The market are holding in the positive territory during the previous hour of trade, though with less favor. NIFTY is currently at 4125.15 as against to its previous closure of 4047.10.
Unitech, Reliance Communications, CineMax, IFCI, Infosys Technologies, Tata Motors, IDBI and L&T are the active scripts on trade in their early hours.
House of Pearl Fashions Limited and Redington (India) Limited (Up by 18.23%) got listed in the NSE today.
February 15th, 2007
The Indian stock markets, like its peers in the US, Europe and Asia opened positive this morning. CNX NIFTY is currently at 4117.65 - up by 1.7%. The Nifty Junior, CNX IT and Bank Nifty indices are up by over 2%.
February 15th, 2007
Systematic Investment Plan or SIP is a popular method offered by mutual funds in the country. SIP allows investors to put their investments in a systematic manner by investing the same amount of money at fixed periods, say on a specified day of every month. With this, the rupee averaging comes into scene and the end investor will be able to buy more units when the NAV of the fund is low and less units when the NAV of the fund is high since the SIP money invested is always fixed. Most SIP funds have been performing well over the past few years.
Reliance Growth Fund, Reliance Vision Fund, Birla Sun Life Equity Fund, DSP Merrill Lynch Equity Fund, Prudential ICICI Power, HDFC Equity Fund, HDFC Top 200 Fund, Franklin India Prima Plus, Kotak 30 and Sundaram BNP Paribas Select Focus are some of the popular diversified equity funds that have given over 90% returns in a 3-year period under the SIP route.
Most of the funds allow the investor to start their SIP investment as low as Rs. 500 per month. Of course, the initial minimum application amount ranges from Rs. 500 (as in case of most schemes from Reliance Mutual Fund or with almost all ELSS funds) to Rs. 1000 or even Rs. 5000 (as is the case with most others). Considering the difficulty in managing such a small size investment to properly utilize the funds in order to get decent returns and overheads involved for the fund management to serve the investor on one side and the investor’s ability to save money as a part of the wealth building processing in today’s economy on the other, we often wonder how much is the best amount to invest every month under the SIP route. While this always depends on the ability of the investor to set some funds aside for long term wealth building by taking investment risks, there are some interesting facts from industry sources.
As per industry estimates, even though Rs. 500 is the minimum SIP amount with most schemes, an average investor will put in Rs. 2000 under the SIP route. However, fund agencies feel Rs. 5000 would be a decent money for investing through the SIP.
Unfortunately, if you opt for a Rs. 5000 SIP route for a period of 1 year, you have to comply with some additional documentation (such as quoting your MIN or submitting photocopies of PAN and Address proof etc.) because the SIP amount itself crosses the Rs. 50,000 mark (Rs. 5000 x 12 months = Rs. 60,000) beyond which the additional documentation is mandatory. Instead, you can break up the same investment amount of Rs. 5000 into two schemes by either investing into two different schemes from the same fund house at Rs. 2500 each or even better by investing into schemes from two different fund houses. This way the risk will be diversified, at least to a certain extent. Of course, you will have to spend few minutes more to keep a track on how the schemes are performing apart from the time spent to counter check with your bank statements if the SIP amounts are properly going from your bank account to your mutual fund as per the schedule. It is always good to diversify since it minimizes risk when the funds go in trouble times.
February 15th, 2007