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| May 14, 2008 | | How to select a financial planner
The financial planner is someone who can help you invest across investment avenues based on your risk profile and investment objectives
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| May 13, 2008 | | FMPs turn unattractive for investors
If you are planning to invest in Fixed Maturity Plans, think twice. Because most mutual fund managers believe that FMPs are unlikely to give higher returns as they did last year. And, this is beginning to show in their collections as well. In March 2007, FMPs had collected Rs 30,869 crore (Rs 308.69 billion). In March 2008, they attracted only Rs 21,688 crore (Rs 216.88 billion). Even in April this year, 62 schemes collected only Rs 1,126 crore
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| May 09, 2008 | | All you want to know about thematic funds
The constraints of managing funds that invest in a select few sectors can often prove to be demanding for fund houses. As a result, it isn't entirely uncommon to find a sector/thematic fund changing/expanding its investment objective/style in due course. This bears testimony to the intrinsic inadequacy of a sector/thematic fund in terms of sustainability over the long-term. Nonetheless sector/thematic funds continue to be launched at regular intervals.
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| May 05, 2008 | | Mutual fund roundup: April 2008
In recent times, 'inflation' has emerged as a buzz word of sorts. Simply put, inflation is a situation wherein too much money chases a limited number of goods. This leads to a fall in the value of money. Inflation is often expressed as a rise in the price level. For example, a product that costs Rs 100 now, would cost Rs 105 a year hence, assuming that prices rise at 5 per cent annually.
Daily investment through mutual funds
A systematic investment plan that invests every day in the stock market can capture the movements for the investor. An analysis of its performance.
Negotiating salary? 4 important tips
There are many of us who get lured with the numbers that show in our CTC package, but when the actual take-home salary comes in our hand, it causes a lot of heartache
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| May 02, 2008 | | Mutual fund 'schemes' of a different kind
Of course, not all AMCs use such marketing schemes; certain AMCs have told us that they would have preferred to keep an arm's length from these tactics, but their hand was forced by other AMCs. The bottom line is that investors/agents are regularly bombarded with rewards/incentives by AMCs and core factors like the fund's investment proposition and track record are conveniently pushed to the background.
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| April 29, 2008 | | FMPs vs FDs: Which side are you on?
Fixed Maturity Plans can be termed as the mutual fund industry's answer to Fixed Deposits (FDs). Over the years, FMPs have established themselves as an option for debt fund investors (i.e. risk-averse investors). In many cases, they occupy the slot that used to belong to FDs. This is not surprising given that both the avenues cater to the same investor category.
Use tax sops and buy a house
Make the Income Tax Act work for you by using its tax saving provisions to fund the purchase of not only your first house, but also of the second one.
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| April 28, 2008 | | Good portfolio=15% return per year
Invest in a basket of well managed equity funds. If your asset allocation demands that you need to be invested, go ahead and invest some money; do an sip. Be sure to select the funds best suited to you, says mutual fund expert Rahul Goel.
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| April 25, 2008 | | US64 Bonds up for redemption: What's next?
Over the tenure of US64 Bonds, the investment scenario has changed radically. Mutual funds (equity funds in particular) have come of age and found greater acceptance among investors. So it should come as no surprise, if you find yourself being persuaded from all quarters to invest the redemption proceeds of US64 Bonds in equity funds. For example, investors in US64 Bonds have received letters urging them to invest the redemption proceeds in equity funds from UTI Mutual Fund.
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| April 19, 2008 | | Principal large cap: Doesn't make the grade
It's not like we are against NFOs for the sake of it. Our view on this subject is if the NFO offers something truly unique (i.e. distinct from existing funds) and can aid the investor significantly in achieving his long-term goals, he can consider investing in the NFO. Failing this, investors are better off investing in existing mutual funds with proven track records across time frames and market phases.
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| April 18, 2008 | | 4 tips to make the most of your money
Following some rather elementary tips can go a long way in not only saving money, but also deriving maximum benefit from it. Perhaps it's the demanding nature of our everyday chores that make us overlook these tips. In this article, we discuss 4 tips that will help you make the most of your money.
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| April 15, 2008 | | 4 tips to make the most of your money
Following some rather elementary tips can go a long way in not only saving money, but also deriving maximum benefit from it. Perhaps it's the demanding nature of our everyday chores that make us overlook these tips. In this article, we discuss 4 tips that will help you make the most of your money.
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| April 14, 2008 | | 4 ways to ace falling markets
But when markets collapse like they did earlier this year, many of these 'great' investments suddenly start appearing like great mistakes. Nonetheless, there are lessons to be learnt from falling markets and we have a 4-step strategy on how you can ace falling markets.
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| April 10, 2008 | | Stocks vs mutual funds: What's better?
Within the domain of investments, two options that investors regularly grapple with are stocks (i.e. direct equity investing) and mutual funds. Both have their advantages, although this note does not get in to that debate. Instead, in light of the present discussion about investing being a full-time activity, let's see how stocks and mutual funds face off against one another.
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| April 09, 2008 | | MFs: The winners and losers of March
Mid cap stocks (and subsequently mid cap funds) have been the worst hit in the recent stock market crash. Investors who added mid cap investments to their portfolios without understanding their true nature are a dismayed lot. Typically, mid caps are presented as an opportunity to make quick money; sadly, investors are rarely made aware of the higher risk involved. While there is no doubt that if identified correctly, mid caps can contribute significantly.
FMPs: The devil is in the assumptions
There is never a dearth of ideas among the AMC (asset management company) think tanks, when it comes to drawing investors towards their offerings. The AMCs usually adopt innovative ways to promote their products. Often these ideas have the desired impact and get investors all interested.
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| April 07, 2008 | | Core sector stocks: High risk, high profit
The best performing industries of the past two years have included power, engineering, construction, capital goods, telecom, etc. Broadly, these are infrastructure-related industries that have seen strong, even geometric growth. These are also, by and large, not industries that receive very high discounts globally. In India however, they have been treated as growth sectors that deservedly, receive growth industry discounts.
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| April 04, 2008 | | JM Mutual Fund: Mid caps rock the boat
When it suits them, fund houses promote a star fund manager to draw investors. The star fund manager's track record in identifying stocks/trends is publicised extensively. NFOs (new fund offers) are launched on the premise that the star fund manager will repeat his stellar performance and give investors a good enough reason to invest in the NFO.
New to mutual funds? Go for SIPs
SIPs should be entered for 12 months at a time, and then renewed. You should use the renewal as an opportunity to review the portfolio. SIPs are a great way to invest in our view. if the environment is volatile, then SIPs are probably the best way for most investors, says mutual fund expert Rahul Goel.
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| March 31, 2008 | | Now selling property comes easy
In a move that could help property investors to exit the market in Mumbai, the Maharashtra State Budget has recently declared that now you need not hold the property for 'at least' three years to take advantage of the concession on stamp duties. In case a property was sold before three years, the buyer would have to pay a stamp duty, based on the entire sale agreement price. There are a large number of people who have purchased 2nd & 3rd houses and this clause will help them.
Pay hike: How to spend wisely
With more disposable income in the hands of public servants, it's time PSU employees started their financial planning. Invest before splurging should be the mantra. Financial experts say that the revised pay scale can serve as an opportunity for them to fill the gap in their investment plans. They can look at squaring off liabilities, investing in contingency fund, mediclaim and life insurance, builing assets and planning for retirement, to effectively utilise their pay hike.
FMPs: Don't ignore the risk
It's that time of the year, when fund houses roll out their FMP (fixed maturity plans) products in response to the attractive yields on corporate bonds. Expectedly, investors view FMPs as a means to clock a higher return at relatively low risk (actually many investors believe there is zero risk in an FMP). While this is mostly true, some points about FMPs are noteworthy.
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| March 29, 2008 | | All about Exchange Traded Funds
ETF is a basket of securities that is traded on the stock exchange, akin to a stock
Mutual funds: The best could be the worst!
There's something about a top-performing fund. The glowing reviews, self-congratulatory advertisements by the fund house and a host of stars (read ratings) and awards. It's a pretty heady mix. Sadly, the NAV performance in isolation presents a one-dimensional picture i.e. it may conceal more than it reveals. In this article, we make a case for looking beyond just the NAV performance by listing instances, when top-performing funds could potentially be bad investments.
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| March 25, 2008 | | Is dividend option in NFO a smarter choice?
What's better -- the dividend option or the growth option? That's one question, which investors regularly pose to us. In the case of an equity fund, so long as both the options have the same portfolio, they are at par (on rare occasions, some funds have different portfolios for the growth and dividend options).
Mid cap funds? Think long-term
The recent stock market crash has been particularly harsh on one investment category -- mid cap stocks/funds. Compared to their large cap peers, mid cap stocks/funds have fallen more sharply. The view that many frustrated investors might take is that investing in mid caps was a bad idea in the first place. And they can't really be blamed, in many ways mid caps were presented as an opportunity to make quick money without informing the investor of the higher risk involved.
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| March 20, 2008 | | HSBC Midcap: Not good enough
Mid cap companies tend to be under-researched ones, thereby providing an investment opportunity that is yet to be identified by the market. Investments in such companies offer high growth potential and the opportunity to clock above-average returns over the long-term (at least 3-5 years). On the flipside, since mid-sized companies are often under-researched, there is a fair chance that some reasons for "not investing" could be overlooked.
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| March 17, 2008 | | Using credit card? 7 points to note
Technically speaking, a credit card is an unsecured loan. This means that unlike a secured loan, which is advanced by a bank/financial institution against a security like property for instance, a credit card is offered without any security. In a secured loan, if the borrower fails to make good on his principal/interest commitment, the bank/institution can seize the security as compensation.
ICICI Prudential Discovery: Missing value
Broadly speaking, growth and value are the two popular investment styles. Growth style investing entails making investments in fairly/fully valued stocks that are expected to do even better going forward. Conversely, value investing involves making investments in fundamentally strong companies that are trading at a discount to their fair value. These stocks are then held onto until the mis-pricing is corrected and they attain their fair value.
Let's think over and above 80C
The Income tax Act, 1961 contains several provisions which can serve as tools for saving your tax outgo. While everyone is more focused on meeting the 80C limits, here are a few more options.
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| March 13, 2008 | | MIPs: How good are they?
Hybrid funds (powered by their flexibility to invest across asset classes) can add immense value to the investor's portfolio (especially during the down turn). While the role of balanced funds in the investor's portfolio has been well-documented, it's time for investors to recognise the value MIPs can add to his portfolio. MIPs invest predominantly in debt instruments with a small portion of assets allocated to equities.
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| March 10, 2008 | | The top mutual funds in Feb
The month's big event was the Union Budget 2008-09; however, it proved to be a bit of an anti-climax for mutual fund investors. The only noteworthy change was that the short-term capital gains tax was raised from 10% to 15%. In effect, short-term transactions will become less attractive for investors. Clearly, the benefits of long-term investing aren't lost on the Finance Minister either. However, the month was certainly not a staid one.
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| March 06, 2008 | | What's the Kotak Opportunities story?
In recent times, there has been a lot of buzz around Kotak Opportunities Fund, a diversified equity fund from Kotak Mutual Fund. We have also received a large number of queries about the fund, and given its performance on the net asset value appreciation front, we aren't surprised.
Birla Top 100: Far from the top
Birla Top 100 Fund, launched in October 2005, is a predominantly large cap fund that invests in the leading 100 companies by market capitalisation. Large caps boast of established track records; over longer time frames, their performances display a degree of stability. Investors are exposed to fewer surprises, which lowers the risk of investing in them considerably as compared to say mid caps or small caps which in many ways are still evolving.
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| February 27, 2008 | | Infrastructure funds? Read this!
In this article, we are not going to preach that you should not invest in infrastructure and related funds (haven't we done that many times already?!). So, no preaching here. Only facts. And then, you decide what you want to do with your money.
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| February 23, 2008 | | When agents mis-sell tax plans
Agents are known to mis-sell tax plans to unaware investors. Mis-selling comes easy as basic facts are misrepresented and investors are made to buy plans that don't benefit them.
All about Morgan Stanley Growth Fund
If MSGF had shared the complete portfolio with its investors more frequently, the red flag on its misconceived investments might have been raised earlier.
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| February 22, 2008 | | Overseas trip? Important money tips
Carrying part of the money as currency and the rest in a travel card makes for a hassle-free holiday abroad at the least cost.
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| February 21, 2008 | | 10 golden rules to become rich!
Once you decide to put your money to work to build long-term wealth, you have to decide, not whether to take risk, but what kind of risk you wish to take. Here are 10 investing rules that can make you rich:
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| February 16, 2008 | | Investing your money? Caveat Emptor
Investors looking to make an investment are often so busy choosing the right option, that they can be oblivious to the basic details. This can be counterproductive over the long-term, especially if an important detail was overlooked and the same comes back to haunt the investor later.
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| February 15, 2008 | | Never let your trading profits turn into a loss
There might be a lot of public orders resting at $121 to buy the stock, but all the orders to buy at that price won't be filled. If they are all filled at $121, there's a reason why informed insiders would be willing to sell all the public wants to buy at the $121 level. My selling out my position at $120-7/8 would be warranted because the price of the stock should drop pretty drastically after all the public orders to buy at the 121 support level are taken out.
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| February 14, 2008 | | Now, reputed fund houses go thematic
There are so many infrastructure funds in the market today that most fund houses can now boast of managing one. So much so that even fund houses that were launched less than 12 months ago with just one equity fund in their portfolios, have been quick on the draw with their infrastructure NFOs.
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| February 13, 2008 | | Mutual fund add-on benefits? Be careful
Innovation is nothing new to the mutual fund industry. In the past, we have seen mutual funds provide add-on benefits like accident insurance, critical illness insurance and even life insurance. A recent innovation involves providing insurance benefit to the child in the event of the parents meeting with an eventuality.
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| February 11, 2008 | | Why auto component stocks are hot picks
Despite the hiccups experienced by the auto component industry, better growth prospects and low valuations suggest that it's a good time to buy solid companies in this space.
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| February 08, 2008 | | Sebi bats for the investors
The Securities and Exchange Board of India ruled that investors could avoid paying the entry load charged while investing in mutual funds
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| February 05, 2008 | | 5 things mutual funds must do for investors
Over the last few years, the domestic mutual fund industry has grown by leaps and bounds. Several asset management companies have established base in the country and there are more on the way. Expectedly, the gamut of mutual fund offerings has grown as well. While few would dispute that the mutual fund industry now has more to offer, there is one aspect that continues to be ignored -- quality of disclosure.
Income generator plans: Read the fine print
Though deferred annuities are mostly sold as pension plans/income generators and tax saving devices, you can safely ignore such plans
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| January 30, 2008 | | How dividends in mutual funds work
Often investors are lured to mutual funds due to dividends. It is necessary to understand the role of dividends in MFs and know that the only way MFs give returns is through NAV appreciation.
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| January 25, 2008 | | How to spend wisely. 4 tips
In a guide targeted at the youth, to ignore spending would be akin to committing a cardinal sin
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| January 24, 2008 | | All you want to know about DSP ML Opp
Investors who are enamored by thematic funds (especially infrastructure funds) must not lose sight of the fact that diversified equity funds (which include opportunities funds) can make aggressive sectoral/thematic calls. More importantly, they can exit the sector/theme when valuations peak; this is something thematic funds cannot do because they are bound by their mandates to remain invested in the theme regardless of the valuations.
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| January 15, 2008 | | Opening a bank a/c? Buy insurance first!
For far too long, individuals have been at the receiving end of unfair practices from various entities in the financial services industry. Now it's time to stand up and be counted!
Investing in MFs? Think beyond yourself
Thinking beyond oneself and one's immediate environment is looked upon as a good trait in any person. But when this logic is extended to mutual funds, one might find it surprising. "Shouldn't mutual funds be concentrating on giving returns to the customer?" is a question that comes to mind immediately. Yes, they should.
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| January 14, 2008 | | How many accounts should one have?
Considering the above and a double income family, there would at least be around four to six different accounts. And managing all of them becomes cumbersome and you realise the complexity of the issue when you have to collate this information to give your chartered accountant or financial advisor.
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| January 12, 2008 | | Is your fund house opportunistic?
Speaking of fund houses, it is quite disappointing to note that not all fund houses have taken the 'no load on direct investments' regulation in the right spirit.
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| January 05, 2008 | | Top performing mutual funds
Investors fail to realise the potential of tax-saving investments in contributing towards wealth creation. As a result, it is vital that tax-planning be considered as a part of the investor's overall financial planning and not in isolation.
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| December 24, 2007 | | Where are your investments headed?
Setting an objective should be the first step in the investment process. You should be unambiguously aware of what you want to achieve; the goal could range from buying a car to providing for your retirement.
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| December 22, 2007 | | SIPs: All you need to know
While few would dispute the utility that an SIP can offer, there is a flipside to the same as well. In this article, we discuss the pros and cons of SIP investing.
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| December 21, 2007 | | Diversified equity funds are dead
So far in December 2007, various Asset Management Companies have filed offer documents for twelve new equity-oriented fund offerings. All of them are either thematic or sector funds. If one were to go by just this fact, then yes, diversified funds are dead.
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| December 20, 2007 | | Should you invest in index funds?
Index funds are typically associated with lower costs; this phenomenon is prevalent both globally and in the domestic mutual funds industry as well. The notification issued by Sebi will mean that now there is a regulation in place to ensure the aforementioned.
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| December 18, 2007 | | Diversified equity funds are dead
So far in December 2007, various Asset Management Companies have filed offer documents for twelve new equity-oriented fund offerings. All of them are either thematic or sector funds. If one were to go by just this fact, then yes, diversified funds are dead.
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| December 17, 2007 | | Housing stocks are a good long-term bet
Strong demand for housing loans and stable real estate prices augur well for housing finance companies. Though the stocks are not cheap, they make good long-term investments.
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| December 15, 2007 | | Personal finance: Don't ignore the bigger picture
On a downside, investors are often guilty of considering various parameters in isolation and ignoring the bigger picture. For example, a fund that fares well on the SD and SR parameters, alongside returns may yet not be the right fund simply because it failed to adhere to its stated investment mandate. The fund could well be a professed large cap fund that contravened its mandate and invested in mid cap stocks to benefit from an upturn in that segment.
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| December 13, 2007 | | 5 things to look for in an FD
A fixed deposit probably ranks as the most conventional investment avenue for domestic investors. More importantly, given its offering, it makes an apt choice for risk-averse investors.
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| December 12, 2007 | | 10 qualities of a successful stock market trader
Many people take to trading in the mistaken belief that it is the simplest way of making money. Far from it, I believe it is the easiest way of losing money. There is an old Wall Street adage, that "the easiest way of making a small fortune in the markets is having a large fortune". This game is by no means for the faint hearted. And, this battle is not won or lost during trading hours but before the markets open but through a disciplined approach to trading.
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| December 11, 2007 | | HDFC Prudence: Striking the right balance
Simply put, asset allocation entails holding a portfolio comprised of various asset classes like equity and debt, among others. Over longer time frames, asset allocation can help investors protect their portfolios on the downside and create wealth as well. Powered by investments in both equity and debt, balanced funds qualify as asset allocation tools. The debt component in balanced funds can insulate the investor's portfolio from the volatility in the equity markets.
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| December 05, 2007 | | Churning your portfolio? Read this first
The negative consequences of regularly churning the portfolio are undeniable. The onus to not get carried away by 'motivated' sales pitches of the investment advisor and make an informed investment decision lies with you.
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| December 04, 2007 | | Why it pays to have a financial planner
In conclusion, the financial planner's role in helping you achieve your financial goals is undisputed. And you would do well to take due care before engaging the services of one.
And the award goes to. . .
Given the contribution that a financial planner can make in helping you achieve your financial goals, you would do well to engage the services of a competent, honest and experienced financial planner.
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| December 03, 2007 | | Why Principal Tax Savings Fund is good
With a corpus of just Rs 198 crore (Rs 1.98 billion), Principal Tax Savings maintains a portfolio of 35-40 stocks. The assets are distributed in such a way that no single holding overwhelmingly dominates the portfolio.
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