Dear Investors, A GOOD TAX SAVING OPTION FOR THOSE WHO ARE IN THE LAST FEW YEARS OF THEIR WORKING LIFE
There is a large section of taxpayers who wait until the last month of the fiscal before completing their investments for tax purposes. With many forms of investments included under Section 80-C of the IT Act, (which provides tax deduction for investments upto Rs.1lakh) there is no dearth of options. Templeton India Pension Plan is for those investors who want to participate in a mutual fund that invests in high quality debt and also a sizeable equity component. WHAT IS THE PRODUCT ? This is an open ended pension fund that seeks to provide capital appreciation under the growth plan and regular income under the dividend plan. The fund manager seeks steady capital appreciation by maintaining a diversified portfolio of equities and seeks to earn regular income on the fixed income component by managing interest rate movement and credit risk. The fund helps the invetor accumulate money over the working life to buy an annuity upon retirement. The fund does not pay a guaranteed annuity. PORTFOLIO : The fund invvests upto 40% of its assets in stocks and the remaining money into high quality debt instruments. Debt instruments include govt. securities and money market instruments. As of January 2010 end, the fund has invested 35% of the money into equities and the rest in fixed income instruments. The fund size is Rs.193.87 crores as on 28th Feb, 2010. The fixed income portfolio has an average maturity of 6.1 years and yield to maturity stands at 7.82%. More than a quarter of equity investments are in banks and the financial services sector. PERFORMANCE : The fund has been in existence for more than a decade. As per Value Research data, as on February 26, 2010 the fund has delivered 30.39%, 6.90% and 10.64% returns over 1, 3 and 5 year period. Since its inception the fund could clock 13.84% returns. It has an expense ration of 2.14% Inception Date 31st March, 1997 TAX SAVING : Investments in this fund qualify for tax benefits under Section 80-C of the Income Tax Act. Being a debt oriented Fund, it attracts long term capital gains at lower of the two; 10% with indexation and 20% without indexation. Additionally, one has to pay education cess as applicable. FUND DETAILS : An investor can start with a minimum investment of Rs.500/-. One can also opt for a Systematic Invesment Plan. The funds benchmark comprises 40% of S&P CNX 500 and 60% of Crisil Composite Bond Fund. Index. There is no entry load. Investment in this fund are locked for a period of three years. The scheme charges 3% exit load if the investor exits before completing 58years of age. There is no exit load if the investor redeems his investments after attaining 58. IS IT FOR ME? The fund invests primarily into fixed income investments of high credit quality. The equity investments are also primarily run into investment companies. This makes it a low risk investment compared to a "go-anywhere" fund. The fund helps you save tax and at the same time maintain a low exposure to equity. If you are a diehard fan of tax saving instruments with low risk appetite, this one can be a good option. The fund is a good tax saving option for those who are in the last few years of their working life. If you are approaching retirement, you can redeem your existing ELSS investments and invest in this fund, so that you need not have to commit fresh funds for tax saving purpose. On the flip side, the funds performance over short to medium term is not exciting. Investors must keep this thing in mind before commiting their money in this fund. WHY INVEST : TAX SAVING BY INVESTING IN A LOW RISK DEBT ORIENTED MUTUAL FUND WHY NOT INVEST : The Fund performance in the recent past is not good. COURTESY : The Economic Times Mumbai Wednesday 3 March, 2010 With Best Regards SHENOY INVESTMENT AND FINANCIAL CONSULTANTS PRIVATE LIMITED 11-A, KASHI NIKETAN, 2ND ROAD, CHEMBUR, MUMBAI - 400 071 TEL : 6797 3433 / 2521 2111 EMAIL : [email protected] [email protected] Dealing in Mutual Funds, General & Life Insurance Products, Post Office Schemes, Fixed Deposits, I.P.Os., and Capital Gains Bonds -- You received this message because you are subscribed to the Google Groups "BETTER PERSONALITY GROUP" group. To post to this group, send email to [email protected]. To unsubscribe from this group, send email to [email protected]. For more options, visit this group at http://groups.google.com/group/better_personality?hl=en.
