Financial Planning & It's Importance

Planning

In simple words, planning is deciding in advance what is to be done, when, where, how and by whom it is to be done. Planning bridges the gap from where we are to where we want to go. It includes the selection of objectives, policies, procedures and programmes from among alternatives. A plan is a predetermined course of action to achieve a specified goal. It is an intellectual process characterized by thinking before doing. It is an attempt on the part of manager to anticipate the future in order to achieve better performance. Planning is the primary function of management.

Different authors have given different definitions of planning from time to time. The main definitions of planning are as follows:

• According to Theo Haimann, “Planning is deciding in advance what is to be done. When a manager plans, he projects a course of action for further attempting to achieve a consistent co-ordinate structure of operations aimed at the desired results.
• According to Billy E. Goetz, “Planning is fundamentally choosing and a planning problem arises when an alternative course of action is discovered.”
• According to Koontz and O’ Donnell, “Planning is an intellectual process, conscious determination of course of action, the basing of decision on purpose, facts and considered estimates.”
• According to Allen, “A plan is a trap laid to capture the future.”

Financial Planning

Financial planning is the process of developing a personal road map for your financial well being. The inputs to the financial planning process are:

1)    Your income, assets, and liabilities

2)    Your financial goals, i.e., your current and future financial needs

3)    Your appetite for risk.

The output of the financial planning process is a personal financial plan that tells you how to use your money to achieve your goals, keeping in mind inflation, real returns, and taxes.

In short, financial planning is the process of systematically planning your finances towards achieving your short-term and long-term financial goals.

Importance of Financial Planning

 
Can you manage without financial planning?

Many people do, but they may find—often when it’s too late — that they don’t have the means to achieve their life goals.

For example, people today realize the importance of living life to the fullest. Consequently, many opt for early retirement from full time jobs, as compared to a few decades ago, when most people worked until the maximum retirement age of 58-60 years.

The average person can, today, expect to live a healthy life well into his or her seventies or eighties, which means that retirement life is almost as long as working life. Financially, it implies that savings (after taking into account inflation) should be enough, not just to maintain the same lifestyle for almost 25-30 years, with no new income, but also to take care of medical expenses, which are usually high the older a person gets. Planning for all this is a tall order for anyone. That’s why it’s critical for everyone to plan their finances from an early age.

The benefits of the financial planning are as under :

• Helps monitor cash flows and reduces unnecessary expenditure.
• Enables maintenance of an optimum balance between income and expenses.
• Helps boost savings and create wealth.
• Helps reduce tax liability.
• Maximizes returns from investments.
• Creates wealth and ensures better wealth management to achieve life goals.
• Financially secures retirement life.
• Reviews insurance needs and therefore also ensures that dependents are financially secure in the unfortunate event of death or disability.
• Lastly, it also ensures that a will is made.

RELIANCE MY GOLD PLAN

Reliance Gold along with World Gold Council as its Marketing Associate has launched the MY GOLD PLAN.

• Disciplined approach to accumulate gold & fulfills your objectives.
• Save in 24 Karat, 995 fineness gold & converts it in Gold Coins. Avoids issues like impurity & quality of gold supplied by the jewelers. (Fixed coin making chrgs all across India)
• Saving of min amt of Rs.1000/- pm & in multiples of Rs. 500/- thereafter is enough to accumulate through My Gold Plan.
• Flexibility to save in 12/24/36/48/60 months tenure (from 1^st Dec 2012 for 15 yrs too.)
• Additional subscription of Rs.1000/- & in multiples of Rs. 500/- thereafter.
• Lock in period – 6 mths. Exit load – 2.5% (applicable upto 12 months). 1.5% administration chrgs.
• 0.5% Safe Keeping chrgs – If not taken the delivery of Gold within 60 days after maturity.

Samridhi Plus is a closed ended Unit Link Insurance Plan (ULIP) with guaranteed highest NAV value of the first 100 months at maturity.

Samridhi Plus offers payment of fund value at the end of the policy term based on the Highest Net Asset Value (NAV) over the first 100 months of the policy or NAV as applicable at the end of the policy term whichever is higher. The policyholder can choose the level of cover within the limits, depending on his/her age.

Plan Parameters:

Entry age : 8-65 years

Maturity age : 18-75 years

Policy Term : 10 yrs

Premium paying term (PPT) : 5yrs or single premium

Minimum Premium:

Yearly Premium : Rs.15000/-

Half Yearly : Rs.8,000/-

Quarterly: Rs.4,000/-

ECS : Monthly Rs.1500/-

Single Premium: Rs. 30,000/-

Sum Assured:

For age below 45 years:
Min.10 times of the annualized premium

Max. 20 times of the annualized premium

For age 45 years and above:
Min.7 times of the annualized premium

Max. 10 times of the annualized premium

Single Premium:

For age below 45 years:
Min:1.25 times the single premium

Max: 5 times of the single premium

For age 45 years and above:
Min. : 1.10 times of the single premium

Max.: 1.25 times of the single premium

Top-up:
No Top-up shall be allowed under the plan.

Accident Benefit:

Accident Benefit is availabe at extra Rs.0.50 per thousand Sum Assured

Premium Allocation Charge:
For Single premium policies: 3.3%

Allocation Charge for Regular premium
1st Yr- 6%
2nd-5th year- 4.50%

Other Charges:
i) Policy Administration charge: Rs. 30/- per month during the first policy year and Rs 30/- per month escalating at 3% p.a. thereafter, throughout the term of the policy.
ii) Fund Management Charges (FMC): 0.90% p.a
iii) Guarantee Charge: 0.40% p.a

Benefits payable on death:

The nominee will get Sum Assured or Policyholder’s Fund Value whichever is higher

Maturity Benefit:
Highest NAV Fund Value Or Maturity Fund Value Whichever is higher.

For more details pls contact VCare Financial Solutions : 9869629086 or write to us on vcarefinsol@gmail.com

IFCI Tax Saving Long Term Infrastructure Bonds– SERIES II

Issuer	IFCI Limited ("the Issuer")
Offering	2,00,000 Unsecured, Redeemable, Non-Convertible Bonds of Rs. 5,000/- each aggregating to Rs. 100 Crore with a green-shoe option to retain over-subscription for issuance of additional Infrastructure Bonds
Type	Private Placement basis
Instrument	Unsecured, Redeemable, Non-Convertible Bonds Series II having benefits under section 80 CCF of the Income Tax, 1961 for long term Infrastructure Bonds
Rating	BWR AA- by BRICKWORK RATINGS INDIA PVT LIMITED
Eligible Investors	Resident Indian Individual (Major) and HUF through Karta of the HUF
Security	Unsecured
Face Value	Rs. 5,000/- per bond
Issue Price	At par (Rs. 5,000/- per bond)
Minimum Subscription	1 Bond and in multiples of 1 Bond thereafter,
Tenure	10 years, with or without buyback option after five years
Options for Subscription	The Bonds are offered under the following 4 options- • Option I - Non-cumulative and Buyback after 5 years • Option II - Cumulative and Buyback after 5 years • Option III - Non-cumulative and no Buyback • Option IV - Cumulative and no Buyback
Redemption / Maturity	At par at the end of 10 years from the deemed date of allotment. For Cumulative Option, at par with cumulated interest thereon.
Coupon rate	• Option I & II - 8% p.a. • Option III & IV - 8.25% p.a. Option II and Option IV will have cumulative payment at the end of the Buyback period or 10 years, as per the option opted by the Investor.
Listing	Proposed to be listed on BSE
Trustee	Axis Trustee Services Limited
Depository	National Securities Depository Ltd. and Central Depository Services (India) Ltd.
Registrars	Beetal Financial & Computer Services (P) Ltd.
Mode of Payment	Interest payment will be made through ECS/At Par Cheques/Demand Drafts
Issuance	Demat form. But, investors interested for physical form may provide a cancelled cheque, self-certified copies of PAN Card and residential proof
Trading	Demat mode only following expiry of lock-in period
Issue Open Date	November 16, 2010
Issue Close Date	December 31, 2010 • The issuer would have the right to pre-close the issue or extend the closing date by giving 1 day notice to the Arrangers
Deemed Date of Allotment	January 31, 2011
Buyback dates	January 31 every year commencing from year 2016 till year 2020.

Pramerica Dynamic Fund with DART (Dynamic Asset Rebalancing Tool)

Pramerica Mutual Fund has introduced its open-ended dynamic asset offering - Pramerica Dynamic Fund - using a proprietary tool, Pramerica Dynamic Asset Rebalancing Tool (Pramerica Dart).

The scheme will invest in debt and equity instruments. The allocation to equity and debt will be determined by Pramerica DART.

The tool takes into account three key factors that influence the markets - fundamentals, volatility and liquidity and comes out with a score that tells how much of equity should be held in the portfolio. This can range from 100-30% in equity depending on market valuations. Fund managers will actively manage the portfolio within the limits prescribed by the model.

The fund aims to achieve long-term capital appreciation by investing in an actively-managed diversified portfolio comprising equity and debt instruments.

The fund will invest 30-100% in equity and the fixed income exposure is capped at 70% of the assets. The fund benchmark comprises 50% of Nifty and 50% of Crisil MIP Index.

The fund will be managed by Ravi Gopalakrishnan and Mahendra Jajoo.

There is no entry load. To curb traffic, there is an exit load of 1% if you decide to redeem before completing one year in the scheme after allotment of units. NFO closes on December 3, 2010 before it reopens on December 13, 2010.

Minimum investment : Rs. 5000/-

Why should you invest in this fund?
The fund aims at generating equity comparable returns with reduced volatility through active diversification between equity and debt in a disciplined manner.

The fund will employ Pramerica DART, the proprietary tool which aims at optimising returns through a prudent asset allocation model.

For any queries pls feel free to contact us on 9869629086 or do write to us on vcarefinsol@gmail.com

VCare Team

LIC has launched a new plan “Wealth Plus" on 9th of February,2010.

Wealth Plus (Plan no 801) is an unit linked plan having a term of 8 years and with a Payment term of 3 years or Single premium. This plan will be available for three months from 9th february. Your money will be invested in the money market till the Plan closes for sale, which is three months after February 9th. There after only it will be invested in the equity market, which implies that the risk is only medium.

People in the age range of 10 to 65 can avail this plan by paying a minimum premium of 40,000 under single premium mode or Rs. 20,000 annually for three years. Maximum premium has no restrictions.

Your risk is covered for a minimum of 1.25 times of the premium you pay under single premium mode. The maximum risk cover one can avail under single premium for age less than 40 is 5 times the premium, while it is 2.5 times if age is below 50 and 1.25 times for ages above 50. Under the regular premium mode the minimum risk cover is 5 times and the maximum cover is 10 times the annual premium for ages below 50.

This plan guarantees to pay you the higher of the Highest NAV reached in the first 7 years of its term or the 8 th year NAV. But this guarantee of highest NAV can only be availed if you complete the term of the policy and of course, a charge is levied for this guarantee at the rate of 0.35% of the fund value.

The plan comes with an extended life cover for a period of 2 years after end of the term. You can surrender the plan even within three years, but the amount will be only paid after three years from date of the policy as per IRDA restrictions and there are no surrender charges.

Instead of charging higher premium for risk cover based on age every year, This plan charges only a level premium based on age at entry. But in the case of revival of a lapsed policy , the age at date of revival is used to arrive at the risk cover premium. Revival can be done only within 2 years from date of lapse and Rs. 500 is charged for revival.

The plan has an inbuilt feature of partial withdrawals wherein, withdrawals can be after three years from commencement of your plan and the maximum withdrawal is restricted to twice in a year. Other condition to be satisfied to make a partial withdrawals is that there should be a minimum of one annual premium left in the fund, and the minimum amount to be withdrawn must not be less than Rs.2000.

Loan is not granted in this plan as one can avail the same via partial withdrawals. The plan also does not provide for payments of Top up premiums.

As maturity benefit you are offered the highest NAV for your units in the fund,if you complete the term of 8 years under the plan.

Death benefit equals the sum assured plus the fund value during the term of the policy. For death during the first two years of the plan, and also after the term of the policy during the extended risk cover period the sum assured is only paid as the benefit.

As maturity benefit you are offered the highest NAV for your units in the fund, if you complete the term of 8 years under the plan.

You can avail an accident rider benefit, by paying @ Rs.0.50 per thousand risk cover.

LIC's Jeevan Nischay policy review

Life Insurance Corporation (LIC) of India has launched one more new guaranteed single premium plan called Jeevan Nischay. This plan is very much in line with last year’s Jeevan Aastha. This new policy will be sold to ‘existing‘ customers of LIC and will be sold for a limited period until end of March 2010. Yes, you got it right – this plan will be sold to only those who have an existing insurance policy with LIC.

Just as in the case of Jeevan Aashta, Jeevan Nischay is a single premium bond, as the protection it offers is only involving the basic cover. It will be a good instrument for guaranteed returns if not the efficient insurance, given the turbulent market conditions in the current economy. The specimen Maturity Sum Assured per Rs. 1000/- single premium is given below for some ages and terms:

Age at Entry	Jeevan Nischay Policy Term
	5 years	7 years	10 years
20	1257	1410	1718
30	1256	1409	1715
40	1249	1400	1699
50	1226	1369	1645

As you can infer from the above table, an investment of Rs 1 lakh would mature into Rs 1.7 lakh after 10 years for those below 40 years at the time of availing policy. Other salient features of this policy include:

• Minimum age at entry should be 18 years with 50 years being the upper limit.
• The policy terms are five, seven and 10 years (See the table above).
• The Minimum Single Premium is priced Rs.10,000 with Maximum Single Premium being Rs.10,00,000.
• If premium amount is Rs. 25,000 or higher, the policyholder would receive a higher maturity sum assured due to available incentive.
• Loan facility available under this policy.
• Policy can be surrendered after one year of commencement of the policy.
• If the policyholder is not satisfied with the terms and conditions of the policy, can opt for refund within 15 days from the policy purchase date.
• On death during the first policy year, five times the single premium is payable.

For more detailed information on the policy visit this illustration or refer to lic’s policy home. You may also be interested in knowing about the previous policies by LIC such as Jeevan Varsha and Jeevan Aastha.

For more details contact us on 9869629086

Disclaimer : This information is based on the details as available on LIC site at the time of writing this article. Please contact LIC agent / Development officer/ Regional office for official and accurate details.

LIC's New Plan - JEEVAN VARSHA

Life Insurance Corporation of India (LIC) has launched a close ended guaranteed addition money back plan 'Jeevan Varsha' and expects healthy response.

“After the huge success of Jeevan Astha which closed recently, the corporation has launched another guaranteed product. This is a regular premium money back policy, having premium payment mode such as yearly, half-yearly, monthly.

The plan would be made available for sale only between 16 February and 31 March, 2009.

Jeevan varsha plan is available with two policy terms of 9 and 12 years. The policy will offer Rs65 per Rs1,000 sum assured and Rs70 for a 12 year term.

Any person who has completed 15 years of age can buy this policy. The maximum age at maturity will be 75 years. The plan has provisions for loan, surrender and revival.

LIC officials said, though guaranteed addition in Jeevan Varsha is lower than Jeevan Astha, the internal rate of return will be similar to it taking into consideration all factors.

For more details of the plan, pls contact VCare Financial Solutions 9869629086 or write to us on vcarefinsol@gmail.com

Importance of Insurance

Insurance is an important component of any sound financial plan. Different types of insurance protect you and your loved ones in different ways against the cost of accidents, illness, disability, and death. Insurance decisions you make should be based on your family, age, and economic situation. There are many forms of insurance and, unfortunately, no one-size-fits-all policy. In finance sector there are many companies provides you different types of life insurance services and plans among them some would be really provides you sufficient coverage against investment.

But why should you take up insurance and why should you spend money on buying the policy. It is certainly true but it is not for a life insurance is always used. It can be a operative source of investment, credit provider etc So the policy holders should make a proper decision about it. Apart from Tax benefits that it provides it also safeguards your loved ones in the event of any unforeseen happenings. No matter which type of policy you choose to take out, make sure to read the fine print before deciding on a policy or service. If you feel that some of the conditions can’t be suits, there is little point in having the policy, as the end result may be that your family will not receive any benefits upon your death. Make sure that you understand what is, and is not, covered by the policy.

As of today people are hell bent on getting themselves insured from some major reputed insurance company or the other. The LIC (Life insurance corporation) has the maximum amount of investors. Life insurance is universally acknowledged to be an institution, which eliminates 'risk', substituting certainty for uncertainty and comes to the timely aid of the family in the unfortunate event of death of the breadwinner.
By and large, life insurance is civilisation's partial solution to the problems caused by death. Life insurance, in short, is concerned with two hazards that stand across the life-path of every person:
1. That of dying prematurely leaving a dependent family to fend for itself.
2. That of living till old age without visible means of support.

Life Insurance Corporation (LIC) has different plans and services that are catering to a wide range of customers. All one has to do is to pay the required premium as per the service/plan. It could be yearly, half-yearly and even monthly. Getting yourself insured is extremely important. Whether there is a robbery or an uncanny mishap or about securing your financial future, if you are insured you remain safe.

For more information contact VCare Financial Solutions 9869629086 or write to us on vcarefinsol@gmail.com

Principal Emerging Bluechip Fund

Mutual Fund on Monday launched the Principal Emerging Bluechip Fund, an open ended equity scheme, which will predominantly invest in small and mid cap companies to tap high growth opportunities offered by such stocks.

The fund opens for subscription on September 22 and will close on October 20. This fund will be benchmarked to the CNX Midcap Index. The scheme will offer both growth option and dividend option. For the purpose of maintaining liquidity or tap market opportunities the fund’s portfolio may also include large cap stocks.

The subscription for the scheme shall be allowed during the NFO at Rs 10 per unit and thereafter at NAV based prices upon re-opening for subscription. There is no minimum redemption amount. The minimum application amount is Rs. 5,000.

There is an entry load of 2.25 per cent, if investment is less than Rs 5 crore. However, there is no entry load for investment of Rs 5 crores and above, as well as for direct investments. There is an exit load of 2.25 per cent if redeemed before one year from the date of allotment.

Asset allocation pattern is as follows:
equity & equity related instruments of mid cap companies 65 per cent - 95 per cent
equity & equity related instruments of small cap companies 5 per cent - 15 per cent
equity & equity related instruments of companies other than mid & small cap companies - 0 per cent-30 per cent.

The AMC reserves the right to invest in equity derivatives, not exceeding 50 per cent of the net assets and in foreign securities and derivatives subject to certain statutory regulations.

Said Rajat Jain, chief investment officer, Principal Mutual Fund, “For a long term investor, mid and small cap stocks are a good bet as they offer higher growth opportunity. Mid caps can be volatile; however volatility can be neutralised by a longer investment horizon without significantly impacting the return expectations. In the current scenario quality mid caps are available at reasonable valuations even after factoring in the current volatility in the business environment and we intend to capitalise on such opportunities through this fund.”

The fund will be managed by Pankaj Tibrewal.

Invest urgently, Contact VCare Financial Solutions - 9869629086 or write to us on vcarefinsol@gmail.com

Life Insurance - A Need

One of my good friend had a small argument with me, that she would not "invest" in Term Plan of Insurance, because she will not get any "returns" out of it. I believe "investing" in a term plan looked a very unprofitable thing to her as she never gets back the money she paid as "premiums" , if she survives.

With respect to Term insurance , she understood the fact that her family will get the money from insurance company in case of her death, but she was concentrating on the fact that she would not get back anything if she survives. What is the return in that case? Nothing !!! , and looked like some one is fooling you with a product called "Term Insurance" , where you are "investing" premiums to get nothing at the end.

Let me now tell why this happens and some give you some insight on this matter.

I have already talked earlier in my last post "Life Insurance and how to go about it" , about Term Insurance . Let me now take more deep dive into it and talk about the reasoning part.

I will first talk about fundamentals of Insurance and then talk about Endowment Policies and why are they popular, and what people don't realise about them. and how Term insurance is the right thing for most of the people.

Basics of Life Insurance

What happens in a average family : There is someone who earns and his family comprises of wife , kids , parents . if not all there is a subset of these family members. The head of the family earns and his family lives happily. All the expenses are met from the earnings of this main member , most of the time the husband. Now consider this person dies in an accident or for that matter because of any event. What happens? What happens to his family members other than the psychological trauma . If they don't have money to take care for them selves ,either some one from family have to take up the job and start working which may not be possible for them, or They have to decrease their standard of life to maintain the expenses . They are now totally unsecured from future's point of view. In short they are totally messed up , which should not have happened. I gave this detailed explanation for the circumstances because i wanted you to understand how bad can happen and proper measures must be taken care for this.

What is the Solution?

Adequate Coverage !!! , this cant be compromised... You must have a backup plan which can give your family the same kind of income which confirms that they are not short of money in case the main earner is gone. If there are some debts like Home Loan , or any other tasks which need money apart from regular income , the cover must be good enough to cover that too..

For example : Robert has a family expenses of 25,000 per month and there is a Home loan of Rs 25 lacs to be paid within 10 yrs. He is 27 yrs old. He has a wife , 2 kids and parents. All of them are dependent on him financially. He has investments of 5 lacs. Now in this case. In case he dies , who will take care of Home loan, how will provide them enough money to live life comfortably. They need 25k * 12 = 3 lacs per year. which they can get per month if they have 35-40 Lacs of money . If they put this in bank , they will get Rs 25,000 per month as interest which they can use. Considering inflation it will not be enough after some years , but lets leave it now for this example. Add home loan of 25 lacs to this 40 lacs and what we come to know is that this family must be covered with minimum Rs 65 lacs . Rs 75-80 Lacs is a decent cover for this family. Now if he takes a cover of 80 lacs for his family, from that day he can happily live all his life without any tension , thinking what will happen if he is not there. He will be attain peace of mind , and not be worried for it. He must get a lot of internal peace because his Family is protected with a good enough cover to take care for them . And this is what you get in "return" from Insurance. No monitory return can give you more satisfaction than peace of mind.

So before doing anything else , his first step is to give adequate cover to his family and that's the most important responsibility for him as a Husband , Father , Son . He must understand that this is not an investment for monitory benefit later in his life , but its for his family happiness and future.

One point to remember and not forget is that this is the minimum cover required for family and anything less than this will be taking risk with family future.

Term Insurance Policies
Lets discuss the features of Term Policies with respect to above example.

Cheap Premium : The premium is very low for Term insurance Policies. For above example . The yearly premium for Rs 75 lacs cover for 25 yrs is just Rs 20,000 yearly or just 1,600 per month !!! . This is in any way affordable for most of the people. Its providing the fundamental requirement of Good cover and low premium and if you think of returns , Good cover and low premium can themselves be seen as good enough return. You family protection at low cost is the return you get.

Opportunity to invest rest of the money in High return Investments :
With term Insurance you save a lot of money in premium and now you can invest this money as per your wish in high return instruments , anyways in Endowment policies you put money for long term and you get it after so long time. So you can now always put your saved money in things which are long term investment products and return great returns.

One of those things is Equity Diversified Mutual funds and Direct Equity (depending on persons ability and interest). In long term Equity Diversified gives fabulous returns (15-20 yrs) and the risk is minimised because of long term. And if you consider India growth story , it looks great in long term , hence Equities for long term is the most obvious choice . They will give you return of 15%+ CAGR. (15-20 yrs)

Also it will be flexible , you can not invest for a year or two , if you want to use the money for your family vacation or some important event.

Conclusion :
Insurance is not an investment product , its a Protection instrument for your Family or any one your want to cover. There are other products for your investments .

Let your finances be the way you want your life to be , SIMPLE !!!
Don't mix Insurance and Investments.

Contact VCare Financial Solutions : 9869629086

IDFC launced Strategic Sector (50-50) Equity Fund

IDFC Mutual Fund has launched an open-ended scheme - IDFC Strategic Sector (50-50) Equity Fund.

The fund will invest up to 50 per cent of its assets in a chosen sector that is positioned for high returns, while the balance amount may be invested in companies across market capitalisations and across sectors, a news release from the company said. This scheme may also invest in debt and money market instruments. This fund will be benchmarked against the Nifty.

If you analyse the market data over the years, you will note that there has been one sector that has predominantly outperformed the market. The Strategic Sector (50-50) Equity Fund is an innovative product that aims to generate long-term capital appreciation by investing in spotting the leading sectors for each year.

IDFC mutual fund which recently took over Standard Chartered Mutual Fund has decided to launch a scheme based on this called IDFC Strategic Sector (50-50) Equity Fund.

The said equity fund, would invest 50% in one sector while the remaining funds will be pumped-in a diversified portfolio.

IDFC Mutual Fund Investment Head Rajiv Anand said, every year the sector that performs is different and the fund managers of the scheme will try to identify which sector is likely to dominate in that year and will invest in them.

Meanwhile, a study done by Citigroup found that gains made by individual sectors were far greater than the capital market.

“In 2001, it was the auto sector that scored highest gains and outsmarted the Nifty index for that year. In 2002, it was energy sector, in 2003, it was metal and in 2004, it was real estate.
Incidentally, the outperformance has almost always been by a wide margin,” Citigroup added.

Anand said as per the Citigroup study, the gains made by even the second and third best performing sectors also were way ahead of gains made by the Nifty.

The wide-based Nifty index went up by 55% during 2007 while metal sector shares went up by a whopping 193% in the same year. In 2005, Nifty was up by 36% while real estate shares were up by 289%.

Fund category :Equity - Diversified

Scheme plan :Growth, Dividend

Scheme type :Open Ended

Launch date :August 28, 2008

Fund closes : Sept 18, 2008

Fund manager :Mr. Kenneth Andrade

Initial Price :Rs 10/-

Min investment :Rs 5,000/-

Entry load :2.25 %

The scheme will charge an entry load of 2.25 per cent in case of investments of less than Rs 5 crore, while there is no entry load for investments of Rs 5 crore and more.

So, take the opportunity & start your investments in IDFC Strategic Sector (50-50) Equity Fund.

Contact VCare Financial Solutions on 9869629086 / 24371526 or write to us on vcarefinsol@gmail.com

ICICI Dynamic Fund - Dividend declared - 20%

Dear All,
ICICI Dynamic Fund has declared 20% dividend. Record date is 22nd August 2008. Dividend Yield - 10.79
So hurry up invest urgently.
Contact VCare Financial Solutions - 9869629086 or write to us on vcarefinsol@gmail.com

Fixed Maturity Plan

Fixed maturity plans (FMP) are closed-end debt funds that aim at generating returns that are indicated at the time of launching the scheme. Mutual funds are not allowed to launch assured return schemes. FMPs, therefore, only indicate the likely returns. FMPs can generate predefined returns because of the way their portfolio is constructed. They invest in debt securities which mature around the tenor of the fund. Since the instruments are held to maturity, there is no risk of the value of the security being affected by interest rate movements and fund managers are able to give returns indicated at the time of investing.

FMPs come with various maturities. The popular tenors are of one month, three months and a little over a year. As closed-end funds, FMPs cannot accept any fresh investment once the NFO is over. To help investors deploy their available funds and reinvest money from maturing FMPs, mutual fund houses launch a continuous series of FMPs. The NFO is generally open for two to three days and the minimum investment is usually kept at Rs 5,000. Since investors cannot withdraw their money till the maturity of the scheme, they need to choose a fund with a tenor that matches their investment horizon.

Expense ratio. This varies from 0.25 to 1 per cent for FMPs. The prevalent yield minus the expense ratio can be considered as an indicative return from the FMP. The expense ratio is mentioned in the offer document.

Why FMP?
FMPs are similar to bank fixed deposits (FD) in features such as fixed tenor and indicative return. But they do not guarantee returns like FDs do. So, why should an investor choose an FMP over an FD? The answer lies in the tax efficiency that FMPs bring to their returns.

The example given in the table shows that while FMP attracts the dividend distribution tax (DDT), FD is subject to income tax. Since DDT is lower than the income tax rate, FMP gives a higher post-tax return than FD.

FMPs with maturities of greater than one year provide capital gains efficiency by structuring the tenor in such a way that investors benefit from double indexation. For example, by holding the FMP launched on 30 March 2008 for a little more than a year (370 days) till it matures on 4 April 2009, an investor gets to use the cost of inflation index applicable for the years 2007-2008 (year of purchase) and 2009-2010 (year of redemption). The tenor of the fund and the date on which it is launched allows double indexation, thus reducing the capital gains tax applicable on the returns.

FMPs suit investors who have a fixed investment horizon and would like to know the likely returns. The tax advantages make them superior to FDs. The only caveat is that investors need to evaluate the credit risk involved in the securities that the FMP is likely to invest in.






1 Dividend distribution tax
2 Assuming the FMP distributed the entire Rs 350 as dividend

Source : Outlook money

Dividends Declared

Hello Everybody,
Following funds have declared the dividends :
Diversified Equity Funds :
SBI Magnum COMMA Fund has declared 20% dividend, record date 25th July 2008. Dividend Yield - 12.27%
So hurry up start investing... the rally is on now.

Contact us for details on 9869629086

Power of SIP

What is SIP?
When it comes to investing in the stock markets, we often wait to collect a large amount of money and invest it all at once. These investments are done in order to finance our future goals like buying a house, child's education, marriage or retirement planning. However recurring household expenses always erode the money which we would have otherwise kept for investments and the result - we end up compromising on our financial goals. Systematic Investment Plan (SIP) is a financial planning tool through which you can invest in the stock markets through small, periodic installments. Eg: you can invest as low as Rs 500/- on a monthly basis. Moreover you can also select the tenure of your installments. SIPs help you set aside a fixed amount every month for investments thus contributing towards your financial goals.

Builds Investment discipline

You earn regularly
You spend regularly
But, do you invest regularly ?

We all know that we need to invest regularly in order to set aside some amount of our earnings for future needs like buying a house or car, planning your children's future or planning for your retirement. Unfortunately most of us end up making sporadic investments which help little in achieving our financial goals. Through an SIP, an investor pledges to invest a fixed amount of money on a monthly basis in a mutual fund scheme for a predetermined time period. Also SIP provides the investor with the flexibility to increase the amount of his monthly installment at any time. The investor can also terminate the SIP at any time before the end of the tenure at no extra charge (A minimum of 6 monthly installments are however required for any SIP). Thus in a disciplined manner, you automatically invest a fixed amount every month for your future needs rather than spending it. Eg: You can start with investing Rs. 1000/- every month for a period of 3 years thereby investing Rs. 36000/- in total. Collecting Rs. 36000/- for investments right away may be difficult considering your household expenses, but you can always set aside Rs 1000/- every month to be invested in the scheme of your choice. Also if you are unsatisfied with the performance of the scheme or for any other reasons, you can terminate the SIP before the 3 yr duration at no additional charge.
Investment Discipline through SIPs now comes with an added advantage - Life Insurance e.g. Birla Sun Life Century SIP and Reliance SIP. SIP investments are also affordable & convenient.
Affordable & convenient
Affordability
Investments do not necessarily mean that one has to collect a substantial chunk of money to invest. One can start investing as low as Rs. 500/- through an SIP. This very feature of small monthly installments makes SIPs light on your wallet and an affordable investment tool.
Convenience in mode of payment
When we think monthly installments, we generally think of one more date to remember apart from the bill payment dates. That's not the case with an SIP. Birla Sun Life Mutual Fund offers you the convenience of direct debit of your SIP installments through Electronic Clearing Service (ECS) facility. Your SIP amount automatically gets debited from your bank account provided we receive a mandate for the same in your investment application.
Convenience in selecting installment dates
Birla Sun Life Mutual Fund offers you a choice of 7 dates to choose for your monthly installments. You may choose the 1st, 7th, 10th, 14th, 20th, 21st, or 28th of the month to pay for your SIP installments. Reliance Mutual Fund offers you 4 dates to choose 2nd, 10th, 18th or 28th.
SIPs have never been so affordable! Now you get life insurance cover of upto 100 times your SIP amount through Birla Sun Life Century SIP and Reliance SIP Insure Offers you insurance upto Rs. 10 Lac. (T & C apply).
SIP installments also help compounding your wealth.
Helps in compounding your wealth
Getting rich is simpler than you think, here's a simple formula to get rich:

Start Early + Invest Regularly = Create Wealth

Invest Regularly
Systematic investing has a compounding effect on your investments. In the long term, an investment as low as Rs 1000/- per month swells up into a huge corpus.This can be best explained by the following graph. The graph shows the value of investment at various rates of return for Rs. 1000/- invested every month for 30 years.

Data Source & Computation: Internal

Start Early
Now that we know that the power of compounding can create magic for your investments, starting your investments early also has its own advantages. Starting early means that the power of compounding starts acting on your money earlier thereby generating higher returns. Consider the following graph:

Data Source & Computation: Internal

An individual who starts planning for his retirement at 25 yrs of age by investing a modest
Rs. 1000/- month collects upto Rs. 40 Lac on retirement whereas his investment over the period is just Rs. 4.2 Lac

On the other hand if the same individual delays his retirement planning by 5 yrs, his wealth upon retirement reduces significantly (approx Rs. 15 Lac.)

Now you can enjoy insurance while your wealth is compounding. With Birla Sun Life Century SIP & Reliance SIP Insure you get life insurance FREE.

Volatile markets are of major concern. Do you know that SIP helps you tame market volatility?

Fights market volatility
Every investor dreams of purchasing stocks at a low price and selling it at a higher price. But, how does one know whether any given time is the right time to buy or sell? Many retail investors try to judge the market movements and end - up losing their monies in the long term.A more successful strategy is 'Rupee Cost Averaging' wherin you invest a fixed amount regularly. Thus you purchase more when the prices are low and purchase less when the prices are high. SIP investments takes advantage of this strategy:

The above example is merely an illustration of 'Rupee Cost Averaging'. The NAVs and returns generated are purely indicative and do not depict the performance of any mutual fund scheme.

Mr. A and Mr. B - One time Investor both invest Rs. 6000/- in a mutual fund scheme. SIP investor invests Rs. 1000/- per month whereas Mr B - One Time thinks that an NAV of 10 is the right price to invest.
In case of the SIP investor, his monthly investments automatically help him purchase more units when the prices are low. In tha same way he purchases less units when the prices are high.
In the long term, the SIP investor gains as his investments are unaffected by market volatility.

Now fight market volatility + get life insurance. Birla Sun Life Century SIP and Reliance SIP Insure gives you FREE life insurance cover.

Fights Inflation
SIP helps the investors invest in the Equity Markets. But, how does that help beat inflation? Well, you may want to check out the following graph:

It is evident from the graph that in the long term, equity investments have helped outperform various other investment avenues and has also helped beat inflation by a huge margin.

It is evident from the graph that in the long term, equity investments have helped outperform various other investment avenues and has also helped beat inflation by a huge margin.

Helps plan for your financial goals

I wish to own a Honda City
Wish I could live in a 3 BHK penthouse with a sea view.
I want to take my family for a European tour.I need to plan for
my Child’s Education

SIP is a one stop shop to fulfill all your financial wishes and needs. It's really as easy as 1, 2, 3.
Click here to visit our Step by Step Financial Planning tool to plan for your financial goals.

Now you can get life insurance along with achieving your financial goals. That's one financial task off your shoulders! Birla Sun Life Century SIP and Reliance SIP Insure offers you FREE life insurance cover.

Helps Save Taxes
Do you always wait till December / January to hunt for the 'right' tax saving fund? While doing so you leave your investment to the mercy of the volatile market by making a lumpsum investment.
Now, you can start an SIP in Birla Sun Life Tax Relief '96 (BSLTR'96) / Reliance Tax Saver is an open ended Equity Linked Savings scheme. Investments of upto Rs 1 Lac in Birla Sun Life Tax Relief '96 / Reliance Tax Saver are exempt from tax as per Section 80C of the Income Tax Act.

Birla Sun Life Tax Relief '96 has been ranked 3rd among the Top performing equity Funds in the World by Lipper, a Reuters company. BSLTR'96 was judged so for its 10 yr performance (as on 31 Dec '07) on the basis of consistent returns among 6302 equity schemes considered for this ranking.

Now you can Save Tax + Create Wealth + Get Life Insurance Cover! Start an SIP in Birla Sun Life Tax Relief '96 through our Century SIP scheme and get life insurance cover of upto 100 times the installment.

About Century SIP
Protection and wealth creation are the two objectives of any investor. Birla Sun Life Mutual fund now offers you the benefit of both through Birla Sun Life Century SIP (CSIP).

Wealth Creation – Systematic Investment Plans (SIP) as a mode of investment is known to create long term wealth for the investor.

Protection – Century SIP offers its investors Life Insurance Cover of upto 100 times the SIP installment amount.

Features
Installment amount Rs. 1,000 per month (min CSIP)
Entry Load : For purchase of units under CSIP: 2.25%
Exit Load**: If Redeemed / switched out within 3 yrs: 2%; If Redeemed / switched out after 3 yrs: Nil
Payment : Electronic Clearing Service (ECS) or Direct Debits or Post Dated Cheques (PDC)
Life Cover Proceeds^ : Goes to the nominee
Benefits to Nominee^: Fund Value + Life Cover equivalent upto 100 times SIP installments
Schemes Available : All Open Ended Equity Schemes
**In the unfortunate event of death of the investor, no exit load on redemption/switching out of units by the nominee/joint holder, as the case may be. ^in case of pre mature death

Life Insurance Cover
The Insurance cover available with Century SIP will be absolutely free for the investor. The cost of insurance will be entirely borne by the AMC.

100 times Insurance
In the unfortunate event of the demise of an investor during the tenure of the SIP, the nominee gets the Fund Value + Insurance Cover equivalent upto 100 times monthly SIP installments. The insurance cover offered to the investor grows with the tenure of the SIP as shown below:

Year -- Life Insurance Cover
1 - Monthly SIP Installment x 10
2 - Monthly SIP Installment x 50
3 - Monthly SIP Installment x 100
4 onwards till end of tenure - Monthly SIP Installment x 100

All the above mentioned limits are subject to maximum cover of Rs. 20 lacs per investor across all schemes/plans/folios.

Insurance Tenure & discontinuation of CSIP
The tenure of CSIP is 55 yrs – Completed age of Investor. The life insurance cover offered to the eligible investor would continue even if the SIP stops after a minimum period of 3 years at the fund value subject to a maximum of 100 times of the monthly SIP installment. The cover ceases to exist on full/partial redemption or switching prior to completion of the SIP tenure.Please refer to the following flowchart:

Note – Insurance cover would cease, if investor redeems (fully / partially) or switch out (fully / partially) units before completion of the Century SIP tenure

* Fund Value = Value of units, accumulated under Century SIP, at start of the each policy year
No Paper Work
To avail of the life cover all an investor needs to do is enroll for a CSIP & sign a “Declaration of Good Health”. In case of unfortunate demise of investor the insurance claim will be directly paid to the nominee by the insurance company (Birla Sun Life Insurance Company.)
Benefits to Family / Nominee
In the unfortunate event of the demise of an investor during the tenure of the SIP, the nominee gets the Fund Value + Insurance Cover equivalent upto 100 times monthly SIP installments. Also no exit load will be cahrged for redemption / switching out of units by the nominee.
Consider the following example: Assuming a scenario where in an investor had started a 10 year CSIP @ Rs. 20,000 pm installment and a rate of return @ 8%p.a. On completion of the CSIP tenure, value of investment and insurance cover would be Rs. 36.59 lakhs and Rs. 20 lakhs respectively.The illustration below explains the same.

Rate of Return assumed @ 12% pa

Computations - Internal

Savings over Term Insurance

In Century SIP, you end up saving the Premium that you would other wise pay in case of term insurance.

For more information :

Contact VCare Financial Solutions on 9869629086 or write to us on vcarefinsol@gmail.com