

Tata Young Citizen's Fund (1995)

Templeton India Asset Plan Education (1998)
Templeton India Asset Plan Gift


LIC Nomura Children's Fund (2001)

HDFC Children's Gift Plan (2001) : you have two set of funds in this ; a savings plan or an investment plan

ICICI Prudential Child Care Plan (study) 2001
ICICI Prudential Child Care (Gift)

Magnum Children's Benefit Plan (2002)






In the Retirement Planning Class, we have two :

UTI Retirement Benefit Plan and Templeton India Pension fund



UTI brought a special plan for Women folk: UTI Mahila Unit Plan



Basically all these are balanced funds with 60:40 equity and debt managed to less expense for the fund management & administration and stability in the rate of return generated. But the investor is personally identifying with such funds and normally stick to an investment strategy of SIP over a longer period or a one time investment with longer holding period. This let the investor sail through the ups and downs of the market fluctuations because one need something to look upon to move forward.


happy investing

The Savings Account Rate Revision

From a 3.5% rate fixed in March 2003, the Savings Account Rate has been revised to 4% by now. Viewed in the context of spiraling inflation, this is not a sufficient increase. currently inflation is above 9% leaving negative returns to the investors.


RBI had asked banks to provide interest on a daily basis with effect from April 1, 2011 on the SB account balances. Previously it used to be on the minimum balance kept between 10th day and last day of the calendar month.

Emergency funds only can be considered for investing in SB account; Alternative modes possible with Money Market Mutual Fund Schemes.


happy investing

The case for equity

SIPs are picking up in Mutual Funds thanks to abolition of Front Loading.


The fluctuating market conditions inviting to buy fresh units; But beware that markets can tank and remain low more than you can remain liquid!!!

Uncertainties galore...

FY 2011 already saw seven rate revisions so far. Experts say more are on the anvil. How do you cope up with investing ?

At least once in an year one needs to take stock of investments. Take a view how best one is going to achieve the target 'life needs'.

International scene is hotting up with events from MENA. Cuba on the other side is embracing private capital. Apprx 30 year old regime of Mubaraq in Egypt is thrown off and credit goes to Facebook authors...it is said that new courses have been launched about the Zukherberg magic in foreign universities.

Course or no course, one needs to manage cash flows, create assets, maintain a balance between life and money.

Every Vishu brings Mallus to dream about a bountiful future. And that 'kaineetam' is very symbolic of the savings mentality in this part of the world.

As gold prices are soaring up, here is gold based financing company that is offering its equity. Surely Kerala is changing.

if you have not started saving for retirement , start one now. however small it may be.

happy investing.

Personal investments: What direction one gets from the budget 2012?

In the area of MFs, the welcoming of foreign investors may do well for capital markets. This may bring in a long drawn conclusion of 'feel good' for the sector.

The DTC target has moved to April 2012 making an year of breather for ELSSs.

The 30,000 for infrastructure bonds also may give an indirect pull to the infrastructural MF schemes as the portfolio component companies get fresh additional funds from individual investors.

Senior Citizens can plan better about their retirement planning due to increased tax brackets.

The study conducted by Ambit Capital shows that india is at the late stage of a bull run which apprx lasted for 2 years. In the last 6 months to 1 year, consumer discretionary financials and technology sectors doing well;

According to them, next phase will benefit the capital goods and commodities(energy and metals)

If you believe in Capital Rotation Theory, go for it.

A pinge of Gold in Portfolio - the Indian MF response to rising prices

Way back in 2008, UTI Wealth Builders Fund came with gold in its portfolio of an Equity oriented scheme with 65% exposure to equity. An open ended equity scheme, did not have much following till 2010 when Religare first launched a MIP with Gold in the portfolio. 10-35% in Gold ETF, upto 25% in equity and rest in debt expects to tame the evergrowing inflation.


From then onwards Taurus MIP Advantage with 5-25% Gold and equity capped at 0-25% with remaining debt (65-95%) NFO 29 June-23 July 2010

Axis Tripple Advantage Fund NFO 30 June-27 July 2010 gave a hybrid portfolio with

- Shares/Equity and related instruments - 30-40%
- Debt Instruments (Fixed Income Securities) - 30-40%
- Gold ETF's or Gold Exchange Traded Funds - 20-30%

The Kotak Multi Asset Allocation Fund offered NFO during 31 December 2010- 14 Januray 2011 a portfolio of 75-90% debt and 5-20% equity and or 5-20% gold as an MIP alternative.


happy investing

Welcome 2011 : Have a relook on your Financial Planning

New year resolutions on personal financial planning has been always a ritual for many. But this time around it is nagging several people on account of rising inflation. December end 2010 it recorded over 14% in food category and over 11% in fuel category. Irrespective of category, it eats into persoanl income and savings.


The sensex was at 3975 at the beginning of the decade and ended at 20509.09;


Gold has seen hike in prices too in the same decade. The demand for jewelery, investment and industrial and decorative needs were quite impressive.



Unprecedented debt worries make nations to resort to print money or take fresh debt to pay an old one. We hear stories of PIIGS today and fear competitive devaluation of currencies in the year unfolding.

So, how do you stay floating?


Buy a pension, if you do not have.
Even if you have a PF account, it is fine. If you do not join NPS; or get an index fund for your golden years.

Have an emergency plan.. to take you through an immediate casuality of income loss , may be equal to 3 months. you can find another job in the meantime.

and follow horses for courses. one investment for one purpose. your life goals are distinctively different in term, amount and the value you attach to it. so your investments also sholud be distinctively different in terms of suitable instrument, term, maturity and risk involved.

happy new year, happy investing.