TAURUS ETHICAL FUND - AVOIDABLE NFO

Hello,
Taurus Mutual Fund has launched a New Fund named Taurus
The New Fund Offer has already open now and will close on 20 March 2009.
The Fund is particularly targetted at Investors who want to put their money in a Shariah-compliant instrument. The fund will make investments only in the shares of companies that are compliant with the dictates of the Shariah, which forbids ties with companies involved in banking, alcohol, tobacco, gambling, non-halal meat or pornography. As interest cannot be earned on investments made as per Shariah laws, the fund will not invest in debt either.


COMMENTS AND ANALYSIS :
New Funds are a strict no-no for me. And coming from a Fund House with a pathetic trackrecord, it is better to avoid the New fund Offer. The fact that Fund's stock universe is limited may also restrict its potential to deliver high returns. Better to stick to an existing Diversified Fund.

Best of luck,
srikanth shankar Matrubai





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JM BASIC FUND - A DISASTER

JM basic fund SIP

Dear Sir
My sip for jm basic fund(G)expires on 25 jan,it was from last one year.Should i continue or not.I have 8 diff. sip of 1000/pm and plannig for 10 year.Others are sbi Contra,hdfc prudence,hsbc equity,Magnum global,diversi power reliance,rel vision and growth,icici infra.All r growth option.I have to re-arrange portfolio,pl advice.
uday1972

SRIKANTH SHANKAR MATRUBAI replied
Dear Uday,
JM Basic Fund has been one of the Disasters of 2008. In fact, the JM Fund House itself has had a Disasterous Year in 2008. Almost all their Funds lost heavily, in fact more than the Benchmark and some Funds lost even 80%.

Their investment
approach too seems to be losing focus looking at thier portfolio. You are advised to STOP your sip in this Fund and Discontinue the same.
Regarding your other Funds, here is my take on each of them :
SBI Contra - Continue
HDFC Prudence — Continue
HSBC Equity — Continue
Magnum Global - Discontinue and switch to Birla Sunlife Equity Fund
Reliance Divesified Power - Discontinue and Switch your SIP to Fidelity Equity Fund
Reliance Vision - Continue
Reliance Growth - continue
ICICI Infra - Stop and Switch your SIP to ICICI Dynamic Fund

And your JM Basic SIP can be routed to a Better Looking and much more promising Sundaram Select Focus Fund.
BEst of luck,
Srikanth Shankar Matrubai,

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MY VIEW ON LIC'S JEEVAN ANAND

JEEVAN ANAND
At first glance, Jeevan Anand looks attractive. All insurance policies look great while buying and look quite meagre when you receive it.

Sample this -

A 30Y old male person `ll put in 27550 Rs. prem. per annum for a 20Y policy. Now look at the bonus announcements of past years for this policy.

2004-2005 - 43 Rs. per 1000 Rs. Sum assured
2005-2006 - 40 Rs.
2006-2007 - 41 Rs.

From the above bonus rate, u can expact an average bonus rate of around 41 Rs. for all the 20 years (not guaranteed).

So after completing 20 years -

A. Total prem. paid over 20 years = 27550*20 = 551000 Rs.
B. Total accrued simple reversionary bonus = 20*500*41 = 410000 Rs.
C. Loyalty addition = 100000 Rs. (not gtd.)
D. Total Maturity amount after 20 years = 1010000 Rs.

E. Now ur family `ll get 5L Rs. more after ur death from the maturity date of policy, it may happen any time in next 10-20-30 years. = 500000 Rs.

Plz. do note in case ur death occurs, during the normal prem. paying term, the benefit of receiving Sa again after maturity of the policy `ll not be there.

On a simple note, u r not even getting double of ur money after paying for 20 years & the remaining cover of 5L in case of death after maturity, may seems high at present but think for next 45-50-60 years & think about the effect of inflation on this 5L amount.
don`t invest in Jeevan Anand Policy, instead ask ur agent for following 3 policies.

1. 1 Anmol Jeevan - 1 Policy of 10L Sum assured for 25 years
2. 1 anmol jeevan - 1 policy of 15L Sum Assured for 20 years
3. 1 Amulya jeevan - 1 policy of 25L Sum assured for 15 years.

Plz. do note all the above mentioned policies r term plans of LIC & u `ll not get any money back from ur prem. pmt. for these policies but on the other hand, ur total prem. paid for these policies `ll not be more than 25-30K (depending upon ur age) whereas ur Jeevan Anand Policy prem. `ll be around 2.25 to 2.75L per annum (again depending upon ur age). U can invest the saved prem. as per ur choice & by the end of 20 years or 25 years (ur term selected in Jeevan Anand policy) u `ll have more money than Jeevan Anand policy.

Insurance is not Investment. Go for PURE TERM COVER. The difference in premium if invested in mutual funds will give you far higher returns. Remember your insurance agent gets 35 to 40% commission on your first premium .

Insurance is an EXPENSE, not an INVESTMENT. No amount of money put in INSURANCE will make you richer or recover the loss suffered by your dependants in your absence. As policy holder if you receive any money from Insurance - you are a loser because you have taken a policy which is costlier than a basic term cover. As nominee if you receive money - you are the biggest loser . What you receive from insurance will only give you temporary relief. The best thing for a nominee is the policy holder staying alive and earning well. So do not look for returns when you are choosing an insurance policy. As policy holder look for the least premium payable per lakh of sum assured. Best & cheapest is PURE TERM COVER.


For investment go for Mutual Funds. And note, nowadays, even most Mutual Funds do offer you Life Insurance Cover.

Do consult your financial advisor before investing.

Best of luck,

Srikanth Shankar Matrubai






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IDFC India GDP Growth Fund

IDFC has recently launched a New Fund Offer named IDFC India GDP Growth Fund.

The IDFC India GDP Growth Fund seeks to invest the assets in the sectors representing the three components of India's GDP viz., Agriculture, Services and Industry. The allocation to these levels of GDP will be in the same proportion as their contribution to the overall India's GDP, and will normally be revised on a semi-annual basis, or whenever the GDPgrowth estimates are revised.

COMMENTS AND RECOMMENDATION :

The Fund is innovative and aims to capture the Growth in India's GDP. The Fund would act as a Good Diversified Fund as it will be investing in Stocks in Sectors and Industries across market captilisation. The Fund Manager, Mr.Ajay Bodke has had a good expertise in managing Funds and has performed reasonably well. The Fund may a Good Pick for Long Term Investors.

The Fact that India's economy is relative insulated from the Global meltdown and that India is better positioned better than most countries makes Indian Markets attractive and India should better GDP numbers going forward. This in turn will help the Fund give good returns.

The Fund, however, may not find it easy to mirror the GDP. Besides, there are not many great performers in the agriculture sector and getting right stocks in optimum proportion would not be very easy. Also, not all the sectors of the economy would perform in a similar manner at any given point and hence the fund has to remain invested in a particular sector in a particular proportion and this is a negative of the new fund.

IN A NUTSHELL, THERE ARE MANY TOP PERFORMING FUNDS WHICH OFFER SIMILAR FEATURES AND HAVE A TRACK RECORD TO BOAST OF. RISK AVERSE INVESTORS WOULD BE BETTER OFF TO WAIT FOR THE FUNDS PERFORMANCE TO COME OUT AND THEN TAKE A CALL. OTHERS CAN TAKE THE SIP ROUTE AND INVEST IN THE FUND.

Best of luck,
Srikanth Shankar Matrubai


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