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10.60% Edelweiss Finance – ECL finance- NCD Feb 2015:


 

//Please note Edelweiss issue will be preclosed on March 02, 2015.

Edelweiss Group’s – NBFC [Non Banking Finance company] arm ECL Finance has come up with Secured NCD issue which will open on Feb 26, 2015 and will close on March 16, 2015.

Company is looking to raise Rs 800 crore through NCDs.

This issue offers different investing options for tenures of 36 months and 60 months like – Monthly Interest, Annual Interest or Cumulative Option where principle and interest will be payable at maturity

ECL Finance is promoted by Edelweiss Financial Services company Ltd which is listed company at both BSE and NSE.

Important Dates:

  1. Issue Open Date:Feb 26, 2015
  2. Issue Close Date:March 16, 2015.

Security : This issue will be secured and company will create charge over physical asset and specific receivables of company in favor of debenture trustees of the issue.

Credit Rating :AA by CARE which indicates higher safety of this issue.

Investment Options: As already stated this issue offers different investment options for tenure of 36 and 60 months with monthly,Annual interest payment and cumulative.

Tax Deduction at source: TDS will applicable for physical mode and tax will be deducted at source if interest in financial year crosses Rs 5000 and if 15G or 15H form is not submitted.

Monthly Interest Payment Option:

Interest will be payable monthly.Here interest will be variable and depend on number of days.

WWW,SAVING-IDEAS.COM - EDELWEISS ECL FINANCE NCD FEB2015 MONTHLY INTEREST OPTION

Annual Interest Payment Option:

WWW.SAVING-IDEAS.COM - EDELWEISS NCD FEB 2015 ANNUAL INTEREST PAYMENT

Cumulative Option:

WWW.SAVING-IDEAS.COM - EDELWEISS NCD FEB2015 CUMULATIVE OPTION

Profit Report – last 03 years:

EDELWEISS NCD FEB2015 PROFIT REPORT

As inflation is trending down currently so high probability is that interest rates will also trend down in future.Interest rate of 10.60% for AA rated NCD can be a good investing option considering period of next 05 years and investor can allocate some part of fixed income portfolio in this issue.

NFO – SBI Mutual Fund Banking & Financial Services Fund

SBI Mutual Fund has come up with new fund -Banking and Financial Services fund – which will invest predominantly in stocks related to banking and Financial sector like Public sector / Private sector banks,NBFCs ,insurance companies etc.

New fund offer has opened on Feb 11, 2015 and will close on Feb 24, 2015.

This is will be sectoral type of fund and performance will depend more on banking and financial sector stocks.

Why One Can Invest in Banking Sector :

  • High household saving rate:India has biggest saving rate after China and large portion of saving goes to banks.New initiatives like Jan Dhan yojana or direct cash transfer will result in more saving in future.
  • Banking and Financial sector fund forms biggest part of total market capitalization.Banking stocks constitutes about 22% of NIFTY capitalization.
  • Current scenario of easing inflation rate and trending down interest rates can result in higher credit growth in future which can beneficial to banking sector.
  • Higher foreign investment in insurance sector likely to help insurance sector to grow more in future.

Ongoing Banking Funds :

Fund Name Starting NAV NAV as on Feb 14, 2015 Inception Date Returns since inception  CAGR
Reliance Banking fund 10 187 May 2003 28.41%
UTI Banking Fund 10 69.79 Apr 2004 19.59%
Sahara Banking Fund 10 48.74 Sept 2008 28.01%
ICICI Pru Banking & Financial Services Fund 10 38.57 Aug-2008 23.15
Religare Invesco Banking fund 10 36.30 July 208 21.61%
Sundaram Financial Services Opportunities Fund 10 30.32 June 2008 18.06%
Taurus Banking & Financial Services Fund 10 18.54 May 2012 25.36%
Baroda Pioneer Banking And Financial Services fund 10 16.97 June 2012 22.12%
Birla Sunlife Banking & Financial Services Fund 10 17.45 Dec 2013 60.24%

Funds launched at different dates and returns are from since launch…Reliance banking fund have provided returns of 28% CAGR since inception is the oldest fund in this category while BSL banking fund is the latest fund launched in 2013 ..as all funds have launched at different dates ..so returns will be different.(e.g 28% returns of Reliance banking Fund and 60% returns of BSL banking fund are not comparable as launch dates are different)

If economy improves further,banking sector will an obvious gainer.But one should remember than this fund is sector fund and carries high risk as well.

 

Reliance Mutual Fund – Retirement Plans – Wealth Creation & Income Generation Schemes:

Generally,retail investors don’t invest in stock market for longer term or start systematic investment for short term like 03 years and then won’t renew it. Not having a goal behind investments  may be one of the important reason that prevents investors from staying longer term in the market.

Considering this, Reliance mutual fund will launch Goal based investment plans Viz.Reliance Retirement Plans with two variants :Wealth Creation through Equity and Income generation through aggressive debt opportunities.

This plan will have tax benefit U/S 80C and investment will be under 05 year lock in.

Lock in period :

There will be lock in period of 05 years but this lock in period will not applicable if investor switch investment between wealth generation and income generation scheme.

Reliance Retirement Plan Wealth Creation :

It will be Equity oriented scheme with exposure in Large and Mid Cap stocks along with fixed income instruments.

Reliance Retirement Plan Income Generation :

It will be Debt oriented scheme.

Reliance mutual fund retirement fund is expected to open on January 22, 2015.

Exit Load:

As this is Retirement plan there will be exit load to discourage investors from early exit from scheme. But No exit load will be applicable if investor switch in between above mentioned schemes.Otherwise exit load of 1% will applicable if  investor redeemed or stitched out investment before attaining age of 60 years.(Investor can make unlimited switches in above mentioned schemes any time even before completion of lock in period)

Effect of inflation:

Table below shows value of Rs 1 lakh over a period of time:

WWW.SAVING-IDEAS.COM - RELIANCE RETIREMENT FUND INFLATION EFFECT

Click on image to enlarge.

Steps of Retirement Planning:

Save Prudently : Save to beat inflation over a period of time.This plan offers choice of asset classes like Equity or debt as per investors requirement.

Accumulate Retirement Corpus: Longer term view needed to generate Sufficient retirement corpus.Lo

Enjoy retirement: This fund offers different options like Systematic withdrawal or dividend payout options to enjoy liquidity.

Other mutual funds like HDFC or ICICI Prudential already have goal based products like childrens Care Plan but don’t have a great success in comparison with other general equity schemes.


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