Mukund Seshadri of MS Ventures takes us through four vital inter-personal skills essential to be a good financial planner.
I often hear people telling me that to be a financial planner you need technical skills: to be able to compute present and future values of goals, understanding personal cash flows, being able to compute income tax liabilities, understanding portfolio allocation, projecting future cash flows, retirement calculation etc. Personal financial planning, however, has a lot to do with inter-personal skills. These skills help the planner to not only understand the needs of the client well, but also ensure that he is able to come out with the best solution for the client. Given below are a few skills essential to make a radical difference in the success of the financial planning process.
Accurate Listening Skills
This is one of the most crucial skills which, as a planner, one must imbibe. Listening does not simply mean to comprehend what the client is trying to say, but also perceive what he is not. At times, the goals and milestones set by a client are based on assumptions that may not be logically valid. A planner’s duty is to openly communicate in such situations.
The urgency of the need must also be determined. Needs with a longer tenure must be planned in time and not allotted a back seat. So, if a client deems a car as an immediate need and retirement planning as one for later, planning for both must start immediately.
Assertive Communication
Assertive communication is the ability to state opinions and feelings without any undue anxiety. The success of a conversation depends a lot upon this. It helps drive home the point without hurting the client’s emotions or feelings since, in the end, it is aimed for the overall well-being of the client.
Negotiation
In this context, negotiation does not relate to the fees charged but to convince the client to gradually change his lifestyle so that s/he could achieve his/her goals. Negotiations have to be realistic and practical after considering the client's overall financial health. A course of action must then be decided upon, one which appeals not just to the client, but also to his/her entire family.
Being a team player
A financial planner works with a team of other professionals like general insurance agents, lawyers, accountants and CAs etc. The planner has to ensure that as a team, all of them offer diligent service for the complete well-being of the client.
Financial planning as a discipline deals majorly with finance, but assessing client behavior and motives using your interpersonal skills can make a sea change in planning finances.
Source: www.cafemutual.com
Thanks,
Gaurav Agarwal
Head Dealer
DENIP Consultants Pvt Ltd
Saturday, January 21, 2012
All that you need to know about Contra Funds
A primer on contra fund – what they are and the risks involved.
As the name suggests, the contrarian approach involves taking investment decisions against the general market, i.e. when everybody is bearish on markets, the contrarian will turn bullish and vice-versa. Likewise, contra funds endeavor to benefit by going against the market herd by capturing the investment opportunities available when the markets reversal takes place as per their foresight.
Contra funds largely invest in fundamentally sound companies which are overlooked by the majority of investors and are trading at a discount. They believe in staying long in such equities until the herd favors them resulting in an uptrend of the share price. However, they do not offload these out-of-favour equities only because they have turned attractive. Instead they hold on until valuations have turned too high and unrealistic or business fundamentals have deteriorated or a better investment opportunity surfaces. These funds are not market cap biased and invest across the board.
Risk involved in Contra funds
Market timing and identifying a contrarian investment is always tricky. If one mistimed his/her investment he/she could end up losing more than what he/she anticipated. Contra funds are habitually long on their investment irrespective of the state of markets until a reversal in outlook occurs.
Who should invest?
Contra funds are ideal for those clients of yours who…
Source: www.cafemutual.com
Thanks,
Gaurav Agarwal
Head Dealer
DENIP Consultants Pvt Ltd
As the name suggests, the contrarian approach involves taking investment decisions against the general market, i.e. when everybody is bearish on markets, the contrarian will turn bullish and vice-versa. Likewise, contra funds endeavor to benefit by going against the market herd by capturing the investment opportunities available when the markets reversal takes place as per their foresight.
Contra funds largely invest in fundamentally sound companies which are overlooked by the majority of investors and are trading at a discount. They believe in staying long in such equities until the herd favors them resulting in an uptrend of the share price. However, they do not offload these out-of-favour equities only because they have turned attractive. Instead they hold on until valuations have turned too high and unrealistic or business fundamentals have deteriorated or a better investment opportunity surfaces. These funds are not market cap biased and invest across the board.
Risk involved in Contra funds
Market timing and identifying a contrarian investment is always tricky. If one mistimed his/her investment he/she could end up losing more than what he/she anticipated. Contra funds are habitually long on their investment irrespective of the state of markets until a reversal in outlook occurs.
Who should invest?
Contra funds are ideal for those clients of yours who…
- are not risk averse
- have deep pockets
- looking to generate that extra return on their investment amount.
- wish to diversify their portfolio by investing in sound, undervalued and ignored investment opportunities with a willing to stay put until he/she gains from the contrarian investment.
- SIP is the best route of investment.
- Should have reasonable performance across various market cycle
- Expense ratio (lower the better)
- Portfolio should be high on quality and liquidity
Source: www.cafemutual.com
Thanks,
Gaurav Agarwal
Head Dealer
DENIP Consultants Pvt Ltd
Success Mantras
V. Set your goals and have a plan to reach them
Research shows that most successful people set goals and know where they are headed. They develop plans and activities that help them to achieve these goals. Besides, they set timelines, budget and monitor their. On the other hand, the not-so-successful tend to leave it to fate – ‘Apni kismet mein joh likha, woh mil jayega’ (I will get whatever is written in my fate).
So how do you go about setting goals and making plans?
Set SMART (Specific, Measurable, Attainable, Realistic, Timely) goals e.g. ‘I will get Rs. 1 crore through 50 new clients this year.’
Develop a simple plan that should set out the road map for reaching these goals. It should address basic issues such as:
IV. Your action today will determine your success tomorrow
Successful advisors take action.
Often when market conditions turn adverse, some advisors and investors get immobilised. They prefer to just wait and hope – for the next bull run, for positive news, developments etc.
On the other hand, instead of being immobilised by ambiguous market signals, successful advisors act.
They go about advising clients to invest now and not to defer investments because they know that in the long run, it is time and not timing that matters. They know that waiting for the ripe conditions to emerge in the market is a futile exercise. Just reflect on this – if investing when the Sensex was at 22,000 made sense, why can’t investing at 15,000 make sense?
Similarly, successful advisors intuitively know that this is the time to acquire new clients because the short-sighted have left the distribution business, leaving behind ‘orphan’ clients. They know that this is the time to do hand holding because this is the time when your client needs you the most. Being with your clients in a difficult time shows you care. In turn you earn the life-long trust of your clients and thus build your most important asset – your reputation as a caring and knowledgeable advisor.
III. Be a professional
If you as an IFA want to command the respect that other professionals such as doctors, architects etc. get, you need to set and maintain high standards of expertise and ethics.
What is it that you should do that distinguishes you as a professional?
Professionals learn constantly; amateurs make excuses to avoid learning. Knowledge is power. Professionals know this and invest their time accordingly. Amateurs feel they know everything or they are too busy or too old to learn anything.
Professionals take charge by thinking, planning and doing things. Amateurs leave themselves to the mercy of others, God, fate etc. But as the cliché goes: God helps those who help themselves.
II. IFAs need to answer ‘Hum aapke hain kaun’
Why should a client do business with you and not the other hundreds of IFAs? Ask yourself what makes you different from others.
IFAs need to differentiate themselves from others. However, our research shows that when we ask IFAs to state the key reason why any investor should do business with them, most give the same answer – service!
There are two problems with this response. Firstly, service is too ‘vague’. When you say service, the prospect has no clarity on what you can do for him or her. Secondly, if 90 out of 100 IFAs are giving the same ‘service’ theme, it becomes meaningless.
So, define yourself in terms that the prospect can relate to and focus on the problems you can solve. A statement like, “I help clients reach their financial goals after doing an in-depth understanding of their needs,” gives your prospect a more powerful reason to do business with you than ‘service’.
I. Are you giving up too early?
A research study has shown that many IFAs gave up after 3 calls to a client, while most clients responded after the 4th call!
You can straight away improve your revenues and profitability if you persist in your follow up with new clients.
The advisory business is severely impacted by the ups and downs of the stock markets. In the bull phase, everyone wants a piece of the action. There is a flood of people who get in to the advisory business lured by the prospects of easy money. In the downturn which inevitably follows each bull run, these ‘fair weather’ friends cannot stand the heat and exit the business as quickly as they had come. On the other hand, those advisors who stick around and stay connected with their clients are the true winners.
Source: www.cafemutual.com
Thanks,
Gaurav Agarwal
Head Dealer
DENIP Consultants Pvt Ltd
Research shows that most successful people set goals and know where they are headed. They develop plans and activities that help them to achieve these goals. Besides, they set timelines, budget and monitor their. On the other hand, the not-so-successful tend to leave it to fate – ‘Apni kismet mein joh likha, woh mil jayega’ (I will get whatever is written in my fate).
So how do you go about setting goals and making plans?
Set SMART (Specific, Measurable, Attainable, Realistic, Timely) goals e.g. ‘I will get Rs. 1 crore through 50 new clients this year.’
Develop a simple plan that should set out the road map for reaching these goals. It should address basic issues such as:
- What do I need to reach this goal?
- How will I do it? What activities will I undertake?
- When will I do it?
- How much will it cost me?
- What is the timeline?
- What results do I expect?
IV. Your action today will determine your success tomorrow
Successful advisors take action.
Often when market conditions turn adverse, some advisors and investors get immobilised. They prefer to just wait and hope – for the next bull run, for positive news, developments etc.
On the other hand, instead of being immobilised by ambiguous market signals, successful advisors act.
They go about advising clients to invest now and not to defer investments because they know that in the long run, it is time and not timing that matters. They know that waiting for the ripe conditions to emerge in the market is a futile exercise. Just reflect on this – if investing when the Sensex was at 22,000 made sense, why can’t investing at 15,000 make sense?
Similarly, successful advisors intuitively know that this is the time to acquire new clients because the short-sighted have left the distribution business, leaving behind ‘orphan’ clients. They know that this is the time to do hand holding because this is the time when your client needs you the most. Being with your clients in a difficult time shows you care. In turn you earn the life-long trust of your clients and thus build your most important asset – your reputation as a caring and knowledgeable advisor.
III. Be a professional
If you as an IFA want to command the respect that other professionals such as doctors, architects etc. get, you need to set and maintain high standards of expertise and ethics.
What is it that you should do that distinguishes you as a professional?
Professionals learn constantly; amateurs make excuses to avoid learning. Knowledge is power. Professionals know this and invest their time accordingly. Amateurs feel they know everything or they are too busy or too old to learn anything.
Professionals take charge by thinking, planning and doing things. Amateurs leave themselves to the mercy of others, God, fate etc. But as the cliché goes: God helps those who help themselves.
II. IFAs need to answer ‘Hum aapke hain kaun’
Why should a client do business with you and not the other hundreds of IFAs? Ask yourself what makes you different from others.
IFAs need to differentiate themselves from others. However, our research shows that when we ask IFAs to state the key reason why any investor should do business with them, most give the same answer – service!
There are two problems with this response. Firstly, service is too ‘vague’. When you say service, the prospect has no clarity on what you can do for him or her. Secondly, if 90 out of 100 IFAs are giving the same ‘service’ theme, it becomes meaningless.
So, define yourself in terms that the prospect can relate to and focus on the problems you can solve. A statement like, “I help clients reach their financial goals after doing an in-depth understanding of their needs,” gives your prospect a more powerful reason to do business with you than ‘service’.
I. Are you giving up too early?
A research study has shown that many IFAs gave up after 3 calls to a client, while most clients responded after the 4th call!
You can straight away improve your revenues and profitability if you persist in your follow up with new clients.
The advisory business is severely impacted by the ups and downs of the stock markets. In the bull phase, everyone wants a piece of the action. There is a flood of people who get in to the advisory business lured by the prospects of easy money. In the downturn which inevitably follows each bull run, these ‘fair weather’ friends cannot stand the heat and exit the business as quickly as they had come. On the other hand, those advisors who stick around and stay connected with their clients are the true winners.
Source: www.cafemutual.com
Thanks,
Gaurav Agarwal
Head Dealer
DENIP Consultants Pvt Ltd
Knowledge is king: Rajesh Koradia
He describes himself as an avid reader and follower of finance bigwigs. Inspired by their writings, Rajesh has taken some crucial decisions in life and business.
Rajesh’s hunger for knowledge and its correct application has made him stand out among successful IFAs in the East. Introduced to the business by his uncle and only five years hence, Rajesh has already established himself in the field.
Advisory service was rather new to Rajesh when he first took over his uncle’s business, as he was still a fresher at selling. “Selling anything needs expertise. It doesn't rely on only knowing the product. It’s more about persuading the end customer about the worth of the product. When I acquired my ARN code, I was not at all confident of making it so big,” reveals Rajesh.
Rajesh's first-ever mutual fund customer was his father-in-law, followed by his brothers and then others in the family. This served as an active, on-the-job training experience, and Rajesh was ready to approach new investors. Rajesh's opening gambit involved a fresh, new look at the way things were done in the MF industry.
“The first six months were the toughest of times in my career; building clients was not a cake walk. My uncle had only introduced me to his clients. Converting and retaining them required expertise and effort on my part. I managed to build up a client base of 65,” recollects Rajesh. His client base was small in number but most of them were big investors. This early success gave Rajesh the confidence and income to enrol for the CFP course.
In a year’s time, Rajesh branded his agency with a new name – ‘Save and Smile’. He purchased an ERP software to maintain all his client data and investment details. This enabled him to keep a track on his clients’ portfolio.
Rajesh duly alerts them to book profits or stay invested whenever needed. “Most IFAs fear losing their AUM if they alert their investors. But I have increased my AUM doing just that. If you alert an investor to book profits once, he will surely approach you again because he is confident of getting returns with you,” claims Rajesh.
He meets his clients personally at their residence, especially over the weekend. “A weekend is another busy day, not a holiday, for me. When you meet a client at his/her home, there are possibilities of running into more than one investor,” says Rajesh.
Rajesh follows industry bigwigs such as: Benjamin Graham, Peter Lynch, Anthony Bolton, Aswath Damodaran, Charles Elliis, Burton Malkiel and Willam Bernstein. He claims to have read all the books written by these personalities.
Rajesh is tech savvy and well-organised. Everyday, he sets aside an hour to update himself with the latest happenings in his profession. “I firmly believe that it is the power of knowledge that convinces people to do business with an IFA. Hence, I update my knowledge regularly,” claims Rajesh.
The ban of entry load in 2008 affected his business negatively; he was confused on whether to charge clients or not. During that phase, he was reading his favourite book – 'Rich Dad, Poor Dad', and he chanced upon a sentence that showed him the way - 'always look for an opportunity in every adversity.'
He read it over and again, until 'eureka’ - the solution he was looking for was right in front of him. Rajesh took a stand to never charge his clients and doubled his business in the next two years.
A priority area for Rajesh over the next six months is financial planning. He hopes to double his current client base to 1600 soon.
Source: www.cafemutual.com
Thanks,
Gaurav Agarwal
Head Dealer
DENIP Consultants Pvt Ltd
Rajesh’s hunger for knowledge and its correct application has made him stand out among successful IFAs in the East. Introduced to the business by his uncle and only five years hence, Rajesh has already established himself in the field.
Advisory service was rather new to Rajesh when he first took over his uncle’s business, as he was still a fresher at selling. “Selling anything needs expertise. It doesn't rely on only knowing the product. It’s more about persuading the end customer about the worth of the product. When I acquired my ARN code, I was not at all confident of making it so big,” reveals Rajesh.
Rajesh's first-ever mutual fund customer was his father-in-law, followed by his brothers and then others in the family. This served as an active, on-the-job training experience, and Rajesh was ready to approach new investors. Rajesh's opening gambit involved a fresh, new look at the way things were done in the MF industry.
“The first six months were the toughest of times in my career; building clients was not a cake walk. My uncle had only introduced me to his clients. Converting and retaining them required expertise and effort on my part. I managed to build up a client base of 65,” recollects Rajesh. His client base was small in number but most of them were big investors. This early success gave Rajesh the confidence and income to enrol for the CFP course.
In a year’s time, Rajesh branded his agency with a new name – ‘Save and Smile’. He purchased an ERP software to maintain all his client data and investment details. This enabled him to keep a track on his clients’ portfolio.
Rajesh duly alerts them to book profits or stay invested whenever needed. “Most IFAs fear losing their AUM if they alert their investors. But I have increased my AUM doing just that. If you alert an investor to book profits once, he will surely approach you again because he is confident of getting returns with you,” claims Rajesh.
He meets his clients personally at their residence, especially over the weekend. “A weekend is another busy day, not a holiday, for me. When you meet a client at his/her home, there are possibilities of running into more than one investor,” says Rajesh.
Rajesh follows industry bigwigs such as: Benjamin Graham, Peter Lynch, Anthony Bolton, Aswath Damodaran, Charles Elliis, Burton Malkiel and Willam Bernstein. He claims to have read all the books written by these personalities.
Rajesh is tech savvy and well-organised. Everyday, he sets aside an hour to update himself with the latest happenings in his profession. “I firmly believe that it is the power of knowledge that convinces people to do business with an IFA. Hence, I update my knowledge regularly,” claims Rajesh.
The ban of entry load in 2008 affected his business negatively; he was confused on whether to charge clients or not. During that phase, he was reading his favourite book – 'Rich Dad, Poor Dad', and he chanced upon a sentence that showed him the way - 'always look for an opportunity in every adversity.'
He read it over and again, until 'eureka’ - the solution he was looking for was right in front of him. Rajesh took a stand to never charge his clients and doubled his business in the next two years.
A priority area for Rajesh over the next six months is financial planning. He hopes to double his current client base to 1600 soon.
Source: www.cafemutual.com
Thanks,
Gaurav Agarwal
Head Dealer
DENIP Consultants Pvt Ltd
Nippon picks 26% stake in Reliance Mutual Fund
The deal values Reliance Asset Management at Rs. 5,600 crore, marking it the largest FDI in the Indian mutual fund industry.
Japan based Nippon Life Insurance Company today signed a Memorandum of Understanding (MoU) to acquire 26 percent stake in Reliance Capital Asset Management (RCAM). The deal is the largest FDI in the mutual fund space.
Nippon Life will invest Rs. 1,450 crore to acquire 26 percent stake in RCAM. The transaction pegs the total valuation of RCAM at approximately Rs. 5,600 crore.
“We are delighted to have Nippon as our strategic partners in the mutual fund business. They are already our partners in the life insurance business. The mutual fund partnership cements and strengthens the relationship between Reliance Group and Nippon Life further and takes it to a new level,” said Anil D. Ambani in a statement.
Reliance Mutual Fund manages Rs. 82,305.80 crore as on December 2011. Nippon Life manages Rs. 30 lakh crore. Nippon has already picked 26% stake in Reliance Life Insurance for Rs. 3,062 crore, valuing the company at Rs. 11,500 crore.
Yoshinobu Tsutsui, President, Nippon Life said “We are delighted to partner with Reliance Capital Asset Management – a leading company in India with highly talented executives, strong investment capability and nationwide distribution network. This investment is our second capital alliance with Reliance Group following the investment in Reliance Life last year. Through this investment, we believe that we can strengthen our business relationship with Reliance Group which has high reputation and reliability in India.”
Earlier, hedge fund Eton Park Capital Management had bought 5% stake in Reliance Capital for Rs. 501 crore.
Source: www.cafemutual.com
Thanks,
Gaurav Agarwal
Head Dealer
DENIP Consultants Pvt Ltd
Japan based Nippon Life Insurance Company today signed a Memorandum of Understanding (MoU) to acquire 26 percent stake in Reliance Capital Asset Management (RCAM). The deal is the largest FDI in the mutual fund space.
Nippon Life will invest Rs. 1,450 crore to acquire 26 percent stake in RCAM. The transaction pegs the total valuation of RCAM at approximately Rs. 5,600 crore.
“We are delighted to have Nippon as our strategic partners in the mutual fund business. They are already our partners in the life insurance business. The mutual fund partnership cements and strengthens the relationship between Reliance Group and Nippon Life further and takes it to a new level,” said Anil D. Ambani in a statement.
Reliance Mutual Fund manages Rs. 82,305.80 crore as on December 2011. Nippon Life manages Rs. 30 lakh crore. Nippon has already picked 26% stake in Reliance Life Insurance for Rs. 3,062 crore, valuing the company at Rs. 11,500 crore.
Yoshinobu Tsutsui, President, Nippon Life said “We are delighted to partner with Reliance Capital Asset Management – a leading company in India with highly talented executives, strong investment capability and nationwide distribution network. This investment is our second capital alliance with Reliance Group following the investment in Reliance Life last year. Through this investment, we believe that we can strengthen our business relationship with Reliance Group which has high reputation and reliability in India.”
Earlier, hedge fund Eton Park Capital Management had bought 5% stake in Reliance Capital for Rs. 501 crore.
Source: www.cafemutual.com
Thanks,
Gaurav Agarwal
Head Dealer
DENIP Consultants Pvt Ltd
Setting its own course – DSP BlackRock
A steady performer with a clean image, the DSP BlackRock AMC has become a fund house to be reckoned with.
With gold being the flavor of the day, the industry is busy churning out gold funds. But DSP BlackRock is in no hurry to follow suit, preferring to go by its convictions rather than following the herd.
This is evident in its compact product line. “You will not find any duplication in our funds. All our 24 funds have a distinct theme. We did not go for the merger of any equity scheme,” points out Ajit Menon, EVP - Head of Sales & Marketing, DSP BlackRock Mutual Fund.
Similarly, in distribution, DSP BlackRock prefers to do things differently. BlackRock’s global policy does not encourage showering its distribution partners with expensive foreign junkets on attaining AUM targets.
So, does this act as a stumbling block in growth? The verdict is divided. “A distributor once told me that we are a good fund house and he has some allocation to our fund. Such comments are reassuring,” says Ajit Menon.
It plans to actively engage its 3,500 distribution partners at an intellectual level. “We need to build a lot more credibility for financial advisory profession. We believe they need a lot more skill development. We are planning to run a program beginning which will help them build their business,” says Ajit.
From managing Rs. 15,945 crore in April 2009, it has climbed to the eighth position with AUM of over Rs. 30,000 crore. The growth predominantly came from fixed income including FMPs and by launching funds at the right time. “One of the things the market recognizes is that we launch funds at the right time” says Ajit.
The launch of DSPBR Top 100 Equity Fund in March 2003 was aimed at capitalizing the potential of large caps. The scheme garnered Rs. 30 crore. Today, the fund’s AUM stands at Rs. 2,870 crore.
When most AMCs shied away from launching funds during 2004 elections, it came out with TIGER (The Infrastructure Growth and Economic Reforms Fund). It collected Rs. 170 crore which has reached Rs. 1,451 crore now.
Filling the gaps
It filled the gap in its fixed income portfolio where it was inactive. Today, it manages Rs. 9,000 crore in FMPs only. Over the last one year, its overall fixed income assets have grown from Rs. 6,000 crore to Rs. 16,000 crore.
While these flows are largely institutional, DSP is steadily seeing increasing retail interest in its fixed income schemes as well. “We are seeing a lot of retail interest in the fixed income side,” says S Nagnath, President & CIO, DSPBR AMC.
International Funds
DSP’s major thrust now is on bringing the popular products from its BlackRock stable to Indian investors. Its recent fund DSPBR World Agriculture collected Rs. 48 crore. With Rs. 1,318 crore assets in international feeder, it commands a lion’s share in this category and six more funds are awaiting SEBI’s nod. It commands 7% market share in the equity funds and 52% share in international feeder funds.
In 2007, it tested waters in the feeder funds category by launching DSPBR World Gold Fund, which has grown to Rs. 1,141 crore now.
While advisors are yet to be fully convinced about the diversification aspect of international feeder funds, its funds have collected decent money from investors. “We have found good response to our previous offerings. It depends on how the advisor and investor evaluate the opportunities that exist,” reveals Nagnath. Geographic diversification is necessary. However, one school of thought observes that the financial markets are connected like never before and the tremor of one market can be felt in any other market
Having proved itself on the active fund management side, DSP BlackRock is mulling over bringing passive funds in its product portfolio. “We are evaluating that segment,” says Nagnath.
Stable Team
What binds DSP team is its team long commitment. Although Nagnath had a short stint at Credit Suisse Asset Management, he has been associated with DSP since its inception in 1996 as a CIO. Anup Maheshwari - EVP, Head Equities & Corporate Strategy has been with DSP since 1997. Similarly, Dhawal Dalal (Head of Fixed Income) and Ramamoorthy Rajagopal (EVP, CAO) have been with DSP since 1996. “The culture flows down from the top management. The culture of our firm is such that people feel a sense of belonging and being part of something good and respectable,” adds Ajit.
Looking Ahead
DSP BlackRock feels it has all the basic elements in place. “We have everything that we require to get there. We have the right team, a strong brand, good culture and high benchmark processes. I think we have all the ingredients to keep growing,” adds Ajit.
It aims to leverage its performance further by creating a pull as wells as a push. Going ahead, it has set out two key goals – to be better known among the investors and to create a greater connect with advisors.
Source: www.cafemutual.com
Thanks,
Gaurav Agarwal
Head Dealer
DENIP Consultants Pvt Ltd
With gold being the flavor of the day, the industry is busy churning out gold funds. But DSP BlackRock is in no hurry to follow suit, preferring to go by its convictions rather than following the herd.
This is evident in its compact product line. “You will not find any duplication in our funds. All our 24 funds have a distinct theme. We did not go for the merger of any equity scheme,” points out Ajit Menon, EVP - Head of Sales & Marketing, DSP BlackRock Mutual Fund.
Similarly, in distribution, DSP BlackRock prefers to do things differently. BlackRock’s global policy does not encourage showering its distribution partners with expensive foreign junkets on attaining AUM targets.
So, does this act as a stumbling block in growth? The verdict is divided. “A distributor once told me that we are a good fund house and he has some allocation to our fund. Such comments are reassuring,” says Ajit Menon.
It plans to actively engage its 3,500 distribution partners at an intellectual level. “We need to build a lot more credibility for financial advisory profession. We believe they need a lot more skill development. We are planning to run a program beginning which will help them build their business,” says Ajit.
From managing Rs. 15,945 crore in April 2009, it has climbed to the eighth position with AUM of over Rs. 30,000 crore. The growth predominantly came from fixed income including FMPs and by launching funds at the right time. “One of the things the market recognizes is that we launch funds at the right time” says Ajit.
The launch of DSPBR Top 100 Equity Fund in March 2003 was aimed at capitalizing the potential of large caps. The scheme garnered Rs. 30 crore. Today, the fund’s AUM stands at Rs. 2,870 crore.
When most AMCs shied away from launching funds during 2004 elections, it came out with TIGER (The Infrastructure Growth and Economic Reforms Fund). It collected Rs. 170 crore which has reached Rs. 1,451 crore now.
Filling the gaps
It filled the gap in its fixed income portfolio where it was inactive. Today, it manages Rs. 9,000 crore in FMPs only. Over the last one year, its overall fixed income assets have grown from Rs. 6,000 crore to Rs. 16,000 crore.
While these flows are largely institutional, DSP is steadily seeing increasing retail interest in its fixed income schemes as well. “We are seeing a lot of retail interest in the fixed income side,” says S Nagnath, President & CIO, DSPBR AMC.
International Funds
DSP’s major thrust now is on bringing the popular products from its BlackRock stable to Indian investors. Its recent fund DSPBR World Agriculture collected Rs. 48 crore. With Rs. 1,318 crore assets in international feeder, it commands a lion’s share in this category and six more funds are awaiting SEBI’s nod. It commands 7% market share in the equity funds and 52% share in international feeder funds.
In 2007, it tested waters in the feeder funds category by launching DSPBR World Gold Fund, which has grown to Rs. 1,141 crore now.
While advisors are yet to be fully convinced about the diversification aspect of international feeder funds, its funds have collected decent money from investors. “We have found good response to our previous offerings. It depends on how the advisor and investor evaluate the opportunities that exist,” reveals Nagnath. Geographic diversification is necessary. However, one school of thought observes that the financial markets are connected like never before and the tremor of one market can be felt in any other market
Having proved itself on the active fund management side, DSP BlackRock is mulling over bringing passive funds in its product portfolio. “We are evaluating that segment,” says Nagnath.
Stable Team
What binds DSP team is its team long commitment. Although Nagnath had a short stint at Credit Suisse Asset Management, he has been associated with DSP since its inception in 1996 as a CIO. Anup Maheshwari - EVP, Head Equities & Corporate Strategy has been with DSP since 1997. Similarly, Dhawal Dalal (Head of Fixed Income) and Ramamoorthy Rajagopal (EVP, CAO) have been with DSP since 1996. “The culture flows down from the top management. The culture of our firm is such that people feel a sense of belonging and being part of something good and respectable,” adds Ajit.
Looking Ahead
DSP BlackRock feels it has all the basic elements in place. “We have everything that we require to get there. We have the right team, a strong brand, good culture and high benchmark processes. I think we have all the ingredients to keep growing,” adds Ajit.
It aims to leverage its performance further by creating a pull as wells as a push. Going ahead, it has set out two key goals – to be better known among the investors and to create a greater connect with advisors.
Source: www.cafemutual.com
Thanks,
Gaurav Agarwal
Head Dealer
DENIP Consultants Pvt Ltd
What successful IFAs are doing with their money
Cafemutual speaks to two successful IFAs to find out how they are managing their personal finances in these volatile times.
Vishal Merchant, Partner C1 Advisors, IFA from Surat
Outlook for equities and debt market for 2012 – He feels that equity market may not correct as it has almost reached historically low valuation and the major concerns from inflation also look under control.
He is very optimistic about the Indian equity market at these levels also and believes that anyone who invest at these levels and holds for three years, will get above average return.
He sees a good opportunity in debt market too because if the interest rates start reducing, it will impact prices of bonds and long-term G-sec funds. “It is a good time to get into the debt market because if someone invests at these levels, he will surely get good returns if he holds the investment for two years.”
Broad Asset allocation – He maintains an 80 (equity) – 20 (debt) asset allocation. In the current volatile market, he has not made any changes to his portfolio. In fact, if given a chance to make any changes, he would increase his allocation to equity.
He describes himself as an aggressive investor who holds his equity investment minimum for 10 years, as all his investments are linked to his goal. He reviews his portfolio every six months in a stable market and quarterly in a volatile market. “I believe in investing through SIPs and have been doing it for long. I have never stopped my SIPs, no matter what the market conditions are. In fact, I have increased it whenever my cash flow increased,” says Vishal.
Do’s and Don’ts for investors:
Do
Vishal Merchant, Partner C1 Advisors, IFA from Surat
Outlook for equities and debt market for 2012 – He feels that equity market may not correct as it has almost reached historically low valuation and the major concerns from inflation also look under control.
He is very optimistic about the Indian equity market at these levels also and believes that anyone who invest at these levels and holds for three years, will get above average return.
He sees a good opportunity in debt market too because if the interest rates start reducing, it will impact prices of bonds and long-term G-sec funds. “It is a good time to get into the debt market because if someone invests at these levels, he will surely get good returns if he holds the investment for two years.”
Broad Asset allocation – He maintains an 80 (equity) – 20 (debt) asset allocation. In the current volatile market, he has not made any changes to his portfolio. In fact, if given a chance to make any changes, he would increase his allocation to equity.
He describes himself as an aggressive investor who holds his equity investment minimum for 10 years, as all his investments are linked to his goal. He reviews his portfolio every six months in a stable market and quarterly in a volatile market. “I believe in investing through SIPs and have been doing it for long. I have never stopped my SIPs, no matter what the market conditions are. In fact, I have increased it whenever my cash flow increased,” says Vishal.
Do’s and Don’ts for investors:
Do
- Investors should focus on long term goals
- Investors should have SIP in their portfolio because SIPs will create tremendous amount of wealth over a period
- They should talk to the advisors and educate themselves;if they do so, they will never make impulsive decisions
Don’t
Surendra Kumar Bagaria, IFA from Kolkata
Outlook for equities and debt market for 2012 – He believes in not predicting anything about the equity market because he says that everyone is clueless about its movement. “It is very difficult to say which way the market will move. But we need to believe that just as the market has gone down, it will come up.”
He feels it is a good opportunity to invest in debt market to fulfil relatively short term goals.
Broad Asset allocation – He is a hardcore equity investor and parks 100 percent of his investment in this category in a bull run, but withdraws some cash during volatile market and puts into debt. He changes his strategy according to market movements but he follows his financial goals.
He is an aggressive investor and believes that only equity investment can give high returns provided they are held for a long period. “You should not panic when the market is low, because during a bull run the equity investments will give you tremendous returns. I constantly invest in equity and do not believe in timing the market to invest.”
Bagaria reviews his portfolio every month to note the performance of his investments.
Do’s and Don’ts for investors:
Do
- They should not go after products which promise huge returns in a short time
- Do not ignore inflation while planning for long term goals as it will result in erosion of capital
- Never ignore one goal in life – retirement planning
Surendra Kumar Bagaria, IFA from Kolkata
Outlook for equities and debt market for 2012 – He believes in not predicting anything about the equity market because he says that everyone is clueless about its movement. “It is very difficult to say which way the market will move. But we need to believe that just as the market has gone down, it will come up.”
He feels it is a good opportunity to invest in debt market to fulfil relatively short term goals.
Broad Asset allocation – He is a hardcore equity investor and parks 100 percent of his investment in this category in a bull run, but withdraws some cash during volatile market and puts into debt. He changes his strategy according to market movements but he follows his financial goals.
He is an aggressive investor and believes that only equity investment can give high returns provided they are held for a long period. “You should not panic when the market is low, because during a bull run the equity investments will give you tremendous returns. I constantly invest in equity and do not believe in timing the market to invest.”
Bagaria reviews his portfolio every month to note the performance of his investments.
Do’s and Don’ts for investors:
Do
- Continue your investments according to your financial goals
- Invest through SIP and increase its percentage whenever you have disposable income
Don’t
Rajaraman Kumbeswaran – IFA from Chennai
Outlook for equities and debt market for 2012 – He feels that the Indian markets will remain volatile as we are dependent on FII investment. “Our economy is dependent on foreign investments, therefore we need to wait and watch how the global markets move.”
Short term debt funds will perform as they did last year. Interest rates won’t be going down soon, he feels; therefore he sees a good opportunity lying in this segment for the next six months.
Broad Asset allocation – He usually allocates his assets in equity (60percent) and debt, gold (40 percent). He believes that people should have debt class in their portfolio because it helps them to earn regular income.
He has a moderate risk appetite because of his age but he reviews his portfolio once in six months. He has continued all his investments in this volatile situation.“This is a golden opportunity, so I have continued my investments and even made fresh investments in the last three months.”
Changes in your strategy in the current situation – “I am a global investor; I am shifting my money from developed countries to developing countries. Besides that I haven’t made any other changes.”
Do’s and Don’ts for investors:
Do’s
- Do not try to time the market
- Don’t be sentimental in taking investment decisions, be logical
Rajaraman Kumbeswaran – IFA from Chennai
Outlook for equities and debt market for 2012 – He feels that the Indian markets will remain volatile as we are dependent on FII investment. “Our economy is dependent on foreign investments, therefore we need to wait and watch how the global markets move.”
Short term debt funds will perform as they did last year. Interest rates won’t be going down soon, he feels; therefore he sees a good opportunity lying in this segment for the next six months.
Broad Asset allocation – He usually allocates his assets in equity (60percent) and debt, gold (40 percent). He believes that people should have debt class in their portfolio because it helps them to earn regular income.
He has a moderate risk appetite because of his age but he reviews his portfolio once in six months. He has continued all his investments in this volatile situation.“This is a golden opportunity, so I have continued my investments and even made fresh investments in the last three months.”
Changes in your strategy in the current situation – “I am a global investor; I am shifting my money from developed countries to developing countries. Besides that I haven’t made any other changes.”
Do’s and Don’ts for investors:
Do’s
- You should divide your financial goals into two categories – short term and long term
- For short term investments, park your money in fixed deposits, bonds and debt market; for long term, you should go with equity and real-estate; If you are not too comfortable with equity, use SIP as your weapon to enter the market
- You need to believe in equity market because there is no other product which can beat inflation and give you returns
Don’ts
Outlook for equities and debt market for 2012 – As far as debt market is concerned, interest rates are expected to come down as there is a good probability that inflation rates will move southwards.
In terms of equities, he feels it is a buy year and investing with a five year horizon is a very good bet.
Broad Asset Allocation – His investments are based on his financial goals. If they are long term in nature, he invests in equity. He makes changes in his strategy if there are changes in goal, income and expenses. “I don't make amendments in my strategy based on short term market conditions.”
He is a systematic investor and invests in a disciplined manner for goals above five years. For short term goals, he sticks to pure debt products. Mukund invests regularly irrespective of market movements. He says, “I believe every time is a good time. It is not timing the market but the time in the market which matters.”
When asked about his risk appetite, he says, “I fear when others are greedy, and greedy when others fear.”
Do’s and Don’ts for investors:
Do's
Thanks,
Gaurav Agarwal
Head Dealer
DENIP Consultants Pvt Ltd
- Don’t put all your money in equity because you should have some spare cash to invest in the market when it is low
Outlook for equities and debt market for 2012 – As far as debt market is concerned, interest rates are expected to come down as there is a good probability that inflation rates will move southwards.
In terms of equities, he feels it is a buy year and investing with a five year horizon is a very good bet.
Broad Asset Allocation – His investments are based on his financial goals. If they are long term in nature, he invests in equity. He makes changes in his strategy if there are changes in goal, income and expenses. “I don't make amendments in my strategy based on short term market conditions.”
He is a systematic investor and invests in a disciplined manner for goals above five years. For short term goals, he sticks to pure debt products. Mukund invests regularly irrespective of market movements. He says, “I believe every time is a good time. It is not timing the market but the time in the market which matters.”
When asked about his risk appetite, he says, “I fear when others are greedy, and greedy when others fear.”
Do’s and Don’ts for investors:
Do's
- Involve family in financial planning – The entire family together needs to work towards their financial goal, it’s a team effort
- Be clear about your goals – Returns is not the sole reason for investing;what people need to know is what has to be done with those returns
- Do avoid loans as much as possible – the debt trap is the worst kind of trap one can fall into;EMIs may end up being very burdensome. So it’s important that one does a good amount of savings before and pays off existing loans using a fixed return debt instrument so that he is loan free and can manage finances better
- Don’t time the market – investments have to be continuous
- Don’t save for tax benefit alone – investments done with the sole purpose of getting tax benefits cannot help achieve goals;exemptions and tax benefits are designed keeping the advantages of the country at large and not you in specific
Thanks,
Gaurav Agarwal
Head Dealer
DENIP Consultants Pvt Ltd
ASK Circle Association organisesan exciting, inter-AMC Cricket tournament in Kolkata.
AMCs in Kolkata gathered to play their favourite sport – cricket – in an indoor setup last Saturday. The tournament was organised by ASK Circle Association, the Kolkata based IFA association. Along with cricket, there were many fun activities to keep everyone entertained.
An otherwise lazy weekend morning, this Saturday saw AMC officials all charged up for the event. “Usually Saturday is a holiday for us, but today none of us are in a mood to rest. We are all set to battle for the trophy,” says Vikas Rathie, Zonal Business Head-East, Reliance Mutual Fund.
Every year, ASK organises an energetic and lively event to get the mutual fund industry together. “This event brings together executives and officials from various AMCs. It serves as an active platform for networking and information sharing. Over 14 AMCs are participating this year,” says Kanak Jain, President, ASK Circle Association.
The event kicked off with a speech by VirendraJi Beniwal, Rajasthan Home Minister, who was present cheering the teams.
Among the AMCs which participated were IDFC, ICICI Prudential, HDFC, L&T, Kotak, Birla, Pramerica, SBI, Religare, IndiaBulls, Daiwa, Morgan Stanley and Fidelity.
‘Reliance’ and ‘ASK Circle Team 2’ were the first to play at 11 with Reliance winning by 55 runs. As the victors rejoiced, cheerleaders with their pom-poms, dressed in red and black, were on the floor to spice up the celebration.
“We are all enjoying the event. Most of us are accompanied by our family members who are busy cheering the players. The matches are still on and excitement is building up,” says Aniruddha Chaudhuri, Regional Head, ICICI Prudential Mutual Fund.
Most officials were accompanied by their families and kids. The event featured a variety of games for kids to keep them engaged. At the end of the first half at 1:30, the players moved to the dining hall after an exhilarating performance. A light, Indian lunch of puri and aloo bhaji was served.
The final battle was between ICICI Prudential and Birla, with the latter taking home the trophy with 24 runs. Anuj Khater won the best batsman award, Barun Sarkar the man of the series and Arun Kumar Singh was declared as the best bowler: all of them belonged from Birla Mutual Fund. Ravindra Singh from ICICI Prudential won the best fielder award.
Source: www.cafemutual.com
Thanks,
Gaurav Agarwal
Head Dealer
DENIP Consultants Pvt Ltd
An otherwise lazy weekend morning, this Saturday saw AMC officials all charged up for the event. “Usually Saturday is a holiday for us, but today none of us are in a mood to rest. We are all set to battle for the trophy,” says Vikas Rathie, Zonal Business Head-East, Reliance Mutual Fund.
Every year, ASK organises an energetic and lively event to get the mutual fund industry together. “This event brings together executives and officials from various AMCs. It serves as an active platform for networking and information sharing. Over 14 AMCs are participating this year,” says Kanak Jain, President, ASK Circle Association.
The event kicked off with a speech by VirendraJi Beniwal, Rajasthan Home Minister, who was present cheering the teams.
Among the AMCs which participated were IDFC, ICICI Prudential, HDFC, L&T, Kotak, Birla, Pramerica, SBI, Religare, IndiaBulls, Daiwa, Morgan Stanley and Fidelity.
‘Reliance’ and ‘ASK Circle Team 2’ were the first to play at 11 with Reliance winning by 55 runs. As the victors rejoiced, cheerleaders with their pom-poms, dressed in red and black, were on the floor to spice up the celebration.
“We are all enjoying the event. Most of us are accompanied by our family members who are busy cheering the players. The matches are still on and excitement is building up,” says Aniruddha Chaudhuri, Regional Head, ICICI Prudential Mutual Fund.
Most officials were accompanied by their families and kids. The event featured a variety of games for kids to keep them engaged. At the end of the first half at 1:30, the players moved to the dining hall after an exhilarating performance. A light, Indian lunch of puri and aloo bhaji was served.
The final battle was between ICICI Prudential and Birla, with the latter taking home the trophy with 24 runs. Anuj Khater won the best batsman award, Barun Sarkar the man of the series and Arun Kumar Singh was declared as the best bowler: all of them belonged from Birla Mutual Fund. Ravindra Singh from ICICI Prudential won the best fielder award.
Source: www.cafemutual.com
Thanks,
Gaurav Agarwal
Head Dealer
DENIP Consultants Pvt Ltd
Hindustan Zinc Q3 net dips marginally
Vedanta group company Hindustan Zinc on Friday reported a marginal decline of 1.24% in its net profit to Rs 1,273.60 crore for the quarter ended December 31, 2011.
The company had reported a net profit of Rs 1,289.58 crore in the corresponding quarter of 2010-11.
Net sales of the company was worth Rs 2,746.77 crore, up 5.89% vis-a-vis Rs 2,601.47 crore of October-December quarter of 2010-11, it said in a regulatory filing. In a statement later, the company said, "The positive impact of increased volumes and rupee depreciation was partially offset by the decline in LME prices."
Source: www.economictimes.com
Thanks,
Gaurav Agarwal
Head Dealer
DENIP Consultants Pvt Ltd
The company had reported a net profit of Rs 1,289.58 crore in the corresponding quarter of 2010-11.
Net sales of the company was worth Rs 2,746.77 crore, up 5.89% vis-a-vis Rs 2,601.47 crore of October-December quarter of 2010-11, it said in a regulatory filing. In a statement later, the company said, "The positive impact of increased volumes and rupee depreciation was partially offset by the decline in LME prices."
Source: www.economictimes.com
Thanks,
Gaurav Agarwal
Head Dealer
DENIP Consultants Pvt Ltd
Syndicate Bank Q3 net up 32% at Rs 338 crore
State-owned Syndicate Bank today reported 32 per cent rise in net profit to Rs 338.12 crore for the third quarter ended December 31.
The bank had posted a net profit of Rs 256.19 crore for the corresponding quarter last fiscal, 2010-11, Syndicate Bank said in a filing to the BSE.
Total income of the lender rose to Rs 4,214.35 crore during the October-December quarter from Rs 4,015.54 crore in the same period last year.
During the first nine months of 2011-12, the bank's net net profit rose to Rs 1,003.96 crore, from Rs 758.85 crore in the same period a year ago.
The bank has reported a total income of Rs 11,919.90 crore in the first three quarters of this fiscal, compared to Rs 8,949.38 crore in the same period in the last financial year.
Source: www.economictimes.com
Thanks,
Gaurav Agarwal
Head Dealer
DENIP Consultants Pvt Ltd
The bank had posted a net profit of Rs 256.19 crore for the corresponding quarter last fiscal, 2010-11, Syndicate Bank said in a filing to the BSE.
Total income of the lender rose to Rs 4,214.35 crore during the October-December quarter from Rs 4,015.54 crore in the same period last year.
During the first nine months of 2011-12, the bank's net net profit rose to Rs 1,003.96 crore, from Rs 758.85 crore in the same period a year ago.
The bank has reported a total income of Rs 11,919.90 crore in the first three quarters of this fiscal, compared to Rs 8,949.38 crore in the same period in the last financial year.
Source: www.economictimes.com
Thanks,
Gaurav Agarwal
Head Dealer
DENIP Consultants Pvt Ltd
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