CAPITAL LETTER

Volume 2 February
February 7,
7, 2010
2010 Issue
Issue 22
Gr ee t i ng s fr om F u nd s I n dia !
FundsIndia Equity Investment Platform!
My name is Srikanth; I’m a director at FundsIndia. Thanks for taking the time out to
read this February 2010 our monthly news letter.
Over the last two issues, we have been teasing you with announcements about
FundsIndia’s new equity investment platform.
Well, it is now here! We have launched the equity investment platform which allows
investors to invest in stocks in the National Stock Exchange. Importantly, it allows in-
vestments in ETFs such as Gold and Index ETFs.
The platform is built to provide an easy, relatively safe way for investors to get exposed to direct
stock market. With an eye to providing investors a less risky way to invest in the stock market, we
have consciously restricted margins and shorting in our platform—they both provide risky ways
to make and lose money in the market that we are not comfortable offering them to our investors.
To use the equity investment platform, our existing customers will need to fill a short form and
request to open an equity trading and Demat account with us. As always, account opening is free
of cost—even demat fees are waived till the second year!
We sent out a brief email to our customers to let them know that we have launched it, and many
of you have signed up for it. Thanks!
Others—please let us know if you have any questions about this new platform. We are very excited
about this, and think it really completes the investment picture for our customers!
Happy Investing!
Top MF schemes in FundsIndia (for January 2010)
Equity schemes Debt Schemes

Reliance Regular Savings—Equity Reliance FRF (G)

IDFC Premier Equity—A Templeton India ST Income

HDFC Top 200 UTI FRF—ST (G)

SBI Magnum Contra UTI Mahila Unit scheme

Sundaram BNPP Select Midcap Reliance MIP (QD)

KYC Compliance made mandatory for all!

In a recent circular, the collective bodies of mutual fund companies have decided to make it mandatory
for mutual fund investors to be KYC compliant regardless of investment amount.
If you are not yet KYC compliant, please get in touch with us immediately so we can guide you with the
process!
Disclaimer: Mutual Fund Investments are subject to market risks. Please read all scheme related documents carefully before investing.
 Fea tur ed Fund and Spotlight Scheme
Kotak Mahindra Mutual Funds
Kotak Mahindra mutual funds come from the stable of Kotak Mahindra Bank Limited,
one of the most trusted financial houses in the country. The company has been known
for innovating in several industry domains, and their excellence continues in the mu-
tual fund arena as well.

The fund house was started in 1998, and today boasts of more than a million customers
around the country. Their assets under management totals close to 38 thousand crores.
They were the first company in the country to offer a scheme focused on government-
debt instruments—gilt funds.

Today the company has over a dozen equity funds, an equal number of debt funds, a balanced fund, fund of funds
and ETFs on offer.

Popular schemes Launched By Kotak MF

1. Kotak Top 30 Fund – An open ended equity scheme (large-cap)

2. Kotak Opportunities – An open ended diversified equity scheme
3. Kotak Bond Regular – A medium-term debt scheme

About Kotak 30 Fund,

the premier equity scheme from Kotak MF

Investment Objective: The scheme seeks capital appreciation, through investments in equities. The fund portfolio
would generally comprise of around 30 companies which may go upto 39 companies.

FundsIndia Commentary:
“Kotak 30 may look risky, but it's large-cap tilt offers safety—While the number of stocks generally fluctu-
ates between 30 and 39, there have been instances where it has fallen to less than 30. A natural outcome of such a
tight portfolio is often concentrated stock holdings. But if you are of the opinion that it is too risky, take comfort in
the fact that the risk is mitigated by its large-cap tilt.
Not an aggressive churner, stocks like Larsen & Toubro, Reliance Industries Ltd, Infosys Technologies, BHEL,
ONGC, ITC and State Bank of India have been in the portfolio for a considerable length of time. Overall, a stable,
large-cap offering that consistently yields decent returns and protects against the downside..”

(sourced from the research desk of valueresearchonline.com)

Investment Options: Growth, Dividend Payout & Dividend Re-investment

Minimum Investment: Rs. 5,000/- and Rs. 1,000/- thereafter
Load Structure:
Entry Load – Not Applicable
Exit Load – If the units are redeemed / switched-out within 1 yr from the date of allotment - 1.0%
If the units are redeemed / switched-out after 1 yr from the date of allotment - NIL
Date of Inception: December, 1998
Fund Manager : Mr. Krishna Sanghvi and Mr. Anurag Jain

All Kotak mutual fund schemes are available for investment at www.FundsIndia.com

Disclaimer: Mutual Fund Investments are subject to market risks. Please read all scheme related documents carefully before investing.
 Pick the Best Investment Path
Dhirendra Kumar

What a flood of confusing inputs for investors! It's the kind of time when you
can build just about any hypothesis and find enough evidence to support it. Let
me count off some of the major ones. In India, corporate results are better, but
on a low base. The Reserve Bank of India (RBI) is going to tighten up credit be-
cause inflation is becoming a problem. But inflation won't respond to these
measures. But the recovery has been robust. But credit off-take is slowing
down. But the markets have spent a lot of time at these levels. But some sectors have run ahead of
their real numbers. But the PSU IPOs are great opportunities. But the PSU IPOs will suck money
out of the secondary markets. But gold prices indicate a deeper problem. But all asset prices are
inflated by the enormous gobs of liquidity that governments have dumped into their economies.
But the global economy is through the worst. But there's a second wave of problems building up
on the horizon - there was Dubai, now there will be Greece.

And that's not a comprehensive list by any means. As I said, there's enough evidence here to sup-
port just about any hypothesis. If you want to decide your course of action as an investor, then
depending on who you are talking to, completely opposite things can be shown to be absolutely
certain. However, it's the kind of time when, instead of getting confused by conflicting inputs, you
should take the view that they are all wrong. Or rather, some random set of factors out of all these
will turn out to be more important, but you won't know which ones till you can look back at them
with 20-20 hindsight.

It would be much better to step aside and recognise that while all this is of great relevance to the
talking heads and the editorial writers, the only reasonable course of action for investors would
be something that doesn't involve dealing with this overload of information that falls well short if
being useful. If you look back upon the last few years, it becomes absolutely self-evident that it's a
complete waste of time trying to peer into this floating mess of tea leaves and try to predict the
overall direction of the investment markets. However, what is not a waste of time for investors is
to figure out which businesses are worth investing in.

Even if you had invested at the worst of times - say early in January, 2008 - but the investment
itself was well-chosen, you would be fine today. Still a little down, but with no reason to be pessi-
mistic. The converse is not true. And that's something that investors should take to heart. This
vast fog of news is of little practical relevance, what really matters is choosing the right invest-
ments.
— Syndicated from Value Research Online —

Disclaimer: Mutual Fund Investments are subject to market risks. Please read all scheme related documents carefully before investing.
 Market Tantra
S. Shankar
Asset Allocation: Looking beyond Mutual Funds
Most investors have an either-or attitude towards financial assets, for example some prefer to invest only
in IPO’s, some in stocks of most promising sector at that moment. This strange affliction
towards one asset only is not a good idea. Many restrict their investment only to mutual
funds as they feel it is easier to manage and is liquid enough to withdraw anytime.
A better way to invest would be to look at all investment avenues and allocate assets to
each of them based on the risk levels you are comfortable with and the returns you need to
meet your goals. With that in mind, here are some ways you can invest.

Fixed Income
Long Term – PPF, NSC, KVP, POMIS – government guaranteed investments that act as solid rock on
which to build a portfolio - the thing about these investments is not the returns but the stability behind it.
A safe nest egg. Short Term(1-3 Years) – Bank FDs and for 2-3 years, debt mutual funds, corporate FDs,
bonds of government sponsored enterprises, etc these are short term in nature and are meant to manage
short term goals while trying to stay ahead of inflation. So here the race is to get inflation + returns to
meet the short term goals which can fall anywhere between a year and three.

Equity
Long term (preferably 10 years or more): Well managed diversified equity funds, Index Funds, Stocks of
blue-chip companies (if and only if you have research expertise or get good financial advise - otherwise
index funds are a better bet). So fill these up with SIPs and STPs but don’t forget to check how they are
doing once a year at least. Rebalance if necessary. Short Term (up to an year) – This is your favorite ex-
perimenting place, invest when markets are down 50% with this money, and sell if it goes up a lot (like it
did last year). This is money that you can afford to lose a bit here and there but also make some.
You can invest in actively managed aggressive equity funds, selected aggressive stocks, IPOs etc.

Caveats
Avoid Futures and Options – they are financial WMD, if you don’t believe me ask Lehman Brothers
Avoid ‘churn’: Avoid buying and selling for the sake of it, this can make your broker rich but not you
Avoid hot tips: If the guys in TV know everything about markets why are they not the richest in India?
There is a multi billion dollar industry whose sole aim is to confuse you. See movie channels instead, at
least the actors look better and the jokes are good!
17, RMG Complex, Phone: 044-4344 3100
TVK Industrial Estate, E-mail: [email protected]
Guindy, Chennai 600032 WWW.FUNDSINDIA.COM
Tamil Nadu, India

© Wealth India Financial Services Pvt. Ltd, 2009

Disclaimer: Mutual Fund Investments are subject to market risks. Please read all scheme related documents carefully before investing.