Invest In Tax Saving Mutual Funds Online
The National Stock Exchange ( NSE) has carried out an extensive exercise in index rebalancing that affects most of the indices it maintains. With effect from April 1, IndusInd Bank and NMDC enter the Nifty, while Wipro and Siemens were pulled out.
Siemens moves down to the Nifty Junior where Bajaj Financials, Tata Global and United Breweries are also being inducted. Biocon, GMR Infra and Torrent Power are being pulled out of the Junior.
There are multiple changes in other indices including the CNX 500, the CNX small caps and in sector indices like the realty, IT and service indices.
The changes have presumably been made on the basis of various factors such as liquidity, market cap, free- float, etc. The changes will also affect industry representation since the inductions and exclusions aren't from the same sectors.
However, the trader will be most interested in the potential impact on share prices of the stocks concerned.
In the broadest terms, a share that is "demoted" tends to lose market cap while a share that is "promoted" tends to gain market cap. One reason for this is simply that exchange- traded funds (ETFs) and index funds must rebalance portfolios to reflect index composition and weight. Other institutions also tend to follow suit and buy into the promoted stock if they are benchmarked to the stock. The demoted stock tends to lose value because of the obverse reason. ETFs and index funds must abandon it and other institutions often choose to reduce exposure as well.
A more subtle reason is that stocks are often promoted or demoted because they are trending up or down. IndusInd Bank is up over 26 per cent in the last year and 2.5 per cent in the last month. That is strong outperformance versus the major indices ( the Nifty is up about seven per cent), and versus its sector peers. NMDC has, however, been inducted for reasons other than performance. It is an attempt to give greater representation to the mining sector. In terms of price performance, it has lost ground in the last year, with market cap down around 17 per cent. Incidentally, Siemens is down 30 per cent in the last year, while Wipro is down one per cent.
There will be far more attention paid to the shares that have entered the Nifty than to shares that have entered other indices. This is just because there are more index funds tracking the Nifty and diversified funds benchmarked to the Nifty but there will be some attention paid to the entries/ exits from the Junior as well.
A trader who focuses on these stocks and goes long on the promoted ones should receive a return somewhat in excess of the market. Shorts on the demoted ones could be more risky and difficult to execute in terms of timing. But shorting the exiting stocks could also be a profitable exercise.
Happy Investing!!
We can help. Call 0 94 8300 8300 (India)
Leave your comment with mail ID and we will answer them
OR
You can write back to us at PrajnaCapital [at] Gmail [dot] Com
---------------------------------------------
Invest in Tax Saving Mutual Funds ( ELSS Mutual Funds ) to upto Rs 1 lakh and Save tax under Section 80C.
Invest Tax Saving Mutual Funds Online
Tax Saving Mutual Funds Online
These links can be used to Purchase Mutual Funds Online that are regular also (Investment, non-tax saving)
Download Tax Saving Mutual Fund Application Forms from all AMCs
Download Tax Saving Mutual Fund Applications
These Application Forms can be used for buying regular mutual funds also
Some of the best Tax Saving Mutual Funds available ( ELSS Mutual Funds )
- ICICI Prudential Tax PlanInvest Online
- HDFC TaxSaverInvest Online
- DSP BlackRock Tax Saver FundInvest Online
- Reliance Tax Saver (ELSS) FundInvest Online
- Birla Sun Life Tax Relief '96 Invest Online
- IDFC Tax Advantage (ELSS) FundInvest Online
- SBI Magnum Tax Gain Scheme 1993Invest Online
- Sundaram Tax SaverInvest Online
- Edelweiss ELSS Invest Online
Best Performing Mutual Funds
- Largecap Funds Invest Online
- DSP BlackRock Top 100 Fund
- ICICI Prudential Focused Blue Chip Fund
- Birla Sun Life Front Line Equity Fund
- Large and Midcap Funds Invest Online
- ICICI Prudential Dynamic Plan
- HDFC Top 200 Fund
- UTI Dividend Yield Fund
- Mid and SmallCap Funds Invest Online
- Reliance Equity Opportunities Fund
- DSP BlackRock Small & Midcap Fund
- Sundaram Select Midcap
- IDFC Premier Equity Fund
- Small and MicroCap Funds Invest Online
- DSP BlackRock MicroCap Fund
- Sector Funds Invest Online
- Reliance Banking Fund
- Reliance Banking Fund
- Tax Saver MutualFundsInvest Online
- ICICI Prudential Tax Plan
- HDFC Taxsaver
- DSP BlackRock Tax Saver Fund
- Reliance Tax Saver (ELSS) Fund
- Gold Mutual Funds Invest Online
- Relaince Gold Savings Fund
- ICICI Prudential Regular Gold Savings Fund
- HDFC Gold Fund
No comments:
Post a Comment