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General Objective of dynamic bond fund is to generate income while maintaining liquidity through actively managed portfolio of debt & money market instruments.

In general interest rate cycles can not be predicted accurately and so there is importance of Dynamic Bond funds which invests in instruments across different maturities and as well can rebalance portfolio based on current interest rate scenario.

IDFC dynamic bond fund is one of the successful fund since last few years & we will take a look at the same including the features of the scheme,Asset Alloation & Asset Quality.

Features Of IDFC Dynamic Bond Fund:

Scheme Launch Date	Dec 2008
AUM Rs.Crores	6500 /-
Entry Load	Nil
Exit Load	0.50% within 90 days.Nil Thereafter
Min Investment Amount	Rs.5000/-
Benchmark	CRISIL Composite Bond Fund Index

IDFC Dynamic Bond Fund – Performance:

Scheme Performance Comparison	IDFC Dynamic Bond Fund	CRSIL Composite Bond Fund Index
1 Month	2.84	2.5353
3 Months	4.85	4.0022
6 Months	7.95	6.6774
1 Year	15.70	11.6066
3 Yrs	10.77	9.05%

Income from Debt funds is subject to long term capital gain tax @rate 0f 10% without indexation or 20% after indexation.

Click Here for Snapshot of taxation aspects of mutual funds

IDFC Dynamic Bond Fund – Asset Quality:

IDFC dynamic Bond fund have more than 90% AAA rating instruments means quality is good and credit default risk is low for the fund.

IDFC Dynamic Bond Fund – Asset Allocation:

Fund have combination of Good quality corporate bonds,G-sec,Certificate of deposits.

IDFC Dynamic Bond Fund- Average Maturity Period: 5.77 Yrs…which is also ideal.

Bond funds carries interest rate risk..but also it offers good opportunity to invest in bond and money market instruments where we common peoples won’t able to invest as much easily.So if you have understood the risk..dynamic bond funds are good to diversify the debt portfolio.

Just Dial Limited – One of the leading local search engine in India has come with IPO issue and details of IPO are as below:

• Issue Open Date: May 20, 2013.
• Issue Close date: May 22, 2013.
• Price band : Rs.470-Rs.543 per equity share (10% discount on the floor price to retail individual investors).
• Minimum bid for retail investors: 25.
• Max bid amount : Rs.2 lakh.
• Listing : BSE,NSE,MCX-SX.

IPO Grading: CRISIL have offered grading of 5/5 for Just Dial IPO.It indicates that company have strong fundamentals.

Issue Allocation:Dust Dial IPO

1. QIBs:At least 75% of the offer size.
2. Non-Institutional Bidders:Not more than 15% of the offer size.
3. Retail Individual Bidders: Not more than 10% of the offer size.

Just Dial -Total Revenue (Millions):

 

Just Dial IPO-Total Profit in Millions:

Just Dial profit have grown by more than 89% from FY08 to FY 12.

Currently market is trading in positive zone & market experts don’t see any major downside risk.CRSIL have allotted 5/5 IPO rating.Its expected that Just Dial IPO will get the good response…But real question is even if I apply for complete max lot ..I don’t think high number of shares shall allotted to any retail investor & it will not lead to significant gain..even if it listed positively in future.

Rajesh has nearly 5 lakh idle in his bank account..neither he don’t have any plan about this money.Currently his money is subject to interest rate 0f 4% and though numerically money is growing… the purchasing value of money is going down year by year considering the inflation effect..

If we consider period of last 10 years,costs have at least tripled.E.g cost of tea in better hotel was Five Rupees 10 years ago and it is more than 15 Rupees now and its true for nearly every thing.So inflation rate is more than 8% for last 10 year..

Today we will look at the value remained idle in saving account over a period of last 10 years against the actual time value & if positive returns achieved @10% annually.

Look at the following chart:

Purple  Line : Shows how purchasing power of Rs.5 Lakh will go on decreasing year to year due to inflation effect.Net effect of saving rate & inflation rate is considered.After 10 years purchasing power of 5 lakh will be reduced to 3,32,416 if money remained in saving account.

Purple line shows net effect of saving rate & inflation rate .Net rate is negative.

One can check the end value difference between red line & Blue line..the difference i is growing with time and its due to negative compounding the money in saving account is facing...