Saturday, April 30, 2011

ING FINANCIAL PLANNING FUND - A REVIEW

WANT INSTANT DIVERSIFICATION, THEN LOOK AT ING OPTIMIX FINANCIAL PLANNING FUND







ING has come out with a New Fund Offer ING Optimix Financial Planning Fund which is a Fund of Funds and aims to invest in mutual funds of AMCs other than ING.
This, according to ING people, is to help investors simplify their investment.
While on the face of it, the Fund offer and plans look confusing, the concept is good though not new.
The Fund aims to invest in carefully selected BEST OF BREED Funds from differennt AMCs  and get the best returns for your investment.
The Fund will invest in Four Different Asset Classes - Liquid Funds, Debt Funds, Equity Funds and Gold ETFs.
And, yes, the Fund will also aim to give its investors flexibility to choose from four Convenient Plans catering to Different Risk Tolerance levels.







While this isn't the first multi-manager FoF from the AMC, it is unique given its strategy of investing across the equity, debt and gold asset classes. In contrast, FoFs from other fund houses typically invest in funds from their AMC only. Besides, this is the first FoF that has an option to add exposure to gold ETFs.






MY ANALYSIS :
PROS:
1. With hundreds of funds to choose from, this Fund ensures that your job is simplified. And monitoring/switching too is not your headache as the Fund Manager will do the same as and when required.
2. Since this fund will not invest in inhouse schemes of ING, you can be sure of having his investment into the Best of Funds as the selection of funds is done purely on merit.

CONS:

1. The entire performance is based on the funds selected and how they fare.  Wrong selection of funds or delay in identifying laggard funds could affect the overall returns of the fund.
2. Similar products from the same Fund House, like the ING Optimix Multi Manager Equity Option has been very disappointing in their performance till now.
3. Additional Costs due to its Fund of funds approach.


RECOMMENDATION :
As with every fund, this fund too has its pros and cons, Passive Investors and First time investors wanting an exposure to equities, this is a Great Fund to take exposure in.
Others, your Fund Advisor could well do a better job.
Investors would however do better to 'PAY FOR QUALITY ADVISE" and invest in Different Funds of different AMCs based on their Asset Allocation, Risk Aversion which a Qualified Financial Advisor would be in a much better position to advise.

Best of luck,
Srikanth Matrubai

Also visit http://equityadvise.blogspot.com

Thursday, April 21, 2011

INVEST IN GOLD THE BEST WAY.....

While there are many ways to invest in Gold, the Mutual Fund route is the best due to transparency, low cost, liquidity, tax benefits and more.

The Ever rising Gold and Silver prices has triggered a rush to invest in these commodities and let us see which is the best way to make maximum returns through the mutual fund route.
Before that, it would be worthwhile to note what experts have to say on the future Gold outlook.

While everyone knows about the Gold ETFs like Reliance Gold Fund, Gold Bees, etc.(Gold ETFs are funds which track the value of Gold by investing in Physical Gold),  not many investors seem to be aware the difference that two Gold Funds have.
These two funds, namely AIG World Gold Fund and DSPBR World Gold Fund are actually Fund of Funds which invest in Gold Mining Companies Worldwide








The DSPBR World Gold Fund invests in the units of Black Rock world gold Fund whereas AIG World Gold fund invests in Falcon Gold Equity  Fund.
The point to be noted here is, that Gold Experts are unanimous in their opinion that the mines in South Africa are saturated and over a period of two-five years, may lose their dominance due to high cost of production.
This point makes it clear that for a LONG term investor, AIG World Gold Fund may give better returns than DSPML World Gold Fund.
Note, the Falcon Gold Equity Fund has been awarded THE BEST FUND for the THIRD Consecutive year at the Lipper Fund Awards 2011.
Another very good way to get a Gold Exposure is through Reliance Gold Savings Fund.
For more details on this you can click here………
http://goodfundsadvisor.blogspot.com/2011/02/reliance-gold-savings-fund.html

The price correlation between the Gold prices and the NAVs of the AIG/DSP World Gold Fund is not direct and tend to vary.
This is because these Funds invests in Equities of Gold Mining Funds and tend to have a time lag between the Gold price variation and Stock price variation.
These stocks normally rise than Gold price rise and fall steeper than Gold price fall.
But, regarding their Gold Fund, the performance is linked to Falcon Gold Equity Fund which in turn invests in equities of Gold Mining companies.








The difference between the DSP Black Rock World Gold Fund and the AIG World Gold Fund is this.
AIG World Gold Fund typically invests in Gold Mining Companies based in Canada and prefers mid caps.
DSP World Gold Fund typically invests in Gold Mining Companies based in South Africa and prefers Large Caps.


So, obviously, a SIP investor would make more money in AIG World Gold Fund as its NAV is more volatile.
Finally, to sum up,
My vote for the BEST way to make gains through Gold investing is through a SIP investment in Reliance Gold Savings Fund.
Best of luck,
Srikanth Matrubai

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