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Investing in Equity Funds: Why Budget Shouldn't Affect Your Investments
Posted On Friday, Mar 01, 2013
Since the last couple of weeks there was a buzz around the word "BUDGET". Speculators, financial officials or even the common man were wondering what exactly Mr. Palaniappan Chidambaram would be unveiling on 28th Feb, as he delivers his budget speech for the eight time - a record only equaled by former Prime Minister Mr. Morarji Desai.
Now that the suspense has finally ended, let us give you 3 reasons why we think Budget is just an event for us.
| 1. | As India’s GDP growth since past 30 + budgets across 9 different governments has consistently grown at an average of 6.3% p.a.* , |
| 2. | We have always advocated the philosophy to have a long-term horizon while investing. As investing is for years; an event like Budget could be for a year. |
| 3. | For us the management of the company has paramount importance and we evaluate the stock on this parameter rather than its momentum. Management stays solid; momentum gets affected by budgets and news. |
So don’t panic with all the noise around you, instead simply focus on your investments.
For the starters, you could consider equity funds as your investment option.
You may choose to invest directly in the market on your own, but you not only need to have the capital but also and more importantly the time to manage your portfolio. In such a fast paced world it is suggested to outsource what is not our core competency, hence investing in Mutual Funds involves professional Fund Managers managing your money, therefore potentially reducing the chances of taking a wrong call on a stock.
Please note that like equities - equity funds too are 'risky' in the short term but in the long run they can help create wealth out of your savings. While the risk factor is always higher with equities, one should not ignore the probability of gaining larger returns from them over a longer period of time. Therefore risk may also be taken as an opportunity to gain higher returns but it should be a calculated risk.
So where should one invest ones savings?
Firstly you need to consult a financial planner to gauge your risk appetite and how much of your savings should be invested in equities. While investing in equities one could look at investing in a diversified Equity fund, like the Quantum Long Term Equity Fund.
Quantum Long Term Equity Fund (QLTEF) an Open-ended Equity Scheme gives you an opportunity to invest in equities. The investment objective of the Scheme is to achieve long-term capital appreciation by investing primarily in shares of companies that will typically be included in the BSE 200 Index and are in a position to benefit from the anticipated growth and development of the Indian economy and its markets.
The Quantum Long Term Equity Fund aims to focus on a disciplined and structured investment process that follows an investment philosophy, which we believe, offers investor sustainable long-term returns with sensible risks.
QLTEF has given a CAGR return of 14.47% since its inception i.e. from March 13, 2006 while its benchmark, the BSE 30 TRI has given a return of 10.56% & the additional Benchmark - (BSE Sensex) of 9%. Past Performance may or may not be sustained in the future. Please refer to the table below for details.
Quantum Long Term Equity Fund is managed by Mr. Atul Kumar & Mr. Nilesh Shetty
Performance of Quantum Long Term Equity Fund, an Open-ended Equity Scheme:
| Performance as on December 31, 2012 Quantum Long Term Equity Fund | |||||
| Jan 01, 2012 to Dec 31, 2012 | Jan 01, 2011 to Dec 30, 2011 | Jan 01, 2010 to Dec 31, 2010 | Since Inception** | ||
| Absolute Returns (%) | Absolute Returns (%) | Absolute Returns (%) | CAGR Returns (%) | Current value of standard investment of Rs.10,000/-(INR) | |
| Quantum Long Term Equity Fund (Growth Option) | 31.21% | -20.16% | 28.82% | 14.47% | 25,100 |
| Scheme Benchmark - (BSE 30 TRI) | 27.99% | -23.64% | 19.14% | 10.56% | 19,815 |
| Additional Benchmark - (BSE Sensex) | 25.70% | -24.64% | 17.43% | 9.00% | 17,982 |
^Quantitative data as on 31 December, 2012 Standard Deviation: 25.48% Beta: 0.65 Sharpe Ratio: 0.64
Past Performance may or may not be sustained in the future and may not necessarily provide a basis for comparison with other investments.
**Date of Inception - March 13, 2006. Since inception returns are calculated on NAV of Rs.10 invested at inception.
^ Please refer below for Definitions.
Other schemes managed by Mr. Atul Kumar
Performance of Quantum Tax Saving Fund, an Open-ended Equity Linked Savings Scheme with a lock-in period of 3 years:
| Performance as on December 31, 2012 Quantum Tax Saving Fund | |||||
| Jan 01, 2012 to Dec 31, 2012 | Jan 01, 2011 to Dec 30, 2011 | Jan 01, 2010 to Dec 31, 2010 | Since Inception** | ||
| Absolute Returns (%) | Absolute Returns (%) | Absolute Returns (%) | CAGR Returns (%) | Current value of standard investment of Rs.10,000/-(INR) | |
| Quantum Tax Saving Fund (Growth Option) | 31.36% | -20.92% | 28.17% | 25.39% | 24,870 |
| Scheme Benchmark - (BSE 30 TRI) | 27.99% | -23.64% | 19.14% | 20.59% | 21,257 |
| Additional Benchmark - (BSE Sensex) | 25.70% | -24.64% | 17.43% | 18.86% | 20,055 |
^Quantitative data as on 31 December, 2012 Standard Deviation: 19.63% Beta: 0.63 Sharpe Ratio: 1.48
Past Performance may or may not be sustained in the future and may not necessarily provide a basis for comparison with other investments.
**Date of Inception - December 23, 2008.Since inception returns are calculated on NAV of Rs.10 invested at inception.
Some attributes of QLTEF other than the complete transparency we offer and the convenience of Investing Online without any paperwork are;
| • | QLTEF follows disciplined research and investment process. |
| • | QLTEF consists of a well balanced portfolio - typically 25 to 40 stocks, across sectors. |
| • | QLTEF has a low portfolio turnover which helps in keeping the expense ratio low. We have one of the lowest expense ratios in the industry today at 1.25%. |
| • | QLTEF holds shares or cash when stock are overvalued - No derivatives and No hedging. |
Invest your money in QLTEF and participate in the Indian equities market.
Disclaimer:
The views expressed here constitute only the opinions and do not constitute any guidelines or recommendation on any course of action to be followed by the reader. This information is meant for general reading purpose only and is not meant to serve as a professional guide for the readers. This document has been prepared on the basis of publicly available information, internally developed data and other sources believed to be reliable. The Sponsor, The Investment Manager, The Trustee or any of their respective directors, employees, affiliates or representatives do not assume any responsibility for, or warrant the accuracy, completeness, adequacy and reliability of such information. Whilst no action has been solicited based upon the information provided herein, due care has been taken to ensure that the facts are accurate and opinions given fair and reasonable. This information is not intended to be an offer or solicitation for the purchase or sale of any financial product or instrument. Recipients of this information should rely on information/data arising out of their own investigations. Readers are advised to seek independent professional advice and arrive at an informed investment decision before making any investments. None of The Sponsor, The Investment Manager, The Trustee, their respective directors, employees, affiliates or representatives shall be liable for any direct,indirect, special, incidental, consequential, punitive or exemplary damages, including lost profits arising in any way from the information contained in this material. Please visit – www.quantumamc.com/disclaimer to read scheme specific risk factors.
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