What is benchmark index of a mutual fund?

In numerous mutual funds offer documents and details, you must have read somewhere or the other - 'Benchmark Index'. What are they? And what difference will it make to your investments?

Simply speaking Benchmark index is the standard against which Mutual Fund Scheme measures its performance. For example many Blue Chip Funds track SENSEX as their benchmark. It means that the scheme's investment style would be similar to SENSEX composition and the fund will try to match or outperform its return.

Some of the popular indexes are...

IISL Indices

Major Indices		Other Indices
	S&P CNX Nifty		CNX IT Index
	CNX Nifty Junior		CNX Bank Index
	CNX 100		CNX FMCG Index
	S&P CNX 500		CNX PSE Index
	CNX Midcap		CNX MNC Index
	S&P CNX Defty		CNX Service Sector Index
			Customised Indices
			CNX Energy Index
			CNX Pharma Index
			CNX Infrastructure Index
			CNX PSU BANK Index
			CNX Realty Index

BSE Indices

SENSEX

MIDCAP

SMLCAP

BSE-100

BSE-200

BSE-500

BSE Sectoral Indices

AUTO

BANKEX

CD

CG

FMCG

HC

IT

METAL

OIL&GAS

PSU

REALTY

TECk

BSE Dollex Indices

DOLLEX-30

DOLLEX-100

DOLLEX-200

Should you buy ICICI Pru Indo Asia Equity Fund?

Finally we have an opportunity to profit from not just Indian markets but other emerging markets from Asia Pacific as well. ICICI Pru Indo Asia Equity Fund plans to invest in Indian Equities as well as their counterparts from Korea, Taiwan, Hong Kong, Philippines, Thailand, Malaysia, Singapore, Indonesia, People’s Republic of China, Pakistan, Australia, New Zealand etc.

In my opinion this fund provides an excellent opportunity for investors to diversify their portfolio without compromising on returns, provided Asian Markets continue to do well.

Fund Objective:

ICICI Prudential Indo Asia Equity Fund is an Open-ended equity scheme that seeks to generate long term capital appreciation by investing in equity, equity related securities and or share classes/units of equity funds of companies, which are incorporated or have their area of primary activity, in the Asia Pacific region. Initially the Scheme will be investing in share classes of International Opportunities Fund (I.O.F) Asian Equity Fund and thereafter the Fund Manager of ICICI Prudential Indo Asia Equity Fund may choose to make investment in listed equity shares, securities in the Asia Pacific Region.

Issue Opens: August 23, 2007
Issue Closes: September 21, 2007

Benchmark Index: The benchmark would constitute 65% of S&P CNX Nifty and 35% of MSCI AC Far East Free ex - Japan Index.

For further details refer to the offer document.

Should you invest in HSBC Dynamic Fund?

HSBC Dynamic Fund

HSBC Dynamic Fund (HDF), a fund that seeks to capitalise on the potential upside in equity markets, and yet attempts to limit the downside risk by the active use of money market instruments and derivatives. The fund aims to normally invest in equity but can react quickly to a negative market by moving 100% of its assets into money market instruments, fixed income securities and derivatives with an aim to limit the downside risk, in the event that the fund manager is bearish on the market.

What about Tax?

The best thing about this fund is that it can become an 100% equity fund and 100% debt fund at its will. However, this puts the returns from fund in a very awkward position. In a normal equity fund, there is no tax payable on gains (Capital Gains) if you have invested for over a year. But what will happen to gains from this fund?

Invest or not?

I would just leave you with few questions...

1. Would returns be taxable?
2. If you are investing for long term, will you like to switch to debt at times and tamper with your returns?
3. If you are investing for short term, should you be investing in equities at all?
4. What would be the benchmark to track performance 5 years down the lane?

For me, its too confusing and might complicate my portfolio. I would rather manage my debt:equity ratio myself.

Key Features

Name of the Scheme	HSBC Dynamic Fund
Investment Objective	To provide long term capital appreciation by allocating funds in equity and equity related instruments. It also has the flexibility to move, entirely if required, into debt instruments at times when the view on equity markets seems negative.
Options	Dividend (Payout / Reinvestment) and Growth
Minimum Application Amount	Rs 10,000/- per application
Minimum additional investment	Rs. 1000/- and multiples of Re. 1/- thereafter
Load Structure (During NFO & ongoing basis)	Entry Load 2.5% for investments / Switch in* below Rs. 5 crores, otherwise Nil. Exit Load 1% for investments below Rs. 5 crores, if redeemed / switched out* within 1 year from date of investment, otherwise Nil. * No Load in case of switches between equity Schemes of HSBC Mutual Fund.
Systematic Investment Plan	Monthly / Quarterly Plan Monthly - a minimum of 12 cheques of Rs. 1,000 each Quarterly - a minimum of 4 cheques of Rs. 3,000 each
Offer Period	3 August 2007 to 30 August 2007
Offer Price	Available at Rs 10 per unit plus applicable load per unit during the NFO period and at NAV based prices thereafter
Minimum Redemption Amount	Rs. 1,000/- and multiples of Re.1/- thereof
Asset Allocation	Equity and equity related instruments - 0 to 100%, and Debt and money market instruments - 0 to 100%
Mode of Holding	Single, Joint or Anyone or Survivor
Nomination Facility	Available to individuals for single / joint holding.
Fund Manager	Jitendra Sriram & Mihir Vora (for equity portion) Gordon Rodrigues (for fixed income portion)

NFO Review: DWS Global Thematic Offshore Fund

DWS Global Thematic Offshore Fund
Open Ended, Fund of Funds

NFO closes on 28th Aug '07

Objective:

The objective of the fund is to generate long-term capital growth from a diversified portfolio of units of overseas mutual funds. There can be no assurance that the investment objective of the Scheme will be realized

Load Structure:

Entry Load: An entry load of 2.75% would be charged for investment less than 5 crores.

Exit Load: An exit load of 0.50% would be charged if redemption is made within one year from the date of allotment for investment less than 5 crores and 0.50% would be charged for investment of 5 crores or more if the investment is redeemed within six months from the date of allotment.

Minimum Investment Amount: Rs 5, 000 and in multiples of Re. 1.

Benchmark Index: MSCI World Index

Downloads: Brochure : : KIM and application form : : Offer Document


DWS Global Thematic Offshore Fund is an opportunity for global diversification, reduced volatility and access to top performing stocks across the globe. Having a core global equity fund means lowered volatility in your investment portfolio as compared to other regional funds.

HDFCbank.com - The inconvenient convenient banking

Some time back I got a chance to experience the Internet banking of HDFC Bank. One of my friends wanted to invest in mutual funds and since she already had a salary account with HDFC Bank it made sense to subscribe through that.

She was smart to tick Internet Banking option while applying for an account with HDFC Bank, hence she can login to HDFCbank.com and transact. However, when we logged in to the site we discovered that all we could do is check balances and transactions-history.

Click on 'Funds Transfer' - Please contact the nearest branch..
Click on 'Bill Payment' - Please contact the nearest branch..
Click on 'Mutual Funds' - Please contact the nearest branch.. huh

Nothing seems to be activated by default. Anyways after all the cribbing and sulking, we decided to visit 'the nearest branch'. Filled and submitted the form after dealing with some confused executives (they wanted us to fill the Mutual Fund Identification Number even after the whole word knew that PAN will work for mutual funds as well).

It wasn't over as yet. Even after 1 month of filling the form, account wasn't active...

Reason 1: The person you submitted form to has resigned, so we couldn't process your application.

Reason 2: We are extremely sorry. We forgot to ask for one document.

But at last all the bank visits and signing paid off. We could see the world beyond - 'the nearest branch', when we clicked on 'Mutual Funds' tab. But our happiness was short-lived.

To our surprise we discovered there was no systematic investment/withdrawal option. Just a handful of fund houses (even the big ones like SBI Magnum were missing). And a sad interface which doesn't even list the funds together. You cannot see the order you have placed after submitting the request to purchase... and so on.

Well, just to remind people at HDFC - Internet Banking is also referred to as Convenient Banking.

Mutual Fund Houses and their Websites

Websites of major Mutual Fund Houses in India:

ABN AMRO Mutual Fund

AIG Global Investment Group Mutual Fund

Benchmark Mutual Fund

Birla Sun Life Mutual Fund

BOB Mutual Fund

Canbank Mutual Fund

DBS Chola Mutual Fund

Deutsche Mutual Fund

DSP Merrill Lynch Mutual Fund

Escorts Mutual Fund

Fidelity Mutual Fund

Franklin Templeton Mutual Fund

GIC Mutual Fund

HDFC Mutual Fund

HSBC Mutual Fund

ING Vysya Mutual Fund

J M Financial Mutual Fund

JPMorgan Mutual Fund

Kotak Mahindra Mutual Fund

LIC Mutual Fund

Lotus India Mutual Fund

Morgan Stanley Mutual Fund

Principal Mutual Fund

Prudential ICICI Mutual Fund

Quantum Mutual Fund

Reliance Mutual Fund

Sahara Mutual Fund

SBI Mutual Fund

Standard Chartered Mutual Fund

Sundaram Mutual Fund

Tata Mutual Fund

Taurus Mutual Fund

UTI Mutual Fund

How to buy Mutual Funds in India?

Many of us want to invest in mutual funds, but have no clue where to get them from? Here are different methods you can use to invest in Mutual Funds. Choose the one that suits you most.

Buy Mutual Funds Online

• Directly from the website of the Fund House : Many fund houses including Prudential ICICI and SBI allow you to purchase funds directly from their website. List of Fund Houses and their websites.

• Through Online Mutual Funds Subscription Services : There are several services that allow you to invest online like ICICI Direct, Reliance Money, Sharekhan etc. Click Here for a list of mutual fund subscription services.
  

• Through your bank's website : Many banks like Citibank, HDFC etc allow you to invest online through their website. Check your bank's website for details. Normally you don't pay anything extra for this service and subscription/redemption is directly linked to your bank account.
  

• Download forms online and subscribe offline : Yes, even this is possible. You can download forms at timesofmoney.com or moneycontrol.com. On Moneycontrol, you can even order printed forms for free.
  

Buy Mutual Fund Offline

• From the Fund House : Write to Fund House (AMC) directly for forms and subscribe.
  

• Walk in to a nearby financial store : Slowly financial stores like Reliance Money, ICICI Direct and Sharekhan are popping out everywhere in the country. Find a one near you.
  

• Ask your bank : Many banks also see Mutual Funds. Call up or ask when you visit your bank next.
  

• From an agent : You can contact an agent or a distributor to buy mutual funds. He should be able to help you with all the procedures also. Click here to find one in your city.