TATA MOTORS, JAGUAR LAND ROVER Q1 SALES AT 78,825 UNITS, DOWN BY 37%.
Tata Motors reported on Thursday a decline of 37% in retail sales at 78,825 units or Q1 FY2023. The sales were broadly flat for March quarter. This was mainly due to shortage in semiconductor, COVID-19 lockdowns in China and transition in model of Range Rover.
Jaguar brand sales went down by 48% in April-June period of 2022. On the other hand sales of Land Rover were at a low of 33% at 63,618 units. JLR mentioned in a statement that despite of a strong order book the sales continue to decline. This is due to shortage of chip globally. It was compounded by the run out of Range Rover Sport model, with deliveries which were about to start got impacted by Covid-19 lockdowns in China.
When compared to March quarter the retail sales were better in UK by 10% and 49% up for Europe. The sales however decreased in China by 5%, North America by 30% and other places by 10. This indicates the transition to new models and carriage time to these places. The chairman said to the shareholders that Tata Motors expects a better second half of the current year to be better. The company estimates sales of overall 500,000 cars in FY2023.
The demand for Commercial vehicles and Passenger vehicles remains strong regardless of ongoing geopolitical and supply chain and inflation concerns. The shortage of semiconductors is improving step by step and the prices are stabilizing which However JLR continues to observe strong demand for its commodity. The company added that they have already added up around 32,000 orders in March 2022 and have grown their order book by almost 2 lakh units. As per the company demand for new Range Rover it at 62,000 units and similar trend is seen for new Range Rover Sport and Defender. The order book for Range Rover Sport it at 20,000 units and is 46,000 units for Range Rover Defender.
Anand Rathi Wealth Q1 Results: Net profit up 34% to Rs 40 cr; revenue rises 36%.
On 12th July 2022, Anand Rathi Wealth reported a net profit of Rs. 39.7 crores for the Q1 FY23. The net profit was up by 33.6% as compared to the net profit of Rs. 29.7 crores in Q1 FY21. This was due to the addition of new clients and strong net flows. The net profit improved by 16% QoQ which was Rs. 34 crores. Net Flows for the quarter stood at Rs. 1,355 crores, up by 395% over same the period last year.
The company’s revenue rose by 35.7% YoY to Rs. 133.5 crores. The revenue during Q1 FY21 was Rs. 98.4 crore. The revenue was up by 17% QoQ to Rs. 110 crores.
The company has recorded strong growth for the June quarter despite challenging market situations.
The Asset Under Management (AUM) of the company for this quarter stood at Rs 32,961 crore, up by15% YoY and 0.27% QoQ. During Q1FY21 and Q4 FY22 the Asset Under Management was Rs. 27,887 crore and Rs. 32,054 crores respectively.
The total operating expenses have increased from Rs. 7067.24 lakhs to Rs. 8062.03 lakhs as compared to the previous quarter. The operating cost is up by 40.3% YoY. This was majorly due to higher employee expenses and fixed costs.
The employee expenses were up from Rs. 52 crores to Rs. 60 crores on a QoQ basis.
Mostly the RM’s expenditures or the provisioning are linked to the revenue. If you look at the revenue, it is in terms of percentage, there is hardly any change. Last year employee benefit expenses were about 45% and it is in the same range even in this financial year. So at the absolute number, it looks higher. But compared with the revenue number in terms of percentage, it is more or less the same.
There was an increase in fixed cost by 17% YoY, because now since offices are running and administrative expenses, business promotional expenses and all have come on track. So this was the normal operating first quarter post-COVID era.
The PBT margin for this quarter is 39.6% as compared to the last quarter (40.2%).
For the June quarter, the return on equity is 42.3%, and for Q1 FY22 and Q4 FY22, 44.3% and 39.8% respectively.
The Earning Per Share for this quarter is Rs. 9.5. The active clients increased 17.4% to 7,477.
Anand Rathi Wealth, got listed in December. The company operates in the financial services industry with a focus on mutual fund distribution and the sale of financial products. The company started its activities in fiscal 2002 and is a registered AMFI (Association of Mutual Funds of India) mutual fund distributor.
Currently, the stock is trading at Rs. 639.45. The share price went down by 9.95 points or by 1.52% as compared to the previous close of Rs.649.45. On 15 July 2022, the stock opened at Rs. 653. The shares hit an intraday high and low of Rs. 655.65 and 638 respectively. The company’s market cap is Rs. 2661 crore.
HCL Technologies, an IT major, declared its financial results for the April-June quarter on June 12th. The IT services company posted a 2% rise in net profit YOY at Rs.3,283Cr. and was down 8.6% QOQ, which was expected to be at Rs.3400 Cr.
The revenue stood at Rs. 23,464 Cr., was up by 3.48% QoQ, which was expected to be at Rs. 23600Cr. The dollar revenue for the June quarter grew 15.6% annually, boosted by new deals and growth in the number of customers. HCL Technologies received 7 large service deals and 9 product deals from April to June. The EBIT margins were below expectations and stood at 17%. EBIT for the company was at Rs. 3992 Cr. and was forecasted to be at Rs. 4200 Cr. IT & business revenue rose 2%, whereas R & D services and engineering revenue increased 3.7%. However, revenue from products and platforms fell 5.1% in Q1FY23.The company announced an interim dividend of Rs. 10 per share.
The IT company added 2,089 new employees in this quarter, increasing its headcount to 2,10,966 employees. The firm intends to hire more than 30,000–35,000 employees in FY23. HCL Technologies conducted 2 million hours of training. The company would inform you about its salary hike in the coming weeks as it was effective from July 1.
Many analysts expect the company to improve its growth as there is an optimistic environment for cloud migration and R&D outsourcing. Since there is pressure in the services sector, the margins are a concern. However, if there is optimization in subcontracting costs, better pricing, automation, and improvement in utilization, then the margin will improve. Management expects margins to recover despite salary hikes. The order bookings, robust hiring, client additions, dividend payout, and cash flow conversion remained impressive.
The share price of HCL Technologies touched a new 52-week low today at Rs. 905.2 and is down by 2.46% on the BSE when the market opened. In one month, the stock has dropped by 8%. The share price was down by 5.89% in one year. The market cap of the company is Rs. 2.47Cr. The stock closed at Rs.918 and was down by 9.40 points, or 1.01%.
Gautam Adani, a led conglomerate to engage in a bidding clash with Reliance & Airtel for 5G spectrum. Adani Group’s entry into the 5G spectrum will result in intensified competition for revenue. Analysts believe Adani Group to engage in a battle for 5G airwaves auction. The auction will be on July 26, in both the coveted but expensive 3.3-3.67 GHz and the cheaper 26 GHz bands. Adani Group as the fourth bidder will increase sell off the spectrum. This will lead to more sales of the spectrum, which is good for the government. The price will rise 10% over the reserve price of Rs.317Cr. a unit.
Adani Group clarifies it doesn’t want to enter the consumer mobility space but would participate in the upcoming auction. Adani Group intends to provide private network solutions with enhanced security at its airports, logistics, power generation, distribution, and manufacturing units. They mentioned their plans align with their recent proposition of increasing the Adani Foundation’s investment in education, skill developments, and healthcare. Despite their current focus being on 5G private captive networks, they would target both 5G airwaves 26 GHz and C-band also called mid-band. As ecosystems are now developed around C-band and not much around 26GHz waves.
Adani telco will include services in automation of factories, remote education centers or remote working facilities, and other 5G storage solutions. Spectrum leasing means one company leasing spectrum from telecoms for a fee to corporates keen to invest in such networks. The large corporates can be setting networks on their own or in a tie-up with a technology company. Adani group will have the facility to serve enterprise offerings which include the private network as a service. The entry of Adani Group could make difficult situations for cash-strapped Vodafone Idea. This would dampen future revenue streams for the current telecom companies. Vodafone Idea may either overbid or miss out on the opportunity to participate in the auction.
The Centre plans 72Ghz worth 4.5 lakh Cr. to be valid for 20 years at the base price in various low bands (600 Mhz, 700 Mhz, 800 Mhz, 900 Mhz, 1800 Mhz, 2100 Mhz, 2300, 2500 Mhz), mid (3.3-3.67 GHz) and high (26 GHz) frequency bands. However, the government expects telecoms to use both mid and high-band spectrum to roll out 5G services.
Avenue Supermarts’ profit jumps 490% to Rs.680Cr. in Q1.
The operator of Dmart stores, Avenue Supermarts declared a PAT of Rs.679.64Cr. in Q1FY23. The company has shown a jump of 490% from to Rs. 680Cr. in Q1 from Rs.115.13Cr. YOY. The growth is however one-sided from a low base effect because of ongoing Covid-19 effects. The firm also recorded a 94% rise in its revenue from operation at 9,806Cr. which was Rs.5,301.74Cr in Q1FY22. EBITDA stood at Rs.1008Cr. which was at 221Cr. in previous year same quarter. EBITDA margin stood at 10.3% in Q1FY23 which was at 4.4% in Q1FY22.
For Q1FY23, Avenue Supermarts reported a consolidated Income of Rs.10067.21Cr. from Rs.8819.02Cr. in the prior year’s corresponding quarter. Net Profit of Rs.642.89 Cr. is recorded in the latest quarter compared to Rs.427Cr. in the previous quarter. The EPS is now at Rs.9.93 which was at Rs.6.59 in March quarter.
Dmart opened 110 new stores in the last three years, one of the largest additions in Q1FY23 and the largest since Q4FY20. They have added a total of 29 stores and are on target to meet 60 additions (over 2020-2022). These stores didn’t operate to their full potential because of the ongoing Covid-19 crisis. As per Noronha, CEO of Avenue Supermarts, the new stores have better design and high capacity to handle large-scale revenue. Since it was the first quarter without any pandemic disruptions, new stores have delivered good results in the current quarter.
Despite decent results, few analysts are bearish on the stock and have given a sell rating. Due to slowdown in the economy, exchange rates volatility. Avenue Supermarts’ revenue continues to improve; the category sales remain below pre-pandemic levels. Based on the clarification by the managment, we forecast a more significant contribution from apparel & footwear.
The online portal of Avenue Supermarts, DMart-Ready is operational in 12 cities. They are assessing feedback from customers to enhance their quality and presence across the country. There is no additional update on the app.
The stock closed at Rs.3986.85 on Monday, after quarterly results were announced on 9th July 2022. The stock gained 45.15 points and was up by 1.15%. The Market Cap of Avenue Supermarts is at Rs.258213 Cr.
TCS profit misses estimates as recession fears hit IT spending.
On 8th July 2022, TCS announced the financial results for April-June 2022 quarter. Tata Consultancy Services reported net income of Rs. 94.8 billion . While analysts predicted a net profit of Rs. 99.04 billion. Revenue from operations increased by 16% to 527.6 billion rupees and up by 4.3% QoQ to Rs. 52,758 crore during Q1FY23. However the operating profit margin slipped by 23.1% as against 25% in the previous quater. This was due the wage hikes and and the continued rationalisation of employee costs amid high attrition. The company recorded 5.2% rise in consolidated net profit at Rs. 9,478 crore on YOY basis. The company has declared dividend of Rs. 8 per share. It will be credited by August 3, 2022, and the record date for the is July 16. The Indian shares fell on Monday, as IT services major Tata Consultancy Services reported weak results last week. On 11th July 2022, TCS share price opened lower at Rs. 3,226.15, while the previous closing price was Rs.3,265.45 on the BSE. The stock hit a high of Rs. 3116.40 and dropped by 4%. Currently the stock price is Rs. 3119.70 and down by 145.75 points or 4.46%. The market cap of TCS is Rs. 1,141,514 crore.
Most of the analysts have now revised downward TCS’s earnings estimates, due to fear of potential U.S. recession, forex volatility, and continued supply-side challenges. On the other hand, the company’s management is optimistic about future growth. According to the management the demand for technology remains ‘robust’. And the company has also not seen any footprint of the recession on the demand side. According to the chief executive officer and managing director Rajesh Gopinathan the company is seeing steady demand from immediate conversations with the customers. And the company is constantly polling to see if there are any early indications of softening .
The shares of TCS traded over the counter worth Rs. 15.9 crore i.e 0.5 lakh shares , compared with a two-week average volume of 0.76 lakh shares. The BSE Sensex was trading 324 points lower at 54,158 levels.
The shares of TCS traded lower than its 5-day, 20-day, 50-day, 100-day, and 200-day moving averages. TCS has recorded negative return of 2.5% in the past one year. This led to the underperformance of the BSE Sensex by 6%. The large cap stock is 3% away from its 52-week low of Rs.3,023.35 touched on June 17, 2022. The IT major hit a 52-week high of Rs. 4,045.50 on January 18, 2022.
Adani Wilmar enters the coveted large-cap category by AMFI
On 5th July 2022, the Association of Mutual Funds of India (AMFI) declared its semi-annual categorization of stocks which takes into consideration data from January 2022 to June 2022.
The Association of Mutual Funds of India (AMFI) classifies all listed companies into large-cap, mid-cap, and small-cap, on a semi-annual basis. Active equity fund managers build their portfolios based on AMFI’s stock categorization on.
According to the stock categorization by the Association of Mutual Funds of India (AMFI), shares of the Life Insurance Corporation of India (LIC) and Adani Wilmar were classified as large caps. AMFI has also classified shares of Adani Power, Cholamandalam Investment and Finance, Bank of Baroda, Hindustan Aeronautics Ltd (HAL), and Bandhan Bank as large-cap from the mid-cap category.
New large-cap additions:
On the new listing, the market cap for the large-cap is Rs. 475,000 Cr. Stocks such as Adani Power, Cholamandalam Investment and Finance, Bank of Baroda, Hindustan Aeronautics, and Bandhan Bank have been upgraded from mid-cap to large-cap. Currently, the market cap of Adani power is Rs. 1,01,533 Cr. And its market price is Rs. 263. Additionally, Adani Wilmar is also added to the large-cap category with a market cap of Rs. 76,161Cr and CMP Rs. 582. LIC has been upgraded to a large-cap and recorded a market cap of Rs. 444,425 Cr. And the current market price is Rs. 702.65. The market cap of Cholamandalam Investment and Finance (CMP Rs. 643), Bank of Baroda (CMP Rs. 98.65), Hindustan Aeronautics (CMP Rs. 1759), and Bandhan bank (CMP Rs. 273.45) are Rs. 52,822 Cr, Rs. 51,015 Cr, Rs. 58,820 Cr, Rs. 44,046 Cr. respectively.
New mid-cap additions:
AMFI has moved IDBI Bank, HDFC AMC, Godrej Properties, Steel Authority of India (SAIL), Zydus Lifesciences, Jubilant Foodworks, and PB Fintech (Policybazaar) from large-cap to mid-cap category. The market cap for mid-caps is Rs 164 billion. The stocks that have been added mid-cap category are Vedant Fashions with market cap of Rs. 24,335 Cr. and CMP Rs. 1003, and Delhivery with market cap of Rs. 36,772 Cr. and CMP Rs. 507.55. Some stocks have been upgraded from small-cap to mid-cap category. These include Tata Tele Maharashtra, KPR Mill, Tanla Platforms, Poonawala Fincorp, Phoenix Mills, SKF India, and Chambal Fertilizers.
New small-cap additions:
Stocks that have been downgraded from mid-cap category are AGS Transact Technologies, UMA Exports, Veranda Learning, Hariom Pipes, Campus Activewear, Rainbow Children’s Medicare, Prudent Corporate Advisory Services, Venus Pipes, Paradeep are added to the small-cap category. Moreover, Nuvoco Vistas, Aditya Birla AMC, UCO Bank, Natco Pharma, GR Infraproejects, Indiamart Intermesh, Happiest Minds, Ajanta Pharma, and Sanofi India.
To make sure a consistent investment universe for equity mutual fund schemes, AMFI categorizes stocks into large-cap, mid-cap, and small-cap. However, a change in the category doesn’t need to result in inventory entries. The equity fund managers find the newly added and upgraded to large-cap stocks more attractive.
As per the AMFI, about 74% of newly listed stocks were classified as small-cap.
The market cap of the top 100 large-cap stocks declined to 68.8% from 71.4% in the July review. However, the market cap of mid-cap stocks which starts from 101 to 250, increased to 16.9% as against 16.2% in the last review. In the previous review, the market cap of small-cap stocks was 12.29% which increased to 14.3% .
After the stock categorization by AMFI, Adani Wilmar declined by 0.92% i.e from Rs. 582.05 to Rs. 576.70. Similary Adani Power also slipped from 262.75 to Rs. 262.70 which is 0.02%. However, stocks such as LIC, Bank of Baroda, Vedant Fashions have been increased by 0.04%, 0.81%, 1.16% respectively. Hindustan Aeronautics Ltd which is upgraded from mid-cap to large-cap fell by 0.68%. Even though some stocks have been upgraded by the AMFI there is a fall in the some stocks.
Today as the market closed, SENSEX was up by 427.49 points or 0.80%, closing at 54178.46 and NIFTY was up by 143.10 points or 0.89%, closing at 16132.90. While the S&P BSE small-cap index closed at 25,568.55 and increased by 328.87 points or 1.30%. NIFTY Bank increased by 1.74% or by 596.05 points and closed at 34920.30. Similarly, Nifty IT also surged by 0.67% or 188.70 points and closed at 28196.30
The most active stocks traded today were Reliance, Titan Company, HDFC, and Tata Steel closed at Rs.23,88.10, Rs.127.50, Rs.1395.80, and Rs.900 respectively.
Global Indices and Commodities:
When the Indian market closed, DAX was trading at 12,776.97 up by 189.246points or 1.42%. NASDAQ was trading at 11361.85 and up by 39.61 points or 0.35% and CAC was trading at 4,5998.95, increased by 1.53% or 90.70 points. Currently, Gold is trading at 50,651 and increased by 151 points and 0.30%, and Silver is trading at 57,247 and gained 0.92%. Crude oil is trading at 7900, increasing by 1.73%.
Currency:
Currently, USD is trading at Rs 79.17, declining by 0.13%. EURO was trading at Rs 80.79 and increased by 0.36%.
Sector-wise performance:
Today, almost all other sectors ended on a positive note. The IT Services & Consulting Service sector increased by 0.81%. However, some stocks in this sector fell, which are Affle India and Bartronics. Sectors such as Finance, Households, Paints, and Pharmaceutical increased by 7.57%, 9.93%, 4.79%, and 2.49% respectively. The oil exploration and production sector fell by 3.12%.
Top 5 gainers:
The top 5 gainers today were Titan Company, Tata Steel, Larsen, and Induslnd Bank, M&M. Titan Company (CMP Rs.2127.50), and Tata Steel (CMP Rs.900) increased by 5.66% and 4.88% respectively. The current market price of Larsen is Rs. 1611.10 and gained 3.53%. IndusInd Bank was up by 2.92% and closed at Rs.861.00. M&M gained by 2.60%. The CMP of the company is Rs.1133.30
Top 5 losers:
Today, the top 5 losers were Dr Reddys Labs, Nestle, Bharti Airtel, Reliance, and Bajaj Finance. Dr Reddys Labs (CMP Rs. 4,338.35) declined by 1.29% and Nestle (CMP Rs. 18,187) by 1.14%. Bharti Airtel closed at Rs. 686.65 and slipped by 1.05%. Reliance decreased by 1.01%. The closing price was Rs. 2387.65 as against the previous closing price of Rs. 2411.95. Bajaj Finance closed at Rs. 5859.90 and fell by 0.98%
Stock in news:
Titan Company’s first-quarter sales jumped by 205% year on year basis. The closing price of Titan Company was Rs.2127.50 as against the previous closing price of Rs.2013.55. The price increased by 5.66%. The board of PBA Infra approved the voluntary delisting of shares of the company from NSE. The company’s share price fell by 2.61% and closed at Rs. 13.05. Deep IND received a Letter of Awards from ONGC. The company’s share price rallied from Rs.188.45 to Rs.198.50. The price increased by 5.33%.
Being mindful about stocks and how they function is essential for strong returns on investment. This will provide substantial financial benefits. Wisely spending your capital is extremely necessary to achieve monetary prosperity and financial goals. It is possible that if you are working on an investment strategy, it will probably include some form of stocks. The stock markets historical success makes this type of investment so common. The S&P 500 index recorded an average return of 9.7% between 1930 and 2013. Although, this includes years and exceptional years which are extremely tough. This high average return on investments in stocks provides a strong basis for buying them.
Stock market investment can look like a scary task. However, as soon as concepts are learned and the right strategies are implemented, the benefits are significant. While there are many vehicles for stock exposure such as mutual funds and ETFs which do not actually require investors to pick up their stocks from the market. However, it remains necessary to understand what stocks are and what they work to achieve when investing.
Straightforward meaning of equity stocks:
Stocks are equity investments that constitute a company’s ownership. If you buy the stock of a particular company, it includes certain rights.
Companies sell shares to collect substantial capital amounts. This capital is then used to fund various projects. This ultimately leads to the growth of business and generate a return for investors and revenue for the company. When a company wants to go public, it must also choose 1-4 separate letters for the distinctive identification called stock ticker symbols. Companies can sometimes even become creative when choosing their ticker symbols.
The stock price of a public company is simply a determination of the value of the company by the market. This value depends among other things, on its assets, current profits, and expected future profits. While raising capital, stock offerings is a great way for a business to grow quickly and expand rapidly. However, there are also disadvantages. In addition to the high charges paid for exchange listing, public firms have to disclose their financial reports as per the rules and regulations.
Categories of stocks viz. Common and Preferred:
Common stock offers you a part and voting rights of the company. With common stock, you aim for capital gains together with dividend collection. However, companies are not obligated to pay dividend to common shareholders. A dividend is a distribution of some amount from total revenue to shareholders or a kind of investment reward.
However, the preferred stock works somewhat differently. The preferential stock does not give you any voting rights. The preferred stock guarantees you more return as compared to common stock. For example, if a corporation pays a dividend, it must first pay its preferred shareholders. Dividends are first paid to preferred shareholders and then to common shareholders. Unless the company cannot pay the dividend in one year on preferred stock, it will proceed to pay it in the future years. They have a right to claim on firms assets in any uncertainty if the firm comes in a position of bankruptcy. Preferred share owners have more significance than common shareholders.
Common stocks are more riskier than preferred stocks. Portfolio must include a perfect blend of both common and preferential share.
Taxation on stocks:
After 1st September 2004, any buying and selling of securities will include the Security Transaction Tax (STT) applied to them. STT is payable on stock trading in India. Inventory income sold within 1 year from the date of acquisition is considered to be STCG. STCG is obliged to taxes and is taxed at 10%. If short-term capital losses are incurred, then it can be compensated for short-term gains in the same financial year. Benefit from stocks sold after 1 year comes in LTCG. Since 1st September 2004, long-term capital gains have been exempt from tax. Long term capital loss is considered to be a loss on inventories sold after one year from the date of purchase. Long term capital losses cannot be substituted with long term capital gains.
Gold funds are unique type of mutual funds, through which investors can invest directly or indirectly in Gold Reserves. They can invest in the gold producing stocks, mining company stocks or in physical gold. Gold funds are the most convenient asset to invest, without the risk of theft or paper work as they are in digital form. This fund is kind of an open ended investment, where investor can issue or redeem at any point of time based on the units which they hold. However, their price directly depends on the metal (gold). Some investors use gold funds to hedge and diversify their portfolio and protect against uncertain economic condition. Many investors diversify around 10 to 20 percent of their portfolio by investing in gold funds. Golds funds are regulated by the SEBI and it is ideal for investors who are risk averse.
Types of gold funds available across globe for investors:
Gold Mining Funds:
In this, funds are invested in stocks of the mining companies and returns depends on the performance of these stocks. However, investment does not get affected due to any fluctuation in economy as gold price is affected mainly due to the fluctuation in demand and supply of gold. Gold exchange traded funds were first introduced by Benchmark Asset Company in India. This funds basically invest in the gold through Demat account. Returns and value of the investments totally depend on the price of gold. Investment in Gold Fund of Fund is same as exchange traded funds as in this, investments are made in particular unit of the Exchange traded funds without opening the Demat account.
Main purpose of Gold Funds:
Main purpose for investors to invest in gold funds is to grow their investment value and create wealth in whatever period the investment is made with protection against the market fluctuation. Price of Underlying asset varies according to change in demand of gold and at the time of maturity returns are calculated on current gold price. If gold price is increased, it gives more returns at the time of redemption.
What are tax charges for Gold Funds?
Normally, the tax which is charged on the Gold Jewellery is applicable to the Gold Mutual Funds schemes. But, taxes also vary according to the tenure. If investments are made for less than three years than revenue is added to the total gross income and considered as short term. But if investments are made for more than three years than 20 percent tax is applicable with indexation norms and CESS charges. However, if capital gains is through exchange traded funds (Gold ETFs), tax exempt is given. No TDS is applicable to Golds Mutual funds. During the time of buying or selling of funds, same tax is applicable as on Gold Jewellery.
Benefits of Gold Funds:
Flexibility in investment:
Gold funds allows investors to invest according to their convenience, comparing to the physical purchase of the gold. Investment can be made as low as Rs 500 and even small income class can also invest in this fund rather than purchasing physical gold which costs higher than these funds and gives flexibility. Gold mutual funds are one of the safest investment as these funds are regulated by Security exchange board of India and they continuously monitors the performance of this type of funds so that investors can analyse their future returns. Gold Funds are also safer than holding physical assets (Gold) as it is in de-materialized form.
Highly liquid:
Gold funds are high liquid funds as investors can redeem them in short term and are also protected against the uncertain economic situation. However, during market hours only, it can be buy or sell and net asset value of previous day is considered at the time of selling and trade is offset in one or two working day. To balance the overall portfolio, investor may always choose gold funds. Gold price is not directly affected to one investor’s overall investment and stocks in which investment is made. Gold fund is considered as one of the safest investment with good returns.
Some finest Gold Mutual Funds in India:
Axis Gold Funds has given return in a year up to 26% and for 3 to 5 year period 4%. SBI Funds has given returns up to 22% in a year and 6% in 5 years. HDFC Gold Fund has given returns of 22% in a year and 6% in 5 year period.
