Some Good Mutual Funds

It all depends on your investment time frame and your financial position on where you should invest and how much. Anyway going by a thumb rule created by me., the "Must Have" funds in any portfolio is given by me. You can choose any of them or rather invest in all the funds.

Birla Sunlife Equity Fund
DSPML World Gold Fund
Fidelity Equity Fund
Franklin Templeton Prima Plus
HDFC Prudence Fund
HDFC Top 200 Fund
JM Contra Fund
Kotak K30
Lotus India Agile Fund
Principal Personal Tax Saver
Reliance Growth Fund
SBI MAgnum Comma fund
Sundaram Capex Fund
Tata Infrastructure Fund


Best of luck.

Another Big Dividend from Personal Tax Saver!

Dear all,

Great News!!!

200% dividend declared in Principal Personal Taxsaver.

the dividend record date is Tue, 26 Feb.

The NAV as of 21.2.08 is Rs. 172.13

The Dividend Yield works out to 11.6%

The performance of the scheme is also Superb

1 Year - 45.48%
3 Year - 40.78%
5 Year - 46.52%

(Returns as on 21.2.08. All Returns in CAGR)


If you remember the fund has declared dividend 2 times in last 3 months of 110% each.

Best of luck

Puravankara Projects - BUY
Though a laggard since listing, Investors with a 3 year view can consider accumulating Puravankara at these levels. The high earnings visibility from its current and planned projects may well provide an upside in the long term. Further, a strong track record of real-estate development, low-cost land bank, more transparent transactions and steady growth in revenue over the last five years are positives.
With a track record of having developed a sizeable area (without having to depend solely on the land bank to discover valuations), I believe there will be a bump in the stock price around the announcement of its annual results.

The company

Puravankara is a real-estate developer with a majority of projects executed in Bangalore. The company’s core business lies in the residential segment with diversification into commercial projects. The company recently raised money in IPO which it plans to deploy the proceeds towards acquisition of land in Tamil Nadu and repayment of debt. While the company is competing with bigger (in terms of turnover) players in this market-cap segment, there appears considerable scope for quickly ramping up revenue.

Comfortable past

Puravankara’s track record of executing 14 residential projects and a commercial one, spanning 3.93 million sq ft of developable area, is proof of its execution capability.


Further, it appears that the company has been benefiting from identifying low-cost land, ahead of the property market. That its land cost, as a proportion of total expenditure, has fallen from 24 per cent in 2004 to 6.4 per cent in 2007, reflects that the company has benefited from the boom in land prices over the last couple of years. Such a sharp decline in land cost also indicates that the company has been able to identify land at the right location and at the right time.

Going by its history and the current land holding, the company appears to prefer locations in cities and their peripheries. We believe that this strategy is relatively less risky as the demand for residential and commercial space is likely to remain robust in such areas. Corrections, if any, are also likely to be less sharp compared to smaller towns. Puravankara, therefore, appears to have a lower risk profile than similar-size peers which are aggressively moving to Tier-II and III cities.

Clean structure

Puravankara’s land holding appears to be structurally superior to a number of real-estate companies. The holding pattern also appears less complex and reflects better clarity in ownership. Of the developable area of 116 million sq ft, 14 million sq ft has ongoing projects in them.

Of the total land, 65 per cent is owned by the company; only 6 per cent of the land is on sole development rights where the title lies with the owner and the company gets only the development rights. The above proportion reduces the risk of any stalling of projects by landowners, who retain the title to the land. Even in the case of joint development projects, the company has stated that its economic interest in the same would be in the 60-77.5 per cent range. This percentage appears to be land owner (who is typically the joint developer) friendly, striking mutual benefit.

The consideration for the above-mentioned land at Rs 795 crore is mostly paid, about 11 per cent remains outstanding.

Given that it has locked into land costs, the company may benefit from appreciation, as the land bank, going by its size, may last six-eight years.

Strength in joint venture

In 2005, Puravankara entered into a joint venture with a subsidiary of the Singapore-based Keppel Land, in which the Singapore Government’s investment arm, Temasek Holdings, has an indirect holding. Keppel Land has a presence across Singapore, China, Indonesia and Vietnam. While this joint venture is likely to improve the company’s execution capability, Puravankara has also been cautious in not exposing more than 7 per cent of its total developable area through this strategy. This venture may give Puravankara a presence in the overseas markets as well. Besides, the company has an ongoing project in Sri Lanka and an office in West Asia. Nevertheless, the venture has its risks, as the agreement does not preclude the venture partners from competing with each other.

The spread

With Bangalore being Puravankara’s strong point, the company continues to have 72 per cent of its developable area in this city. The company has also cautiously taken smaller exposure to land in Kochi and Chennai, Mysore and Hyderabad among other locations.

The demand from the middle- and upper middle-income group, to which Puravankara primarily caters to, is fairly robust in the above locations. Any correction in the now infrastructure constrained Bangalore is unlikely to dent the company’s profitability margins much, as the land is spread across the city and its outer limits. Further, the volume in the above income group segment is likely to provide some insulation to margins.

Strong financials

Puravankara’s revenue has grown at an annual rate of 75 per cent over the past three years, to Rs 417 crore in 2006-07. Operating profit margin at 32 per cent have remained stable over the past four years.

While there was scope for improvement in OPMs, with the land cost having reduced over the years, increasing construction costs appears to have prevented further growth. The margins are nevertheless above industry average.

The company which had a high gear of over 3 regarding debt-equity, is now having a more comfortable ratio of 1 after the IPO.
The soft interest rate scenario will only add to the profits of the company. So, what are you waiting for?

Best of luck.

Reliance Power Bonus Share Issue

The issue of bonus shares is nothing but a gimmick. Bonus is given on fundamentals not on emotion. Free bonus shares ultimately increse the number of share without increasing net worth of the company and hence will decrease the market price of the share further. What kind of compensation is this for investors.it is not a fair practice for company coming with ipo higher price than realising mistakes and to improve image for future issues giving bonus to eye wash investors and capital market.

Why only Mutual fund is targeted by SEBI?

It is becoming a menace to apply for KYC all over again after all the drama over MAPIN., UIN, etc. Isn't Pan Card enough?.
And my question, why is the Mutual Fund industry targeted only?. You dont need a Pan card for Insurance, even for a Ulip!, they why only Mutual Funds. And now, not just Pan card, but also you have to get a KYC done....!. Ha, it clearly shows that Damodaran of SEBI is baised towards Insurance and dead against Mutual Funds. The Insurance Lobby is strong and our Mutual Fund Lobby is eating nuts instead of fighting against this discrimination by SEBI.
See the SEBI has made KYC compulsory for investments above 50000 and also removed the Entry Load for Direct Investments. Now My question is, why not the same treatment for Insurance., Why not have a KYC for Insurance investments and why not remove the premium for Insurance for Direct Investments. I mean why not give the 25% commission the Insurance agent is given to the Ulip investor. Why are after the pittance of 2.25% commission given to the Mutual Fund Investor. Mr.Damodaran., are you listening?


I think no., he is busy listening to the Insurance Lobby on how to make life more miserable to the Mutual Fund Industry.

ULIP is a Debt Trap

A far as investment in equity markets are concerned, ULIPs should be discarded in the first thought because the equity-unit-linked creates all the confusion and innocent people fall prey.


In the first year, the overhead charges are around 25-30 per cent of the premium paid up in the first year. There is an entry load for the fund, typically around 5 per cent, and management fees or policy administration charges of around 1.5 per cent. Mortality charges, or insurance premiums, are deducted every year, which essentially covers your life. In case of any eventuality, your family gets the insurance amount.

In the first year, the agents get a higher commission paid through the overhead charges, which is the centre point of the debate. The next year, the overhead charges come down between 10 and 7.5 per cent, and from the fourth year onwards, it is 5 per cent. Fund management charges remain static.

As long as there are funds in your account to pay for the premium, your life is covered. If the unit value falls the next year to an extent they don't cover your insurance, you might be told to pay up the insurance premium, or your cover could lapse. Another thing, investments and insurance, they say, should be separated. They offer no guarantee unlike traditional plans which offer 6-10 per cent returns.

Many agents don't dwell on the various charges year on year. Clients are usually told that withdrawals are permitted from the third year onwards and the annual premiums will be taken care by the corpus in the fund. What they don't say is that if there are insufficient funds for payment towards mortality charges, the insurance cover lapses.

A small calculation by any layman will clearly show the loss in ULIPs as compared to mutual funds.

Timing in the Stock Markets

Timing is not important but Time is!. The longer your investment horizon is, the higher your profit should be. Because there is no alternative to equity over a longer period in terms of returns. And what better way than to invest via SIP. The following are my recommendations which my analysis says will give above market returns. These recommendations are a mix of diversified, sector, balanced funds which are recommended with the assumption that you have a long time horizon, i.e., at least 3-5 years.


1. BIRLA SUNLIFE EQUITY FUND
2. DSPML TIGER FUND
3. DSPML WORLD GOLD FUND'
4. FRANKLIN TEMPLETON PRIMA PLUS
5. HDFC TOP 200 FUND
6. LOTUS INDIA AGILE FUND
7. JM CONTRA FUND
8. RELIANCE NATURAL RESOURCES FUND
9. SBI MAGNUM COMMA FUND
10. SBI MAGNUM BALANCED FUND

BEST OF LUCK TO YOU

Mobile as calculator?

Mobile phone as a calculator? Insurance as an investment vehicle?

How many of you would use a mobile phone predominantly as a calculator? I guess, not many. In fact, you would look at me curiously as to why I am asking such a silly question, and whether there would be anyone in this world who would answer in the affirmative. If I were to offer a phone that had no SMS or address book facility, but a scientific calculator functionality attached, how many would buy it? Surprisingly, in the world of financial products and services, this is exactly what many unwary customers end up doing.

Here is how it happens. Assume the margin for the distributor in selling calculators were ten times that of selling mobiles phones. What would he do in such a case? Most likely, he would only sell phones that had a calculator feature attached – whether or not the customer wanted it. He would wax eloquent about the advanced nature of the calculation facility, glossing over the lack of basic mobile phone related features, or the fact that a ‘simple’ mobile phone costs only a fifth of this ‘special’ phone. Only if a knowledgeable customer insists, would he even show her the ‘simple’ and effective, fairly priced phone. Such a customer would know that there are several good standalone calculator brands for her to choose from, should she need one.

Transfer to the world of financial services. We all know we need life insurance, much as we have now come to need mobile phones. Now, life insurance in itself is a complete product, where the company takes a premium from the customer, and pays a lump sum to the family in the unfortunate event of the customer’s demise. Almost every single life insurance company has this insurance scheme – which is called a ‘term plan’. But for the distributor or insurance agent, this is not where the juice is!

The high margin business for an agent is what is called ULIP, or unit linked insurance plan. Here, investment is the ‘calculator’ of our analogy, the red herring thrown in to confuse the customer. The agent would sell ULIP as a great investment plan, which also provides insurance. Never mind, that it only provides lip service to insurance, just as a phone without SMS or address book would be useless as a mobile phone! Also, never mind that there are several much better investment plans available in the market (like good scientific calculators) at a much lower price than the ULIP.

An unwary customer would be subjected to a barrage of ‘features’ and ‘benefits’, without educating her on the real costs extracted by the company and distributor in providing these features. She would be shown unrealistic projections and growth rates of her corpus. The blatant falsehoods in many of these claims would come forth only years later, by which time the agent would have long gone. The main objective of insurance, which is what the plan is meant for, would typically be given a go-by. Worse, customers are often given insurance covers that are ridiculously low; after which she comes to live in the false security that her family is provided for.

	Life cover	Costs of investment management
ULIP vs. term insurance	ULIP provides very low life cover (for a given premium). Choose term cover of 10-12 times income using a term policy	---
ULIP vs. mutual fund	---	15% - 30% initially in case of ULIPs. 2% - 2.25% in case of mutual funds

There is no breach of the law here. It is the customer who has the responsibility of reading the fine print and being knowledgeable about various products and associated costs. The distributor would only work to maximize his income; the customer should try and protect her interests. Thus, if she goes to a mobile store (insurance), then might as well buy a simple and effective mobile phone (term insurance policy at competitive rates). It is worth going to the adjacent shop (electronics) to buy the calculator with desired features (the investment plan). An agent who claims to fill both spaces through his product, only ends up filling his own coffers instead, at the cost of the customer.

True Facts about Money Back Policy

Your "Money-Back"or " Your-Money" Back Policy?

There is a great joy in receiving money and if it comes on its own, we feel elated! Whether what we received was already rightfully our own, becomes secondary to the pleasure of the receipt. Insurance companies and dividend- distributing mutual funds make use of this feeling of joy to innovate products that appeal psychologically rather than financially to the consumer. Let us take the case of money back insurance policies today.

A friend of mine called me to celebrate the first birthday of his kid and proudly told me that he has become a good father for this kid, at least financially. Further probing revealed that he had purchased a children‘s endowment policy with a money back option. He was happy that his son would get Rs. 50 lakh at the age of 24, which will finance his higher education.

"And do you know what the best thing is", he continued, "I will start getting back money from the insurance company! The starting premium is Rs. 126,321 (Rs. 123,150 as investment and Rs. 3,171 as payor rider premium) which reduces from 4th year onwards such that I get back Rs. 39,500 in the last year of the policy!"

Is it really good?

IRDA guidelines require that all illustrations shown by insurance companies show returns of 6% and 10% p.a. on a non-volatile basis. We will look at the "guaranteed" and the 10% returns only. Note, however, that the 10% return is highly unlikely given that the company will invest -by the design and the bye-laws of the policy - in government and secure securities.

The company is guaranteeing my friend an annual return of 4% p.a. To calculate this number, you need to calculate the IRR of the series of 24 payments of Rs. 123,150 (without payor rider premium) every year for a guaranteed value of Rs. 50 lakhs.

Now let us look at the money back part of the policy: The company says that if it makes profits on the policies it sells or on the investment it makes, it will share it with the policy holder. Assuming the 10% return, the company expects a schedule as shown in the exhibit. The company declares a bonus, which is netted off against the premium payable by the investor. Hence, in the year 3, when the bonus of Rs. 23,050 is announced, the premium for the next year is reduced by that amount. Given that we do not know how much bonus the company will declare, the premium every year will be a fluctuating number.

Now note IRR or the implied internal rate of return when the insurance company is "earning 10%". The IRR in this case works out to 7.19%, which is lower than 10% due to adjustment of "payor rider premium" , company administration charges, agent‘s commission, etc. Note that this is lower than the return from PPF, which has an implied IRR of 8%.

The interesting part of the policy is the payor rider which waives the premium in case some unfortunate event happens to my friend. Note that there is no separate life cover in this policy. However, if my friend were to take a term life cover for himself, then even if something were to happen to him, his son would get the sum assured right upfront, which he can invest such that the amount grows till the time he reaches 24.

Let us evaluate the policy:

Life cover: There is no life cover in case anything happens to my friend during the tenure of the policy. However, since he has taken a "payor rider", the premiums on this policy will be waived if something were to happen to him, such that his son will still get the money at the specified years.

Inflation: Let us look at what the amount of Rs. 50 lakh will mean to his son when he reaches the age of 24. Note that education costs rise far more quickly than the general inflation: we see that anecdotally as well as there is documented literature to show that education costs can rise by almost 1.5 times the normal inflation. Assuming a 6% normal inflation, education costs will possibly rise by 9% year on year. Hence, 23 years from now, the Rs. 50 lakh will be valued at only Rs. 6.9 lakhs (i.e. Rs. 50 lakhs/(1.09^23)) in today‘s terms. I asked my friend to think about what degrees his son can possibly acquire with this type of money today.

Returns: "There is a guaranteed return" - something that mutual funds don‘ t promise me" , said my friend. "I understand that the returns guaranteed are only 4%, but still I know for sure that I will make that return." At such low rates of return, you are actually eroding your capital!

Tax benefits: whether you invest in an insurance policy or invest in a PPF / ELSS scheme, the tax benefits are similar and the amounts are received tax free in the hands of the individual.

What is a better option?

Consider getting a term insurance (for a 30 year male, a Rs. 50 lakh cover should cost around Rs. 15,000 a year). Ideally my friend should invest the remaining amount of Rs 111,321 per year into PPF, but current regulations do not allow an individual to invest more than Rs 70,000 per annum into a single PPF account. What can be done is that my friend can invest another Rs 30,000 per annum into a PPF account opened in his wife‘s name. Doing this will allow him to claim the maximum benefit of Rs 1 lakh under Section 80 C. After 23 years, this investment of Rs 1 lakh per annum will amount to Rs. 6576476 which is higher than what the insurance company promises - and yes, all of this is tax free! So we see that by investing an amount of Rs 115,000 per annum (Rs 100,000 towards PPF + Rs 15,000 towards term insurance), which is around Rs 11,000 lesser than the premium being paid in case of the money back policy, he can build a greater corpus. Also, if something unfortunate were to happen to my friend in the meanwhile, then his son still gets the Rs. 50 lakh life cover, which can be invested on his behalf for a bigger corpus.

Un-bundle insurance and investments: This should be your guiding mantra in almost every financial decision involving insurance and investment. Else you will end up with a policy where your own money is returned to you as "money back"!

Life Insurance

Life Insurance - How much ?

Most of us are aware of the need for life insurance cover to secure financial needs of the family. Earlier, given the lack of choice of financial assets to invest in, one of the first financial commitments an individual would get into would be an LIC policy for his dependents. Since then, the insurance landscape has changed quite significantly - both on the supply side in terms of the number and nature of policies on offer, and on the demand side with both partners in the family often working and being fairly independent financially. It is the latter aspect that we deal with in this article. This demand side situation has implications on the amount of cover an individual would need to go for.

Most insurance agents and some write-ups advocate a multiple-of-income approach. For instance - a cover of 10 times annual income. While it is no one’s case that insurance cover required can be computed accurately to the last decimal (like, say, tax liability), we believe this simplistic approach is too gross an approximation and neglects some important variables that could significantly impact cover requirement. For instance, for similar income, the sole bread-winner of a family of four would think about his insurance need very differently from a double-income-no-kids (DINK) couple. We advocate an approach that would take not more than 15-20 minutes to calculate a more accurate range within which the insured amount should preferably lie.

Our approach

The approach essentially consists of calculating Net Present Value (NPV) of relevant expenses and liabilities -current and those expected in future.

• Living expenses: With a working spouse, a cover of 12 months of family living expenses would often suffice. However, with a dependent family, we would have to project living expenses with 5-7% inflation for at least the next 10-15 years.

• Uncovered key milestones in next 3-5 years: Families would have several goals planned over the next 3-5 years - such as child’s education, marriage, etc. It is advisable to add any amount that is not already saved to the outstanding loan amount. The choice of 3-5 years is typically optimum. It often takes a family at least that long to overcome the financial shock of loss of a bread-winner. Also goals beyond this horizon cannot be foreseen with much clarity and often change if one of the family is not around.
• Outstanding loan values: Most loans are taken for assets that we use on a regular basis (such as house or car), which quickly become part of the family lifestyle. These are typically illiquid assets that yield much lower value on distress sale. Thus, the total of outstanding loan amount should be the another number that adds up in the total insurance requirement calculation.

For example, consider a DINK couple with dependent parents who want to move into a Rs. 40 lakh house in the next 2 years for which they expect to make an down payment of Rs. 10 lakh. Their living expenses are Rs. 50,000 per month.

The cover that the couple should take is should take into account the living expenses of their parents. At 7% inflation and 6% expected return on investment; the couple should take a cover of Rs, 90 lakh on this account. To that they should add the upcoming milestone of Rs. 10 lakh. Hence, they should take a cover of Rs. 1 crore between themselves. Typically, the ratio of the cover would be defined by the income of each individual.

After the total cover required is computed using the above method, we can net off all existing policy amounts. Here, it is again important to be cognizant of all existing insurance covers. For instance, home loans often have the insurance option at an additional cost, several employers contribute towards group insurance, many credit cards have attached life or accident cover, etc. Once this amount is known, the additional insurance to be taken can be determined.

I = (Outstanding loan amounts: prepayment value) + (Needs of 3-5 year milestones) + (NPV of 10-15 year family living expenses) - (Employer group insurance)

This approach is a quick and yet reliable way to determine life insurance requirement. There are several refinements that can be made to this - but there might be limited value in additional accuracy. For instance, outstanding loans keep diminishing as the EMIs are paid, but this is roughly compensated with increase in lifestyle. Thus, one might not need to revisit the cover every year, but only when there are significant developments in the family - such as a new loan, birth of a child, etc.

There is one exception, however, to this method of calculation - one that applies to people nearing their retirement. Here, NPV of liabilities based approach would typically overstate the insurance cover required, since the remaining earning potential would typically fall below this. Moreover, by overstating the insurance requirement, the premium needed is likely to become extremely high, since premiums increase rather sharply with age. Thus, for such a person, estimation of NPV of earning projections till retirement would be a better estimate. A prudent person should have saved the money for all his milestones prior to retirement.

Having decided the amount of insurance required, the next step is to opt for the correct scheme. Here, a Term Insurance policy is invariably economically better than a Unit Linked Insurance Plan, Endowment Plan or a Money Back Policy. We, however, leave a detailed comparison of these options out of the scope of this article.

Say NO to ULIP. Here's why! Part 2

Stay Away From ULIPs

By Research Desk | Jan 31, 2008 | Email article to a friend | Tell us what you think of this website

Does it not make sense to invest in a ULIP? After all it gives the benefit of investing along with an insurance cover. Our views on mixing insurance and investment can be summed in two words: DON'T EVER! The lure of Unit Linked Insurance Plans (ULIPs) is in its convenience - it combines insurance with investment. But what may appear as convenient may not make sound investment sense. A common misconception is that the entire amount you pay is invested by the insurance company. Not so. From the premium paid, the insurer deducts charges towards life insurance (mortality charges), administration expenses and fund management fees. So only the balance amount is invested. Also, ULIPs have very high first year charges towards acquisition (including agents commissions). In order to evaluate the return generated by a ULIP, you need to take into consideration only that portion of the premium that is invested in a fund. This information is not easy to come by. You will not know which stocks the fund manager has invested in, which sectors he is betting on, how concentrated his portfolio is and how it appears at any point in time. Neither are you aware of his stock picking capability and how strong his research team is (if he has one). You must be able to compare the returns with similar products in the market. Also, with a ULIP, you have to block your money for long periods of time. So you sacrifice on transparency and liquidity. For the tax benefit, opt for an ELSS. Here too you get benefit under Section 80C and the investment is locked only for three-years. If you have already invested in a ULIP, you might as well stick it out. Because all the charges, which could be as high as 60 per cent in the first year, begin to taper from the fourth year onwards. So you will have to stick on for at least 10 - 15 years to make sure you get a decent return on your investment. The high costs, difficulty in evaluation, lack of transparency and low liquidity don't make a ULIP a sound avenue to put one's money. Its the agents who benefit most since commissions can go up to 25 per cent. Insurance should never be an investment.

Stopping your old SIPs just to avoid 2.25% is foolish on your part. You missed investing during weak markets.
Remember, it is your agent who does all the legwork for you. And if you have any post allotment problems like Statement not recd, dividend not recd, will you leave your work and go to each AMC just for this sake?. Then what happened to your saving of 2.25%?
And why crib when you are getting returns of more than 50%?. See when you are ready to give 10% commission to your insurance agent and more than 25% commission to your ULIP agent., you should not be so stingy and hyper about a pittance of 2.25% commission.

My clients are mostly tech savvy. They can invest directly through the net. But they prefer to invest through me. Do you know why?. Because, they know that they are getting quality advice. Just tell me how much you have earned. Do you know.... my clients have earned upwards of 50% annualised returns even in this weak markets?!!!!. That's the power of good advice.

Because the markets were bullish, you could buy any crap and make money. Let the market be bearish, then you will know your capacity to make good judgements and then you will be forced to come back to quality advisors like me. Think again.
The mutual fund advisors get 2.25% which is a pittance, for they give quality advice and do all the legwork for you and follow up also.

Think again.

Best of luck

Gold ETFs

Even though there are 4-5 Gold ETFs available in the market, my suggestion would be that you are better off investing in DSPML World Gold Fund. This fund invests in stocks of Gold companies worldwide through Merill Lynch World Gold Fund. And believe it or not, it has given double the returns than that of GOLD. And since its launch in India, around 4 months it has given a Compounded Return of 102%. Can you ask for anything more?. Just see, gives the protection of gold and gives returns MORE than Gold. You just cant ignore DSPML World Gold Fund. It is a must in everyone's portfolio

Best of luck

Small and Mid cap fund

I feel you can invest in JP Morgan Smaller cos Fund. Even though it a new fund, I feel their way of investing is definitely good for long term gains. Alternatively you can look at DSP ML Small and Mid cap fund. If investing in NFOs is not an issue, there 3 fund right now open for investment namely Lotus Small and Mid cap fund, Standard Chartered Small and Mid cap fund and HSBC Small Cap fund. Of the three, I personally that the Standard Chartered Small n Mid cap fund will be an outperformer.
Best of luck

variety of invstments

Never compare financial products without a specific client, needs in mind. A client who is ready for risk, and not afraid of medium term volatility should definitely look at equity mutual funds., just saying that stock markets are risky is a hasty decision to make. There is always a Balanced Fund, and even a Mip plans with 15% equity exposure., these are definitely giving better returns than your ppf, insurance, bank deposits.

think again

Say NO to ULIP. Here's why!

Does it not make sense to invest in a ULIP? After all it gives the benefit of investing along with an insurance cover.

Our views on mixing insurance and investment can be summed in two words: DON'T EVER! The lure of Unit Linked Insurance Plans (ULIPs) is in its convenience - it combines insurance with investment. But what may appear as convenient may not make sound investment sense.

A common misconception is that the entire amount you pay is invested by the insurance company. Not so. From the premium paid, the insurer deducts charges towards life insurance (mortality charges), administration expenses and fund management fees. So only the balance amount is invested. Also, ULIPs have very high first year charges towards acquisition (including agents commissions). In order to evaluate the return generated by a ULIP, you need to take into consideration only that portion of the premium that is invested in a fund. This information is not easy to come by.

You will not know which stocks the fund manager has invested in, which sectors he is betting on, how concentrated his portfolio is and how it appears at any point in time. Neither are you aware of his stock picking capability and how strong his research team is (if he has one).

You must be able to compare the returns with similar products in the market. Also, with a ULIP, you have to block your money for long periods of time. So you sacrifice on transparency and liquidity.

For the tax benefit, opt for an ELSS. Here too you get benefit under Section 80C and the investment is locked only for three-years.

If you have already invested in a ULIP, you might as well stick it out. Because all the charges, which could be as high as 60 per cent in the first year, begin to taper from the fourth year onwards. So you will have to stick on for at least 10 - 15 years to make sure you get a decent return on your investment.

The high costs, difficulty in evaluation, lack of transparency and low liquidity don't make a ULIP a sound avenue to put one's money. Its the agents who benefit most since commissions can go up to 25 per cent. Insurance should never be an investment.