What are Contra Mutual Funds

What are Contra Mutual Funds

Contra mutual Funds are equity oriented mutual funds whose investment objective is to invest in the shares of the companies or sectors which are under-performing mainly due to the short term concerns.


The fund manager follows the contrarian investment approach i.e. buying shares of the companies whose share prices are depressed due to short term concerns. The demand of these shares is very less as they are usually rejected by other investors


These under-performing stocks are usually available at lower price than their fair value or intrinsic value and are likely to perform well in the long run as market price of a share will always tend to move towards its fair price or intrinsic value creating opportunities for traders to generate superior returns in the long run


Contra mutual fund is out of favor or against-the-wind style of investing. Fund managers select companies which are fundamentally strong but whose true potential is not reflected in its share price. The concept is to buy shares at a price lower than its fundamental price or intrinsic value.


Please note that contra mutual funds may not give superior return in the short term but are ideal for investors who have investment horizon of medium to long term. Also, the reward risk ratio is quite high for investors in the long run.


Rajiv Kapoor
Investment Advisor
9839034761

HEALTH INSURANCE

Not having enough health insurance

Healthcare costs in India are increasing at a distressing rate. Based on some estimates, the annual healthcare inflation is the range of 15 – 25%. A hospitalization for a serious illness can cost Rs 5 Lakhs or above and long term hospitalization can be a tremendous financial burden on households.

While health insurance is essential for all, it is even more relevant for senior citizens because health risks increase with advancing age. Employees who are covered under their company’s group health insurance policy usually do not worry about health insurance but you should know that, you will lose your health cover on retirement.

So, it may be prudent to buy individual mediclaim or family floater plan before retirement even if you are covered under your employer’s group health insurance scheme, so that you can continue with the same health insurance plan even after retirement.

We spend so much on things that spoil our health such as fast food, junk food and alcohol and think

so much when it comes to payment of premium for a health insurance policy ……………. ???

Buy a health insurance policy for yourself and your family. You never know of tomorrow.

Know more from me……… !!

What will be the best mutual funds over the next 3 years, with a moderate risk in the market?

 

One of the best strategies to deploy in markets and one which comes with moderate risk is Dynamic Asset Allocation Funds.

Asset Allocation Funds or Dynamic Asset Allocation funds are best to invest in a market for people looking for Moderate Risk.

How Do Dynamic Asset Allocation Funds Work?

Simply put Dynamic Asset Allocation funds work on the principal of “Invest more in Equity when the Markets are low and Invest less in Equity when the markets are high”.

1.)    These funds change their Debt to Equity Asset allocation accordingly.

For example, at a stage of markets these funds could have Debt: Equity ratio as 60:40 and if markets correct (go lower) then it can change to 30:70.

All this is done by the fund manager themselves based on an index which tracks the expensiveness of the markets. The index and corresponding Debt : Equity Allocation could be like this. (please note that this illustration is from an indicative stand point only)

2.) Apart from the fact that you will buy more equity when markets are down, another distinctive advantage is that these funds book profits automatically for you. Once the markets start moving up, the fund managers sell equity and buy more debt and hence it results in profit booking for the investors.

3.) These funds come with equity taxation and the long term capital gains tax are zero. Many of these funds use Equity arbitrage as a strategy to ensure that they remain in the 65% zone for Equity + Equity Arbitrage to get Equity funds taxation.

We have created a Portfolio of the two best Dynamic Asset Allocation fundsavailable in the market. You can start SIP or do a lump sum investment in these funds anytime.

But mind you that these funds are basically conservative in nature and may not give very good returns vis a vis the sensex

Regards

www.rajivfcs.weebly.com

Rajiv Kapoor

Practicing Company Secretary

Kanpur

9839034761