NFO talk

NEWS :- Birla Sun Life Special Situations Fund:

Birla Sun Life Special Situations Fund is an open end equity fund that will invest in contrarian picks or stocks where there is potential for unlocking of value due to a corporate action.

Return/risk profile: While the return potential it carries is high, the fund’s risk profile will be also high. The fund is suited only to investors who own other equity products in their portfolio. Stocks in contrarian or special situations can carry significant downside risk if the expected event or unlocking of value doesn’t materialise

Fund Manager: A. Balasubramanian
Details: New fund offer closes on January 15. The benchmark is BSE 200. Minimum investment is Rs 5,000

Views:-

Investors can invest a small portion of their funds for diversification, if they feel the theme is interesting. Risk - return proportion is high. Birla Sunlife is having a good number of performing equity funds. Investors who don't have Birla funds may add this to their kitty for diversification .

ELSS and PPF

Among the tax saving investment options, ELSS and PPF/EPF are unique in the sense that returns from are absolutely tax free.

1) Interest earned from PPF is not taxed during accrual or pay out.

2) Dividend from ELSS is tax free.

3) ELSS has a lock-in period of three years. So,Profit on sale of units held after 3 years is a long term capital gain. It is subject to Nil tax as per current IT act.

ELSS and PPF are the way to go...

ELSS- equity linked saving scheme of Mutual Funds

PPF- Public provident fund

RPF- Contribution to Employee Provident Fund

' Tax investment options' , " Ways to invest to save tax', "1 lakh investment exemption under 80c'

'Which is the best tax saving investment option?',ta saving tips, how to save tax, what are the instruments that you can invest to save tax,best option to invest

Stocks and MFs penetration

I was travelling through some of tier-2,tier-3 cities in South India and even through some smaller towns. I was amazed to see the number of mutual fund advertisements, ads of stock brokerage houses. I was visiting these places almost after 5 years. Was good to see that equity investments is pulling in more and more people. Even in IPOs there is a broader participation from the public. if this trend continues for a while, we may not be an FII dependent market.

Another significant thing that was noticeable was that disposable income had reasonably increased in those places and spending pattern of people has also changed. realised that 'India growth story ' is real at least to some extent. Hope this growth continues and brings out many more millions out of poverty.

Advantage of planning for tax (investments) in advance

Planning for you tax saving investments at the beginning of the financial year is very critical (April - it's time to plan your taxes )and can be very handy for you. I would like to quote examples of two persons I know. The first person always plans for his tax saving investments in advance. This year too, he needed to save Rs 48,000. He planned out an SIP for 8000 for 6 months starting May'07 in a ELSS MF (tax saving mutual fund). His SIP got over in Oct07 and he is ready to present his savings to his employer by end of October'07 ( his employer needs it only by Jan'08). Now apart from saving 30% taxes on amount invested, he also has earned more than 10,000 as unrealised profits on his investments( thanks to the bull run !!).

My second friend starts thinking about tax planning only on January 1. His employer needs tax proof to be submitted by Jan'10. He never saves too. So, he is thinking between taking a personal loan for investing or paying 30% tax instead of saving.

Both of these friends almost earn the same amount and spending patterns are also similar. But the second person also spends a bit extra as there is no commitment like SIP.Planning for your tax investments always makes a difference. If you keep investing throughout the year, you tend to gain a lot as you don't feel the burden of investing a huge amount. You also need not fall prey to year end rush which can make you take a wrong investment decision too.

Always plan for your taxes in advance.Happy tax saving!!.

ELSS= Equity linked saving scheme.

Tax Saving-ELSS Advantage!

Tax saving-Dividend Reinvestment option in ELSS – Think about it

108 vaishnava divyadesams

Running behind a theme

A thematic fund has become a fashion nowadays. We see fund houses coming up with a lot of thematic NFOs. 'Infrastructure' is very hot among them.

Nothing wrong in having a part of portfolio in thematic funds. But we need to understand such 'concepts' are seasonal and may tumble once the season is down. The most important thing is that season never ends with a notice. (like IT sector suddenly seeming unattractive and most IT sector funds going down all of a sudden)

If you are a long term investor, you should have thematic funds just to add flavor and not as your main holding. For new investors its always better to avoid thematic funds as far as possible.

NFO= New fund offer from Mutual funds.

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