Employees Provident Fund Organisation had appointed four fund managers (ICICI Prudential Asset management Company (AMC), State Bank of India, HSBC AMC and Reliance AMC) to handle the money that belongs to employees across India. The first nine months have passed (till June 30) and there is a basis to decide which of these four managed to get the best returns.
The data, collected by CRISIL (which was chosen to judge their performances), reveals that the winner is ICICI Pru, which has become the top earner by the dint of providing a 8.73 per cent return on the EPFO funds that it manages.
Following in its wake is SBI, which managed to garner a gain of 8.70 per cent.
While HSBC comes in third, bringing up the rear is Reliance, with returns of 8.67 per cent and 8.52 per cent.
The margin of the win is negligible and if looked at holistically there is hardly anything separating them. But the significant part of the performance is that all of them have been able to generate returns in excess of 8.5 per cent, which is the interest rate that the EPFO has been paying to its subscribers over the last three years.
The amount promised this year is also 8.5 per cent.
The fund managers were appointed in July, 2008.
The EPFO has a subscriber base of 4.5 crore and its corpus is 2.57 lakh crore. more mutaulfundinfo
Saturday, August 15, 2009
Tuesday, November 11, 2008
What Performance Number Should I Look At?:
The three-year of five-year total return is the most important number to consider when choosing a mutual fund. That number will give you a good impression of the fund’s overall performance and stamina.
You can check a fund’s performance on the fund company’s website, at mutual fund tracker Morningstar.com or at financial news sites like Yahoo! Finance.
Don’t make your buying decision on just great recent returns, but do look at one-month, three-month or year-to-date returns. Recent returns give you an idea of how the fund is doing now. But there’s no telling what the market will be like next month.
What Should I Compare My Fund’s Total Return To?:
Each fund has a benchmark, an index that you can judge it by. Most broad stock market or big company funds compare themselves to the S&P 500. Funds that specialize in a sector, size of company or foreign country will use another index. You may also be able to compare your fund to the particular Lipper Index that tracks mutual funds by type.
The Morningstar Style Box:
Morningstar.com provides a benchmark and the nifty Morningstar style box that categorizes how big and aggressive your fund's companies are.
The style box is like a tick-tack-toe board with nine squares. One box marks where your fund stands. The bottom row is for small companies; the top for big companies. The left column is for value-oriented companies (undervalued or slow-growing). The right column is for growth companies. The middle is the middle.read more
The three-year of five-year total return is the most important number to consider when choosing a mutual fund. That number will give you a good impression of the fund’s overall performance and stamina.
You can check a fund’s performance on the fund company’s website, at mutual fund tracker Morningstar.com or at financial news sites like Yahoo! Finance.
Don’t make your buying decision on just great recent returns, but do look at one-month, three-month or year-to-date returns. Recent returns give you an idea of how the fund is doing now. But there’s no telling what the market will be like next month.
What Should I Compare My Fund’s Total Return To?:
Each fund has a benchmark, an index that you can judge it by. Most broad stock market or big company funds compare themselves to the S&P 500. Funds that specialize in a sector, size of company or foreign country will use another index. You may also be able to compare your fund to the particular Lipper Index that tracks mutual funds by type.
The Morningstar Style Box:
Morningstar.com provides a benchmark and the nifty Morningstar style box that categorizes how big and aggressive your fund's companies are.
The style box is like a tick-tack-toe board with nine squares. One box marks where your fund stands. The bottom row is for small companies; the top for big companies. The left column is for value-oriented companies (undervalued or slow-growing). The right column is for growth companies. The middle is the middle.read more
Stories Telling You To Watch Out For Capital Gains Tax
This past week I've seen a couple stories more or less taunting already wounded mutual fund investors that despite their losses they're about to get hit with capital gains taxes, too. "Just when you thought your mutual fund losses couldn't get any worse, your fund might be about to add insult to injury," warns the Chicago Tribune's Gail MarksJarvis. "Now we have to brace for a second whammy," worries Allan Chernoff, at CNNMoney.
But not everyone has to worry.
First off, if your mutual funds are in your retirement account, you don't care at all.
And if you're in an index fund, this is another time to be happy about that. I took a look at Vanguard's Total Stock Market Fund's distributions chart. As of the end of September the fund had a realized capital loss of $1.15 or 4% and had an unrealized loss of fifteen cents or half a percent.
If you're in an actively managed fund in a non-retirement account, there could be some trouble. The country's most popular fund, the Growth Fund of America, doesn't list this year's capital gains on its website. Last year the fund returned 11% and had a long-term capital gain of $2.06 on an NAV of $33.41. But the fund does have relatively low turnover--which makes for relatively low capital gains.
And it's not necessarily bad news.
Vanguard's actively managed Windsor Fund also shows capital losses this year. (Which is normally not good news, but in the context of taxes is. You don't pay taxes on your losses.)
So, don't get too scared by those stories.readmore
But not everyone has to worry.
First off, if your mutual funds are in your retirement account, you don't care at all.
And if you're in an index fund, this is another time to be happy about that. I took a look at Vanguard's Total Stock Market Fund's distributions chart. As of the end of September the fund had a realized capital loss of $1.15 or 4% and had an unrealized loss of fifteen cents or half a percent.
If you're in an actively managed fund in a non-retirement account, there could be some trouble. The country's most popular fund, the Growth Fund of America, doesn't list this year's capital gains on its website. Last year the fund returned 11% and had a long-term capital gain of $2.06 on an NAV of $33.41. But the fund does have relatively low turnover--which makes for relatively low capital gains.
And it's not necessarily bad news.
Vanguard's actively managed Windsor Fund also shows capital losses this year. (Which is normally not good news, but in the context of taxes is. You don't pay taxes on your losses.)
So, don't get too scared by those stories.readmore
Will the Election Impact 401(k)s?
Reuters had a smart story today about whether Democratic wins in the election yesterday will lead to tinkering with 401(k)s. The theory is that we've all become far too dependent on 401(k)s--and by we I mean both the fund industry and individual investors. The market crash makes even more clear what we already knew: people aren't saving enough for retirement.
Reuters writer Jason Szep speculates that Democrats may try to tinker with 401(k)s to get people to save more. I agree: they might and they should.
But Szep then suggests that they would consider a more radical plan devised by Teresa Ghilarducci, an economist at the New School. The idea is to give workers a tax credit if they invested their money in an account managed by the Social Security administration in risky assets that guarantees three percent above inflation. The plan is a pretty good one. It offers the best of privatizing Social Security: we'd get market returns. But I don't think the guarantees make it all that attractive. I'd rather see the Social Security administration be allowed to invest some portion of our money in the market rather than loaning it out to government agencies.
The plan seems like a bridge between 401(k)s and Social Security--one that would jeopardize the fund industry. But I also think it's really unlikely. Far more likely is the Democrats find some way to get more people to put more money in 401ks. And maybe they'd put on some automatic defaults to the plans and limits on fees. That would be bad for some industry players, but great for the industry as a whole and even better for investors. I would love to see plans that automatically enrolled workers in low-cost lifecycle funds than invested only in index funds. readmorerajput harendrasingh
Reuters writer Jason Szep speculates that Democrats may try to tinker with 401(k)s to get people to save more. I agree: they might and they should.
But Szep then suggests that they would consider a more radical plan devised by Teresa Ghilarducci, an economist at the New School. The idea is to give workers a tax credit if they invested their money in an account managed by the Social Security administration in risky assets that guarantees three percent above inflation. The plan is a pretty good one. It offers the best of privatizing Social Security: we'd get market returns. But I don't think the guarantees make it all that attractive. I'd rather see the Social Security administration be allowed to invest some portion of our money in the market rather than loaning it out to government agencies.
The plan seems like a bridge between 401(k)s and Social Security--one that would jeopardize the fund industry. But I also think it's really unlikely. Far more likely is the Democrats find some way to get more people to put more money in 401ks. And maybe they'd put on some automatic defaults to the plans and limits on fees. That would be bad for some industry players, but great for the industry as a whole and even better for investors. I would love to see plans that automatically enrolled workers in low-cost lifecycle funds than invested only in index funds. readmorerajput harendrasingh
Thursday, November 6, 2008
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