The Changing Times

" These are the times of Light and darkness, these are the times of hope and despair"- Dickens in his famous epic- A Tale of Two cities.

This was not said of only the times in which the novel is set, it can be said of any time in any history.Beacuse it was only the time that was always changing as also eulogised in the opening commentary of TV serial Mahabharata - " Main Samay Hoon..."

Present time is also same- no different from 20 years back or 50...or 100 or even 1000.It will continue like this too- only the people witnessing will keep changing.

For those who care to see and observe objectively- present time is no different than the era preceding the Independence date when the constitution was being written.

A slow and steady movement is taking place ... Just like the Constitution-the most important religious book is being written called the GST code.A book that will change the entire environment in which we live and breathe- and pay graft.

In the process of this GST draft being written- things have taken place which cannot be believed and a Federal form of Governance is growing deep and firm.

The centre has given away and further giving away- it's bargaining power and Authority to allocate funds to different states. This must be the only Second Magna Carta being signed.

No longer will a Montek Singh Ahluwalia have to keep a Chief Minister waiting for 2 hours to listen to his plea of funds for development.

A new and an interesting fund.

In the field of Finance and Investment , very often it is the lack of information that prevents a person from making gains...I guess it same with life.
Today while searching around for some new modes in the Large Cap space- I came across a gem- well apparently.
I searched deeper and found that it was even better than what appeared on surface.
Ladies and Gentlemen Welcome to CPSE-ETF. I had to really look around and pinch myself to believe that the fund was launched by Reliance a more than 2 years ago.
As in the case of ETF:
1.You can buy it on a stock market like shares with getting the price of your choice.
2.AMC charges are very minimal-0.07%
3.Liquidity is very high.
Such funds if in normal MF mode tend to have a risk of having too few investors.In case of ETF this may not be so, especially as the fund as an asset base of 2284 crores.
There are a few points that make it high on risk:
1. The fund is very high on risk due to concentration into very few companies- 10 at present.
2.Exposure to top company (ONGC at present ) is as high as 24.5%
3. Exposure to top sector is 77%- as the ETF has NIFTY PSE index as it's benchmark.
4.The fund largely reflects the PSU energy companies and hence is a highly specialised SECTOR fund. Thus it carries the associated risk of a sector fund.
In my opinion the fund is high on risk but for Seafarers who are well invested - they may try investing here with nimble foots and SIP way.
You will have to do it on your stock trading platform.
Last year the fund gave 5.3% higher return than the next best in Large Cap category.

Disclaimer: This is a discussion forum. So please do some research on your own too- and discuss it here. I am just proceeding to buy this thru my broker.

Financial Plan for a Young Professional

A young professional asked for a plan where:
1. He could park his 1.0 lacs for about 2.5 years.
2.Have a Emergency Fund- he wanted to know how much he should have.
3.Invest a monthly investible surplus of Rs.60k/month.
4.Save his taxes.

Maneuvering within the restrictions , this is my plan considering his background and age.

I had to plan a little more seriously for you since the time span that you have mentioned is a little short of what we call long term and a lot more than Short term.

So I will give you a plan:

• 1.       Keep the Rs.1.0lacs (of surplus) in Dynamic bond Funds (list attached). Pref. being for BSL Dynamic Bond Fund, HDFC Hi-Interest fund-Dynamic Plan; ICICI Long Term Plan- all in Growth Option and Direct Mode so that you don’t have to shell out any commissions. Dynamic Bond- this fund is as good as a saving bank account and can be redeemed and received in your bank account the next day before 10AM. The returns over 3 to 5 years in these entirely Non-Equity have been stupendous and I have reason to believe that they will give over 10% for next few years.
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• 2.       Now with your monthly Kitty of 60k you will proceed as follows- to invest INTO EQUITY funds through STP instead of SIP.
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• i)                    With the 60K of this month proceed to deposit in HDFC Cash Management Fund-Treasury Plan- GROWTH option-DIRECT mode. Having done this set up a WEEKLY STP of Rs.7500 per week into HDFC BALANCED FUND- GROWTH PLAN- DIRECT MODE. This will transfer 7500x5=37500 every month and still leave some balance for STP for next month.
• ii)                   Next month: with the next Month’s Rs.60,000 start another investment in ICICI Pru Liquid Plan-Direct Plan and at the same time set up a STP of Rs.2000 from this fund into ICICI Pru Long Term Equity (Tax Saving fund)-Growth-Direct Plan. This will take care of your investment and TAX saving at the same time. Also start a STP of Rs.3000 from ICICI Pru Liquid Plan-Growth-Direct to ICICI Pru Value Discovery Fund-growth option-Direct. (So total Stp’s in this fund will be Rs.25K per month).
• iii)                 Further next month AFTER THAT  Invest your 60K in DSPBR Money Manager Fund-Growth Option-Direct. Once the Folio is created start STP of Rs.2000 per week from this fund into DSPBR Micro Cap Fund-Growth-Direct and a STP of Rs.3000 per week in DSPBR Small and Mid Cap fund-Growth-Direct.
• iv)                 In the 4^th month – again TOP up HDFC CASH Mgmt Fund. In the 5^th month Top up ICICI Pru Liquid Fund, in the 6^th month- DSPBR…ad inifinitum.
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• 3.       The above plan will ensure your tax saving to the max, at the same time investment in Stocks of all capitalization. In addition it will ensure that you have money available in Liquid funds at all given time. Your Liquid funds will never exhaust and your Equity investments will continue with due RISK mitigation across all market conditions.
• 4.       Even if you chose not to top up the Liquid funds- the STPs will automatically stop once the amount in Liquid funds exhausts. This will not pose any risk or legal binding on you. In ICICI once you deposit money in the source scheme of the STP , the STP will automatically start.
• 5.       I have not used the entire 60K for STPs every month , so that it lasts till you put money again into the Liquid Fund. You can divide 30k into any 2 funds every month or 20K into all 3 every month. Once you start- you will be able to judge and decide for yourself.
• 6.       You will only have to visit any of the above Mutual Fund office ONCE to start your investment. Your KYC data will be updated . Then you can start ANY investment in ANY fund from your PC- -in DIRECT mode. This will give you a saving of 1-1.2% in commission every year.
• 7.       For any other information you can visit valueresearchonline.com