Money Today Archive August 23, 2007 Issue

Edition: August 23, 2007

Cover Story

By Babar Zaidi

Building wealth in EMIs

Systematic withdrawal plans and systematic transfer plans help reduce your risk and improve your returns. And they are also less taxing.
  • Betting on sectors Sector equity funds allow investors to take a calculated gamble. But while the returns are higher than in a diversified fund, so are the risks.
  • Myth busters There are a lot of myths about mutual funds in the mind of the common investor. We dispel five common misconceptions.
  • What funds were rated, and how The older a fund scheme, the better it is to know how it has done over the years and in different market conditions.
  • 7 blunders of the MF world Which of the following common investment blunders have you committed? Avoid them and see your returns improve.
In this MT Issue
Long-term capital gains from shares and equity funds (where over 60% of the corpus is invested in equities) are tax free. But the gains from the sale of other assets are taxable.
Mutual Fund
Prasunjit Mukherjee, CEO, Plexus Management evaluates the DSP Merrill Lynch World Gold Fund.
  • Balanced funds The 149 funds analysed in this issue  yielded an average 19.7 per cent return in the past one year. Find the winners — and the losers.
  • Debt funds (retail) The 280 funds evaluated on 12 parameters below show an average one-year return of 7.05 per cent, much lower than equity and balanced funds. The best performer rose 12.4 per cent, the worst lost 8.1 per cent. Separate wheat from chaff.
Expert View
Sanjiv Shah
Should retail investors invest in index funds or ETFs? Yes. What are your chances of finding managers who can keep beating the index? Slim to none.
  • The magic of linking Ulips can be used for family protection, mortgage, loan repayment, inheritence, lumpsum investment, saving for retirement or school and college fee.
  • Risks ahead, rewards too There's no doubt that Indian markets are becoming increasingly aligned with global markets.
  • When the tide ceases to rise The combo of severely low levels of cash in equity funds and (over) confident bullishness on the economic prospects of this country is a little too unrealistic.
  • Invest in common sense If the problem of choosing companies is to be replaced by that of figuring out whether one should invest in this exotic idea or that one, then nothing much has been achieved.
  • Waiting for innovations Structured products, following the basic investment principle of buying low and selling high, could serve as a useful transition to turn savers into investors.
  • Funds as planners Over the next 10-12 years the MF industry in India will mushroom to an assets under management level of $1 trillion. This will propel India to the global top five rankings.
  • World wide wealth Mutual funds are a well-regulated and convenient route to take on starting investing internationally.
  • Manager not gatherer Investors, if not careful, potentially sign away one car for every Rs 1 lakh that they invest.
  • Focused changes If a professional stays focused he gains a level of stability which may not have been envisaged at the beginning of his career.
By Narayan Krishnamurthy
Striking the right balance isn’t easy when choosing options for paying in foreign currency. Here’s a look at pros and cons.
Small Fortune
Are you spending way too much time…and money at coffee shops? Cut down the number of times you go to a coffee shop and see your savings grow.
We are all fund managers — we manage whatever funds we have. But it's the efficiency of management that sets us apart from professional fund managers who handle thousands of crores of rupees in mutual funds.
Portfolio Doctor
Bangalore-based Ankur Varshney is an aggressive investor. But he must increase exposure to equities to build the Rs 5-crore retirement corpus he desires.
By Prasunjit Mukherjee
Mutual funds are a smart way for people to invest, but with so many funds available, how do you choose the right ones?
Editors Note
Rohit Saran
Actually it was always a question of when — not if — we do our mutual fund special, and what not to include in it. Mutual fund is the most versatile investment instrument.
Talk Back
We are launching a blog which will have daily updates of our portfolios. Readers can submit their opinions and exchange comments with other readers, investors and experts.

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