Compare Various Equity Funds of Different AMCs before Buying

Your investment portfolio is incomplete, if you do not allocate a part of your investments towards the mutual fund saving schemes. There are different types of mutual funds in the market, which will offer you the benefits of aggressive investments as well as the security of conservative investments.

Any young investor will find the world of stock market enticing as the newspapers and TV channels speak highly about the stock market investors. Moreover, the world of finance is significantly influenced by stock market, and minute rise or fall in the market is seen to give chills to bankers. Young investors are compelled towards equity investments, owing to their huge potential of returns. However, many of them are not ready to take the risk of direct investment. 

Equity funds are ideal for doing investments in the equity market, if you do not possess adequate knowledge and expertise concerning the movements of market. For hassle-free investments, mutual fund companies or AMCs are known to provide an assorted bucket of equity investment schemes. Before you choose any of these schemes, kindly compare various equity funds provided by a particular AMC.

A large number of people are seen investing in equity diversified funds. The pool of this fund is diverted towards various industries of all types and capital segment. These schemes will promise medium term capital gain. On the same grounds, dividend yield funds offer excellent returns on short to medium term investments. However, these funds carry high risk, but do promise astonishing returns.

For investments in particular sectors, sectorial funds are the best. There are many funds in the market, which do investments in specific group of companies for a particular sector only. IT, Finance, Agriculture, FMCG are a few sectorial funds to be named. 

Lastly, there are small, mid, and large cap funds, which do investments based on the working capital of company.

Read more ...

Direct Tax Code Impact on Equity Linked Savings Scheme

Though DTC proposals is marginally negative for the investors, tax benefit is one of the several benefits of investing into mutual funds, and reducing them or removing them should not have a major impact on investors buying behavior.

Equity Linked Savings Schemes (ELSS) has become a very popular product among the investors over the past few years due to its dual benefits such as exposing the investor’s money to equity and providing tax advantage. Some of the investors had made their entry into equity markets by investing through this category of mutual fund product. Investors made investments into ELSS through Systematic Investment Plan (SIP) or lumpsum mode. SIP way of investment has helped investors to benefit from correction in the market by buying more units when the markets declined and fewer units when the markets surged up. This helped them to average their cost per unit in a long run. Along with it, equity portion helped to generate long term capital appreciation. Investors who had opted for dividend option were able to reap gains during the surging market scenario, by receiving periodic income. ...(Read More)

Read more ...

Awards & Accolades DSP BlackRock Received in Year of 2011

Following Schemes of DSP BlackRock Mutual Fund have been ranked CRISIL Mutual Fund Rank 1 (Top 10% of each category) for the quarter ended March 31, 2011.

• DSP BlackRock Equity Fund (Open End Consistent Equity category)
• DSP BlackRock Balanced Fund (Open End Consistent Balanced category)
• DSP BlackRock Short Term Fund (Open End Debt Short Schemes category)
• DSP BlackRock Money Manager Fund – Institutional Plan (Open End Ultra Short Term Debt Super Institutional Schemes category)
• DSP BlackRock Micro Cap fund (Open End Small and Mid Equity Schemes category)
• DSP BlackRock Small and Midcap Fund (Open End Small and Mid Equity Schemes category)
  
  

CNBC TV18 - CRISIL Mutual Fund of the Year Awards 2011

DSP BlackRock Small and Mid Cap Fund awarded 'CNBC TV18 - CRISIL Mutual Fund’ of the Year Award for 2011'

Category: Small and Mid Cap Funds
Period: Calendar year 2010
No. of eligible fund houses: 24

Read more ...

Equity Funds - Check out 10 Steps to Invest in

Equity market investments typically yield high returns, particularly if invested over longer periods of time, although such equity fund investments are characterized by a high degree of price volatility in the short term. The volatility in our markets, particularly in the nineties, reflects significant shifts in the nature of the Indian economy, with the services sector gaining increasing importance. This fundamental change in the economy has resulted in a dramatic change in the nature of our stock markets with the services sector, including technology, assuming increasing importance. Investment in private equity fund has dismayed many in the short term, but if executed in the framework of the steps outlined below, may help in better choices.

STEP 1: 

Identify your objective, given your needs, life stage and resources. If you want to increase the value of your investment in order to have a larger sum to spend at a later date, your main priority will be capital growth.

STEP 2:

Identify your risk tolerance and then invest appropriately Young people at the start of their working lives will have a greater appetite for taking financial risk as compared to people at the end of their career who are looking forward to stable income and preservation of capital. These two extremes will exemplify the ability to take equity exposure. The young person is likely to be invested largely in equities for he can afford to take short term capital loss in anticipation of higher rates of return from equities. The elderly will be unable to take the risk of capital loss even in the short term as their ability to make back any losses will be limited by time and ability to earn.

STEP 3:

Categorize your stock: Cyclical, Growth or Defensive Investing in cyclical stocks, such as those in the cement or steel sector, requires an understanding of the economic scenario. An active involvement in the investment is required in order to reap the maximum benefits of swings in economic cycles over time. The stock prices are likely to move through extreme highs and lows, and the ability to time entry and exit will be necessary. Growth investing refers to stocks in sectors where the future direction is clear for the medium term - such as technology. However even here, timing is key, for the stock may do nothing for a long time as momentum builds up and then move sharply thereafter.Defensive investing is that which is done from a long term viewpoint, where a stock is held on the premise that it will grow consistently and on a sustainable basis over time, such as those in the fast moving consumer goods sector. While the appreciation may, at times, not be as dramatic as cyclical or growth stocks, stocks that constitute defensive investments grow steadily over longer time periods.

STEP 4:

Check out the technical position. Can you actually sell your investment when you want to? The liquidity of a stock is very important in taking an investment decision, for if there is very little free stock available in the market, buying and selling may well impact the stock price in an adverse manner. It is interesting to see what the price volume relationship is for a stock. So if a stock price is moving up or down on high trading volume, it is more likely that there is real interest in that price movement than if there is very little volume supporting the price move.

STEP 5:

Know what the company does The fate of each stock is tied inextricably to the fortune of the underlying business, and the market's perception of the future prospects for that business. The industry's future potential in terms of projected demand-supply is key as is the company's competitive position in the industry. The business model of the company should be considered, as well as possible future changes, and the ability of the company to sustain growth and momentum well into the future.

STEP 6:

Know who runs the company The capability and integrity of management is even more important in determining the future viability of your investment. A strong, credible, experienced and shareholder responsive management team is critical for operating and growing a successful company. In the newer areas of our economy, management vision is also of significant importance.

STEP 7:

Know the company's performance The price earnings (P/E) ratio is the often quoted measure of a company's value. This ratio divides the stock price by the year's earnings, and is useful in arriving at comparative valuation. But the tool that is quite prevalent in professional evaluations is the return on equity (ROE), which is the year's earnings divided by the net worth of the company. This when compared to the cost of capital for the company allows the investor to gauge the company's wealth creating ability. Apart from the ratios the investor must also focus on the sustainability of earnings growth.

STEP 8:

Know the company's valuation Two stocks may have the same EPS but different P/E's. This is because ROE may be different and its sustainability may be different. Broadly speaking, the higher the sustainable ROE, the higher the P/E rating. A high P/E does not therefore necessarily imply an overvalued stock. Stocks with high sustainable ROEs are likely to trade at high P/E multiples.

STEP 9:

Know the price target Having selected stocks and built a portfolio, it is now imperative to track these investments closely. One method of doing so is to set expectations, by identifying a target price, and to re-evaluate the stock when this target is reached. Here, it is important to consider opportunity costs. If there is a loss on a stock, should one realize that loss and invest in another stock, which has a greater potential, or should one wait for the loss to turn into a profit. By not selling out of low return stocks to get into higher return stocks, investors miss out on opportunities.

STEP 10:

Do you want a professional manager? Many investors mistakenly assume that they can purchase one or two stocks and they will do well. In the absence of good luck, this can be a dangerous strategy since there is always a risk of a stock declining in value or the business facing company specific problems. The more diversified the portfolio, lower is the risk of one poorly performing stock affecting overall performance of the portfolio. However, a good way of diversifying the portfolio is to invest through mutual funds where the professional fund manager and the rigorous investment process is likely to limit risk while maximizing profit, depending on the risk profile of the fund invested in.

Read more ...