Académique Documents
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06Nov2012
Templeton India
Equity Income:
InvestVidya
Bala
Consistent Performers
Festival Without
GoldDhirendra
Kumar
We are making some interesting improvements in the FundsIndia service as well as the
platform. We have rolled out some of these already, and more are on the works.
I am sure you have started receiving our weekly mutual fund recommendation email that
we started about a month back. Please note that all these recommendations are permanently archived in our blog as well. You can go to our home page at any time, click on the
Blog link and find all our recommendations and read about them.
Later this month, we will roll out a completely revamped set of pre-packaged portfolios on our platform as well.
There will be many more portfolios than today, and will suit a wider range of needs of our investors. Along with
this, we will also be unveiling of our list of FundsIndias Featured Funds list a considered list of funds that has
been put together after extensive research and analysis.
We have also rolled out a new referral system. Apart from increased incentives, the new system has a very interesting feature that I would like to tell you about. If you go to the Referral page after logging into your FundsIndia account, you can create a personal referral link for yourself. You can even place your own message (about,
say, why you like FundsIndia and why you would like to recommend the service). You can then publish this link
anywhere you want twitter, facebook, blog, forum etc. Whenever someone clicks on the link, they will come to a
page that will show your personal message and help them will registering their account. Any account opened
using your referral link will mean referral points for you! I encourage you to please check this out and use it for
referring your friends and colleagues.
This new referral system will come in especially useful in the upcoming tax-saving season. We have a new tax
saving pre-packaged portfolio for this season, and you can help your friends save taxes as well by referring
FundsIndia to them!
Let me also take this opportunity to wish you and your family a very Happy Diwali!
Disclaimer: Mutual Fund Investments are subject to market risks. Please read all scheme related documents carefully before investing.
Volume 4, Issue 11
Page 2
The Reserve Bank of India disappointed the market after it decided to keep policy rates on hold at the recently held meeting. It is positive
to note that after a brief fall, the Nifty recovered ground and had gotten back to the broad trading range of 5,630-5,730.
While we maintain the bullish view for the stock market, a look at the behavior of the India Rupee in relation to the US Dollar raises a flag.
The Rupee has been depreciating in the recent weeks and has breached key support levels as well. Unless there is quick reversal there
would be a strong case for the Rupee to seek further lows versus the Dollar.
A move below Rs.53.40 would indicate that the US Dollar is losing ground and this would have a positive rub-off on the equity market
sentiment as well. Else, expect the Dollar to appreciate to Rs.56.50-56.70.
A look at the 10-year bond yield chart indicates that the much anticipated interest rate cut is not round the corner. Or, at least, the bond
market does not seem to be pricing this in, as yet.
From a technical perspective, we maintain our target of 6,000 for the Nifty. The journey towards this target is underway and any semblance of positive news flow would help the Nifty get past this psychological barrier of 6,000.
The bullish sequence of higher highs and higher lows is pretty much intact and the index has to fall below 5,570 to question the possibility
of an immediate rally to 6,000.
Disclaimer: Mutual Fund Investments are subject to market risks. Please read all scheme related documents carefully before investing.
Volume 4, Issue 11
Page 3
This month, we cover the outlook for a couple of stocks from the pharmaceutical sector. The stocks from the Pharma sector have been top
performers in 2012. A look at the technical indicators suggests that a few stocks still have room to the upside. Lupin and Cipla are the
names that we have in mind from this sector.
A look at the daily chart of Lupin featured below indicates that the stock has been in a downward correction in the past few weeks. This
correction seems complete and the next leg of the rally seems underway.
A look at the daily chart featured above indicates that Cipla has taken support and bounced off crucial levels. This is a sign of strength and
investors may use weakness to build an exposure in Cipla. A breakout past Rs.440 could propel Cipla to the major resistance at Rs.470.
Mr. B.Krishnakumar is the Head of Equity Research at FundsIndia. With extensive experience in tracking the stock market (over 15 years) he has
worked with companies such as The Hindu , Business Line and Dow Jones Newswires. He will be contributing to our monthly newsletter with his
stock market outlook which shall hold good for a month. Mr.B.Krishnakumar can be reached at b.krishnakumar@fundsindia.com
Mr.B.Krishna Kumar also hosts a weekly webinar that discusses the market outlook
for the following week. You can register for the webinar by clicking here:
https://www4.gotomeeting.com/register/927617871
Disclaimer: Mutual Fund Investments are subject to market risks. Please read all scheme related documents carefully before investing.
Volume 4, Issue 11
Page 4
Disclaimer: Mutual Fund Investments are subject to market risks. Please read all scheme related documents carefully before investing.
Volume 4, Issue 11
Page 5
FundsIndias Financial Planning Desk would like to introduce you to a series of articles on the need and methods involved in Financial
Planning. This will be a six part series and will cover the following topics.
Series 1 : The need and importance of financial planning.
abilities, your income to loan etc.,
Where do you stand today in terms of your finances. What is your li-
Series 2 : The importance of budgeting. This includes your income, liabilities and savings. The four steps involved in the financial
planning.
Series 3 : Inflation, time value for money and the advantage of disciplined investments. The importance of asset allocation.
Series 4 : Insurance Planning. Understanding insurance, the types of insurance. Understanding what is Human Life Value(HLV)
Series 5 : Children Future Planning. Quantifying the goals, find the futuristic value and planning theinvestments based on individuals risk appetite, time horizon.
Series 6 : Retirement Planning. The importance of retirement planning, the advantage of early investments towards retirement
corpus accumulation.
To start with, lets just cover the question What is Financial Planning?
Financial planning is the process which will help you in creating a roadmap for reaching your goals. This will help you in identifying,
quantifying the current financial needs and how can one achieve these goals in a disciplined approach.
Financial Planning involves planning for your life goals such as your own childs education, your childs marriage, retirement, purchase of an asset such as a house or a car and any other goals you may want to achieve.
When doing financial planning, with the help of your planner, we will determine and quantify your goals, and then evaluate your cash
flows to see how to allocate funds towards your goals in a manner that your financial objectives are accomplished.
Once a plan is being created by taking all your personal financial goals into account, then we would suggest you to start your investments towards reaching those goals. The recommendations are provided to fit into the financial plan.
Life is full of uncertainties. Future investment earnings and interest and inflation rates are not known
to anybody. However, I can guarantee you one thing... those who put an investment program in place
will have a lot more money when they come to retire than those who never get around to it.
Noel Whittaker
Mr.S.Sridharan is the Head of Financial Planning with FundsIndia. You can reach Mr.Sridharan at sridharan@fundsindia.com
Disclaimer: Mutual Fund Investments are subject to market risks. Please read all scheme related documents carefully before investing.
Volume 4, Issue 11
Page 6
Consistent Performers
FundsIndia Research
In this page, we feature mutual fund schemes in popular categories that have stood the test of time and delivered performance consistently. These schemes have consistently
featured in the top quartile of their category in terms of performance over multiple time periods in the past. For equity funds and income funds, we have chosen three, five
and seven year time periods for such ranking. For short term and ultra-short term funds, we have chosen shorter time frames. Please note that in some cases, we have
pruned the list for length - we have removed institutional schemes and those that have very high initial investment amounts (in the debt side) from this list. This list will be
updated every month, although we do not anticipate significant changes on a month-on-month basis. Rankings data for this report has been sourced from Value Research
Online.
MIP Funds
Average
6-M Re- 6-M
1-Y Re3-Y ReRanking
Fund Name
turn (%) Rank
turn (%) 1-Y Rank turn (%) 3-Y Rank (%)
Rating
SBI Magnum Children's Benefit Plan
6.05
4/59
12.89
1/58
9.73
3/47
4.96
4 Star
Tata MIP Plus
5.68
9/59
11.53
8/58
7.86
12/47
18.19
3 Star
Debt Short Term Funds
Fund Name
UTI Short-term Income Regular
DWS Short Maturity Premium Plus
Debt Ultra Short Term Funds
Fund Name
Birla Sun Life Short Term Opportunities
Peerless Short Term
Sundaram SD Short-term
HDFC Floating Rate Income LT
Taurus Short Term Income
Religare Short-term Plan A
Tata Fixed Income Portfolio Scheme
C2 Reg
Sundaram Flexible Fund Short Term
Reg
Templeton India Low Duration
JM Short-term
JM Money Manager Super
HDFC Short Term Opportunities
Tata Fixed Income Portfolio Scheme
B2 Plan A
JM Money Manager Reg
Tata Fixed Income Portfolio Scheme
B2 Reg
Average
Ranking
3-M Re- 3-M
6-M Re- 6-M
1-Y ReRating
turn (%) Rank
turn (%) Rank
turn (%) 1-Y Rank (%)
2.79
6/43
5.43
5/43
10.72
2/40
10.19
1 Star
2.71
10/43
5.4
8/43
10.44
6/40
18.95
3 Star
Average
1-Y ReRanking
turn (%) 1-Y Rank (%)
Rating
2.62
2.59
2.52
2.44
2.48
2.48
3/172
5/172
8/172
14/172
11/172
10/172
6.3
5.29
5.34
5.32
5.14
5.02
2/170
7/170
4/170
6/170
10/170
20/170
11.08
10.71
10.5
10.91
10.5
11.5
3/167
6/167
10/167
4/167
9/167
1/167
1.57
3.54
4.33
4.69
5.89
6.06
2 Star
5 Star
2 Star
1 Star
5 Star
1 Star
2.41
18/172
5.1
13/170
10.32
21/167
10.23
2 Star
2.39
2.41
2.35
2.36
2.52
21/172
19/172
33/172
29/172
7/172
5.34
5.01
5.01
5
4.94
5/170
23/170
24/170
25/170
39/170
10.14
10.32
10.41
10.34
10.13
37/167
22/167
13/167
17/167
41/167
12.44
12.58
13.7
13.92
17.19
1 Star
5 Star
4 Star
5 Star
3 Star
2.36
2.33
30/172
40/172
4.97
4.9
33/170
43/170
10.17
10.34
31/167
18/167
18.47
19.78
3 Star
5 Star
2.36
32/172
4.97
35/170
10.17
33/167
19.65
3 Star
Disclaimer: Mutual Fund Investments are subject to market risks. Please read all scheme related documents carefully before investing.
Volume 4, Issue 11
Page 7
Fund Name
Franklin India Bluechip
ICICI Prudential Top 100
HDFC Index Sensex Plus
SBI Magnum Equity
Large & Mid Cap Funds
Fund Name
Reliance Equity Opportunities
IDFC Premier Equity
ICICI Prudential Discovery
Hybrid: Equity-oriented
Funds
Fund Name
HDFC Balanced
HDFC Prudence
3-Y Re5-Y Return (%) 3-Y Rank turn (%) 5-Y Rank 7-Y Return (%) 7-Y Rank
18.84
15.91
14.04
3/50
9/50
13/50
8.14
10.19
11.34
7/42
4/42
2/42
19.83
22.41
16.86
2/26
1/26
4/26
Average
Ranking(%) Rating
10.12
10.46
15.38
4 Star
5 Star
5 Star
Disclaimer: Mutual Fund Investments are subject to market risks. Please read all scheme related documents carefully before investing.
Volume 4, Issue 11
Page 8
Sona hee hai, koi fizool kharchee thodey naa hai, says the doting husband in the TV advertisement for Tanishq gold jewellery, while Diwali crackers can be heard in the background. Its just gold, not a waste of
money.
Its the season for buying gold. Unfortunately. Ill hasten to add that theres nothing unfortunate about the
season. I expect it to be as auspicious and happy as any festival season in the past. However, its the gold-buying aspect of the Diwali
season that could become a problem. Gold and Diwali are intricately related and even in economically marginal times such as these,
the idea of buying gold is an easy sell. After all, you may have resolved not to waste money this Diwali, but as the man says in the ad,
buying gold is not a waste of money. Implying that its actually an investment. When you combine it with the enormous social and cultural affinity that we Indians have built up for gold over centuries past, its an irresistible combination.
And thats the problem. In the last ten years, gold has doubtlessly been a great investment. In domestic Indian prices, if you had
bought some gold each Diwali over the last ten years, then these are the gains you would have seen by the next Diwali: 9.3 %, 11.7 %,
8.0 %, 26.6 %, 11.5 %, 32.7 %, 23.5 %, 22.8 %, 36.7 %, 16.5 %. Compounded, the total gains are 670 %.
Its a matchless record among all kinds of investments. In particular, the record from 2009 to 2011 has given gold buying the kind of
cachet that it hasnt had for a generation in India. Sure, the stock markets gained more from 2002 to 2008, but the kind of crash they
had after that disproves the point. Moreover, outside a select set, there are very few people who think that they can reliably extract the
maximum possible gains from stocks. Gains from gold, on the other hand, seem there for the taking. As the clich goes, its just money
lying on the table, waiting to be picked up. Anyone could have made these kinds of returns, and many did.
But that was the past. The question that savers need to ask themselves is, How likely is it that this run of unprecedented returns in
gold will continue? Or, let me put it this way, How likely is it that 10 grams of gold will cost Rs 2 lakh in 2022? My answer to that
question always has been, Not very.
As has been pointed out often, gold is an unproductive asset. Unlike stocks or bonds, its a type of asset whose value depends on nothing but a shared belief that that value will rise and keep rising. However this apparently irrational gold boom has gone on long enough
for it to shake the faith of a lot of people in the basic uselessnesss of gold. Theres an old saying in investment, which is often said in
irony, this time its different.
However, one of the things that really is different this time is the deep commitment shown by the big central banks of the world to not
let asset prices fall. Heres what Ben Bernanke said a month ago: if people feel that their financial situation is better because their
401k (investments) looks better or for whatever reason they are more willing to go out and spend, and thats going to provide demand that firms need in order to be willing to hire and to invest.
Thats what it has come down to. Instead of the financial markets being a reflection of the real economy, this approach hopes to rig the
financial markets so that, hopefully, their rise might somehow become a self-justifying phenomenon. In other words, all rationality
might have exited from the price of gold, and indeed other assets.
I would normally have said that regardless of how gold tugs at your heartstrings around Diwali, you should take a hard look at the logic
of gold. Unfortunately, no one knows any more what that logic is.
Disclaimer: Mutual Fund Investments are subject to market risks. Please read all scheme related documents carefully before investing.