Reliance Fixed Horizon Fund-XX-Series 8 issue closes on 13th October
Reliance Mutual Fund has launched Reliance Fixed Horizon Fund-XX-Series 8, a close-ended income scheme.
The investment objective of the scheme is to seek to generate regular returns and growth of capital by investing in a diversified portfolio of central and state government securities and other fixed income/debt securities maturing on or before the date of maturity of the scheme with the objective of limiting interest rate volatility. The tenure of the scheme is 150 days.
The new issue closes on 13 October 2011. The minimum investment amount is Rs5,000. Crisil Short Term Bond Fund Index is the benchmark index. Amit Tripathi is the fund manager.
Invest in the scheme if you know that interest rates are headed down. A number of similar schemes have been launched in the past by various fund houses—but returns have been disappointing
The primary investment objective of the Motilal Oswal MOSt Benchmark Government Bond Fund scheme is to generate risk-free returns by investing in a portfolio of securities issued and guaranteed by the Central government and state governments. Recently, a similar scheme was launched by Daiwa Mutual Fund, Daiwa Government Securities Fund-Short Term Plan, an open-ended gilt fund launched in April 2011. It has given a measly return of 4% since its launch. There are a couple of fund houses such as Birla Sun Life, DSP and UTI among others, which have such schemes and their average returns since inception are just 8%-that is no more than the returns from fixed deposits. In fact, the current bank interest rate is 9%.
Gilt funds primarily invest in government securities (G-Secs) issued by the Reserve Bank of India (RBI). These funds also invest in corporate bonds, zero-coupon bonds and treasury bills, certificates of deposit, commercial paper and usance bills, as well as derivative instruments like exchange-traded interest rate futures and interest rate swaps. As you know, the NAV (Net Asset Value) of any fund fluctuates on a daily basis just like share prices because the underlying asset-whether bonds or shares-fluctuate on a daily basis. The fact is: anything that is interest-bearing will go up and down with the market. The value of bonds of any kind is primarily influenced by the prevailing interest rates. If interest rates go down, the value of bonds go up. The daily NAV of a gilt fund is calculated by valuing a variety of government bonds, which a fund has invested in, that are traded in the market. As interest rates fluctuate, the value of the securities in which the scheme has invested, fluctuates as well. This, in turn, will be reflected in the changing value of the fund and its NAV.
When it comes to gilts, the usual route for an investor is mutual funds. Retail investors do not have access to G-Secs because these are dealt in large lots which only institutional players can afford to buy. But gilt funds can pool money from retail investors and buy government securities, offering an indirect route to retail investors. However, most investors invest in such funds without realising that gilts may be risk-free, but only on maturity. Meanwhile, the value can go up and down. And investors then cry foul if the NAV falls from the purchase price.
The principal amount that you have invested may erode due to interest rate fluctuations and mark-to-market formula of securities valuation. The right time to invest in a gilt fund is when interest rates in the economy are near their peak levels, inflation expectations are likely to go down, growth slowdown is seen in the months ahead and overcapacities get built up in the economy. An ideal timeframe should be two years, depending on the clues from broader indicators in the economy.
The benchmark for the scheme will be 10-Year Benchmark G-Sec. Entry load is nil. Exit load is 0.50% for exit within 6 months. Minimum application amount is Rs10,000 and in multiples of Rs1.
The scheme will invest 80%-100% of assets in G-Secs, T-Bills, & CMBs with low risk profile and invest up to 20% in money-market instruments and cash at call with low- to medium-risk profile.
Money market instruments include CDs, CMBs, T-Bills, and government securities with an unexpired maturity up to one year, commercial bills, CBLOs, repo/reverse repo and any other similar instruments with a maturity of up to 1 year or less, as specified by the RBI from time to time.
Meet a David who faces many invisible Goliaths—but he continues his journey undeterred, putting up a brave face in this unforgiving metropolis—and has a value system that our ‘leaders’ would do well to follow
A schoolmate of mine settled abroad after finishing his post-graduate studies in India. After a long time, he visited India with his wife to spend some time with his relatives.
He sent me an email about an auto-rickshaw trip in Mumbai. Doesn't sound very exciting, does it? But read on patiently and I promise you a heart-moving experience.
Here goes the text of the email: "One Sunday, my wife, and I had to travel to Andheri from Bandra. When I waved at a passing auto-rickshaw, little did I expect that this ride would be any different...
"As we set off, my eyes fell on a few magazines (kept in an aircraft-style pouch) behind the driver's backrest. I looked in front and there was a small TV. The driver had put on the Doordarshan channel.
"My wife and I looked at each other with disbelief and amusement. In front of me was a small first-aid box with cotton, Dettol and some medicines. This was enough for me to realise that I was in a special vehicle.
"Then I looked round again, and discovered more-there was a radio, fire-extinguisher, wall clock, calendar, and pictures and symbols of all faiths from Islam and Christianity to Buddhism, Hinduism and Sikhism.
"There were also pictures of the heroes of 26/11-Kamte, Salaskar, Karkare and Unnikrishnan. I realised that not only my vehicle, but my driver also was special. I started chatting with him and the initial sense of ridicule and disbelief gradually diminished.
"I gathered that he had been driving an auto-rickshaw for the past 8 to 9 years; he had lost his job when his employer's plastic-goods company was shut down. He had two school-going children, and he drove from 8 in the morning till 10 at night.
"No break—unless he was unwell. "Sahab, ghar me in baith ke TV dekh kar kya faida? Do paisa income karega toh future mein kaama ayega. (What is the point in sitting at home and watching TV? If I earn a few paise, then I can make some use of it in the future)."
"We realised that we had come across a man who represents Mumbai-the spirit of work, the spirit of travel and the spirit of excelling in life.
"I asked him whether he does anything else as I figured that he did not have too much spare time. He said that he goes to an old-age home for women in Andheri once a week or whenever he has some extra income, where he donates toothbrushes, toothpastes, soap, hair oil, and other items of daily use.
"He pointed out to a painted message below the meter that read: '25% discount on metered fare for the handicapped. Free rides for blind passengers up to Rs50.'
"My wife and I were struck with awe. The man was a hero! A hero who deserves all our respect!!!
"Our journey came to an end. Forty-five minutes of a lesson in humility, selflessness, and of a hero-worshipping Mumbai, my temporary home. We disembarked, and all I could do was to pay him a tip that would hardly cover a free ride for a blind man.
"I hope, one day, you too have a chance to meet Mr Sandeep Bachhe in his
Yes, my videshi friend, the man is a hero in a little way. But there are hundreds of millions of 'small' men like him who are also heroes.
Every day they have to battle invisible Goliaths; in the form of avaricious policemen who will rip away earnings; in the form vote-seeking politicians who will grab his home and donate it to one of his followers; in the form and mullah-maddened jihadis who will rip his guts out with a bomb, leaving his children orphaned.
But then, why wish him ill? We should wish him the best of luck and pray that he does not have to face these invisible Goliaths.
(R Vijayaraghavan has been a professional journalist for more than four decades, specialising in finance, business and politics. He conceived and helped to launch Business Line, the financial daily of The Hindu group. He can be contacted at [email protected]).