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CONTINUE
TO RISE?
PAGE 16

GETTY IMAGES

Market rally

BEST PICKS
AT THE
PEAK
With the Nifty close to scaling 10K,
find out how to rejig your stock
portfolio and rebalance your mutual
fund investments. PAGE 2

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02 The Economic Times Wealth, July 24-30, 2017 Cover Story

Market rally
BEST PICKS

GETTY IMAGES
AT THE PEAK
The markets are at an all-time high. However,
there are still several pockets worth investing in.

The Nifty has rallied

significantly in past few years
NARENDRA NATHAN sic tenet of equity investing—de- gives a better picture. At 25.28, PE is at a seven-year high.
cisions cannot be based on ab- The broader market valua- 25.28

W
ith the broad- solute index values alone. That tion is no longer cheap. The rea- Nifty 50
er indices hit- is because a Nifty value of son is that the market has been PE
ting new highs 10,000 today will not be the going up relentlessly despite the
at regular in- same as Nifty value of 10,000 a lacklustre earnings growth in
tervals, the In- few years down the line. “In- the last 3-4 years. The Nifty PE is
dian stock market is on a roll. stead of looking at the absolute above 25, a seven-year high.
The benchmark Nifty is tantalis- value of an index, investors There is no reason to panic 20.19
ingly close to the 10,000 mark. should look at its valuation lev- though as experts do not fore- 9,900
The BSE Sensex breached the els,” says Vetri Subramaniam, see a big crash. “Though the
32,000 level for the first time Group President and Head, Eq- broader market valuation is
last week. uity, UTI Asset Management quite rich, the government’s
The Nifty has rallied signifi- Company. Stock market prices policy reforms, a stable macro
cantly in the past few years (see are determined by earnings in environment, liquidity flow 4,249
chart), generating handsome the long-term, though short- from global and domestic inves-
20 June 2007 19 July 2017
returns for investors. At a time term price movements are trig- tors etc, are still supporting the
like this, an investor should gered by sentiments, and, market,” says Navneet Munot, Since the valuation is high,
strategise keeping in mind a ba- therefore, the valuation matrix ED and CIO, SBI Mutual Fund. investors need to be careful now. Source: ETIG Database
Cover Story The Economic Times Wealth, July 24-30, 2017
03

However, since the valuations are al- After growth, the next factor to con-
ready high, investors need to moder-
ate their return expectations. For in-
sider while inveting is valuation.
This strategy is known as growth at CONSTRUCTION Capacity expansion
stance, the Nifty has only generated a reasonable price or GARP. As the
MATERIAL will help Greenply
moderate return of 7.65% since Sep- stock market is forward looking, some
tember 2010, the last time it crossed stocks that are expected to grow faster Unorganised players rule in this segment, Nifty 50
the 25 PE mark. in the coming years have already with a presence in plywood, laminates, 116.08
100 Greenply Inds
The markets right now are in a high moved up. “Investors should be cau- tiles, etc. Though there is not much change
value period. According to experts, tious about those pockets where valu- in tax, a higher GST would force more un-
such periods and lower point-to-point ation are quite demanding,” says Mu- organised players on to a level playing
returns should not deter investors not. field, benefiting organised players in the 99.81
from continuing with their regular in- There are several sectors that have medium term.
vestments, especially if they are doing benefited from GST but are not worth “With more than 60% of the market
it for the long term (7-10 years). Long- getting into because valuations have
share with unorganised players, large ply- 19 Jul 2016 19 Jul 2017
term investors can continue with their shot up. “Tiles and sanitaryware man-
wood players will be a major beneficiary of
regular SIPs without bothering much ufacturers are the main beneficiaries
the GST regime,” says Krishna Kumar, CIO, GREENPLY INDS
about current valuations (see page 8). of GST, but most stocks have already
Sundaram Mutual Fund. Among the two ANALYST RECOMMENDATIONS
Another way to generate better re- moved up,” says Kunj Bansal, ED and
CIO, Centrum Capital. Leather and large plywood players, we have picked
turns is to select sectors that are ex- BUY HOLD SELL
pected to do better than the market leather products is another segment Greenply Industries because of its lower
valuation (PE of 24.52 compared to 35.17 5 6 0
average. The theme playing in the with large unorganised players. GST
market right now is the shift from the will benefit the organised players like for Century Ply). Greenply’s net profit has VALUATION RATIOS
unorganised to the organised. Bata India and Relaxo Footwear. How- grown by 15.56% in the last five years com- PE PBV DIV YIELD (%)
Boosted by demonetisation and im- ever, both are quoting at very high val- pared to 7.88% clocked by Century Ply.
24.52 4.21 0.22
plementation of the GST, the shift is uations—PE of 45 and 50, respective- Greenply’s sales should pick up in coming
expected to pick up pace. “Formalisa- ly—and are not worth considering years because of the ongoing capacity ex- RETURN RATIOS
tion of the economy is benefitting the right now. However, there are sectors pansion. A `115 crore plant coming up in
PAT CAGR (%) ROCE (%) RONW (%)
large and organised players, but at where stocks are still available at rea- Hardoi, UP, will increase Greenply’s ca-
some point, we will witness a stand- sonable valuations. We have short- pacity from 32.4 million square meters 15.56 20.09 19.29
ardisation, where players in informal listed stocks that are quoting at rea- (MSM) to 46 MSM. The plant is expected to
sectors will also remodel their busi- sonable prices or those where the go on stream by December 2018.
M-CAP: `3,313 crore
ness and bounce back,” says Munot. high valuation is justified.
04 The Economic Times Wealth, July 24-30, 2017 Cover Story

JEWELLERY TEXTILES AND GARMENTS

The increase in tax rates on jewel-
lery was small (3% GST compared PCJ plans to set up The textile industry is mostly
unorganised and the GST has
Kitex has kept
to around 2% tax earlier), but large 25 stores a year come as a body blow for trad- capital needs low
organised players will benefit be- ers who operated mostly with
cause the opportunities are huge. Nifty 50 Nifty 50 116.08
130.12 cash. Since the unorganised 100 Kitex Garments
“Since the opportunity is big, the 100 PC Jewellers segment is big, most apparel
earnings template of these compa- manufacturers will benefit.
nies will change. This trend will However, some players like
not happen in a quarter and may Page Industries are quoting at
take a year or more to become vis- 116.08 a PE of 71 and PBV of 28. Then
ible,” says Pankaj Pandey, Head of there are players like Kitex 77.33
Research, ICICI Direct. Here again, Garments that are valued rea- 19 Jul 2016 19 Jul 2017
valuation is the biggest bottleneck. 19 Jul 2016 19 Jul 2017
sonably.
Titan Industries is already quot- Kitex Garments has grown KITEX GARMENTS
ing at a historical PE and PBV of 62 PC JEWELLERS by 21.16% over the past five ANALYST RECOMMENDATIONS
and 11 times, respectively. This is ANALYST RECOMMENDATIONS years, compared to Page In-
why we decided to go with PC Jew- BUY HOLD SELL
BUY HOLD SELL dustries’ 19.82%. With a mar-
ellers, which is still valued at rea- ket share of around 70% in in-
3 0 0
3 0 1
sonable levels. Though the growth fant-wear exports, Kitex is a VALUATION RATIOS
rate now is lower compared to Ti- VALUATION RATIOS
leading player. Infant clothing PE PBV DIV YIELD (%)
tan, PC Jewellers is taking steps to PE PBV DIV YIELD (%)
commands higher margins 19.65 4.09 0.39
benefit from the GST shift and gain 20.78 1.33 0.20 and there is a high entry barri-
market share from the unorgan- er due to stringent quality and RETURN RATIOS
ised players. It plans to set up RETURN RATIOS safety standards. Since Kitex
PAT CAGR (%) ROCE (%) RONW (%)
around 25 new stores a year, open- PAT CAGR (%) ROCE (%) RONW (%) has kept its capital require-
ing new showrooms in metros and ment low, it has been generat- 21.16 32.40 22.86
tier 1 cities, while taking the fran- 10.53 25.35 18.52
ing a good free cash flow.
chisee route for smaller cities. It M-CAP: `1,819 crore
M-CAP: `8,946 crore
also plans to increase its design ca-
pacity and add new products, es- All share prices have been normalised to a base of
pecially on the diamond side of the 100. ROCE: Return on capital employed; RONW:
business, where margins are high. Return on net worth. Source: ETIG Database.

PLASTIC PRODUCTS
The GST rate fixed now for plastic
furniture (28%) is higher than the
Supreme Ind may see
earlier rate of around 18%. So there double-digit growth
LUBRICANTS won’t be any significant gains for
large players in the short-term. Nifty 50 125.34
Though the government has However, industry experts say this 100 Supreme Inds
kept most petroleum prod- Stable crude prices 10% increase in tax rate is an anom-
ucts like petrol, diesel, avia- have helped Castrol aly and, therefore, will be brought
down to 18% soon. The opportunity
tion fuels, etc, outside GST, it 116.08
has kept automobile lubri- Nifty 50 emerging from other plastic prod-
cants within the GST’s pur- 100 Castrol India
116.08 ucts like piping and packaging is
view, helping players like huge. “Since the unorganised play-
ers have a large market share in 19 Jul 2016 19 Jul 2017
Castrol.
plastic products, big players should
Castrol is the price setter in
benefit from GST implementation
SUPREME INDS
the Indian automotive lubri-
cant market because of its 100.07 in the long term,” says Kumar of ANALYST RECOMMENDATIONS
strong brand recall and large Sundaram MF. BUY HOLD SELL
distribution network. More 19 Jul 2016 19 Jul 2017 We have shortlisted Supreme In- 13 3 2
importantly, the government dustries because of its reasonable
CASTROL INDIA VALUATION RATIOS
has kept the GST rate at 18% valuation and high return ratios. By
PE PBV DIV YIELD (%)
compared to the prevailing ANALYST RECOMMENDATIONS focusing on high margin value-add-
rates of around 28%. This is ed products, Supreme has demon- 34.18 9.47 1.30
BUY HOLD SELL strated its ability to maintain gross
because the unorganised seg-
10 2 1 margin at higher levels (around 35% RETURN RATIOS
ment is very large and the
government wants to facili- VALUATION RATIOS over the last decade). Though there PAT CAGR (%) ROCE (%) RONW (%)
tate the shift from unorgan- PE PBV DIV YIELD (%) will be a sluggish start due to high
10.10 33.04 25.02
ised to organised. Large or- GST rates on plastic furniture prod-
29.66 33.91 2.69
ganised players have already ucts, demand is expected to recov- M-CAP: `14,714 crore
started reducing prices, RETURN RATIOS er in the second half of 2017-18. Su-
thereby reducing the price preme will also benefit from initia- market share gain from unorganised play-
PAT CAGR (%) ROCE (%) RONW (%)
gap with that of unorganised tives like housing for all, doubling ers and low base of last year. Supreme is
players. Stable crude oil pric- 5.81 174.47 115.24 farm income, increased spending also increasing capacity. In addition to in-
es are also helping Castrol to on irrigation, water supply, etc. The creasing its capacity in its Khopoli plant
M-CAP: `20,210 crore company is expected to report dou-
maintain its margin. near Mumbai, it is also planning new capac-
ble-digit volume growth due to ities in Telengana and Assam.
Cover Story The Economic Times Wealth, July 24-30, 2017
05

Auto and auto ancillaries are direct benefi- nue and continues to show double-digit vol-
ciaries of the GST regime and most of the ume growth. The unorganised players are
AUTO ANCILLARY companies have already passed on this
benefit to consumers in the form of lower
more in the replacement market and to cor-
ner market share, Amara Raja plans to ex-
Minda is scaling up Amara Raja is prices. However, as in other sectors, most
stocks have already moved up, stretching
pand its capacities both in the two-wheeler
and four-wheeler space. Amara Raja also
product line controlling costs valuations. We have picked up Minda In- supplies batteries to UPS, inverters and in-
dustries from the ancillary space due to its dustries like telecom and newer verticals
Nifty 50 292.31 Nifty 50
95.59 fast growth rate and reasonable valuations. like solar batteries. Though margins will be
Minda Industries 100 Amara Raja Batt. Though it is a diversified player and manu- erratic due to price fluctuations in its main
factures products such as horns (17% of rev- raw material lead, it is taking steps to miti-
enue), lights (25% of revenue) and others, gate this by concentrating on profitable seg-
100 Minda Industries is very strong in switches ments and taking cost control initiatives.
116.08 (32% of revenue) and enjoys a market share
of 67%. To scale up its product line, it is also
116.08 entering alloy wheels and batteries. It plans Please send your feedback to
19 Jul 2016 19 Jul 2017 19 Jul 2016 19 Jul 2017 to raise its alloy wheels capacity from [email protected]
55,000 units per month
MINDA INDUSTRIES AMARA RAJA BATT. now to 1.2 lakh units per
month by March 2018.
ANALYST RECOMMENDATIONS ANALYST RECOMMENDATIONS
Among auto ancillar-
BUY HOLD SELL BUY HOLD SELL ies, battery is another
13 2 0 12 4 6 segment with large un-
VALUATION RATIOS VALUATION RATIOS organised players. We
have picked up Amara
PE PBV DIV YIELD (%) PE PBV DIV YIELD (%)
Raja Batteries due to its
35.23 5.76 0.13 30.04 5.54 0.51 better growth and re-
turn ratios. Amara Raja
RETURN RATIOS RETURN RATIOS is the second biggest
PAT CAGR (%) ROCE (%) RONW (%) PAT CAGR (%) ROCE (%) RONW (%) lead acid manufacturer
in India after Exide In-
34.27 21.43 26.71 14.26 28.28 20.32 dustries. The automo-
bile segment constitutes
M-CAP: `5,920 crore M-CAP: `14,369 crore
around 60% of its reve-
06 The Economic Times Wealth, July 24-30, 2017 Cover Story

Are small investors following

the right strategies?
Find out which plan of action will be the most effective for you in the current market condition.

YOGITA KHATRI ket levels can hurt your portfolio. “Typi- you are overweight, you might want to re-
cally, after a bull run, SIP returns will look jig your portfolio and invest in other asset

A
s the equity markets touch new attractive, but taking only short-term per- classes,” he adds.
highs, many investors are left in formance into account before starting an
the lurch trying to decide what SIP can prove counter-productive,” says Waiting it out
they should do next. While Deepak Jasani, Head, Retail Research, During bull markets, some investors have
some are excited by this pros- HDFC Securities. Neither starting SIPs nor the tendency to sit on the sidelines and
pect, and want to invest more to make the stopping them should be triggered by mar- wait for a correction. Delhi-based Shourya
most of the peak, others are wary of overval- ket conditions. Opt for them only if your fi- Asthana, 36, a product designer, is a case
uation and choose to exit. Yet others want to nancial goals and target asset allocation in the point. “I believe, when the US Fed
sit tight and see how things turn out before plan allow for equity exposure. “For in- increases interest rates, our markets will
taking a call. Here are the strategies of few stance, if you are underweight in equity correct,” says Asthana. However, small in-
such investors to help you decide what the based on your asset allocation plan, you vestors are better off not trying to predict
best course of action could be. can start afresh even at current levels, in a such market movements. “Waiting for cor-
staggered manner,” says Harsha Upad- rection in a bull market can turn out to be
Opting out hyaya, Chief Investment Officer, Equity, futile. Buying in instalments is a better
Meet Mumbai-based Arjun Amlani, 32, a
chartered accountant by profession. Over the
Kotak Mutual Fund. “On the contrary, if strategy,” says V.K. Vijayakumar, Chief In-
SHOURYA
past month, Amlani has stopped three SIPs
out of the four he had. “The stocks that my
ASTHANA 36, DELHI
mutual funds were holding looked over-val- ARJUN AMLANI EXISTING EQUITY
ued to me,” says Amlani. In a rising market,
there are bound to be multiple opinions 32, MUMBAI PORTFOLIO VALUE
about valuations. Only in hindsight would we
know if the valuations were expensive or not. EXISTING EQUITY
“If we look back at the Nifty level of 9,000, PORTFOLIO VALUE `12.75 lakh
valuations looked expensive then, but the in stocks and mutual funds
market is up more than 10% from there,” says
Kunj Bansal, ED & CIO, Centrum Wealth Man- PLAN OF ACTION
agement. Amlani had been investing `15,000 `23 lakh Waiting for correction to buy
a month through the three SIPs for two years. in stocks and mutual funds
good stocks.
Not only is it too early to judge the perfor-
mance of the funds, but is also unwise to take ACTION TAKEN IS IT A GOOD IDEA?
a call on individual stocks’ valuations when Stopping three SIPs because
investing through SIPs. “Taking a view on This strategy may not always
SIPs defeats the whole purpose of opting for of high valuations. work. It is best to invest
systematic investing,” says Ashwin Patni, systematically, across
Head, Products and Fund Manager, Axis Mu- IS IT A GOOD IDEA? market levels, in both
tual Fund. No. This defeats the whole purpose stocks and mutual funds
Although Amlani got a pretty decent re-
turn of around 15%, he was still not im- of systematic investing. to win in the long run.
pressed. “I opted for SIPs only because of the
fear of missing out,” he says. “My direct equi-
ty portfolio has given me much better re- vestment Strategist at Geojit Financial Ser-
turns, in the range of 25-60%, over the past AKSHAY NATEKAR vices. Bansal concurs: “Instead of taking
eight years,” he adds. 33, PUNE such cash calls, which are driven by biases,
Opting for SIPs should not be a function of look at stocks that are relatively better
fear. Further, like stocks, mutual funds too valued.”
need time to prove their mettle. Being a fi- EXISTING EQUITY However, sitting back and doing nothing
nance professional, Amlani understands the PORTFOLIO VALUE may be a good strategy for some investors,
power of equity for wealth creation, but has like Chetan Singh. This 29-year-old Bengalu-
more faith in buying stocks on dips and sell- ru-based MNC employee has been investing
ing them on highs. “A better strategy would
be to buy stocks that are fundamentally
`45 lakh systematically through market ups and
downs for seven years. “I invest `20,000 a
in stocks and mutual funds
strong at all levels to reduce the risk of losing month to meet a range of goals, from taking a
out on a good stock,” suggests Pankaj Karde, PLAN OF ACTION vacation to retirement.” says Singh. While
Head, Institutional Sales and Trading, Sys- SIPs should continue across market levels,
tematix Shares & Stocks. Buying quality stocks at regular inter- it’s important to note that this calls for re-
vals and continuing with SIPs. viewing and rebalancing, especially if your
Making the most of it target asset allocation goes haywire.
Some investors, on the other hand, are look- IS IT A GOOD IDEA?
ing to invest more through SIPs since these Yes. But it’s best not to over-diversify a Looking for better value
have yielded good returns so far. However, portfolio with too many stocks and MFs. Pune-based Akshay Natekar, 33, is self-em-
taking such ad-hoc decisions based on mar- ployed and looks to buy quality stocks on a
Cover Story The Economic Times Wealth, July 24-30, 2017
07

regular basis, irrespective of market levels. ket moves are more stock-specific than sec-
“This approach has helped me accumulate tor-specific,” says Karde. “Small investors
some really good stocks over the past 12 should leave sector allocations to financial
years,” says Natekar, who has a direct equi- experts,” adds Aditya Makharia, Head of Re-
ty portfolio of `8 lakh. He now wants to ac- search, Motilal Oswal Mutual Fund. Muthura-
cumulate `25 lakh, so that he can opt for man’s new strategy is to hold only four funds
portfolio management services (PMS). “I across the main categories—large-, mid- and
believe PMS will earn me 1-2% more return small-caps, balanced and diversified.
than mutual funds and also help diversify
my portfolio,” says Natekar, who has also
built a mutual fund portfolio of `37 lakh. Please send your feedback to
However, it is more advisable for retail in- [email protected]
vestors to stay away from riskier options
like PMS and opt for mutual funds instead.

CHETAN SINGH Rebalancing for success MUTHURAMAN

29, BENGALURU The current market conditions also call for
rebalancing and decluttering your portfo-
RMB 28, COIMBATORE
lio. Coimbatore-based Muthuraman RMB,
EXISTING EQUITY TOTAL EXISTING EQUITY
28, is an IT professional. He holds a total of
PORTFOLIO VALUE 10 mutual funds, five of which are sectoral PORTFOLIO VALUE
funds. “It has become a headache to man-
`7 lakh age these funds,” admits Muthuraman,
who is now looking to rebalance and trim
`5 lakh
in mutual funds down his portfolio by moving out of secto-
in mutual funds
PLAN OF ACTION ral funds. PLAN OF ACTION
While investing in concentrated themes
Continuing to invest Rebalancing portfolio by
likes sectoral funds can help deliver en-
through SIPs. couraging returns during growth phases, it moving out of sectoral funds.
IS IT A GOOD IDEA? can hit you hard during a lull, since they’re IS IT A GOOD IDEA?
cyclical and riskier than large-cap and di-
Yes, but fund performance versified equity funds. “Multi-cap or diver-
Yes, it is best not to invest too
must be reviewed regularly. sified funds are the best category of equity much in thematic funds.
mutual funds. Also keep in mind that mar-
08 The Economic Times Wealth, July 24-30, 2017 Cover Story

What you
SANKET DHANORKAR should do by tinkering with their SIPs. Starting
April 2002, the average 10-year monthly

A with your
s the market scales new rolling return from an SIP in the average
peaks, mutual fund inves- diversified equity fund stands at 14.7%, if
tors are left wondering if you continued investing throughout the
their fund portfolios will de- 10-year period, irrespective of the mar-
liver in the future. The ket situation. What if you had chosen to
high valuations pose a dilemma for
both new investors and regular SIP
investors. Here’s how they can make
the most of the market situation.
equity funds stop your SIP commitments whenever
the market valuations got stretched?
If you avoided the outflow when the
Nifty PE crossed 22, then the aver-
age rolling return from the SIP
Fresh lump-sum investments
If you are planning on investing in a
fund or starting another SIP, you
will need to take a nuanced ap-
proach, suggest financial planners.
now would be 15.5%—only 0.8% more
than if you had stuck to the SIP
throughout.

The other cost of stopping SIPs

For instance, if you are looking to in- While you should avoid fresh investments Staying away from the market and not
vest a large sum, then a diversified eq- deploying the money may come at an-
uity fund may not be the right choice. in pure equity funds, discontinuing SIPs other cost: the lesser the money you
The risk-reward is not favourable for have working for you, the lesser would be
making lump sum investments in a 100% may not be particularly rewarding. the final corpus generated from the SIP.
equity product at this stage. “Any lump-sum Over the past 10 years, a regular monthly in-
now may be best deployed in an equity sav- vestment of `5,000—total investment of `6
ings fund, where the money is invested lakh—would have helped you amass a cor-
across stocks, bonds and arbitrage in a man- pus of `12.23 lakh. On the contrary, stop-
ner that reduces the risk and makes it tax-ef- ping the SIP midway, owing to stretched val-
ficient,” says Neeraj Chauhan, CEO, Finan- uations, would have yielded a kitty of `9.25
cial Mall. These funds will deliver higher re- lakh. Another issue is what to do with the
turns than pure debt funds, but will be less money that is not used for the SIPs. In most
volatile than pure equity funds, as they in- cases, the amount would either remain idle
vest in debt and arbitrage instruments. For a in the savings account or be spent on house-
slightly long time horizon of say, 4-5 years, a hold or lifestyle needs. Clearly, you would
dynamic equity fund would be a better alter- be in a better position to reach the target
native to a traditional equity scheme, Chau- amount for your goals, if you remain com-
han adds. Here, the fund manager will dy- mitted to the regular savings habit. “The
namically switch the equity exposure, in- whole purpose behind taking the SIP route
vesting more when the markets are cheap is to maintain the investing discipline. This
and less when they are expensive. gets defeated when you play around with
it,” says Chauhan.
Looking to start an SIP? Besides, the problem with a start-stop ap-
Some investors might also be contemplating proach is that it is difficult to execute. Not
starting a fresh SIP in an equity fund. This many individuals would have the time to
approach may still work if the time horizon monitor the investment so closely. Even for
and the choice of the fund is right. Money in-
vested via SIP, at current market levels, is
Stop SIPs? Or continue investing? those who do, very few would ensure they
re-initiate the SIP when the market valua-
likely to fetch modest returns over the medi- The difference in the average return for regular SIPs and those undertaken tions become comfortable. Behavioural bi-
um term. A longer holding period may be re- when valuations were not too high, is less than 1%. ases usually creep in, preventing many
quired to squeeze out healthy returns. Apart from getting back to regular investing. In-
from stretching the time horizon, Chauhan REGULAR SIP stead of seizing the opportunity when the
10.1%
suggests that investors initiating an SIP may Minimum SIP WHEN market falls, investors would find them-
opt for a multi-cap fund, rather than a large- *return 11% NIFTY PE < 22 selves paralysed, say experts. Similarly, re-
or mid-cap scheme. A multi-cap fund retains balancing the portfolio—the need of the
the flexibility to decide the optimum mix Maximum 20.4% hour for many fund investors now—can be
across market capitalisations depending on Investors are difficult. One alternative would be to opt for
return
the relative attractiveness of each basket. 21.1% not likely to a trigger-based facility offered by mutual
This puts it in a better position to build a gain much by funds. Setting a trigger automates the pro-
discontinuing
portfolio, taking into account the current Average 14.7% cess of booking gains in a rising market—
market environment. Apart from this, if in- SIPs when when your fund makes a pre-determined
return 15.5% the market
vestors have some surplus, they should put level of gain, the trigger gets activated. How-
the money in a liquid fund, which can then valuations ever, investors would have to ensure the
*Average 10-year monthly rolling returns from SIPs during April 2002-June 2017.
be deployed at the right time, says Vidya Benchmark: CRISIL AMFI Diversified Equity Funds Performance Index
are high. money so redeemed is invested in a safer
Bala, Head, Mutual Fund Research, avenue—an income accrual bond fund, for
FundsIndia. “In case of any correction in the making the most of the correction.” should you continue with your monthly SIP instance.
market, just investing via an SIP will not ef- commitments in the current market climate?
fectively capture the depth of the correc- Regular SIP investors Or, would you be better off taking a break till
tion. Shifting money from a liquid fund in an If you have been investing regularly via SIPs, valuations become reasonable? Analysis sug- Please send your feedback to
equity fund in 3-4 instalments will help in you would have earned a healthy return. But gests that investors would not benefit much [email protected]
Guest Column The Economic Times Wealth, July 24-30, 2017
09

KEEP YOUR SIPS AS

SIMPLE AS POSSIBLE
MONEY Don’t be swayed by what AMCs and distributors say. The easiest way to
MYSTERIES dilute the magic of SIPs is to make them complex, says Dhirendra Kumar.

vestor continued investing a small SIP amount of

`5,000 in these each month for 20 years. The four
funds yielded `1.29 crore, `1.85 crore, `1.21 crore
and `2.05 crore respectively. Keep in mind, that
the total investment made in each case was a mere
`12 lakh .
However, it’s very easy to sabotage this, and
that’s exactly what many mutual funds are actively
trying to do. They are promoting the idea that a
plain and simple SIP is not good enough and that
investors must do something more. They suggest
adding various embellishments to the SIP to make
it better.
Generally speaking, these ‘enhanced’ (in reality,
degraded) SIPs en-
gage in a form of mar-
The real ket timing by modu-
value of SIPs lating the investment
based on market con-
lies in the ditions. These tricks
are offered by many
simplicity asset management
they bring to companies (AMC) and
even some distribu-
the table, tors. One common
trick is to increase or
and the decrease the SIP
based on index levels
hands-off or valuation of the
approach markets.
Another tactic is to
that they have an SIP, which
flows into a debt fund
teach the when the market con-
investor. ditions are supposed-
ly more suitable for
GETTY IMAGES
such funds. At a later
date, based on a predetermined set of rules, the

S
ystematic Investment Plans (SIPs) invest, even though that is the best time to do so. money flow is shifted from the debt fund to an eq-
work wonderfully in helping inves- They are wary of further drops and choose to uity fund. There are other plans that vary the date
tors get great returns from equity- wait to invest after the markets have reached the of the investment based on similar rules.
based funds. However, a major threat bottom. The reverse is also true. When the mar- Each of these is offered by an AMC or distributor
to investors being able to use this kets are too high, they don’t invest, waiting in- to enhance returns. They are sold by showing the
method of investment is the attempt by mutual stead for the markets to dip. The recent months investor some sort of a back calculation to prove
funds to fine-tune and optimise SIPs. It sounds have seen a lot of such behaviour. Obviously, that it’s a superior way of investing. However, they
strange, but it’s true. Let’s see how. these people are now torn between regret and miss the point entirely. The real value of SIPs lies in
Earlier in this series of articles, I had written stubbornly waiting for that dip to occur. the simplicity they bring to the table, and the hand-
about how SIPs were the best feature of mutual SIP investors tend to be immune to such im- off approach that they teach the investor. The mes-
fund investing. Through an SIP, you can invest a pulses. Whether the markets rise or fall, the SIPs sage behind these supposedly enhanced SIPs is ex-
regular amount in a fund. It is typically, an equity continue, simply because they are automatic and actly the opposite. They promote the idea that in-
fund, although SIPs are available for practically it takes some effort to stop them. Sooner or later, vesting in mutual funds is a complex activity that
every fund. That’s all you have to do, maths and as the markets go through their usual cycles, requires constant attention and adjustment.
psychology take care of the rest. pushing up the value of investments, SIP inves- The only adjustment that one should make to an
I had pointed out two important ways in which tors start making good money. This teaches them SIP is to increase the amount of the monthly invest-
SIPs help you save more and get higher returns. the value of continuing with their SIPs in re- ments as their income increases. That’s a natural
First, there’s the math. When you invest a fixed sponse to market conditions. This is the begin- increase, and the only one that makes sense. An
sum regularly you are allocated more units when ning of a virtuous cycle, creating a new genera- SIP is a wonderful investment technique, which is
the markets are low. It’s like buying anything tion of investors who understand the value of based on the principle of keeping things simple.
else—you will get more for the same amount of regular investing. Avoiding complexity is an important goal, and one
money when the price is low. However, when The combined impact of the maths and psy- that you, as an investor, should never lose sight of.
The author is the you eventually sell it, each unit gets you the same chology is amazing. Here are some numbers
Founder and price. This enhances your returns. from a little experiment that I quoted earlier. I se-
CEO of Value
Research
Second, there’s the psychology. When the lected four equity funds that are old enough and Please send your feedback to
markets turn downwards, many investors don’t calculated what would have happened if an in- [email protected]
10 The Economic Times Wealth, July 24-30, 2017 Review Preview

New app to benefit taxpayers Product launches

The My Tax app is being developed in-house by the Income Tax Department. MUTUAL FUND

T
he Income Tax Depart- convenience and simplicity Axis Mutual Fund has launched Axis
ment will soon launch a are key to alleviating fear of Equity Advantage Fund Series 2. The
mobile app that will act the taxman and widening the scheme will invest in a diversified
as a portal for almost any- tax base, having adopted the portfolio of equity and equity related instruments.
thing I-T-related. From pay- motto that taxpayers must be The minimum investment is `5,000 and the scheme
ments, tax deducted, to com- treated as customers. closes on 28 July.
munications from the Prime Minister Narendra
department, everything can Modi has sent a clear message ICICI Prudential Mutual Fund has launched ICICI
be managed through the My to the tax authorities that they Prudential Value Fund, Series 16. The small-cap
Tax app. need to ensure that taxpayers equity fund will invest in a well-diversified portfolio of
It is being developed in- do not fear the department. stocks. The minimum investment is `5,000 and the
house, a government official The department is working issue closes on 7 August.
told ET. The individual’s pro- on a number of initiatives to
file will be mapped to the per- Taxes (CBDT) to make the ad- will have mobile and desktop improve its image. UTI Mutual Fund has launched UTI Nifty Next 50
manent account number ministration non-intrusive versions. The app will provide ET had earlier reported that Exchange Traded Fund. The scheme seeks to provide
(PAN), allowing the collation and taxpayer-friendly. It will various services such as PAN, the department is working on returns that, before expenses, closely correspond to
of all tax-related information, complement similar initia- TAN (tax deduction and col- jurisdiction-free assessment, the total return of the securities as represented by
including deductions by third tives by the board such as on- lection account number) and which means a taxpayer will the underlying index. The minimum investment is
parties, pertaining to that line scrutiny, which allows tax tax payments. not be linked to a particular `5,000 and issue closes on 28 July.
login. Taxpayers will also be officials to seek details of The My Tax app will be per- ward or assessing officer. As-
able to respond to queries transactions and get respons- sonalised, but it’s not clear sessment, if any, can be done INSURANCE
from the I-T Department or es by e-mail. whether tax-filing facilities anywhere in India, reducing PNB MetLife in partnership with Kar-
file complaints via the app, The department recently will be available immediately. the scope for interaction and nataka Bank has launched PNB
which is being developed by unveiled Aaykar Setu, a new The I-T Department is keen harassment. MetLife Loan Life Suraksha, a single/
the Central Board of Direct taxpayer service module that on the initiative as it believes —Deepshikha Sikarwar limited premium plan covering the loan liability of a
customer against business, home, vehicle, education,
personal, agriculture or any other. The product will be
available across 769 branches of the bank.

BANKING
`99.77 Two more low-cost carriers to
take to skies in September
Bank of Baroda has launched new
products and services such as Baroda
E-Business Pack for MSME custom-

crore ers; Baroda Champs Saving A/Cs for children and

paperless pre-approved digital personal loans.
was the average daily
A
ir Odisha and
profit of Reliance Air Deccan are
likely to start
Industries in the first operations under the domestic calendar
quarter of 2017-18. low-cost flying scheme
by September-end af-
More than 70% of com- ter they informed the Tuesday
Monday Wednesday
Wednesday
panies listed on the NSE government about JULY
reported net profits of having acquired air-
craft for the purpose.
failing which they
would not be granted
before granting them
a scheduled commut-
JULY
DEC
25 JULY
26 26
less than `100 crore for The two airlines a licence. er operator permit,” a
the fiscal year 2016-17. Data from 8 91-day T-bill 182-day T-bill
were among five oper- Three other air- ministry official, who
infrastructure bid and cover bid and cover
ators which were lines, which were did not want to be
industries ratio ratio
awarded a total of 128 awarded the RCS named, said.
routes in March under routes, were Alliance The two airlines
the regional connec- Air, SpiceJet and Tur- have informed the
tivity scheme, also boMegha. They have ministry that between
Jet pilots told to known as UDAN (Ude already started oper- them they have six

take pay cut Desh Ka Aam Nagrik). ating the flights. Beachcraft B-1900D Tweet
The two airlines had
won the largest chunk
“The ministry has
granted a ‘no objec-
aircraft. Each aircraft
can seat 19. corner
J
et Airways plans to slash the pay of routes with 50 of tion certificate’ to The RCS scheme
of dozens of its junior pilots by as these going to Air Odi- both the operators. At aims at making flying
much as 50% in a cost-cutting sha and 34 to Air Dec- present, the Directo- affordable for the A Balasubramanian
move that could impact up to 400 pi- can. All carriers were rate General of Civil masses with fares @MFBALA
CEO, Birla Sun Life Mutual Fund
lots. The airline, in letters sent to pi- given six month’s time Aviation is looking capped at `2,500 per
lots earlier this month, has proposed to start operations, into their documents hour. #Nifty Price to Earnings multiple is
they either take 30-50% salary and a matter of discussion in the stock
stipend cuts, or quit, saying it was market now but Price to
Expectation in India is not a concern
forced to take such steps as it was “in-
tensely focused on fleet and network
rationalisation”. Lakshmi Iyer
The measures are to be implement- “People said demonetisation is just a @Lakshmi1876
ed from 1 August. quote of short-term pain for long-term gain. All CIO, Debt, and Head, Products, Kotak
“Certain developments in the mar- Mutual Fund
ket, including that of the Gulf region, the week the economists are waiting for that gain June CPI @ 1.54%. Core CPI sub 4%.
as well as our continued efforts to en- Food inflation -ve
hance internal efficiencies, has result- to come. I don’t see that yet.” Monsoon on track. Cake seems set
ed in the review of our network, fleet RAHUL BAJAJ (macro). Await the icing (MPC rate
and crew utilisation,” a Jet Airways CHAIRMAN, BAJAJ AUTOS decision)
spokesman said.
Review Preview The Economic Times Wealth, July 24-30, 2017
11

Pink notes go missing from ATMs ICICI offers loans

Bankers and ATM providers report sharp drop in supply of `2,000 notes from the RBI. up to `15 lakh
through ATMs
A
shortage of `2,000 notes in re- the total amount of high-value currency

I
cent weeks and months has in circulation. ndia’s largest private sector lender ICICI Bank
stumped bankers and ATM oper- “While there is a definite shortfall in will be selling personal loans of up to `15 lakh
ators who are already grappling with the supply of `2,000 denomination through its ATMs that can be availed of by se-
cash shortage in some parts of the coun- notes, overall supply is fine as banks are lect salaried customers even if they haven’t previ-
try due to heavy usage and hoarding. giving out sufficient `500 notes which is ously applied for one.
Bankers and ATM service providers convenient for the consumer as they can Using data from credit information companies,
say that there has been a sharp drop in get change easily for smaller currency the lender will pre-qualify select customers for
the number of `2,000 notes in circula- notes,” said Ravi Goyal, MD of AGS personal loans.
tion. Supply of new notes from the cen- Transact Technologies which manages Such customers will get a message on the ATM
tral bank has plummeted in recent around 60,000 ATMs in the country. screen after completing a transaction, informing
weeks leading to speculation that it The RBI rushed to print `2,000 notes them about their eligibility for personal loans.
could be a deliberate strategy to restrict immediately after demonetisation was If a customer chooses to opt for one, she can
the flow of high-value notes in the econ- announced in November last year and avail of a five-year personal loan of up to `15 lakh
omy. that supply may have reached a level and the amount will be credited instantly into her
“We are receiving currency notes that the central bank is not comfortable account, the bank said in a statement. The service
from the Reserve Bank in `500 denomi- with now, bankers said. This may be a is already available.
nation,” said Neeraj Vyas, COO of State conscious strategy to curb the new sup- A customer is given multiple amounts to choose
Bank of India. “The `2,000 denomina- ply of high-value notes and print more from and will be informed about other crucial de-
tion notes are coming over the counters low-value notes like `500 or even ` 200 tails like the interest rate, processing fee and
by way of recirculation.” which may be introduced soon. monthly instalments, before the transaction is
There are around 58,000 ATMs of the ments was not answered. “A new phenomenon is that `2,000 completed by crediting the loan amount into the
SBI out of the 2.2 lakh in the country. However, the central bank continues notes are not coming in for deployment customer’s account.
The country’s biggest bank has also to pump in `500 currency notes ensur- at ATMs and along with this, we see a ICICI Bank Executive Director Anup Bagchi said
moved to recalibrate the `2,000 curren- ing that there is no overall cash crunch 12% increase in the average ticket size of this will help customers receive money conveni-
cy cassettes in a few of its ATMs to `500 which was seen during the demonetisa- ATM cash withdrawals post demonetisa- ently once they opt for a personal loan.
currency ones so that more cash can be tion last year. tion,” said Loney Antony, MD of Hitachi “We believe this is a compelling proposition as
stuffed inside the machines. Bankers say that this could be part of Payment Services which manages more it is a completely paperless procedure and instant
An e-mail sent to RBI seeking com- the strategy of the RBI to keep a leash on than 50,000 ATMs. —Pratik Bhakta disbursal of funds through the ATM,” he added.

SBI launches And elsewhere EPFO glare on

website for international
In China mall, pods to store workers in firms
home buyers
husbands while one shops
T
he Employees Provident Fund Organ-
isation (EPFO) is cracking down on
companies that are making provident

A
Chi- fund contributions for international work-
nese ers, including OCIs (Overseas Citizens of In-
mall dia), on their rolls on the basis of the basic
has intro- salary.
duced “hus- For Indian citizens, an employer can cap
band storage” the contribution to PF at `1,800 a month,
facilities for there is no cap for international workers.
wives to leave The EPFO is using the argument that the em-
their spouse ployer is splitting the salary into a smaller

T
he State Bank of India has taken while they basic wage and paying out larger portions
another step to boost its home shop, a BBC under other heads to reduce the PF obliga-
loans, billed as a safe bet for lend- report, quot- tion. It is consequently insisting that compa-
ers battling billions in corporate bad ing Chinese nies pay PF on the entire salary of an inter-
loans. The bank has launched SBI Realty, newspapers, said. For instance, there’s no ventilation or national worker, including OCIs. The EPF
www.sbirealty.in, a one-stop integrated According to The Paper, the Global air conditioning. “This pod is not per- Act was extended to international workers
website for home buyers, who now Harbour Mall in Shanghai has erected fect because the space is relatively in 2008. The EPFO has become proactive in
mostly seek operational ease over any- a number of glass pods for wives to closed and there is no ventilation and dealing with the issue in the past two years,
thing else. The lender is expected to ex- leave any disgruntled husbands who air conditioning. I sat inside for five and now are telling companies to make full
pand its home loan credit through this don’t want to be dragged around the minutes to sweat,” one customer PF contributions with effect from 2008.
move. SBI-Realty will help customers to shops. said. Several legal experts said a number of com-
choose their desired home from the uni- Inside each individual pod is a The pods have been the source of panies, MNCs in particular, have made the
verse of 3,000 SBI-approved projects chair, monitor, computer and game- much humour on Chinese social me- requisite PF contributions, including the
around the country. These projects are pad, and men can sit and play retro dia, and have sparked debate about penalties for delayed contributions, even
spread across 13 states and Union Terri- 1990s games. The four pods distribut- whether they could be rolled out though there are several grey areas in the
tories covering 30 cities including met- ed around the mall have been operat- even wider. law.
ros, semi metro and towns. ing for nearly a month and are cur- One user approves the decision, In many cases, companies have had to
The SBI has the largest share in the rently free to use, but manufacturing saying that the pods “give these men first identify OCIs in their employment.
home loan market. It grew home loans staff said a “perfect version” will soon an incentive to go shopping, and to “When you are hiring Indians from another
nearly 17% to about `2.23 lakh crore dur- be charging money. pick up the bill” for their wives shop- organisation, you are not asking to see their
ing 2016-17. “There are 9.5 lakhs home A few men who tried out the pods ping. But others disagree. “If my hus- passports. OCIs do not require an employ-
units available on the website. Custom- said they thought they were a novel band just wants to go out and play ment visa to work in India. In the case of one
ers can compare current and past trends idea. Others agreed, but said that that games, what’s the point of bringing client, 20-25 people were found to be OCIs,”
of prices for the properties in various lo- there were areas for improvement. him out?” Atul Gupta, partner, employment, at law
calities in the city,” the bank said. firm Trilegal, said.
12 The Economic Times Wealth, July 24-30, 2017 Investing

“Don’t worry about a big

correction in the market”
to consumers (like FMCG) will be the benefi- deployed. Large-caps should continue to do
ciaries . GST implementation has also accel- well and a large-cap rally will reflect on all
erated another structural change that was major indices. The short-term factors sup-
happening slowly: Organisation of the unor- porting the markets are monsoon and falling
ganised sector. Lesser cost due to tax arbi- inflation.
trage was the USP of several small-scale in-
dustries but, with the implementation of What should investors do now?
GST, this is going to change. This shift should Investors have no option but to continue
help organised players to gain a higher mar- with equities because of another structural
ket share. change happening in the economy due to
the fall in interest rates, post-tax return
How do you rate the implementation of GST? from bank FDs is only around 5%. So, long-
So far, there are no issues with the GST net- term investors should continue with their
work and its implementation is progressing regular SIPs.
smoothly. We had to take a lot of GST-related
actions. Despite being on real time data, we Do you prefer mutual funds over stocks?
could handle these operational problems I don’t have a preference. But if you are a
and issue the first GST compliant contract first time investor, I will recommend SIPs in
note on 3 July (the first trading day). Though mutual funds. This is the best route for in-
smaller and unorganised players are facing vestors, who don’t understand the stock
some difficulties, the feedback I am getting market. The mutual fund industry has creat-
from them is positive. Even small traders ed a good ecosystem of long-term investing
have accepted GST. and people have under-
stood that long-term wealth
GST aside, the market “Despite the can be created through the
valuation is high now.
Should investors worry
recent rally, the SIP route. SIPs have come a
long way since Templeton
about a big correction? Indian stock started it in the 2000s. You
Though valuation is not can consider direct equity,
cheap, it is also not very market can if you have the required
expensive. There is no
need to worry about big
deliver good knowledge or have a good
support system in place.
corrections now. Cor- returns because But here again, you need to
rections will be smaller keep the expenses low by
because of the continu-
the fundamentals buying quality stocks and
ous money flowing into of our economy keep them for the long
the market. FII (foreign term. The biggest mistake
institutional investor) have improved.” most retail investors make
flows should continue now is getting into the stock
due to positive global factors. The large do- market through futures and options—which
B. Gopkumar The stock market has rallied significantly.
What should investors do now?
mestic inflow in the market and the way In-
dians invest are other structural changes
most investors don’t understand—getting
their hands burned and then deserting the
Executive Director Despite the recent rally, the Indian stock mar- happening now. For example, the mutual stock market altogether.
ket can deliver good returns. This is because fund SIP’s average ticket size has gone up
and CEO, the fundamentals of our economy have im- from `1,200 to around `3,000 now. The Stock brokers are upgrading their mobile
Reliance Securities proved significantly in the past 2-3 years. For common SIP tenures have moved from 6–12 platforms now. It is useful for traders, but
example, now no one is worried about our months to 5-10 years. Due to increased do- how will it be useful for investors?
In a freewheeling chat with fiscal or trade deficits. There are also several mestic flow, the number of people tracking It will be useful for investors because the big
structural changes that will help our econo- FII flow has come down drastically. I am not data (fundamentals of the company, recom-
Narendra Nathan, my and companies. saying that FIIs are not important, but the mendations by research houses, news report
B. Gopkumar explains the dependence on these has come down. about that company, etc.) can be made avail-
What are the structural changes? Stock market traders have also learnt les- able on the mobile platform. Today’s mobile
structural changes taking
The Goods and Services Tax (GST) is the big- sons from the earlier euphoric rise during apps are feature rich and they make life easy
place in the economy, stock gest structural tax regime change. It is very 2003-8 and the resultant meltdown. For ex- for customers. We do so many things on mo-
market and the broking good for the economy because GST will boost ample, you won’t find too much leverage in bile, so why not invest as well? Investors and
tax collection (by making tax evasion diffi- the market now. The number of people hunt- traders are accepting this change. Mobile vol-
industry. cult) and increase the tax-to-GDP ratio. It will ing for small and penny stocks has also fallen. ume is already at around 4% of the market
also make our economy competitive by al- Cash on the sidelines is another factor that and we expect this to double in one year.
lowing faster movement of goods. The clos- will support the market during corrections.
ing of check posts, a major source of delay, In addition to around `4,500 crore inflow
corruption and inefficiency, is the biggest every month, equity mutual funds are also Please send your feedback to
benefit of GST implementation. Sectors close sitting on large cash piles, which needs to be [email protected]
Family Finance The Economic Times Wealth, July 24-30, 2017
13

Link goals to Sachiin Shende, 44, Salaried, Pune

investment How to invest for goals

Aggressive saving and investing should help the GOAL
Future cost (`) / Resources
Investment
needed
time to achieve used
Pune-based Shendes to reach their goals easily. (`/month)

Emergency fund 5.58 lakh Cash, fixed deposit -

RIJU MEHTA for which he can start an SIP of `23,000 in an
equity fund for the first two years and then Child’s education 13 lakh / 4 yrs - 23,000

S
achiin and Kalpana Shende live shift to an arbitrage fund. For the son’s wed-
with their 14-year-old son in a ding in 11 years, Sachiin will need `21 lakh, Child’s wedding 21 lakh / 11 yrs - 8,500
rented house in Pune. Sachiin and he can amass this amount by starting an
brings in a monthly salary of SIP of `8,500 in an equity diversified fund.
Retirement 2.3 crore / 16 yrs EPF, stocks, mutual funds 21,000
`1.46 lakh, and combined with a For retirement in 16 years, Sachiin will
rental income of `8,000 from a house he need `2.3 crore and he can allocate his
bought three years ago, the total income stocks, mutual funds and EPF corpus to it. Investible surplus needed 52,500
adds up to `1.54 lakh. After monthly expens- Besides, he will need to start an SIP of
Annual return assumed to be 12% for equity, 7% for debt. Inflation assumed to be 7%.
es of `51,167 and an investment of `12,000, `21,000 in an equity fund. As for the house
he is left with a surplus of `28,750. He also worth `70 lakh that he wants to buy in anoth-
has two loans for a home and a car, for which er year’s time, he can sell his existing house
he is paying EMIs of `40,700. His goals in-
clude saving for contingencies, child’s edu-
worth `60 lakh and take a loan for the re-
maining amount. Combined with the exist- Insurance portfolio
cation and wedding, buying a house, and re- ing loan, he will have a liability of `38 lakh
tirement. Financial Planner Pankaaj Maalde and an EMI of about `37,420. Existing Suggested
suggests Sachiin start by repaying the car Sachiin has two traditional plans and two Existing monthly monthly
loan of `4 lakh from his cash holding, which Ulips. Maalde suggests he retain only one tra- INSURANCE Suggestions
cover (`) premium premium
will free the EMI of `10,000. ditional plan and surrender the others. He (`) (`)
Sachiin can begin by building a contingen- should buy a term plan of `1.5 crore, which
cy corpus of `5.58 lakh by allocating `1 lakh will cost `2,500. He has a health plan of `4.5 Life insurance
of cash and `5 lakh from his fixed deposit. lakh, but should increase this to `10 lakh at
Term plan - - Buy `1.5 crore term plan 2,500
This amount should be invested in an ultra the earliest. He has an accident disability
short-term debt fund. Next, he wants to save plan of `25 lakh, and should pick a critical ill- Traditional plans (2) 1.68 lakh 1,650 Retain one plan 417
`13 lakh for his son’s education in four years, ness plan worth `25 lakh as well.
Ulips (2) 5.5 lakh 2,792 - -

Portfolio Cash flow Total 7.18 lakh 4,442 `1.5 crore 2,917
Asset Current value (`) Existing Suggested Health insurance
Real estate 60 lakh (`) (`)
Employer’s - - - -
Cash 8 lakh Income 1.54 lakh 1.46 lakh
Outflow Buy `10 lakh
Debt Own 4.5 lakh 1,442 2,500
family floater plan
EPF 7.5 lakh Household
51,167 33,167
expenses Total 4.5 lakh 1,441 `10 lakh 2,500
FD 5 lakh
Dependants 15,000 15,000
Equity Critical illness & Buy `25 lakh 1,125 + 500
Insurance 25 lakh 500
6,383 7,042 accident disability critical illness plan (existing)
Mutual funds 2.95 lakh premium
Stocks 81,000 Loan EMIs 40,700 37,420 Total 25 lakh 500 `25 lakh 1,625
Total 84.26 lakh Investment 12,000 52,500 Insurance cost - 6,383 - 7,042
Total outflow 1,25,250 1,45,129
Premiums are indicative and could vary for different insurers.
Liabilities Current value (`)
Surplus 28,750 871
Loans 32.1 lakh
Total liability 32.1 lakh Looking for a professional to analyse your investment portfolio? Write
WRITE TO US
to us at [email protected] with ‘Family Finances’ as the
Financial plan by FOR EXPERT subject. Our experts will study your portfolio and offer objective advice
Net worth (approx) `52.1 lakh Pankaaj Maalde ADVICE on where and how much you need to invest to reach your goals.
Certified Financial Planner
14 The Economic Times Wealth, July 24-30, 2017 Financial Planning

How experts are securing

their children’s education
Cutting on spending and investing regularly is their mantra to meet the rising educational costs.

HIRAL THANAWALA reer options, and the best institutes to pursue

these. His next step was to adjust the costs to

T
he rising cost of education makes inflation. To build the required corpus of `1.5
it imperative that you start plan-
ning for your child’s academic ex-
crore for each child, he has been investing
20% of his income in unit-linked child insur- KAMLESH RAO, 47
penses systematically. To give ance plans and equity mutual funds. MD & CEO, Kotak Securities
you an idea, here’s how leading
finance honchos have been planning to meet Start investing early
Children: One son (17 years old)
their children’s educational expenses. It is a must that you start investing early like
Vijay Goel, MD and CEO, Wealth Manage- Corpus required: `1.5 crore in
Investment focus ment, Motilal Oswal. He has been investing in
current value.
In 2010, Kamlesh Rao, MD, Kotak Securities, equities via mutual fund, portfolio manage-
wanted to buy a larger house, but decided to ment services and stocks, for the past 17 How he is building the corpus
shelve the plan. “I didn’t want to stretch my- years, to build a corpus of `1 crore each for He started by investing `30,000 on
self by buying a bigger house and paying his children. To illustrate, if you start saving monthly basis in stocks and diversi-
EMIs for the next 15 years,” says Rao. At that `10,000 per month, and your return on in-
fied mutual funds and has now
time, Rao was investing `30,000 per month vestment is 12% per anum, in 10 years, your
increased it to `1.5 lakh per month.
in diversified equity mutual funds to build a corpus would grow to `23 lakh. But in 15
`1.5-crore education fund for his son. He has years, it would be more than double this
now increased his investment in stocks and sum: `49.95 lakh. “I should have started sav-
mutual funds to `1.5 lakh per month. The ing earlier towards my children’s education,”
goal is due in three years and Rao, who has al- says Suresh Soni, CEO, DHFL Pramerica Mu-
ready built a corpus of `90 lakh, is confident tual Fund. He is now investing `1.5 lakh in eq-
of meeting the goal. uity funds via monthly SIPs to build a corpus

Prepare for varied academic options

for his second child.
VIGHNESH
The increased educational choices have Cut the risk component SHAHANE, 47 SURESH SONI, 46
made planning slightly complicated. Your It is important to safeguard the accumulated CEO and Whole Time Director, CEO, DHFL Pramerica Mutual Fund
child, who might have been preparing to be a corpus against market risk. Soni’s goal was to IDBI Federal Life Insurance
doctor, could very well change his mind and build a corpus of `1 crore in current value
instead opt for a course in biotechnology. It is terms for each child by the time they turned
best to keep such career changes in mind 18. He started investing 10 years ago via SIPs,
while building a corpus, to avoid last minute supplemented by lump sum investments and
hassles owing to the varying expense struc- has met the goal for the elder son. When he Children Children
tures of different academic courses. “My chil- came closer to meeting the goal, three years A son and Two sons (18
dren dabble across multiple areas. They will back, he started shifting his investments from a daughter and seven
finally choose on one particular career, but equity funds to debt funds via a systematic (18 and years old)
this makes my financial planning process transfer plan. Now, he has parked the entire eight years
trickier,” says Vighnesh Shahane, CEO and corpus into fixed income instruments, doing old) Corpus
Whole Time Director, IDBI Federal Life Insur- away with the risk that comes with equities. required
ance. In order to gear up for financing his Corpus `1 crore in
children’s uncertain academic choices, Sha- required current value
hane first found out the costs of various Please send your feedback to
[email protected]
`1.5 crore for each.
prominent courses, including emerging ca- in current
value for How he is
each child. building the
corpus
How he is For his elder
VIJAY GOEL, 47 building son, he start-
MD and CEO, Private Wealth the corpus ed investing
Management, Motilal Oswal Has been in mutual
investing funds 10
Children 20% of his years ago.
Two daughters (17 and 12 years old) income in For his
unit-linked younger son,
Corpus required
child insur- he is invest-
`1 crore in current value for each
ance plans ing in equity
child.
and equity funds with
How he is building the corpus mutual monthly SIPs
Has been investing in stocks and funds. of `1.5 lakh.
mutual funds and availing portfolio
management services.
Taxation The Economic Times Wealth, July 24-30, 2017
15

Filed your tax return?

Don’t forget to verify it
Filing your tax return is not enough. You also need to verify it to complete the process. Here’s how to do it.

SURAJ GOEL AND

PREETI MOTIANI DON’T MISS THIS
INCOME IN ITR

T
hough the tax filing
deadline is still a
week away, many Though fully taxable, some interest
taxpayers have al- often gets ignored when filing
ready filed their re- returns, says PRAGATI KAPOOR
turns. However, many of them INTEREST ON LOCKER FDs

GETTY IMAGES
have not completed the entire
Customers seeking lockers in a bank
process. After filing the tax re-
are often pushed to invest in FDs. The
turn, the taxpayer also needs to
income from these deposits often
verify the return. If this is not
goes unnoticed by the investor. In
done within the stipulated
most cases, the fixed deposit is linked
time, the return will be deemed
to the locker and the interest earned
invalid and the taxpayer will
is adjusted against the annual locker
have to file it again.
rent. If the fixed deposit is cumulative,
Taxpayers who e-file have the
there is no periodic interest entry in
option to e-verify their returns.
the savings account. As a result, the
This can be done at the time of
taxpayer forgets to include this inter-
uploading or even after upload-
est even though it is fully taxable.
ing. They also have the option
to take the physical route by INTEREST ON APPLICATIONS
sending the signed verification
to the Centralised Processing The year 2016-17 witnessed several
Centre (CPC) at Bengaluru. public issues, many of which were
oversubscribed. Oversubscription
means that a large number of appli-
cants get partial allotment and the
FIVE WAYS TO E-VERIFY YOUR TAX RETURN balance application money is refund-
ed to them with interest. Since this
AADHAAR THOUGH USE BANK ACCOUNT USE DEMAT interest is not a very large sum, it is
OTHER OTP
LINKED OTP NETBANKING TO VALIDATE ACCOUNT TO VERIFY often overlooked by individuals. How-
ever, this interest has to be included
Can be used only if If gross income after Log in to Netbank- Taxpayer must first pre-val- Similar to the val- in the tax return.
the Aadhaar is deductions is below `5 ing and click on idate his bank account using idation using the
linked to your lakh and/or the refund or tax filing to go to the profile settings of the bank account. INTEREST ON SECURITY SUMS
registered mobile demand is less than `100, e-filing website. e-filing account. Possible Taxpayer must Some power and telecom companies
number. An OTP is the taxpayer can e-verify Then generate the only if PAN and name match first validate his ask subscribers to make a one-time
sent to your mobile using an OTP from the tax EVC. An EVC will with bank records. Enter the demat account. security deposit at the time of apply-
number. Enter the department's e-filing por- be sent to your registered mobile number. ing for a connection. Many suppliers
Once validated by
OTP and click on tal. This OTP is sent to email and mobile After it is validated by the pay interest on these deposits to the
the depository,
submit to verify the mobile phone and e-mail. number. Use it to bank, generate EVC. Only 12 subscribers. Mostly, the interest is
generate the EVC.
return. verify return. banks offer this facility. adjusted in the last bill of the finan-
cial year instead of being actually
paid out. This interest is also fully
taxable and has to be reported.
TAKING THE TRADITIONAL PHYSICAL ROUTE INTEREST EARNED ON NSCs
If you are not able to e-veri- Here are a few things to keep in mind when you do so. NSCs offer cumulative interest which
fy your return because of The ITR-V should reach the CPC within 120 days from the date of e-fil- is paid on maturity after five years.
any reason or are not com- ing the return. The interest earned every year is
fortable with e-verification reinvested and therefore qualifies for
procedures, download the Sign in blue ink and send via ordinary post or speed post. Do not use a deduction under Section 80C. Howev-
ITR-V (also known as the courier to send the ITR-V. er, interest accrued on the NSC in the
acknowledgement receipt), ITR-V is auto-generated and is emailed to you after you successfully last year is paid on maturity and not
sign it and send it to CPC at upload/e-file your income tax return. It can also be downloaded from reinvested. So, it cannot be claimed
the following address: the e-filing website under the 'View Returns/Form' on the 'Dashboard'. as a deduction.
CPC, Post Box No - 1, You are not required to send any supporting document along with the
Electronic City Post Office, ITR-V. Just send the one page signed ITR-V. TAX FREE INTEREST ON PPF
Bangalore - 560100, Interest on the PPF is tax free, but
When your ITR-V is received at the CPC, you will receive an email and
Karnataka, India. has to be declared as ‘Income
an SMS alert. Processing of your return will only start after verification.
claimed exempt from tax' on an year-
Note: HUFs and individuals using ITR 3 for the financial year 2016-17 (ITR 4 for 2015-16) to file their tax returns and whose accounts are required to be audited under section
ly basis in one's tax returns.
44AB have to mandatorily verify their returns using the digital signature certificates. Returns filed using the digital signature method are not required to be verified further.
16 The Economic Times Wealth, July 24-30, 2017
Learn & Keep

WILL THE MID-CAPS CONTINUE TO RISE?

The mid-cap basket is still outperforming, but its earnings growth may not be high enough to justify the valuation premium, says Sanket Dhanorkar.

Select pockets are expensive Excellent performance by some stocks

247.3 Difference between No of 5-year share 5-yr PAT RoE
Company Sector
Mid-cap index has 14 July 2017 price & EPS CAGR companies price CAGR (%) CAGR (%) (%)
> 25% 10
outperformed… Between 10% and 25% 31
CEAT Tyres 80.9 64.6 23.9
Ajanta Pharma Pharmaceuticals 73.4 36.8 36.8
Up to 10% 28
TVS Motor Co. Automobiles 70.2 25.2 22.3
Between 0% and -10% 13
Nifty 100 Between -10% and -25% 3 Natco Pharma Pharmaceuticals 69.8 41.9 14.4
Nifty Midcap
< -25% 11 Vakrangee Infotech 62 39.9 28.9
100 Source: Axis Capital
16 July 2012 Compiled by ETIG Database

ps
200.6 For almost 40% of stocks in NSE Midcap, the price Mid-cap stocks that have surged the most have also
ca 14 July 2017 CAGR was ahead of earnings CAGR by at least 10%. reported impressive growth in earnings.
id-
The reported earnings also missed estimates by a
M

huge margin.

...but for valuations to sustain, earnings Premium artificially high Wider representation across sectors
growth will have to pick up pace soon
Weightage Nifty Midcap Weightage
139.7 Nifty 100 Nifty Midcap 100 Nifty 100
(% of portfolio) 100 (% of portfolio)
30 June 2017
50%
Current PE 25.9 32.1 Banks 15.9 Finance 13.0
100 40%
128.4
16 July 2012
30 June 2017 Adjusted PE* 21.7 22.1 Oil & Gas 13.0 Pharmaceuticals 9.8
30% 10-yr avg PE 20.3 19.1 Infotech 11.2 Capital Goods 8.3
Nifty Midcap EPS 20% 26% Current PBV 3.7 2.6 FMCG 10.8 Banks 7.9
Nifty100 EPS 10% 30 June 2017
Automobiles 7.9 Metals 5.9
10-yr avg PBV 3.2 2.3
Valuation premium 0%
TOTAL 58.7 TOTAL 45.0
Compiled by ETIG Database
-10% After adjusting for negative EPS in each index, the PE Unlike the large-cap universe, there is more diversity in the mid-cap space.
-20%
multiple for the mid-cap index does not appear very The top 5 sectors in the large-cap segment account for nearly 60% of the
high relative to the large-cap index. entire index, compared with merely 45% in the mid-cap segment.
-30%

While the valuation premium of mid-caps over the

large-caps has increased, the former's earnings
growth is not high enough to justify this premium. Debt burden has had a stronger impact on large-caps
Large-cap Total borrowings (` cr) DE Mid cap Total borrowings (` cr) DE
Reliance Ind 1,83,676 0.84 Adani Power 49,231 7.46
Some of the most
Just 14 stocks in mid-cap basket are likely to contribute Power Grid Corpn 1,12,753 2.53 Jindal Steel 39,958 2.29
indebted sectors are
NTPC 1,07,191 1.25 SAIL 38,901 0.8 represented in the
more than 50% to earnings growth in 2017-18 Bharti Airtel 1,02,582 1.55 Rel Comm 32,049 1.17 large-cap space.
Barring a few
Piramal Punjab Larsen & Toubro 83,897 2.43 Reliance Power 29,935 1.62
Union Bank Canara Bank Dish TV CESC M&M Financial exceptions, the
Enterprises National Bank Tata Steel 82,350 2.14 DLF 26,663 0.94 leverage in mid-cap
108% 104% 97% 73% 71% 65% 56% Tata Motors 74,489 1.05 Reliance Infra 21,603 0.98 firms is lower than in
the large-cap basket,
Vedanta 62,500 1.33 GMR Infra 19,844 7.02
which has benefited
Cadila Interglobe IOCL 58,830 0.87 NHPC Ltd 17,548 0.66 their stock prices.
ABB TVS Motor Siemens Hindustan Zinc Havells
Healthcare Aviation
54% 52% 39% 34% 30% 23% 22% Hindalco Ind 58,451 1.77 Oil India 14,184 0.44
TOTAL 9,26,720 TOTAL 2,89,916 Compiled by ETIG Database
Source: Axis Capital
Figures are estimated earnings growth for 2017-18 EPS: Earnings per share; PE: Price to earnings; PBV: Price to book value; RoE: Return on equity; DE: Debt to equity
18 The Economic Times Wealth, July 24-30, 2017 Financial Planning

THE MONEY QUESTION Paper

Work
Are discounts, coupons and sales really saving you money?

Swati believes that shopping during sales Rectifying income

and discounts or using coupons are signs tax returns
of frugality and indicates judicious use of After an income tax return is filed, it is pro-
cessed by the CPC, Income Tax Depart-
money. Her logic is that instead of ment. However, after processing, if an
focusing on negotiating or earning more assessee realises that some income was
not reported, or some deduction was not
money or investing it, she is saving in this availed of in the return computation, it is
manner. It is the ‘sale’ season and she possible to file a rectification request.
After the filing of the revised return, the
has been picking up a lot of goods at Income Tax authorities may revise the inti-
‘insanely cheap’ prices. She cannot quite mation or order (if already passed), if they
find merit in the revision.
believe how less she paid for what she
bought. But the question is whether she
is really being frugal and saving money.
Prerequisite
To file for a rectification, the assessment
rugality is about being resourceful. While

F
of the original return should have been
Swati might think that using discount cou- processed at the CPC, Bengaluru.
pons and shopping during sales make her
frugal, in reality the opposite is true. A
‘20% off’ coupon may seem good, but it is
usually 20% off on `5,000 or 20% off on the entire Online portal
purchase. Such offers appear good, but they almost Rectification of the return can be carried
always force the buyer to pick things they do not out online on the income tax portal https://
need. So they inevitably land up with a lot of frivolous incometaxindiaefiling.gov.in/. The assessee
purchases in the name of a good deal. Posters scream- should log in using his login name and
ing ‘Buy 3, get 1 free’, ‘Hurry! last 2 days’ and dis- password and go to ‘Rectification’ option
counts on expensive products are similar offenders. under the tab ‘E-File’.
Some of these so-called sales are not genuine. Many
vendors are known to hike prices and then offer these
items on sale. In the process, they create an artificial
discount. This may be a feel-good factor for the buyer,
but did they really buy those goods at a lower price? Details
Discount coupons, deals and sales have the power The type of return you are filing (income
to encourage buyers like Swati to consume what they tax or wealth tax), and the assessment
don’t need, while making them believe that they are year pertaining to the rectification needs
being frugal. That is not to say that all sales and dis- to be added. Latest communication ref-
counts are bad and Swati should avoid them. Howev- erence number needs to be mentioned.
This is the number of the last communi-
er, for the sake of her finances, she should know the
cation received from the Income Tax
difference between bargain hunting and true frugali-
Department.
ty. Swati must realise that she is not only spending
more, but is also spending carelessly. Discount-in-
duced spending may not actually offer her a mone-
tary benefit. It’s mere psychological play of the ven- Rectification request
dors. In reality, she is just shopping and being a typi-
After validating the details, the assessee
cal consumer.
should enter the rectification request type
It is definitely a good deal if Swati ends up saving and enter the required details. Once the
money on goods that she was already planning to buy. details to be rectified are entered and
Searching for deals, discounts and bargains is a differ- submitted, an acknowledgement number
ent story though. It becomes a problem when buyers is generated for future reference.
overspend or buy things they did not even want.
GETTYIMAGES

SMART THINGS TO KNOW: Mutual fund fact sheet information Verification

Once the rectification request is filed, it
needs to be verified either through the

1
The fact sheet covers
2
The next detail it
3
Volatility measures
4
Fund fact
5
The fact sheet
assessee’s Net banking portal or using the
Aadhaar OTP income tax verification
mechanism. The filed revised return is
sent by e-mail to the assessee’s registered
basic information, such showcases is the pertaining to ratios, sheet also carries returns of email ID.
as the fund objective, portfolio strategy of such as Standard has details the fund, and the
nature of fund, fund the fund through Deviation and about representative
manager’s name, fund’s investment style, Sharpe Ratio, are charges in benchmark index
inception date, fund portfolio with also mentioned to terms of to enable
benchmark index, corpus top holdings, and gauge the inherent expense comparison of the Points to note
size, current NAV, allocation across risk of the fund. ratio and fund’s performance � It is also possible to file rectification
among other details. sectors and issuers. loads. with its benchmark. application through the physical mode.
The content on this page is courtesy Centre for Investment Education and Learning (CIEL). � The IT Department has allowed rectifi-
Contributions by Girija Gadre, Arti Bhargava and Labdhi Mehta. cation of returns filed after the due date.
Financial Planning The Economic Times Wealth, July 24-30, 2017
19

Uneasy sits the crown on

the inheritor’s head
For no fault of theirs, inheritors are seen as undeserving of the wealth they have. Here’s what parents
can do to help the next generation deal with the money they are born into, says Uma Shashikant.

W
e walked out of the theatre one understand the basics of financial deci-
after watching The Lion sion making, the working of financial mar-
King. My son wondered kets and instruments, the implications of
aloud if Simba was a hero cost, fees and taxes, and the essentials of le-
after all. Wasn’t he an enti- gal and compliance frameworks in manag-
tled bloke, who ran away from his responsi- ing wealth. While your inheritors can engage
bilities and spent time dancing with tramps experts to deal with technicalities, they will
in the woods? How could he simply come need sound financial literacy to make the
back and claim a kingdom with no creden- right choices about their inheritance.
tials except for being the crown prince? The Fourth, enable them to develop frame-
disapproval of the inheritor is quite wide- works for dealing with situations that they
spread and intense than most of us care to will encounter by being wealthier than their
acknowledge. peers. Chief among them is the somewhat
We live through times when so many of us constant demand for loans. Sadly, these
ordinary people will leave behind wealth for tend to be mostly interest-free and common-
our children. In the present age of obsessive ly never returned, as the borrower thinks
parenting, where so many of us began life that the inheritor had it free anyway. Teach
from scratch, but have earned and saved your children to lend sensibly and be willing
with such earnestness, our children will to write off small amounts. Inheritors are
soon belong to that group of inheritors. And easily surrounded by flatterers, low quality
that is not easy on them. relationships and scheming ‘friends’. The
Barbara Boulin runs the Inheritance Pro- wealthiest end up being in a club of their
ject and has published extensive interviews own, unable to trust outsiders. Help your
with inheritors that provide a stunning in- children cultivate meaningful relationships
sight into the minds of heirs. While the that balance generosity and quality of rela-
world expects the inheritors to feel entitled tionships.
and brag about their fortune, the real stories Fifth, do not impose the traditional view
are filled with shame, guilt, reticence and that inherited wealth should be protected at
confusion. While we prepare to leave our all costs, that the principal should not be
children with a better start in life compared touched, and that only dividends and in-
to ours, we also have to take the time to pre- comes should be consumed. Create a finan-
pare them mentally and emotionally, and cial plan that aligns with your child’s goals
enable a smooth transition. and needs. They can build more wealth than
The inheritors face intense jealousy and you did in your lifetime. They can choose to
envy. They are seen as undeserving of the disinherit and give it all away to charity.
wealth they have, and are easily painted as They can choose to share the wealth for
dumb, incompetent and below average. The causes that are close to their heart. Allow
easiest way to deal with envy is to under- them the freedom to make their choices.
mine the other. If the unlucky poor and un- Sixth, educate them against affluenza—the
derprivileged evoke sympathy, the lucky disease that spends all money on material
rich and privileged invoke hatred. It can be possessions, only for effect and the need to
argued that both groups found themselves belong to an elite club. That expensive car
there by sheer stroke of luck and had little to will lose value rapidly; that heated swim-
GETTYIMAGES
do with their situation. However, if given a ming pool will need a fortune to maintain;
free hand, mobs would tear down the and that obscene mansion will keep the real
wealth of the inheritor to distribute it all to them know what is in store. Understand tor. Help him list and prioritise these goals. friends out. Let them know the downside of
charity and force the lucky heir to begin their priorities, and help them figure out There is little merit in keeping the wealth mindless acquisition of objects.
from scratch. The luck of the inheritors be- how they would like to best use the wealth locked in the two-bedroom flat in a city, Your inheritors can turn out to be those
comes their albatross and it is not easy to they will inherit. It does not make sense to when your child dreams of running a school who use the firm footing they have, to make
deal with evident and strong resentment. lock up the money in a restrictive trust fund in a remote village. A portion of the wealth a difference, taking on risks others find diffi-
Young people crave acceptance, to belong that does not tie up with their objectives. If could be used today to give them a better ed- cult, and making career decisions that need
and be approved in their social circles. If your child wants to share his wealth with ucation that helps them begin their life on a the best minds that do not care for market
standing on your feet and earning your liv- others in society, or donate for a cause, you better footing, instead of convincing them salaries. Maybe it was Nala, not Simba who
ing is seen by their peers as a matter of should willingly enable that. Research shows that hoarded wealth will secure an unknown deserved to be crowned, said my son.
pride, the inheritors begin on the wrong that inheritors tend to use their wealth dif- future. Help your child make a ‘bliss-list’ or
foot. This is one of the primary reasons why ferently for material comforts, investment the choices he can make because of his in-
the inheritors are reticent and move within capital, social causes, or inert hoarding, de- heritance, that would enhance the quality of
groups of their kind, unwilling to mix and pending on their orientation. Each one is a his life.
mingle. What can we do to help the next significant choice that impacts their life. Third, ensure that they are financially lit- The author is Chairperson,
generation of inheritors that so many of us Help your child make it, by holding intense erate. There are online schools for inheri- Centre for Investment
have unwittingly cultivated? and meaningful conversations about wealth. tors. There is enough material, publications, Education and Learning.
First, begin the conversation early and let Second, identify key goals for your inheri- courses, classes and certifications that help
20 The Economic Times Wealth, July 24-30, 2017 Your Queries

Q A
QUESTION OF THE WEEK

& Q Should I invest this in mutual funds or buy a flat and use the money
I am 30 years old and have a monthly surplus income of `25,000.

to pay home loan EMIs? I do not need a house to live in and am looking to
utilise the surplus only from an investment perspective.

Both assets have different risk-return and liquidity profiles. The choice
should largely depend upon:
��Your reason and tenure of investing. Both realty and equity are suitable
if you remain invested for 5-7 years.
��Volatility you can bear. Ordinarily, realty prices fluctuate less than
equity.
��Your existing asset allocation, especially your equity and investible real
estate component. If you already have a large proportion of either, do
not increase your share further.
��The quality and location of the apartment which you can purchase for
this EMI.
��Your liquidity needs. While no one can predict future returns, you
must not be compelled to sell your apartment in case you need money
urgently. Equity beats real estate on this front.

Our panel of experts will answer questions related JAYANT R. PAI

CFP AND HEAD OF

to any aspect of personal finance. If you have a MARKETING, PPFAS

MUTUAL FUND

query, mail it to us right away.

Q My salary and share in profit from the

firm, in which I am a partner, is less than Q are
I have a five-year-old son and a one-month-old daughter. We
covered under a family floater health insurance policy. Is Q My wife and I recently sold a plot
that was held jointly by us. Can
`50 lakh per annum. I have also made short- it advisable to have separate health insurance covers for my son we invest the sale proceeds
term capital gain from stocks in 2016-17. Can I and newborn daughter? separately to save on capital gains
claim the benefit of Sec 44 ADA even though tax? Please suggest options.
my firm’s gross receipts exceed `50 lakh per
annum? Which ITR form should I use?
The decision to take an individual or floater cover depends on the
extent of coverage required. However, a child less than six years The sale of land can generate short-
Since the sum of your share of profit and old cannot be covered under an individual plan. A child less than term or long-term capital gain,
partner’s salary—your total gross receipts from three months old can have an insurance cover only by way of a depending on the holding period.
the profession—don’t exceed `50 lakh, you can floater plan—with in-built maternity benefits—that covers both the The gains will be short-term if the
claim the benefit of Sec 44ADA in respect of parents. A child more than three months old and less than six land was held for less than 36 months,
your salary. The share of profit is exempt under years of age can be covered under a family floater policy where at and long-term if it is held for more
Section 10. That the firm’s gross receipts exceed least one adult is also insured. Therefore, in both the cases, you than 36 months. Short-term capital
`50 lakh should not make a difference to your must wait for your son and daughter to turn six, before they can gains are added to your taxable
individual case. ITR 2 will be applicable for you. have individual health insurance policies. income and taxed at the applicable
slab rate. There is no way to minimise
tax liability on short-term gains.
However, long-term capital gains tax
SANJAY DATTA can be reduced by investing the
HOMI MISTRY CHIEF, UNDERWRITING
amount. The gains can be invested in
PARTNER, DELOITTE CLAIMS AND REINSURANCE,
HASKINS & SELLS ICICI LOMBARD notified bonds—REC, NHAI—within
six months of the transfer of land. Tax
exemption on this invested amount
can be claimed under Section 54EC. A
Q I am 74 and I have `7 lakh in the PPF, `1 lakh in mutual
funds and `15 lakh in stocks. I would want to earn a Q Apart from salary, I have some income from
dividends from listed shares and equity- maximum of `50 lakh can be invested
regular pension of at least `10,000 per month by reinvesting oriented mutual funds as well as long-term capital in one financial year in these bonds.
this sum of `23 lakh. Please suggest where I should invest. gains from sale of listed equity shares. Can I submit You can also invest the amount in a
ITR-1 and report these as exempt income?
residential property, or use it to build
a house, within two years of the date
You are in the spending phase of your life and should invest
of sale or one year prior to the sale.
in avenues where you can maintain liquidity and can enjoy Yes, you can submit ITR 1 in this case, if your annual You and your wife can both the invest
your funds as and when required. We suggest you continue salary income is less than `50 lakh. The exempt the sale proceeds and claim
investing in the PPF till maturity and then you may put the income category in ITR 1 covers the following: exemptions as per your share of
accumulated sum in a balanced funds. You can expect tax- Income from dividend, income from sale of equity ownership in the land.
efficient returns of around 10% per annum from these shares where STT has been paid, and agricultural
funds. You can invest the remaining `16 lakh in a mutual income less than `5,000. If you are using the I-T
fund monthly income plan, and opt for systematic Department’s portal to file, the dividend income
withdrawals of `10,000 per month. This tax-efficient avenue should be filled in exempt income, under Section
can help you get a return of around 10%. We also suggest you 10(34), and income from sale of shares should be ARCHIT GUPTA
make a will as it’ll help you to pass on your wealth. filled under exempt income, under Section 10(38). CEO, CLEARTAX

Ask our experts

RAHUL PARIKH SHUBHAM AGRAWAL
CEO, BAJAJ SENIOR TAXATION ADVISOR, Have a question for the experts? Mail it to
CAPITAL TAXFILE.IN [email protected] with Query as subject.
Insurance The Economic Times Wealth, July 24-30, 2017
21

More people buy health

insurance before marriage
Find out how Indians’ priorities related to health insurance change after they get married,
according to the recent Max Bupa Health Insurance Pulse 2017 survey.

1 What is your reason for 3 Which type of insurance b Indemnity with critical illness

buying health insurance? do you prefer? Pre-marriage

33%

a Taking care of b Increased susceptibility to a Only 33%

physical health. lifestyle diseases / to take Post-marriage
indemnity
care of critical illness.

49% 44% 16% 11% c Fixed benefit health plans

Pre-marriage Pre-marriage Pre-marriage Post-marriage
53% 51% 27%
Post-marriage Post-marriage Pre-marriage
23%
Post-marriage
c Increasing medical expenses.
a Life insurance 5
d Personal accident cover
58%
Pre-marriage
72%
What type
50%
Pre-marriage
46%
Post-marriage
Post-marriage of coverage
b Health insurance
do you have? 13%
Pre-marriage
14%
Post-marriage
d Safety of family.
64% a Myself
32% Do you Pre-marriage
Pre-marriage
have life 6 What is
Post-marriage
42%
2 and health 62% the sum
e Recent bad experience insurance?
Post-
marriage
64%
Pre-marriage
42%
Post-marriage
assured
in family. taken?
b Me & my family
a Less than `1 lakh
36%
Pre-marriage
The survey was carried out
among 2,000 Indians in 28-70 58%
34% 32% Post-marriage
Pre-marriage Post-marriage year age group, comprising 54%
men and 46% women. All
figures do not add up to 100%
7% 7%
Pre-marriage Post-marriage
due to multiple responses.

29%
4 What are your b `1-2
lakh
Pre-marriage

expectations from Post-marriage

20%

health insurance? c Take care of physical health.

c `2-5 lakh d `5-10 lakh
a Should 53% 44%
pay for all Pre-marriage Pre-marriage
healthcare 51% 48%
needs. Post-marriage Post-marriage
36% 22% 21%
Pre-marriage Pre-marriage Post-marriage
b Should help settle d Provide claims e Should offer flexibility
claims on time. without deductions. to customise products.
e `10-30 lakh
32% 3%
Pre-marriage
Pre-marriage
43% 7%
35% 49% Post-marriage 36% 39% 43%
Pre-marriage Post-marriage Pre-marriage Post-marriage Post-marriage Post-marriage
22 The Economic Times Wealth, July 24-30, 2017 Smart Stats

smart stats
In Mutual funds 23
This Loans and deposits 26
Section Alternate investments 27

ET WEALTH TOP 50 STOCKS

Every week we put about 3,000 stocks through four key filters and rate them on a mix of factors. The end result of this
exercise is the listing of the top 50 stocks based on the composite rating to help ease your fortune hunt.
RANK PRICE ` GROWTH%* VA L UAT I O N R AT I O S RISK R AT I N G Fast Growing Stocks
Current Previous Stock Revenue Net Div Downside Bear No. of Consensus Top 5 stocks with the highest expected revenue
Rank Rank Price Profit PE PB Yield PEG Risk Beta Analysts Rating % growth over the previous year.
Vedanta 1 1 269.55 20.80 94.28 14.47 1.65 7.12 0.26 1.67 1.51 22 4.86
Indiabulls Housing Fin 92
Power Grid Corporation 2 2 218.70 27.50 32.80 15.33 2.29 1.15 0.46 0.92 0.84 42 4.57
Apollo Tyres 3 3 253.70 14.84 371.04 11.73 1.77 1.17 0.03 1.43 1.60 25 4.32 Manappuram Finance 85
GAIL India 4 4 379.15 30.64 40.18 19.05 1.63 2.27 0.47 0.98 1.17 38 3.42 L&T Finance Holdings 51
Oil & Natural Gas Corporation 5 5 165.85 11.79 21.58 10.34 0.96 4.55 0.41 0.94 0.43 37 4.24
Havells India 48
CESC 6 6 899.85 15.89 36.20 17.21 1.17 1.11 0.23 1.41 1.49 27 4.22
Engineers India 45
Tata Power 7 7 82.90 23.15 128.95 30.13 1.69 1.57 0.18 1.01 1.71 27 3.18
VA Tech Wabag 8 11 602.95 21.03 89.33 32.71 3.37 0.60 0.36 1.14 1.20 21 4.71 See revenue column in the adjacent table.
Indiabulls Housing Finance 9 8 1,158.75 92.38 32.62 16.86 4.18 3.13 0.52 1.35 1.63 14 4.36
Hindalco Industries 10 9 213.65 11.63 126.92 22.99 1.03 0.47 0.21 1.57 2.05 31 4.48
Tata Motors 11 10 460.15 15.99 116.71 20.96 2.69 0.04 0.18 1.48 2.54 46 4.39 Least Expensive Stocks
J Kumar Infraprojects 12 16 295.40 38.57 35.18 21.19 1.61 0.68 0.52 2.40 2.32 16 4.69 The 5 stocks with the lowest forward PE.
Granules India 13 12 145.45 25.82 76.46 20.18 3.68 0.59 0.34 1.63 2.11 15 4.47
Oil & Natural Gas Corp 10.34
JK Cement 14 20 985.00 21.81 61.69 30.10 3.88 0.82 0.49 1.31 1.81 24 4.38
IRB Infrastructure 10.66
Cyient 15 14 523.00 13.74 23.24 17.00 2.76 2.00 0.72 1.08 -0.48 25 4.56
Oil India 16 13 285.25 30.13 13.04 14.20 0.77 5.47 1.03 0.90 0.51 31 3.64 Manappuram Finance 11.33
NMDC 17 15 123.40 16.16 41.21 19.32 1.74 10.37 0.30 1.46 2.49 25 2.80 Apollo Tyres 11.73
NTPC 18 17 165.45 16.55 11.02 12.78 1.40 2.60 1.07 0.90 1.13 38 4.47 NTPC 12.78
L&T Finance Holdings 19 21 152.80 51.37 38.35 29.47 3.42 0.53 0.58 1.56 3.25 14 4.79 See PE column in the adjacent table.
Cipla 20 19 571.90 21.12 78.46 45.83 3.69 0.35 0.57 0.98 0.58 44 3.41
Jubilant Life Sciences 21 18 742.00 21.04 43.67 19.88 3.33 0.42 0.48 1.78 2.48 14 4.93
DB Corp 22 24 373.80 16.45 20.24 18.25 4.29 2.23 0.86 0.80 0.53 22 4.41 Best PEGs
ACC 23 37 1,712.00 22.63 71.48 53.39 3.73 0.98 0.79 1.06 1.54 39 3.13 Top 5 stocks with the least price earning
Bharat Heavy Electrica 24 23 146.45 14.54 218.96 78.52 1.10 0.83 0.36 1.40 2.19 46 2.17 to growth ratio.
Dr Reddy's Laboratories 25 22 2,750.10 15.00 60.62 38.17 3.68 0.72 0.63 1.15 0.26 46 2.98
Tata Power Hindalco Industries
JSW Energy 26 25 65.45 14.17 35.45 16.97 1.04 0.78 0.46 1.56 2.43 27 3.48
Sobha 27 27 403.95 16.41 35.33 24.33 1.48 0.49 0.69 1.44 1.51 18 4.39
0.18 0.21
Persistent Systems 28 28 655.20 13.93 21.57 17.59 2.79 0.91 0.84 0.91 0.50 35 4.06
Gujarat Gas 29 29 766.80 36.61 146.44 47.57 6.31 0.33 0.32 1.05 0.91 20 3.60 0.03
IRB Infrastructure 30 32 216.25 5.55 14.75 10.66 1.45 2.31 0.53 1.54 3.14 23 4.52 0.18 0.23
Emami 31 31 1,085.15 21.99 89.86 71.89 13.93 0.82 0.74 1.20 1.50 36 4.11
Cadila Healthcare 32 26 525.80 32.16 42.81 36.76 7.86 0.59 0.91 1.45 1.50 39 4.03 Apollo Tyres Tata Motors CESC
Engineers India 33 30 164.75 45.38 33.09 33.23 3.86 2.23 1.34 1.57 1.99 21 4.14
See PEG column in the adjacent table.
JSW Steel 34 33 214.60 16.20 20.76 14.65 2.28 1.02 0.71 1.31 1.65 32 3.66
Arvind 35 34 379.65 17.99 54.55 31.34 2.76 0.63 0.57 1.41 2.77 18 4.11
Indraprastha Gas
Manappuram Finance
36
37
NR
35
1,124.80
101.90
38.99
85.20
24.71
10.88
26.03
11.33
5.24
2.54
0.84
1.98
1.05
1.03
1.00
2.23
1.50
3.90
33
11
3.82
5.00
Income Generators
Top 5 stocks with the highest dividend yield.
JK Lakshmi Cement 38 36 463.95 29.94 188.60 64.06 3.92 0.05 0.34 1.44 2.22 25 3.68
India Cements 39 38 208.90 12.41 128.17 39.76 1.25 0.48 0.40 2.02 3.73 22 4.05 NMDC | 10.37
Ambuja Cements 40 39 261.60 18.64 50.49 47.12 2.70 1.06 1.10 1.16 1.74 38 3.11
Vedanta Ltd | 7.12
KEC International 41 NR 294.60 18.01 29.46 25.24 4.85 0.51 0.83 1.38 1.27 29 4.66
Oil India | 5.47
Havells India 42 40 463.35 47.87 74.33 59.65 8.79 0.75 0.76 1.41 1.76 44 2.93
Oil & Natural Gas
KEI Industries 43 NR 239.60 25.88 35.13 18.93 3.94 0.25 0.54 1.55 2.66 10 4.60
Corp | 4.55
Container Corporation 44 41 1,180.10 17.56 15.96 33.64 3.27 1.02 0.66 1.08 0.88 32 3.28
Indiabulls Housing
VRL Logistics 45 42 323.95 15.00 60.75 41.48 5.40 1.25 0.50 1.33 1.21 10 4.20 Fin | 3.13
Mindtree 46 46 484.30 11.04 25.89 19.67 3.02 1.97 0.78 1.10 1.17 31 2.42
Dividend stocks are considered
Indo Count Industries 47 43 159.20 19.11 30.79 13.64 3.74 0.25 0.44 1.91 2.66 12 4.67 safe stocks during a downturn.
Coromandel International 48 45 430.50 22.30 32.26 25.99 4.29 1.17 0.85 1.44 2.16 14 4.00 Figures indicate what an investor
can earn as dividend for every
Skipper 49 44 229.80 21.61 21.38 21.01 4.74 0.62 0.99 1.29 1.96 15 4.80 `100 invested.

* The figures under this head are for expected growth. NR: Not in the ranking. Data as on 20 July 2017. Source: Bloomberg
Least Risky
Top 5 stocks with the lowest downside risk.
expected to show growth in revenue, net weight to net profit growth and 10% to analysts covering the stock (the
Methodology profit and EPS (earnings per share) in the growth in EPS (the higher, the better, higher, the better) and 10% to Power
in the next four quarters. The final two for each parameter). Growth is consensus rating (a composite rating Grid Corp
The four filters used to arrive at filters were that the companies should calculated by comparing the based on the recommendations by all Persistent 0.92
the Top 50 stocks have made profits in the past four ’consensus estimate’ for the next 12 analysts who track a stock. Again, the Systems
Only traded stocks: Of the about 7,000 quarters and have a positive net worth. months with the historical 12-month higher, the better). 0.91
listed stocks, only actively traded stocks Rating rationale values. 4. ... and so do the risks.
were considered. Having arrived at the final stocks 2. ... but only at reasonable valuation. Total weight: 10%. Two kinds of risks Oil India NTPC
Only big stocks: Only companies with universe, we ranked them using the Total weight: 40%, which comprises were considered. A 5% weight was
an average market capitalisation and following four principles. 10% weight to PE ratio, 10% to PB assigned to downside risk and bear 0.90 0.90
revenue of over `1,000 crore were A percentile rating (on a 1-100 scale) is ratio, 10% to PEG ratio (the lower, beta each (the lower, the better, in
considered. given to each parameter and the the better, for all three parameters) both cases).
composite ranking is arrived at using the and 10% to dividend yield (the higher, DB Corp
Only well tracked: We picked stocks
that are tracked by at least 10 analysts. weighted average of these parameters. the better). 0.80
The ranking methodology has been developed
Only profitable and growing: We 1. Growth is the key... 3. Analysts’ views matter... by Narendra Nathan. A detailed explanation
considered only those stocks that are Total weight: 30%, which comprises Total Weight: 20%, which comprises of the methodology is available at See downside risk and bear beta columns
10% weight to revenue growth, 10% 10% weight to the total number of www.economictimes.com/wealth in the adjacent table.
Smart Stats The Economic Times Wealth, July 24-30, 2017
23

LAGGARDS & LEADERS

ETW FUNDS 100
B E S T F U N D S T O B U I L D Y O U R P O R T F O L I O
Taking a long-term view of fund returns, here is a list of 10 funds
in each category—five leaders (worth investing) and five laggards
(that may be a drag on your portfolio).

LAGGARDS LEADERS

ET Wealth collaborates with Value Research to identify the top-performing 100 funds Equity: Large cap 5-year returns
across 10 categories. Equity funds and equity-oriented hybrid funds are ranked on 3-year 11.84 22.25
returns while debt-oriented hybrid and income funds are ranked on 1-year returns. HSBC Dynamic Fund Mirae Asset India Opportunities Fund

12.54 20.85
Baroda Pioneer Large Cap Fund SBI Bluechip Fund
VALUE NET R E T U R N S ( % ) 12.83 20.62
RESEARCH ASSETS EXPENSE
FUND RATING (` cr) 3-MONTH 6-MONTH 1-YEAR 3-YEAR 5-YEAR RATIO LIC MF Index-Sensex Plan JM Multi Strategy Fund
Equity: Large Cap
Mirae Asset India Opportunities Fund ����� 4,030.38 10.17 20.87 25.99 17.71 22.25 2.31 17.7%
The 3-year
13.05
Tata Index Sensex Fund
19.93
Birla Sun Life Frontline Equity Fund
JM Multi Strategy Fund ����� 139.30 7.72 22.45 32.38 16.81 20.62 —
return of Mirae 13.08 19.81
Motilal Oswal MOSt Focused 25 Fund* ����� 631.20 6.08 19.54 25.35 16.64 — 2.63 Asset India Opp
Invesco India Growth Fund ���� 189.99 10.27 20.59 22.78 16.29 19.49 2.32 is the highest in Motilal Oswal MOSt Shares M50 Birla Sun Life Top 100 Fund

SBI Bluechip Fund ����� 14,266.72 7.6 17.07 17.49 16.29 20.85 1.97 its category.

DSP BlackRock Focus 25 Fund ���� 2,607.40 5.9 15.07 17.83 15.37 18.8 2.46
Reliance Top 200 Fund ���� 3,565.73 9.93 21.57 24.85 15.25 19.34 2.03 Equity: Multi cap 5-year returns
Franklin India Flexi Cap Fund ����� 2,931.93 7.28 15.94 16.05 14.84 19.74 2.29
Birla Sun Life Frontline Equity Fund ����� 17,769.64 8.11 17.82 19.91 14.42 19.93 2.07 12.52 25.19
IDBI India Top 100 Equity Fund* ���� 439.24 8.09 18.78 17.66 14.22 17.78 2.94 LIC MF Equity Fund Franklin India High Growth Companies Fund
Kotak 50 Regular Plan ���� 1,366.35 7.68 16.63 16.1 14.19 16.77 2.17 13.18 23.93
Birla Sun Life Top 100 Fund ���� 2,984.84 7.72 17.71 20.63 14.04 19.81 2.19 Edelweiss Prudent Advantage Fund Birla Sun Life Advantage Fund
Invesco India Business Leaders Fund ���� 126.88 8.84 16.56 15.98 14.01 17.26 2.36
13.35 23.67
DHFL Pramerica Large Cap Fund ���� 292.52 8.78 18.98 17.21 13.36 17.25 2.54
UTI Dividend Yield Fund Birla Sun Life Equity Fund
ICICI Prudential Focused Bluechip Equity Fund ���� 13,497.24 8.61 16.97 19.52 13.29 18.19 2.1
13.55 22.59
Invesco India Dynamic Equity Fund ���� 240.57 6.84 15.29 19.81 13.24 17.68 2.48
Union Equity Fund Kotak Select Focus Fund Regular Plan
SBI Magnum Equity Fund ���� 2,055.40 6.57 15.48 14.61 13.1 16.26 2.1
Edelweiss Equity Opportunities Fund ���� 263.87 8.29 19.19 17.4 12.95 16.86 2.54 14.03 22.58
Reliance NRI Equity Fund ���� 89.72 6 16.42 21.07 12.52 17.32 2.68 Birla Sun Life International Equity Fund Reliance ETF Junior BeES

Equity: Multi Cap

Motilal Oswal MOSt Focused Multicap 35 Fund ����� 7,095.95 5.99 23.5 32.45 27.1 — 2.16 27.1%
The 3-year return
Equity: Mid cap 3-year returns
Birla Sun Life Advantage Fund ���� 3,702.85 8.87 20.83 26.44 20.06 23.93 2.24
of Motilal Oswal
Kotak Select Focus Fund ���� 11,590.49 7.34 20.06 25.49 19.99 22.59 1.98 0.45 28.79
MOSt Focused 35
Franklin India High Growth Companies Fund ����� 6,581.90 6.87 18.43 20.65 19.63 25.19 2.32 is the highest in Baroda Pioneer Midcap Fund Mirae Asset Emerging Bluechip Fund
SBI Magnum Multicap Fund ����� 2,486.50 6.86 17.79 22.05 19.56 21.85 2.07 its category.
12.16 25.48
Reliance ETF Junior BeES ���� 125.76 7.53 21.2 29.62 19.38 22.58 1 Birla Sun Life Dividend Yield Plus Fund Kotak Emerging Equity Scheme
ICICI Prudential Nifty Next 50 Index Fund ���� 70.22 7.49 21.36 30.18 19.29 22.11 0.81
12.46 25.01
Kotak Opportunities Fund ���� 1,654.75 7.01 19.22 26.68 18.9 20.57 2.13 HDFC Core & Satellite Fund Canara Robeco Emerging Equities Fund
DSP BlackRock Opportunities Fund ���� 2,770.97 6.39 16.23 25.29 18.5 21.75 2.51
14.25 24.18
Invesco India Contra Fund ���� 552.96 8.07 19.69 25.35 17.93 22.35 2.43
Axis Midcap Fund Principal Emerging Bluechip Fund
Birla Sun Life Equity Fund ���� 6,016.35 8.45 17.43 30.18 17.63 23.67 2.2
14.79 23.53
Franklin India Prima Plus Fund ���� 11,027.37 7.89 17.57 17.31 17.56 20.69 2.22
DHFL Pramerica Midcap Opportunities Fund Kotak Mid-Cap Regular Plan
BNP Paribas Dividend Yield Fund ���� 347.65 8.57 20.03 25.47 17.07 20.57 2.69
SBI Magnum Multiplier Fund ���� 1,860.36 6.57 17.28 20.25 16.63 20.54 2.11
ICICI Prudential Indo Asia Equity Fund ���� 171.12 5.95 19.24 28.05 15.12 20.28 2.6
ICICI Prudential Value Discovery Fund ���� 17,231.64 3.57 11.47 11.75 14.21 22.26 2.11 Equity: Small cap 3-year returns
Equity: Mid Cap
Mirae Asset Emerging Bluechip Fund ����� 4,005.24 8.78 25.26 37.52 28.79 32.41 2.35
28.8%
The 3-year
13.06
Union Small and Midcap Fund
30.53
SBI Small & Midcap Fund
Kotak Emerging Equity Scheme ���� 2,043.78 4.4 19.39 27 25.48 27.02 2.1
return of Mirae
Canara Robeco Emerging Equities Fund ���� 1,994.12 5.95 24.87 34.77 25.01 29.64 2.36 Asset Emerging 19.84 30.11
Bluechip is the HSBC Midcap Equity Fund DSP BlackRock Micro Cap Fund
Principal Emerging Bluechip Fund ���� 1,098.38 6.62 22.15 32.37 24.18 28.86 2.21
highest in its
L&T India Value Fund ���� 4,453.76 7.92 19.76 30.96 23.04 27.57 2.02 21.73 26.59
category.
HDFC Mid-Cap Opportunities Fund* ���� 16,932.63 6.03 19.79 30.17 22.58 26.63 2.07 HDFC Small Cap Fund L&T Midcap Fund

SBI Magnum Midcap Fund ���� 3,789.44 3.86 14.81 17.76 22.21 28.95 2.03 24.26 26.53
Franklin India Prima Fund ���� 5,747.47 3.16 18.21 22.4 21.68 27.6 2.31 Franklin India Smaller Companies Fund L&T Emerging Businesses Fund
Motilal Oswal MOSt Focused Midcap 30 Fund ���� 1,337.15 0.11 13.08 19.69 21.06 — 2.48 24.68 26.49
Sundaram S.M.I.L.E. Fund Reliance Small Cap Fund
Equity: Small Cap
SBI Small & Midcap Fund ���� 706.87 7.87 23.13 32.08 30.53 33.18 2.38
DSP BlackRock Micro Cap Fund ����
����
5,919.83 5.21 18.29 28.69 30.11 32 2.38
Hybrid: Equity oriented 5-year returns
Franklin India Smaller Companies Fund 5,830.46 4.67 18.44 24.59 24.26 32.14 2.38

Equity: Tax Planning 7.88 20.17

Tata India Tax Savings Fund

Birla Sun Life Tax Relief 96
����
�����
704.87
3,533.88
8.15
8.89
22.68
21.49
25.3
23.27
20.25
19.51
21.87
23.08
2.52
2.27
20.2%
The 3-year return
Principal Equity Savings Fund

8.48
ICICI Prudential Balanced Fund

20.12
Birla Sun Life Tax Plan ���� 551.95 8.74 21.25 22.69 18.72 22.3 2.63 of Tata India Tax Tata Regular Saving Equity Fund Tata Retirement Savings Fund
Savings Fund is
IDBI Equity Advantage Fund* ���� 644.94 7.31 18.76 17.53 18.25 — 2.85 the highest in its 9.51 20.05
IDFC Tax Advantage Fund ���� 621.42 10.3 25.33 29.45 17.79 22.31 2.4 category. L&T Equity Savings Fund L&T India Prudence Fund
DSP BlackRock Tax Saver Fund ���� 2,780.79 6.26 16.1 23.63 17.55 22.11 2.5 9.51 19.34
L&T Tax Advantage Fund ���� 2,293.41 8.05 21.62 26.85 17.49 19.82 2.08 DHFL Pramerica Equity Income Fund HDFC Balanced Fund
Franklin India Taxshield Fund ���� 3,041.93 6.63 15.2 15.62 16.64 19.87 2.34
11.10 19.28
Axis Long Term Equity Fund ����� 13,544.32 8.89 21.23 17.67 16.56 23.95 1.97 HDFC Equity Savings Fund SBI Magnum Balanced Fund
Invesco India Tax Plan ���� 420.62 7.73 17.3 19.22 16.52 21.04 2.46
Annualised returns in % as on 19 July 2017.
24 The Economic Times Wealth, July 24-30, 2017 Smart Stats

ETW FUNDS 100 Top 5 SIPs

VALUE NET R E T U R N S ( % )
RESEARCH ASSETS EXPENSE Top 5 equity schemes based on 10-yr SIP returns.
FUND RATING (` cr) 3-MONTH 6-MONTH 1-YEAR 3-YEAR 5-YEAR RATIO
Hybrid: Equity-oriented
Tata Retirement Savings Fund
L&T India Prudence Fund
�����
�����
151.05
5,168.47
5.14
6.92
20.05
16.64
25.06
20.71
19.72
16.82
20.12
20.05
2.79
2.02
19.7%
The 3-year return
DSP BlackRock Micro Cap Fund
26.50
HDFC Balanced Fund* ���� 12,483.37 8.11 15.96 22.53 16.1 19.34 1.87 of Tata Retire- Canara Robeco Emerging Equities Fund
ment Savings 24.68
ICICI Prudential Balanced Fund ���� 14,242.74 6.7 12.43 22.52 15.72 20.17 2.25
Fund is the high-
Birla Sun Life Balanced '95 Fund ���� 9,258.64 5.6 13.74 18.65 15.42 18.7 2.22 est in its category. Franklin India Smaller Companies Fund
SBI Magnum Balanced Fund ���� 12,059.84 7.71 14.01 16.17 14.56 19.28 1.98 24.00
HDFC Mid-Cap Opportunities Fund
Hybrid: Debt-oriented Conservative 23.26
ICICI Prudential MIP 25 ���� 1,377.84 4.43 7.98 14.35 12.49 12.63 2.12 L&T Midcap Fund
SBI Magnum Monthly Income Plan ���� 1,216.60 3.53 5.54 12.42 12.49 11.5 1.96 22.75
ICICI Prudential Regular Income Fund ���� 2,488.80 2 3.64 8.87 10.23 9.02 1.56
SIP: Systematic investment plan % annualised returns
SBI Magnum Monthly Income Plan ����� 239.70 1.88 4.46 8.63 10.61 11.14 2.31
As on 19 July 2017
Debt: Income
SBI Regular Savings Fund ���� 806.81 2.95 4.92 12.86 11.08 10.51 1.2 12.9%
The 1-year return
SBI Magnum Income Fund ���� 1,844.45 3.01 4.58 11.88 10.71 9.25 1.45
of SBI Magnum
Franklin India Income Builder Fund ���� 970.03 2.71 4.41 10.56 9.88 9.75 2.11
Income is the
ICICI Prudential Banking & PSU Debt Fund ���� 7,924.17 3.04 3.75 10.55 10.25 9.76 — highest in its
category.
Top 5 MIPs
DHFL Pramerica Medium Term Income Fund ���� 770.28 3.03 3.62 10.5 10.68 — 1.03
Top 5 MIP schemes based on 3-year SWP returns.
UTI Medium Term Fund - Regular Plan* ����� 168.22 2.39 3.65 9.91 — — 1.25
Kotak Medium Term Fund - Regular Plan ����� 4,397.77 2.17 3.4 9.74 10.15 — 1.7 ICICI Prudential MIP 25
Birla Sun Life Treasury Optimizer Fund ���� 7,268.23 2.7 3 9.48 10.31 10.17 0.6 12.59
HDFC Medium Term Opportunities Fund* ���� 8,982.39 2.52 3.49 9.45 9.7 9.49 0.31 SBI Magnum Monthly Income Plan
Kotak Corporate Bond Fund ���� 1,076.98 2.12 3.64 8.82 10.23 8.78 0.5 12.46
Invesco India Medium Term Bond Fund ����� 1,360.47 1.94 3.83 8.24 8.98 8.44 0.9 Kotak Monthly Income Plan
11.63
Debt: Short Term
Franklin India Low Duration Fund
UTI Banking & PSU Debt Fund*
�����
����
4,236.30
1,382.44
2.5
2.18
4.59
3.45
9.96
9.64
9.81
9.42
9.76
—
0.78
0.3
9.9%
The 1-year return
Reliance Monthly Income Plan
11.35
UTI MIS Advantage Fund
����
of Franklin India
DHFL Pramerica Short Maturity Fund 1,692.75 2.45 4.05 9.43 9.38 9.25 1.3 11.11
Low Duration Fund
Baroda Pioneer Short Term Bond Fund* ����� 549.06 1.95 4.14 9.32 9.18 8.97 1.23 is the highest in its
BOI AXA Short Term Income Fund ���� 375.99 2.09 3.73 9.25 9.31 8.64 1.35 category. SWP: Systematic withdrawal plan % annualised returns

HDFC Regular Savings Fund* ���� 4,988.47 2.08 3.68 9.14 9.83 9.35 1.77
As on 19 July 2017
Birla Sun Life Short Term Fund ���� 18,055.01 2.35 3.58 9.09 9.59 9.49 0.31
HDFC Short Term Opportunities Fund* ���� 9,410.55 2.08 3.54 8.42 9.04 9.08 0.36
Reliance Medium Term Fund ���� 10,234.98 1.96 3.45 8.15 8.72 8.77 0.9
Indiabulls Short Term Fund ���� 436.77 1.92 3.35 7.9 8.76 — —

Debt: Ultra Short Term

Large Cap
BOI AXA Treasury Advantage Fund ����� 522.07 1.95 4.1 8.8 8.9 9 0.55 8.8%
The 1-year return
Cash Holdings
L&T Floating Rate Fund ���� 506.64 2.12 3.86 8.66 8.58 8.89 0.74
of BOI AXA Treas- 46.06
Baroda Pioneer Treasury Advantage Fund* ���� 2,233.72 1.93 4 8.59 9.02 9.14 0.8
ury Advantage is
Kotak Low Duration Fund ���� 5,096.78 1.93 3.73 8.42 9.19 8.68 0.99 the highest in its
DHFL Pramerica Low Duration Fund ���� 1,392.60 1.87 3.69 8.22 8.99 9.06 1.13 category.
Indiabulls Ultra Short Term Fund ���� 950.56 1.87 3.67 8.19 8.67 8.86 —
JM Floater Long Term Fund ����� 225.57 1.87 3.81 7.91 8.5 8.4 —
JM Money Manager Fund ���� 114.19 1.69 3.17 7.42 8.38 8.8 —
Principal Money Manager Fund ���� 30.29 1.51 3.28 7.02 8.23 8.79 1.19 11.34
9.79
7.32 7.23
Debt: Dynamic Bond Exp. ratio as on 30 June 2017
UTI Dynamic Bond Fund* ���� 1,540.44 3.39 4.25 13.34 11.29 10.8 1.64 *Exp ratio before 30 June 2017
HSBC HSBC Union Franklin JM
ICICI Prudential Long Term Fund ���� 2,336.90 4.23 4.39 13.32 12.57 12.14 1.26 Returns as on 12 July 2017 Dividend Dynamic Focussed India Equity
SBI Dynamic Bond Fund ���� 3,014.09 3.55 4.43 12.43 11.36 9.45 1.52 Assets as on 30 June 2017 Yield Equity Fund Largecap Flexi Cap Fund
All equity funds sorted on 3-year returns; debt funds ranked on 1-year returns Rating as on 30 June 2017 Fund Fund Fund

% as on 30 June 2017
Did not find your fund here?
Log on to www.wealth.economictimes.com for an exhaustive list.

Methodology
EQUITIES (figures over the past one year)
The Top 100 includes only those funds that have a 5- or
Large-cap: Mostly invested in large-cap companies.
Debt: Liquid
4-star rating from Value Research. The rating is determined
by subtracting a fund’s risk score from its return score. Multi-cap: Mostly invested in large- and mid-cap FUND Expense Ratio
The result is assigned stars according to the following companies.
distribution: Mid-cap: Mostly invested in mid-cap companies.
RAISER 0.10
0.11

����� Top 10% Small-cap: Mostly invested in small-cap companies. 0.09

10 lakh
0.08
���� Next 22.5% Tax planning: Offer tax rebate under Section 80C. 0.07
(Not covered
��� Middle 35% in ETW Funds International: More than 65% of assets invested abroad.
��� Next 22.5% 100 listing) Income: Average maturity varies according to objective. Is the number of mutual
� � Bottom 10% Gilt: Medium- and long-term; invest in gilt securities. fund investor accounts
Fixed-income funds less than 18 months old and equity Equity-oriented: Average equity exposure more added in June. This
funds less than three years old have been excluded. This than 60%. takes the total investor Kotak Kotak UTI Liquid DHFL Canara
ensures that all the funds have existed long enough to be Debt-oriented aggressive: Average equity exposure folio count to an all-time Liquid Floater Cash Pramerica Robeco
tracked for consistency of performance. Given the focus on between 25-60%. Short Term Fund Insta Cash Liquid
long-term investing, liquid funds, short-term funds and FMPs high of 57.82 million, Plus Fund Fund
Debt-oriented conservative: Average equity exposure according data from the
are not part of the list. For the same reason, we have con-
less than 25%.
sidered only the growth option of funds that reinvest returns Securities and Exchange % as on 31 May 2017
instead of offering dividends that increase the NAV of funds. Arbitrage: Seek arbitrage opportunities between equity
and derivatives. Board of India.
Despite these rigorous filters, the list includes 2/3 funds of % expense ratio is charged annually.
each category to maximise choice from the best funds. Asset allocation: Invest fully in equity or debt as per
market conditions. Methodology of Top 100 funds on www.wealth.economictimes.com
The fund categories are:
Mutual Funds The Economic Times Wealth, July 24-30, 2017
25

BIRLA SUN LIFE TAX RELIEF 96

Among the best tax-saving funds

ET Wealth collaborates with Value Research to analyse top mutual funds. We examine the key fundamentals
of the fund, its portfolio and performance to help you make an informed investment decision.

HOW HAS THE FUND PERFORMED? BASIC WHERE DOES THE

With a 10-year return of 11.25%, the fund has beaten both the category average
(10.92%) and the benchmark (8..55%).
FACTS FUND INVEST?
DATE OF LAUNCH
29 Mar 1996
Fund
Portfolio asset
Growth of `10,000 vis-a-vis category and benchmark `29,044 CATEGORY
allocation Debt & Cash
Fund style
Equity
Category
TYPE
0.93% box
`28,190 Growth Blend Value
Tax Planning

Small Medium Large

CAPITALISATION
AVERAGE AUM 6.36%
`3,533.88 cr SMALL CAP

BENCHMARK
`10,000
S&P BSE 200 Index 43.89%
49.74%
MID CAP LARGE CAP
Index INVESTMENT STYLE
`22,706 WHAT IT Equity
99.07%

July 2007 July 2010 July 2013 July 2017

COSTS The fund maintains no bias
NAVS* towards any market cap.
As on 18 July 2017
GROWTH OPTION
`28
The fund has marginally outperformed Top 5 sectors in portfolio (%)
DIVIDEND OPTION
its peers over the past decade.
`159 Financial 20.03
MINIMUM INVESTMENT Automobile 18.56
`500
Services 10.84
Fund MINIMUM SIP AMOUNT
Annualised performance (%) `500 Healthcare 9.57
Index
Category average EXPENSE RATIO (%)
FMCG 9.28
23.25 2.27 Nearly 40% of the portfolio is invested
22.89 23.06
20.68 EXIT LOAD in financial and auto sectors.
19.35 18.52 19.27 19.27
17.41 1% for redemption
15.83 15.09 within 365 days
10.95
*As on 18 July 2017
Top 5 stocks in portfolio (%)
Sundaram-Clayton 8.55
Honeywell Automation 5.62
Bayer CropScience 5.61
6 month 1 year 3 year 5 year Gillette 5.35
As on 18 July 2017 Johnson Controls - Hitachi 4.37
The fund has vastly outperformed Air Conditioning India
over the 3- and 5-year periods. The fund takes large positions in its top
bets and is benchmark agnostic.

Yearly performance (%) HOW RISKY IS IT?

Fund Category Index

54.54 51.14 Standard Deviation 13.46 14.11 13.04

35.47

9.15
24.28 21.87 24.50
FUND Sharpe Ratio 1.00 0.75 0.44

Mean Return 18.04 15.12 10.32

-1.48
3.55 3.42 3.95 4.90
MANAGER As on 30 June 2017 Based on 3-year performance.
2014 2015 2016 2017 Ajay Garg
TENURE: 10 YEARS AND 8 MONTHS The fund boasts a superior risk-return
Barring last year, the fund has consistently As on 18 July 2017 Education: B.E and MBA profile compared to many of its peers.
outperformed in recent years.
Wherever not specified, data as on 30 June 2017. Source: Value Research

SHOULD This fund has no particular bias

towards any market cap size and
businesses with strong moats and the
ability to sustain or achieve leadership
tions in his top bets, most of which are
not a part of the benchmark index.
the portfolio. In fact, many of the top
picks are from the MNC space. Boast-
YOU takes a pure bottom-up view in portfo-
lio construction. The emphasis is on
position over a decade. The fund man-
ager does not believe in index hugging,
This lends an element of aggression to
the portfolio. However, the strict focus
ing among the best risk-return profile
in its category, the fund’s proven track
BUY? quality—the fund manager prefers and is comfortable taking large posi- on quality ensures there is no junk in record makes it a worthy pick.
26 The Economic Times Wealth, July 24-30, 2017 Smart Stats

LOANS & DEPOSITS

ET Wealth collaborates with ETIG to provide a comprehensive ready reckoner of loans and fixed-income
instruments. Don’t miss the information on investments for senior citizens and a simplified EMI calculator.

Top five bank FDs Top banks for 2 years

Interest rate (%) What `10,000
Tenure: 1 year compounded qtrly will grow to
BANK NAME MCLR WITH EFFECT FROM
IDFC Bank
RBL Bank
7.50
7.40
10,771
10,761
Bank MCLR State Bank Of India 8.10 1 July 2017
DCB Bank 7.20 10,740 Marginal Cost of funds-based Lending Rate HDFC Bank 8.25 7 June 2017
City Union Bank 7.10 10,729 (MCLR) is the new benchmark lending rate Axis Bank 8.30 17 June 2017
Yes Bank 7.10 10,729 designated by RBI and will replace the base
Tenure: 2 years rate for new borrowers. Union Bank Of India 8.45 1 July 2017
RBL Bank 7.50 11,602 IOB 8.65 10 May 2017
DCB Bank 7.25 11,545
IDFC Bank 7.25 11,545
IndusInd Bank
Yes Bank
7.15
7.10
11,523
11,511
Top banks for 6 months Top banks for 3 years
Tenure: 3 years BANK NAME MCLR WITH EFFECT FROM BANK NAME MCLR WITH EFFECT FROM
RBL Bank 7.35 12,442 State Bank of India 7.95 7 June 2017 State Bank of India 8.15 1 July 2017
DCB Bank 7.25 12,405
IDFC Bank 7.20 12,387
Axis Bank 8.15 1 July 2017 Axis Bank 8.35 17 June 2017
Yes Bank 7.10 12,351 ICICI Bank 8.15 17 June 2017 HDFC Bank 8.45 7 June 2017
Lakshmi Vilas Bank 7.00 12,314
Bank of India # 8.25 1 July 2017 Bank of Baroda * 8.50 7 July 2017
Tenure: 5 years
RBL Bank 7.35 14,393
Canara Bank 8.25 7 June 2017 Punjab National Bank 8.50 1 July 2017
DCB Bank 7.25 14,323
IDFC Bank 7.20 14,287
Yes Bank 7.10 14,217 Top banks for 1 year Top banks for 5 years
Karur Vysya Bank 7.00 14,148
BANK NAME MCLR WITH EFFECT FROM BANK NAME MCLR WITH EFFECT FROM

State Bank Of India 8.00 1 July 2017 Bank of Baroda * 8.65 7 July 2017
Top five senior citizen bank FDs HDFC Bank 8.15 7 June 2017 Punjab National Bank 8.65 1 July 2017
Interest rate (%) What `10,000
Tenure: 1 year compounded qtrly will grow to ICICI Bank 8.20 1 July 2017 Indian Bank 8.90 3 July 2017
RBL Bank 7.90 10,814
Axis Bank 8.25 17 June 2017 Punjab & Sind Bank 9.10 7 June 2017
IndusInd Bank 7.65 10,787
Yes Bank 7.60 10,782 Bank Of Baroda * 8.35 7 July 2017
City Union Bank 7.50 10,771
Union Bank of India 7.50 10,771 * Strategic Premium of 0.25%. # Business Strategy Spread of 0.30%.
For any changes in MCLR rates, please email us at [email protected]
Tenure: 2 years
RBL Bank 8.00 11,717
IDFC Bank 7.75 11,659
DCB Bank 7.70 11,648 Your EMI for a loan of `1 lakh
IndusInd Bank 7.65 11,636 TENURE 5 YEARS 10 YEARS 15 YEARS 20 YEARS 25 YEARS
Yes Bank 7.60 11,625
@ 8% 2,028 1,213 956 836 772
Tenure: 3 years
RBL Bank 7.85 12,627 @ 10% 2,125 1,322 1,075 965 909
DCB Bank 7.75 12,589 @ 12% 2,224 1,435 1,200 1,101 1,053
IDFC Bank 7.70 12,571
Yes Bank 7.60 12,534
@ 15% 2,379 1,613 1,400 1,317 1,281
Figures are in `. Use this calculator to check your loan affordability. For example, a `5 lakh loan at 12% for 10 years will translate into an EMI of `1,435 x 5 = `7,175
Lakshmi Vilas Bank 7.50 12,497

Tenure: 5 years
RBL Bank 7.85 14,751 Post office deposits Interest (%)
Minimum
invt. (`)
Maximum
investment (`)
Features
Tax
benefits
DCB Bank 7.75 14,678
IDFC Bank 7.70 14,642 Senior Citizens’ Saving Scheme 8.3 1,000 15 lakh 5-year tenure, minimum age 60 80C
Yes Bank 7.60 14,571 Sukanya Samriddhi Account 8.3 1,000 1.5 lakh per year One account per girl child 80C
Karur Vysya Bank 7.50 14,499
Public Provident Fund 7.8 500 1.5 lakh per year 15-year term, tax-free returns 80C

5-year NSC VIII Issue 7.8 100 No limit No TDS 80C

Top five tax-saving bank FDs Time deposit 6.8-7.6 200 No limit Available in 1, 2, 3, 5 years 80C #

Interest What `10,000

Post Office Monthly Income Single 4.5 lakh 5-year tenure, monthly returns Nil
Tenure: 5 years and above rate (%) will grow to 7.5 1500
Scheme Joint 9 lakh 5-year tenure, monthly returns Nil
RBL Bank 7.35 14,393
DCB Bank 7.25 14,323 Kisan Vikas Patra 7.6 1,000 No limit Can be encashed after 2.5 years Nil
IDFC Bank 7.20 14,287 Recurring deposits 7.1 10 No limit 5-year tenure Nil
Yes Bank 7.10 14,217
Karur Vysya Bank 7.00 14,148 Savings account 4 50 No limit `10,000 interest tax free Nil

All data sourced from Economic Times Intelligence Group ([email protected]). # Benefit available only for 5-year deposit
Non-traditional Investments The Economic Times Wealth, July 24-30, 2017
27

Alternative investment
returns monitor
The scope and attractiveness of alternative investments is increasing. Here’s a weekly tracker of returns from such investments. But don’t
compare these with returns from traditional investments since the proportion and purpose of alternative investments is vastly different.

Diamond Index Precious Metals Index Wine Index Coin Index

1,783.36 345.75
120.72 19 July 2016
19 July 2017 19,200
19 July 2016
116.91
19 July 2016 16,901
1,636.73 19 July 2017
19 July 2017 19 July 2017
304.05
19 July 2016
CHANGE

1 WEEK - 0.5% 1 WEEK 2.13% 1 WEEK 0.03%

- 1 WEEK - 5.05%
1 YEAR - 3.16% 1 YEAR 8.22%
- 1 YEAR 13.71% 1 YEAR - 11.97%
Overall Diamond Index is based The S&P GSCI Precious Metals The Liv-ex Fine Wine 50 Index The Krugerrand Coin index
on actual transactions from 20 Index comprises gold (91.33%) and tracks daily price movement of the represents the denomination of a
different market players and silver (8.67%) and provides a bench- most heavily traded commodities in 22 carat gold bullion coin weighing
reflects price movements in the mark for investment performance in the wine market. It includes only the one troy ounce that is listed for
global diamond market. The the precious metals commodity 10 most recent vintages and is trading on the Johannesburg
index is updated daily. markets. It is updated daily. updated daily. Stock Exchange.

Penny stocks update

Penny stocks as a recommended non-traditional investment? Not exactly. ET Wealth neither has the expertise nor
does it recommend investing in such stocks. But since the relatively ‘low’ cost of investment attracts some investors
to penny stocks, we provide a weekly snapshot of this most volatile and uncertain type of stock investing.

Top Price Gainers Top Volume Gainers

Stock Market price 1-week (%) 1-month (%) 1-month 1-month Market cap Stock Market price 1-week (%) 1-month (%) 1-month 1-month Market cap
(`) change change average volume average volume (` crore) (`) change change avg volume avg volume (` crore)
(lakh) change (%) (lakh) change (%)

Eastern Silk Industries 4.92 27.13 82.90 1.92 201.88 38.84 Neeraj Paper Marketing 9.62 4.68 -10.09 0.00 10,666.67 10.58
Mangal Credit and Fin. 3.07 -2.85 68.68 2.44 -14.65 48.54 Lanco Infratech 0.89 -2.20 -52.66 162.18 2,091.95 294.95
Samtex Fashions 5.73 21.66 68.04 0.21 -62.16 42.69 Rollatainers 5.85 -4.41 13.59 1.85 1,521.29 146.31
Unitech 8.45 17.69 65.36 162.01 433.78 2210.77 Econo Trade (India) 7.61 -9.30 -45.84 0.06 1,476.62 14.21
Karuturi Global 1.73 -3.89 63.21 14.47 207.61 140.08 JMT Auto 5.93 8.01 -5.42 7.98 1,345.16 298.75
Nu Tek India 0.99 0.00 59.68 2.59 264.44 15.30 Everlon Synthetics 2.25 0.00 15.98 0.06 965.52 12.65
RattanIndia Infra. 5.79 33.41 52.37 6.27 184.08 800.32 Aadhaar Ventures India 0.66 -7.04 -8.33 6.19 731.74 10.37
Techindia Nirman 7.65 26.03 51.19 0.04 -10.58 10.96 Indo Pacific Projects 1.63 1.87 1.24 0.02 543.50 16.38
Alacrity Securities 8.15 5.16 49.54 0.20 150.00 17.18 Noble Explochem 6.10 1.84 -1.45 0.05 485.74 11.73
Tarai Foods 6.04 0.83 47.68 0.03 12.97 10.71 Unitech 8.45 17.69 65.36 162.01 433.78 2,210.77

Top Price Losers Top Volume Losers

Lanco Infratech 0.89 -2.20 -52.66 162.18 2,091.95 294.95 SR Industries 9.25 -4.05 37.04 1.09 -100.00 12.88
Panafic Industrials 3.09 1.64 -48.15 3.32 -60.33 25.37 Cals Refineries 0.10 0.00 0.00 1.37 -87.76 82.94
Symbiox Investment 5.02 -14.77 -47.43 2.25 370.85 15.71 Lycos Internet 7.75 -5.26 -1.77 2.20 -65.33 369.09
Goenka Diamond 0.35 -5.41 -39.66 1.27 225.69 11.10 Panafic Industrials 3.09 1.64 -48.15 3.32 -60.33 25.37
Capital Trade Links 6.86 7.19 -36.48 4.29 -20.11 34.99 Indosolar 7.72 8.73 -12.67 2.06 -56.78 283.22
Virtual Global Education 2.45 20.10 -35.36 19.83 -26.10 103.81 SRS 3.16 -4.53 -18.56 2.28 -55.71 88.03
Nitin Fire Protection Ind. 7.57 -5.02 -30.80 4.17 8.34 221.23 Urja Global 0.84 -3.45 -14.29 1.21 -50.97 42.60
Jyoti Structures 8.58 -4.77 -27.04 3.45 205.45 93.99 Visagar Polytex 1.27 4.10 -1.55 6.63 -50.30 31.27
REI Agro 0.27 -3.57 -22.86 3.87 63.48 25.87 Vikas WSP 9.60 1.05 -8.40 1.02 -45.53 131.90
Ferro Alloys Corp 9.14 -1.93 -21.00 1.14 7.84 169.36 Gennex Laboratories 4.59 -4.57 -5.94 1.23 -43.14 58.06

The stocks have been selected using the following filters: Price less than `10, one-month average volume greater than or equal to 1 lakh and
market-capitalisation greater than or equal to `10 crore. Data as on 19 July 2017. Source: ETIG Database and Bloomberg
28 The Economic Times Wealth, July 24-30, 2017 Pick of the Week

J. K. Cement: Strengthening growth

The company has strong fundamentals, promising prospects and is trading at reasonable valuations.

D
espite its recent outperformance, analysts con- second-largest white cement manufacturer in India. Since Fundamentals
tinue to be bullish on J.K. Cement. This is be- there are only two major players in the white cement seg-
cause this fast-growing mid-cap cement com- ment, it offers relative price stability. In addition to faster Actual Consensus estimate

pany is expected to maintain its growth mo- volume growth, white cement also commands a higher 2015-16 2016-17 2017-18 2018-19
mentum. J.K. Cement’s operating performance margin—its price is almost 3-times that of grey cement. Fo- Revenue (` cr) 3,755.68 3,969.40 4,636.40 5,289.62
is expected to rise in the first quarter of 2017-18 because of cus on white cement has cushioned J.K. Cement from the Operating profit (` cr) 355.71 550.04 707.40 910.25
the cement price rise in the South—it rose 7% quarter-on- price volatility in the grey cement segment. Net profit (` cr) 63.38 226.53 340.33 496.28
EPS (`) 8.89 32.69 49.01 70.42
quarter (q-o-q). Increased demand in Reasonable valuation is another
the southern region is also helping factor that is attracting analysts to Dividend
J.K. Cement improve utilisation of its this counter. Its enterprise value Valuation
Karnataka plant. The company’s ca- Analysts’ views (EV) is placed at $120 (`7,722) per JK Cements
PBV
3.57 26.38
PE yield (%)
0.82
pacity is mainly in the North, where tonne, significantly lower than the Prism Cement 6.55 355.14 0.00

cements prices have spiked 6% q-o-q,

2 replacement cost of around $150 J K Lakshmi Cement 3.95 66.56 0.16
Hold 19 HeidelbergCement India 3.26 40.86 1.46
and central India, where prices rose (`9,653) per tonne. More impor-
Buy India Cements 1.33 37.15 0.48
5% q-o-q. Since price increases is tantly, if one adjusts white cement Birla Corporation 2.29 33.90 0.69
helping the company offset rise in 3 valuation separately, its gray ce-
cost, J.K. Cement is expected to re- Sell ment capacity is trading only at $90 Latest brokerage calls
port 12% growth in sales and 10% rise (`5,791) per tonne. This means
Reco date Research house Advice Target price (`)
in net profit in the first quarter of there is a good chance for a further 18 Jul ’17 Investec buy 1,253
2017-18. re-rating in the counter. 17 Jul ’17 Centrum Broking buy 1,310
To maintain its high growth mo- 14 Jul ’17 Karvy Stock Broking buy 1,216
mentum, the company’s manage- Selection Methodology: We pick 10 Jul ’17 Motilal Oswal Securities buy 1,287
ment is planning on raising `1,000 the stock that has shown the maxi- 10 Jul ’17 Edelweiss Capital buy 1,175

crore—the necessary approval for mum increase in ‘consensus ana-

raising the funds will be obtained in High growth momentum, higher capacity lyst rating’ in the past one month. Relative performance 138.98
the its annual general meeting to be utilisation, strong presence in the white Consensus rating is arrived at by av- Market price: `979.30
held on 29 July. J.K. Cement is work- cement segment and reasonable valuations eraging all analyst recommenda-
ing at high capacity utilisation levels have made J.K. Cement analysts’ top pick. tions after attributing weights to
in the North and, at the current each of them (5 for strong buy, 4 for
growth rate, it will hit 100% capacity buy, 3 for hold, 2 for sell and 1 for 114.29
utilisation in the next three years. Since commissioning of strong sell) and any improvement in consensus analyst 100
new capacities takes around 24-30 months, this is a timely rating indicates that the analysts are getting more bullish
move and will help J.K. Cement maintain its growth. Ac- on the stock. To make sure that we pick only companies
cording to consensus estimate, the net profit of the com- with decent analyst coverage, this search is restricted to
pany is expected to report an annualised growth of 46% stocks that are covered by at least 10 analysts. You can see
between 2016-17 and 2018-19. similar consensus analyst rating changes during the past 20 July 2016 Sensex JK Cement 20 July 2017
Despite being a mid-cap company, J.K. Cement is the week in the ETW 50 table. —Narendra Nathan
Performance of JK Cement compared with the Sensex. Figures are
normalised to a base of 100. Source: ETIG Database & Bloomberg

BUY
What experts advise
Stock Research house Advice Market 1-year target
price* (`) price (`) Comment

Initiate 'buy. Edelweiss has rapidly evolved from its earlier capital
Edelweiss Financial Services Citi Buy 200 240 markets / agency business—accounted for 65% of profit before tax in
2009-10—to a bank-like structure.

Initiate 'buy'. L&T Finance is a turnaround story. From 20-plus

L&T Finance Holdings Motilal Oswal Buy 153 180 product lines and sub-standard return ratios, it is transforming into a
focused financier with eight product lines across three verticals.

Initiate 'buy. It operates FM radio stations under the brand Radio City
Music Broadcast Angel Buy 369 434 and Radio Mantra and has sustainable growth opportunities over the
next 5-7 years. Most of its capital expenditure also through.

Upgrade to 'buy'. Since 60% of the footwear industry comprises

Bata ICICI Direct Buy 572 650 unorganised players, GST would be a positive for Bata as higher
compliance cost for unorganised players would level the playing field.

SELL *Market price as on 20 July

Stock Research house Advice 1-year target

price (`) Comment

Downgrade to 'reduce'. It will be a challenge for KPIT to maintain the

KPIT Tech Reliance Sec Reduce 130 120 balance between revenue growth and margins, till we see some
consistency in the former.
Retain 'sell'. Though the stock has underperformed the broader index
ABB Elara Capital Sell 1,459 1,145 by 2% in the past 12 months, it still trades at expensive valuation of
63.9-times its expected earnings per share in 2017.
Maintain 'sell'. The bank’s initiatives around new business expansion,
Kotak Mahindra Bank SBI Cap Sell 980 835 participation in the shift towards financial savings and digital customer
acquisition (811 platform) are still in their infancy.
Mutual Fund The Economic Times Wealth, July 24-30, 2017
29

Early start means all goals PORTFOLIO

DOCTOR
can be reached easily
Vibhor Mangla has about `25 lakh invested in 17 funds and SIPs worth `55,000. He is saving for the
education and marriage of his daughter (aged 2) and his retirement. Here’s what the doctor says:
PORTFOLIO INVESTOR’S EXISTING PORTFOLIO
CHECK UP FUND NAME AMOUNT EXISTING RECOMMENDED ACTION NEW
Investing in mutual funds INVESTED (`) SIP (`) SIP (`)
through SIPs but not ICICI Pru Focused Continue investing in this large-cap
aligned with goals. 4,72,752 5,000 outperformer.
5,000
Bluechip
Has also not calculated Continue SIPs in this good performing
ICICI Pru Value Discovery 3,56,330 7,000 value fund.
7,000
present and future costs.
If daughter’s education Continue SIPs in this outperforming
HDFC Mid Cap Oppn. 2,79,232 6,000 scheme.
6,000
costs `12 lakh today, will
need `55 lakh in 16 years. Switch to large cap DSP BlackRock
DSP BlackRock Micro Cap 2,70,342 7,000 Focus 25 for stable growth.
-
At 12% returns, `4.7 lakh in
Switch to large cap IDFC Focused
ICICI Pru Focused Equity IDFC Premier Equity 2,41,875 4,000 -
Equity.
and `5,000 SIP will be `46

GETTY IMAGES
lakh in 16 years. Switch to Franklin India Flexicap for
Franklin India Smaller Cos 1,52,814 3,000 stable returns.
-
If daughter’s marriage will
cost `20 lakh today, he will Mirae Asset India Oppn. 1,44,561 6,000 Continue SIPs in this outperforming fund. 6,000
need `1 crore in 22 years.
Kotak Select Focus 1,24,541 4,000 Continue SIPs in this fund. 4,000
At 12% returns, existing
`3.56 lakh and `7,000 SIP
SBI Bluechip 1,14,570 3,000 Hold this outperforming large-cap fund. 3,000
How is your mutual fund
in ICICI Pru Value Discovery Franklin Build India 89,675 5,000 Continue SIPs in this outperforming fund. 5,000
will be `1 crore in 22 years. portfolio doing? Not many
Franklin India Prima Plus 77,129 5,000 Continue SIPs in this outperforming fund. 5,000
If current expenses are `1 investors are able to answer
lakh a month, he will need UTI Mid Cap 66,178 - Continue holding this fund. - this. This section will provide
`4.54 lakh a month after 27
years. Target for this is `8.5 Reliance Small Cap 64,835 - Switch to large cap Reliance Top 200. - the answer. The portfolio
crore. Existing `17.36 lakh Switch to Franklin India Flexicap for
in other funds and SIPs of Franklin High Growth Cos 34,204 - stable returns.
- doctors on our panel will
`43,000 would be enough.
UTI Equity 32,273 - Continue holding this fund. -
assess the health of the
Note from doctor Tata Balanced 22,975 - Continue holding this fund. -
mutual funds held by
Funds are good, but holds
BNP Paribas Equity 21,378 - Continue holding this fund. -
individuals, examine their
too many of them. Prune
down list to 6-8 funds. DSP BlackRock Focus 25 - - Switch from DSPBR Micro Cap. 7,000 suitability and, if required,
Reduce risk when goal is IDFC Focused Equity - - Switch from IDFC Premier Equity. 4,000 recommend corrective
2-3 years away. Switch from Franklin India Smaller measures. While doing so,
Franklin India Flexicap - - Companies.
3,000
Monitor portfolio regularly. they will consider the
Review investments and
rebalance once a year.
TOTAL `25,65,664 `55,000 `55,000 performance of the schemes,
the risk profile of the investor
as well as the financial goals
Hike SIP amount every year and defer goal of the individual. The investor
Anil Medicherla, 31, invests `15,000 a month in six funds and wants to hike the SIP to will get a detailed diagnosis
`20,000. He is targeting a corpus of `3 crore in 14 years. Here is what the doctor says: PORTFOLIO of his fund portfolio and if he
CHECK UP
INVESTOR’S EXISTING SIPs Not possible to
needs to make changes.
accumulate `3 crore in
FUND NAME AMOUNT SIP RECOMMENDED ACTION
INVESTED (`) AMOUNT (`) 14 years if investing
`20,000 a month.
HDFC Top 200 34,777 2,500
Increase SIP in this long-term WRITE TO
performer to `4,000. Even if you assume 15%
returns (too optimistic in
US FOR
ICICI Pru Value Discovery 32,588 2,500
Increase SIP in this good
current situation), corpus
HELP
performer to `4,000.
would grow to `1.26 If you want to get your mutual
Switch to large-cap DSP
DSP BlackRock Micro Cap 27,899 2,000 crore in 14 years. fund portfolio examined, write to
BlackRock Focus 25.
us at etwealth@timesgroup.
Increase SIP in this stable fund to If you increase SIP by 10%
HDFC Balanced 41,213 3,000 com with “Portfolio Doctor” as
`4,000. every year, you can reach
the subject. Mention the names
`1.56 crore in 14 years
Continue SIPs in this large-cap of the funds, the current value of
DSP BlackRock Top 100 33,446 2,500 fund.
(assuming 12% returns).
investment and if you have SIPs
Increase SIP in this large-cap fund Defer goal by four years. running in them. Also mention
Birla Sun Life FrontLine Equity 34,171 2,500 to `4,000. Also, increase SIP by 10% the goals for which you invested
every year for a corpus of and the tenure you had in mind.
TOTAL `2,04,094 `15,000 `3 crore in 18 years.
30 The Economic Times Wealth, July 24-30, 2017 Career

flect on whether you are in the wrong job or

the wrong firm. Perhaps you are in a compet-
itive team whereas you are energised by col-
laboration and not competition. Consider a
change of role, employer or even career. Give
yourself three months to figure if you like
the change and leave enough doors open to
get back in case the change doesn’t work out.

Inspire a fire
Are you an inspiration for someone else? If
not, become one. Find people within your
current circle or in a new community—a col-
league or a team at work, a niece, a neigh-
bour or even strangers. Be a giver and give
generously and freely of yourself to be the
most inspiring person for the community or
persons you are committed to. The biggest
benefit is to you because your own internal
conversations change. Similarly, hang
around people with mojo who inspire you
and simultaneously avoid the company of
those who constantly whine.

Who’s your mentor?

Do you have someone who you respect and
admire in your life? Do you have access to his
advice, feedback, praise and criticism? If not,
GETTYIMAGES
find yourself a mentor like this. Put in the ef-
fort to build and keep the relationship

Find your mojo at work

charged. The time spent together teaches
and empowers you and also gets you out of
your rut and needless internal criticism.

For good meaning

Devashish Chakravarty tells you how to get back your drive and confidence. The best way to climb out of failure, depres-
sion and adversity is to find meaning in every
situation. The author of Man’s Search for

Y
our mojo is your magic power, fectiveness are at your highest. The resulting dreamt of. Go on that overnight hike in the Meaning and legendary Holocaust survivor,
charm and influence as a profes- success then brings your mojo back. hills this weekend. Learn something new like Viktor Frankl, talks about ‘Sunday neurosis’,
sional at work. Do you remem- playing the keyboard. When you start learn- where people find their lives to be empty and
ber the time when you had it? Change your frame ing a new skill like coding, the first few days meaningless when the working week is over.
You were excited about your Your environment, schedule and situation are tough, but as you make progress, the re- On the other hand, when you find meaning
new job or project, about the opportunity impact you only in the colours in which you ward mechanisms in your brain kick in, re- in everything that you choose to do, you
and about your future. Your days were filled choose to paint them. If you change your storing your energy levels every day. bounce back from setbacks rapidly and avoid
with energy and hope, unlike now, when you frame of reference, your internal state chang- chronic anger and frustration.
drag yourself to work and wait for the day to es too. Create goals and plan a path to the fin- Weight in gold
get over. You have lost your mojo when you ish line. Change your daily schedule and you Does the ‘imposter syndrome’ trouble you? Not on my watch
feel a lack of desire or confidence in your ca- will find new thoughts emerging. Change Many high achievers and more women than Reclaim your calendar and your clock. Get
reer or job. Though you go through your your surroundings and work from a café to- men are unable to internalise their achieve- your 24 hours to bow to your choosing. Au-
highs and lows like everyone else, now is the morrow and you will discover a new ap- ments and abilities, convincing themselves thor Tim Ferris says in his 4-Hour Work Week,
time to recover your mojo. proach to a problem. Reorder your priorities that they are underserving or just lucky and ‘Ignore all information and interruptions
to focus on your dreams and not your obliga- will someday be called out as a fraud. To that are irrelevant, unactionable or unimpor-
Do what you like tions, and a new world view will come forth. avoid this stress, vocalise your emotions to tant. Most are all three!’ This applies to your
Yes, do only what you like and outsource Walk and sit erect to get your confidence let go of them. Write down your achieve- inbox, blinking cellphone, Facebook, What-
what you don’t. Whether personal chores or back. Think of new ways to generate sales ments to remind yourself of the hard work sApp and colleagues who stop to gossip with
professional tasks, get someone to do the leads or to market your products to find your that made you. Next, write down your short- you. Getting hold of your time puts you and
stuff that de-energises you and choose those excitement. and long-term goals to focus on the future. your mojo in the driver’s seat of the idling
that you enjoy. Look back on the last month Verbally acknowledge your achievements Ferrari racing car that is you!
and check what you liked doing most. Maybe Play time and pat yourself each time you hit a goal!
you can make the follow-up client calls on be- All work and no play do not make your day! If
half of your colleague, while he completes you have no hobby or activity in your daily Path less taken
the sales process audit for you. When you life that gives you joy, now’s the time to find Maybe it is the environment or work content The writer is Director, Executive
Search at QuezX.com.
play to your strengths, your efficiency and ef- one. Do something daring that you always that is constantly sapping your passion. Re-

SLEEP HEALTH WEALTH FOOD RELATIONSHIPS

If you have long work If you are listless, Loads of financial obli- Choosing the right foods Emotional stress is the
hours, a tiring commute depressed and unener- gations without the changes your mood and largest hidden cause of
5 WAYS and are spending time getic, the cause may lie means is a constant energy levels dramatical- losing your mojo. Much of
with your family, then in wellness. Hit the gym stress on your sub-con- ly. Avoid the three your emotional well-
YOU ARE chances are you are sleep- or take a walk in the scious and affects work whites—sugar, flour, being comes from rela-
LOSING ing less than 7-8 hours a
night. The fastest way to
sun to get those feel-
happy chemicals juicing
energy. Seek advice to
reduce the cash out-
dairy products—as they
destabilise insulin levels,
tionships that sustain
you. Take time to connect
STEAM recover your mojo is to get
3-4 nights of good sleep in
through your brain. You
will be healthier and
flow, rework your EMIs,
tighten your budget and
causing tiredness and
hunger. Choose raw or
with family, friends and
new people at work to
a row to overcome fatigue look better too. Keep off switch to a higher pay- home-cooked food. Build laugh together and re-
and rebuild your brain and smoking, alcohol and ing opportunity, even if a diet plan with adequate kindle your sense of
body. unhealthy addictions. it isn’t your dream job. proteins, carbs and fats. belonging with others.
Investing The Economic Times Wealth, July 24-30, 2017
31

“Most macro parameters

are looking quite good”
looking quite good. The consumer price in- monitoring, simplicity and unified market.
flation is low at about 3%, and may rise grad-
ually to about 4% by the end of the financial What is the outlook for the banking sector?
year 2017-18. This should allow some room Credit growth will continue to be subdued
for the RBI to reduce rates, but it also de- for another 4-6 quarters due to limited de-
pends on global factors. Most developed mand for corporate credit on account of
markets are exiting the easy monetary poli- high leverage among companies in the pow-
cy, which may force the RBI to keep the rates er, telecom and steel sectors, and large non-
firm. The current account deficit (CAD) is performing loans (NPLs) in the public sector
quite comfortable and for this financial year banking system. However, we expect mod-
we expect it to be 1.3%, mainly due to lower erately strong growth of around 15% in retail
crude oil prices. While the central govern- credit. Further, private banks and NBFCs are
ment’s fiscal position is healthy, there seems better positioned than public banks to bene-
to be growing concern about the states’ fiscal fit from the growth in retail loans. We contin-
deficits, due to the growing trend of loan ue to like private retail banks even though
waivers. While the government continues to they are trading at relatively higher multi-
progress with its key reforms measures like ples. The corporate banks should be keenly
the GST, growth is still linked to consump- watched despite high levels of NPLs as most
tion lead, and investment lead growth is yet of the large, troubled assets are already rec-
to pick up. ognised, and the government as well as the
RBI are working on resolution mechanisms
What are you expecting from the first quar- for large corporate NPLs.
ter earnings?
The aggregate earnings What has been your
growth of the market “The portfolio strategy of late?
may not be much in this
quarter, as some of the
unorganised We follow a bottom-up ap-
proach in stock selection,
larger companies con- sector will and due to overall higher
tinue to report lower valuations, there are limited
growth or decline in eventually opportunities. At present,
earnings. We are looking
at healthy earnings
benefit from the earnings growth is richly
valued as overall growth has
growth from consumer implementation been lower. We prefer good
and private sector finan- quality companies with
cials. The metals sector
of the GST as it long-term earnings visibility
is also likely to show will increase tax even at higher valuations.
strong growth in earn- We are more positive on the
ings due to better prices compliance.” domestic consumption-
and lower input costs. IT linked companies at pre-
services is likely to report flat earnings. The sent as growth in private capex is yet to pick
Sampath The equity markets have registered
significant gains since the beginning of this
companies exposed to government spend-
ing, such as those in the road infrastructure
up. Private sector banks have a large growth
opportunity as they could continue to take
sector, are also likely to do well this quarter. away market share from public sector banks.
Reddy year. Do you foresee a further upside?
For the very near term, we see a limited up- So, we are also positive on automobiles, con-
side from current levels as the Indian equity Which sectors are expected to benefit and sumer discretionary sectors, consumer sta-
Chief Investment markets have already rallied significantly in which will underperform with the ples and NBFCs.
Officer, Bajaj Allianz the past six months. Moreover, the valua- implementation of GST?
Life Insurance tions of the broader market are closer to the The unorganised sector will eventually ben- How attractive is the bond market and
higher end of the band. From here on, for the efit from the implementation of the GST as what’s your advice to investors?
equity markets to do well, it is important that tax compliance increases. The share of the The bond yields in India have come down
While the central earnings growth accelerates. For the past unorganised sector is quite high in some con- substantially in the past two years, giving
government’s fiscal couple of years, earnings growth has been sumer staple sectors like biscuits and edible good returns to investors. Due to benign in-
poor, led by banking sector NPAs and com- oil, and in consumer discretionary sectors flation and healthy macro-economic indica-
position is healthy, there is
modity companies. Even defensive compa- like adhesives and paints. The companies in tors, the RBI may further reduce rates by 25-
growing concern about the nies in the pharma, telecom and IT services sectors like soap, toothpaste and automo- 50 bps over the next few quarters. While
states’ fiscal deficits, sectors did not contribute to growth. Most biles have also been positively impacted. bond market investors may look for capital
sectors have a lower base of earnings and are The cost of ownership of residential real gains this year, a large part of the bond mar-
Sampath Reddy tells generating lower profits than their potential. estate may increase after GST, which could ket rally is already over.
Hiral Thanawala. affect the demand for it in the short term.
What is your view on the Indian economy at However, in the long term, the GST will have
present? a positive impact across sectors, bringing in Please send your feedback to
Most of the macro-economic parameters are efficiency of operations through ease of [email protected]
32 The Economic Times Wealth, July 24-30, 2017 Your Feedback

Readers’ response, online and in print, to ET Wealth stories has been overwhelming and enlightening.
We pick some that add information and perspective to our articles from previous issues.

In real estate, house is beyond the means of tors and not first-time buy- start saving for retirement’,
an average earner today. ers. There is over-supply in was sound. I started saving
don’t ignore Krishna, e-mail the market and investments for retirement only when I
time correction Real estate is the most cor-
in real estate will go for a
toss. The returns are too low
was 45. Even then my wife
felt there was no urgency to
This refers to the cover story, ‘Real es- rupt sector in India. After all, when compared to those keep money aside for a goal
tate: why not to invest now’. The the bulk of black money is from mutual funds. that was so far away. Thank-
myth doing the rounds is that real es- parked in real estate. In Raj Rao, e-mail fully, my efforts bore fruit.
tate prices never fall and always move every city you will find thou- When I retire in early 2018, I
up. Nothing could be more wrong. sands of vacant plots and If one wants to invest in real will have a sufficient corpus
Consider a property worth `50 lakh, apartments. These are sold estate, one shouldn’t put and income sources to ena-
which has not appreciated in value by builders and developers money in flats. It’s better to ble me to maintain my cur-
over the past four years. It would to gullible and greedy inves- invest in plots and, that too, rent lifestyle, which is not
mean it has corrected 36% in value tors. Then there are thou- without taking on the burden extravagant, for the next
compared to the returns from a `50 sands of houses that are of a loan. Flats should be 20-25 years. After that, I will
lakh fixed deposit at 8% interest per under-construction and excessive financing for hous- bought only if one needs a have the option of selling my
annum over the same period. Inves- ready-to-be-occupied. ing. Property prices in India place to reside in. Consider- property, if I am still alive.
tors in property should understand Despite the slowdown in are now close to the prices in ing the interest rates and ROI, N.K.T., e-mail
that there is something called time sales, builders have refused the US just before the global buying a flat on loan as an
correction along with the price cor- to bring down prices, financial crisis. investment is not wise. Plots The article on retirement was
rection. because they know people Raohcl, e-mail in a well-connected suburb of very good. Remember, every
Don, e-mail have black money to pay for a metro and tier 1 cities will day is a good day for invest-
it. However, after the recent Just stay in a rented house fetch good returns, but after ing in the future. Make a habit
The real estate sector is ruled by goons efforts of the government to near your workplace or chil- a minimum lock-in period of of saving at least 10% to 20%
and various mafias. The government flush out black money, we dren’s school. Decide where five years. of your earnings so that you
needs to regulate this first. It is be- can expect a huge correc- you want to retire and start Saket, e-mail never have to be dependent
cause of these vested interests that the tion. The government has to investing in that location. on anybody. Where there is a
cost of real estate is so high in India. put the brakes on mindless M.K., e-mail Equity all the way will, there will be a way.
They have rigged up prices and the expansion in the Indian The advice given in the col- V. Wadhwa, e-mail
common man is suffering. Owning a property sector and curb This story is useful for inves- umn, ‘It’s never too late to

LOWEST WAGES FOR MANUFACTURING IN 2016

The highest wage earners were in the services, banking and insurance sectors, finds the Monster Salary Index Report.

Higher education Gender was a Employees were Size of

provided a wage significant factor in satisfied with their jobs, company, in
advantage determining wages but not the pay terms of number
of employees,
`116.9 was the `345.8 per hour mattered
median hourly wage was the average wage
of someone with a of a male employee. 77.3% employees were satisfied with their jobs.
secondary education. `191.5 per
hour was the gross
`206 was earned `259.8 was the 48.4% said they were satisfied with their pay. median pay in
hourly pay for companies with less
by a bachelor’s degree
women employees. than 10 employees.
holder per hour.

25% was the

`379.7 was the gender pay gap `393 was the
earning of a master’s level. figure in
degree holder. companies with
more than 5,000
employees.

Source: Monster Salary

Index Report 2016, covering
17,301 respondents.

The Economic Times Wealth, published by Bennett, Coleman & Co. Ltd. exercises due care and caution in collecting the data before publication. In spite PUBLISHED FOR THE PROPRIETORS, Bennett, Coleman & Co. Ltd. by Rajeev Yadav at Times House, 7, Bahadur Shah Zafar Marg, New Delhi-110 002,
of this, if any omission, inaccuracy or printing errors occur with regard to the data contained in this newspaper, The Economic Times Wealth will not be Phone: 011-23322000, Fax: 011-23323346 and printed by him at The Times of India Press, 13 & 15/1, Site IV, Industrial Area, Sahibabad, UP. Regd. Office: Dr
held responsible or liable. The content hereof does not constitute any form of advice, recommendation or arrangement by the newspaper. The Eco- Dadabhai Naoroji Road, Mumbai 400 001. EDITOR: Babar Zaidi (Responsible for selection of news under PRB Act). © Reproduction in whole or in part
nomic Times Wealth will not be liable for any direct or indirect losses caused because of readers’ reliance on the same in making any specific or other without written permission of the publisher is prohibited. All rights reserved.
decisions. Readers are recommended to make appropriate enquiries and seek appropriate advice before making any specific or other decisions. RNI NO. DELENG/2011/37994. MADE IN NEW DELHI VOLUME 07 NO. 30