Category: Personal Finance

Should I start SIP In Dynamic Asset Allocation funds?

Based on the market movements, Dynamic asset allocation funds, also known as balanced advantage funds, actively manage their allocation towards equity and debt stocks. As a result, investing in these funds can give you a long-term wealth potential as well as a cushion against the downside in case of falling equity markets.

According to the performance report of ICRA Analytics Ltd, Dynamic Asset Allocation Funds marked a three-month return of 5.51 percent, a six-month return of 10.14 percent, a one-year return of 26.1 percent, a three-year return of 11.37 percent, a five-year return of 9.74 percent, and a ten-year return of 12.15 percent as of September 30, 2021.

With a minimal risk exposure, these returns can be a decent approach for investors in a falling market scenario to start SIP in Dynamic asset allocation funds with an investment horizon of at least 3 years or more.

According to the data of ICRA Analytics Ltd, In September 2021, mutual fund contributions under the Systematic Investment Plan (SIP) surpassed Rs 10,000 for the first time, totaling Rs 10,351 crore, rising 13% from June 2021. SIP AUM climbed by 8% in September 2021 after reaching the Rs. 5 lakh crore milestone in July 2021.

SIP AUM was Rs. 5.45 lakh crore at the end of the quarter, rising roughly 13% over the previous quarter. It accounted for 15% of total industry assets, while SIP accounts increased by 12% to 4.49 crore. Hence, we would like to suggest our readers stick to their SIPs or start SIP in Dynamic Asset Allocation Funds to welcome the takeaways into their portfolio like the power of compounding, rupee cost averaging, and low initial investment.

Edelweiss Balanced Advantage Fund Direct-Growth

Edelweiss Balanced Advantage Fund Direct-Growth returns of the last 1-year are 29.10%. Since launch, it has delivered 13.65% average annual returns, according to the data of the fund house as of 18 Nov 2021. The equity side of the fund is predominantly engaged in the financial, technology, energy, fast-moving consumer goods, and automobile sectors. ICICI Bank Ltd., Reliance Industries Ltd – PPE, National Bank For Agriculture & Rural Development, Infosys Ltd., and Nifty 50 are the fund’s top five holdings.

The fund has a 0.45 percent expense ratio, which is lower than most other funds in the same category. The fund now has a 59.90 percent equity allocation and a 20.09 percent debt exposure. As of 30 September 2021, Edelweiss Balanced Advantage Fund Direct-Growth has Rs 6,331 crores in assets under management (AUM), and the fund’s NAV was 39.35 crores as of 18 Nov 2021. Value Research has given the fund a 5-star rating, and you may start investing in it with Rs 500 SIP.

Performance as on 18 Nov 2021	Scheme	Scheme Benchmark CRISIL Hybrid 50+50 – Moderate Index	Additional Benchmark NIFTY 50 – TRI
Period	Return (CAGR)	Return (CAGR)	Return (CAGR)
1 Year	29.10%	23.56%	38.88%
3 Year	18.83%	16.09%	19.82%
5 Year	16.18%	13.59%	18.52%
Since Inception – Existing Plan	13.65%	9.41%	14.17%
Source: edelweissmf.com

Kotak Balanced Advantage Fund Direct Growth

Kotak Balanced Advantage Fund Direct has a one-year return rate of 19.96 percent. According to the date of the fund house as of 18.11.2021, it has generated 13.26% average annual returns since its inception. The fund has its equity allocation across the Financial, Metals, Services, Technology, Energy sectors. The fund’s top five holdings are GOI, ICICI Bank Ltd., Adani Ports and Special Economic Zone Ltd., and Infosys Ltd. The fund has a 0.45 percent expense ratio, which is lower than most other Dynamic Asset Allocation funds.

The fund now has a 78.73 percent equity allocation and a 21.27 percent debt exposure. Kotak Balanced Advantage Fund Direct-Growth had Rs 11,813.44 crores in assets under management (AUM) as of 30 September 2021, and the fund’s NAV was Rs 15.07 crores as of 18 November 2021. The fund has a 5-star rating from Value Research, and you can start SIP with Rs 500.

Tenors	Since Inception	Last 5 Year	Last 3 Years	Last 1 Year
Kotak Balanced Advantage Fund – Direct (G)	13.26%	–	15.02%	19.96%
Nifty 50 Hybrid Composite Debt 50:50 Index	13.49%	13.43%	15.69%	20.87%
Nifty 50 TRI	15.87%	18.54%	19.88%	38.88%
Performance as of 18.11.2021. Source: kotakmf.com

Disclaimer

The views and investment tips expressed by authors or employees of Greynium Information Technologies, should not be construed as investment advice to buy or sell stocks, gold, currency, or other commodities. Investors should certainly not take any trading and investment decision based only on information discussed on GoodReturns.in We are not a qualified financial advisor and any information herein is not investment advice. It is informational in nature. All readers and investors should note that neither Greynium nor the author of the articles, would be responsible for any decision taken based on these articles. Please consult a professional advisor. Greynium Information Technologies Pvt Ltd, its subsidiaries, associates, and authors do not accept culpability for losses and/or damages arising based on information in GoodReturns.in

About Escorts:

Escorts is the country’s fourth largest tractor manufacturing entity with a market share of 11.3 percent. The company also caters to the domestic railways and construction equipment segment. Talking about its sales mix in FY21, tractors account for the major sales component.

Kubota Escorts transaction:

The company will issue additional equity through the preferential allotment route to the Japanese tractor major Kubota Corporation for a price of Rs. 2000 per share with inflow of approximately Rs. 1873 crore.

In the transaction, Kubota’s shareholding in Escorts shall increase to 16.4 percent from 10 percent and the company will become a joint promoter of Escorts.

There is a proposal to change company name to Escorts Kubota Ltd.

All the current JV’s are planned to be merged.

Nanda family will retain its stake and Mr. Nikhil Nanda will continue to be the CMD.

Brokerage’s advice on Escorts to investors

The scrip in the past 5 years has zoomed 6 times from levels of around Rs. 300 in November 2016, significantly outperforming Nifty Auto index. “We retain B U Y on Escorts with Kubota now a co-promoter with expectations of enhanced product offerings and increased global sourcing from India”, says the brokerage.

Target Price and Valuation: The brokerage values Escorts at revised SOTP-based TP of Rs. 2,200 (23x P/E on core FY23E EPS, 15% discount on treasury shares; previous TP- Rs. 1,900 )

Key triggers for future price performance:

• New product launches in the farm mechanisation side (ex-tractors).

• Optimum utilisation of surplus cash on b/s, currently nearly at Rs. 5,000 crore.

• Expect 13% tractor revenue CAGR over FY21-23E.

• Construction equipment, railways growth to be faster amid expected pickup in economic activity and positive outlook for user segments

Alternate Stock Idea:

Other than Escorts, the brokerage house in its auto OEM coverage is bullish on M&M. The company recommends buying the stock of M&M for a target price of Rs. 1125, potential upside of 21.75% from the last traded price of Rs. 923.7 per share. The brokerage highlights positives of M&M as prudent capital allocation, UV differentiation & EV proactiveness.

Disclaimer:

The above stock was picked from the brokerage report of ICICI Direct. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution. Greynium Information Technologies, the author, and the brokerage house are not liable for any losses caused as a result of decisions based on the article.

Target Price

The Current Market Price (CMP) of Lumax Inds is Rs. 1,486. The brokerage firm, Edelweiss has estimated a Target Price for the stock at Rs. 1,710. Hence the stock is expected to give a 15% return, in a Target Period of 1 year.

Stock Outlook
Current Market Price (CMP)	Rs. 1,486
Target Price	Rs. 1,710
1 year return	15.00%

Company performance

Lumax Inds reported a topline of Rs. 453 crore (which was ~7% above expectation). EBITDA stood at ~Rs. 37 crore, registering a growth of 10% YoY and ~4.8x on a QoQ basis. EBITDA margins for the quarter stood at 8.2% vis-à-vis 8.5% in Q2 FY21 and 2% in Q1 FY22. Edelweiss stated, “Although the company was able to sustain gross margin of 36% similar to the same quarter last fiscal; increase in employee cost and other expenses dragged EBITDA margins.”

Comments by Edelweiss

According to Edelweiss, “As the issue of semi-conductor shortage eases from Oct-21, we expect production schedules for 2W/PV OEMs to normalize from Q4FY22. Further, we expect LED penetration for both 2Ws and 4Ws to also see an uptrend. Being the market leader in the automotive lighting space, LUMAX should be a major beneficiary of the LED transition. We maintain our ‘BUY rating with a target price of Rs. 1,710/share, valuing it at 18x FY23E EPS.”

About the company

Lumax accounts for over 60% market share in Indian Automobile Lighting Business. The group’s products include end-to-end Lighting solutions, Gear Shifters, Shift Towers, 2-wheeler Chassis, Intake Systems, Seat structures & Mechanisms, LED Lighting, HVAC Panels, Electrical & Electronic Components, Cables & Wiring Harness, Telematics Products and Services, Oxygen Sensors, and On-board Antennas among others.

Disclaimer

The above stock was picked from the brokerage report of Edelweiss. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution. Greynium Information Technologies, the author, and the brokerage house are not liable for any losses caused as a result of decisions based on the article.

Investment

oi-Vipul Das

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Published: Saturday, November 20, 2021, 12:14 [IST]

Punjab & Sind Bank (PSB) launches “Swasth Bharat TD Scheme” with an additional rate of interest of 0.15%. This term deposit scheme can be opened by individuals who have got at least one dose of COVID-19 vaccine. The scheme is valid up to 31.12.2021 and it can be opened by any Indian resident individual.

On its website, the bank has mentioned that “To give impetus to nationwide vaccination drive of the government and this product encourages the eligible customers to get themselves administered with Coronavirus vaccine either partially or fully, Bank has introduced new Swasth Bharat Scheme to provide offer of additional rate of Interest on the term deposits of the customers.”

PSB launches Swasth Bharat TD Scheme with an additional Rate of Interest.#PSB #Unite2FightCorona #IndiaFightsCorona #PSBSwasthBharatTDScheme #DFSIndiaCelebratesAmritMahotsav #AmritMahotsav #PunjabAndSindBank pic.twitter.com/PiSCLVADMG

— Punjab & Sind Bank (@PSBIndOfficial) November 20, 2021

Key takeaways of PSB Swasth Bharat FD Scheme

Eligibility: By submitting a government-issued vaccination certificate, any Indian Resident Individual (single/jointly/EorS) who has received at least one dose of Anti-Covid 19 Vaccine can open a PSB Swasth Bharat FD Scheme.

Tenure of Deposit: This term deposit scheme can be opened for a maturity period of above2 to less than 3 years only.

Amount of Fixed Deposit: One can open PSB Swasth Bharat FD Scheme with a minimum deposit amount of Rs. 1000/ and maximum of less than Rs 2 Cr.

Rate of interest: The rate of interest on the PSB Swasth Bharat FD Scheme will be 15 basis points more than the prevailing rate, with a quarterly compounding option. Senior citizens, employees, and ex-employees will continue to get their applicable additional rate of interest. On deposits of less than Rs 2 Cr maturing in above 2 years to less than 3 years, PSB is currently offering an interest rate of 5.15%, however, under the Swasth Bharat FD Scheme, the interest rate will be 5.30% respectively.

Validity: PSB Swasth Bharat FD Scheme is valid up to 31.12.2021.

Nomination: A nomination can only be filed in favour of one nominee only.

Punjab And Sind Bank FD Rates

On domestic term deposits, NRO accounts, capital gain accounts scheme 1988, recurring deposit scheme and PSB fixed deposit tax-saver schemes of less than Rs 2 Cr, the bank is offering the following interest rates with effect from 16/09/2021 (% p.a.).

Maturity	Regular Interest Rates (% p.a.)	Senior Citizens (% p.a.)
7 – 14 Days	3	3
15 – 30 Days	3	3
31 – 45 Days	3	3
46 – 90 Days	3.7	3.7
91 – 120 Days	3.9	3.9
121-150 Days	3.9	3.9
151 – 179 Days	3.9	3.9
180 – 269 Days	4.45	4.95
270 – 364 Days	4.5	5
1 Year – 2 Years	5.05	5.55
Above 2 Year	5.15	5.65
3 Years – 5 Years	5.3	5.8
> 5 Year – 10 Years	5.3	5.8
Source: Bank Website. Revised w.e.f. 16/09/2021

Story first published: Saturday, November 20, 2021, 12:14 [IST]