Mutual Funds - Fund Strategy
The power of systematic investing
'Even as technology funds were battered in 2000, investors with periodic investments have been better off than their counterparts with a one-time investment.'
Should your money be in US-64?
'The equity markets have been good for a large part of this year coupled with US-64's higher allocation to technology and hence, investors can expect a higher pay-out on June 30.'
A solid performance
'If the mayhem on the bourses and the sharp erosion in net asset values of equity funds has made you jittery, a peep into history might just soothe your nerves. The diversified equity and sectoral funds are still up an average 47.53 per cent from their mid-May 1999 levels.'
A win-win situation
'Short-term investors stand to reap a rich reward with dividends from mutual funds having been made tax-free. Yet, the best way is to draw dividends and remain invested for a long time.'
Budget and mutual funds
'As the Budget changes will affect different infotech companies differently, choosing the right stocks will become a more sophisticated game. This will bring about the crucial difference in fund performance, which is invisible today. Till now, the secret of tech investing success has been to just buy them, but this will increasingly become difficult."
Saying goodbye to your fund
''There are several factors that make selling a fund appropriate - a fund's unsuitability to your portfolio, a deteriorating performance, a change in style or allocation of a fund, a change in management and inefficient service."
What's the real story?
''Sectoral classification of mutual funds has never been so confusing as technology evolves rapidly and no basic standard industry classification exists."
The rise and rise of mutual funds
''1999 has been the year of mutual funds. The rise from disgrace to a preferred investment vehicle was driven by a series of factors. They were a) the consolidation and transformation of funds in terms of their structure over the past years, b) the dramatic turnaround of the equity markets in 1999, c) the virtual disappearance of safe and rewarding fixed return alternatives, and finally d) the tax incentive in Budget '99 making dividend from open-end equity funds tax-free."
Infotech Funds: Hottest Flavour
''When investing in the sector, my advise is that you look beyond the mania and evaluate infotech stocks and the funds that own them the same way you would any investment - thoroughly, and from the perspective of a long-term owner, "says Dhirendra Kumar.
Funds for the long distance runner
''The case for investing in these funds is too compelling today. These funds are ideally suited for long-term capital build-up. They have a defined term and are under no continuous pressure of inflows and redemption in the fund. Hence, these funds are expected to deliver above average returns. Consequently, investors can hope to get significantly higher yield from their investments for their stay till the end of the fund,"says Dhirendra Kumar "
''Most people park money they'll need soon in a bank account, but they could do better by taking on a bit more risk says Dhirendra Kumar "
How to Buy Low, Sell High
''Periodic disciplined investing can be an easy way to build your portfolio. You can employ this technique by setting aside a fixed amount of your savings every month to invest. When you invest the same rupee amount every time, rather than buy a specified number of shares, you buy more shares when the prices are low and less when the prices rise. The result: you can lower your average cost per share."
''Trading at a handsome discount ranging between 30 to 50 percent, some closed-end funds are just too good to be true. So don't rush to your broker with a buy order on the fattest discount to the NAV. While some of these could well turn out to be rare gems, one has to steer clear of many a hazard. "
Sector funds - Do they offer better performance?
'On the attractiveness of a sector fund, these funds with their sharp focus should deliver superior returns and the sector outlook of the funds being offered is very bright over the medium to long-term time horizon. However, these funds lose out on the benefits of diversification.'
Diamonds in the dust
'If you think all PSUs are sick, think again. Funds with special focus on PSUs are wonderful picks.'
Thank you Mr. Jalan
'Credit policy special'
Buying a closed-end fund
'Why own a closed-end fund when every fund company is floating a brand new open-end fund every other day. Because, a careful buying can get you bargains.'
Systematic Withdrawal Plan - Smart Income Option
'Investors looking for a steady income from their investments are increasingly relying upon debt funds'