Readings: Reliance Money Kiosks, New NSE Derivatives, FMP Risks
- Economic Times: Reliance Money to set up 10,000 kiosks by March ‘08
Reliance Money . . . would increase the number of web-enabled trading kiosks from 2,500 as of now to 10,000 by March 2008. By March 2009, the number of suck kiosks would be increased to 25,000.
. . . 90 per cent of stock trading done in India was in the form of ‘call and trade’ and only 10 per cent was through the internet.
- Ajay Shah: Derivatives on Nifty Junior and CNX-100
Over the last 10.57 years, you could have got a 21.89% return per year (not counting dividends) while paying 25 basis points to an index fund manager. Imagine that. If you use ETFs, you can replace the (big) cost of the mutual fund agent / distributor with the (small) brokerage fee.
All three indexes have high correlations. The correlation between Nifty and Junior is 0.85 while that between Nifty and CNX-100 is 0.995%. The correlation between Junior and CNX-100 is 0.893.
- DNA Money: Investing in FMPs has its risks, too
Unlike a fixed deposit where the returns are guaranteed, in case of an FMP, the return is only indicative. A mutual fund cannot guarantee returns.
Why then do mutual funds launch so many FMPs? The answer is simple - they help in asset gathering. In 2006, FMPs helped bring in Rs 89,647 crore for mutual funds. In the first four months of 2007, they have mopped up Rs 71,607 crore.
One of the ways in which FMPs have increased their indicative yields is by investing in credits that are not in the highest safety category.
Related Posts:
January 14th, 2008 at 5:59 pm
Reliance money office Sector 50 persons are trying to befool the customers. The applicants who have applied for openeing Demat a/c before 1 month have not been issued the DP number.
The guys who have collected the applications are now not taking the calls from Customer.