Stock paying Dividend in September 2012

List of Indian Stocks which are paying dividends in the month of September 2012

Portfolio Management: Introduction, Types, Risks and Services of Portfolio Management

In this article, we will present the basic overview and ingredients of the concepts, process and tools of portfolio management. Every portfolio management task should begin with a well defined aim, and looking at the aim of the portfolio, the investors take a call whether they wish to invest in the portfolio or not. So basically, the aim and objective of a portfolio management scheme is very important.

The discussion will consider how these factors vary across investors for various types of institutional as well as individual investors. Asset allocation decisions and their implications are also important parameters for an investor to decide whether to put his hard earned money into these portfolio schemes or not.

We present a broad level overview of the topics which will be discussed in portfolio management. They include: Portfolio management styles; performance of active versus passive strategies; measuring risk and calculating risk adjusted returns; performance attribution; selection of appropriate benchmarks, etc.

Topics for portfolio management includes the following:
? Introduction to Portfolio Management
o Investment Objective Setting
o Modern Portfolio Theory
o Risk and Return - Definition, Sources and Quantification
o Asset Allocation - Definition, Importance, Tactical versus Strategic

? Fixed Income Portfolio Management
o Active versus Passive Fixed Income Portfolio Management
o Active Portfolio Management Styles
o Indexed Portfolios
o Assessing Performance

? Equity Portfolio Management
o Active versus Passive Equity Portfolio Management
o Active Portfolio Management Styles
o Indexed Portfolios
o Assessing Performance

After going through these topics in detail, a financial consultant, a portfolio manager or anyone should be able to:
? Describe the characteristic features of various portfolio management styles (active, passive, semi-active/passive, indexing, etc.) and implications for security selection and portfolio construction of the different styles
? Discuss basic issues in assessing investment management performance including defining, differentiating and relating to one another: measurement of investment returns, performance assessment, and return attribution
? Identify key elements of MPT (Modern Portfolio Theory) and CAPM (Capital Asset Pricing Model) and recognize how particular aspects of each are used in quantifying risk and assessing returns
? Discuss investor rationale for adopting indexing strategies, including types of indexing (full portfolio replication, enhanced indexing, etc.), impact on expected risk and return as well as fee and expense related issues
? Define commonly used risk measures (standard deviation of return, Beta & duration) and describe their use in quantifying and expressing risk as well as assessing performance

Portfolio Insurance: Definition, Example, & Use of Portfolio Insurance

Today, in this article, we will talk about Portfolio Insurance, how Portfolio Insurance is achieved and configured?

What is Portfolio Insurance?
Portfolio Insurance is the term assigned to the practise of limiting the losses or even eliminating the losses, for a position which you take in stocks or bonds or in any other set of investments. It is a method of hedging a portfolio of stocks against the market risk by short selling stock index futures.
How is Portfolio Insurance achieved?
Portfolio Insurance is achieved by using Financial Derivatives or Options. So Basically, you buy a stock, as long as it is above its buy price, you are in profit. The risk or loss comes when the price of the stock goes below your buy price. Hence, the practise of eliminating this loss is known as Portfolio Insurance. Some financial experts also claim that risk can never be eliminated from a Portfolio, only its effects can be mitigated. Hence, the practise of mitigating the risks from the Portfolio is known as Portfolio Insurance.

What is the commonly believed rationale behind Portfolio Insurance?
Portfolio Insurance: The Rationale behind Portfolio Insurance
Let's say you have the following Portfolio:
.. 1000 shares stocks A, 1000 shares stock B
.. Volatility of each stock 30%
.. Current stocks price of A and B is $50
.. T-Bill rate is 8%

..Scenario:
..You can Expect that FED will tighten the rates in next three months
..You have a constraint that your Portfolio value should not go down below $90,000

.. What's the solution?
.. Go for Portfolio Insurance, by structuring options products in your portfolio

What will be the cost of this portfolio insurance?
Let's say: Cost of 3m put option which has a $45 strike price is $0.79
..So we Need 2,000 options
..Hence the total cost of this portfolio insurance comes to $0.79 times 2000 = $1,586.00 USD

Small Savings Schemes (Tax Saving Schemes): Investments & Risks

Given the recet turmoil in the stock markets and the case like Satyam frauds coming out, the investors trust is shaken. No body is willing to take unknown risks in the open markets by investing is stocks and mutual funds. Instead, investors are now getting more and more concerned about the security of their investments. They are also looking for safe investments that too over a shorter period of time, as the longer your investment horizon is, the longer the risk is. Ask a Satyam investor who has been holding the Satyam shares since a long time (buying at 700) and now seeing all the turmoil with current market price at around 50 Rs.
So, the need of hour is security as well as small tenure of investments. Not only that, the investors are also concerned about making large value of investments in various investment schemes. They want to invest only small amounts that too with caution. Small Savings Schemes do exactly that. They provide you with options to invest your money in small amounts, yet providing the benefits of safety and even tax saving. In this article, we will discuss about Small Savings Schemes and how they help you in making a good and secure investment.

Let's start with the basics: What are Small Savings Schemes?
Small savings schemes are offered to investors who are willing to invest small amounts of money for varied period of times. These schemes are usually offered by government backed organizations, and are designed to provide safe and attractive investment options with tax benefits to investors who want to stay away from the risks of the stock market.

What are the investment options available under the Small Savings Scheme?

There are multiple options available for investors for Small Savings Schemes. They include tax savings and investment instruments and can be listed as below:

Public Provident Fund
Employees' Provident Fund
National Savings Certificate
Kisan Vikas Patra
National Savings Scheme, 1992
Relief Bonds
Post office monthly income scheme
Post office time deposits

What are the benefits of investing in Small Savings Scheme?

There are many benefits.
First and foremost, you get safety for your invested money. They provide assured returns even through volatile markets.

Government Backing: Since all these schemes are controlled by government-run post-offices and public sector banks, the safety of your investment, timely payments of interest and repayment of principal on maturity is safe.

Small Investor Friendly: Some of these investment schemes have a minimum investment of Rs 5, making it easy for anyone to invest in the schemes.

Tax benefits: For people with high taxable incomes, the tax benefits offered by these schemes are very attractive.
Liquidity: Access to your investments is very easy.
Most of the schemes provide for premature withdrawals and a few of the schemes also offer loans based on the investment made.
These schemes can be shifted from one post office to another. Hence they are suitable for persons having transferable jobs.

What are the risks in investing in Small Savings Scheme?
Dont believe that just because the Small Savings Schemes are backed by the goverment, there are no risks. Risks are everywhere. Here is an article explaining the Post Office Savings Scheme: Investments and Risks.
Then, some schemes like PPF and NSC offer long term investments. Hence your money is locked in for long term. Beware of that fact.
Third, you may be charged for pre-mature withdrawal of your invested money.
Fourth, all schemes do not offer transfer from one office/city to other.
Fifth, please be aware that it is not easy to get the money from government offices, even after maturity of your investments. Every now and then we hear stories about how individual are harassed for getting their PF money or pension money and cases of bri-bery are reported

Escorts Power & Energy Fund

A New Fund Offer or NFO is currently open in the Indian Mutual Fund Markets. The NFO belongs to Escorts Mutual Fund house which has come out with its Escorts Power & Energy Fund.

What are the NFO dates for Escorts Power & Energy Fund?
The NFO for Escorts Power & Energy Fund will open on August 25th 2008 and will close on September 23, 2008.

What are the investment purpose and objective of Escorts Power & Energy Fund?
The Escorts Power & Energy Fund is an open ended mutual fund, hence any number of units can be bought or sold as per the demand and supply. This fund focuses on Power/ Energy Sector and tries to generate good returns in the long run for the investors who believe that the Power and Energy Secotr can give them good returns and the Escorts Fund Management will be able to capitalize those returns in this sector.

What is the fund class and type of Escorts Power & Energy Fund?
The Escorts Power & Energy Fund offered by Escorts Fund house is an Equity Diversified scheme and is open ended in nature.

What are the Investment plans available within Escorts Power & Energy Fund?
There are two investment options available within Escorts Power & Energy Fund. Dividend and Growth. Dividend Reinvestment is default sub-option
under divided option. The investor can select the option as per his needs.

What is the Entry load for Escorts Power & Energy Fund?
The entry load charges for Escorts Power & Energy Fund is the same as standard 2.25%, like that for any other fund.

Related: Other fund from Escorts: Escorts Leading Sectors Fund

What are the exit load charges for Escorts Power & Energy Fund?
The exit load charges for Escorts Power & Energy Fund is 1% if redeemed within 1 year from the date of allotment.

Is there a SIP option available within Escorts Power & Energy Fund?
Yes. SIP or Systematic Investment Plan is available within Escorts Power & Energy Fund. The SIP Entry load for Escorts Power & Energy Fund is 2.25% per transaction

What is the minimum application amount for the Escorts Power & Energy Fund?
The minimum application amount for Escorts Power & Energy Fund is Rs. 5000/- and in multiples of Re. 1 thereafter (under both options) growth and dividened.
When will the scheme reopen for continous sale and repurchase of Escorts Power & Energy Fund?
Escorts Power & Energy Fund scheme re-opens for continous sale and repurchase on : 20th October, 2008

Sahara Banking & Financial Services Fund

Banking & Financial Services seems to be the hot flavour of the mutual fund companies in the present time though the interest rate hikes have severley affected the banking secotr stocks. But you never know that as an investor, you may strike a bargain in these times.

It seems that all the mutual fund houses are set to encase upon this Banking & Financial Services sector. The latest offerings in the Banking & Financial Services mutual funds being : ICICI Prudential Banking & Financial Services Fund , Reliance Banking Exchange Traded Fund RBETF and then we see a lot of ads about the Sundaram BNP Paribas Financial Services Opportunities Fund .

Now SAHARA Mutual Fund has joined the bandwagon with their fund called Sahara Banking & Financial Services Fund.

What is the Sahara Banking & Financial Services Fund?
Sahara Banking & Financial Services Fund is yet another mutual fund trying to bet the investors money on Banking & Financial Services Sector. It's an open ended scheme and comes with 2 schemes for investment - Dividen and Growth Option.

Is this Sahara Banking & Financial Services Fund worth investing?
Nobody knows the future - one can only take a bet on that. The recent past has seen a lot of turmoil in the Banking & Financial Services stocks as there has been a huge variation in interest rates and inflation. So its you as an investor to take the call and make a bet.

What are the NFO dates for Sahara Banking & Financial Services Fund NFO?
The Sahara Banking & Financial Services Fund will open on date July 28th, 2008 and close on date 26th August 2008.

How will the assets be allocated in Sahara Banking & Financial Services Fund?
The pattern of investment in Sahara Banking & Financial Services Fund will be as follows: 75%-100% in Equity and Equity related securities of companies
whose business comprise of Banking / Financial services, 0%-25% in Debt funds, liquid funds, money market funds and 0%-10% in Money Market Securities.

What is the load structure of Sahara Banking & Financial Services Fund?
Entry load of Sahara Banking & Financial Services Fund: 2.25%

Exit Load for Sahara Banking & Financial Services Fund: NIL.

No entry load shall be charged for direct applications received by the AMC.

What are the risk factors of Sahara Banking & Financial Services Fund?
There is sector specific risk, what if the banking stock prices start falling further. The returns on this fund will be hit drastically.
Even though the banking stocks are available for cheap now, nobody is certain what will be the situation when the NFO closes and the fund manager actually buys the shares and invest the money. What is the guarantee that fund manager will take the right decision and invest your money at the cheapest possible price? What if he is afraid of volatility and decides to sit on cash instead of investing money

More information about Sahara Banking & Financial Services Fund?
Interested investors can contact Call Sahara Mutual fund at Ph (022) 67520121 or SMS MUTUAL to 59090.

Stock Mutual Funds

There are hundreds and thousands of mutual funds available in the market. On a broad basis, we can classify them as Mutual Funds based on Stocks/Shares and Mutual Funds based upon Debt Instruments like Bonds. Though there are other types of Mutual Fund instruments, like commodity mutual Funds, in this article, we would concentrate upon the Stock Mutual Funds only and discuss which are the best available stock mutual funds and how should an investor go about investing in such stock mutual funds or Equity mutual Funds.

What are Stock Mutual Funds OR provide an Introduction to Stock Mutual Funds?
In the simplest language, the stock mutual funds or "equity funds" are those mutual funds which invest their money only in stocks or shares or equities. Since stocks are considered to be risky, hence the stock mutual funds which are constituted only by Stocks are also risky, as compared to other types of funds, like bond funds or Money Market funds.
Though they come with high risk, along with that they are expected to provide high returns. It is usually assumed that stocks give better returns over the long run as compared to other instruments. They are also supposed to beat the affects of inflation. Whether these assumptions are true or not, is a subjective task, because investors like you and me have to take a call. Most of the investors do it by leaving their money to be managed by professional money managers who are supposed to understand the stock market better than the common man. Since we tend to leave the investment decisions to the mutual fund managers, atleast we should be aware about studying the stock mutual fund investment objectives and performance of the fund manager.

Which are the best performing stock mutual funds recently?
Though there is no guarantee of the returns from past performance of the stock mutual fund, it does give the pointers towards how the fund manager has performed. As per the various information available on internet sites, here are the Best Performing Stock Mutual Funds:

Top 3 best performing stocks mutual fund over the past 1 year:

Oppenheimer Commodity Strategy Total Return Fund: Offering from the Oppenheimer fund house, this fund investment objective is to seek total return. It is designed to provide investor portfolio diversification, long term growth potential and a hedge against inflation through exposure to commodities markets. The fund primarily invests in commodity-linked derivatives and investment-grade and non-investment-grade corporate bonds and notes. The fund may also invest up to 25% of its total assets in a wholly-owned and controlled subsidiary.

Commodities Strategy (A Class) Fund: Another Commodity Fund from the Rydex investments Fund house. The fund invests in in commodity-linked structured notes, ETFs that provide exposure to the commodities markets, and in commodity-linked derivative instruments, including swap agreements, commodity options, and futures and options on futures, and equity securities. It is non-diversified stock mutual fund and the expense ratio is 1.17%.

Goldman Sachs Commodity Strategy Fund : The fund invests in a portfolio of commodity index-linked securities (including leveraged and unleveraged structured notes), other commodity-linked securities and derivative instruments that provide exposure to the performance of the commodities markets, and in other fixed income and debt instruments. Under normal circumstances, it invests at least 25% of assets in commodity-linked structured notes. The fund is a non-diversified stock mutual fund.

Top 3 best performing stocks mutual fund over the past 5 year::

U.S. Global Investors Global Resource Fund: The investment seeks long-term growth of capital plus protection against inflation and monetary instability; current income is a secondary objective. The fund normally invests at least 80% of assets in the equity securities of companies within the natural resource sector. It may invest without limitation in the various industries of the natural resource sector, such as oil, gas, and basic materials. The fund invests at least 40% of assets in securities of companies that are economically tied to at least three countries other than the U.S. It is non-diversified stocks mutual fund.

BlackRock Global Resources Fund: The fund invests at least 80% of total assets in securities of global energy and natural resources companies and companies in associated businesses, as well as utilities. It may invest without limit in companies located anywhere in the world and will generally invest in at least three countries and in companies tied economically to a number of countries. The fund invests primarily in developed markets, but may also invest in emerging markets. It invests up to 20% of total assets in other U.S. and foreign investments. It is non-diversified stocks mutual fund.

Profunds UltraSector Oil & Gas Fund: The investment seeks daily investment results that correspond to 150% of the daily performance of the Dow Jones U.S. Oil & Gas index. The fund normally commits at least 80% of assets to equity securities contained in the index and/or financial instruments that have similar economic characteristics. It employs leveraged investment techniques and may use sampling techniques in seeking its investment objective. The fund invests assets which are not invested in equity securities or financial instruments in debt instruments or money market instruments. It is non-diversified stocks mutual fund.

FAN ETF First Trust ISE Global Wind Energy Index Fund

A New ETF or Exchange Traded Fund has been launched in the market in the Wind Energy Sector. The Wind ETF is called FAN or First Trust ISE Global Wind Energy Index Fund. This is one of the unique products from the wind energy sector by FirstTrust Mutual Fund house.

FirstTrust Global Wind Energy ETF (the Exchange Traded Fund) is designed to track the performance of the ISE Global Wind Energy Index. The Fund will normally invest at least 90% of its assets in common stocks that comprise the Index or in depository receipts representing securities in the Index.

What is a Wind Energy Fund or Wind Energy ETF?
Wind Energy Mutual Funds or Wind Energy ETF Exchange Traded Funds are a type of mutual funds or ETF which fall into the Alternative Energy Fund category. These Wind Energy funds typically concentrate upon investing the money in companies which are in the business of wind energy and are primarily manufacturers, developers, distributors, installers, and users of energy derived from wind sources.
Hence, these Wind Energy Funds provide an excellent investment option to investors who are conscious about the environment and want to go for Green Investments, thereby avoiding companies whose projects may harm the environment. Wind Energy Funds or ETF are one of the best options for such investors.

Which benchmark indices index are available to track the performance of the Wind Energy Sector?
There are atleast 2 such index or indices available to track the performance of the Wind Energy Sector. First is the NASDAQ OMX Clean Edge Global Wind Energy Index and second one is the ISE Global Wind Energy Index, which is the first global wind index to provide a benchmark for investors interested in tracking public companies that are active in the wind energy industry. Eligibility to be included in the index is limited to those companies that are actively engaged in the wind energy industry, such as the development or management of a wind farm or the production or distribution of electricity generated by wind power. To date, only 53 companies worldwide have been included in the index.

What is the FAN ETF First Trust ISE Global Wind Energy Index Fund?
The First Trust ISE Global Wind Energy Index Fund or FAN ETF is an exchange traded fund based upon the ISE Global Wind Energy Index. FAN ETF will attempt to closely track the performance of the ISE Global Wind Energy Index.
The top 10 holdings of this index/fund are: REpowersystems AG - 10.51%, Vestas Wind Systems - 10.28%, Gamesa - 8.81%, Hansen Transmissions - 6.80%, Japan Wind Dev. Co. - 5.13%, Babcock & Brown Wind Partners - 4.40%, Nordex AG - 4.34%, Theolia SA - 4.28%, Clipper Windpower - 2.94%, Gurit Holding AG - 2.81%.

What is the expense ratio of FAN ETF First Trust ISE Global Wind Energy Index Fund?
The expense ratio for the FAN ETF Fund is 0.60%, and FAN ETF trades on the NYSE Arca exchange.

Related Competitor Product: Invesco PowerShares Global Wind Energy Portfolio

Related Articles: Green Mutual Funds  Alternative Energy Mutual Funds   Low Cost Mutual Funds

What are the fundamental valuations of FAN ETF First Trust ISE Global Wind Energy Index Fund?
The current PE or price to earnings ratio of FAN ETF fund is 25 and net assets are worth around 9 million USD. As this alternative energy sector is supposed to see a big investment, so is expected from the Wind Energy sector investments.
What are the risk factors for FAN ETF First Trust ISE Global Wind Energy Index Fund?

The FAN ETF may also invest in utility companies. Companies in the industrials sector face risks that arise from the general state of the economy, intense competition, consolidation, domestic and international politics, excess capacity and consumer demand, spending trends in that they may be significantly affected by overall capital spending levels, economic cycles, technical obsolescence, delays in modernization, labor relations and government regulations.o

Table of Contents

Wind Energy ETF Fund: PowerShares Global Wind Energy Portfolio

A new sector of investments has become the hot sector for investments. Moving away from the traditional fossil fuel based energy sector funds, the investors who are concerned about the environment are now looking for Alternative Energy Mutual Funds. In this article, let us discuss the pros and cons and examples of one type of alternative energy mutual fund, which is Wind Energy mutual fund or Wind Energy ETF.

What is a Wind Energy Fund or Wind Energy ETF?
Wind Energy Mutual Funds or Wind Energy ETF Exchange Traded Funds are a type of mutual funds or ETF which fall into the Alternative Energy Fund category. These Wind Energy funds typically concentrate upon investing the money in companies which are in the business of wind energy and are primarily manufacturers, developers, distributors, installers, and users of energy derived from wind sources.
Hence, these Wind Energy Funds provide an excellent investment option to investors who are conscious about the environment and want to go for Green Investments, thereby avoiding companies whose projects may harm the environment. Wind Energy Funds or ETF are one of the best options for such investors.

What is the market outlook for returns on Wind Energy Investments?
As per the expert comments, Wind energy is one of the world's fastest growing energy industries. Wind energy was around $30 billion global industry in 2007 and is projected to continue growing.
With the ever growing demand for traditional energy sources like fossil fuels and gas leading to their depletion, the alternative energy sector is much sought after. Everyone is looking for alternative sources of energy and wind energy sector appears to be a promising one with dual benefits – supplying energy and keeping the environment clean and healthy.

Are there any benchmark indices index available to track the performance of the Wind Energy Sector?
NASDAQ recently launched an index for tracking Wind Energy sector. It’s called the NASDAQ OMX Clean Edge Global Wind Energy Index. This index is comprised of companies related to the use, development, manufacturing or distribution of wind energy. Clean Edge divides the components of the Index into two categories; Pure Play Securities and Multinational Corporation Securities. To determine which category a company is in, Clean Edge applies proprietary screens to each eligible component.
As of July 22, 2008 , this index had the following constituents: Nordex AG, Gamesa Corp Tecnologica SA, Vestas Wind Systems A/S, Iberdrola Renovables, Hansen Transmissions International NV, EDF Energies Nouvelles SA,Clipper Windpower Plc, China High Speed Transmission Equipment Group Co. Ltd., Theolia, Greentech Energy Systems, Zoltek Cos Inc, American Superconductor, Canadian Hydro Developers Inc, Fersa Energias Renovables SA, Repower Systems, GURIT HOLDING AG-BR, Japan Wind Development Co., Ltd, General Electric, Siemens AG, E.On AG,ABB Ltd. (ADR), C. Rokas S.A., Renewable Energy Generation Ltd., Plambeck Neue Energien-Reg, FPL Group, China WindPower Group Ltd., Centrica,Mitsubishi Heavy Ind.,AES Corp.,Xcel Energy Inc,Acciona SA

What are the available fund options for investments in Wind Energy Sector?
The most recent development has been the launch of an ETF calledPowerShares Global Wind Energy Portfolio by Invesco Poweshares, which is a front runner in Exchange traded fund products. This PowerShares Global Wind Energy Portfolio ETF is based upon the above mentioned NASDAQ OMX Clean Edge Global Wind Energy Index and will closely track the performance of this index.

Related Competitor Product: FAN ETF First Trust ISE Global Wind Energy Index Fund

Related Articles: Green Mutual Funds  Alternative Energy Mutual Funds   Low Cost Mutual Funds

What are the risks involved with Wind Energy Fund ETF Investments?
Since the PowerShares Global Wind Energy Portfolio is based upon NASDAQ OMX Clean Edge Global Wind Energy Index, which is global in nature, there is always a currency or forex risk. Along with this also comes the geo-political risk, along with local tax laws, accounting standards, etc.
Then there are the general risks like obsolescence of technology, emergence of other mediums of energy sources like solar energy which may be more efficient and similar things.

Where can an investor get more information about the Invesco PowerShares Global Wind Energy Portfolio?

Interested investors may seek more information by calling Invesco toll-free number: 800.983.0903.

Table of Contents

Guinness Atkinson Global Energy Fund Review GAGEX

Investors who are looking for investments in energy stocks or energy sector are today having loads of options to choose from. One such energy sector specific fund is the Guinness Atkinson Global Energy Fund and has the symbol GAGEX.

What is the Guinness Atkinson Global Energy Fund all about?
The Guinness Atkinson Global Energy Fund is a fund which primarily invests in stocks of companies which are engaged in the production, exploration, discovery or distribution of energy, including the research and development of alternative energy sources.
This fund attempts to gain capital appreciation in the long term by banking on the ever growing energy demand, especially on the energy hungry developing countries like India and China.

Though there are many funds offering investments in the alternative energy mutual funds, the traditional sources of energy through fossil fuels – like oil, natural gas, coal, and other fossil fuels will continue to remain the important energy source for years and decades.
The Guinness Atkinson Global Energy Fund is banking for its performance on the above assumption.
What criteria is followed while selecting companies for investment by Guinness Atkinson Global Energy Fund?

• The Guinness Atkinson Global Energy Fund invests in energy companies worldwide without regard to market capitalization, and in companies domiciled in the U.S. and foreign countries, including, potentially, companies domiciled or traded in emerging markets.

• Energy includes oil, natural gas, coal, nuclear, utilities, and alternative energy. Activities include exploration, discovery, production, and distribution.

What are the risks involved in investments in Guinness Atkinson Global Energy Fund?
Apart from the risk of oil prices cooling off which may lead to prices of these stocks and hence the Guinness Atkinson Global Energy Fund NAV value may go down substantially. There are other risks also. Since the Guinness Atkinson Global Energy Fund invests on a global basis in both foreign and domestic energy companies, there is a forex risk or foreign currency risk. This also relates to geo-political risk, market specific volatility and problems with local taxes and accounting methods.
At the end of the day, investor is concerned about his investment value and its returns (profit/loss). Hence, there are substantial amount of risks involved.

What has been the performance of the Guinness Atkinson Global Energy Fund?
The Guinness Atkinson Global Energy Fund was started in June 2004. Since inception, it has given a return of around 37% (as per their website).
Morningstar has assigned a rating of 3 stars for the Guinness Atkinson Global Energy Fund, which is exactly mid way average for the category.

Related: Green Mutual Funds  Alternative Energy Mutual Funds   Low Cost Mutual Funds

What is the expense ratio for Guinness Atkinson Global Energy Fund?
As per their latest prospectus (dated May 30, 2009), the gross expense ratio for Guinness Atkinson Global Energy Fund is 1.34% while the net expense ratio is 1.37%.

On the geographical front, what has been the investment pattern of Guinness Atkinson Global Energy Fund?
The maximum exposure (47%) has been on the US energy companies, followed by Canada (16.6%). Then the remaining countries stand at less than 5% each and are primarily concentrated in Europe and South America.

Where can I get more information on the Guinness Atkinson Global Energy Fund?

Interested investors can call the Guinness Atkinson Global Energy Fund helpline (toll free from US) 800-915-6566.

Table of Contents

Green Mutual Funds: Introduction, Investment, Risk, Example

There is a very long prevailing concept of so called Green Mutual Funds. In this article, let us discuss about An introduction to Green Mutual Funds, how Green Mutual Funds work and how to invest in Green Mutual Funds along with the risks associated with Green Mutual Funds.

Green mutual funds fall into the investment category of Socially Responsible Investment. But there are only a very few investment firms which offer funds which are REALLY socially responsible.

Anyways, keeping our focus on Green Mutual Funds,
“Green Mutual Funds” are funds that invest in companies whose activities, projects and investments are beneficial or atleast supportive for the environment, instead of ruining it or causing problems like pollution. Some simple examples for these kind of green companies can be those which are:

1. Engaged directly in helping the environment–like innovative recycling, waste management, or asbestos removal companies, or

2. Have clean, sustainable, “Green” business models– meaning that their processes are not environmentally harmful

Are Green Mutual Funds good investment option?
The Green Mutual Funds have been gaining popularity recently as more and more investors are starting to think about the environment. Increasing oil consumption, global warming effects, increasing rates of natural disasters, and similar other factors are now leading many investors to think that if we don’t start taking care of the environment, this Earth may not be a very nice place in the near future.
Hence, Green Mutual Funds are gaining popularity. However, Green Funds as an investment option depends upon what you are looking at in terms of returns and how the fund manager of the Green Mutual fund play around with the money of the investors.
As per the details available on various sites on internet, there are about 65 SRI or Socially Responsible Investment Funds, which “claim” to be Socially Responsible. Out of these, there are only SIX funds which can be really classified as Green Mutual Funds. They are as follows:

Portfolio 21 (PORTX):

PORTX is a fund which invests in companies of all sizes around the world that are incorporating sustainability into everyday business practices.

Though they may have changed their investment strategy over a period of time, but from the information that is available on various source like internet, here are the valuation parameters for investment in the Green mutual fund call PORTX or Portfolio 21:
Companies are evaluated on a wide range of factors: their products and services, investments, leadership on environmental sustainability, environmental management processes, liabilities and facility-level improvements. To get in the fund, a company doesn't have to be outstanding in all areas, but must have strengths in multiple areas.

Winslow Green Growth:
After PORTX, there is another hugely popular Green Mutual Fund called Winslow Green Growth Fund. This fund primarily invests in small cap growth companies primarily in the U.S. However, they have strict criteria for investment – They invest exclusively in firms whose impact on the environment is either beneficial or benign. They first shortlist the so called GREEN companies and then among them, they look growth opportunities. The segment of small cap stocks give them a big and wide base of companies for investing, since there are thousands of small companies available. They also do an environmental review to make sure their invested companies are off the track and started causing environmental degradation. One of the very popular Green mutual fund for investment with depth of options for investments.

PowerShares WilderHill Clean Energy Portfolio
PowerShares WilderHill Clean Energy Portfolio tracks the WilderHill Clean Energy Index (ECO), which is a selected basket of 36 clean energy stocks that define the U.S. clean energy sector The clean energy sector is a term used to define the businesses that stand to benefit substantially from a social transition by use of cleaner energy and conservation. This fund is primarily an ETF or Exchange traded fund, which can be called as a clean energy ETF or Green ETF, which attempts to replicate the WilderHill Clean Energy Index (ECO). A very popular fund among the investors, giving them the Green Mutual Fund concepts yet available for real time trading as it is an ETF.

Sierra Club Funds:
Though there are no real “Green Companies” in the large cap segment, bu this Sierra Club fund invests in large cap companies which are thoroughly screened to avoid industries the Sierra Club considers environmentally destructive. So this fund may not go for companies which are in the business of solar energy, but they are open to all companies which attempt to care for the nature and environment & minimize their ecological footprint that's good for the environment and can have a widespread effect. Since they are large companies, they have the money and influence to make a footprint if they take any green initiative.

Related: Alternative Energy Mutual Funds   Low Cost Mutual Funds & Green Investing: Green Investments: Consider these stocks now!

New Alternatives (NALFX):
This fund, NALFX, basically invests in companies of all sizes that too on a global basis which have a positive impact on the environment. The fund emphasizes investments in renewable energy and the environment such as clean air and water, conservation and pollution prevention. The Fund's goal is to invest 25% or more of assets in companies involved in alternative energy.

Green Century:

The Green Century fund invest in companies of all sizes but their primary focus is on large caps. This fund is similar to the Sierra Club fund discussed above when it comes to selecting large cap companies in their environmental initiatives.

Table of Contents

Low Cost Mutual Funds

I usually oppose the investments in mutual funds due to these reasons. Primarily, it being heavy fees and charges in the name of fund management, yet no guarantee of any sure shot returns. However, markets are large and millions and billions of market participants are still favouring mutual fund investments, without caring for high amount of mutual fund fee and administration charges.

So if you invest in mutual funds, you must pay attention to fees and fund management charges. It's as simple as that -"If you can manage to save even 0.5% from your fund management fees it results in saving thousands if you stay invested over a long period of time. Hence, in this article let me discuss some Low Cost Mutual Funds, which can be used as efficient investment vehicles and provide savings in terms of low cost mutual fund fees if you decide to invest in fund for long time.
There are many such articles available on internet with the details of Low Cost Mutual Funds. In this article, I’ll attempt to put up a summary of all the available Low Cost Mutual Funds. They are selected based upon the past performance of the mutual funds over last few years.
I am putting the Low Cost Mutual Funds in the following categories:

Low Cost Mutual Funds – Index Funds:
These mutual fund offerings called Index Funds are designed to track the results of a benchmark like the Dow Jones, S&P 500 index, etc. These funds are good for investors who cannot understand the complex jargon of mutual fund prospectus and don’t have time to do research. Index funds always attempt to be with the market performance of the underlying index, hence they make good investment. Since index products are relatively static they feature little turnover that can trigger capital gains and they charge the lowest fees in the mutual-fund world.
A few good performing examples here are the Fidelity Spartan 500 index fund (FSMKX), which invests in the market's largest companies like IBM, Microsoft, GE, etc. and is a favourite for investment in 401(k) plans. For the past 10 years it has returned 7.9% annually till 2006, v/s. 8.1% for the S&P. That slight gap is due, in part, to the 0.10% expense ratio.

Another is the Vanguard Total Stock Market fund (VTSMX). It invests in 3,700 companies, giving it more exposure to potentially faster-growing smaller companies that aren't members of the S&P 500. It has returned 10.9% annually since its inception in 1992.

Low Cost Mutual Funds – Exchange Traded Funds ETF:
Though not exactly like a mutual fund, but they are similar. They more or less track the performance of the underlying index without much deviation, as trading on ETF goes on in real time on stock exchanges like any other shares.
Coming to the expenses part, the ETF equivalent of the S&P 500 - nicknamed Spiders - charges just 0.06% per year in fees; Vanguard's Total Stock Market ETF (VTI) has a 0.05% expense ratio.

Low Cost Mutual Funds – Growth Funds:
Growth Funds are those which try to achieve capital appreciation by investing in companies which utilize investors money into profitable projects. These companies do not pay regular dividends, but invest the income back into profit making projects, thereby generating growth. One of the low cost Growth Mutual Fund is Mairs & Power Growth fund (MPGFX). This fund has returned 12% annually over the last decade - four percentage points better than the S&P 500.

There's another reason why we like Frels: He's cheap -- or at least his fund is. Mairs & Power Growth doesn't whack investors with a sales charge and its annual expenses -- $7 annually for every $1,000 invested -- are half those charged by the typical domestic-equity fund. Kerry O'Boyle, who follows the fund for Morningstar, likes the patient, long-term focus. "Mairs & Power Growth has the right stuff," he wrote in a recent report on the fund. The charges are low, only $7 per $1000 invested – almost half of that charged by other mutual funds.


Low Cost Mutual Funds – Value Funds:
Value Funds are those which usually pay a lot of dividends to the investors regularly. One such Low cost Value Mutual Fund is T. Rowe Price Equity Income fund PRFDX. T. Rowe Equity Income has a dividend yield of 2.4%, about 30% higher than the yield on the S&P.

Low Cost Mutual Funds – International Mutual Funds:
Apart from the US domestic funds, the International funds from India, China, Latin America, Europe and other foreign countries are also attractive. More so, investing in international funds helps you achieve diversification. Though International Mutual Fund tend to charge more because of the administration and money transfer across the globe along with the forex risk, there are still some good funds which charges relatively less.
Dodge & Cox International Stock (DODFX), which charges a measly 0.70% expense ratio. The fund has returned 21% annually over the last five years (2006).
Hence, making an investment in a mutual fund is based upon investors preference. Selecting a Low Cost Mutual Funds to suit your needs is also important. Better to cut down on costs if you can find such a Low Cost Mutual Funds.

Birla Century SIP: Birla Sun Life Century SIP Plan Review

Along with Reliance SIP + Insure Plan, there is a similar offering from Birla Sun Life Mutual Fund which claims to offer both investment as well as FREE insurance for the investor or insured. In this article, let’s discuss How good is this Birla Century SIP plan & should the investor invest in such Birla Century SIP plan?

What is this Birla Century SIP plan from Birla mutual fund house?
The Birla Century SIP plan claims to offer a unique combination of Investment through SIP or Systematic Investment Plan along with FREE insurance to the investor – FREE because the investor does not have to pay separately for the premium of insurance.

The benefits of Birla Century SIP plan are as follows:
• Wide Coverage: 18 years to 46 years for investor age group
• Cover continues till 55 years
• No medical check-up only a signed declaration of good health from investor
So process appears to be smooth.

How is the insurance cover detail in Birla Century SIP plan?
Year 1 – Insurance coverage till 10 times of Monthly SIP Installment
Year 2 – Insurance coverage till 50 times of Monthly SIP Installment
Year 3 onwards – Insurance coverage till 100 times of Monthly SIP Installment, that why the name “Century SIP”
Here is the flowchart explaining how the Birla Century SIP plan works for different time horizons:


However, the maximum insurance value is capped at 20 Lakh Rs., irrespective of your SIP amount and investment horizon.

What is the minimum SIP installment amount for Birla Century SIP plan?
The minimum investment monthly SIP amount is Rs. 1000 per month.

What is the entry load and exit load charges for Birla Century SIP plan?
It’s the same as standard mutual funds.
Entry load of 2.25% and exit load of 2% upto 3 years and Nil from 3 year onwards.
Maximum to Minimum tenure for Birla Century SIP plan: 3 years to 37 years.

Related: Competitor Product: Reliance SIP + Insure Scheme

What happens to Life insurance cover in case an investor decides to discontinue the SIP?
If SIP discontinues within 3 years of 1st installment: Life Cover ceases
If SIP discontinued after 3 years of 1st installment: Life Cover continues at fund value subject to maximum of 100 times monthly SIP value.

Other things to look for in Birla Century SIP plan?
There are a few exceptions in which the insurance cover will not be available:
• Death due to suicide
• Death within 45 days of SIP start except when the death is due to accident
• Death due to pre existing diseases – this is the biggest and most ambiguous exception – in case someone dies of a disease like heart attack, there are always issues in proving that the disease was or was not pre-existing.

In a nutshell, a good option for investors looking for investment + insurance. However, the load charges are heavy. How about simply investing in ETF’s for investment and buying a put no-frill life insurance cover?? May be that combination costs you less than the fund, if you can find the right insurance policy.

Table of Contents

Alternative Energy Mutual Funds: Introduction, Investment, Risk, Example

In this article, we’ll discuss about Alternative Energy Mutual Funds, An introduction to Alternative Energy Mutual Funds, how Alternative Energy Mutual Funds work and how to invest in Alternative Energy Mutual Funds along with the risks associated with Alternative Energy Mutual Funds.

What is meant by the term Alternative Energy?
Alternative energy is a term used for an energy source that is an alternative to using fossil fuels like petrol, diesel, gas, etc. Generally, it indicates energies that are non-traditional and have low environmental impact. Here is the list of Alternative Energy Sources:
• Biomass
• Geothermal
• Solar energy (Example of Solar Energy Fund)
• Wind energy (Example of Wind Energy Mutual Fund)
• Wave Power

What is an alternative energy mutual fund?
An alternative energy mutual fund is a mutual fund company that collects money from investors who are looking for capital appreciation by investing in the alternative energy sector companies. This collected money is then invested in a group of companies that are engaged in some way in the development of alternative energy resources, such as wind, geothermal or solar energy. The major alternative energy mutual funds also invest in companies that promote a clean environment. Though alternative energy mutual fund is supposed to be a new concept, but there have been some famous alternative energy mutual funds which are existing in the markets for a long time:
• The New Alternatives Fund: NALFX Mutual Fund, began 1982: investments in a variety of companies focusing on renewable energy sources, as well as interests in companies focusing on energy conservation and environmental protection
• The Guinness Atkinson Global Energy Fund Review GAGEX , symbol GAAEX, began 2006: The fund invests in global companies that "derive more than 50 percent of their revenue from alternative energy or alternative energy technology

How can I invest in alternative energy mutual fund?
The simplest way to invest in alternative energy mutual funds is to put your money in the alternative energy mutual funds for e.g. those listed above.

How do I measure the performance of the alternative energy mutual fund?
The performance of any mutual fund is to be measured against a benchmark index. In case of alternative energy mutual fund, the index can be Alternative Energy index. This includes renewable energy and environmental technologies (often referred to as cleantech), as well as transitional and alternative fuels such as nuclear power and natural gas. Alternate of Alternative Energy Indices are a stock market index which have been developed to monitor investment in alternative energy, for e.g. Dow Jones has World Alternative Energy Index, which tracks the performance of 20 largest global stocks in renewable energy, energy efficiency and distributed energy. As the world transitions to a diversified low-emissions energy infrastructure, the emerging energy market will continue to evolve. During the transition from a predominately fossil fuel based energy economy the transition will encompass technologies such as carbon capture and storage to reduce emissions from coal-based utilities, an increased use of natural gas as a cleaner burning alternative, and increased use of nuclear power.
Then there are other indices from other organization like Ardour Global Alternative Energy Index, AXglobal and Credit Suisse, including regional alternative energy index like ALTEXAustralia, Ludlow, Wilderhill, etc.

Related Articles: Green Mutual Funds  Low Cost Mutual Funds

How to decide whether a particular alternative energy mutual fund is good investment or not?
That is a highly subjective decision and varies from individual to individual. Just because some mutual fund professional is managing your money does not mean that you can be assured of returns and can forget the losses. It has to be determined on the factors of demand and supply, the requirement of alternative energy, like
• How will this source of alternative energy provide a substitute for current sources of energy?
• How cost-effective will this source of alternative energy prove to be?
• What areas of the world can utilize this source of energy?
Now since we are concentrating on alternative energy mutual fund investments, the past performance of mutual fund house can also be looked upon.
Related: Wind, Solar, Biomass, Geothermal - Which Fund/Stocks Should I Invest?

Though there is no guarantee of assured returns from a mutual fund, but past performance does sometime shows how well the mutual fund has been performing and can something be expected from it. Click on the above link to see how the sub-sectors have performed historically.

Table of Contents

Reliance SIP + Insure: Reliance SIP Insure plan

There is a new kind of investment vehicle introduced in the Indian Mutual Fund and Insurance Industry. It’s a combination of SIP (Systematic Insurance Plan) and insurance benefit. The latest offering is from Reliance Mutual Fund and is called the Reliance SIP+Insure Plan.

But the million dollar question is - How good is this SIP + insurance plan & should the investor invest in such SIP + insure plans?. In this article, let’s try to analyse this investment option called SIP + insure.
As far as I know, there are 2 mutual fund houses who have come out with this kind of plan – one is Reliance Mutual fund with its Reliance SIP + Insure Facility, while the other is Birla with its Century SIP.
What’s this Reliance SIP + Insure plan all about?
This Reliance SIP + Insure plan claims to offer a combo pack of SIP investment with so-called “FREE” insurance offered to the investor.

How does the Reliance SIP + Insure plan work?
Basically, the Reliance SIP + Insure plan works as follows: You decide to put your money in one of the Reliance Schemes through a pre-defined SIP investment amount. The Reliance SIP insure plan offers FREE insurance for the investor to the maximum possible beneficiary amount of the accumulated unpaid SIP amount. So say one decides to opt for the SIP amount of Rs. 10,000 per month and the investor dies after 5 years. So over this 5 year or 60 months, the investor has paid a total of 600,000 Rs. to the Reliance Sip + Insure plan. Suppose that at the time of death of the investor, the investment value has risen to 650,000. Hence, the insurance beneficiary value will be 650,000 for the nominee of the investor. The remaining part of the SIP installments of the deceased will be paid by the insurance company.

What are the investment schemes available for investment under the Reliance SIP + Insure plan ?
The following schemes are available for investments under the Reliance SIP + Insure plan:
• Reliance Growth Fund - Retail Plan
• Reliance Vision Fund - Retail Plan
• Reliance Equity Opportunities Fund - Retail Plan
• Reliance Equity Fund - Retail Plan
• Reliance Equity Advantage Fund- Retail Plan
• Reliance Regular Savings Fund – Equity option
• Reliance Regular Savings Fund – Balanced option
• Reliance Banking Fund
• Reliance Pharma Fund
• Reliance Media & Entertainment Fund
• Reliance Diversified Power Sector Fund – Retail Plan

What are the minimum investment requirement and eligibility criteria for Reliance SIP + Insure plan?
• Minimum Investment for SIP installment: Rs.2000 per month & in multiples of Re 1 thereafter. No upper limit (Why would they mind anyone giving them loads of money to manage)
• Minimum Period of Contribution: 3 years and in multiples of 1 year thereafter.
• Maximum Period of Contribution: 15 years OR till attaining 55 years of age, whichever is earlier (e.g., a person can register an SIP of maximum 10 yrs at the age of 45 yrs.) The insurance cover ceases when the investor attains 55 years of age.
• Mode of payment of SIP installments is only through Direct Debit & ECS ( Post Dated Cheques shall not be accepted). They do not want to get into the hassles of depositing the cheques and getting it cleared.

Related Competitor Product: Birla Century SIP plan

Any tax benefit available with Reliance SIP + Insure plan?
No tax benefit is available with Reliance SIP + Insure Investment plan.

What are the entry load, exit load charges or load structure for Reliance SIP + Insure plan?
Don’t expect any respite from the fund managers when it comes to load structure.
• The Entry Load under Reliance SIP Insure shall be same as applicable to normal purchase /additional purchase transactions in the respective designated schemes. It may be anywhere from 2% to 3% (based upon the standard load of mutual funds – not sure though)
• There will an Exit Load of 2%, if the accumulated units acquired or allotted under Reliance SIP Insure are redeemed or switched out to another scheme before the maturity of SIP tenure as opted in the respective scheme either by the SIP-Insure unitholder or by the nominee.

What are the drawbacks and risks associated with Reliance SIP + Insure plan?
There are many drawbacks in this Reliance SIP + Insure plan.
• The second point listed above, about the exit load is a big drawback. You will have to pay a heavy charge of 2% if you decide to switch your money from one scheme to another
• The entry load may also be higher and will be charged at each of your SIP, i.e. monthly.
• Then there is risk of mutual fund non-performance – no guarantee of any returns
• If you select a non-performing or loss making investment scheme, you will have to pay exit load of 2% to switch to another scheme
• What appears to be a “FREE” Insurance is actually another investment.
• The Insurance cover shall commence after “waiting period” of 90 days from the commencement of SIP installments. Though the waiting period will not be applicable in respect of accidental deaths. The insurance will also not be applicable if the death is due to a pre-existing decease.
• The longer you live, the less insurance cover you get.
• Investment only through ECS and Direct Debit Facility. It may turn out many investors who do not have bank accounts in banks without ECS or Direct debit facility.
• The insurance benefit will NOT be given to the nominee upon the death of the investor. Instead, the nominee will have to continue the scheme, though the remaining SIP amounts will be paid by the insurance company.

Hence, as compared to a life insurance where one gets the money when the insured dies, in Reliance SIP+Insure Plan, the nominee will have to wait to realize the investment value till the end of the entire SIP horizon.

Table of Contents

Escorts Leading Sectors Fund

There is a new equity mutual fund that has come out to the capital markets. The fund belongs to Escorts Asset Management AMC & the fund name is Escorts Leading sectors fund. The fund is currently open and is in NFO or New Fund offer period.

What are the NFO dates or open dates for Escorts Leading Sectors Fund?
The NFO or new fund offer period for Escorts Leading Sectors Fund is from 3rd July 2008 to 1st August 2008.

What are the entry load and exit load for Escorts Leading Sectors Fund?
Entry Load of Escorts Leading Sectors Fund: 2.25 %
Entry Load of 2.25% for applications below Rs 5 crore. For SIP Entry Load - 2.25% per transaction.

Exit Load of Escorts Leading Sectors Fund: 1.00 %
The scheme will charge an exit load of 1% for the purchase of investment amount below Rs 5 crore and redeemed within 1 year from the date of allotment. There will be an exit load of 2% for the investment greater than or equal to Rs 5 crore and redeemed within 6 months from the date of allotment and an exit load of 1% will be charged if the investment is redeemeed before 1 year.

How will the assets be allocated in the Escorts Leading Sectors Fund?
The Asset Allocation of Escorts Leading Sectors Fund will be as follows: The fund will invest up to 70%-100%; in equities and equity related instruments with medium to high-risk profile and 0%-30% in debt instruments, government bonds and money market instruments.

What is the minimum amount of investment required for NFO of Escorts Leading Sectors Fund?
Minimum Investment Amount for Escorts Leading Sectors Fund is Rs 5,000 and in multiples of Re. 1 thereafter.

Which benchmark index will be tracked by Escorts Leading Sectors Fund?
The Escorts Leading Sectors Fund will be tracking the S&P CNX Nifty Index.

Related: Should you trust your Mutual Fund Manager?   ICICI Banking & Financial Services Equity Fund
Application form for Escorts Leading Sectors Fund (PDF).

Anything special about Escorts Leading Sectors Fund?
Nothing special – just another equity based mutual fund attempting to manage investor’s money.

Individuals who believe in the investment management skills of money managers of Escorts AMC can bet their money on Escorts Leading Sectors Fund.

Table of Contents

ICICI Prudential Banking & Financial Services Fund NFO Review

High on the heels of other fund houses, the ICICI Asset management has joined the bandwagon to offer another equity mutual fund in the Banking and Financial Services domain. It’s called the ICICI Prudential Banking and Financial Services Fund.

It seems that the entire mutual fund industry is attempting to bank upon the Banking and financial services sector. Recently launched funds in the Banking and financial domains are: Reliance Banking Exchange Traded Fund (RBTEF),  Lotus India Banking Fund &  Sundaram BNP Paribas Banking & Financial Services Fund.

However, the Banking stocks have taken a massive hit recently due to the recent turmoil in the interest rates, especially where ICICI Bank raised the interest rates by 75 basis points for home loan borrowers and HDFC bank increased it in the range of 50 to 75 basis points.

Now ICICI has come out with this fund at a time when banking stocks are struggling.

What are the unique and special features about ICICI Prudential Banking and Financial Services Fund?
Nothing new. The ICICI Prudential Banking and Financial Services Fund is another open ended equity mutual fund which will primarily invest in equity stocks and equity related financial instruments of companies which have businesses in Banking and financial services domain. Its an open ended fund, which means new units can be created as required and redeemed as per the demand and supply.

What are the entry load and exit loads of ICICI Prudential Banking and Financial Services Fund?
The fund requires a standard entry load of 2.25% and exit load of 1% for investments less than 5 crore Rupees during the NFO or new fund offer period. The exit load will be charged if investors exit the fund within 6 months from the date of allotment.

What are the opening dates and closing dates of New fund offer or NFO of ICICI Prudential Banking and Financial Services Fund
The NFO for ICICI Prudential Banking and Financial Services Fund opens on date 9th July 2008 and closes on 7th August 2008.

Is it a right time to launch such a bank related fund?
The ICICI Prudential Banking and Financial Services Fund will focus on banking and financial sector and the companies in this sector are witnessing mayhem due to hike in the interest rates. However, it is possible to get a cheap bargain for banking stocks in such turbulent times for the banking stocks. Its pure randomness.

Should the investors invest in this ICICI Prudential Banking and Financial Services Fund?
I’ve always been an opponent of Mutual fund investments for this reason. The primary reason being high fund management charges and no guarantee of returns. Even though the banking stocks are available for cheap now, nobody is certain what will be the situation when the NFO closes and the fund manager actually buys the shares and invest the money. What is the guarantee that fund manager will take the right decision and invest your money at the cheapest possible price? What if he is afraid of volatility and decides to sit on cash instead of investing money?

It all works randomly. Instead of paying such high charges to the fund manager, a better option would be to buy Banking ETFs like that of Reliance Banking ETF or buy 1 or 2 banking stocks directly, like SBI HDFC or ICICI.

Table of Contents

Mirae Asset Global Commodity Stock Fund MAGCSF

There is a new fund which is currently open for subscription during the NFO period. The fund belongs to Mirae Asset Global Investments and is called the Mirae Asset Global Commodity Stock Fund.

What is so special about the Mirae Asset Global Commodity Stock Fund (MAGCSF)?
This fund from Mirae claims to be the first fund in India which is focusing on the commodities. The reason they quote is that price of commodities are rising globally and hence this Mirae Asset Global Commodity Stock Fund (MAGCSF) which is focusing on commodities will give excellent returns to the investors.

How will the Mirae Asset Global Commodity Stock Fund (MAGCSF) invest the money of investors?
The MAGCSF will primarily invest in commodity/commodities related stocks in Asia Pacific markets and emerging markets thus ensuring that it is able to tap into opportunities available across countries thereby seeking to generate superior returns on your investments. They are also targeting to achieve diversification at geographical level: Australia, Brazil, Hong Kong, Indonesia, Malaysia, Philippines, Singapore and Thailand. Geographical & Sectoral diversification allows the fund to leverage on commodity plays available in many countries for e.g. Agriculture in Brazil, Metals in Australia, Energy in China etc and thereby reduce risks.

Which sectors will be targeted by Mirae Asset Global Commodity Stock Fund (MAGCSF) for investments?
The Mirae Asset Global Commodity Stock Fund (MAGCSF) will target 3 commodities:
1) Agriculture: products including corn, wheat, rice, soybean
2) Metals: steel, aluminium, iron ore along with precious metals like Gold, Silver
3) Energy: oil, natural gas, coal, wind energy etc stocks
What is the risk of investments in Mirae Asset Global Commodity Stock Fund (MAGCSF)?
Apart from others, the main risk is forex risk as they are looking for global diversification. There is also market (country)specific risk, which is directly affected by political situation as well. Having such a wide level of diversification will also mean paying high transaction costs.

Related: ING Latin America Equity Fund NFO Review

What is the minimum and maximum investment available in Mirae Asset Global Commodity Stock Fund (MAGCSF)?
Rs. 5000 is the minimum investment and in multiples of Re. 1 afterwards.
During NFO fund unit will be available at the rate of Rs. 10 per unit plus applicable load.

Any SIP or Systematic Investment Plan available within Mirae Asset Global Commodity Stock Fund (MAGCSF)?
- Systematic Investment Plan (SIP): Rs. 1000/- (multiples of Re.1/ - thereafter), minimum 6 installments or Rs 1500/- minimum 4 installments

Which benchmark index will be tracked by Mirae Asset Global Commodity Stock Fund (MAGCSF)?
A mix of some indices in the following proportions: MSCI Asia Pacific ex Japan and India Energy and Materials Index (55%) + MSCI Brazil Energy and Materials Index (10%) + BSE 200 (35%)

What are the opening dates for Mirae Asset Global Commodity Stock Fund (MAGCSF)?
NFO or New Fund offer closes on 23rd July, 2008.

What investment options are available through Mirae Asset Global Commodity Stock Fund (MAGCSF)?
- Growth Option
- Dividend Option

What are the entry load and exit loads for Mirae Asset Global Commodity Stock Fund (MAGCSF)?
Entry Load: Regular Plan (a) < Rs. 5 Crores: 2.25%, > Rs. 5 Crores : NIL (b) Systematic Investment Plan/ Systematic Transfer Plan : 2.25% (c) By Fund of Funds (regardless of amount) :NIL (d) By Switch-In from the other equity schemes of the Fund : NIL (e) By Switch-In from the schemes other than equity schemes : same as the case in (a) above.

Exit Load: Regular Plan: (i) (a) < Rs.5 Crores : a. Redemption up to 6 months (180 days) from the date of allotment : 1.00%, (b) Redemption on or after 6 months and up to 12 months (365 days) from the date of allotment : 0.50%, (ii) > Rs. 5 Crores : NIL. iii). For Systematic Investment Plan/ Systematic Transfer Plan/Systematic Withdrawal Plan: If redeemed within 12 months (365 days) from the date of allotment: 1.00%.

More information about the Mirae Asset Global Commodity Stock Fund (MAGCSF)and investments: Email: customercare@miraeassetmf.co.in Tel: - 91-022-67800301

Table of Contents

ING Latin America Equity Fund NFO Review

There is a new Mutual Fund coming to the Indian Mutual Funds Markets. It’s from ING Investment Management and is named as ING Latin America Equity Fund.

What is the ING Latin America Equity Fund all about?
There is nothing new in this fund except for the following:
1. ING Latin America Equity Fund will focus on Latin American companies and their investments.
2. ING Latin America Equity Fund is a fund of fund (what is a fund of funds), not just a plain vanilla stock based mutual fund.
3. Though one of its unique features is that this will be the first mutual fund or fund of funds in India which will focus of Latin American Markets.

Where will ING Latin America Equity Fund invest the money of investors?
The ING Latin America Equity Fund will primarily invest in ING’s existing Luxembourg domiciled fund thereby seeking to provide an Indian investor long-term capital appreciation & exposure to countries which are amongst the fastest growing economies in the emerging market space. The Luxembourg Fund will try to achieve this by investing primarily in stocks of companies based out of Latin American countries or stocks of companies deriving a majority of their revenues from Latin American economies.

Why this ING Latin America Equity Fund has chosed Latin America as a so called “Investment Destination”?
Latin American Countries include Brazil, Argentina, Mexico, Colombia, etc. As per the details in the advertisements, Latin America has experienced a profound transformation over the past few decades. The Latin American economies are becoming increasingly attractive with more stability in its macroeconomic environment and a greater pragmatism in policy & institutional reform. Strong economic growth, reduction in external indebtedness and export dynamism has led to an increased interest in local equity markets from domestic and foreign investors alike.
Thus, Latin America does indeed offer the possibility of discovering opportunities in places you least expect.

What are the risks in ING Latin America Equity Fund?
Now I don’t know how far the above claim is true and will it be able to continue to sustain in the future as well. All these facts are based on past records and it’s the investors who will have to take the risk. Moreover, this is an indirect investment, because it is investing in another foreign fund which will thereby invest in the stocks of the Latin American countries and companies. Forex risk is there, and so is the dependency on the performance of the Luxembourg Fund.

What are the NFO dates opening dates for the ING Latin America Equity Fund?
The ING Latin America Equity Fund will open on date 19th June 2008 and close on date 10th July 2008.

What is the investment pattern for ING Latin America Equity Fund?
Asset Allocation will be done as follows in the ING Latin America Equity Fund: 65%-100% in ING (L) Invest Latin America Fund, 0%-20% in Money Market Instruments including reverse repo and 0%-35% in Other overseas mutual fund schemes.

Load Structure: What are the entry load and exit load for ING Latin America Equity Fund?
Load structure for applications received during NFO and on-going sales:
For investments below Rs.5 Cr - Entry Load : 2.5%, CDSC : 1% if redeemed within 180 days from the date of investments (date of allotment if invested during the NFO).
For investments of Rs.5 cr and above: Entry Load: Nil, CDSC : Nil,
Systematic Investment Plans SIP is available during New Fund Offer periods as well as on going sales.
The load structure for SIP would be same as mentioned above.

Where can I get more information on ING Latin America Equity Fund? Interested investors may call ING investment management toll free number 1800 220042.

Table of Contents

ICICI Prudential launches Top Up plan in SIP & Mutual Funds Investments

You have “top-up” facility in your prepaid mobile phone recharge, now you can also avail the same facility in your investments in Mutual Funds from ICICI Prudential Asset Management Company.

Top-Up plan: For the first time in India, systematic investment plan with a feature of a “Top-Up” in the mutual fund industry has been announced by ICICI Prudential Asset Management Company.

Basically, this plan or this feature has the so-called top up facility. This top up facility allows the investors to increase their periodic investment or systematic investments through an automated route in multiples of Rs 500, on a pre-determined and regular basis.

Say for example you decide to get into a mutual fund managed by ICICI Prudential through a monthly SIP or systematic investment plan. In this plan, you decide to contribute 5000 per month. Now you opt for the top up facility and decide to increase you SIP amount after every year by 500 Rs. Hence, till one year, each month you would pay 5000 for the SIP investment. After 1 year, your monthly SIP investment amount will increase to 5500. After 2 years, it will become 6000 per month and so on.

The key benefits of the scheme are that it offers the flexibility to top up investment at pre-determined intervals of six months or 12 months. Also, it is said that the automatic features like a direct bank debit, or payment through debit card or credit card will provide execution ease in the investment process and reduce the efforts required by investor.

However, one of the biggest problems with this setup is that you will have to declare the top up amount and frequency before the commencement of the scheme. Say if you are willing to invest for 20 long years, you will have to make a prediction about your income and then take up the top up plan. There is no information available whether you can stop or basically – top-down – your investments based upon your situation. No information is available about the charges that the ICICI fund management will take if one wishes to top down or stop payment.

Related: ICICI RICH ULIP NFO Review, ICICI Prudential Focused Equity Fund

Another problem is that this top up plan is available through direct fund clearing, so one has to ensure that the increased amount is available at the specified date. What if your salary doesn’t reach your bank account on time and is delayed by a day or two?

Then the biggest question is about the consistent flow of funds. What if you loose your job after some time and do not have the extra money to invest? Can you come out of this scheme? What are the penalty charges? No info is given about that. ICICI has a very bad reputation when it comes to imposing penalties.

Investors are advised to be aware of these charges before making a long or short term commitment. If things go bad, the ICICI AMC will show no mercy on you while imposing charges and penalties. A good feature altogether, provided you are sure about what you want to achieve and whether you have consistent funds to honour your investment obligations or not.

Table of Contents