Tag Archives: sundaram equity plus

Investing in NFO

ImageNFO [New Fund Offer] is always deemed as a risk. Everyone advises you to go for an existing MF, rather than invest in a NFO. One of the reasons being that, the existing funds have performance and past results to go by. But in case of NFO, its a big risk.

But then, investment itself is a risk. Even MFs can turn non-profitable if fund managers don’t do their job well. The kind of analysis we do before buying a MF, we can do a similar analysis of the AMC before investing in the NFO.

I have invested in quite a few NFOs, based on the past performance of the AMC who have managed successful MFs. Also, the asset allocation makes a difference too. As in the case of Sundaram Equity Plus fund where 35% was allocated to gold and rest 65% to equity. That made it an interesting assortment and I leapt towards that NFO. It perfromed pretty well and even touched a high of 11.02, which was a real positive.

Another NFO which turned out well for me was SBI Bluechip Fund [D]. It oaid great dividends in its first few years before the slow down. But then I burnt my finger in SBI PSU Fund.

Another point to note is the timing of the NFO. When you invest in a NFO while the market is bearish, then you will earn profits during bull run. But when you invest in a NFO which is launched during a bull run, taking advantage of rising sensex, then its a sham. It takes away the hard earned money as soon as the bull run dies down. This happened to me with Reliance Small Cap Fund [G]. I got the timing totally wrong.

Anyways, that has not deterred me. Just a few days back I went ahead and invested in two more NFOs. One was the IDBI India Top 100 Equity Fund and the other was Taurus Banking & Financial Services Fund.

The simple reason for this step was to take advantage of the situation where banking stocks have been beaten down and with falling sensex I can look to gain during a bull run. I could have also go in for a Banking Fund from any of the AMCs, but the NAV was quite high. For each unit purchased from existing MF, I can have 5 units here. And then, the %gain would be more or less the same, if they invest in similar banking stocks.

All I can say is, do not stay away from NFOs. The NFOs give us a chance to enter the market at a lower cost and more number of units. But do check on the market status since timing is everything.

This post was also published on Yahoo Network


Posted by on May 11, 2012 in lifestyle, mutual fund, nfo, personal finance


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My Own ‘Capital Protection Oriented Fund’

Last year, in March’ 2010, I made the mistake of creating a FD for Rs.100000/-. I did not have time to look into other investment options and blindly went for this option through my ICICI a/c. What was worse is that, the interest rate offered, back then, was 7%. The only clever thing I did was that, I made the FD for 390 days only. So, at the end of the term, sometime in April’ 2011, an amount of Rs.106500/- was credited to my a/c, after deducting TDS etc.

This time around, I had the same option of renewing that FD at about 9.25%; but I decided against it. I made up my mind to create a ‘Capital Protection Oriented Fund’ of my own and test its performance for a period of 1 year. I know it sounds silly, but I did. Its a bit experimental, but all I wish to achieve from it is growth at 12-14%. Here’s what my fund now consists of:

a. I made a FD of Rs.40000/- at 8.5% for 390 days only. The interest generated is Rs.3400/-. I could have got a higher interest, but I would have to go for a longer term.

b. I put another Rs.10000/- in a NFO called ‘Sundaram Equity Plus’, so I now have 1000 units of it. The reason for investing in this NFO was that, it balanced out the equities with gold; 5 – 35% to be placed in gold and 65 – 95% in equity.

c. The remaining Rs.50000/- I put it in the stock market in the following scrips in a balanced portfolio:

i. Jaypee Infratech – 100 nos @ 52.15

ii. Punj Lloyd – 75 nos @ 56.5

iii. IRB Infra – 50 nos @ 158.38

iv. Next Mediaworks(Mid-day Multimedia) – 50 nos @ 5.75 [penny stock purchased so I don’t leave out a single paisa]

v. Zee News – 25 nos @ 11.05 [penny stock purchased so I don’t leave out a single paisa]

vi. Rajesh Exports – 50 nos @ 86.7

vii. Reliance Com – 50 nos @ 82

viii. Vijaya Bank – 50 nos @ 69.6

ix. Manappuram – 75 nos @ 57.5

x. IPO Muthoot Finance – 40 nos @ 175 [had applied for more, allotted 40]

xi. FPO Power Finance – 43 @ 192.85 [5% discount to retail investor]

I shall keep updating this as and when I do a buy/sell. Suggestions/comments welcome!

This post was also published on Yahoo Network

Update 1 in Feb-2012: I sold Rajesh Exports @ 136.15, giving me a profit of 2472.05.  I should have sold it earlier, when it had touched a high of 145, but I missed the opportunity as I wasn’t able to track my portfolio during that period. Anyways, I re-invested the amount in buying the following:

i. Manappuram – 45 nos @ 45.15

ii. Jp Power – 45 nos @ 45.35

iii. Vijaya Bank – 50 nos @ 57.75

Update 2 in May-2012: The FD of Rs.40000/- matured and I decided that this time around I would not renew the FD for that high a value. Too much money in debt instrument isn’t a good idea. So, I created a new FD for Rs.30000/- at 9.25% interest. This FD matures in June’13 and the maturity amount is Rs32974/- . The remaining proceed of Rs13400/-, I re-invested it in the following:

i. Adani Power – 50 nos @ 50.75

ii. IRB Infra – 25 nos @ 111.15

iii. JP Associates – 45 nos @ 59.4

iv. Manappuram Fin – 25 nos @ 23.65

v. Muthoot Fin – 20 nos @ 131.5

vi. Power Fin – 17 nos @ 140.25


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