Blog

NFO – Important Points to consider before investing in NFO

Mutual Funds

-

December 6, 2017

NFO – Important Points to consider before investing in NFO

New Fund Offer (NFO) is well-known term. NFO means the first subscription offer given by fund house for the mutual fund. You might have come across news related to New fund offer launch in the past few months. You might be thinking to invest in one of them. If that is the case, here are some important points to consider before investing in NFO.

What is NFO?

A new fund offer is new subscription offer for the new scheme launched by the fund house. NFO is a way to raise the money from the general public by the fund house. This money is used for investment in stock, bonds, treasury etc. NFO is offered for the limited period of time. A value of New fund offer is generally kept at Rs.10. Once the NFO period is over it will be launched as a mutual fund. One can invest in the mutual fund at NAV price.

Also Read – How to live off from dividends? – Invest and never work again

Important Points to Consider before Investing in NFO

If you are planning to make investment in NFO you should consider following points.

Investment Theme –

The first point is Investment Theme. This means where fund house is planning to invest money. Their investment theme (small cap, mid cap, large cap, balance etc.) should match with your objective.

In addition to this if fund house has unique investment strategy you can take a look at that. Examples are Pine Bridge India US Equity Fund, Motilal Oswal NASDAQ 100 ETF etc.

Background of Fund House

It is very important to take a look at the background of Fund House before investing in NFO. You can take a look at past performance of fund manager. It is also important to check the credibility of fund house before investment. The qualification and experience of the fund manager play a vital role in the fund’s performance.

Fund Class & Type

Every Fund has a type and class. Funds are Growth, Dividend, Direct, Short Term, Long Term, FMP, Debt Type. You should take a look at fund type before investing. The fund type should match with your risk-return profile.

Cost

Cost or expense is another important factor of consideration. This includes initial fund issue expense, load, advertisement cost etc. If expense is high from the beginning returns will be affected for sure. You can even look at actual expense or expense by other similar schemes in the past.

Entry Load, Exit Load and Other Factor

You should also take a look at entry load and exit load of the fund. Additionally, you can check minimum investment required for the fund.

Why should you stay away from NFO?

Truly speaking investor should stay away from New Fund offer unless and until unique proposition is found in fund offer. Several reasons for not investing in NFO are given below.

No Performance History –

As it is new fund offer you cannot find detail about past performance. In absence of performance history, one cannot perform a quantitative or qualitative analysis.

High Initial Expenses –

The initial expenses on marketing of fund and launch are manage out of NAV of fund over the period. This clearly means that return on new fund will be affected.

Not cheaper than other Peers –

It is a myth that new fund offer means fund available at cheaper rate. The fund is launched with a value of Rs.10 only. The fund collected from investors is used for investing in equity and based on the performance of equity NAV will be declared.

Diversification is Limited –

The New fund offer limited or less diversification. These are focused fund mid cap, large cap or small cap. As fund offer limited diversification it is risky to invest in the fund.

NFO is not IPO –

Please understand that NFO and IPO both are different. In NFO initial NAV is fixed at Rs.10. While in IPO stock price is fixed based on demand and several other factors. NFO make an investment in multiple shares. So, NAV and returns depend upon the growth of multiple underlying securities.

Conclusion –

It makes sense to avoid New Fund offer and Invest in currently available funds based on investment profile, fund analysis, and other factors.

Gratuity – Important Points to Know About the Gratuity

Personal Finance

Shitanshu Kapadia

-

December 5, 2017

6

Gratuity – Important Points to Know About the Gratuity

If you are doing a job you must be aware of Gratuity. Gratuity is an amount payable to the employee at the time of leaving a job. It is a big amount. It is the right of the employee and no employer can deny it. I have recently received a query about the gratuity. The question was – Recently I have resigned from the job. I have completed four years and seven months at the time of resignation. Am I eligible for the gratuity amount? What amount will I get as a Gratuity? Well, Answer is simple as you have completed 4 years and 7 months which is near to 5 years (eligible age) you are eligible for the gratuity amount.

This is just an example. There are many such questions about gratuity that may be popping up in your mind. If it is a case here is 10 important points to know about the gratuity.

Also Read – Capital Gain Tax Calculator – Download

What is Gratuity?

As per definition gratuity is a sum of money paid to an employee at the end of a period of employment. It is also known as a reward for the good services rendered to the organization.

Important Points to Know About the Gratuity

– Gratuity is payable only after completion of 5 years from Date of Joining/Absorption, after separation from the company.

– There should not be any break in your services. Entire job tenure should be in the same organization. The service period is rounded off to nearest integer this means if you have done a job for 4 years and 6 months you are eligible to get gratuity amount. Above 6 months is considered as a completed year.

– Above rule of 5 years is not applicable in case of disablement or death. The entire amount is given to legal heirs or nominee.

Gratuity payable is calculated using following formula –

Gratuity amount is calculated as on Date. The employer has to pay the amount as per formula.

– From above formula, one can clearly say that amount of gratuity depends on last drawn basic monthly salary and qualifying years of the service.

– The rule of gratuity is applicable to the organization with more than 10 employees. If total employees are less than 10 this rule is not applicable.

Also Read – How to know your Gratuity Benefits – Calculator Download

– The amount paid as a gratuity is tax-free for the government employees. For private sector employees total 20 Lakh is tax-free. An additional amount is taxable in nature. This total amount is lifetime amount.

– The formula given for the calculation is for the reference. An employer can give amount exceeding this formula. However, an additional amount will be taxable.

– An employer can penalize employee by not paying gratuity amount, in case employee makes a loss to the company. However, employer has to terminate service of employee due to this damage.

– If the service of the employee is terminated for his riotous or disorderly conduct or any other act of violence on his part gratuity may be wholly or partially forfeited.

I have tried to cover major aspects of gratuity act. In case you have any specific query or confusion you are requested to post it in the comment section.

I have surely try to answer your query.

MoneyWorks4me – Mutual Funds and Stock Decision Making Tool

Shitanshu Kapadia

-

December 3, 2017

0

MoneyWorks4me – Mutual Funds and Stock Decision Making Tool

MoneyWorks4me is a website that offers free and paid services for stock market analysis. Recently this website has launched an amazing tool for the Fundamental Analysis of the mutual funds. Any retail investor can use this tool free of cost to find out financial health of the mutual fund. It gives suitability of stock and mutual fund for investment along with analysis and data. Let’s take a look at What is MoneyWorks4me? How MoneyWorks4me can be used for Mutual Funds and Stock Market Decision making tool.

What is MoneyWorks4me?

MoneyWorks4me.com is a financial portal that empowers investors to create a wealth from the stock market. This portal offers an unbiased opinion, research, data, and tool for doing fundamental analysis. You can quickly take a right decision for investment in the stock and mutual fund. In addition to that this website also offers paid features for the advance investors.

Read – 5 Technical Screener Website for Technical Analysis

How to use MoneyWorks4me for Mutual Funds and Stock Market Investment Decision Making?

First, you need to create your login account on MoneyWorks4me. It is free. In order to create a free account click on Register button. You will be prompted to input your email id, password, and mobile number. Once you input this detail click on Generate Verification Code. It will generate OTP. On entering OTP you will be able to complete registration. Once your login is created you need to login via username and password. Now follow the process given below for stock market and mutual fund decision making.

MoneyWorks4me for Stock Market Analysis

On left most navigation panel you will find “Decision Maker”. It is 10 Years X-Ray feature to find if a Company is worth investing. In this tool, you will get financial performance and analysis for the stock. On clicking “Decision Maker” tab you will be redirected to a new page with a search bar.

Enter the name of the company/stock in the search bar and press search button. It will display analysis of the company/stock in four parts.

Value Creation – This includes last 10 years analysis of Growth parameters like sales, EPS, cash flow, profit margin etc.

Also Read – Chartink Screener – Fundamental and Technical Scanner

CAGR – This section shows CAGR data of Sales, Adjusted EPS, and Book value per share.

Key Financial Parameter – In this section you will find RoE, Profit Margin, Debt to Equity ratio, Working capital days etc.

Management X-Ray – This section gives rating information about corporate governance, promoter holdings, transparency, and Integrity.

Entire result is visually appealing as it is shown with different color coding which can be understood easily.

In addition to above, it clearly gives an indication that stock is good for investment or not. If you want to know the right price or investment and right allocation you need to spend money as it is a premium feature and not available for free login. Overall it is a quick tool for the decision making.

MoneyWorks4me for Mutual Fund Analysis

In order to use decision maker tool for the Mutual Funds, you need to visit Mutual Funds section. This section gives information about Right Fund, Right Price, and Right Allocation.

Enter the name of the mutual fund in the search bar. Select Category, Plan type, and Scheme type. Once you are done with the selection press Go button. You will be able to see the result in four parts.

Returns Performance – This section gives return performance summary of the fund. It includes last 10 year fund returns, Benchmark returns and fund expense ratio.

Risk Analyser – This section identifies various risk involved with fund like business risk, valuation risk, liquidity risk etc.

Portfolio Quality – Portfolio Quality section gives information about Top 10 stock holdings and sector holdings.

Fund Overview – This gives fund overview, investment objective and asset allocation.

It also allows you to search for the direct mutual fund. You can clearly take a decision on the right fund for investment. However, if you are looking for right price and right allocation for the investment you need to pay money as it is a premium feature.

Over to You –

Do you use services offered by MoneyWorks4me while making an Investment?

Do you think facility described above will help you?

Do share your views and experience in the comment section.

Mudar Patherya Stock Recommendations and Tips for Investment

Stock Market

Shitanshu Kapadia

-

December 2, 2017

0

Mudar Patherya Stock Recommendations and Tips for Investment

Mudar Patherya is a versatile person. He is famous as a stock market analyst and columnist. However, very few know that he is cricket writer, communication professional, philanthropist and public space activist. Mudar Patherya is a specialist in identifying penny stocks and micro-cap stocks.Nobody can dispute the proposition that Mudar Patherya has a deep understanding of micro-cap stocks and of what makes them tick.

Few solid microcap stocks recommended by Mudar earlier were Caplin Point, Himadri Speciality Chemical, GMDC, 8 K Miles, HSIL, Somany Ceramics etc. All these stocks have performed very well and given very good return to the investors. So it makes sense to look at stock recommendation given by Mudar Patherya. In this post, we will take a look at stock recommendation and tips for investment by Mudar Patherya.

Also Read – Dolly Khanna Success Story – Stock Portfolio

Mudar Patherya Stock Recommendations

On the auspicious occasion of Christmas, Mudar Patherya has recommended five stocks for the investment. All these stocks are expected to give very good returns in the future.

Automotive Axles –

AutomotiveAxles is first stock recommended by Mudar. Automotive Axles is in the business of automotive ancillary. The company is on the verge of being debt free. The company has a lot of surplus cash. The management of the company is very good. The fundamentals of the company seem to be strong.

Jindal Saw

Jindal Saw is in the pipe manufacturing business. The increasing demand for Ductile Iron pipe is beneficial for this company. As per Mudar valuation of the stock is very low. The increase in revenue and decline in interest outflow are two positive points for Jindal Saw.

Recommended Post – Rakesh Jhunjhunwala Story from 5K to $3.1 Billion

MIRC Electronics

MIRC Electronics is one of the favorite stock of Vijay Kedia. MIRC Electronics YOY performance is not so good. However, Mudar is positive that management efforts and hyper-competitive electronic market will surely help this stock.

Dixon Technologies

Dixon Technologies is not a well-known company. Very few people know about this company. Dixon Technologies financial performance is very good. The company is expanding its business and entering into manufacturing of television and washing machine. Low working capital cycle and strong fundamental is a positive side of this stock.

Godawari Power

Godawari Power is another stock recommended by Mudar. The dramatic increase in profit margin and revenue is a positive side of this stock. Interest outflow is steady. Market cap is modest. Anytime this stock can surge to a new level.

Stock Market Tips by Mudar Patherya

Fundamental of Stocks – One should look at a number of factors such as revenue, growth, interest cover before investing in the stock. The stock should be fundamentally strong. It should be base on investing in any stock.
Management of Company – One should assure that management of the company is top-notch, honest and competent. They should be able to turn around the fortunes.
Basket Approach – Investment in micro-cap stock is the high-risk high return game. While the gains can be multifold, the mortality rate of such stocks is also high. One should have balanced portfolio and basket approach while investing in such stocks.
High quality less known stocks – A style of Mudar is different. He always suggests a high quality less known stock. The chances of getting a good return on these stocks are very high.

Reference – Business standards.