Shubhojit Chatterjee asks “Can you please help us to know how to trade in Sensex as we are trading through ICICI Direct and they don’t have access to NSE”.
First lets review what an indexed mutual fund is. Indexed funds are an investment vehicle that aims to replicate movements of an index of a financial market such as NSE or BSE. For Indian investors that means a fund that will do as well or as poorly as the SENSEX or Nifty. These indexed funds will own all the securities of that index. So, for SENSEX index fund that means owning shares in all 30 companies that make up the index. Its usually a computer model that drives this fund not human stock picking. This also means lower management costs and fees because its mostly automated.
For the Indian market however the indices are fairly narrow so you dont actually get to capture the broad market, but a basket of stocks. (Editorial note: you would have done well though in the last 9 months!).
Here is a list of (maybe not complete) of Index funds that track the SENSEX:
1. HDFC funds
2. Franklin India BSE Sensex Fund & Nifty fund
4. LIC MF Index Fund SENSEX & Nifty
Over the past few years funds that tracked Nifty have had a better risk / reward return (beta) than those that tracked SENSEX, since the Sensex is more volatile, and most funds that track the Sensex dont do as good a job as those that do Nifty.
Filed under: Uncategorized | Tagged: Franklin India Fund, HDFC Funds, Index fund, Indexed Fund, LIC funds, Mutual Fund, Nifty, SENSEX, Tata funds, UTI Funds
Hi,
u write abt mutual fund and a lot of overall market related stuff. how about mentioning the doings of the market.. one such eg being RPL.
RPL under SEBI Scanner.. the drop from 290 to 195 has been completely operated. thats the news all over.. check this link of financial express and live mint
http://www.financialexpress.com/news/Smart-operators-in-RPL-futures-make-a-cool-Rs-1-000-cr/244312/
Between November 1 and November 6, 2007, a particular group made short sales of 10crore shares of Reliance Petroleum in the futures segment of National Stock Exchange costing Rs.3,000 crores approximately. they made a cool Rs 1,000 crores in less than a month, because the Reliance Petroleum shares have now crashed from Rs.295 to Rs 195 per share!. These guys have made Rs.100 per share.
isnt it ironic that someone knew that RIL was going to sell a huge quantity of shares and the prices were bound to come down?
My 2nd question is Who financed these traders for their margins? Where has this profit gone? and who bore the loss???
Its innocent small investors who bought Reliance Petroleum shares at the high prices, not knowing that this unholy alliance was indulging in insider trading and making illegal profits while Mukesh Ambani’s own company RIL was selling shares without disclosing this to investors!!
Hi Everyone.
Your blog is nice and informative. We think your visitors will like this posting.
We all know that Indian stock market has become volatile now a days. One day its going up and another day its coming down. So we all should like to know
what is the reason for it.
Well We say its the game of FII how they direct the market. They have huge money with them they can direct any share as per there needs and requirement.
Now its a alarming time.
We suggest you to be very much beware now as year closing of FII is on the cards. There year closing is based on year to year basis. Not like ours i.e. March.
So many will try to invest more money and rest will try to take there profit back home. In this scenario its best to follow market trend and work with small
quantity. Just wait and watch.
Regards
SHARETIPSINFO Team
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We have some helpful sectorial analysis of some of the India mutual funds and ETFs at http://www.indiafund.net
The volatility in the Indian stock market will probably continue unabated well into the future. A diversified approach will protect investors from the risks of a single stock or sector, but investors will nonetheless be subject to these volatile markets.
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Sensex had taken 21 months to touch the 20,000 level from the 10,000 level. It took only nine months after hitting its all-time peak of 21,206.77 on January 10, 2008 to dip below 10,000 to touch more than 2 years old low.
Now Sensex is hovering in the range of 8000 to 9000. There is more pain and downside left.
Do not get trap in these interim rallies and sudden surge of 5-10% in a single day.
If you are a investor, start buying large fundamentally strong companies in 4 steps of 25% each.
Holding them for an year and above would give you substancial gains.
Cheers
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