IDFC Savings Scheme Series I

Dear Investor,

 

We are pleased to provide you investment opportunity in IDFC Savings Scheme Series I which is a Close ended debt scheme with a tenor of 36 months. The scheme endeavors to generate returns by investing in high quality fixed income securities with a maturity profile matching the maturity of the scheme and generate capital appreciation by investing in equity and equity related instruments.

 

IDFC Savings Scheme will initially deploy at least 75% of the funds collected during the New Fund Offer in high quality debt securities with an intention to generate income. The scheme will invest in a portfolio predominantly of fixed income securities that are generally maturing in line with the duration of the scheme. The scheme shall follow a predominantly passive investment strategy for the fixed income component of the Scheme. The fund will seek to generate capital appreciation by investing in equities. The equity allocation will be benchmarked to Nifty Index and will be invested in either high quality large cap companies or in equity mutual funds offering such portfolios. Depending on overall portfolio considerations and depending on market conditions, the fund manager may also have allocations to equity derivatives. The derivative portfolio will comprise of futures and options on the Nifty Index and will be actively managed by the fund manager within the overall asset allocation of the fund. The allocation to equity derivatives along with cash equity and equity mutual funds will be within the overall equity allocation as per the asset allocation of the scheme.

 

 

Scheme Features:

 

Minimum Investment amount: Rs. 5000 / -

 

NFO Closing: 29^th Oct, 2010

 

Maturity: 3 years, maturity date-7th Nov 2013

 

Liquidity: Close Ended debt scheme listed on NSE.

 

The debt portfolio will be allocated to good quality AAA and AA+ rated entities

 

The equity allocation will be managed passively and will be benchmarked against Nifty

 

Current 3 year AAA yields (~8.25%) and the expected equity allocation is 25%

 

Benchmark: CRISIL MIP Blended Index

 

Scheme will allot units before 8th Nov 2010, investors will get benefit of 3 indexations

 

The fund is suitable for all those conservative investors who are looking for additional returns over and above current fixed income options available without taking risk on capital.

 

 

Kindly communicate your request for application forms by calling our Toll-Free Number 1800 425 0123 between 9.30 am to 6.30 pm

 

Regards,

Abhijit Singh| Branch Head | Sprism Investment Services Pvt Ltd
#4 | 2nd Floor | Khaitan Chambers | Modi Street |Mumbai.

(022 – 30268502 | Mobile: (+91) 9769733071 | 7 Fax 022- 30268500
* abhijit@sprism.in | website: www.sprisminvest.com

Height of Financial Stupidity

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Height of Financial Stupidity Posted: 21 Oct 2010 08:27 PM PDT Photo by purplemattfish Two things are infinite; human stupidity and the universe, but I'm not sure about the former. --Albert Einstein Tenzing on Hillary and Hillary on Mount Everest is the height of heights; peeing through key hole of a glass door is the height of stupidity. Now, what's the height of financial stupidity…there's a not one but many…most of us continue to violate some basic and simple financial truths and make stupid financial choices. It is very amazing to see how people get sucked in by the financial traps set up the financial industry; banks, stock brokers, life insurance companies, wealth management firms continue to harness the financial stupidity of people to make money. Human stupidity is the other name of irrationality, self deception and willful ignorance and is the single biggest contributor to human suffering. Let's see some of the ways in which people act stupid to ruin their financially life: Examples of Financial Stupidity Real Estate is the best form of investment 1. Investing in property thinking that just because land is in short supply, property prices can only move skywards. 2. Buying a residential house just to save on rent without considering the opportunity cost of money. 3. Going for a home loan to save tax even if one has enough of spare money to invest forgetting that like tax, interest is a cost borne by the borrower. Investing means trading stocks/ mutual funds 4. Either going 100% in stocks or 100% in bank fixed deposits. 5. Indulging in 'market timing' or 'stock picking' ignoring the fact that more than 80% returns of an investment portfolio are determined by 'asset allocation'. 6. Investing in Mutual Funds solely on the basis of returns without considering the risk undertaken to earn those returns. 7. Investing in Mutual Funds based on short term returns and / or dividend declaration. 8. Investing in IPOs by borrowing money to make listing gains. 9. Investing in PMS considering it to be a wealth management product not understanding that it is a high cost 'Portfolio Mismanagement Scheme'. 10. Getting lured by the fancy names of financial products. 11. Having an over-diversified investment portfolio with too many stocks/mutual funds leading to unnecessary duplication. 12. Buying jewellery for investing in gold instead of investing through gold ETFs. Insurance is a tax savings and investment tool 13. Investing in life insurance not knowing that it can be lethal for financial health. 14. Not buying adequate insurance coverage. 15. Investing in life insurance policies from LIC thinking that money is safe. 16. Buying life insurance just to favor a relative, family friend or a neighbor. 17. Mistaking insurance agents––peddling life insurance––for financial advisors. 18. Buying / investing in multiple insurance policies. 19. Falling for guaranteed returns schemes. Enjoy now, pay later 20. Considering fuel as the only cost of running a vehicle. 21. Buying /renting an expensive/unaffordable house by overstretching the finances. 22. Falling for zero interest rate schemes forgetting that processing charges is also a cost. 23. Spending to gain more points on loyalty cards and credit cards. 24. Not thinking twice before buying an expensive car or the latest gizmo, just to impress friends, relatives and neighbors. 25. Handing over a tip to a waiter even if not satisfied with the service…just to avoid the embarrassment. 26. Borrowing to finance a depreciating asset while own money is lying idle in bank accounts. 27. Borrowing money based on quoted 'flat rates of interest', not understanding that actual cost of borrowing is 2 to 3 times that of flat interest rates. 28. Choosing complexity over simplicity by mindlessly acquiring multiple credit cards, opening multiple bank accounts, investing in multiple mutual funds, buying multiple insurance policies. Photo by ImageLink 29. Taking a casual approach towards managing money which has been earned the hard way, not understanding that managing money is as important as earning it. Put differently, working hard for money but not allowing the money to work hard. Taxing the brains 30. At last, the height of financial stupidity: Standing in long queues to file tax return on the last date. Is there any other financial stupidity I have left out? How do you handle your money? Judge yourself whether you're a financially intelligent or a financial idiot? The only way to comprehend what mathematicians mean by infinity is to contemplate the extent of human stupidity. --Voltaire courtesy : Money Quest

Tax Saving Bonds by L&T Infrastructure Finance Co.

Dear Investor,

 

We are pleased to present you the details of public issue of bonds by L&T Infrastructure Finance Company. Investment upto a maximum of Rs.20,000 in these bonds is eligible for deduction u/s 80CCF of the Income Tax Act for the Financial Year 2010-11. An Individual or HUF can avail of this benefit in addition to the limit of Rs.1 Lakh u/s 80C.  

Company Profile: 

L&T Infrastructure Finance Company Limited, a 100% subsidiary of Larsen & Toubro Limited, was incorporated in 2006, and is registered with the RBI as a systemically important non deposit taking NBFC and classified as an IFC. The company's business comprises the provision of financial products and services for customers engaged in infrastructure development, construction and operations & maintenance with a focus on the power, roads, telecommunications, oil and gas and ports sectors in India. The company is registered with the RBI as an Infrastructure Finance Company, or "IFC", which allows it to optimize its capital structure by diversifying its borrowings and accessing long-term funding resources, thereby expanding its financing operations while maintaining its competitive cost of funds. The total income of the company for Fiscal Year 2010 was Rs.4,504.23 million. The total loans and advances outstanding of the Company as at March 31, 2010 were Rs. 42,884.99 million and total disbursements for Fiscal Year 2010 were Rs.37,955.14 million. 

Salient Features of the Issue: 

 

• Public issue of bonds by an infrastructure finance company under Sec 80 CCF

 

• The bonds are rated CARE AA+ by CARE and LAA+ by ICRA

 

• These bonds will be issued only to Resident Indian Individuals (Major) and HUF

 

• The bonds are fully secured with exclusive first charge on specific receivables of the Company

 

• The Bonds bear an attractive combination of coupon rate ranging between 7.50% and 7.75% p.a. coupled with tax benefits of upto Rs 20,000 under

      Sec 80 CCF

 

• The bonds will be issued in Physical or Demat Form at the option of investors

 

• No TDS applicable on bonds issued in Demat form.

 

• The bonds will be listed on NSE and can be traded after the 5 year lock-in period

 

• The bonds have a face value of Rs.5000 each and the minimum application is 5 bonds

Issue Profile:

 

 

The issue closes for subscription on November 02, 2010. Kindly communicate your request for details and application forms by calling our Toll-Free Number 1800 425 0123 between 9.30 am to 6.30 pm 

Regards,

 Abhijit Singh| Branch Head | Sprism Investment Services Pvt Ltd#

#4 | 2nd Floor | Khaitan Chambers | Modi Street |Mumbai.
(022 – 30268502 | Mobile: (+91) 9769733071 | 7 Fax 022- 30268500
* abhijit@sprism.in | website: www.sprisminvest.com

 

SIP in Equity Funds - the road to wealth

Dear Investor,

 

Have the domestic markets peaked? Are we set to witness the benchmark indices scale new heights soon? Is a correction in the offing? These are some of the questions haunting the investor community for quite some time now. Such questions appear to be quite straight forward and simple but unfortunately, the answers are not. This is primarily because we have had a massive rally in equity markets since the lows tested in March 2009 on the back of robust FII inflows which have crossed $20 bn in 2010. In such a scenario, what are the options available to small and conservative investors? Do they have to completely avoid equity markets now? Left with few options, do they only have to rely upon fixed income products? Well, the answer is a resounding NO.  Investors do have an option to reap the huge potential of equities while assuming limited risk and thereby enjoying optimal returns. This can be conveniently achieved through the Systematic Investment Plan (SIP) route offered by the mutual funds 

Illustration of the benefits of SIP in few top mutual fund schemes: 

The following table clearly shows how investments through SIP (say Rs.5000 every month) have outperformed one time investments from Jan 2008 to Oct 2010 – the period over which the domestic equity markets virtually completed a cycle of rise and fall. We have considered few schemes (growth option) with a consistent track record of performance under large, mid, diversified, tax planning and sectoral equity categories. The list is merely indicative and not exhaustive.

 

SCHEME NAME	CURRENT NAV	TOTAL UNITS	TOTAL AMOUNT	PRESENT VALUE	YIELD (%)	PROFIT   (SIP)	PROFIT        (ONE TIME INVESTMENT)
Canara Robeco Equity Diversified	58.96	4,669.03	170,000	275,286.09	38.37	105,286.09	29,268.39
ICICI Prudential Taxplan	152.58	1,896.60	170,000	289,383.74	42.76	119,383.74	32,566.18
Reliance Banking Fund	117.14	2,961.13	170,000	346,866.89	59.38	176,866.89	120,077.20
S&P Nifty	6,135.85	39.47	170,000	242,173.43	27.49	72,173.43	-582.43

                                                                                                                                                                                                            Source: MFI Explorer

Please contact us for more details on the benefits of SIP and suggestions for other equity schemes which can be considered. You can also reach us by calling our Toll-Free Number 1800 425 0123 between 9.30 am to 6.30 pm.  

Regards, 

Abhijit Singh| Branch Head | Sprism Investment Services Pvt Ltd

#4 | 2nd Floor | Khaitan Chambers | Modi Street |Mumbai.
(022 – 30268502 | Mobile: (+91) 9769733071 | 7 Fax 022- 30268500
* abhijit@sprism.in | website: www.sprisminvest.com

UTI Monthly income scheme MIS Advantage

---------- Forwarded message ----------
From: Sprism News Flash <advisory@sprisminvest.com>
Date: Sat, Oct 16, 2010 at 11:12 AM
Subject: UTI MIS Advantage
To: NIXON JOHN RODRIGUES <nixonrodrigues@yahoo.com>

Dear NIXON JOHN RODRIGUES,

 

We are pleased to provide you an opportunity to invest in UTI MIS Advantage Fund – a monthly income scheme from UTI Mutual Fund. Considering the volatile nature of equity markets and the modest returns generated by traditional fixed income instruments, a MIP scheme which combines the best of both the worlds is a 'must-have' in every investor's portfolio.

 

The special features of UTI MIS Advantage Fund are as follows:

 

• Consistent Performance: The Monthly Income Schemes of UTI have been extremely consistent with superior risk-adjusted returns – while UTI MIP has never gone below 2nd quartile amongst its peer group during any quarter in the last 2 years, UTI MIS Advantage has been equally consistent

• Constant Rate of Dividend: UTI is the only fund-house to have given predictable and almost constant rate of dividend every month. Also the Monthly Income Schemes of UTI have declared dividends uninterruptedly every month since the last 5 years

• Sticking to mandate: UTI has stuck to its mandate by managing funds with capital preservation and predictability in income distribution as the two most important parameters – UTI's commitment to the fundamental philosophy of Monthly Income Schemes has not changed through the good, bad or ugly times

• Flexibility to investors – UTI MIS Advantage in particular has several options catering to the individual needs of the investors:

                         a. Monthly Dividend Option for an investor needing monthly income

                         b. Monthly Payment Plan for investors who do not want DDT to be deducted but want a monthly stream of income

                         c. Flexi -Dividend Option for investors seeking dividends from time to time

                         d. Growth Option for investors seeking cumulative growth by way of capital appreciation

 

Kindly refer to the enclosed attachment for more details on the fund. Please communicate your request for application forms by calling our Toll-Free Number 1800 425 0123 between 9.30 am to 6.30 pm    

Regards,

 Abhijit Singh| Branch Head | Sprism Investment Services Pvt Ltd

#4 | 2nd Floor | Khaitan Chambers | Modi Street |Mumbai.
(022 – 30268502 | Mobile: (+91) 9769733071 | 7 Fax 022- 30268500
* abhijit@sprism.in | website: www.sprisminvest.com

Coal India IPO opening on Oct 18

 

India's largest coal producing company Coal India (CIL) will open its initial public offering (IPO) for subscription on October 18, 2010. The company is offering 63.16 crore equity shares through the issue, which was an offer for sale by the President of India, acting through the Ministry of Coal, Government of India. The price band for one of the most eagerly awaited public issues has been fixed at Rs.225-245 a share and employees of Coal India and retail investors will get 5% discount to the issue price.

The offer shall constitute 10% of the post offer paid-up equity share capital of company. The government expects to raise over Rs 15,000 crore through the IPO, which will be largest ever amount raised by an Indian company via offering. The issue will close on October 21.

About Coal India Ltd:

Coal India Limited (CIL) - a Schedule 'A' 'Navratna' Public Sector Undertaking under Ministry of Coal, Government of India, has its Headquarters in Kolkata. It produces coking and non-coking coal of various grades for diverse applications

As of March 31, 2010, the company operated 471 mines in 21 major coalfields across eight states in India, including 163 open cast mines, 273 underground mines and 35 mixed mines (includes both open cast and underground mines). It also operated 17 coal beneficiation facilities with an aggregate designed feedstock capacity of 39.40 million tons per annum. Coal India's major consumers are the power and steel sectors. Others include cement, fertilizers, brick kilns etc

As per draft prospectus, CIL is the largest coal producing company in the world (Source: CRISIL Research), based on raw coal production of 431.26 million tons in fiscal 2010. It is also the largest coal reserve holder in the world (Source: CRISIL Research) based on reserve base as of April 1, 2010.

 

Company Financials (Consolidated):

Amount (Rs. Million)	2009-10	2008-09	2007-08	2006-07	2005-06
Total Income	5,25,922.92	4,60,640.65	3,86,166.97	3,50,054.07	3,40,087.99
PAT (Restated)	98,294.09	40,628.05	42,850.07	42,052.69	61,136.01

 Our Views:

In the next four years we expect demand for coal to increase by 11% on grounds of thermal power plants being set up in country. Coal India Limited has low cost competition advantage in industry with dominant position as it owns 48% of India's proven reserves and contributes over 81% of the total coal production in India. Given India's abundant coal reserves and the absence of other sustainable fuel sources, the company plays a strategic role in meeting countries energy requirements. The company enjoys strong financials & fundamentals. With the ever rising demand for power, we expect the company to have an impressive ROE and generate substantial free cash flows. Therefore, we recommend our investors to SUBSCRIBE to this IPO.

 

IPO DISCLAMIER:

 This article has been prepared solely for information purpose and does not constitute a solicitation to any person to buy or sell a security. While the information contained therein has been obtained from sources believed to be reliable, investors are advised to satisfy themselves before making any investments. Sprism Investment Services Private Limited does not bear any responsibility for the authentication of the information contained in the reports and consequently, is not liable for any decisions taken based on the same.  Sprism Investment Services Private Limited only seeks to provide information updates and analysis.   

 

Regards, 

Abhijit Singh| Branch Head | Sprism Investment Services Pvt Ltd

#4 | 2nd Floor | Khaitan Chambers | Modi Street |Mumbai.
(022 – 30268502 | Mobile: (+91) 9769733071 | 7 Fax 022- 30268500
* abhijit@sprism.in | website: www.sprisminvest.com

SBI bond issue.

 

State Bank of India will raise up to Rs. 10 billion by selling lower tier-II retail bonds maturing in 10 and 15 years, an official of SBI Capital Markets Ltd told TickerNews Service on Friday.

SBI has reserved 50% of the bonds for retail investors, 25% for high networth individuals and 25% for qualified institutional buyers.

The state-owned bank is offering annual coupon of 9.25% on the 10-year retail bonds that have a call option at the end of fifth year, the official said.

The 15-year retail bonds having a call option at the end of 10th year, carry an annual coupon of 9.50%.
The official said the coupon on retail bonds would be raised by 50 basis points if the call option is not exercised.