Insurance & Investment Shoppee

Raj Nagar, Ghaziabad, Uttar Pradesh

The Birla Sun Life Asset Management Company Ltd. (BSLAMC) manages Birla Mutual Fund. Birla Mutual Fund provides various schemes like fund of funds, monthly income funds, equity schemes, debt and treasury products, and offshore funds.

Birla Mutual Fund - Overview

Birla Mutual Fund is a joint venture between the Aditya Birla Group and the Sun Life Financial Services Inc. based in Canada. The Birla Mutual Fund was set up in the year 1994. The company is one of the leading mutual fund investment companies in India. The spectrum of the investment options offered by Birla Mutual Fund is very big catering all kinds of investors, be it big or small. The range includes diverse sector specific fund of fund schemes, monthly income funds, equity schemes, debt and treasury products, and offshore funds. Birla Sunlife Mutual Fund is one of India's leading mutual funds with assets of over Rs.17, 098 crore under management as of Aug 2006. Birla Sun Life Asset Management Company Limited, the investment manager of Birla Sunlife Mutual Fund.

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An ELSS (Equity Linked Savings Scheme) is a mutual fund that has to invest a minimum of 80% in Equity Shares. The balance 20% can be in debt, money market instruments, cash or even more equity. There is a 3 year lock-in period for the ELSS mutual funds. Post the 36 months, the funds remain invested and work like any other open-ended mutual fund.

Why an ELSS?

• It has been an established fact that in the long run equity gives a much higher inflation adjusted returns when compared to any other investment except for maybe real estate. The top 5 ELSS funds have given returns from 22% to 26% compounded annually over the past 5 years. This is again higher than the market (Nifty) returns over the past 5 years which is at 19%.
• ELSS is part of the Section 80C instruments which are cumulatively eligible for a deduction from income up to Rs.1L. This gives the tax payers benefits from 10% to 30% (excluding the educational cess) based on their current tax slab.
• The return (maturity and the dividend [(if opted for]) from the ELSS is also tax free under the present EEE (Exempt - Exempt - Exempt) regime.
• The 3 year lock-in period makes sure one stays invested. Otherwise in a normal mutual fund one tends to withdraw in case of any monetary requirement.
• The lock-in period also helps the fund managers to plan their investments better and also to hold on to valuable investments as they do not have to worry about sudden redemption pressures.
• The above logic is proved in the higher returns achieved by the ELSS funds when compared to the market returns. Wealth creation because of this is much better than most of the other mutual funds. Only some sector based mutual funds have given better returns than the ELSS fund in the past 5 years.

Options With The ELSS

Salaried people with a tight budget can opt for a monthly investment (SIP using ECS). The automatic investment from the bank through ECS makes it an easy way to invest. Those who want an income in between can opt for the dividend option. This is particularly suitable for senior citizens. Also, the ELSS gives a tax free return compared to a bank or company deposit, which is taxable.

Advantages With ELSS

The advantage with ELSS compared to the ULIPs is the frequency (mostly a single investment or a monthly investment for a year) and term for investment, for getting good returns.

Limitations With ELSS

The investment in an ELSS cannot be switched or closed before the 3 years are completed form the date of investment. During market downturns, this becomes a limitation as one can only sit and watch the funds go down. One has the option of averaging when the market goes down, but an investment to save tax may not be required in the year in which the market is going down. The lock-in works negatively also for the monthly investment because the lock-in is calculated from the date of the investment and not from the date the scheme was started. This means that the 12th month's investment can be withdrawn only on the 48th month. This is a disadvantage compared to ULIPs, where the lock-in is from the date of start of the scheme

ELSS - A Favored OptionMost fund houses start an ELSS regular investment at Rs.500/- per month. Single investments start generally at Rs.5000/-. This makes ELSS accessible to all tax payers. With the compulsory lock-in giving better returns than other investments, even the most risk averse can look at an exposure to the ELSS fund for their tax benefits.

HDFC Mutual Fund has been one of the best performing mutual funds in the last few years. HDFC Asset Management Company Limited (AMC) functions as an Asset Management Company for the HDFC Mutual Fund.

AMC is a joint venture between housing finance giant HDFC and British investment firm Standard Life Investments Limited. It conducts the operations of the Mutual Fund and manages assets of the schemes, including the schemes launched from time to time. As of Aug 2006, the fund has assets of Rs.25, 892 under management.

IN 2003, following a decision by the Zurich Insurance Company (ZIC), the Sponsor of Zurich India Mutual Fund, to divest its asset management business in India, AMC had entered into an agreement with ZIC to acquire the asset management business. Consequently, all the schemes of Zurich Mutual Fund in India had been transferred to HDFC Mutual Fund and renamed as HDFC schemes.

The Reliance Mutual Fund is one of the most popular and leading mutual funds in the mutual fund sector of India. The Reliance Mutual Fund is owned by Anil Dhirubhai Ambani Group and with respect to net worth it ranks among the top three of all the private financial service providers in India. It is an ISO 9001:2000 certified company, which offers innovative mutual fund products to a wide pool of customers. The Reliance mutual fund products are available in hundred and fifteen cities across India. It is one of the fastest growing mutual funds in India and the main reason of its popularity is that it has a wide portfolio of products that meets the requirements of each and every type of investors. The Reliance Mutual Fund is headed by Mr. Vikrant Gugnani - the CEO of the company.

Benefits Of Reliance Mutual Fund

• Make transactions online
• New Purchases
• Additional Purchases
• Redemption
• Switch
• Registration / Cancellation of STPs & SWPs
• Dividend Transfer Plan
• Track your Transactions
• Subscribe for E statements
• Apply online for Reliance Any Time Money Card
• Modify your Personal Details
• Check the balance of Units in a Folio
• Register for E-statement
• Register Mobile number for SMS alerts

With Reliance Mutual fund online transaction facility you no longer have to work through the heaps of paperwork to manage your account. Simply log ontowww.reliancemutual.com and enjoy the comfort of accessing your portfolio right from your desktop.

Prudential ICICI Mutual Fund is one of the largest mutual fund houses in India. Prudential ICICI Mutual Fund is a joint venture between Prudential plc, one of UK's largest players in the insurance & fund management sectors and ICICI Bank, a well-known and trusted name in financial services in India. Prudential Plc holds 55 per cent of the asset management company and the balance is held by ICICI Bank. ICICI Prudential Asset Management Company is a joint venture between Prudential plc and ICICI Bank. Neither ICICI Prudential Asset Management Company nor Prudential plc are affiliated in any manner with Prudential Financial, Inc., a company whose principal place of business is in the United States of America.

Equity Funds

• ICICI Prudential Discovery Fund
• ICICI Prudential Power Fund
• ICICI Prudential Dynamic Plan
• ICICI Prudential Emerging Star Fund
• ICICI Prudential Tax Plan
• ICICI Prudential Growth Plan
• ICICI Prudential Fusion Fund Series - i, ii, iii