Prudential guaranteed income fund

The Nifty Pharmaceutical index gave negative returns for four successive years from 2016 to 2019. Was it a good investment avenue at the start of last year? Similarly, the Nifty Commodities index fell 13 percent in 2018 and barely returned two percent in 2019. If you had just gone by their past returns, you may not have invested in them at the start of last year. And you would have ended up missing out on the subsequent rally. So, how do you identify the ‘next big theme’? There’s a mutual fund that aims to do just that. But it’s a scheme with high risks and potentially high returns. ICICI Prudential Thematic Advantage Fund (IPTAF) works on such a premise. What’s on offer Although the scheme was launched in 2003, the fund’s current avatar is just 2.5 years old. Its long-term history should be ignored if you want to get a true picture of this fund’s performance. At its core, it’s a fund-of-funds (FOF) scheme that invests at least 80 percent of its assets in theme or sector … [Read more...] about This fund identifies the next big sector or theme: Should you invest in it?

In 2020, the Securities and Exchange Board of India (SEBI) issued a diktat asking fund houses to make their multi-cap schemes true-to-label. They were asked to invest at least 25 percent of their assets each in large, mid and small-cap stocks. There was no such restriction earlier. Later SEBI allowed fund houses to have a new flexi-cap category with no rigid market capitalisation based investment mandate. Of a total of 35 schemes originally in the category, 25 became flexi-cap funds . The remaining 10 schemes continued to be multi-cap funds. Who shifted and who remained? Given that a significant chunk of the assets of multi-cap funds was invested in large-cap stocks (close to 80 percent), most of the large-sized schemes converted to being flexi-cap funds. At the moment, the assets under management of flexi-cap funds is Rs 1.6 lakh crore. Only two large-sized schemes, Nippon India Multi-cap Fund (Rs 7,459 crore, as on October 2020) and ICICI Prudential … [Read more...] about How mutual funds worked behind the scenes to comply with SEBI multi cap funds’ order

Share to Twitter Share to Linkedin Mere “common stocks” fell 18% in last year. But these preferred shares are set to do better. Especially for contrarian income seekers like us. I’m talking about safe 7% to 8% yields. Backed by good old fashioned cash flows. With double-digit price upside , too, as these share prices bounce back after a rough run. A quick primer if you’re new to preferred stocks. They are part stock, part bond—and all yield , as we’ll see in a minute. Preferred stocks trade around a par value and deliver a fixed amount of regular income, just like a bond. They don’t have any voting rights, which also is like a bond. But we can buy and sell them on a stock exchange, just like typical common stocks. And also like common stocks, preferreds represent ownership in a company. Because preferreds’ prices move less dramatically than stocks (except last year, which we’ll talk about in a moment), preferreds get virtually no coverage … [Read more...] about Secure 8% Dividends From These Mostly Ignored Funds

Share to Twitter Share to Linkedin Today we’re going to build ourselves a portfolio that hands us a 10.5% yield. And we’re going to do it with just three funds. The appeal of a 10.5% payout is tough to deny: when you’re getting that much of your investment back every year in dividends, you’ll recoup the whole thing in less than 10 years. Everything else is gravy! What’s more, two of the three funds below—all of which are closed-end funds (CEFs) —pay dividends monthly, so we’re getting our payouts in line with our bills. That’s unheard-of in the world of vanilla stocks. Almost all of them make us wait three long months for our next payout. To get started, we only need three things: A brokerage account. Just about any account will do, as all the major firms support the CEFs I’m about to show you. Savings—but much less than you think. You’ll be amazed at how little money you need to build our 10% income stream. With a yield that size, … [Read more...] about 3 Overlooked Funds For 10.5% Dividends In 2023

Share to Twitter Share to Linkedin December brought a bit of a turnaround in hedge fund performance , with global macro funds taking center stage as the best performers. Meanwhile, multi-strategy funds stalled last month, and smaller funds outperformed larger ones in some strategies, marking a turnaround of what was seen in many previous months of 2022. In its "Monthly Hedge Fund Update" for December, Citco reported that the overall weighted-average return for the hedge funds it administers was -0.7%, a significant turnaround after two straight months of positive returns. The overall median return was flat, indicating no difference in performance between large and small funds. Global macro funds were the big winners in December Global macro funds generated an attractive weighted-average return of 3% and a median return of 1.1%, indicating that smaller funds following this strategy outperformed their larger counterparts. The only other strategies … [Read more...] about Hedge Funds End 2022 On A Sour Note As Global Macro Outperformed And Multi-Strategy Stalled

Many mutual funds (MFs) were on a money-raising spree in 2020. And they did so by rolling out new schemes. According to ACE MF, 50 equity new fund offers (NFOs) were launched. With the S&P BSE Sensex rising 84 percent between March and December of 2020, fund houses have been keen to capitalize on the rally. And what better way to attract investors than a new and exciting theme we hadn’t heard of before? Small wonder then that of all these NFOs, 11 were thematic funds. Seven fund of funds were also rolled out, two of them are international schemes. And to keep costs low, 16 index funds and ETFs were launched as well. The Securities and Exchange Board of India’s (SEBI) 2018 rule allows just one scheme in each category. So, fund houses have now taken to rolling out multiple ETFs and thematic funds. Will investors benefit or have fund houses gone back to gathering assets at any cost? Investing in new areas Some fund houses are focusing on offering new strategies to invest … [Read more...] about Why you should steer clear of new thematic funds

There is no risk free financial investment, even sovereign guarantees have been known to fail. Hence, checking the credit worthiness of the insurer is important (Image: Shutterstock) Traditional life insurance plans are known to be high cost financial products, which make for a terrible investment choice. However, when an endowment plan from a trusted life insurance brand guarantees 5-7 per cent (internal rate of return - IRR) tax-free income, the offer becomes quite lucrative. Certain guaranteed return life insurance policies offer just this. You can choose to pay premiums for 5-10 years and then receive a lump sum anytime between the next 10-30 years. Looking at this... … [Read more...] about Personal Finance: A life insurance policy or fixed income investment? What to choose?

Investors prefer redeeming mutual funds during bearish market conditions fearing further losses; others exit during bull market conditions in order to book gains at assumed peaks. However, such knee-jerk reactions to market conditions may adversely impact your wealth creation objectives. Let’s look at five scenarios when you should be redeeming your mutual fund investments. Achievement of set financial goal Investment in mutual funds should always be aligned with set financial goals such as retirement , child’s higher education , marriage, home loan or car loan down payment. Redeem existing mutual funds only after you achieve the earmarked financial goals tied to those investments. In case your financial goal is just one year away from maturity and your mutual fund investments have already reached or exceeded the target corpus, consider shifting your equity mutual fund investment into financial instruments offering higher degree of capital protection such as savings … [Read more...] about 5 key triggers to watch for before selling your mutual funds

Changes to section 80C could help people in better tax planning. The clamour for removing some of the deductions from Section 80C of the Income Tax Act is increasing as experts feel that it has become cluttered and not very practical for tax planning. Experts feel that the section needs a review as the last one happened in 2014 and incomes have surged since then along with other contributions like provident fund. This has shrunk the space within 80C. “The 80C bucket is cluttered now – there’s housing loan principal repaid, tax-saver fixed deposits, employees’ provident fund and so on, along with life insurance premium paid. Salaries have increased over the years and alongside, so have employees’ EPF contributions. This consumes a large part of the 80C limit,” said Vighnesh Shahane, MD and CEO of Ageas Federal Life Insurance. Section 80C that allows tax breaks up to Rs 1.5 lakh is one of the primary reasons why people go for investments like housing and life cover. … [Read more...] about Budget 2023: Is it time to declutter Section 80C of Income Tax Act?

For tax-payers who had chosen the new, alternative tax regime introduced in Budget 202 0, assessment year 2021-22 was the first time they had to file returns under the framework. In fact, salaried tax-payers had the option to switch between two tax regimes even at the time of filing their income-tax returns. That is, the existing tax regime that offers tax benefits and a new regime which offers a lower tax rate for those who give up on the benefit of tax deductions for select savings and expenses. The new tax regime came into effect from April 1, 2020 (financial year 2020-21) under section 115BAC of Income Tax Act, 1961. It doesn’t allow 70 exemptions and deductions such as house rent and leave travel allowance, education allowance, section 80C and 80D benefits and home loan interest deduction under Section 24. Also listen: Opted for the new tax regime? Know the nitty-gritties of filing tax returns this year This has led to additional procedural complications at … [Read more...] about Why the new income tax regime has few takers