Top TEN 10 Best Mutual Fund Companies in India to invest your money for 2018.

Top TEN 10 Best Mutual Fund Companies in India to invest your money for 2018.

We have identified the best top ten Mutual Fund Companies in India to invest your hard earned money for 2018.

RANKING
NAME
AAUM(LAKHS)
1
ICICI Prudential Mutual Fund
30617349.99
2
HDFC Mutual Fund
30079372.59
3
Aditya Birla Sun Life Mutual Fund
24779454.09
4
Reliance Mutual Fund
24558135.45
5
SBI Mutual Fund
21803397.37
6
UTI Mutual Fund
15493934.88
7
Kotak Mahindra Mutual Fund
12488805.71
8
Franklin Templeton Mutual Fund
10414047.74
9
DSP BlackRock Mutual Fund
8632570.03
10
Axis Mutual Fund
7737748.04

Source: AMFI - JAN- MAR 2018.

These are the top ten best Asset Management Companies to invest your hard earned money with. Remember these are listing of AMC. These AMC's AAUM is no reflection of its fund managers investment abilities.

SBI Magnum Tax Gain Fund Scheme 1993 dividend for 2018 has been announced by SBI MF

With over lakhs of investors and a stable track-record of over 25-years SBI Magnum Tax Gain Fund 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 2018

Magnum TaxGain ELSS Scheme : 40%

With over lakhs of investors and a stable track-record of over 25-years SBI Magnum Tax Gain Fund 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

SBI Magnum Tax Gain Fund Scheme 1993 dividend for 2014 has been announced by SBI MF

With over 14 lakh investors and a stable track-record of over 20-years SBI Magnum Tax Gain Fund 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 2014

Magnum TaxGain ELSS Scheme : 35%

Magnum Tax Gain ELSS has generated excellent returns over past 20 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 4074 Crores. 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 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 28-Mar-2014. Post declaration of the dividend the NAV of the scheme will fall to the extent of the dividend payout. Check NAV of the scheme.

Hottest Colour Fashion Trends for investing in Mutual Funds.

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.


RISK, COLOURS
RISK PROFILE FOR MUTUAL FUNDS

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).

Investing in Mutual Funds - Know your charges.

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.

MF CHARGESMUTUAL FUND TRANSACTION CHARGES

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.

Final Word


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


How to file a mutual fund complaint with SEBI?

How to file a mutual fund complaint with SEBI?

Often many investors ask how to file a mutual fund complain 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)



ONLINE MODE

1] Log on to SEBI SCORES (SEBI Complaints Redress System)
http://scores.gov.in/default.aspx

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
  •  Others 
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

©OnlineMF

Rajiv Gandhi Equity Savings Scheme(RGESS): Tax Saving Scheme now with Mutual Funds.

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 marketment 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 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 abeit 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.



ELSS SALES

(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.

OnlineMF.

Rajiv Gandhi Equity Savings Scheme (RESS) : Should you invest in this equity scheme?

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.

Is Reliance Mutual Fund giving up the AAUM race for profitability?

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 MF 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 gutso 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. Absense 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 assest 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.

The product managers at rival AMC's were no match with aggresive launches of Reliance. Right from conceptualising an interesting investment theme/product, to launching the same in fastest time. It sounds similar to stories from other industries like automobiles, mobile phone markets. It is of equal importance to have a scheme in your portfolio before your rivals offers the same. Many AMC struggled to generate concensus internally, on themes which were relevant in the market. And by the time, when eventually some concensus would have been made, the markets would have lost 1000-1500 points. Many could never get schemes which were good at the perfect time to capitalise on sentiments. It resulted in many businesses being sold off or transferred and no real consolidation was ever strong enough to challenge its leadership.

Recent AAUM numbers of Indian Mutual Fund industry do make a point that Reliance is no longer pursuing the AAUM game. Reliance AAUM has not increased in past few quarters and to make matters worse it has in fact decreased.

Investors would be hoping that the Leader of Indian Mutual Fund Industry is pausing, only just, to take a bigger leap forward.

©OnlineMF.

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Common benefit and features of investing in mutual funds.

Mutual Fund is an excellent financial product which allows pooling of resources to reduce overall cost of investing and sharing of risks.

E-Mail/Electronic Communication

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

©OnlineMF.

Related articles

What are the most common features and benefits of Mutual Funds?

What are the most common features and benefits of Mutual Funds?

Unlike most other financial products like provident fund, insurance and post office schemes, Mutual Funds not only provides convenience while investing money, but it also offers a variety of features to benefit investors. A few of those most common features of 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, Laborers 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, and 25th of each month. This makes regular investments on salary dates possible.

Mutual Fund Offer Letter
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.

Invest in China with just Rs 10,000 in Hang Seng BeEs ETF

Invest in China with just Rs 10,000 in Hang Seng BeEs ETF


After the mad rush for Gold ETF Asset Management companies were actively scouting go the next big idea to launch to seek cover for their dwindling Assets Under Management(AUM). Accordingly, Benchmark Mutual Fund will be launching an ETF based on the Hang Seng Index. Hang Seng BeEs as it is called would be listed on the NSE on Monday , 15th February.The Purpose of this EFT is to enable investors track Hang Seng Live and reveal hang seng index chart on real-time basis.


Benchmark AMC and its Niche:

Benchmark has carved a niche for itself in the Indian Mutual Fund Industry by successfully launching first ETF in Asia(not only India) Nifty BeEs. It is also credited with launching the Gold ETF first time in India. Shariah based ETF products were first introduced to the Indian Mutual Fund Investors by Benchmark Asset Management Company.


Trade on Hang Seng Stock Exchange:

Hang Seng BeEs would be the first ETF to introduce Indian Stock Market Investors to a closed market like China. India and China are two of the fastest growing economies in the world. Indian investors would largely benefit by the diversification offered with the launch of hang seng index based ETF. Hang Seng Stock Exchange is one of the largest exchanges in the world. Hang Seng Index Charts, Hang Seng Futures, Hang Seng Historical Data can also be now be determined and tracked on a real-time basis.


Hang Seng Timings:

Hang Seng BEnchmark Exchange traded Scheme(BeEs) will trade during the Hong Stock Exchange Timings. The Heng Seng Stock Exchange closes two and half hours prior to the NSE Closing timings. The corresponding time would be between 7.30 am to 1.30 pm Indian Standard Time. The timings are better suited to indian traders and investors alike, compared to US Markets and European market timings. The NAV for the Scheme would also include the currency fluctuation.


Taxation Rules for Trading in Foreign ETF:

The ETF are treated as Debt funds for tax treatment and would therefore attract tax rules which are currently applicable to the non-equity funds in India. The Hang Seng Index currently comprises of 42 Stocks and is the benchmark for the China ETF in India. Rs 10,000 is all you need for your ticket to China: The units are available for a minimum amount of just Rs 10,000. To cater to large masses and enable wider market participation the entry amount is kept at Rs 10000 only. All Major Global Corporations have invested billions of dollars in the Chinese Economy. So why Indian Investor should not join the race and participate to diversify their existing portfolios?


Charges for trading on China ETF:

There are no charges levied by the AMC in form of NIL entry load and NIL exit load for buying and selling on the NSE. A minor bid/ask spread, brokerage for trading and needs to be borne by the investor. Hitherto, only High Net worth Individuals was active in using these innovative financial products. In future retail investors should add such products to their overall portfolio diversification strategy. 

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.

NFO do not come cheap


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Does Rs 10 = Rs 100
Yes or No, read and find out...

Many investors get lured by mutual fund NFOs only because they think they can buy units cheap - for just 'Rs. 10'. While buying an asset at a low price is a good idea, it may not necessarily work while choosing a mutual fund. Why?

The performance of mutual funds is driven by the underlying securities in the fund and not the NAV at which the fund is available. One of the most common reasons why people prefer to invest in a fund with a low NAV is because they think the potential for growth in such a fund will be higher than funds that have a higher NAV. The following example illustrates that this is just another myth.

Let's assume there are two funds - An 'expensive fund' with an initial NAV of Rs. 100 and a 'cheap fund' with an initial NAV of Rs. 10. Let us also assume that both the funds have identical portfolios and that an investor invests the exact amount of Rs. 10,000 in both the funds. The only difference is that the investor gets 100 units of the expensive fund and 1000 units of the cheap one.

Since both the funds have identical portfolios, let's assume that over the next 30 days, both funds appreciate by 10% each. Thus the NAV of 'expensive fund' goes from Rs. 100 to Rs. 110 and the NAV of 'cheap fund' appreciates from Rs. 10 to Rs. 11. The gains in both cases are identical after 30 days.



Old Fund New Fund

NAV on Day 0 100 10

Investment amount 10,000 10,000

Units allotted 100 1000

% change in NAV
after 30 days 10% 10%

NAV on Day 30 110 11

Value of invested amount after 30 days 11,000 11,000

Do not go chasing ads, listen to the your needs (Part-1)

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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 lac** ".  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.


Annual taxable income (Rs) Applicable tax before investment (Rs) Optimal amount to invest (Rs) New taxable income (Rs) Applicable tax after investment (Rs) Savings (Rs)
1,70,000 2,000 20,000 1,50,000 0 2,000
1,90,000 4,000 40,000 1,50,000 0 4,000
2,50,000 10,000 1,00,000 1,50,000 0 10,000
3,00,000 15,000 1,00,000 2,00,000 5,000 10,000
4,00,000 35,000 1,00,000 3,00,000 15,000 20,000
5,00,000 55,000 1,00,000 4,00,000 35,000 20,000
7,00,000 1,15,000 1,00,000 6,00,000 85,000 30,000
9,00,000 1,75,000 1,00,000 8,00,000 1,45,000 30,000

SEBI ACTS FINALLY, in interest of Retail Investor.

BUT IS IT TOO LITTLE TOO LATE?
SEBI is now mulling the idea for separating the corporate investor from retail investors in every scheme of mutual funds, so that latter does not suffer at the expense for former. Even, if it suffers it will now come at a cost.
Retail investors until now always had to pay a higher entry load compared to Corporate Investors. The exit loads were also biased to favor the Corporate Investor more than retail investor. It was easier for a Corporate investor to enter and exit a Mutual Fund scheme at minimal transaction costs. However, that lack of barriers came at the expense of retail investors.
Many companies park their Working Capital and short term funds in various mutual fund schemes to seek higher returns for otherwise idle money.

Corporate Investors

Corporate Investors until now had it easy while investing in Mutual Funds of major fund houses. They were offered parking of their idle funds at huge concessional rates compared to retail investor.
Corporates could invest and withdraw funds with ease providing them the ample liquidity, which they relished upon.
Corporate Investors were also provided extra benefits in terms of ease of withdrawal with negligible or zero penalty for early withdrawal of funds.
With the advent for ECS, RTGS and various quick settlement facilities the turnaround time required to process the withdrawals of Corporate funds also reduced considerably. It only made Corporate Investor pour in more money to their existing investments.
RTGS provided ample opportunity to them to receive redemption funds within shortest possible time.
So what was initially an investment vehicle for idle funds could have also evolved into an easy mechanism for producing higher returns with minimal transaction costs.

Retail Investors

It was easier for a Corporate investor to enter and exit a Mutual Fund scheme at minimal transaction costs. However, that lack of barriers came at the expense of retail investors.
They were charged huge sums for early withdrawals compared to corporate Investor. When a Corporate investor exits a scheme (redemption), then the securities held by the fund have to be sold to pay the Corporate Investor in Cash. This results in erosion of NAV. It also results in selling costs which are bourne by the remaining customers (existing unit holders).
Since the barriers (costs as well as time required to encash) to exit a scheme are so less that Corporate find it simple route to make quick buck and exit.

All through this downturn in assets of all major fund houses, retail investor has shown his faith in the abilities of money managers. They have not panicked and not followed a herd mentality unlike Corporates. A Major portion of 47,000 Crs of outflows in October's AUM has been in Fixed Maturity Plans which are favorites of the Corporate Investors.
Very few retail investors might have redeemed their portfolios in such harsh conditions.
In fact they might have stopped believing in the advices and tips of their favorite Grocery Shop guy who sells less Grocery than stock tips.
In fact during such times retail investors turn to proven records of top Money Managers and trust their instincts more than Grocery Shop advisor with stock TIPS.

Fund Houses (Asset Management Companies)

Even for fund houses it was easy money at cheap rates and in huge amounts. It was a win-win situation for both Corporates and Fund houses. The lone suffer in this party was the gullible and naive retail investor.
It is easy for Fund houses to collect Rs 100 from Single Corporate Investor than to collect Rs 5 from 20 retail investor located at different locations.
The Corporate Investor fulfilled the insatiable desire of marketing and money managers to pump up their AUM. So long the party lasted everybody was cheering. Now the same corporate investor has exited various schemes which were designed for making their life easier and returns higher. The money managers could not keep pace with double whammy of erosion of NAV along with outflows of same easy money.
Many fund houses struggled to keep pace with redemptions. Some had to knock on the doors for the regulators.
Last thing you would wish to do as a fund house.

SEBI

SEBI had all the key records, data with it all along.
This practice was on since many years. Just that the regulator has now chosen to act upon it now, is not surprising.
SEBI at times acts much like the cops in movies which arrive on the scene after the crime has been committed.
SEBI on its part needs to be more proactive and have a firm grip on the nerve of industry. It may also be the case that it does not have the necessary manpower and required expertise to cater to the huge surge the Mutual Fund Industry.
The regulator woke up after close to 47,000 Crs (See October AUM figures) of erosion and withdraws of funds from the Industry.

However, to be fair to the regulator many people do not like regulatory interference during uptrend in the markets. It’s only during downtrends that regulators are respected and existing regulations are adhered to.
If regulators intervene during uptrend in the markets they are viewed as unnecessary interference and supervision.

SEBI has decided to implement either

Option 1:
Same entry fee for both Corporate and Retail Investor OR

Option 2:
Create separate investor classes and manage both separately within main fund so that both the parties are firewalled.

Onlinemutualfund (OMF) recommends the Option 2 and hopes SEBI and adopts it.

Second option, is to be more reasonable and sound, as it keeps all the players happy.
Hope right decisions are made and retail investors are again a happy lot.
Tell us about your opinion, views, and comments, remember it counts.