JM Auto Sector Funds announces changes in fundamental attributes

JM Financials Mutual Fund has approved the change in fundamental attributes of the scheme and its conversion from an Open ended sector scheme to an open ended equity scheme vided their resolution dated 7 April 2009 and 15 April 2009 respectively. The change in fundamental attributes include change in name, investment objective, investment strategy, benchmark index, asset allocation and other related matters of JM Auto Sector Fund. Accordingly the following changes are proposed in JM Auto Sector Fund with effect from 23 May 2009.
Details about the changes:
1. Change of name of the scheme to: JM Mid Cap Fund
2.Change of investment objective of the scheme: The investment objective of the scheme will be to generate long term capital growth at a controlled level of risk b predominantly investing in Mid Cap companies. Consequent to the above changes in the investment objective of the scheme, the scheme will undergo a change from an open ended sector scheme to an open ended equity scheme.
3. Change of asset allocation pattern of the scheme: Under normal circumstances the asset allocation of the scheme would invest upto 65%-100% in equity and equity related instruments with high risk profile and invest upto 35% in money market instruments / debt securities.
4. Investment Strategy: JM Mid Cap fund, as the name suggests will be a purely mid cap fund. It is an open ended growth scheme which focuses on investing in the midcap segment of the market with a disciplined investment approach. Being a growth oriented scheme, the scheme seeks to invest a substantial portion of its portfolio in equity and equity related instruments. Under normal circumstances, around 65% of the corpus shall be deployed in such securities and the balance in debt/money market instruments. However, whenever the valuations of securities rise in a sharp manner, the scheme will take advantage of trading opportunities presented and in such a scenario, the scheme will have a high turnover rate. The scheme will endeavor to use a mix of top down and a bottom up approach.
The strategy will be to identify stocks that can demonstrate strong growth over 3 year's horizon on the back of scalable business. The scheme seeks to achieve long-term growth of capital at controlled level of risk by primarily investing in midcap stocks. The midcap segment comprises mostly of companies that have been able to sustain themselves in the initial phases of growth. Since may companies out of this segment would show higher growth in future and move towards the large variety of business to choose from. Further, this segment is relatively under researched and hence offers an excellent opportunity for bottom-up focus thus enabling the spotting of winners ahead of the market.
5. Benchmark: The benchmark of the scheme would be – CNX Mid Cap Index
6. Fund Manager: The scheme would be managed by Mr. Sanjay Chhabaria

Investing in 'Grandfather instruments'

Generation, following the footsteps of their elders? There may be a few in a hundred, who would do so.
This holds good for financial planning too, and even going about choosing the type of financial instruments.
Youngsters normally prefer to invest in equities with greed to earn higher returns, as against investors belonging to the older generation, who look for stable and regular returns from investment instruments.
Young greedy investors, who had been fascinated by the dazzling skyward rally of the equity markets in early 2008, have witnessed their portfolio value virtually halving.
With their portfolio worth reducing, investors have been forced to look for avenues outside D-Street. “Which avenue to choose in this scenario?” is the question perplexing the investors, hit by the global meltdown and volatility of the markets.
Have we ever tried to consider and review investing into instruments used by our grandparents and people of the older generation? Most of us might have never thought of investing into instruments like Post Office Money back scheme, National Saving Certificate and the like.
We normally hear about them from our grandfathers, and senior citizens, particularly in the context of retirement planning. Lets thus call such instruments, as `grandfather` instruments, within the realm of our discussion on considering them as a prospective investment option, and try to review them as under : -
Public Provident Fund (PPF) scheme was introduced by the government in 1968. This `grandfather` instrument, can be opened by any individual assessee, while a guardian can open the account on behalf of minor.
A PPF account can be opened by any individual assessee. (Guardian can open the account on behalf of minor). Along with the exempt (Income Tax) interest of 8% per annum, calculated on the minimum balance from the fifth day till the end of the month, the investment tool also can be used for tax planning purpose, u/s 80C of the I.T. Act.
One can build a decent corpus by investing the principal amount over a period of 15 years. The minimum lock-in period is 7 years. On expiry of the 15 year duration, the PPF account can be prolonged for duration of 5 years at a time.
During the period, the minimum amount one can invest is Rs 500 and then in multiples of Rs 5. The maximum amount in a financial year can be Rs 70,000, in lump sum or installments.
PPF can also help you acquire a loan of up to a maximum 25% of the balance from the third financial year to the sixth financial year. However, the loan option is not available once you start withdrawing, that is sixth year after opening of account.
Post Office Monthly Income Scheme (MIS) is mostly opted by Voluntary Retirement Scheme (VRS) takers and retired people looking for fixed monthly income.
While PPF limits the account to one person, here, one can open multiple MIS accounts and each account can be converted into a joint account and vice versa.
MIS requires a minimum investment of Rs 1,500 or in multiples thereof. The upper limit for a single account is Rs 450,000 while that for a joint one is Rs 900,000. Alongside one can also claim a bonus of 5% on maturity. (Revised on Dec. 8, 2007)
However, unlike the case in PPF where interest is tax free, the interest income of 8% in this case is taxable. It is however not subjected to TDS (tax deducted at source) deduction. Also, the balance is exempt from tax. Alongside, one can claim a bonus of 5% on maturity of the instrument which is 6 years. (Earlier, it was 10%; the same has been revised to 5% with effect from Dec.8, 2007.)
National Savings Certificates (NSCs), are certificates issued by government of India that can be availed in the denominations of Rs 500, Rs 1,000, Rs 5,000 and Rs 10,000 at all post offices across India. This ‘grandfather’ instrument carries an interest of 8% which is compounded half yearly and has a maturity period of 6 years.
Though the interest of 8% is subjected to tax, a full amount of Rs 100,000 can be deployed towards tax planning exercise, eligible for deduction u/s 80C of the I.T. Act.
Kisan Vikas Patra (KVP) works in a similar way to NSCs and can be availed in same denominations across post offices in India.
They attach an annual interest rate of 8.25% and maturity period of 8 years and 7 month. They have been propagated as a safe route for investors who wish to double their investment. That is if one procures KVP certificate of Rs 100, one will earn up to Rs 200 on maturity.
While these instruments may be low on their returns aspect as compared to equities and mutual funds, they beyond all doubts, are backed by government, and hence are comparatively safer.
So `grandfather` instruments like these would prove to be safer and prudent to park your funds into, and improve the worth of your portfolio, particularly when the stock markets are highly volatile, as is the case in the current scenario.
Moreover, by investing in these instruments, you can follow the footsteps of your parents or grandparents and also build your retirement corpus.

Source: http://in.reuters.com/article/personalFinance/idINIndia-39013520090413?mlt_click=IFR+Asia_21_Stories+2-8_sec1-priCon-m5-NONE_News&sp=true

Investment Mantras for Women

There are some myths about women when it comes to investment. Some of them are…
Women are not as active as men when it comes to investing money; they generally keep themselves away from taking investment decisions; they are well known for spending money or keeping it idle rather than investing it for earning more; even, non-working women are mostly dependant on their spouses for meeting their day to day expenses…
Though, to some extend its true that women are dependant on their spouses for finance, they should also think about their future. Problems don’t come giving prior notice. What if they face the situations of being divorced or widow?
In such cases the main problem for a woman is the regular flow of income to take care of their needs, provided they are not buck-earners. However, in the current scenario of layoffs, lack of job security and slowdown, even earning women can also face these problems.
As per the latest International Labor Organization (ILO) report, the deepening economic and job crisis across the globe is expected to increase the number of unemployed women by up to 22 million in the year 2009.
The global employment trends (GET) report by ILO indicated that, of the 3 billion people employed around the world in 2008, 1.2 billion were women (40.4%). It said that, in 2009, the global unemployment rate for women could reach 7.4%, compared to 7% for men.
Women should start thinking and understanding the importance of money and its investment aspect to avoid critical situations at any stage of their lives. They need to develop skills to plan for their financial needs.
Generally, women tend to keep cash idle rather than investing it. They tend to think that this `idle cash` can be easily used for contingencies and to spend on their personal care like beauty parlors and jewellery etc.
However, as an exception, few women do invest into risk-averse avenues such as bank deposits and post offices` schemes. They generally avoid risky options such as equities, as they think that it takes a rocket science to understand equity markets` trends, patterns and volatile nature.
Instead of worrying about the `complexity` of equity markets, they should equip themselves with the basic knowledge about investing to make fruitful investments.
Financial independence is a very crucial thing for women in today’s world. Women from different age groups should start investing from the early stages of their lives to secure the future and for better lifestyle.
Below are the various investment options for women from different age groups.
Age group 20 - 30 years
You can call this stage as `Young Unmarried Stage`. Women from this age group can plan their future very well as there are various investment options available suiting their needs at this stage. Investing in equities is perhaps the best option for the women at this stage.
Equities are well known for growth and good returns, provided the markets are doing well. The dividend income from equities can also help them to earn regular income. They can follow intraday trading and buy today sell tomorrow (BTST) strategies. Other investment options for this group are derivatives, F&O and equity linked mutual funds.
Age group 30 - 40 years
This stage is called `Young Married With Children Stage`. In this stage women have to think about their children also. To secure the future of their children they should opt for the investments options which suit them. There are different categories of mutual funds and insurance policies like educational plans. Women between this age group should go for such plans.
Age group 40 – 50 years
This is `Married with Older Children Stage`. As children become old, parents have to keep funds ready for their higher education and marriage. This is a very crucial stage for any parent as their children’s career depends on their education and parents have to arrange funds for their education.
Accordingly women should opt for the investment options like insurance plans for the marriage and education purposes.
Age group 50 – 60+ years
This stage is called `Retirement Stage`. At this stage, women can invest into less risky and safer investment options such as PPF, NSC, Post Office Saving Schemes and debt instruments for the steady flow of income at the later stages of lives.
A word of advice
Before making any investment, women need to do the cost benefit analysis of their investment options. They should analyze the risk associated with it, its liquidity and safety aspects. They just need to understand the basics of investing and opt for the right kind of avenues which will suit them. If they follow the basics, no doubt, a woman can also be as good investor as a man!

Source: http://in.reuters.com/article/personalFinance/idINIndia-39055220090415?mlt_click=IFR+Asia_21_Stories+2-8_sec1-priCon-m5-NONE_News&sp=true

India well placed to benefit from improving int'l mkt: Fidelity

Fidelity International said attractive share valuations indicate the bearish phase in global markets may be over and India is well placed to benefit from the improving global environment.
"My belief that the market is bottoming out is underlined by attractive valuations, market sentiment and by looking at current market conditions in relation to the historical bear and bull market cycles," Fidelity International President Investments Anthony Bolton told reporters.
About India Bolton said the country's economy was largely domestic consumption-led, which meant that it has been less affected by the deceleration in global growth.
"As an economy that has continued to grow in spite of unprecedented turmoil in the global economy, I think India is well placed to benefit from an improving global environment," he added.
Fidelity International has a presence in India through Fidelity Mutual Fund, which launched its first fund in 2005.
Talking about the company's growth over the last four years, Ashu Suyash, Managing Director and Country Head India, Fidelity International, said, "as one of the fastest growing among the new asset management companies, we are delighted with the progress we have made over a short span of time.

Source: http://economictimes.indiatimes.com/India-well-placed-to-benefit-from-improving-intl-mkt-Fidelity-/articleshow/4411365.cms