December, 2016
Issue - 132
“What is your Financial Resolution for 2017?” Ventura Research Desk: The article for this month, “What is your Financial Resolution for 2017?”reveals the appropriate financial resolutions for different stages of life. The top performing equity and debt mutual fund schemes are highlighted on Page 6 & 7. Happy Investing!! Juzer Gabajiwala
Markets: • The Sensex and Nifty 50 fell by -0.10% and -0.47%, respectively, in the month of December 2016. Market participants are in a 'wait and watch' mood as they analyze the impact of demonetization on various segments of the economy. This uncertainty on the demonetization front and the time taken for recovery is leading to volatility in the market. • The Consumer Price Index (CPI) for November fell sharply to 3.63% against 4.2% in October. It was the lowest rate since November, 2014,on account of a sharp decline in food prices, which slowed to 2.11% from 3.32%. This fall in inflation was also due to a slowdown in consumer demand, owing to Prime Minister Modi's sudden move, in early November, to ban high value currency notes. Also, the 10 year G-Sec yield rose by 26 bps to end at 6.51% compared to 6.25% last month, as the RBI kept the repo rate unchanged at 6.25%.The Index of Industrial Production (IIP) declined 1.9% in October as compared to 0.7% in the previous month as most industries in the manufacturing sector showed negative growth. • According to data released by SEBI, FIIs were net sellers in the equity markets during the month of December 2016, with a total sale of Rs.8,176 crore. Mutual funds were net buyers with total purchases of Rs. 9, 179 crore. Investment Trends
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Global Indices Returns - 1 Month
*Returns as on Dec 30, 2016
Global Indices Returns: Global markets were in the mixed zone during the month of December 2016, with the DAX gaining the most. Among the Indian benchmark indices, the S&P BSE Sensex and Nifty 50 fell by -0.10% and -0.47%, respectively, in December 2016. Top 5/Bottom 5 Equity Schemes Top Performers Scheme Name DSPBR Natural Res &
Under Performers Absolute Ret. % (1Y) Scheme Name 42.88
Absolute Ret. % (1Y)
SBI Pharma Fund
-14.16 -10.42
New Energy Fund SBI Magnum Comma Fund
31.45
Reliance Pharma Fund
Sundaram Rural India Fund
20.71
UTI Pharma & Healthcare Fund
-9.85
ICICI Pru Bnkg & Fin Serv Fund
20.18
Reliance Eq. Opportunities Fund
-7.22
CPSE ETF
16.32
BNP Paribas LT Equity Fund
-7.10
Debt Schemes Top Performers Scheme Name ICICI Pru Long Term Gilt Fund
Under Performers Annualised Ret. % (1Y) Scheme Name 18.01
Franklin India CMA
Annualised Ret. % (1Y) 6.33
ICICI Pru Gilt-Invest-PF
17.61
MOSt Ultra ST Bond Fund
6.34
Reliance Gilt Securities Fund
16.73
HDFC Cash Mgmt-Call
6.41
ICICI Pru Long Term Plan
16.66
L&T Cash Fund
6.48
L&T Gilt Fund
16.60
Sundaram Income Plus
6.78
*Returns as on Dec 30, 2016. Funds having AUM above Rs. 100 Crores are considered.
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December, 2016
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“What is your Financial Resolution for 2017?”
One more year is over and we are stepping into the new year-2017. It is quite likely that most of us have not been able to follow our resolutions last year; in fact, we may have broken them in the first month of the year itself. However, where financial resolutions are concerned, no matter what stage of your life you are at, it is never too late to start planning or re-examining your finances afresh. Even if one tends to break those resolutions, they still act as a reminder that you need to plan. According to us, there are three different stages of an individual's financial life: 1.) 2.) 3.)
Foundation Stage (Single and earning) Accumulation Stage (Married with kids) Maintenance Stage (Retired)
Let us see what financial resolutions one can look at during these different stages of life: Foundation Stage (Single and earning): This is the stage where most youngsters are not dependent on their parents for their expenses. With a regular flow of income comes the independence to spend on technology products, entertainment, shopping, etc. There is a tendency to spend on discretionary items without thinking even once. This leads to no savings at the end of the month. And having little or no savings at the end of the month, on a regular basis, could develop into a bad financial habit that stays with us for life. Avoid unnecessary expenses. Let's say, for example, that you are spending Rs. 100 per day on a coffee at a cafe. When you pick up that cup, an amount of Rs.100 may not seem like much. But over a month it amounts to Rs. 3000 and becomes a whopping Rs. 36,000 for the year. We are not saying it is a wrong thing to do, but rather than spending your money on coffee, if you invest Rs 3000 per month through a SIP, it could become approx. Rs. 7 lacs after 10 years (assuming returns @12% p.a.). Financial Resolution: SPEND LESS, SAVE MORE.
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Accumulation Stage (Married with kids): This is the stage to accumulate enough assets for your future retirement and plan for financial goals like your children's education and marriage, purchase a home, etc. But have you created a plan that enables you to build a corpus for each of these goals? And more importantly, do you follow that plan which you have created? In addition to your plan for each goal, you should have a life insurance cover, which will be helpful to your dependents in case of an unfortunate event. To achieve these goals, you should start investing in investment products which can generate good and reasonable returns over the long term. Financial Resolution: FINANCIAL GOAL.
CREATE
A
CORPUS
FOR
EACH
Maintenance Stage (Retired): After retirement, most of us invest in fixed income instruments, like bank fixed deposit, for safety. However, we end up earning low returns on such products and still pay taxes on what we earn from them. In order to ensure that a retirement corpus stays robust, one should consider a combination of fixed income instruments, such as Debt mutual funds which offer high returns along with tax efficiency. Financial Resolution: PROTECT CAPITAL AND BEAT INFLATION. After you invest, just follow Kevin O'Leary's rule of thumb, “NEVER SPEND THE PRINCIPAL, ONLY THE INTEREST”.
A year can make a difference!! Happy New Year and Happy Investing in 2017.
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Performing Mutual Fund Plans Debt and Hybrid Funds
Corpus (Rs. Crs)#
NAV (Rs.) Gr
CAGR (%)*
Div
1 yr
3 yr
5 yr
Income Funds 15,568
29.15
12.66
13.82
12.07
10.67
IDFC Dynamic Bond Fund-Reg(G)
5,317
19.77
11.31
12.86
11.67
10.11
HDFC High Interest-STP(G)
2,101
32.29
12.25
11.50
10.02
9.37
HDFC Gilt-Long Term Plan(G)
3,718
34.05
11.35
16.40
13.75
10.58
Reliance Gilt Securities Fund(G)
1,336
21.77
10.47
16.73
13.88
11.46
112
28.62
12.47
14.53
12.85
11.41
3,783
39.98
14.28
12.62
13.56
11.87
Franklin India MIP(G)
455
48.59
14.01
9.25
12.34
11.38
Birla SL MIP II-Savings 5(G)
287
30.99
13.35
12.03
12.29
10.79
Birla SL Dynamic Bond Fund-Ret(G)
Gilt Funds
IDFC G Sec-PF-Reg(G) Hybrid - Monthly Income Plans(MIPs) HDFC MIP-LTP(G)
Crisil Composite Bond Fund Index
2798.21
12.83
11.94
9.73
Crisil MIP Blended Index
3401.40
11.43
11.65
10.24
Debt and Hybrid Funds
Corpus
NAV (Rs.)
Annualised(%)*
(Rs. Crs)#
Gr
Div
3 mths 6 mths
1 yr
20,012
305.38
122.02
7.75
8.83
9.00
5,249
25.60
10.18*
6.91
7.87
8.12
Ultra Short Term Plan ICICI Pru Flexible Income Plan Kotak Treasury Advantage Fund
18,827
2204.03 1009.80*
7.09
8.07
8.48
Kotak Floater-ST
10,620
2620.17 1004.36*
6.65
6.95
7.66
Birla SL Cash Plus
25,376
256.30
107.23
6.58
6.91
7.68
ICICI Pru Liquid Plan
29,699
236.25
119.34
6.62
6.91
7.64
6.50
6.87
7.48
Reliance Money Manager Fund(G) Liquid Funds
Crisil Liquid Fund Index
2642.58
*Returns are compounded annualized as Dec 30, 2016. *NAV for these schemes is of Monthly Dividend option and rest are for annual dividend option. # Monthly Corpus as on Nov 30, 2016
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Performing Mutual Fund Plans Equity and Hybrid Funds
Corpus (Rs. Crs)#
NAV (Rs.) Gr
CAGR (%)*
Div
1 yr
3 yrs
5 yrs
Equity - Large Cap Birla SL Frontline Equity Fund Franklin India Bluechip Fund HDFC Top 200 Fund
13,848
170.56
23.31
6.99
16.23
18.48
7,609
367.05
39.06
6.16
14.17
14.46
12,641
351.50
47.83
7.84
14.31
15.51
Equity - Multi Cap Franklin India High Growth Cos Fund(G)
5,130
30.34
28.05
4.32
23.93
24.36
MOSt Focused Multicap 35 Fund-Reg(G)
4,587
19.07
19.07
6.93
-
-
Kotak Select Focus Fund(G)
6,937
25.01
19.04
8.69
21.16
20.27
12,987
42.52
28.05
10.65
27.55
26.05
Equity - Mid & Small Cap HDFC Mid-Cap Opportunities Fund(G) DSPBR Micro-Cap Fund-Reg(G)
4,174
49.80
30.24
11.79
39.42
31.83
Mirae Asset Emerging BlueChip-Reg(G)
2,943
35.66
23.29
11.66
32.98
30.12
Franklin Infotech Fund(G)
144
110.88
20.99
-2.57
5.95
12.63
Reliance Pharma Fund(G)
1,593
134.36
62.89
-10.27
16.98
21.10
Equity - Sectoral
Tax Saving Scheme(ELSS) 10,487
30.40
19.88
-1.23
20.70
22.33
DSPBR Tax Saver Fund-Reg(G)
1,458
35.71
14.73
10.33
20.84
21.37
Reliance Tax Saver (ELSS) Fund(G)
5,882
47.28
19.26
3.69
22.76
22.83
Birla SL Balanced '95 Fund(G)
5,009
613.78
135.36
8.38
18.69
17.16
HDFC Balanced Fund(G)
8,136
119.02
27.08
9.23
19.55
18.68
ICICI Pru Balanced Fund(G)
4,627
104.62
11.90
Axis LT Equity Fund(G)
Balanced Fund
Nifty 50 Index S&P BSE Sensex
13.30
19.05
19.41
8185.80
2.80
9.12
12.09
26626.00
1.78
8.00
11.48
*Returns are compounded annualized as on Dec 30, 2016. # Monthly Corpus as on Nov 30, 2016
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Jaipur Kanpur Allahabad Ahmedabad
Patna
Jabalpur
Indore
Vadodara Surat
Guwahati
Kolkata
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Ahmednagar
Mumbai Pune
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Bangalore
Coimbatore
Chennai Tirupur Trichy
Kochi
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December, 2016