Mutual Funds: Bank of India Blue Chip Fund, Bandhan Largecap Fund top largecap funds for April-June quarter, says CRISIL report

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According to the CRISIL list, the Bank of India Blue Chip Fund topped the large-cap category. Bank of India Blue Chip Fund reported a total of Rs 159 crores in assets under management (AUM) as of June 302024.

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A recent report by CRISIL has ranked mutual funds for the quarter ending June, evaluating them based on performance and key metrics. In the June quarter, there was a significant increase in domestic capital flowing into the equity market, particularly through mutual funds. This influx has notably boosted the Nifty 50, leading to a return of 8.1% within that period. Additionally, the Nifty Smallcap 100 index experienced a remarkable surge of 20% during the same timeframe.

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According to market trends in this calendar year, small and mid-cap stocks have continued to be popular among investors. Retail investors have shown significant interest in stocks from this sector in the first half of 2024.

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Since the beginning of the year, both the Nifty Midcap and Nifty Smallcap indices have experienced a considerable increase of around 21 percent, surpassing the Nifty benchmark's rise of 10.5 percent. More specifically, the Nifty Midcap index has outperformed the Nifty in four out of six months this year, while the Nifty Smallcap index has shown higher returns in three of those six months.

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According to the CRISIL list, the Bank of India Blue Chip Fund topped the large-cap category. The fund has 98.85% investment in domestic equities of which 65.33% is in Large Cap stocks, 7.52% is in Mid Cap stocks, and 4.73% in Small Cap stocks. The fund has 0.21% investment in Debt, of which 0.21% in Government securities.

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The investment objective of the scheme is to provide investors with opportunities for long-term capital appreciation by investing predominantly in equity and equity-related instruments of large cap companies. 

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Bank of India Blue Chip Fund reported a total of Rs 159 crores in assets under management (AUM) as of June 30, 2024. The fund primarily allocates its investments in sectors such as Financial, Automobile, Capital Goods, Energy, Metals & Mining. Its top 5 holdings include prominent companies like HDFC Bank Ltd., State Bank of India, Reliance Industries Ltd., NTPC Ltd., and Avenue Supermarts Ltd.

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Piyush Gupta, Director of Funds Research at CRISIL, said the Bank of India Blue Chip Fund achieved this ranking after completing three years of performance history — an essential criterion for inclusion in CRISIL's Mutual Fund ranking.

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Gupta emphasized that the fund's robust performance and superior ranking based on portfolio metrics, including industry and company diversification, were pivotal in securing its leading position. The fund boasts a diversified portfolio that spans various sectors and companies, showcasing a sound investment strategy and risk management approach.

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Bandhan Large Cap Fund Direct-Growth is a Large Cap mutual fund scheme offered by Bandhan Mutual Fund. As of June 30, 2024, the fund manages assets worth Rs 1,515 Crores, positioning it as a medium-sized fund within its category. 

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With an expense ratio of 0.91%, which is comparable to the industry standard for Large Cap funds, Bandhan Large Cap Fund Direct-Growth aims to provide investors with competitive returns while maintaining cost efficiency.

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In one year, the fund has delivered impressive returns of 36.71%, showcasing its potential for growth. Since its inception, Bandhan Large Cap Fund Direct-Growth has maintained an average annual return of 14.62%, demonstrating its consistency in performance. Moreover, the fund has a track record of doubling the invested amount every 4 years, highlighting its ability to generate wealth over the long term.

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When compared to other funds in its category, Bandhan Large Cap Fund Direct-Growth exhibits a consistent track record in delivering returns, aligning with industry standards. Although its performance in mitigating losses during market downturns is considered average, the fund's overall performance and growth potential make it a viable option for investors seeking stability and growth in the Large Cap segment.

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Talking about Bandhan Large Cap Fund, Gupta said the enhancement in performance of the fund was due to its exceptional returns and improved diversification at company and sector levels.

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The Bandhan Large Cap Fund has seen an advancement in its industry concentration ranking, moving from fourth to second, as well as in its company concentration ranking, progressing from fourth to third. Furthermore, its robust liquidity ranking has further bolstered its overall ascension.

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FDs for Senior citizen: DBS Bank India launches priority banking program; top points here

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Senior citizens enrolled in the DBS Golden Circle can earn up to 7% interest per annum on savings account balances above Rs 4 lakhs and up to Rs 5 lakhs.

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DBS Bank India has announced the launch of its new offering, 'DBS Golden Circle'. This priority banking program has been carefully crafted to address the specific needs of senior citizens. Designed for resident Indian individuals aged 60 and above, the program provides an array of exclusive benefits and services to simplify and enhance the banking experience.

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The program provides a range of benefits and services tailored to meet the needs of senior citizens. These include competitive interest rates on both savings accounts and fixed deposits, advanced security measures, and customized financial solutions aimed at tackling income uncertainty – a prevalent issue among the elderly population, as emphasized in the India Ageing Report 2023 published by the United Nations Population Fund.

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Senior citizens enrolled in the DBS Golden Circle can earn up to 7% interest per annum on savings account balances above Rs 4 lakhs and up to Rs 5 lakhs. Additionally, they can benefit from an enhanced interest rate of 0.50% per annum on fixed deposits with a tenure ranging from 376 days to 540 days. These competitive interest rates enable senior citizens to effectively grow their savings and achieve greater financial stability.

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"DBS Golden Circle is designed to make banking easier and more convenient for senior citizens, with a strong focus on trust, safety, and convenience.," said Prashant Joshi, Managing Director and Head of Consumer Banking Group, DBS Bank India.

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Fixed deposits (FDs) that have been held for over one year do not impose any penalties for early withdrawals. This policy is designed to provide senior citizens with the flexibility to access their funds in the event of an emergency.

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Furthermore, account holders can take advantage of additional perks such as zero transaction fees for national electronic funds transfer (NEFT) and real-time gross settlement (RTGS), as well as the option to obtain duplicate account statements.

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Additionally, customers can benefit from lifetime free debit cards, unlimited complimentary domestic automated teller machine (ATM) transactions, discounted rates on locker rentals, special overdraft terms secured against FDs, and preferential loan offerings.

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The launch of 'DBS Golden Circle' coincides with a significant milestone for DBS in India - its 30th anniversary. This celebration highlights the bank's unwavering dedication to the local market. DBS Bank India continues to utilise its widespread physical presence and digital capabilities to deliver tailored solutions that adapt to the changing requirements of its clientele, fostering trust and nurturing enduring partnerships.

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NFO alert: Aditya Birla Sun Life Nifty India Defence Index Fund, Mirae Asset Nifty500 Multicap 50:25:25 ETF on offer. Check details

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Aditya Birla Sun Life Nifty India Defence Index Fund, is an open-ended index fund meticulously designed to mirror the performance of the esteemed Nifty India Defence Index.

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New Fund Offer: Aditya Birla Sun Life Asset Management Company has made a strategic announcement regarding the introduction of a new financial product. Aditya Birla Sun Life Nifty India Defence Index Fund, is an open-ended index fund meticulously designed to mirror the performance of the esteemed Nifty India Defence Index. Interested investors are notified that the subscription for this promising fund is slated to commence from August 9 and will remain open until August 23, offering a limited window of opportunity to participate in this enriching investment opportunity.

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Founded in 1994, ABSLAMC is a joint venture between Aditya Birla Capital Limited and Sun Life (India) AMC Investments Inc. The new fund has been established with the objective of accessing opportunities within India's developing defense sector. This sector is currently undergoing rapid modernization and a significant influx of investments. The defense budget of the Indian government is estimated to be Rs 6.22 lakh crore. It is projected that there will be a 15% compound annual growth rate (CAGR) in capital expenditure from the financial year 2024 to the financial year 2030. These developments indicate a strategic emphasis on self-reliance and the enhancement of advanced military capabilities within the country.

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Investors in the Aditya Birla Sun Life Nifty India Defence Index Fund will benefit from a wide range of companies operating in the defence sector. These companies are engaged in various activities such as manufacturing, aerospace, shipbuilding, and defence electronics. The fund's investment strategy is in line with the overall efforts to enhance national security and economic strength through targeted investments in the defence industry.

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A. Balasubramanian, Managing Director & CEO, Aditya Birla Sun Life AMC Ltd, said: “There is substantial market growth potential (for defense sector), given the low-cost base, and companies in this sector are expected to gain higher market share as demand surges.”

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Mirae Asset Investment Managers (India) Pvt. Ltd. has floated ‘Mirae Asset Nifty500 Multicap 50:25:25 ETF’, which is an open-ended scheme designed to replicate and track the Nifty500 Multicap 50:25:25 Total Return Index. The index provides a balanced exposure with 50% weightage in large-cap stocks, and 25% each in mid-cap and small-cap stocks, reflecting a comprehensive cross-section of the Indian market.

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The Exchange-Traded Fund (ETF) is scheduled to be launched on August 12, 2024. The NFO period will run until August 26, 2024, during which interested investors have the opportunity to partake. The minimum investment required to participate in this offering is set at Rs 5,000, with the option for subsequent investments in multiples of Rs 1. The fund will be under the management and oversight of Ekta Gala and Vishal Singh.

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The Exchange-Traded Fund (ETF) boasts transparency and affordability, making it an attractive choice for investors looking to diversify and maintain stability in their portfolios. Mirae Asset's recently launched ETF offers investors the opportunity to access a wide range of market segments through a strategy guided by a disciplined approach, designed to provide reliable, steady long-term returns.

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Siddharth Srivastava, Head – ETF Products and Fund Manager at Mirae Asset, emphasized that this ETF represents a strategic addition to their product lineup. The fund aims to offer a balanced investment approach by combining the stability of large-cap stocks with the growth potential of mid and small caps. This method is intended to provide a well-rounded investment experience while maintaining a disciplined approach through quarterly rebalancing.

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NPS tax breaks: After tax tweaks in Union Budget 2024, which tax regime will give you more benefits under NPS

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One of the measures proposed in the Union Budget 2024 for salaried taxpayers was the increased deduction limit on employers’ contribution to employees’ National Pension System (NPS) from 10% to 14%, which is valid only under the New Tax Regime.

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National Pension System: This year in the Budget, Finance Minister Nirmala Sitharaman brought in many tax changes in the existing structure that would affect all taxpayers. She brought in major change to the Capital Gains Tax regime affecting all asset classes. On the other hand, the Budget proposed liberalised tax slabs and rates, and hiked the standard deduction limit to Rs 75,000 under the new, concessional tax regime.

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One of the measures proposed for the salaried taxpayers was the increased deduction limit on employers’ contribution to employees’ National Pension System (NPS) from 10% to 14%, which is valid only under the New Tax Regime.

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After the Union Budget 2024, the new tax regime, which is now the default tax-filing regime, has been simplified further but it will continue to offer fewer deductions compared to the Old Tax Regime. The previous regime, although still available, is no longer the default option and provides multiple deduction opportunities. It is crucial for taxpayers to analyse which regime best aligns with their financial objectives and maximizes their benefits. 

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In terms of NPS, tax benefits are available under both old and new tax regimes in India. NPS taxation differed from the Old Tax Regime and New Tax Regime. Under the old tax regime, NPS offers tax benefits under three sections of the Income Tax Act, 1961. 

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NPS additions under New Tax Regime (Budget 2024-25)

Employees opting for the New Tax Regime are now entitled to a larger deduction of up to 14% of their basic salary for the contributions made by the employer towards the NPS on behalf of the employee under Section 80CCD(2) of the Income Tax Act. This change was introduced in the Union Budget 2024, which outlined a substantial rise in the deductible amount for employer contributions to employees' NPS.

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The deduction rate applicable to employees' basic salary has recently been increased from 10% to 14%. This new deduction rate will be applied to both public-sector companies and private-sector entities under the revised regime.

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It is important to highlight that government employees currently enjoy a 14% deduction on their NPS contributions. This enhanced deduction is governed by Section 80CCD(2) of the Income Tax Act and is eligible for both the existing and the newly simplified tax structures. However, the heightened 14% deduction rate will exclusively be in effect under the newly introduced simplified tax system.

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CA (Dr.) Suresh Surana told Business Today: Given the recent amendments to the National Pension System (NPS) provisions in the budget, the attractiveness of the Old Tax Regime versus the New Tax Regime might be evaluated as follows:

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> The Old Tax Regime allows for a range of deductions and exemptions including deductions for both employer’s as well as employee’s contribution to NPS. It still offers advantage of a broader range of tax-saving instruments.

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On the other head, the Concessional/ New tax regime provides for concessional tax rates with restrictions on claiming various deductions and exemptions.

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However, it is pertinent to note that deduction w.r.t. employer’s contribution to NPS u/s 80CCD(2) is provided under both such regimes, however, the higher deduction of 14% (as against 10%) can be only claimed by taxpayers opting for the concessional (New) tax regime.

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"With the revised provisions allowing a 14% NPS deduction under the New Tax Regime, the attractiveness of the new regime has increased, especially if taxpayers favour a simplified tax process without the need to claim multiple deductions. The higher NPS deduction aligns the new regime more closely with the benefits previously available under the old regime. However, if a taxpayer has significant deductions and prefer to leverage them (including the full NPS deduction), the old tax regime might still be more attractive," Surana added. 

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Which tax regime will be suitable?

Surana said the decision on which tax regime is more attractive post-budget depends on the taxpayer’s individual financial situation.

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"If they prefer maximizing deductions and have other eligible expenses, the Old Tax Regime may be beneficial. However, if taxpayers value a simplified tax process and can benefit from the higher NPS deduction in the New Tax Regime, then the new regime could be more appealing. Please note that this amendment is effective from Financial Year 2024-25," he added. 

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NPS under Old Tax Regime

Taxpayers opting for the Old Tax Regime have the opportunity to claim tax deductions for contributions to the NPS under three different sections of the Income-tax Act, 1961: Sections 80CCD (1), 80CCD (1B), and 80CCD (2).

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Under the Old Tax Regime, Section 80CCD (1) of the Income-tax Act, 1961 allows for a deduction from taxpayers' gross total income for NPS contributions. Both salaried and self-employed individuals can benefit from this deduction. The maximum deduction permitted under Section 80CCD(1) is 10% of the salary (Basic + DA) for salaried employees and 20% of the gross total income for self-employed individuals, with an upper limit of Rs 1.5 lakh in a financial year.

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It is important to remember that the total deductions under Section 80C, Section 80CCC, and Section 80CCD cannot exceed Rs 1.5 lakh.

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Furthermore, Section 80CCD (1B) provides an additional deduction of up to Rs 50,000 for NPS contributions, which is in addition to the Rs 1.5 lakh limit available under Section 80CCD (1).

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Section 80CCD (2) specifically applies to the employer's contribution towards an employee's NPS account. 

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Consequently, this benefit is exclusively accessible to salaried taxpayers.  Employees in the private sector may have the opportunity to modify their salary structure to include employer contributions to the National Pension System (NPS), which are deducted from their overall cost-to-company (CTC) package.

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How to plan a Rs 8 crore mutual fund portfolio for retirement with Rs 50,000 monthly SIP. Expert tips

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Contrary to the widespread belief that the ability to take risks should be based on an individual's behaviour, investing success is more likely determined by the ability to take risks based on investment horizon.

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I want to invest monthly Rs 50,000 in the mutual fund for my retirement. I want a corpus of Rs 8 crore. I can invest another 19 years. Suggest me how I can prepare my portfolio and advice accordingly on which I can invest. 

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Shivansh Dandona: Head - Investment Management, FinEdge says a rough calculation suggests that by investing Rs 50,000 monthly through a SIP for 19 years, you could accumulate a corpus close to Rs 5 crore during this period. There is a shortfall of about Rs 3 crore, however, there are ways to cover it to meet your retirement goal. A step up of 8 percent on your SIP every year is recommended and would be sufficient to get to your targeted retirement corpus. Since the step up would happen gradually every year, your monthly cash flows will also not get affected. 

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Portfolio Strategy 

Contrary to the widespread belief that the ability to take risks should be based on an individual's behaviour, investing success is more likely determined by the ability to take risks based on investment horizon. Given that your goal is 19 years away, an aggressive equity portfolio would be most suitable to achieve it. To construct such a portfolio it is important to have a diversified equity allocation which could be as under: 

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Large Cap funds - Allocation percentage: 50% 

Allocation to large cap funds would be primarily to achieve stability and growth in the portfolio. 

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Mid Cap funds - Allocation percentage: 25% 

These funds could have the potential for higher growth compared to large-cap funds. 

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Small Cap Funds - Allocation percentage: 25% 

These funds focus on smaller companies with high growth potential, though they carry more risk and could be very volatile. 

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Your investment journey is long, and regular monitoring of your mutual fund portfolio to stay updated with your goal achievement is critical. Adjust your portfolio based on significant changes in your financial goals or life stage. Importantly, take help from an investment expert who would help you in construction of your portfolio and would ensure that you stay focused on your path to achieving your goal of retirement. 

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(Views expressed by the investment expert are his/her own. E-mail us your investment queries at askmoneytoday@intoday.com. We will get your queries answered by our panel of experts.) 

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REITs in Hindenburg: How investors can make profit from real estate investing

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Investing in REITs allows individuals to invest in large-scale, income-generating real estate without actually having to buy, manage, or finance any properties themselves.

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Hindenburg Research's report has cast a shadow of doubt over SEBI Chairperson Madhabi Puri Buch, raising serious allegations of conflict of interest. Among these, a key issue points to her husband, Dhaval Buch, and his advisory role at Blackstone, a major player in the Real Estate Investment Trusts (REITs) sector. 

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The report suggests that while Madhabi Puri Buch was at SEBI, Blackstone sponsored two REITs that were approved by the regulator, potentially signaling a conflict of interest. Hindenburg further alleges that Buch's promotion of REITs during this period may have been influenced by her husband's position.

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Both Madhabi Puri Buch and her husband have dismissed the allegations, asserting that there was no conflict of interest. They maintain that all actions were conducted transparently and in accordance with regulatory standards.

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So what exactly is REITs?

REITs, or Real Estate Investment Trusts, are companies that own, operate, or finance income-producing real estate. Investing in REITs allows individuals to invest in large-scale, income-generating real estate without actually having to buy, manage, or finance any properties themselves. REITs typically own a diversified portfolio of real estate assets, which may include commercial buildings, shopping malls, apartments, hotels, or even infrastructure projects.

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"Today, REITs own a diversified portfolio of real estate assets, including commercial buildings, shopping malls, apartments, hotels, and infrastructure projects, allowing investors to expand their choices. Notably, India’s commercial real estate market could increase the office REIT market size by 6-6.5 times, offering more investment opportunities to those interested in exploring this avenue. In fact, India currently boasts a REIT-ready commercial supply of Rs 5.8-6.2 lakh crore across 7 key cities, with Bangalore alone accounting for nearly 31% of the supply," said Harish Fabiani, Chairman, IndiaLand Group.

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How can you make profit from REITs?

Investors in REITs can earn returns on their investments in two primary ways: dividends and capital appreciation. "By law, REITs must distribute at least 90% of their taxable income to shareholders as dividends. The dividend yields are generated from the total rental income of properties owned by REITs. As a result, REIT investors typically receive a regular income stream. Notably, REITs that invest in commercial properties generate at least 2–3 times higher yields than residential projects," said Fabiani.

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In addition to dividend yields, investors can generate earnings through the appreciation of their share price in a REIT. With an increase in the underlying asset value or the acquisition of more profitable properties, the prices of REIT shares tend to surge. Additionally, investors may choose to sell their shares at a higher price than the initial investment amount to realise a capital gain. In these ways, REIT investors enjoy the benefits of their real estate investments without shouldering the responsibilities of direct property ownership.

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There are currently four REITs in India; Embassy REIT, Brookfield REIT, Mindspace REIT and Nexus Select Trust.

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What about taxation?

Rental income generated by a REIT is transferred to investors. These investors are subject to income tax on this amount at their applicable tax rates. For Non-Resident Indian (NRI) investors, the tax rate is specifically 10%. Similarly, interest income distributed by the REIT to investors is taxed according to the investor's individual tax bracket. Dividend income from the REIT is also taxed at the investor's tax rate, with a 10% Tax Deducted at Source (TDS) applicable. Any other income generated by the REIT is exempt from taxat

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Indians can generate inter-generational wealth: Union Mutual Fund CEO Madhu Nair explains

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But warns that many may miss out because of a lack of discipline

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Madhu Nair, CEO of Union Mutual Fund, has a bullish view on the investment landscape. That’s why he believes that the assets of mutual fund industry could touch Rs 140-200 lakh crore in 7-10 years. He feels money flows into equities and bonds in India will surprise over the next 10-15 years.

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Over the past decade, the industry’s assets under management (AUM) have increased by 527% to Rs 61.16 lakh crore in June 2024 from Rs 9.75 lakh crore in June 2014.

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In an interaction with Business Today, the money manager added that the next 10-15 years will be extremely positive for India. “People can generate inter-generational wealth going ahead. However, a lot of people will miss out because of a lack of discipline. If the power of compounding is the 8th wonder then I think the power of forgetting (buy and hold for long-term) is the 9th in the financial world.”

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Nair added that there is a need to increase mutual fund distributors in the country. He said that at present, there are around 40,000 active mutual fund distributors in the country. “You cannot avoid India, if the country will become the third largest economy in 5 years. India will be treated as an asset class in 15 years,” Nair said adding Union Mutual Fund is also mulling to launch portfolio management services (PMS), alternate investment fund (AIF) and offshore business.

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On August 12, Union Mutual Fund announced the launch of the new fund offer (NFO) for Union Multi Asset Allocation Fund. The NFO will open for subscription on August 20, 2024, and close on September 3, 2024. The scheme will re-open for continuous sale and repurchase within five business days of the allotment date.

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“As we prepare to launch the Union Multi Asset Allocation Fund, we aim to provide diversified investment solutions that empower our investors to achieve their financial goals, in this dynamic market environment,” said Nair. Union Mutual Fund had a total AUM of Rs 16,111.46 crore as of June 30.

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Of late, Union Mutual Fund announced a substantial 75% increase in AUM in Delhi over the past year. “This achievement reflects not just our robust investment strategies but also the strong belief our clients have in the long-term potential of the Indian markets," said Nair during a press meeting held in Delhi last week.

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Nothing left...': Investor says Rs 25 lakh per annum salary is 'too little to run a family of 3'

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According to Sourav Dutta, a ₹25 LPA salary equates to a take-home pay of around ₹1.5 lakh per month, which, he argues, leaves little room for savings or investment after covering basic expenses.

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Known for his controversial opinions, investor Sourav Dutta's new post on X has sparked a heated debate. In a his post, Dutta claimed that a salary of ₹25 lakh per annum is not enough to support a family of three. 

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According to Dutta, a ₹25 LPA salary equates to a take-home pay of around ₹1.5 lakh per month, which, he argues, leaves little room for savings or investment after covering basic expenses.

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In his post, Dutta broke down the monthly budget: "A family of 3 would spend 1L on essentials, EMI/rent. 25K for eating out, movies, OTT, day trips. 25K for emergency and medical. Nothing left to invest."

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The post ignited a flurry of responses. While some agreed with Dutta's assessment, citing the rising costs of living and inflation, many others challenged his calculations.

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One user responded bluntly, saying, "Touch some grass brother or get yourself tested or maybe both," questioning the realism of Dutta's figures. Another pointed out, "A family spending 25k a month for 'medical' would never spend 25k a month on miscellaneous expenses like eating out, day trips etc. Please don't misguide people with ridiculous calculations."

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Others emphasized that those earning ₹25 LPA are well aware of how to manage their finances, with one comment stating, "Someone earning 25 LPA with a total of three family members would perfectly know how much to spend on room rent, essentials, and entertainment. Nonsense figures. Emergency and Medical is not a monthly bill."

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This isn't the first time Dutta has sparked a row with his views on salaries. 

He had previously claimed that ₹25 LPA is "nothing" in today's market, particularly when discussing the impact of tech salaries. Many professionals, especially those with over a decade of experience earning around ₹25 LPA, disagreed with his stance. They argued that the adequacy of a ₹25 LPA salary depends on various factors, including location, industry, experience, and individual lifestyle choices. 

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