What Ho!» Personal Finance

ICICI's PruTracker – Analyze Scheme Performance

gautamsatpathy — Thu, 14 Feb 2008 02:07:42 +0000

ICICI Prudential Mutual Fund is one of India’s leading AMCs. They manage a lot of money (AUM) and are innovative in their product offerings. They also have a good track record of technology use. Their web site was one of the first to offer direct purchase of Mutual Fund units as well as portfolio tracking.

The PruTracker is a good product though it lacks some fundamental features, particularly on the usability side but that is another post

Of late I have been using their web site a lot and thought I would write about my experience. Late yesterday night I stumbled upon their Analyze Scheme Performance page. This page lets you select a Mutual Fund from ICICI Prudential’s stable, give a date range and select a Performance Measure for analysis. Available measures are:

NAV History
Dividend History
Performance Simulator
Comparison vs Benchmark

I decided to take the Performance Simulator for a spin.

ICICI Prudential FMCG Fund (Click picture for full size image)

What you get is analysis for a single lump sum investment on the start date and an analysis of a monthly SIP between the start and end dates.

Performance Simulator
If you had invested Rs. 1,000.00 on 31-03-1999 (dd/mm/yyyy) in the chosen scheme, then the value would have become Rs. 4,663.00 on 13-02-2008 (dd/mm/yyyy). The corresponding dividend amount paid would have been Rs. 0.00 . Your gain/(loss) would have been Rs. 3,663.00.

Systematic Investment Plan (SIP) Simulator
If you had invested Rs. 1,000 in the SIP option of the chosen scheme (on a monthly frequency), starting on Mar-1999 , then your value would have become Rs. 4,11,486.00 by Feb-2008 a return 28.83 % ( CAGR ). Your gain/(loss) would have been Rs. 3,03,486.00 , on a total investment of Rs. 1,08,000.00.

Note that this screen defaults to the launch date of the fund for start date and today’s date for the end date.

The information returned is useful to some extent. It tells you how the fund has performed over the time period selected. Note that this is real performance (based on certain assumptions) and not a projection.

I then decided to try out a couple of other ICICI Prudential funds I invest in.

ICICI Prudential Power Fund (Click picture for full size image)

ICICI Prudential Infrastructure Fund (Click picture for full size image)

The Analyze Scheme Performance functionality of the PruTracker is a good way to understand performance and compare similar schemes over the same period of time. For the sake of this article I have used the same three funds as above for performance comparison.

Now, FMCG, Power & Infrastructure are all Equity Diversified funds but have very different objectives, investment styles & portfolio capitalization. As a result you cannot compare their performance against each other.

Caution: Do not use this information to make investment decisions. As noted above these funds are totally different from each other and this is not a valid comparison for investment decision making. This is done here for illustration only.

The first thing is to ensure that the comparison is for the same time period. The Infrastructure fund is the newest (launched Sept 9, 2005) and hence I used that as the start date for all there funds. Left the end date as Feb 13, 2008 (yesterday) for all three funds. See the results below:

ICICI Prudential FMCG Fund – Sept 9, 2005 to Feb 13, 2008 (Click picture for full size image)

ICICI Prudential Power Fund – Sept 9, 2005 to Feb 13, 2008 (Click picture for full size image)

ICICI Infrastructure Fund – Sept 9, 2005 to Feb 13, 2008 (Click picture for full size image)

Results:

	SIP Amount	Total Investment	Value	% Return (CAGR)
ICICI Prudential FMCG Fund	Rs. 1,000/-	Rs. 30,000/-	Rs. 38,629/-	22.17%
ICICI Prudential Power Fund	Rs. 1,000/-	Rs. 30,000/-	Rs. 41,759/-	29.56%
ICICI Prudential Infrastructure Fund	Rs. 1,000/-	Rs. 30,000/-	Rs. 54,126/-	56.14%

The results are interesting and when used to compare similar funds can provide good information for investment decision making.

You can also use the Value Research web site to analyze these funds:

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Buying Gold

gautamsatpathy — Tue, 12 Feb 2008 10:07:01 +0000

Gold as an investment. Google for “buy gold” and you will come up with tons of articles giving the same old advice. Buy gold in bullion form not jewelery, why buy gold, where to buy gold, gold ETFs etc etc. They tell you the same thing, over and over again.

But none of these articles will tell you how to buy gold! They will tell you that Gold makes a good investment. And that banks in India charge more than jewelers. And that gold bullion is better than gold jewelery. Yes. Fine. But where do I buy gold bullion? From ABC or from XYZ? Damn. So much for the power of the Internet!

I came across this comparison table recently and though it is the same fodder for the same old mill, it does demonstrate what all the pundits are shouting themselves hoarse about.

From this it is clear that it is best to buy your gold bullion from the local jeweler. But which one? Or does Tanishq sell gold? And if I buy gold from the local jeweler how do I have it’s purity certified?

The next question is how do I sell gold? Will the jeweler buy gold coins / bars? No idea. I have never tried to sell any gold.

The bottom line is that you will have to do your own research. And as the market is unorganized, you don’t have any guaranties. Buy from a jeweler you trust. Get your purchase certified independently. Most Tanishq outlets have gold purity checking machines and will check your gold for you.

I have started a research exercise wherein I am trying to identify jewelers in Hyderabad who sell gold coins and bars. Will post results here as and when they become available.

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Cash Flow – Excel Spread Sheet

gautamsatpathy — Sat, 09 Feb 2008 19:47:05 +0000

I have always had trouble figuring out my cash flow. Understanding where my money is coming from and where is it going. Secondly, what are my obligations over time, say the next month and throughout the year.

After trying various personal finance software and discarding them as too cumbersome and rigid, I designed an MS Excel spread sheet to help me keep track of my money. I am a firm believer in the “keep it simple” philosophy.

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Screen Shot – Cash Flow 2007 – 2008 (Excel)

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You can download a copy of this spread sheet from my web site and read more about it’s usage. Plus tips on how to customize it for your own use.

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Bye Bye Entry Loads!

gautamsatpathy — Wed, 23 Jan 2008 19:32:19 +0000

See the screen shot below for my most eagerly awaited Mutual Fund Account Statement

Notice the NAV & the Price in INR columns. The last transaction dated 14/1/2008 is the sweetest. No Entry Load!

I have already canceled most of my ICICIDirect SIPs. So far I have been able to take care of only a part of my portfolio by creating SIPs offline. The rest will be completedby the end of Jan 2008.

Hip! Hip! Horray! No Entry Load!

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ICICIDirect's New Message On Mutual Fund Purchase Page

gautamsatpathy — Mon, 21 Jan 2008 23:32:33 +0000

The new direct sales no-load criteria for Mutual Funds in India came into effect on January 4, 2008. Under this investors are not charged an entry load if they purchase directly from the AMC. The operative word is “direct”.

I have seen a lot of discussion on this issue on our internal mailing lists at work and elsewhere on the web. A lot of people seem to be confused about what “direct” means. The word was taken to mean “online” by a large section of people. The experts quickly pointed out that there is a distinction between purchasing mutual fund units on the web site of the AMC vs. buying the same units from a brokerage house like ICICIDirect.

Anyway, I recently logged into the ICICIDirect web site to purchase units in a short term floating rate fund from Chola and I noticed that they have posted a new message on the Mutual Fund Purchase page (see screen shot below).

Notice the paragraph highlighted in blue? It clearly states that they are brokers and hence are entitled to their pound of flesh.

I noticed this on Jan 15, 2008, a good 10 days after the new rules came into force and am not sure when they posted this message. On Jan 4? Or later after their customer support was flooded by mistaken but nevertheless angry customers complaining about the entry loads charged on their purchases?

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