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Quick Reference guide for personal financial planning Sep 2012

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Quick Reference guide for personal financial planning Sep 2012 Powered By Docstoc
					                                                                                                                                        Quick
                                                                                                                                    Reference
                                                                                                                                        Guide
                                                                                                                                     8th September 2012
Analyze your financial status, yourself. Make your goals meet.




The guide gives the returns of asset classes for different periods of time, to be used in your personal financial
planning.

        Indicators:          No change from last month                         Less than last month                    More than last month


                                     Summary of investment return rates
Returns are shown as an annualized %, and are not adjusted for inflation or taxes.

Type of Asset                           10 years                  3 years                                                            1 year
Debt – Savings bank                         -                        -                                                         4.00 to 7.00 % 
Debt – Fixed deposits              8.25 to 9.00 %           8.50 to 9.25 %                                                   7.25 to 9.30 % 
Debt – Mutual funds                    8.00 %                   8.88 %                                                          12.15 % 
Equity – Mutual funds                 24.51 %                   9.77%                                                           12.55 % 
Equity – Nifty                        18.30 %                  3.64 %                                                            5.91 % 
Gold                                  20.24 %                  26.64 %                                                          15.11 % 
Real estate                      -8.96 % to 27.38 % *       -4.19 % to 29.28 %                                               -24.74 % to 20.00 %
* Real estate returns for 4.5 years based on NHB Residex data



                                                                Return rates in %
              30                                                                            26.64
                                    24.51
              25
                                                   20.24
              20                            18.3
                                                                                                                                    15.11
              15                                                                                               12.15 12.55
                        9                                      9.25    8.88   9.77                       9.3
              10               8
                                                                                                                             5.91
               5                                                                     3.64

               0
                                   10 years                                3 years                                  1 year
                      Debt – Fixed deposits          Debt – Mutual funds         Equity – Mutual funds          Equity – Nifty        Gold




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                                                                                                                 Reference
                                                                                                                     Guide
                                                                                                                  8th September 2012
Analyze your financial status, yourself. Make your goals meet.




                                                 Debt – Savings Bank
After the savings rate deregulation by the RBI, most of the banks still continue offering 4% on the savings bank
balances. The banks that offer higher savings bank rates are

    1   Yes Bank:                      6 % up to Rs. 1 lac and 7 % above Rs. 1 lac
    2   Kotak Mahindra Bank:           5.5 % up to Rs. 1 lac and 6 % above Rs. 1 lac
    3   Indusind Bank:                 5.5 % up to Rs. 1 lac and 6 % above Rs. 1 lac
    4   Ratnakar Bank:                 5.5 % on any balance amount
    5   Karnataka Bank:                4% up to Rs. 2 lac and 5 % above Rs. 2 lac



                                                Debt – Fixed Deposits
A list of interest rates for fixed deposits of varying duration's is presented in the table below. Use the table to
find out the banks offering the higher interest rates for your fixed deposit investments.

Bank                                 90 days or less                1 year                    3 years                   10 years
Axis Bank                              6.50 %                    9.00 %                   9.25 %                    8.50 % 
Bank of Baroda                         6.50 %                    9.00 %                   9.00 %                    9.00 % 
Bank of India                          5.50 %                    9.25 %                   9.00 %                    9.00 % 
Canara Bank                            7.00 %                    9.00 %                   9.00 %                    9.00 % 
Central Bank of India                  7.00 %                  9.30 %                 9.00 %                  8.50 %
HDFC Bank                              7.00 %                    7.25 %                   9.25 %                    8.25 % 
ICICI Bank                             6.50 %                    8.00 %                   9.25 %                    8.50% 
Kotak Mahindra Bank                    7.00 %                  9.25 %                 9.00 %                  9.00 % 
State Bank of India                    7.50 %                  8.50 %                 8.50 %                  8.50 % 
Union Bank of India                    6.25 %                    9.25 %                   9.25 %                    8.50 % 
Yes Bank                               6.25 %                    9.00 %                   8.75 %                    8.75 % 
Interest rates are shown for amounts less than Rs. 1 crore. The rates can differ for less than Rs. 15 lacs deposits.

The interest rates on fixed deposits have been stable over the last one month, with a downward bias. Investors
should start preparing for lower rates on their new fixed deposits in the future.




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                                                Debt – Mutual funds
NAV : Net asset value in Rupees per unit

The top 5 performing funds over a 10 year period are

S. No.                        Scheme name                          NAV 10 years   NAV current      Annualized %
                                                                     before
   1     ICICI Prudential Long-term Reg                               10.65          23.24           8.11 %   
   2     Kotak Bond Regular                                           14.69          32.02           8.10 %   
   3     Escorts Income                                               16.80          36.58           8.09 %   
   4     IDFC Dynamic Bond Plan A                                     10.22          22.07           8.00 %   
   5     Sahara Income                                                10.20          21.42           7.70 %   
                                                                                        Average      8.00%    


The top 5 performing funds over a 3 year period are

S. No.                         Scheme name                         NAV 3 years    NAV current      Annualized %
                                                                     before
   1     Escorts Income                                              28.16           36.58           9.12 %   
   2     IDFC SSI Medium Term Plan B                                 10.50           12.29           9.11 %   
   3     SBI Dynamic Bond                                            10.60           13.76           9.07 %   
   4     IDFC SSI Medium Term Plan A                                 14.84           19.05           8.68 %   
   5     Birla Sun Life Medium Term Retail                           10.26           13.08           8.44 %   
                                                                                        Average      8.88 %   


The top 5 performing funds over a 1 year period are

S. No.                         Scheme name                          NAV 1 year    NAV current      Annualized %
                                                                     before
   1     Escorts Income                                               32.49          36.58          12.58 %   
   2     Kotak Bond Deposit                                           26.60          29.86          12.28 %   
   3     Kotak Bond Regular                                           28.52          32.02          12.28 %   
   4     Birla Sun Life Medium Term Inst                              11.36          12.70          11.82 %   
   5     Birla Sun Life Medium Term Retail                            11.70          13.08          11.79 %   
                                                                                        Average     12.15 %   




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                                              Equity – Mutual funds
NAV : Net asset value in Rupees per unit

The top 5 performing funds over a 10 year period are

S. No.                         Scheme name                         NAV 10 years   NAV current      Annualized %
                                                                     before
   1     Franklin India Bluechip                                      21.08         212.13          25.96 %   
   2     ICICI Prudential Top 200                                     11.62         107.03          24.85 %   
   3     Kotak 50                                                     10.88         100.12          24.84 %   
   4     SBI Magnum Equity                                            8.03           43.02          23.66 %   
   5     Sundaram Select Focus Reg                                    10.01          81.02          23.24 %   
                                                                                        Average     24.51 %   

The top 5 performing funds over a 3 year period are

S. No.                         Scheme name                         NAV 3 years    NAV current      Annualized %
                                                                     before
   1     ICICI Prudential Focused Bluechip Equity Inst I              12.38          17.18          11.54 %   
   2     ICICI Prudential Focused Bluechip Equity Retail              12.21          16.59          10.76 %   
   3     ICICI Prudential Top 100 Inst I                              15.26          19.95           9.34 %   
   4     Franklin India Bluechip                                     165.94         212.13           8.53 %   
   5     Religare Agile                                               5.46           6.91            8.17 %   
                                                                                        Average     9.77 %    

The top 5 performing funds over a 1 year period are

S. No.                         Scheme name                          NAV 1 year    NAV current      Annualized %
                                                                     before
   1     ICICI Prudential Top 100 Inst I                              17.32          19.95          15.18 %   
   2     ICIC Prudential Top 100                                     121.68         138.31          13.67 %   
   3     Religare Agile                                               6.13           6.91           12.72 %   
   4     Reliance Top 200 Inst                                        10.95          12.12          10.69 %   
   5     Reliance Top 200 Retail                                      11.66          12.88          10.48 %   
                                                                                        Average     12.55 %   




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                                                      Equity – Nifty
The returns of the Nifty index are listed below for 4 different periods.

          Years                  Start value                End value      Absolute %           Annualized %
           10                      998.55                    5358.70        436.65 %             18.30 % 
            5                     4507.85                    5358.70         18.87 %             3.52 % 
            3                     4814.25                    5358.70         11.31 %             3.64 % 
            1                     5059.45                    5358.70          5.91 %              5.91 % 

These returns could be achieved by following a passive investment strategy in index mutual funds. This is the
recommended route for investors who do not want to get involved in direct investment in the equities of
individual companies.

It would be possible for skilled investors to achieve higher returns by investing directly in equities of companies
and following an active investment strategy. This is not recommended for normal investors as they involve a
higher degree of risk, and need the investor to have a higher expertise in the dynamics of equity investing.



                                                                 Gold
The returns given by gold are listed below for 4 different periods.

          Years                  Start value                End value      Absolute %           Annualized %
           10                       5050                     31889          531.47 %             20.24 % 
            5                       9284                     31889          243.48 %             27.99 % 
            3                      15700                     31889          103.11 %             26.64 % 
            1                      27703                     31889           15.11 %             15.11 % 

Investments in gold can be done by investing in physical gold bars and coins, or in the gold Exchange Traded
Funds (ETF's) available on the stock exchanges.




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                                                        Real estate
Analysis of top and bottom 3 cities during the period 2007-2012. NHB Residex's index was used for the analysis.
Top 3 cities – NHB Residex

                           Years          Start           End      Absolute %     Annualized %
                            4.5            104            309       197.12%         27.38%
Chennai                      3             143            309       116.08%         29.28%
                             1             271            309        14.02%         14.02%

                           Years          Start           End      Absolute %     Annualized %
                            4.5            100            217       117.00%         18.79%
Faridabad                    3             145            217        49.66%         14.38%
                             1             206            217         5.34%          5.34%

                           Years          Start           End      Absolute %     Annualized %
                            4.5            101            200        98.02%         16.40%
Pune                         3             117            200        70.94%         19.57%
                             1             169            200        18.34%         18.34%


Bottom 3 cities – NHB Residex

                           Years          Start           End      Absolute %     Annualized %
                            4.5            119             78       -34.45%          -8.96%
Jaipur                       3              63             78        23.81%           7.38%
                             1              65             78        20.00%         20.00%

                           Years          Start           End      Absolute %     Annualized %
                            4.5            106             73       -31.13%          -7.95%
Kochi                        3              83             73       -12.05%          -4.19%
                             1              97             73       -24.74%         -24.74%

                           Years          Start           End      Absolute %     Annualized %
                            4.5            96              85       -11.46%          -2.67%
Hyderabad                    3             81              85        4.94%            1.62%
                             1             84              85        1.19%            1.19%




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                                                                                                  Reference
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                                                                                                    8th September 2012
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                                             Sources of information
The analysis presented above is based on information available in the public domain. Specific sources of the
information are listed below.

Type of Asset                    Information sources
Debt – Savings bank              State Bank of India - www.sbi.co.in

                                 Yes Bank - www.yesbank.in

                                 HDFC Bank - www.hdfcbank.com

Debt – Fixed deposits            State Bank of India - www.sbi.co.in
                                 Term deposit rates of varying durations and below Rs. 1 Crore

Debt – Mutual funds              Value Research - www.valueresearchonline.com
                                 Based on the results of the point to point returns calculator for Debt – Income
                                 funds

Equity – Mutual funds            Value Research - www.valueresearchonline.com
                                 Based on the results of the point to point returns calculator for Equity – Large Cap
                                 funds with growth options

Equity – Nifty                   National Stock Exchange of India - www.nseindia.com
                                 Historical index data is used for the analysis

Gold                             MCX - www.mcxindia.com
                                 goldpricenetwork.com
                                 www.kitco.com
                                 www.goldprice.org

Real estate                      Residex - www.nhb.org.in
                                 Data is treated to a subjective analysis due to the localized nature of real estate
                                 prices




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Description: The guide gives the returns of asset classes for different periods of time, to be used in your personal financial planning.