ECONOMIC & FINANCE

1. WOW ! WHAT A MONTH IT
WAS !
Almost every Equity Index shown a good rally and closed 7-10%
higher than its month opening ! We saw major recoveries in
Banking & Financial Sectors and phenomenal rise in metal
stocks.
One thing is very clear that market is not at all feared about
COVID numbers now ! Rather , the decline in cases is pumping
more air in the equity market. Also it is quite evident that there
is a clear sign of sector rotations – sometimes its pharma,
sometimes its technology and sometimes its Banking ! So how
should you be placed in your equity investments ?
Read this issue of our Newsletter to know more about the right
strategy to stick with- in the current situation ! Please must
write back to us if u have any suggestion in the newsletter.
I humbly request you to share this Newsletter link in your
facebook page or among your friends, for our encouragement.
Kashinath Mantri, Managing Director
Special Feature -
Health First
Inspiring Case
Story - Smart
way to Save Tax
Market Indicator
& MF Chart
INVESTMENT KNOWLEDGE CENTER
Sunrise Associates
A Monthly Newsletter for Investors Education & Awareness
WHAT'S INSIDE THE ISSUE ?
31ST MAY 2021
+91-72858-63329
sunconnect02@sunassociates.in
www.sunassociates.in
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2. A large section of Indian investors prefer to use Liquid
Mutual Funds to create the emergency Funds. You can
create emergency funds in your savings bank account also,
but we prefer the route of Liquid MF because it is mapped
under your portfolio and visible under our database for
regular monitoring
In case you don’t have surplus funds to invest at a go, don’t
rush to invest at a go – you can start a habit of keeping 5%
of your Monthly Income aside under Liquid Fund. Keep
doing this 4-5 years and then stop the process.
TIPs to create an emergency fund
Chapter 1 : Health First
The second wave of COVID was really fast and furious – the death tools rose to its peak in the month of April
and number of cases went off the roof ! This time we all understood three key things related to our finances
We must keep an emergency
fund in Liquid Mutual Funds
or any other form ,
equivalent to our 3 months
expenses
We must keep an active
cashless Health Policy in
hand, for a minimum of Rs 5
Lacs
We must keep a COVID covered
term insurance policy to secure
your family in case of any unseen
deaths
Buying a medical policy after 50 or 55 there is chances that
due to existing life style decease one may not get desire
coverage even after paying a large premium! If you are
already in the 50s or 60s age group, then do set aside a Kitty
of 5-10 lacs for your medical Kitty, and invest that fund in
any good Dynamic Asset Allocation fund.
If you are in the early bracket of your age and don’t have
enough savings to shell out on unseen medical expenses ,
then must go for a cashless health policy without Room
rent limitation. Ask us for a best premium quotation which
is suitable to your need. Once you decide the policy and
annual premium, then you must open a SIP in Liquid MF
equivalent to Annual Premium /12. This will help you
manage the sudden cash flow towards the premium.
TIPs to to buy a good medical
Policy
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3. Buying a term policy is a very important decision in your life
and it is equally important to choose the most suitable one !
Like you must check one key point– is the term policy
covers COVID deaths ?
Besides this , you should be choosing the total policy cover
wisely. It is not necessary to buy all the desired cover at a go
– say example your current Human Value is 1 Cr and you
want to buy a policy for 1 Cr. If the required premium is not
under your annual budget then you must reduce the cover
size and buy the policy; buy the additional cover once you
have feasibility to do so. And finally , decide your term with
proper deliberations, like- what is your Kids current age ,
what is your retirement age , what is the rate of your annual
savings and portfolio growth rate etc ?
Ask us, for a one to one counselling and
discussion to decide upon a perfect term policy
TIPs to buy a COVID covered
term policy
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4. Chapter 2.1 : Equity Market
Indicator
INDIAN INDICES
as on 31st May '21
KEY INTERNATIONAL INDICIES
as on 31st May '21
SENSEX NIFTY 50 NASDAQ 100 S & P 500 Dow Jones
51937.44 15582.80 13748.74 4204.11 34529.45
3 Month
1 Month
6 Month
1 Year
Period
6.47%
5.78%
48.75%
55.95%
6.50%
7.25%
20.15%
58.59%
-1.53%
4.22%
12.71%
43.93%
0.55%
10.31%
16.08%
37.58%
1.93%
11.63%
16.50%
35.54%
SENSEX NIFTY 50 NASDAQ 100 S & P 500 Dow Jones
"India stocks were among Asia-Pacific’s top-performing markets
in May, even as the country continues to grapple with tens of
thousands of new cases every day "
“The markets seem to like to differentiate between economic and obviously
corporate earnings development versus then the rise of the new cases,” Tuan Huynh,
who is chief investment officer for Europe and Asia-Pacific at Deutsche Bank International
Private Bank
India has registered more than 28 million infections so far and is the second worst-hit
country in the world in terms of caseload, according to data compiled by Johns Hopkins
University. Daily cases have eased from the record high of over 400,000 at the start of May
— but continue to hover above 100,000. That’s still quite high compared to other countries
in the world.
U.S. investment bank Goldman Sachs is “overweight” on India, and expects stocks there to
outperform.
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5. Chapter 2.2 : Commodity Market
Indicator
1905.30 69.32
3 Month
1 Month
6 Month
1 Year
Period
GOLD (USD) /
OUNCE
SILVER(USD) /
OUNCE
CRUDE OIL
(USD)
28.01
GOLD (USD) (%) SILVER(USD) (%) CRUDE OIL(%)
7.66%
9.88%
6.43%
7.42%
8.10%
5.95%
23.62%
45.05%
3.08%
4.82%
45.66%
80.90%
"Gold and Silver was shinning all though out May......it was a
strange scene to see in market when both Equity and Gold saw
buying spree "
SGB, Sovereign Gold Bond series was also launched in the month of May and its different
tranches will be launched at various intervals in 2021-22.
Investors have subscribed for an impressive 5.31 tonnes of gold under the government's
latest sovereign gold bond offer, underscoring revival of interest for the yellow metal, which
has hit three-month highs of Rs 4,777 a gram, ex taxes. The government has garnered Rs
2,540.87 crore through the Series 1 of FY22 offering, the second-highest by quantity only to
August 2020's record 6.35 tonnes.
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6. Chapter 2.3 : Other Market
Indicator
"It was green all the way in the month of May '21 . The market
trapped many bears and took them to surprise "
Almost every Indices did well in the month of May, but Midcap, Small Cap and Energy was
a clear winner . Experts believe that Banking and Financial will be on the top of chart in
months to come
Domestic Investors gained a lot in this upside momentum as FIIs were lagging behind in
terms of infusing funds in the may of Month. Analyst suggest the investors to remain
cautious while taking any sectoral bet, rather they advice to go through a good diversified
Flexicap Fund or Multicap Funds for better growth in capital
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7. Chapter 2.4 : Mutual Fund
Performance Chart
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8. SUJOY CHAKRAVARTY,
48 YRS
How he used his Risk appetite to choose ELSS over PPF and
managed to generate much bigger wealth for himself, which he
could not have done through his traditional deposits
C H A P T E R 3 : C A S E S T O R Y
HOW SUJOY DOUBLED HIS
ROI BY CHOOSING ELSS
OVER PPF, IN LAST 10 YRS
Story line by Sujoy Charavarty , Bangalore
Sujoy is a Software Engineer based at bangalore ; he started his tax
Saving Investments at the age of 36 . As required by his HR and to
increase his take home, he needed to invest 1.5 lacs every year in any
Tax Savings scheme under section 80 C. Despite his families traditional
way of investing in PPF , he chose to go for ELSS, which had a non
guaranteed returns and market volatility element........
Today , after 10
years he is boasting
about his decision
because the portfolio
value of ELSS is
almost double , what
PPF would have
delivered !!
By Investing through
ELSS....
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9. While we are going to drill this story for your motivation and investment inspiration , let us
understand few basic definitions here :
What is the full form of ELSS and PPF ?
ELSS : Equity Linked Savings Scheme
PPF : Public Provident Fund
What are the key feature of both these investment schemes ?
Both these products are used to invest to save income tax by deduction of upto Rs 1.5 lacs , under section
80 C . For example, if you have a total income of Rs 10 lacs a year, then by investing Rs 1.5 lacs in ELSS or
PPF , your taxable Income will come down to 8.5 Lacs
What is the basic difference in ELSS and PPF ?
Most important difference is the Risk or Guarantee. In ELSS you can’t get any guaranteed returns and
have chances to lose your capital also , if equity market goes down ! But in PPF it is a government
guaranteed fixed annual returns.
However, ELSS has delivered much better returns as compared to PPF over a period of 10-15
years , because our Equity markets have always beaten the Fixed Income returns in longer term
Thus , ELSS is the tax saving mutual fund which serves both the purpose of saving taxes and
help you create long term wealth.
Today , after 10 years he is boasting about his decision because the
portfolio value of ELSS is almost double than what PPF would have
delivered !!
ELSS funds generate returns by primarily investing in equity and
equity-related instruments. This makes it a suitable investment
option for a person with long term goals. You get a combination
of the highest gain of 12% and above, as well as the lowest lock-in
period of 3 years by investing in ELSS, which is the best
investment option when compared to other options with tax
deductions under Section 80C of the Income Tax Act, 1961.
However, PPF carries a longer lock-in period of 15 years which can
further be extended for another 5 but, there is a facility of
premature withdrawal from 6th year onwards.
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10. In the year 2011, Sujoy Chakravarty, simply divided his annual investment
target in 5 different ELSS Schemes - Rs 2500 each , total of Rs 1.50 Lacs a
year. Today after after 10 years his total portfolio value stands at : Rs
37,38,328.95 as compared to Rs 23,59,050.30 , if he had invested in PPF
You can use the information given in this real story, to make the right call for your investment
and tax benefit needs. Additionally, you can ask us for ELSS Scheme Chart and more details to
full-fill your annual Tax Saving targets through ELSS.
Disclaimer :
Mutual Fund investments are subject to market risks, read all scheme related documents
carefully. The NAVs of the schemes may go up or down depending upon the factors and
forces affecting the securities market including the fluctuations in the interest rates. The past
performance of the mutual funds is not necessarily indicative of future performance of the
schemes. The Mutual Fund is not guaranteeing or assuring any dividend under any of the
schemes and the same is subject to the availability and adequacy of distributable surplus.
Investors are requested to review the prospectus carefully and obtain expert professional
advice with regard to specific legal, tax and financial implications of the
investment/participation in the scheme.
While all efforts have been taken to make this web site as authentic as possible, please refer
to the print versions, notified Gazette copies of Acts/Rules/Regulations for authentic version
or for use before any authority. We will not be responsible for any loss to any person/entity
caused by any short-coming, defect or inaccuracy inadvertently or otherwise crept in this
newsletter
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11. Chapter 4 : Readers' Questions
Question 1 : Can I buy a mutual fund in
my demat account?
- Rahul , Kolhapur
Answer: Yes. Mutual fund is just like
any other security which can be held
physically or in demat form. You just
need to open a demat account and tell
your distributor to open your demat
based MF transaction account.
Everything will be same, just that your
units will be held in demat form.
Question 2: How can I do online KYC to
start my investments in mutual fund?
-Rajni Juneja, Bangalore
Answer: As you know KYC is a very
important compliance to start a mutual
fund investment. The KYC can be done
physically by signing up an application
form. However, you can also do KYC,
through Aadhar based OTP verification
or Aadhar based E-signature method.
Question 3: Which are the best SIPs to
invest in?
- Ahmed Saleem, Bangalore
Answer: This is a very vague question.
Because SIP is an objective based
investment methodology. You must
assess financial goals and risk
appetite before asking this question to
any financial advisor or distributor.
Still, I assume that every Indian
household should have a minimum of
two key SIPs. One in a good Flexi-cap
scheme and another in any asset
allocation scheme.
Post Your Queries here
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