If you don’t know what the hottest colour trends are for 2013 then you’re in the right place. We’ve rounded up the hottest colours from the investment runways in our spring/summer 2013 trend round up. Mutual Funds would now flaunt new hottest fashion colours to help help you decide best ones for your profile. Now investing in mutual funds is a lot simpler as you need to select only the colour that looks best on you.
Wondering what’s latest runway fashion and colours connection to Mutual Funds. Well actually there none. Its simple attempt to make you all grab the attention to new changes in the Indian Mutual Fund industry. You can now invest in funds which have colour codes pre-defined as per set criteria.
DECODE THE COLOURS
The blue colour coded box indicates low risk,
The yellow colour coded box indicates medium risk,
The brown colour coded box indicates high risk.
Market regulator Securities and Exchange Board of India (SEBI) has put in place a broad guidelines for “product labelling” with colour coding for mutual funds (MF). This move is with an aim to assist each individual investor assess risk associated with the respective schemes. SEBI said these guidelines would be implemented from 1 July 2013, for all existing and forthcoming Mutual Fund Schemes.
According to these guidelines, product labels carrying different colours along with details about the schemes need to be disclosed on front page of the Mutual Fund Initial Offering Application Forms.
A blue colour coded box would indicate low risk, yellow would signify a medium risk, while brown would represent schemes with high risk. Essentially in future all Initial Offering Application Forms would carry such colours which denote the investment parameters of that specific scheme.
According to the Indian Securities Market Regulator SEBI the move was undertaken to address the issue of rampant mis-selling in the past. A committee comprising of Senior Members of Securities and Exchange Board of India Officials was set up to examine the system of product labelling that would provide potential investors an easy understanding of the kind of scheme in which they are investing in and its corresponding suitability to them. The labels would include details about the scheme including nature of schemes. Indicators would provide insights if the scheme if likely to create wealth or provide regular income. It would also provide an indicative minimum time horizon for such schemes.
DECODE THE INVESTMENT HORIZON
The coded box indicates Short term investment horizon,
The coded box indicates Medium investment horizon,
The coded box indicates Long Term investment horizon.
Moreover, each mutual funds would have to state a brief about the investment objective in a single sentence followed by kind of product in which investor is investing (equity portfolio or debt portfolio).
When investing in mutual funds – know your charges, so you will not be caught off guard while calculating the total returns on your investments. Investors in Mutual Funds do always consider various fund related factors like Manager, performance, ratings, returns etc prior to making a decision. However, one aspect that few look into are the charges paid to make these investments.
All investors investing in mutual funds conduct some background checks on schemes and fund houses they invest their hard earned money into. Is the Fund manager experienced, are the returns consistent etc, are few aspects which are considered. As this factors do have a major bearing on the overall performance of the money that you have invested. The lesser known fact is that recently many banks and other Mutual Fund agents have started charging their customers through what are called are Transaction Charges or Transaction Fees.
Recent mandate by SEBI, a government body which regulates the Indian Mutual Fund Industry allowed agents/brokers to charge the every new customers Rs.150 as transaction charges for first transaction where the total value exceeds Rs.10000. This includes new Systematic Investment Plan investors as well.
Existing investors of Mutual Fund schemes are charged. They also need to pay Rs.100 as transaction charges for first transaction where the total value exceeds Rs.10000. This includes existing Systematic Investment Plan investors as well provided the total commitment towards SIP is for Rs.10000/- or above.
In respect of systematic investment plan (SIP only), a transaction charge of Rs.100/- is payable in 4 equal instalments, starting from the 2nd to the 5th instalment. So read your statements to know your charges of Rs.25 from your 2nd to 5th SIP instalment. These charges would be deducted from your total amount invested by the Fund in which you are investing then the balance would be your net investment in the scheme. So look out for those innocuous charges ranging from Rs.25 to Rs.150 in your next Mutual Fund Account Statement. If you do notice those charges on your Mutual Fund Account Statement, you know you read it first here at OnlineMF.
I hate these charges, we all do. So is there a solution?
Not all investors would be charged these fees. If your total investments do not go beyond Rs.10000, you would be not charged. SEBI has also granted an option for agents/brokers to not charge their customers for these fees. Many have opted not to charge these fees to their customers. Brokers can decide category of schemes they intend to charge depending on the same, investors can opt for such brokers. So next time you can ask your broker about these fees and can decide knowing if it’s worth opting for it.
The Mutual Fund industry has some of the lowest charges paid by investors compared to other products available in the market. The Mutual Fund government regulator is very proactive towards the interest of the investors. The Indian Mutual Fund Industry strives to portray transparency to its investors to the extent possible. It’s always good to be an informed investor, however, not making an investment would be a bigger mistake. So next time you invest in mutual fund, keep in mind the these charges, do not be much concerned and go ahead with your planned investments in the Funds to suit your goals.
Wishing you all Happy Investing In Mutual Funds. © OnlineMF
Often many investors ask how to file a mutual fund complaint with SEBI after their numerous attempts to resolve their mutual fund related queries. OnlineMF tries to explain to the entire process of filing a online mutual fund complaint form with the mutual fund regulator SEBI.
USE THIS AS THE LAST MEANS OF PROBLEM SOLUTION
All investors should knock on the doors of the regular SEBI only after all the other means of finding a resolution for investor complains are not met. Mutual Fund Complaints should be addressed with the respective Mutual fund companies before you adopt this route.
SEBI INVESTOR COMPLAINT WEBSITE http://scores.gov.in/default.aspx
SEBI SCORES (SEBI Complaints Redress System)
1] Log on to SEBI SCORES (SEBI Complaints Redress System)
2] Select Complaint Registration under Investor Corner
Update all the below information like
- Name of Investor :
- Complaint Lodged by :
- Address of Correspondence of Investor :
- City/Location :
- Pin Code :
- State/UT :
- PAN of Investor :
- Phone Number :
- Mobile Number (For receiving SMS)
- E-mail Address of Investor
Ensure the highlighted information are accurately filled up in your mutual fund complain to SEBI.
3] Select Appropriate Category
- Listed Companies/ Registrars & Transfer Agents
- Brokers/Stock Exchanges
- Depository Participants/Depository
- Mutual Funds
- Other Entities
- Information to SEBI
Click on Mutual Fund Category to register investor complaint
4] Complete the Online Complaint form
Selected Category : Mutual Funds
*Complaint Against :
*Nature of Complaint Related to : MutualFunds
Select the appropriate nature of your complaint for any of the below options:
- Delay/Non-receipt of dividend on Units
- Delay/Non-receipt of Interest on delayed payment of Dividend
- Delay/Non-receipt of Redemption Proceeds
- Delay/Non-receipt of Interest on delayed payment of Redemption
- Non-receipt of Statement of Account/Unit Certificate
- Discrepancy in Statement of Account
- Non receipt of Annual Report/ Abridged Summary
- Wrong Switch between Schemes
- Unauthorised Switch between schemes
- Deviation from scheme attributes
- Wrong or excess charges/load
- Non updation of changes viz.address, PAN, bank details, nomination, etc
- Non receipt of Annual Account
5] Select the mode of your Mutual Fund holdings
- Physical Mode
- Demat Mode
6] Complete the image verification
Verify and complete the image verification by tying in the numbers/alphabets provided in the image into the comments box in the same format.
7] Click on Submit Button
Once you complete the online mutual fund complaint you would be provided with a registration number. Do remember to store carefully this complaint registration number for future reference.
An email is generated instantaneously acknowledging the receipt of the complaint and allotting a unique complaint registration number for future reference and tracking.
PHYSICAL /OFFLINE MUTUAL FUND COMPLAINT
If you are facing issues registering your online mutual fund complaint form OR you do not have access to Computer or Internet Connection you can register your complain by calling on the phone number of SEBI at 022-26449188/26449199. Investors can also send the complaint physically by post to any of the Offices of SEBI.
USEFUL MUTUAL FUND RELATED INFORMATION
SEBI TOLL-FREE PHONE NUMBER
SEBI helpline Number: Use the SEBI Mutual Fund helpline number 1800-22-7575 and 1800-266-7575 for your investor related questions.
SEBI INVESTOR’S WEBSITE
Before you register mutual fund complaints to SEBI check the investor website for more details. SEBI INVESTOR’S WEBSITE http://investor.sebi.gov.in
Back to Basics Series II : This article is in response to SEBI’s Public Appeal for following the right approach to Mutual Fund Industry.
SEBI Investor Education
- Sebi to relax mutual fund exposure norms for HFCs (news.in.msn.com)
- Sebi for FDs, insurance, postal savings in demat format (news.in.msn.com)
Rajiv Gandhi Equity Savings Scheme(RGESS): Tax Saving Scheme now with Mutual Funds.
The Rajiv Gandhi Equity Savings Scheme (RGESS) which is a Tax Saving Scheme comes now loaded with Mutual Funds for your investments. After considering the various views of the marketmen and general sentiment in the Mutual Fund Industry, the Finance Ministry is now proposing to add Mutual Funds as one of the products to avail the tax rebates under the amended rules for Salaried employees. Managing to do a delicate act of pleasing both the investors as well as marketmen.
Mutual Fund Market Sentiments.
This is in response to the general market sentiments of the Indian Mutual Fund Industry. The Industry was losing direction and focus. The growth had already tappered off and the clearly it was headed for years of down trending. The AAUM were falling, so were the number of new registration of Folio Numbers. The Regulator re-defined couple of rules which made many Asset management Companies reconsider their business models. The regulator set up firewalls between Industry bodies and Self Regulatory Organisations. It also questioned the logic of various fees structures which were being charged to investors. Finally, a change of guard at the Finance Ministry made few changes evident, one of them being the push for adding ELSS scheme to the RGESS albeit in reincarnated form.
Reincarnation of Equity Linked Savings Scheme ELSS
The popular ELSS survives the government wrath to be reborn in a new avatar as RGESS. ELSS which was eligible for Tax rebates under the Section 80 C was proposed to be removed. The new Direct Tax Code which was intended to be rolled out, excluded the rebates provided for the ELSS. Thus effectively putting an end to a succesful product which was gaining popularity among the retail investors. It takes huge and consistent efforts to educate the investors of benefits of any products. It is certainly a product which was gaining lot of momentum and acceptance since its launch more than 5 years ago.
(RGESS)Rajiv Gandhi Equity Savings Scheme
The proposed Rajiv Gandhi Equity Savings Scheme scheme would allow income tax deduction of 50 per cent to new retail investors, who invest up to Rs 50,000 directly in equities, and whose annual income is below Rs 10 lakh. To make the scheme more attractive for retail investors, the Finance Ministry is considering reduction in the lock-in period under the scheme to one year from the proposed three years. Now this will make this a truly retail market product for tax saving instrument. Though as an investor benefits of Mutual Fund investments are better realised over a period of at least 3-4 years. If this product gets launched in the market in the proposed form, it would be the only tax saving instrument with least number of years in terms of the lock-in period. However, this is something no one in currently seems to be worried about.
For first time retail investors investing directly in the equity markets, this would be an option which is definitely worth considering.
Rajiv Gandhi Equity Savings Scheme (RESS) : Should you invest in this equity scheme?
SEBI Chairman UK Sinha certainly does not think so if you are a first time investor into stock markets. On a recent opinion provided by the SEBI to government UK SINHA former Chairman of UTI Assset Management Company indicated his reservations about first time retail investors investing in Rajiv Gandhi Equity Savings Scheme (RESS).
Introduction of RESS(Rajiv Gandhi Equity Scheme)
Finance Minister in his Budget had recommended introduction of Rajiv Gandhi Equity Savings Scheme for investors. The rational was the extremely low penetration of retail investors in the Indian Equity Markets. This scheme is conceived to encourage participation by new retail investors in Indian Stocks.
Why the Government is keen on Retail Participation in Indian Equity Markets?
While average Indian buying into equity markets is increasing by each passing day. However, it still cannot compare to the interests and levels of buying/consumption made by Indians in Gold and other savings instruments. The quantum of investments in Bank Fixed deposits and Gold is multiple times more than the investments in equity markets. Banks are still considered to be safe and sound investment option compared to stocks. Government is keen on changing this investment pattern and move towards enhanced in stock markets. While any economy prefers to have a balanced portflio of spread across various assest classes. The ratio of investments by Indians is skewed towards the Deposits and Gold. Such high is the proportion of these investments that is has become the cause of worry for the government.
Buying Gold means Losing Foreign Currency
India is not a producer of Gold. So all the gold has to be imported, causing huge loss of precious foreign currency. The more gold we buy, the more needs to be imported, causing more drain on the precious little foreign currency (mostly it is US Dollar) India holds. Most of it gets exhausted in buying Gold.
How does the Government encourage you invest in equity markets?
Government is introducing RESS providing Tax Deductions to retails investors participating in the Indian Equity Markets. This deduction would be available under probably section 80C to salaried retail investors. This is an incentive being provided by the government to motivate new investors who trationally invested in bank deposits and gold by granting them tax deduction to the taxable income for that financial year.
Should you invest in this scheme?
Well, that is the million dollar questioon. Though, the purpose of investing in this scheme is to provide a stepping stone into the Indian Equity markets for new investors by the government. SEBI Chairman does not think that the new investors would be exposing themselves to the right platform to begin their journey into the financial markets. I guess the SEBI Chairman who knows markets, marketmen and governments would know, what he is saying.
Reliance Mutual Fund is changing its strategy of chasing the AAUM, to now focus on increasing its bottomline. The AAUM of Reliance Asset Management Company (Largest Mutual Fund Manager in India) is slowly tapering off. Does this mean it has given up its self-styled race for size to now focus on making its balance sheet stronger?
Reliance the Undisputed Leader in AAUM: Reliance held the No 1 spot in assets under its management for past many years. Its was originally Reliance’s idea to aggressively market various schemes and garner biggest chunk of new assets under its control. It launched innovative products, schemes and offered large incentives to market its funds. It redefined the Indian Assets Management business by taking a sizeable lead ahead of its rivals. With sustained efforts and aggressive posturing it reached indomitable position in the Indian Mutual Fund Industry in a very short time.
Knowledge, Products, Marketing and Timing: Reliance Group has a firm understanding of the Indian Markets. It has always kept pace with the changing demographics of its consumers. In one of the fastest growing market of the world, it is of utmost importance to connect with your investors and stay ahead of the curve. SIP for just 100, ATM Card for Mutual Fund Investors, First SIP in Gold Fund are few recent examples of innovative concepts by Reliance Capital.
Good management, excellent and timely PR, stable fund managers are a few qualities associated with Reliance Mutual Fund. It managed volatility and downtrends in markets with gusto by being in the public eye when it mattered the most. Able Fund Managers were available in public domain(effectively and efficiently doing a Public Relations job) to calm investor’s nerves when their portfolios were bleeding. Such hand holding is often the need of the hour in volatile markets.
Rivals made it easy for Reliance: While Reliance was in race with itself, others like HDFC Mutual Fund had different ideas about the whole concept of increasing the AAUM. It regularly doubted Reliance claims of ever-increasing investors and assets. The measurement of company’s size is a difficult task in a complex Indian financial market. Absence of clear and strict guidelines to calculate various parameters of AAUM made it easier to tweak numbers. Rivals were left with playing the catch-up game to the market leader, Reliance. Many asset management companies, baring few like Quantum AMC and Benchmark AMC failed to offer a different product than the one which Reliance already had in its portfolio.
Mutual Fund is an excellent financial product which allows pooling of resources to reduce overall cost of investing and sharing of risks.
Feature of MUtual Fund
Account statements and scheme related documents can be send to your mailbox
Benefit of Fund
Email delivery of your account statements ensure that you do not waste you time in filing your paper statement(physical statements). It also ensures that your account statement do not go to wrong address or unintended/unauthorised person. This benefit of email communication is important from safety and security perspective. It is a eco-friendly option for environment conscious investors. By opting for email statement investors help in saving trees which are destroyed to make paper based physical statements.
Grievance Officer/Customer Complaint/Service Manager
Feature of MUtual Fund
Asset management Companies appoint experience staff to handle customer related complaints.
Benefit of Fund
Unsatisfactory service, delay in credit of dividends, delay in receiving statements, wrong address, incorrect NAV, Incorrect schemes and many other small and major customer service related issues are managed by these officers. They co-ordinate with Local branches and the Main Office of the AMC to resolve issues and ensure good customer service.
Request for Account statement/Annual Reports
Feature of MUtual Fund
Account statement can be requested by customer whenever required.
Benefit of Fund
Customer is provided with an Annual Report of the scheme in which he has invested. One can call on any of the popular Toll free Phone Numbers of Mutual fund to place a request for latest NAV details or updated A/C statement.
Website/SMS Code/NAV on Mobile Phone
Feature of MUtual Fund
All Major Mutual fund companies have active websites which provide scheme related information.
Benefit of Fund
Daily NAV, Dividend details, key persons, registrar company and various other details are regularly published on websites. Various locations where Mutual fund has service desk, branches are also listed on these sites.
Publishing of NAV Rate
Feature of MUtual Fund
Daily NAV Rates are updated by Mutual fund Companies on websites and newspapers.
Benefit of Fund
Everyday Net Asset Values of schemes are updated on the websites of fund companies. These are also uploaded on AMFI Website(Association of Mutual Funds in India). NAV of major fund houses are published in many regional and national dailies like MINT, ECONOMIC TIMES, BUSINESS LINE etc.
Buy Mutual Funds using your VISA ATM Card.
Feature of MUtual Fund
Use your VISA ATM Card to buy Mutual Funds Units at your ATM Center.
Benefit of Fund
Mutual Fund units can now be purchased by using your ATM Card at any VISA Approved ATM Center. This makes the process of investing in Mutual Funds extremely easy and convenient for many people who do not have time to manage their finances. Investments in Mutual Funds can be made on days when the increments/bonus/pending cheque payments are received. This will assist in parking funds for long-term to build an investment nest.
Back to Basics Series I (Part2) : This article is in response to SEBI's Public Appeal for following the right approach to Mutual Fund Industry. SEBI Investor Education
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Unlike most other financial products like provident fund, insurance and post office schemes, Top Mutual Funds not only provides convenience while investing money, but it also offers a variety of features that benefit investors. A few of most common features and benefits of top mutual funds are highlighted.
Micro SIP/Chota SIP
Feature of Mutual Fund
Invest as low as Rs 100/- in Mutual Fund Companies
Top Mutual Fund Companies offer its investors an option to invest extremely small amounts such as Rs 100/-, Rs 500/-, Rs 1000/- each month depending on individual’s capacity into many of its mutual fund schemes.
Benefits of Mutual Fund: Benefits of Mutual Fund are for people who want to invest small amounts. Daily Wage Workers, Rickshaw Taxi Drivers, Labourers who wish to invest into Mutual Funds.
Flexibility of Dates
Features of Mutual Fund
Ease of investing on convenient dates
Investor can invest in top Mutual Fund Scheme on their choice of dates. Many large Mutual Fund companies offer multiple dates for investing into its top performing mutual fund schemes. E.g Few dates would be 1st, 5th, 10th, 15th, 25th of each month. This makes regular investments on salary dates possible.
Benefit of Mutual Funds: Benefits Salaried people who receive money at the end of the month and wish to invest in Mutual Funds.
Timely Payments through ECS
Feature of Mutual Funds
Hassle free, Regular Payments to allow you to concentrate on other important things in life
Investors in Mutual Funds need not worry about making timely payments each month through opting for ECS Payment Method. This ensures regular, hassle free, timely and correct monthly payments.
Benefit of Mutual Fund: Feature is useful for people who are busy or travel a lot, as he does not have time to keep track of his monthly payments.
Investing Through POA (Power of Attorney)
Feature of MutualFund
Investing without physical presence
Investments in Mutual Funds can be done through Assignment of a Power of Attorney for effective financial planning. Army Personnel, Officers posted on-duty at far off places, owners/directors of limited companies, Non-Resident Indians, Resident Indian posted onsite/outside India can invest through the convenience of POA.
Benefit of Mutual Fund: Your Financial Planning for family’s benefit cannot be discontinued in your absence. Defense and Police Officers can appoint wife or family members to be POA and allow them to invest on your behalf.
SBI Magnum Taxgain Scheme 1993 dividend for 2009 has been announced by SBI MF. With over 17 lakh investors and a stable track-record of over 15-years SBI Magnum TaxGain ELSS Scheme 1993 has proved to be one of the most consistent performer amongst the tax saving schemes category in the Indian Mutual Fund Industry. See previous dividends declared
Dividend for 2009
Magnum TaxGain ELSS Scheme : 28%
Magnum Tax Gain ELSS has generated excellent returns over past 15 years and continues to provide retail investors a profitable avenue with constant stream of fat dividends. The SBI TaxGain Equity Linked Savings Scheme is also one of the largest equity scheme in India with corpus of over 3,262 Crores (Download Magnum TaxGain April 2009 Fact Sheet). SBI Mutual Fund is India’s largest bank sponsored mutual fund and has an enviable track record in judicious investments and consistent wealth creation.
After an long delay(and nil dividend in the previous financial year) it had become almost imperative for the fund manager/investment managers at SBI MF to declared a dividend no matter how small the dividend amount be. The scheme’s rivals like HDFC TaxSaver and HDFC Long Term Advantage Fund had already declared decent and timely dividend income in the past. Irony of dividends in falling markets is that, it lowers already low NAV.
Dividend Income Bigger than Annual Bonus/Increment:
In fact, for many Salaried Investors of this scheme, due to economic downturn the Dividend Income received from SBI Magnum Taxgain has ironically outstripped their annual bonus/incentive and annual increment incomes in their current profession.
The record date for dividend is 29-May-2009. Post declaration of the dividend the NAV of the scheme will fall to the extent of the dividend payout. Check NAV of the scheme.
Related Posts Only (manually created not automatically generated)
- SBI Magnum Taxgain Scheme 1993 dividend for 2010
- Latest NAV of SBI Mutual Fund Magnum TaxGain ELSS Scheme-Updated Daily
- Elss schemes comparision 16-may-2008
- Elss performance report nov 2007
- Elss comparision aug 2007
- SBI Mutual Fund Magnum Taxgain Dividend History
- SBI Mutual Fund Equity Schemes Form
- SBI Mutual Fund Magnum Taxgain Equity Linked Savings Scheme ELSS
- SBI Mutual Fund Magnum Taxgain ELSS Equity Linked Savings Scheme
- SBI Mutual Fund Tax Advantage Fund Series 1
Often we come across well drafted advertisements and commercials at the most innocuous of all places. Many of us end up falling prey to some smart ad-men’s near perfect product or advertisement placement.I came across one such advertisement as well. The Ad read ” Save Tax of Rs 42,990 on investments of Rs 1 lacs** “. The Mutual fund advertisement further explained the benefits of investing in that fund which read as below:
Tax savings: Tax benefits up to Rs 33,990/-* on investment of Rs 1 lac u/s 80c of the Income tax Act, 1961.
Free Life Insurance Cover: 5 times your investment, subject to a minimum cover of Rs 10,000 and a maximum of Rs 5,00,000. Premium on Rs 1 lac cover for 3 yrs would be approximately Rs 9,000 which investors might save.
Capital Growth: ELSS as a medium to long term investment vehicle provides scope for capital growth.
Potential savings on Rs 1 lac investment in ELSS scheme is Rs 42,990.
**Tax saving of Rs 33,990 + Rs 9,000 Life Insurance Premium
*Assuming the investor falls into highest tax bracket and surcharge is applicable.
The advertisement is right in its claims and makes no false promises, mis-selling or overt statements.
Investors would definitely benefit from investments made in such ELSS Tax Saving schemes, however, an investor needs to understand that one of the major highlights of this scheme which is displayed in bold letters above is the charm of saving Rs 42,990.
Do all investors end up saving Rs 42,990?
Simple answer is NO.
Not all investors fall in the highest tax bracket, so savings, for investors in different tax brackets would differ. So it becomes imperative for investors not to chase smart ads and inquire about tax or savings benefits to which accrue to him.
Investors who invest in ELSS schemes are traditionally retail investors who park their money in such scheme as they offer reasonable returns with the shortest possible lock-in period.The government has made a host of individual savings ‘tax-deductible’ under one umbrella called Section 80C and a simple new rule has emerged – if you invest up to Rs. 1 lac in a tax saving instrument or even a combination of them, you effectively reduce your taxable income by up to Rs. 1 lac to save up to Rs. 33,990 in taxes (including applicable surcharge and education cess).
But, you don’t have to invest an entire lac. For example, if your taxable income is Rs. 1,70,000, you would need to invest just Rs. 20,000 in a tax saver to reduce your taxable income to Rs. 1,50,000 and drop your tax to zero!
Below is an indicative table provided for better understanding of tax brackets and applicable effective saving on ELSS schemes for individuals within respective income slabs.
|Your annual taxable income (Rs)||Your applicable tax before investment (Rs)||Optimal amount to invest (Rs)||Your ‘new’ taxable income (Rs)||Your applicable tax after investment (Rs)||Your savings (Rs)|
A Review of performance of GOLD ETF based on earlier post Gold ETF beats it all
Gold Exchange Traded funds have performed exceptionally well since their inception in India. One of the primary reasons attributed to it could be inherent bias of Indians towards gold as a precious metal. However, recently Gold is receiving a fair share for investment purposes as well. In times of economic and financial turmoil it is a safe heaven for many.
Gold EFT’s which are primarily traded on NSE (see codes) have outperformed many local and International equity indices(BSE, NIFTY, Dow Jones, Nikkei, Hang Seng).
At a time when equities valuations around the world were getting beaten down Gold ETF has provided investors promising returns of more than 15%. Comparing this returns to double digit negative returns of equity indices, surely makes a case for many investors to diversify their existing portfolios and include any of the available Gold ETF’s (BeEs, Kotak, Quantum, Reliance, and UTI)
Listed below is a comparison of returns of Gold ETF with various indices around the world. The NAV for 29-Oct-2008 is considered for comparison. Some data is proportionately adjusted for comparative study.
|Scheme Name||1 mth %||3 mths %||6 mths %||1 yr %||3 yrs %||NAV||Category||Structure|
|UTI Gold ETF||(10.52)||(8.45)||1.19||16.39||NA||1164.88||ETF||Open Ended|
|Gold BeES||(10.51)||(8.46)||1.18||16.32||NA||1162.31||ETF||Open Ended|
|Kotak Gold ETF||(10.52)||(8.44)||1.15||16.29||NA||1165.41||ETF||Open Ended|
|Quantum Gold Fund – Growth||(10.51)||(8.35)||1.31||NA||NA||580.25||ETF||Open Ended|
|Reliance Gold ETF – Dividend||(11.07)||(9.48)||(0.01)||NA||NA||1136.79||ETF||Open Ended|
|Average performance of similar category funds||(10.63)||(8.64)||0.96||16.33||NA||1041.93||–||–|
|MSCI World Index||7.41||2.33||8.16||18.73||16.22||–||–||–|
|*Note:- Returns calculated for less than 1 year are Absolute returns and returns calculated for more than 1 year are compounded annualized.|
James Grant : “Nothing beats a little cash in a bear market and the oldest form of cash is gold.”
Karl Marx : “Although gold and silver are not by nature money, money is by nature gold and silver.”
At the end of the day, bullion is more important than the billion.
Related Posts Only (manually created not automatically generated, thankfully)
How to buy Gold ETF?
Listed below is a simple way to own a Gold ETF.
Gold EFT are fast becoming a rage in India. One reason attributed to its popularity could be its stellar performance in a relatively subdued market conditions.
When first introduced in India, many were skeptical about its relevance and suitability in Indian markets, however increasing volumes and new scheme launches(Quantum, SBI) indicate its growing acceptance in a naive market like India. It is a complex financial instrument. (read EFT F.A.Q).It involves many different entities apart from usual fund managers who manage the scheme. However, its has its own limitations since it is listed on exchanges.
Many people are unaware of ways to buy a GOLD ETF.
You need a Demat account along with broker who is a member of NSE to buy a Gold ETF.
Along with traditional brokerage firms like India Infoline, Geojit, IndiaBulls, Sharekhan also offer a demat account with brokerage facilities.
Once you have a brokerage account you can buy Gold ETF by placing an order like a normal stock order to buy listed Gold ETF. Most of the ETF are listed only on NSE. Unfortunately, BSE does not have any Gold ETF listed on it.
Additionally codes like be required to be inputted to buy it online or through telephone, as many brokerage firm’s customer care executives are unaware of the codes.
Benchmark Mutual Fund – Gold Benchmark Exchange Traded Scheme (NSE Symbol: GOLDBEES)
See today’s price Nav of UTI Mutual Fund – UTI Gold Exchange Traded Fund (NSE Symbol: GOLDSHARE)
Quantum Gold Fund – Exchange Traded Fund (ETF) (NSE Symbol: QGOLDHALF)
Interesingly, Quantum Gold is also available for 0.5 grams(1/2 gram) of gold. Now that’s truly a product for the masses since the pricing is half of other available Gold ETF.
Apart from Gold ETF, some other mutual funds are also available which invest in different gold mining companies and international gold funds as well.
Since these funds(DSP World Gold, AIG Gold) are not ETF’s, no demat account is required and can be purchased like any other mutual fund schemes.
Update: January, 07, 2009.
Now Kotak Securites has launched a facility where investors can invest in Gold ETF on a regular basis.
These facility in similar to SIP in GOLD ETF, or GOLD ETF SIP.
Kindly comment in case any other brokerage has similar facility.
Listed below are reasons why you should not invest in Reliance SIP+Insure.
7 Reasons for not investing in Reliance SIP+Insure Plan.
1] The type of Insurance is Group Insurance Policy. The cheapest and easiest form of insurance policy available with any insurance company.
2] Only the 1st Holder is insured. So, in case, a couple subscribes to SIP +Insure then only one person can avail of the insurance benefits.
3] The Sum Assured, in case of death is not paid to the nominee, but shall go back to the scheme of the AMC(Reliance Asset Management Company). Remember, the scheme benfits more than the dependents of the deceased in case of death of the holder.
4] Huge exit load of 2% for discontinued SIP. If you agree to pay your SIP for 11 yrs but pay only for 10 long and tiring yrs, still the scheme charges you 2% for the remaining 1 yr which you do not wish to continue.(learn to calculate exit load charges)
5] No insurance upto 90 days (exception to it is accident cases only) , i.e 3 months. In case of death within 3 months, except of accidental deaths, the scheme shall not pay the dependents a penny.
6] The dependents will end up paying the scheme 2% back if the death occurs within 3 months due to reasons other than accidental death.
7] Minimum period of investment is 3 yrs and Rs 2,000 for each installment, i.e totalling to Rs 36,000 for Group insurance worth less than 10 lacs.
There are group insurance polices availables at a very low costs, which can be availed of for insurance requirements. Insurance worth of Rs 10 lacs may or may not be sufficient for your entire family’s needs.
The Exit loads are relatively very high even if investor is paying his SIP for a long period, if he discontinues even 1 day prior, he ends up paying 2% Exit loads.
Sunny Side to life :
SIP is also available without this offer.
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