CAPITAL LETTER

Volume 1 October 7, 2009 Issue 3 Greetings from FundsIndia! Hello again! My name is Srikanth; I’m a director at FundsIndia. Thanks for taking the time out to read the third is- sue of our monthly news letter. When we launched the FundsIndia platform, our primary identity was as a company that sells mutual funds online to investors. Of course, that is what we started of doing. However, our aim was always to do something more, and be something bigger— our ambition (or vision, if you want to employ corpo- rate-speak) is to become an online destination that fully serves the prudent investor in India. In a land of trading platforms, we wanted to be the first online investment platform. And that means we cannot just restrict to just mutual funds, but would need to cover the entire risk spectrum of in- vestments. So, we are happy to announce that FundsIndia has expanded its offering a step beyond mutual funds. Now, you can invest in fixed deposit products offered by reputed corporate houses in the country using the FundsIn- dia platform. To start with, we are offering deposit products from HDFC, Mahindra and Mahindra, Shriram Trans- port Finance, and Unitech. We will offer deposit products from more companies as we move forward. How do deposits in FundsIndia work, you ask? For answer to that question, I’m going to ask you login to FundsIndia yourself and find out!! :-) Happy Investing!

Featured Fund

This month’s FundsIndia featured fund house is mutual funds. As previ- ously, we are choosing to focus on new entrants in the asset management space in India to introduce them to our investors. Religare asset management company is a wholly owned subsidiary of Religare securities which in turn is owned by Religare Enterprises Limited. A new kid in the block in the scene, the company had a blockbuster year in 2008 both with the launch of several headline-grabbing new schemes and their acquisition of the asset management business of Lotus. All Religare mutual fund schemes are available in FundsIndia for investments. Spotlight Scheme

Religare mutual funds profiled above has recently launched a PSU equity fund that is the spotlight scheme for this month. This equity scheme seeks to invest in the public sector unit companies in India. The Fund will invest in companies where the Central/State Governments have majority shareholding or where the management control lies with the Government . At least 65% of the assets will be invested in companies which are part of the BSE PSU Index. Unlike popular perception, most of the PSU companies in India are leaders in their respective areas of operation and in many sectors they have a virtual monopoly. In addition, many of the PSU companies have their presence in core sectors and therefore, considering the Government thrust for infrastructure, these companies offer strong growth potential for years to come. This scheme is categorized to be on the higher end of the risk spectrum along with sectoral schemes, and should be part of an investor’s diversified portfolio. The minimum investment required is Rs. 5000. FundsIndia is proud to be an online channel partner with Religare Mutual Funds. And, of course, you can invest in the PSU Equity fund via FundsIndia.

Disclaimer: Mutual Fund Investments are subject to market risks. Please read the offer document carefully before investing.

Market Tantra Bull-run is back?

S. Shankar Dhirendra Kumar

Financial planning is essential, The machinery of a bull run has started working again. Every day, the not just helpful ' boys (relationship managers, in modern language) call armed with

the results of their 'research', and al- Many people go through life without having a most miraculously, they are right. financial plan (FP), many postpone FP thinking FP is for the They say a will move and it does rich or I don’t have time for it now till, they have very little of move. It's almost like the good old either time or money!. The problem with this attitude is that you days of 2006 and 2007 once more. make enemies out of both time and money, enemies so danger- However, there's always an however. Last time around, when ous that they have destroyed civilizations and started wars, things started to go wrong, first in mid-2007 an d then later in small money grows to huge wealth if invested carefully and nur- January, 2008, these momentum were the ones that tured, a large chunk of wealth gets destroyed over time if day to caused the deepest grief to investors. The reason is very simple. day its not cared for and guarded. So the best thing to do is to Selecting investments in this fashion invariably results in a port- make both time and money your friends. Its easy to do once you folio that's composed largely of mid- and small-cap momentum have a plan and keep revisiting it every year or so. stocks. These are the only type of stocks that can produce large We have on this site developed for your use a financial planning movements quickly enough to satisfy the expectations of gains tool that helps you either make a quick plan for a single goal or a that come with the trading mindset. Not just that, such portfo- comprehensive plan for your life time goals. So it could be a lios are typically also concentrated in whatever is the hot sector single goal of money required for a dream vacation or complete of the moment. Last year, more traders' were trapped into huge financial planning to enjoy a peaceful retirement life. Sadly not losses in the real estate counters than any other. many have used the planner till now, we urge you to take a few Now that we're seeing the beginning of another heady phase, minutes and complete it. So in this festival season plan & pros- there is a danger that along with the hot gains, we'll also get the per with both time and money on your side. same set of problems. The solution is also simple - while it's great to make money in the hot stocks, the basics of portfolio construction cannot be forgotten. And it goes without saying that the most important principle of portfolio construction is NRI? Looking to help a friend? that of diversification. Diversification across companies, across sectors and across capitalisation. While an individual investor If you are an NRI and are looking to help a friend with their should not be expected to get into the portfolio construction investments in India, here is something to keep in mind. theories, some basic rules of thumb should be followed. FundsIndia has tied up with to provide banking ser- Here are my suggested thumb rules to ensure that at least a vices to NRIs who may not have an NRE/NRO banking account minimum discipline is maintained: back home. They will also process the customer’s PAN card and 1. Own at least 10 stocks. The largest holding should be at KYC registration free of cost as part of the process! In essence, most 15-20 per cent and the smallest no less than 5 per they will completely equip the customer to invest in India all for cent of the total; FREE! 2. Own stocks in at least 3 distinct sectors, with no single If you think you know someone who could use this service, sector taking up more than half of your portfolio; please write to us [email protected], and we’ll be glad to 3. Do not have exposure only to smaller companies. Make help! sure that at least around half of your equity exposure is to BSE 100 companies. Alternatively, you could keep about that much of your equity exposure in a good diver- New to FundsIndia? sified equity mutual fund that is focused on large-cap stocks. If you are new to FundsIndia and would like to read our When there's trouble in the markets, following these rules will second issue, you can download it at: ensure that you lose less and your overall gains are actually http://www.fundsindia.com/capitalletter/Capital_letter higher. _sep09.pdf. —-Syndicated from Value Research Online--

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Disclaimer: Mutual Fund Investments are subject to market risks. Please read the offer document carefully before investing.