Oh, great gr8. U hav changed the topic now. :D
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Oh, great gr8. U hav changed the topic now. :D
Markets @ 2.15pm
Sensex now down 108 points (1%) to 10715.
BSE100 index down 0.82%.
BSE500 index down 0.51%.
BSEPSU down 0.85%.
BSEMIDCAP rise by 0.72%.
BSESMLCAP rise by 0.98%.
BSEBANKEX rise by 0.83%.
///Even the most worst performing fund in Equity:Diversified category produces 23.16% annualised return over 5 years.
If your lock in period is more than 5 years you can expect return to the tune of 30%.But normally people will not hold their investment for such a long period esp in MF`s
S. True. But wat's surprising is those worst performing (?) stocks produce over 20% annual returns consistently. Remember that 23.16% return of Taurus discovery fund is not a cumulative one, its annualised. So if u put cumulative figure, even the worst performing stock would hav doubled the investment in 5 years. Indha magical figure yellam paartha TNla chit fundsla panam pottu yemaravanga neraya peru stock marketla invest panna aarambichuduvanga.Quote:
Originally Posted by great
Markets @ 3pm
Markets turn RED.
Sensex now down 226 points (2%) to 10597.
BSE100 index down 1.89%.
BSE500 index down 1.57%.
BSEPSU down 2.00%.
BSEMIDCAP down by 0.29%.
BSESMLCAP down 0.14%.
BSEBANKEX down 0.24%.
Nifty down 2.37% to 3123 points.
All indices end in red.
Sensex down 250 points (2%) to 10573.
BSE100 down 2.14%.
BSE500 down 1.81%.
BSEPSU down 2.27%.
BSEMIDCAP down 0.41%.
BSESMLCAP down 0.38%.
BSEBANKEX down 0.56%.
Buying a new fund? Read this
May 24, 2006
In 2005, there were about 40 launches of New Fund Offers, garnering over Rs 25,000 crore (Rs 250 billion).
The attraction of a NFO to the investors is indisputable. Asset Management Companies are shoring up their Assets Under Management like there is a no tomorrow.
Reliance Equity Fund garnered over a whopping Rs 5,700 crore (Rs 57 billion) in one NFO; this is equivalent in size of a small AMC.
What is it that drives investors to these new issues proverbially like a moth to a flame?
Aggressive marketing by asset management companies, superb advertising campaigns, media fanfare and pushy distributors tempt investors.
They find the lure of a new fund offer irresistible.
I guess, it is the psychological factor which makes them feel that they are getting allotment at Rs 10, which is 'cheap'. They fail to distinguish between a primary NFO and an equity Initial Public Offering.
The primary difference between an equity IPO and a mutual fund NFO is that equity IPO can be perceived to be undervalued and there is a possibility of potential gains on listing.
But in the case of a mutual fund NFO, the money mobilised is deployed in purchasing stocks from the stock market at then current market price. The Net Asset Value on listing shall reflect the prevailing market price of the scrips in the portfolio constructed.
So there is no earthly reason to be excited about listing gains.
But the investors of new mutual fund schemes do not seem to see the difference in this fine line.
Existing schemes come with track records have been in the business a while. Their portfolios are constructed and are available for your inspection. You can judge their performance against the backdrop of various market cycles. The performance can be benchmarked and the fund manager's ability gauged.
Against this, in a new fund offer, you start from scratch with a clean slate.
But, to be fair, the AMCs have been quite creative and have structured lots of new schemes with innovative themes. So, when is it that you can consider investing in a new fund offer?
Keep these points in mind:
1. If the NFO is from a fund house you do not have exposure to, you can consider investing. Take a look at all your current mutual funds. Do you have any from this fund house? If not, consider it. But don't do it blindly. The track record of the fund house, its investment style, the fund manager's track record are all crucial inputs.
2. If the concept of the scheme fits into your portfolio, invest. Say if you do not have any exposure to a midcap scheme, then you could consider investing in a Kotak Midcap or an SBI Midcap. Or you could consider putting your money on a theme that is novel in nature and where you are optimistic of its future prospects, say like a Birla Gen-Next or a Kotak Lifestyle.
3. If the concept of the NFO is venturing into virgin areas whose prospect seem to be bright. For instance, Templeton Equity Income fund which plans to invest in global equities; this was allowed earlier as well, but with a lot of restrictions.
4. If the NFO fits into your overall asset allocation, then opt for it. Let's say you need to increase the number of debt funds in your portfolio, but you also need monthly income that is tax efficient. If a NFO hits the market that is debt-oriented under the Monthly income plan category -– by all means subscribe.
Here are some examples of innovative ideas fund houses have come up with to capture current trends:
Sundaram SMILE: Investing in small and midcap stocks.
Franklin MultiCap: Bottom-up approach to investing in stocks across the market capitalisation
Tata Services Industries: Investing in companies which comprise of the services sector.
PruICICI Infrastructure: Invests in scrips of companies from the infrastructure industries.
Optimix Income Multi Manager: Invests in income schemes of other mutual funds.
Standard Chartered Liquidity fund: Liquid scheme investing majorly in MIBOR linked instruments.
Mutual fund regulator Securities and Exchange Board of India has plugged the practice of charging 6% to open-ended new fund offers (*see below for explanation). Now, SEBI has scrapped this provision and the funds will have to meet the expenses from the entry load itself.
As a result, we have seen more close-ended funds being launched.
As long as this was prevalent, distributors (the mutual fund agents) were offered extremely high upfront commissions.
The party for distributors is now over. No new investors can enter a close-ended fund and the ones who have invested will be charged a heavy fee if they exit (sell units) soon. So distributors who encouraged their clients to sell their funds when they made a profit and buy into new schemes will no longer be able to rake in money from the churning of clients' portfolios.
Hopefully, now, NFOs will only be launched when there is a gap to be filled in the AMC's portfolio or when it wants to tap into a genuinely good new idea.
Investors should keep in mind the above mentioned points before blindly rushing to subscribe for an NFO's.
Sensex but do so vis-a-vis the stated benchmark
Source : rediff.com
S Gr8. Many ppl think that buying a new fund during NFO wil b its best price to buy. Even I thought I like that wen I buy my first fund (an UTI fund). But later only I realised it may not b always true that buying during NFO wil b best. But any how I've sold it for profit. My mistake didn't cost me much financially. But it gav me gud experience.
BSE Indices @ 12.40 PM
Sensex after reaching day's high of 10588 now down 52 points to 10521.
BSE100 down 0.61%.
BSE500 down 0.76%.
BSEPSU down 0.39%.
BSEMIDCAP down 1.29%.
BSESMLCAP down 1.44%.
BSEBANKEX down 1.45%.
Nifty down 0.35% to 3105 points.
BSE Indices @ 1.48 PM
Sensex down 111 points (1.05%) to 10462.
BSE100 down 1.19%.
BSE500 down 1.29%.
BSEPSU down 0.91%.
BSEMIDCAP down 1.76%.
BSESMLCAP down 2.06%.
BSEBANKEX down 2.50%.
Nifty down 0.58% to 3098 points.