Good Funds at this time

Mr. nitesh wrote back
Thanks for your reply.My age is 25.time horizon-Not decided (jab tak paise ki jaroorat na pade),Risk-80:20(Equity:Debt).

Details of my investments are as follows:
1)One ICICI endowment policy premium@25k
2)One ICICI ULIP premium@24K
3)One Term MAX New York premium@5K
4)F.D of 1L(got from my father Life insurance)
5)Stocks of 1L

As you figure out from the above facts My Payout is 55K.I still left with 45K income tax discount.Does premium paid in mutual funds are counted in tax free category?

Also,I want to know :

1) If I go for ELSS(SIP) option with diversified equity funds than which funds are good for me?
2) Does the premium is tax free or the Income coming after selling the funds is tax free?
3) For how much time should I opt for the Premium period?
4)If I go
for Sip +insurance for 3 years then If something happens to me after 3 years then there is insurance benefit.what do you say upon this?

I aslo want to take Rs.2000 monthly on my mother's name.Her age is 53.She is an govt. employee.which funds are suitable for her(ULIP/Pension plans/Mutual funds etc.)?

SRIKANTH SHANKAR MATRUBAI's reply








Dear Nitesh,
As told to you earlier, it is better you try to stop your ULIP and start investing in Mutual Funds., the earlier the better.
First of all, let me clarify your doubts.
I could not understand your question "Does premium paid in mutual funds are counted in tax free category? ". Probably, you may mean whether the premium paid for ULIPs are counted in tax free category (sec 80c). yes, they are.
And ALL your investments in ELSS are Tax Free. If you sell your mutual funds after 1 year, they are completely TAX FREE. Regarding your 4th question about sip insure, Yes, in Reliance and Kotak Sip Schemes, you will not get any insurance after 3 Years, if anything happens to you.
But, if you have invested in Birla and DWS Tax Saving Fund, then the Insurance will continue till you are 55 years of age.

After knowing your age and risk profile, I am recommending the following funds, do invest in them, preferably through SIPs.
Birla Sunlife Equity Fund
DSPML World Gold Fund
DWS Tax Saving Fund
Fidelity Equity Fund
Jm Contra Fund
HDFC Prudence Fund
Reliance Natural Resources Fund
Mirae Asset India Opportunities Fund
Sundaram Select Focus Fund

Best of luck.
Srikanth


----- Original Message -----

Which Tax Fund to Invest?

Hi this is gopal, I am interested in buying MF for my tax reduction come profit
What are the MF u suggest me to invest for a locking period of 3 years.

SRIKANTH SHANKAR MATRUBAI's reply ::
Hello Dear Gopal,
Mutual Funds are the best avenue for Tax Saving Purpose as well as to Earn Above Inflation Returns. Please note all your investments in Equity Linked Savings Scheme (ELSS) are locked for 3 years. Though you have not provided your time horizon, risk capability, goals, targets, etc. I am recommending the following as a Thumb rule which I normally give without any hesitation.
Birla Sunlife Tax Relief 96 Fund (Right now it is offering Free Life Insurance as additional benefit, if you invest through sip. Make full use of it)
DWS Tax Saving Fund (It too offers Free Life Insurance 5 times your investment and has also been consistent in its performance since launch)
Fidelity Tax Advantage Fund
HDFC Tax Saver Fund
Lotus India Tax Plan
Principal Personal Tax Saver (offers Free Personal Accident Insurance Cover)
Sundaram Tax Advantage.

Never invest in ULIPs for Tax Purpose. Insurance is NOT investment. Always invest in Mutual funds. As far as possible, invest through Sips.

Regards,
Best of luck,
Srikanth

JP Morgan Alpha Fund

‘Too many cooks spoil the broth’ is an old saying that holds true today as well. Incidents of too many people worsening a situation have had the saying being repeated again and again. And that’s something that the fund managers of the JP Morgan India Alpha Fund have to try and not prove true. Why? Because the said fund has not one, not even two, but four fund managers – Mr. Harshad Patwardhan and Mr. Amit Gadgil to look after the equity component of the scheme and Mr. Nand Kumar Surti and Mr. Namdev Chogule to manage the debt portion.

And that’s not the only thing ‘different’ about the fund. An equity-oriented fund, JP Morgan India Alpha, has a unique strategy of aiming to wipe off market risks by adopting various market neutral strategies. Confused? Here’s how the strategy works… The strategy the fund will adopt is one that is being used by hedge funds. A market neutral strategy is one where the fund manager takes a long position (buy) and a short position (sell) at the same time. The idea is to generate returns over and above the market returns through superior stock selection skills and thus, reducing the market risk to nearly zero.

For example, if we look at the current hike in oil prices, it is beneficial for the oil companies but is not good for the airline industry. If the fund manager believes that the oil price hike would continue, he would buy the shares of an oil company and short sell the shares of an airline company, thus giving rise to two situations. The first situation is when the oil prices go upward and the market goes up, the oil companies would benefit from the strong market sentiments and strong oil prices. The second situation is when the oil prices start falling or a market situation indicates the decline in the oil prices, then the fund manager will close out the trade and thus the market neutral strategy is safely used.

But the success of this strategy lies in the competence of the fund manager and whether or not he is able to rightly capture the correlation and risk factors. Any incorrect estimation by the fund manager may lead to heavy losses. Although JP Morgan Asset Management Company has a considerable experience in handling similar funds globally, whether their experience would succeed to be a key factor in taking the Indian investors into confidence remains to be seen.

The scheme is an interval scheme that opens for sale and repurchase of units at fixed intervals.
Source : Value Research

I for one, feel that this could give a return of just about 10% simply by looking at its Benchmark, which is, surprise, surprise, Crisil Liquid Index, so investment is not recommended for long term. Much better to stay put and watch the fund\'s performance for about 6 months or so, and then take a call.
Regards,
Srikanth Shankar Matrubai

Letter in Deccan Chronicle

Dear

Read my letter in today's Deccan Chronicle , Bangalore edition on Page 2 on 11.30pm deadline on closure of pubs
The letter goes like this ::
MOVE WILL CHECK CRIME
Sir,
I wholeheartedly welcome the 11.30pm deadline on pubs and other night spots. I am sure crime graphs will come down drastically with the deadline. It should have been implemented long back. The opponents of the ban say Bengaluru is an international city and metro. But for whose sake is the deadline fixed?. Bengaluru is not a city of pub-hoppers. They just form a miniscule part of the population and they don't have any right to decide the city's fate. With this deadline, I am sure Bengaluru will become a safer place to live as more crime takes place after 11am.
Srikanth Shankar Matrubai,
Bengaluru