S&P BSE Sensex*	Re/US $	Gold Rs/10g	Crude ($/barrel)	FD Rates (1-Yr)
33,685.56 |528.34 1.59%	64.61 | 0.21 0.32%	29,195 | -165.00 -0.56%	60.41 | 2.11 3.62%	5.0% - 7.0%

Never make commitments when your emotions are high!

Market success excites investors. And unseasoned investors often commit big-ticket fresh investments when they can’t decide what’s appropriate for their financial future.

What we see is history repeating itself!

With stock indices touching the sky nowadays, investors are boisterously bullish on the potential of the Indian equity markets. Good time for mutual fund houses to come up with New Fool Offers (NFOs).  Don’t get it wrong — that’s not the financial nomenclature.

“NFO” stands for “New Fund Offer”. But, mutual fund houses try to lure investors into new offerings by launching them at a time when it’s easy to convince them about the future returns.

NFOs are being launched at a time when mutual fund houses are expected to merge similar schemes. But it seems they have figured loopholes in the current regulations to keep their NFO factories alive and running at their optimal capacity. Like always, fund houses are offering high incentives to distributors to persuade investors to invest in NFOs.

Recently, the Securities and Exchange Board of India (SEBI) released guidelines on mutual fund classification. The move was intended to rationalise the product bouquet of the mutual fund industry and bring discipline in the approach of all industry players.

Along with broad categories, SEBI also indicated subcategories for the better classification. Mutual fund houses aren’t allowed to offer more than a scheme for each category.  To avoid product duplication, it also restricted mutual fund houses from offering products in specific subcategories, if they have a product in the alternative subcategory. For example, a fund house offering a contra scheme can’t simultaneously offer a value-oriented scheme.

Looking at the recent NFO launches, it seems mutual fund houses have misinterpreted the SEBI guidelines. They have launched new schemes, almost implying that the SEBI has made it mandatory for each fund house to have a scheme in each subcategory.

A few fund houses are launching multi-cap schemes, while others are betting on focused schemes. Launching a “close-ended fund” is still the preferred option of a few fund houses, as the new SEBI regulations on classifications aren’t applicable to them.

5 Reasons for avoiding NFOs

1. More often than not, NFOs don’t offer anything new. They just re-bundle ready-made products. For example, a diversified equity scheme can choose not to have any bias towards market capitalisation and invest as per the attractiveness of opportunities. Yet fund houses come up with multi cap funds, flexi cap funds, small and midcap funds, small cap funds, and even micro-cap funds.
    
2. Usually, NFOs are launched when valuations are expensive; markets are nearly at an all-time high, and the investors’ sentiment is positive. This limits the chance of fund managers getting good bargains while constructing a portfolio and due to overzealous inflows into equity schemes, fund managers are forced to invest despite unattractive fundamentals.
    
3. Mutual fund NFOs with the Net Asset Value (NAV) of Rs 10 are still sold as “cheaper offerings” as compared the existing schemes with higher NAVs.
    
4. NFOs have no track record to rely on.
    
5. You always have an option to choose a scheme from the existing ones based on their track record. You can’t gain a good opportunity from NFOs unless they have an extraordinary feature, which is rare to find.

PersonalFN is of the view that, investors need to outsmart opportunistic fund houses that want to grow their business without bothering about your interest. Of course, not all fund houses are alike. Some of them manage their assets meticulously and avoid repetition of products. While choosing a fund for your portfolio, you shouldn't forget to pay close attention the traits of a fund house.

What mutual fund investors do?

• Never try to time the market.
   
• Invest as per customised asset allocation plan that considers personal financial goals and the risk appetite of the investor.
   
• Never speculate on the macroeconomic or corporate events such as industrial growth, GDP growth, and corporate earnings, etc.
   
• Prefer the Systematic Investment Plan (SIP) route to invest in equity-oriented schemes.

For superlative research-backed guidance to select best mutual funds, count on PersonalFN’s unbiased mutual fund research services.  FundSelect Plus, PersonalFN’s model mutual fund portfolio service has a decade-long market-beating track record. You get access to 7 high-performing, time-tested readymade portfolios.

Apart from four equity-oriented portfolios, you get access to three readymade debt mutual portfolios. The debt portfolios have been formulated with the investment tenure as the cornerstone. Depending on your investment horizon — less than 3 months, 3-12 months, or more than 12 months, you can choose the portfolio.

PersonalFN’s track record speaks for itself. The three portfolio have comfortably outperformed their respective benchmarks. Don’t miss the Special Anniversary Discount. Subscribe now!

Now The I-T Department May Chase You Again. Here's Why…

Usually, the Income-Tax (I-T) Department has the infamous reputation of harassing gullible and low-income taxpayers while (conveniently) providing “under-the-table” escape routes to the big tax evaders. But contrary to this belief, the I-T Department has also been known to offer relief in the litigation process to tax-payers with genuine cases from time to time.

Ironically, one of the Supreme Court’s recent rulings has disqualified this goodwill gesture Supreme Court made a landmark decision recently. It prohibited the Central Board of Direct Taxes (CBDT) from issuing any circular with retrospective effect.

According to one of the senior practising Chartered Accountants, “Many small taxpayers who had earlier faced tax demands of between Rs 4-10 lakh may be impacted. These cases, which were dismissed by the tax tribunal, may now be revived and referred back to the tribunal. This will increase litigation and assesses too will have to cough up extra legal expense.” 

Read more.

Can You Rely On EPF For Your Retirement? Know Here...

In November 2017, the Employees' Provident Fund Organisation (EPFO) trustees will convene to decide the EPF interest rate for 2017-18. After achieving a 5-year high of 8.80% in 2015-16, the EPF interest rate was cut to 8.65% for FY 2016-17. This tracked the declining yield of Government Securities (G-Sec).

In 2016, the 10-year benchmark G-Sec yield fell from 7.8% in January to 6.8% in October, before the radical demonetisation move of the Government. Due to excess liquidity spurred on by the note ban, yields fell to a low of 6.2% in November 2016. It wasn't long before the yield started rising again. As on October 30, 2017, the benchmark yield is back at the pre-demonetisation level of 6.8%.

The current gap between the EPF interest rate and G-Sec yield is significantly high at 185 basis points.

Read more.
 

Important Facts About Bharat 22 ETF You Must Know

In August 2016, the Government set the ball rolling with an announcement that it proposed to launch a new Exchange Traded Fund. A year later, the new ETF known as the ‘Bharat 22 ETF’ will be open for retail subscription on November 15, 2017.

The Bharat 22 ETF has a similar mandate to the CPSE ETF launched in March 2014, however, many aspects differ. In the chart below, we have listed the key differences between the Bharat 22 ETF and the CPSE ETF.

CPSE ETF Vs. Bharat 22 ETF

CPSE ETF	Bharat 22 ETF
Tracks NSE’s NIFTY CPSE Index	Tracks the S&P BSE Bharat 22 Index
Managed by Reliance Mutual Fund	Managed by ICICI Prudential Mutual Fund
10 stocks in portfolio	22 stocks in portfolio
5% discount on NAV during initial offer period	3% discount on NAV during initial offer period
Loyalty bonus of one free ‘bonus’ unit for every 15 units held for 1 year from allotment	No loyalty bonus announced

As you can see, the CPSE ETF was intended to attract retail investors with its higher discount and loyalty benefit. The Bharat 22 ETF, though devoid of the perks, offers investors a more diversified portfolio of 22 stocks. With better diversification, returns are expected to be less volatile.

Read more.

Axis Multicap Fund: Should You Invest?

Multi-cap funds offer investors a diversified portfolio of stocks across the market-cap spectrum. The ability of the funds to vary their portfolio across market-caps based on the market outlook, gives investors an opportunity to earn higher returns. Some schemes may have either a predominant large-cap or mid-cap allocation.

Multi-cap funds provide investors a benefit of investing across market capitalisations through a single fund. Multicap funds tend to outperform large cap funds during the bull run and contain the downside risk better as compared to mid and small cap funds. The stock selection is not biased upon the size of the company rather concentrates only on its growth potential. This strategy gives the fund manager a flexibility and opportunities to buy companies across the spectrum in fast growing sectors.

These funds aim to give investors best of both the worlds. The investment in large cap stocks provides stability to the portfolio and that in mid and small caps help generate extra-ordinary returns. In the risk-return curve, they fit in between large-cap funds and mid- and small-cap funds.

Axis Mutual Fund has launched a new fund offer: Axis Multicap Fund (AMF), an equity oriented fund investing across large cap, mid cap, small cap stocks. The fund is mandated to invest 80%-100% of its net assets into equity and equity related instruments. The objective is to create long term capital appreciation for its investors by investing 80-100% of its net assets into equity and equity related instruments. However, there can be no assurance that the investment objectives of the scheme will be realized.

Read more.

Some mutual fund houses are trying to improve the comfort and convenience factor for their existing investors.

Recently, Union mutual funds decided to allow their existing investors who aren't holding scheme units in demat form, to the transaction through emails. The fund house has apparently created a dedicated email address which can be used to make additional purchases and redemptions.

Moreover, you can perform non-financial transactions such as a request to consolidate folios and cancellation of SIP facility.

Everything About Education Loan You Need To Know

How To Insure Life Optimally

Market Capitalization: Market capitalization refers the total dollar market value of a company's outstanding shares. Commonly referred to as "market cap," it is calculated by multiplying a company's shares outstanding by the current market price of one share. The investment community uses this figure to determine a company's size, as opposed to using sales or total asset figures.

Quote: “The four most expensive word in the English language are 'This time it's different."- Sir John Templeton

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