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optimistic about
economy, but
there is hope
P14
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BEFORE YOU
SELL A FUND
Worried by the volatility, many investors plan to redeem their
mutual funds. Answer a few questions before you do so. P2

Investors, be Instead of PE, Why all credit Can we fix

ready for poor look at PEG while risk funds are not the rot in the
Q2 numbers picking stocks bad investments system?
P8 P10 P12 P16
 cover story
02 The Economic Times Wealth October 14-20, 2019

BEFORE
YOU
SELL A
FUND
Investors who plan to redeem their funds
must ask themselves these questions.
Why
By Sanket Dhanorkar

T
he past few months have not been very encouraging for stock inves-
tors. After some relief from the 3,000 point rally in the Sensex follow-
ing the cut in the corporate tax rate, the index is tottering once again.
Even mutual fund investors, who had almost begun to think that
their money will only grow, are feeling the pinch. SIPs started a few
years ago are in the red, prompting many investors to redeem funds at a loss.
Are you also thinking of throwing in the towel? Before you press the sell
button, analyse the reasons behind your decision. Investors spend a lot of time
identifying the best fund, but withdrawals are usually knee-jerk decisions.
Investors succumb to the vagaries of the market and dump their holdings at
the wrong time. “Moving out during a downturn is one of the biggest mistakes
investors make,” says Prableen Bajpai, Managing Partner, FinFix Research &
Analytics. Exiting prematurely can lead to shortfalls in financial goals. In this
week’s cover story, we help investors make the right decision. If you are plan-
ning to sell a fund, ask yourself six simple questions. The answers will help you
figure out whether an exit is the right thing to do at that time.

Asset allocation changes over time

If allocation was initially 50-50 in debt and equity, this is how the mix
would have changed due to differential returns over the past 12 years.

Equity allocation & yearly returns (%) Debt allocation & yearly returns (%)

2008 31 -50.63 69 8.81

2009 43 72.48 57 3.58

2010 46 17.7 54 4.9

2011 37 -24.7 63 6.9

2012 41 28.3 59 9.6

2013 42 5.9 58 3.6

2014 45 31.5 55 14.3

2015 42 -3.9 58 8.7

ILLUSTRATION: ANIRBAN BORA

2016 40 2.7 60 12.8

2017 45 27.6 55 4.7

2018 44 4.5 56 5.7

2019 44 5.5 56 8.4

Nifty 50 index returns used for equity, Crisil Composite Bond index returns for debt;
Returns for 2019 are up to 27 Sept Compiled by ETIG Database
 cover story
The Economic Times Wealth October 14-20, 2019 03

Vaibhavi Pawar
32, Mumbai
Started investing in equity
funds in June this year. She
invests `11,500 a month
in five equity funds for her
son Raghav’s education
and her retirement.
Though all of the funds

is your asset are in the red due to the

market correction, this IT

allocation?
professional is not worried.
Not only does she hold
some good funds, but the
s a first step, check the total exposure of equity exposure is less than

A your investment portfolio to equity. The

key to wealth creation is disciplined asset
allocation, says Nilesh Shah, Managing Director
5% of the total investment
portfolio. Moreover, she
has taken the SIP route,
of Kotak Mutual Fund. “If the market movements which reduces the risk
have changed the asset allocation significantly, one significantly.
should take a call to sell or buy,” he adds. In other
words, exit from your equity funds only if the allo-
cation to equity has exceeded the desired level. But
if the equity allocation is already much below what
it should be, then selling won’t make much sense.
Vaibhavi Pawar (see picture) has less than 5% expo-
sure to equities. This is why she is not overly wor- “I am new to
ried that her equity fund SIPs are in the red. equity funds
What is the ideal allocation to equities? There is
no fixed number and depends on the individual’s and the decline
risk profile. Financial planners say one should
rebalance the portfolio after a big market move
was initially
or once a year, whichever happens earlier. If you worrisome. But
can’t do this on your own, go for dynamic funds.
“Asset allocation-based funds prove helpful as they
I will continue
automatically take out or invest money at the right investing because
time,” asserts Sankaran Naren, Executive Director
and CIO-Equity, ICICI Prudential Mutual Fund.
my allocation to
equity is below the
desired level.”

NITIN SONAWANE

do you need
the money?
he asset allocation is linked to the time avail-

T able. If the goal is more than 5-7 years away, a

tilt towards equity is recommended given its
potential to create wealth in the long term. A near-
term correction should not bother you. Markets
are inherently volatile but the ups and downs
normalise over several years. In fact, the SIP route
helps you make the most of these gyrations. Puneet Puneet Saxena 36, Jaipur
Saxena’s (see picture) goals are over 20 years away.
Investing on and off in equity funds for
So, he sees the correction as an opportunity.
several years, but started regular SIPs in
However, if the goal is 2-3 years away, a higher
exposure to equities can put the corpus at risk. If the
equity and hybrid funds two years ago. He
markets dip very close to the finish line, it can leave invests `30,000 a month for his daughter’s
you significantly short of the required corpus. To higher education and his retirement. Though
avoid this, investors should cut allocation to equity his SIPs had earned good returns till last
as the goal approaches. “A gradual exit from equity year, the correction has wiped off those
funds ensures that the returns earned over the gains. But he plans to continue because his
years are not eroded if markets crash close to the goals are more than 20 years away.
goal date,” asserts Bajpai.
 cover story
04 The Economic Times Wealth October 14-20, 2019

has your fund Weed out consistent underperformers

These funds have underperformed their benchmark indices for past three years.

performed? SCHEME NAME CATEGORY

Underperformed benchmark by (%)
2017 2018 2019
a scheme may call for an exit,” says Bajpai.
“However, switch only if the fund under- Reliance Vision Large & midcap 26.5 11.5 0.4
performs for at least 6-8 quarters,” she UTI Core Equity Large & midcap 21.9 4.8 2.3
adds. Retired PSU manager T. Joseph (see
picture) is saddled with an underperform- Franklin India Bluechip Large cap 11.5 6.7 6.3
oor performance by a fund is a good ing fund and needs to get out.

P reason to sell it. But keep in mind that

when the broader market is down, no
fund can escape a decline. When assessing
Even when a fund underperforms over
a slightly longer time horizon, it may not
always call for an exit. If your fund keeps
Taurus Starshare (Multi Cap)
HSBC Multi Cap Equity
Aditya Birla SL Equity Adv
Multicap
Multicap
Large & midcap
15.3
8.6
9.0
5.9
10.6
12.0
2.7
3.9
1.8
a fund’s performance, check how other delivering the threshold return required
funds in the category have done. Don’t to generate your target corpus, there is no BOI Axa Large & Mid Cap Equity Large & midcap 9.1 12.6 0.1
limit the comparison to a short time frame. need to switch. “Consistency in return is L&T Large & Midcap Large & midcap 7.1 11.3 3.2
Check the performance over 2-3 years, more important than targeting highest re-
covering a longer stretch of the market turns,” asserts Ankur Maheshwari, CEO, Franklin India Equity Multicap 14.0 3.2 4.4
cycle. If the fund has consistently under- Equirus Wealth Management. Other funds Invesco India Multicap Multicap 9.5 8.9 1.7
performed its benchmark index or peers may be doing better but if the 12% deliv-
for the past few years, then a switch is war- ered by your fund is sufficient to build the
Returns for 2019 are up to 27 Sept
ranted. “Consistent underperformance of desired kitty, there is no need to change.

T. Joseph, 60, Delhi

When he retired two years ago, he
was advised to invest a chunk of his
retirement benefits in three hybrid
funds and start SIPs in four equity
funds. His goal is to save `35 lakh to
buy a house in his hometown. Only
two of the hybrid funds have given
positive returns, while one is deep
in the red following defaults in debt
investments. SIPs are also in losses.

your goals
changed?
here are times when the goal for “Investing a large
T which an investment was made
change. A major change in circum-
stances may alter the time horizon or tar-
sum into equity-
linked funds at one
geted corpus of the goal. Someone may be
planning to purchase a bigger house after go was a mistake. I
7-8 years. An addition in the family or aged
parents moving in may call for a larger
should have taken
living space immediately, advancing the the SIP route
purchase timeline to within the next few
months. This may require the investor to
instead. Also, the
change his investment strategy and even choice of fund was
tweak the asset allocation. He will have
to sell the equity funds, since the goal is
not good.”
now only a few months away. “Any shift ASHWANI NAGPAL
in the goal that necessitates a change in
asset allocation may also call for an exit
from the fund,” says Radhika Gupta, CEO,
Edelweiss Mutual Fund. ome investors seek safety in numbers. portfolio. Their contribution will be diluted
The reverse is also true. If one is saving
to buy a house in 2-3 years, debt funds are
the best option. “But if he postpones it by
S Others simply keep buying the latest
table-toppers. Eventually, their port-
folios become heady cocktails that are too
by the slackers. “Having more than 5-6 equi-
ty funds, for instance, doesn’t add any value,”
says Gupta.
4-5 years, the investor should switch to hy- unwieldy to monitor. This is another reason Besides, a large number of funds are more
brid or equity funds,” advises Deepti Goel, to sell funds because too many schemes difficult to keep track of. A cleanup is a must
Associate Partner, Alpha Capital. do more harm than good. As you add more if your portfolio has grown unwieldy over
Funds will also have to be switched if the funds to your portfolio, it only leads to dupli- time. If you have a messy portfolio of funds,
target corpus has changed. For instance,
one may have invested in equity funds to
accumulate a hefty corpus for a child’s
you have cation. You end up buying the same stocks
through other funds, defeating the whole
diversification principle. “You are likely
it may be time to prune some holdings and
consolidate. But don’t start dumping funds
blindly. Prune your portfolio in a way that
education in a top B-school abroad. But if
the child decides to opt for a different pro-
gramme in a local institute, the required
too many to end up owning the same set of stocks by
investing across 3-4 large cap funds,” says
Maheshwari.
aligns with the desired asset allocation while
keeping your broader investment goals in
mind. Identify funds that are similar to each
corpus will be much lower. The investor
can sell off some equity funds. funds? In fact, diversifying beyond a point may
take the bite out of the winners in your fund
other. If you hold 3-4 large-cap equity funds,
it might make sense to get rid of 2-3.

your fund
changed?
t times, exiting a fund may have noth-
A ing to do with the fund’s performance
or overall market behaviour. Many
funds have new investment mandates or
have been merged with other schemes.
This has changed the nature of these funds
and could be a compelling reason to exit.
A change in mandate may be particularly
troublesome if the new positioning changes
the fund’s risk profile or doesn’t align with
Several large-cap funds saw their mandates change in 2018
A change in mandate means the new fund may not match the returns expectation or risk profile of the investor.
EARLIER SCHEME NAME
Aditya Birla SL Top 100 Equity
HDFC Growth
HDFC Large Cap
ICICI Prudential Top 100
Invesco India Growth
Kotak Classic Equity
Principal Large Cap
SBI Magnum Equity
UTI Opportunities
UTI Top 100
your needs anymore. Gupta argues, “An
exit may be warranted provided there is
a material change in the character of the
fund.” Similarly, investors may recon-
sider their continuation in a fund that is
absorbed by another scheme running a
distinct mandate.
A fund manager’s exit may also prompt
you to consider selling a fund. However, a
change at the helm should not be a blind
cover story
The Economic Times Wealth October 14-20, 2019 05
NEW SCHEME NAME NEW CATEGORY
Aditya Birla SL Focused Equity Focused
HDFC Balanced Advantage Hybrid - Balanced Advantage
HDFC Growth Opportunities Large & Mid Cap
ICICI Prduential Large & Mid Cap Large & Mid Cap
Invesco India Growth Opportunities Large & Mid Cap
Kotak India EQ Contra Contra
Principal Focused Multicap
SBI Magnum Equity ESG
Focused
Thematic
UTI Value Opportunities
UTI Core Equity
Value
Large & Mid Cap
reason for dumping a fund. Even if a star driver of the fund’s track record is the
manager leaves a fund house, you should
ideally give some time to the incoming
fund manager to prove his credentials.
individual behind it. Another fund man-
ager may also bring an entirely different
style to managing the fund,” points out
he may turn out to be even better than the Maheshwari.
outgoing fund manager.
An exit may be justified only if the fund
relied excessively on the skills of the indi- Please send your feedback to
vidual, without having proper investment etwealth@timesgroup.com
processes in place. “At times, the main
 mutual fund
06 The Economic Times Wealth October 14-20, 2019

Worried by market volatility?

These funds help control risk
Equity savings funds and dynamic equity schemes are less volatile than regular diversified equity funds.
by Narendra Nathan

I
nvestors who were chasing mid and
small-cap equity funds till recently
are now looking for safe havens.
Though benchmark indices (Sensex
and Nifty) are still close to their
highs, the deep correction in the mid and
small-cap segments has dampened inves-
tor sentiment. Investors are seeking refuge
in less volatile product categories such as
equity savings funds and dynamic asset
allocation funds. Mutual fund distributors
have also started pushing equity savings
as ‘safe products’, pointing at the relatively
decent returns compared to equity funds
and low volatility of this category.
Equity savings funds are less volatile
because they have a lower exposure (25-
30%) to stocks. Right now, their returns
are higher than those of pure equity funds
because of the market correction. “These
low-volatile products become popular
in bear markets. However, they should
not be treated as substitutes for equity
GETTYIMAGES

funds. If the market suddenly turns bull-

ish, these funds will underperform pure
equity funds,” says Ashish Shanker,
Head - Investments, Motilal Oswal Private
Wealth Management. Even so, these funds
are useful for investors with a low risk ap-
These schemes delivered reasonable returns in recent years
petite. “These funds will suit retirees and Equity savings funds have a small 25-30% exposure to Dynamic equity funds can put up to 100% in equities when
first-time investors,” says Shanker. stocks and suit investors with low risk appetite. valuations are low. They cut allocation when markets are high.

Dynamic funds are better CAGR (%) CAGR (%)

Unlike equity savings funds, dynamic
asset allocation funds can capture the
market upside better because most of them
can have up to 100% of their corpus in eq-
uity when market valuation is low. These
funds will also able to protect the downside
because they reduce the equity exposure
significantly at peak or when the market
valuation is at very high levels. More im-
portantly, the shift between equity and
debt in most of them will happen based on
well known metrics such as PE, PB, divi-
dend yield, future earnings growth, etc.
Everybody wants to buy low and sell
high, but the problem is in its execution. “It
is difficult for investors to do it themselves
because they will be taken over by greed
and fear,” says Ankur Maheshwari, CEO,
Equirus Wealth Management.
The biggest issue is the inertia of in-
vestors. “People waiting for correction
don’t get in when the correction actually
happens, because they get scared or wait
for further correction,” says Shanker.
Investors can get over inertia by investing
through automated platforms. The Smart
SIPs facility from Rank MF helps investors
put in more when valuations are low and
reduce when valuations are high.
Though it appears that dynamic asset al-
Fund
ICICI Prudential Equity Savings Fund
Axis Equity Saver Fund
Edelweiss Equity Savings Fund
HDFC Equity Savings Fund
Kotak Equity Savings Fund
Benchmark - VR MIP TRI
location funds will always get it right, these
funds have some limitations. Most of them
use valuation parameters of benchmark
indices (Sensex and Nifty) for allocation
decisions. However, the PE ratio of the
Sensex and Nifty are very high right now
(largely because the earnings growth rates
are low). This means the equity allocation
will be low for schemes using this metric. If
earnings revive and markets shoot up, dy-
namic funds sitting with a high allocation
to debt will tend to underperform.
Can you do-it-yourself?
Should you go with dynamic asset alloca-
tion funds or do it yourself? It depends
on your ability and discipline. First, you
1-year 3-year Fund 1-year 3-year
8.89 6.57 Motilal Oswal Dynamic 12.44 8.16
9.79 7.32 ICICI Prudential Balanced Advantage 11.20 7.55
6.51 6.66 Franklin India Dynamic PE Ratio Fund of Funds 7.35 7.15
5.60 6.25 Invesco India Dynamic Equity 6.96 7.10
7.31 6.98 Aditya Birla Sun Life Balanced Advantage 7.29 5.77
10.83 7.66 Benchmark - VR Balanced TRI 11.15 9.83
Source: Value Research Online. Data as on Oct 9.
need to identify the valuation metric (PE, sure), keeping track of these numbers can
PB, etc) and the benchmark index you are be quite cumbersome. Besides, the avail-
going to follow. Though these values are ability of historical data is also an issue.
readily available for most indices, only Lastly, there is the issue of taxation.
investors who can decipher these numbers Every shift from debt to equity and vice
should use them. versa has a tax implication. However, there
Do-it-yourself investors also have the is no tax implication for an investor when a
option of shifting between equity and debt fund buys or sells. If you end up paying tax
based on individual scheme portfolio met- on the capital gains made by every switch,
ric. “While the asset allocation decisions of it will eat into your overall returns.
dynamic allocation funds will be based on If you think this is a little too much
benchmark indices, our Smart SIPs does trouble, it is better to go for a rule-based
the allocation for each fund. Therefore, the dynamic asset allocation fund.
predictability is high,” says Omkeshwar
Singh, Head – Rank MF, Samco Securities.
While some funds disclose these ratios on a Please send your feedback to
etwealth@timesgroup.com
monthly basis (along with portfolio disclo-
 guest column
The Economic Times Wealth October 14-20, 2019 07

SIP investors and the

new virtuous cycle
As the latest data reveals, SIP investors are not reacting to volatility and are
sticking to investing through thick and thin, says Dhirendra Kumar.

O
nce upon a time, equity mutual
funds used to go into a half dead
zombie-like state whenever
DHIRENDR A KUMAR
CEO, VALUE RESE ARCH the equity markets got shaky.
Savers would stop investing
and fresh inflows would dry up. Some
money investors would start panicking and pull

mysteries out their money. At every little bump up,

even more investors would redeem their
money. Advisers and analysts would cry
themselves hoarse asking investors to stay
put but their entreaties would generally not
be heard. Hardly anyone would be willing
Indian mutual fund to pay attention to the fact that these down-
turns or stagnant phases were the best
investors have
times to invest.
moved in a big way The solution to this madness was of
towards using SIPs course SIP investing. I’ve long been writing
and therefore, are that SIP investing is just as much about the
not swayed by the psychology of the individual as it is about
temporary ups and the maths of investing. Something like
downs of the equity a decade ago, I wrote this: SIPs are also a
great psychological help while investing.
markets.
Investors inevitably try to time the market.
When the market falls, they sell and they
don’t invest any more. When it rises, they
invest more. This is the opposite of what
should be done. SIP puts an end to all this
by automating the process of investing
regularly. It eliminates the mental load of
deciding when to invest and leads to better
returns for the investor.
At the time, I would lament the fact that
while this simple psychological trick would
keep you investing in downturns and thus
boost your returns, too few investors were
enrolled in any Systematic Investment
Plan. However, during the past years, this
GETTYIMAGES

has changed significantly. Indian mutual

fund investors have moved in a big way
towards using SIPs and therefore, are not
swayed by the temporary ups and downs of
the equity markets.
This is amply demonstrated by the
September edition of the monthly in-
vestment data that is released by the
Association of Mutual Funds of India
(AMFI). Interestingly, the headline num-
ber on equity investments sounds like bad
news: net inflows into equity and equity-
linked funds fell 28% from `9,152 crore
to `6,609 crore. So why is that good news?
Simply because the SIP inflows increased
from `8,231 crore to `8,263 crore! That
means that while the non-SIP investors
behaved exactly like they used to in earlier
times, SIP investors are an exception and
continue investing in bad times or good.
Non-SIP investors in aggregate pulled out
money while SIP investors marched on un-
fazed and actually invested more.
Once upon a time, such behaviour would
be impossible to find except among a tiny
minority of knowledgeable investors,
whereas now it’s mainstream and of the
same scale as the older, self-destructive
kind of behaviour. The important thing
is that this is a self-perpetuating and self-
reinforcing phenomena. The more inves-
tors switch to SIPs and stop trying to time
the markets, the more they will themselves
experience the superior returns and then
invest even more in this manner. The
amount of money that SIP investors save
and invest productively is objectively high-
er than others because they don’t stop and
the good experience makes them increase
their investments to as much as they pos-
sibly can.
There’s an old saying about saving and
investing that has been doing the rounds
in different versions: It’s not how much you
earn, it’s how much you save. It’s not how
much you save, it’s how much you invest.
It’s not how much you invest, it’s how well
you invest. It’s not how well you invest, it’s
for how long you invest. It’s not just any of
these, it’s all of these.
In a way this perfectly captures why sav-
ers who take the SIP route are so successful
in achieving their actual financial goals.
If you invest a small amount of money and
achieve great returns it does not matter. I
mean you can brag about it on Twitter or
Facebook but it doesn’t move your life for-
ward. Whereas starting SIPs, increasing
the amount and going on for years helps you
at each step and actually gets you where you
want to go.
Please send your feedback to
etwealth@timesgroup.com
 stocks
08 The Economic Times Wealth October 14-20, 2019
Investors, be ready for weak
numbers in second quarter
The silver lining is the situation is not expected to be as bad as it was in the first quarter.
by Narendra Nathan
W
ith GDP growth at just 5%,
the first quarter of 2019-20
was disastrous for India.
As domestic slowdown
persisted in the second
quarter, the government announced stimu-
lus packages to help boost the economy.
However, with the US-China trade war con-
tinuing to negatively impact global growth,
India Inc is likely to report another set of
weak numbers for the second quarter.
Experts, however, feel the second quar-
ter won’t be as bad as the first. “With an ex-
pected aggregate revenue growth of 2-3% y-
o-y for Nifty companies, the situation is bet-
ter,” says Amar Ambani, Senior President
and Head of Research, Yes Securities.
However, pressure on the bottom line re-
mains. Companies would have found it dif-
ficult to cope had the corporate tax cut not
been announced. “The second quarter net
profit will get a boost because of lower tax-
es and write back of higher taxes provided
in the first quarter,” says Ashish Shanker,
Head, Investments, Motilal Oswal Private
Wealth Management. While the situation
is still weak at the aggregate level, it is a
mixed bag at the sectoral level. Let us take a
look at how sectors are likely to fare.
Auto
As auto companies report monthly sales
figures, the fall in second quarter sales
volume is known. The market’s focus will
now be on realisation per vehicle, following
the discount companies had to give to push
demand, and the margin, which will reflect
the impact of fall in commodity prices. The
impact of fall in key raw material prices
will only be visible in the coming quarters
and not in this one. Net profit fell badly due
to lower realisation on the back of higher
discounts. Aggregate net profit will also be
dragged down due to huge losses suffered
by Tata Motors. “Auto numbers would have
been worse without the tax reversals,”
says K. Subramanyam, Co-Head - Equity
Advisory, Altamont Capital.
Banks
While consumer facing banks will report
stable net profit growth (around 30% y-o-
y), most of the aggregate net profit growth
is expected to come from corporate facing
banks due to reduction in asset write down
and low base effect. For example, SBI, ICICI
Bank and Axis Bank are expected to report
100% plus net profit growth y-o-y.
Capital goods
Revenue and net profit for the quarter
is expected to show decent y-o-y growth
because of increased execution of pending
Lower taxes will help push Q2 results
Sectors like auto, mining and oil and gas will continue to be under pressure.
67 Revenue (%) Net profit (%)
7.70
8.70
21.80
10.60 11
4.90
Auto
Banks Capital FMCG Consumer
NBFCs goods
-13.35
-6.90
-46.30
Based on y-o-y projections by several research houses
orders, especially by companies from the
engineering and T&D segments. However,
private sector capex is yet to pick up and
therefore, the order inflow will be under
pressure, except for a few companies like
L&T. The new taxation rule—only 15% tax
for new manufacturing facilities that come
up by 2023—should attract global manu-
facturing majors and therefore, result in
private capex revival in future.
Consumer staples
Despite a visible slowdown in rural de-
mand, consumer staples companies (or
FMCG companies) are expected to report
decent numbers because the slowdown is
yet to impact non-discretionary consump-
tion. The fall in raw material prices is an-
other factor helping them. Big FMCG com-
13.95
11.30 41.15
5.05
8.55 Metals & Oil and
3.95
mining
IT Pharma
durables
-16.05 -3.60
-52.40
panies like HUL, Nestle, ITC, etc are big
taxpayers and therefore, will benefit from
the recent reduction in corporate tax.
Consumer durables
While consumer staples are holding up,
the situation is not rosy for consumer
discretionary companies. This is because
many consumers still buy big ticket items
like televisions and air-conditioners on
instalments and therefore, ongoing credit
tightness is hampering sales. However,
the government’s efforts to shore up con-
sumer confidence and RBI’s interest rate
reductions should improve the situation.
“Consumer spending is expected to pick
up in the coming quarters because of con-
tinued rate reductions by RBI,” says Atul
Kumar, Head – Equity Funds, Quantum
MF. Some improvement in rural discre-
tionary consumption due to a good mon-
soon can be another positive. “Spending by
households is expected to improve in the
third quarter due to festival demand and
also due to large discounts offered by com-
panies to clear inventory,” says Dhananjay
Sinha, Head of Strategy Research, IDFC
Securities.
Metals
The ongoing fall in commodity prices,
triggered by global slowdown concerns,
have taken a toll on the performance of the
metals and mining segment. Since the situ-
ation is worsening at the global level, their
woes may continue in the coming quarters
too. “The pressure on metal companies,
especially steel, will increase. They will
be the real losers in the coming quarters
if their demand of anti-dumping duty is
not accepted by the government,” says
GETTYIMAGES
Subramanyam.
IT
Though some companies are postponing
orders due to uncertainties generated by
the ongoing trade war between US and
China, the order situation is under control
for Indian IT companies. “Impact of trade
war is limited on Indian IT companies
because the US is still doing well compared
to Europe,” says Sinha. Among large caps,
while TCS and Infosys are expected to
report steady performance, Wipro is ex-
pected to lag.
gas Pharma
This segment has been a mixed bag for the
last few years. While pharma companies
continue to face pressure from their US
businesses, their domestic divisions con-
-7.10 tinue to do well. There may be some posi-
tive surprise by large exporters also, most-
ly because the US FDA-induced problems
are getting solved and also because of low
base. For example, Dr Reddy’s is expected
to report 50% plus y-o-y net profit growth in
the second quarter.
Oil & gas
While independent refineries and city
gas distribution segments are expected to
report stable numbers, others will be im-
pacted by the volatility in crude oil prices
(while global slowdown is pulling it down,
political tensions in Middle East is holding
it up). Though there won’t be any impact on
oil PSUs in the second quarter, the govern-
ment may impose subsidy burden on them
in coming quarters if crude oil flares up.
Please send your feedback to
etwealth@timesgroup.com

Why 7 is important in equity fund investing
The probability of earning negative returns is eliminated if one stays invested for at least 7 years.
Financial advisers and fund
managers alike stress on
the importance of staying
invested in equity mutual
funds for at least seven
years. Ever wondered
why? According to Subir
Jha, Founder, Buckspeak,
a Hyderabad-based wealth
management firm, the
chances of earning negative
returns are eliminated if
equity funds are held for a
minimum of seven years. He
was addressing participants
at the ET Wealth Investment
Workshop in Hyderabad.
“The market goes through
a complete cycle over seven
years. Historically, we haven’t
seen an investment not mak-
ing money in seven years.
Investors can make money in
two years too, but that is not
sustainable,” Jha said.
Jha’s advice to the partici-
pants was not to seek instant
rewards from investments.
Volatility here to stay,
make the most of it
The small- and mid-cap seg-
ments have taken a battering
over the past year and a half.
While most mutual fund
investors want to play safe,
Yogesh Bhatt, Senior Fund
Manager, ICICI Prudential
Mutual Fund, feels this is
a good time to start SIPs in
small and mid-cap schemes.
“Investors need to understand
the importance of catching the
falling knife for value,” Bhatt
told participants at the ET
Wealth Investment Workshop
held in Hyderabad.
Acccording to
Bhatt, investors
need to befriend
volatility if they
want to suc-
ceed in creating
wealth over the
long term. He
added that de-
spite volatility
and correction,
the market has
given around
15% CAGR since
2001. “The mar-
ket favours the
long-term inves-
tor,” he said.
However, he
cautioned inves-
tors against
investing in a
poorly managed
financial planning
The Economic Times Wealth October 14-20, 2019 09
“It can ruin your investment with the last point—constructing a investors should think that they can the due diligence before investing
decisions,” he said. portfolio. He also cautioned DIY in- time the market, or they can’t lose in equity schemes or they can lose
“If you want instant grati- vestors against trying to time a vola- their capital. “Equity investments money,” Jha said.
fication or quick results, you tile equity market. He said no new are risky. Direct investors should do — Shivani Bazaz
will not succeed in investing.
Ideally, your horizon should
be as long as one market cycle,
so you can earn good returns
in seven to 10 years,” Jha said.
The reason why many
investors failed to earn good
returns was because they
tried to copy what the others
were doing, explained Jha.
“Investing is like living your
life. The problem starts when
you start copying others. So,
you need to prepare your fi-
nancial plan,” he added.
According to him, the four
steps one should follow while
planning one’s finances were:
 Analyse current situation
 Define financial goals
 Create a financial plan
 Construct portfolio
He said investors generally
made the mistake of starting
scheme. “If your portfolio has
an underperformer, you will
not earn good returns. Look
for a scheme with a good track
record,” Bhatt said.
Bhatt felt the markets will
remain volatile for some time.
“Investors need to understand
volatility and how it benefits
them because volatility is here
to stay. If you are investing via
SIP, you will keep buying ex-
pensive if there is no volatility.
Focus on long-term goals and
don’t fear volatility,” he said.
— Shivani Bazaz
 stocks
10 The Economic Times Wealth October 14-20, 2019

Consider PEG to Indian Oil Corporation

This government-owned oil company with Maharatna
status is engaged in refining, pipeline transportation and

pick good stocks

marketing of petroleum products. Its businesses also include
exploration, production and marketing of natural gas and
petrochemicals. Analysts are bullish on the stock due to
its healthy free cash flows, diversified business model and
aggressive investments in expansion, marketing and refinery
upgradation. The company’s GRMs are likely to improve with
the implementation of International Maritime Organization
PEG takes into account the projected earnings growth and acts as a regulations from early next year. In terms of EV to the
estimated 1-year forward EBITDA multiple, Indian Oil trades
more reliable valuation measure than the standard PE multiple. at 43% discount relative to the average EV/estimated EBITDA
multiple of the BSE200 index.

PEG CURRENT 1-YEAR UPSIDE

RATIO ROE (%) PRICE (`) TARGET POTENTIAL

0.66 14.2 `149 `176 18.5%

150

140
INDIAN OIL
CORP.
130
125.9
120

110

100 S&P BSE

200
80 105.9
5 Oct 2018 7 Oct 2019

BUY 24 HOLD 7 SELL 6

Hindalco Industries
GETTYIMAGES

The company is engaged in the production of aluminum and

by Sameer Bhardwaj and reduction of interest rates, the
benefits will be visible only over a
in the PE ratio, price to earnings
growth (PEG) ratio is used, which is
copper and has a footprint in 11 countries outside India.
According to a recent report by Antique Stock Broking, a
balanced business portfolio, integrated aluminium business
model and improvement in profitability from the value-
added product capacity expansion are the key positives

P
E multiple is widely used
to identify overvalued
and undervalued stocks.
It combines a company’s
stock price and its net
earnings and determines the
amount an investor is willing to
pay for every rupee of the net profit
earned by the company (or expected
to earn in future). A stock with low
PE multiple is considered under-
valued whereas one with high PE is
considered overvalued. However,
current market conditions are mak-
ing it difficult to derive meaningful
inferences from the standard PE ra-
tio. This is because one of the signifi-
cant reasons for the recent volatility
is poor corporate earnings.
The poor performance of the cor-
porate sector is largely due to mac-
roeconomic issues like the NBFC
crisis, declining consumption and
capital expenditures, falling ex-
ports and trade wars. Although the
government and RBI have provided
significant impetus like corporate
tax cuts, removal of FPI surcharge
period of time.
Market participants have offload-
ed the majority of stocks and over
76% of listed companies have deliv-
ered negative returns in the past
year. The reduction in stock prices
have led to considerable reduction
in PE multiples. However, poor
earnings growth in the past and in-
significant future earnings expec-
tations do not indicate that low PE
stocks are quality stocks. Decline
in PE multiples often provides good
entry points for investors, but it is
critical that future growth expecta-
tions are included while trusting
such low valuations.
A high PE is justifiable for a
stock that is expected to report
strong earnings growth in future
compared to a low PE stock that is
expected to report slow growth.
Fundamentally, a high-growth
company is a better pick. The ability
to grow faster attracts investors,
which eventually results in greater
shareholder wealth creation.
To account for such distortions
calculated by dividing a stock’s PE for the company going forward. Hindalco’s leverage levels
by its projected EPS growth. Stocks have improved with net debt/EBITDA at 2.6 times in 2018-
with PEG ratios of less than 1 are 19 compared to 3 times in 2017-18. The future earnings
considered undervalued, whereas visibility will be supported by aluminium spot prices that
those with ratios of more than 1 are are likely to stabilize at current levels with low level of
considered overvalued. A PEG ratio inventories and limited significant capacity additions.
of 1 implies the stock is fairly valued.
We looked for stocks available
PEG CURRENT 1-YEAR UPSIDE
at attractive valuations in terms RATIO ROE (%) PRICE (`) TARGET POTENTIAL
of PEG ratios and included compa-
nies covered by Bloomberg. The 0.98 8.4 `182 `234 28.5%
12-month and 24-month blended for-
120
ward PEG ratios for such companies
were extracted. The 12-month and S&P BSE
24-month ratios are based on esti- 110 200
mated EPS growth for the next 1 and 105.9
2 years. Only those stocks with 1 and 100
2 year forward PEG ratios that have
a value of less than one and positive
are included. In addition, estimated 90
free cash flows (FCF) for the future HINDALCO
1 year period were extracted and the 80
INDUSTRIES
companies ranked in the descend- 75.7
ing order of such estimated FCFs.
70
We will look at seven companies
5 Oct 2018 7 Oct 2019
covered by at least 10 Bloomberg an-
alysts and with 1-year forward price BUY 22 HOLD 2 SELL 1
potential greater than 10%.
 stocks
The Economic Times Wealth October 14-20, 2019 11

Tata Steel PEG

RATIO ROE (%)
CURRENT
PRICE (`)
1-YEAR
TARGET

0.42 8.7 `325 `440

UPSIDE
POTENTIAL Varun Beverages
This diversified steel player has integrated
120
35.6%
operations ranging from mining to manufacturing This beverage industry player is a franchisee of carbonated
and marketing of finished steel products. According 110 and non-carbonated beverages sold under the trademarks
to a report by ICICI Direct, the company’s focus on S&P BSE owned by PepsiCo. According to a report by Karvy Stock
increasing domestic steel capacity will make it a 100 Broking, robust volume growth aided by highly under-
200
key beneficiary of the government’s decision to 90 105.9 penetrated territory and innovation of new products that are
reduce the corporate tax rate from 34% to 25.17%. less seasonal in nature are the significant growth levers for the
Tata Steel’s Indian operations’ key assets enjoy 80 company. The return ratios are likely remain healthy due to
cost competitive position globally which aids 70 TATA STEEL the absence of any major capital expansion in the near future
its overall EBITDA margins. Going forward, the 57.0 and better capacity utilization for next few years will enhance
company plans to increase its share of domestic 60 the return on capital employed. The brokerage believes the
capacity to 71% by 2025. The brokerage house 50 company is likely to gain synergy from the acquisition of 20%
believes that the second half of 2019-20 will augur 5 Oct 2018 7 Oct 2019 equity stake in Lunarmech Technologies and expect revenue
well for the company due to the steps taken by the growth of 31% with healthy demand for carbonated beverages.
government to spur investment and likely pick-up BUY 19 HOLD 5 SELL 5
in the economic activity.
PEG CURRENT 1-YEAR UPSIDE
RATIO ROE (%) PRICE (`) TARGET POTENTIAL

0.93 17.9 `612 `767 25.4%

140

VARUN
130
BEVERAGES
123.1
120

110

100 S&P BSE

200
80
105.9
5 Oct 2018 7 Oct 2019

Motherson Sumi
PEG CURRENT 1-YEAR UPSIDE
RATIO ROE (%) PRICE (`) TARGET POTENTIAL BUY 10 HOLD 3 SELL 0
0.98 15.9 `98 `127 29.4%
The company manufactures automotive wiring
120 harnesses, mirrors for passenger cars and
110 supplies plastic components and modules to the

100
S&P BSE 200
automotive industry. Analysts are bullish on
the stock due to the management’s efforts to Aditya Birla Fash & Retail
reduce losses at its greenfield facilities through
90 105.9 increased productivity and manpower cost This is a fashion conglomerate with a strong network of 2,714
80 rationalisation. Expectations of a gradual recovery brand stores across 750 cities in the country. Retail expansion,
70 MOTHERSON in the European auto market from early next brand investments and product innovation has helped the
SUMI year, diversification in the new product line like company to report good margin performance across segments.
60 61.2 camera-focused mirrors and strong order book Analysts expect robust profitability due to the aggressive cost-
50 will keep the company’s fundamentals healthy in saving measures and strong balance sheet. Steady working
5 Oct 2018 7 Oct 2019 future. Moreover, Motherson’s integrated product capital, healthy operating cash flows and strategic acquisition
development facilities, wider product range, ability in the ethnic space will help the company to improve return
to offer products at competitive prices and strong ratios going forward. According to Bloomberg consensus
BUY 26 HOLD 7 SELL 2
customer relationships are other growth catalysts. estimates, the company is likely to report a blended 12-month
forward RoE of 18.1%, compared to an average forward RoE of
14.14% by the BSE200 index.

PEG CURRENT 1-YEAR UPSIDE

Biocon PEG CURRENT 1-YEAR UPSIDE RATIO ROE (%) PRICE (`) TARGET POTENTIAL
RATIO ROE (%) PRICE (`) TARGET POTENTIAL
0.66 18.1 `207 `245 18%
0.48 15.8 `229 `285 24.4%
The biopharmaceutical company is engaged in 130
discovering, developing and producing biologics in 120
ADITYA
chronic therapies such as diabetes, oncology and BIRLA
immunology. According a report by JP Morgan, the 110 FASHION
120
company is well-positioned in the emerging bio- S&P BSE AND RETAIL
similar markets supported by its R&D capabilities, 100 200 115.4
deep pipeline and strong management team. 105.9 110
With success in biologic development, Biocon has 90
entered into partnership with global companies BIOCON
like Mylan and Sandoz and attained approvals
in large markets. The research house believes
80 74.9 100
S&P BSE
200
the growth momentum in the core business is 70 105.9
likely to remain strong and an earnings inflection 5 Oct 2018 7 Oct 2019
will be visible over the next two years, aided by 90
the recent launches, approvals in the US/EU and 5 Oct 2018 7 Oct 2019
BUY 14 HOLD 3 SELL 6
double-digit growth in emerging markets.
BUY 18 HOLD 1 SELL 0
PEG ratio and RoE (%) are 12-month blended forward. Current price as on 7 October 2019. BSE200 estimated RoE: 14.14%. Source: ACE Equity & Bloomberg.
 mutual funds
12 The Economic Times Wealth October 14-20, 2019

All credit risk funds aren’t junk

Several funds have given healthy returns over the past year and are worth considering by investors.

by Sanket Dhanorkar tions forced the fund manager to sell more

liquid investments.

A
string of defaults and rating This is one side of the story. There are
downgrades over the past year several credit risk funds, with more di-
has hurt perceptions about versified portfolios, that have delivered
debt funds. Credit risk funds in healthy returns. IDFC Credit Risk Fund,
particular have got a bad name. ICICI Prudential Credit Risk Fund, HDFC
Sharp fall in NAVs of a handful of credit Credit Risk Fund and Kotak Credit Fund
risk funds have led to large outflows from have fetched 9% returns over the past year.
this category. The total corpus managed Several schemes have clocked more than
in this basket has shrunk from `91,000 7%. Junking all such funds on account of a
crore in August last year to `68,500 crore few rotten apples would be unfair.
in August this year. However, investors Fund managers say this is in fact a good
should look deeper instead of painting the time for investors to consider good quality
entire basket with the same brush. credit risk funds. The gap between yields of
Credit risk funds are so named because AAA or highest grade corporate bonds and
they are mandated to invest a large chunk lower rated bonds have widened considera-
of their assets (at least 65% of corpus) in in- bly in the past few months. Bond prices and
struments rated AA or lower. Investment yields move in opposite directions. The el-
in lower rated bonds entails higher risk as evated yield on lower rated bonds suggests
it signifies lower capability of borrower to prices of these bonds have been beaten
repay obligations. At the same time, these down. This offers potential for high re-
offer higher yield, with potential for capi- turns in coming years. Amandeep Chopra,
tal gains in the event of a future upgrade Group President & Head of Fixed Income,
in credit rating of the bonds. These funds UTI AMC, says, “Those with a slightly
can potentially deliver upto 2-3% higher higher risk appetite should definitely look
returns than liquid funds. at credit risk funds. Most corporate bonds
On the face of it, this category has are priced cheap and provide a degree of up-
yielded a paltry 1.2% returns over the side when the market settles.” The quality
past year—the lowest among all debt fund funds in this basket are currently running
categories. However, the returns have a yield to maturity (what the fund would
been dragged down by three or four credit fetch if it held on to all underlying bonds
funds, which have been singed by credit till maturity) in excess of 9%. Lakshmi
events. Iyer, CIO, Debt, and Head, Products, Kotak
Some of the funds had taken concen- AMC, insists this is a good opportunity to
trated exposure in issuers that defaulted. accumulate credits with well-run balance
BOI AXA Credit Risk was the worst hit, sheets. “Spreads have widened considera-
tanking 48% during this period. In June, bly as confidence in corporate credit is still
the scheme had to write down the entire low. Once normalcy returns to the market,
value of its investment in Sintex BAPL— this segment will fetch healthy returns.”
constituting a quarter of its net assets as on However, investors will have to keep in
May end—when its parent company Sintex mind the risk involved in these funds. Only
Industries defaulted. Sundaram Short those who have sufficient risk appetite
Term Credit Risk, UTI Credit Risk and should consider these funds, preferably
GETTYIMAGES

Invesco Credit Risk also saw falling NAVs, limiting the allocation to not more than 10-
to a lesser extent. Some credit funds have 15% of the portfolio.
seen stressed issuers assume higher pro- The choice of fund is critical in this
portion of their assets after large redemp- space, so ascertain the fund’s portfolio
composition and size carefully. Avoid
funds that run a compact portfolio or
Concentrated holdings are risky Pick funds with large asset base concentrated exposure in a few issuers.
Liquidity is poor in lower rated bonds so
Large scale outflows from some funds have artificially Adequate diversification and quality portfolios have allowed
when any of these bonds faces a downgrade
increased the degree of concentration. these funds to steer clear of problems facing others.
or default, it is difficult for the fund man-
1 YEAR TOP 3 HOLDINGS
1-yr return (%) Top 3 holding
as % of corpus
20.4 ager to exit the holding. This risk is ampli-
SCHEME NAME
RETURN (%) AS % OF CORPUS 17.4 fied in funds with concentrated holdings.
A large asset base gives the fund manager
BOI AXA Credit Risk -48.5 72.9 13.5 better leeway to diversify and spread risks.
11.7 The worst may not be over in terms of
9.3 9.1 9.1 9.4 8.9 credit profile of India Inc, so more credit
IDBI Credit Risk -0.1 49.9 7.6
events may hit firms that have borrowed
Invesco India Credit Risk -3.1 34.8 from debt funds. However, the impact of
such events on the fund’s returns will be
minimised with a diversified portfolio.
Principal Credit Risk 0.5 34.3 IDFC Credit ICICI Pru HDFC Kotak Mahindra
Risk Credit Risk Credit Risk Credit Risk Credit Risk
Debt Yojana
PGIM India Credit Risk 3.7 27.9 Please send your feedback to
Compiled by ETIG Database. Source: Ace MF
etwealth@timesgroup.com
 spending
The Economic Times Wealth October 14-20, 2019 13

Festive traps to
watch out for
Retailers, builders and
lenders, among other players,
are going all out to lure
buyers this festive season.
However, before you reach for
your wallet, read between the

GETTYIMAGES
lines of the offers to avoid
getting short-changed.
Preeti Kulkarni points out
five such traps to avoid.

NO-COST EMIS LOW-COST LOANS CASHBACK OFFERS

No-cost EMIs are the rage this season, with
e-commerce companies, lenders and retailers
offering such options. For example, you can
buy a mobile phone worth `50,000 using
this option and repay this loan in 10 equal
instalments of `5,000 each. “These are triple
zero schemes where there is no processing
fee, downpayment or interest payout
involved,” explains Anuj Kacker, Co-Founder
and COO, Moneytap, a digital lending platform.
However, there are no free lunches. The
Reserve Bank of India (RBI) had, in fact,
banned 0% EMI in 2013, stating that such
offers merely served the purpose of alluring
and exploiting vulnerable customers. Since
there cannot be an interest-free loan, there
cannot be a no-cost EMI. “The cost is built
into the sales price. If you were to make an
upfront payment, you could be offered a
discount, which would not be the case when
you opt for EMIs,” says Navin Chandnani,
Chief Business Officer, Bankbazaar.com, an
online loan aggregation portal.
Then, there could be online offers where the
sales price is the same irrespective of whether
you are making an upfront payment or in
instalments. “In such cases, you need not be
concerned. The required adjustments (built-in
discounts or interest charges) will be made in
the invoice at the backend by the merchant,”
adds Chandnani. The cost is typically borne by
the brands in such cases. “The lending partner
will recover the cost of extending a loan from
the brands. This is also termed subvention
fee,” says Kacker.
Before making a choice, enquire whether
you can get a discount instead of the no-cost
EMI offer. Also, find out if you need to make
an upfront payment before the rest of the
amount is converted into EMIs.
No-cost EMI offers apart, retailers and
lenders also offer loans with interest-
free periods. “Enquire whether there is a
processing fee involved. Usually, it is around
2%,” says Kacker. This option is useful for
borrowers who do not want to lock-in their
money. “For the convenience of spreading
out the cost of say an electrical appliance
worth `50,000 over 10-12 months, `1,000
(2% of the price) is a relatively affordable
amount to pay in absolute terms,” he adds.
Also, ascertain whether the ‘interest-free’
period comes with an expiry date. “Typically,
low-value purchases come with an interest-
free period of 15 days, post which an
interest is charged,” says Chandnani.
SUBVENTION SCHEMES
A tripartite agreement between a developer,
lender and borrower, this allows the latter
to shell out 10-20% of the total cost initially.
The EMIs are deferred till possession or
a specified date, making houses more
affordable. While the National Housing Bank
has barred housing finance companies from
participating in such arrangements, banks
face no such restrictions. This apart, several
builders have come up with their own
versions of subvention schemes where the
buyer has to book the flat after paying 5-20%
of the agreed price. The rest is to be financed
after possession. While these structures
boost buyers’ affordability, the costs are 7-8%
higher than regular rates. If affordability is
not a concern, find out if you can negotiate
an upfront discount on the price.
The key clauses to look for while availing a cashback
offer are the maximum cap, minimum spend and the
effective date. Also, read the fine print to understand how
the minimum spend will be computed. “Let’s assume the
minimum spend is `3,000. The offer could be applicable to
three purchases aggregating `3,000 during the sale or only
to a one-time purchase worth `3,000. Both models exist,”
says Kacker.
An instant cashback, applied at checkout while shopping
online, is preferable to one credited after two or three
months. Similarly, a 20% cashback may look attractive, but
not if it comes with a ceiling of say `1,500 when your total
spend is `50,000. “If you are using a credit card to pay, there
could be a clause that says the cashback could be rolled back
if card bills are not cleared on time,” says Prashant Bhonsle,
Head, Student Loan and CMO, Incred, a digital lending NBFC.
FREEBIES WITH
HOME PURCHASES
Developers shower freebies like modular kitchens, air-
conditioners, and semi-furnished apartments to entice
buyers. However, it is wise to drive a hard bargain for
straight discounts on the rates instead. “Most developers
have not announced hard discounts (officially notified and
applicable to all) during this festive season as there are
several factors preventing them from doing so,” says Anuj
Puri, Chairman, ANAROCK Property Consultants. He attributes
this to the NBFC crisis-induced liquidity crunch, NHB diktat
to HFCs on subvention offers and high cost of raw materials.
“This year developers are offering ‘effective’ discounts by
way of waiver of GST or even stamp duty and registration
charges,” he adds. For home-seekers, this will result in
cost reduction of 5-12%. However, if you are a genuine
homebuyer, you should try harder to get the price lowered.
Dvelopers may extend direct discounts to buyers showing
serious intent to seal the deal.
 learn & keep
14 The Economic Times Wealth October 14-20, 2019

Current perception
Economy not SURVEY REMAINED Job situation grave now, but future bright
in the pink of ROUND
IMPROVED
SAME
WORSENED
More Indians
pessimistic
health Sep 2018 33.7 22.1 44.3
about
Current perception Expectation for next year
Jul 2019 37.4 24.2 38.4 one-year
SURVEY REMAINED SURVEY WILL REMAIN
economic IMPROVED WORSENED WILL IMPROVE WILL WORSEN
Sep 2019 33.5 18.6 47.9 ROUND SAME ROUND SAME
outlook
compared Sep 2018 35.2 19.3 45.5 Sep 2018 54.1 17 29
Expectation for next year to last year.
However, Jul 2019 32.5 21.9 45.6 Jul 2019 56.7 17.5 25.8
WILL over half the
SURVEY WILL WILL
REMAIN Sep 2019 28 19.5 52.5
ROUND IMPROVE
SAME
WORSEN respondents Sep 2019 51.2 15.4 33.4
feel the
Sep 2018 53.2 16.7 30.2 situation will
improve next The majority feel the employment situation has worsened. However, many
Jul 2019 59.4 16 24.6
year. more are of the opinion that job prospects will be better next year.
Sep 2019 53.2 15 31.8

Indians less optimistic Be prepared for Current perception Current perception

spike in prices SURVEY
ROUND
INCREASED
REMAINED
SAME
DECREASED
SURVEY
ROUND
INCREASED
REMAINED
SAME
DECREASED

Sep 2018 80.8 13.2 6.1

Sep 2018 88.3 8.5 3.2

about economy, but

An overhwelming majority Jul 2019 72.5 22.3 5.2
feels prices have increased. Jul 2019 81.7 15 3.3
Over three-fourth
Sep 2019 74.2 19.5 6.3
respondents believe they Sep 2019 86.1 10.6 3.3
will increase next year too.
Expectation for next year

there is still hope

WILL
Expectation for next year SURVEY
ROUND
WILL
INCREASE
REMAIN
SAME
WILL
DECREASE

Rising inflation could

WILL
SURVEY WILL
REMAIN
WILL Sep 2018 79.8 14.2 6.1
ROUND INCREASE DECREASE
SAME
Jul 2019 77.8 18 4.1
Sep 2018 80.1 12 7.9 eat into budget and Sep 2019 77.9 16.1 6.1
An RBI survey finds most people expect prices and expenses to rise. However, Jul 2019 73.9 16.1 10 investment returns
Close to 75% say inflation has increased.
they also expect the employment scenario and incomes to improve. Sep 2019 75.9 13.8 10.3
*Applicable only for those respondents who felt prices have
However, share of those who feel inflation will
decline increased over the last quarter.
increased or will increase.

Incomes stagnant, Current perception

Rise in expenses imminent Brace for higher spends on
but should rise SURVEY
ROUND
INCREASED
REMAINED
SAME
DECREASED
essential items
Current perception
Sep 2018 28.3 48.3 23.4
SURVEY REMAINED
Current perception
INCREASED DECREASED
Jul 2019 25.8 51.3 22.9 ROUND SAME
SURVEY REMAINED
INCREASED DECREASED
ROUND SAME
Sep 2019 25 48.3 26.7 Sep 2018 78.4 18.2 3.5
Sep 2018 83.6 13.1 3.4
Jul 2019 71.7 25 3.4
Expectation for next year Jul 2019 81.7 15.7 2.6
Sep 2019 74.1 22 3.8
SURVEY WILL WILL REMAIN WILL Sep 2019 83.8 13.6 2.6
ROUND INCREASE SAME DECREASE

Sep 2018 59.1 33.1 7.8 Expectation for next year Expectation for next year
WILL
Jul 2019 55.4 37.7 6.9 SURVEY WILL
REMAIN
WILL SURVEY WILL WILL REMAIN WILL
ROUND INCREASE DECREASE ROUND INCREASE SAME DECREASE
SAME
Sep 2019 53 37.4 9.6
Sep 2018 81.2 15.7 3.1 Sep 2018 84.2 13.1 2.7 Eight out of 10 households saw their
Most respondents feel their incomes have stagnated Jul 2019 76.8 20.1 3.2 A large number of respondents saw their expenses rise Jul 2019 82.9 14.3 2.8 essential spends shoot up over the past year.
in the past year. However, the majority thinks their over the past year. An almost equally large number The outlook for next year is that essentials
incomes will rise next year. Sep 2019 77 19 4 expect expenses to increase next year too. Sep 2019 83 13.7 3.3 will eat more into the household budget.

Source: The RBI Consumer Confidence Survey, which covered 5,192 households in 13 major cities. All figures denote % of respondents. PHOTOS: GETTY IMAGES
 financial planning
16 The Economic Times Wealth October 14-20, 2019
Time to fix rot in the system
If we cannot set right three drivers of the economy, consumption will suffer, says Uma Shashikant.
S
lowdown is the word on every lip.
Numbers are tumbling out, showing
consumption is dropping and busi-
nesses are not making fresh invest-
ments. While some warn that the
demographic dividend has boomeranged into
teeming unemployed youth, others are point-
ing at slowing exports. Old ways of doing
business no longer work. We are yet to figure
out how to negotiate the new path.
UMA SHASHIK ANT
IS CHAIRPER SON, CENTRE
Consider three important drivers of the
FOR INVES TMENT economy—agricultural income, investment
EDUC ATION AND LE ARNING by industry and credit growth from banks
and institutional lending. Without these
three, we can’t fix the biggest driver—con-
sumption demand.
Agriculture is a long-neglected segment
in India, despite being the source of liveli-
hood for the majority of the population.
We need long- Agricultural incomes have stagnated, rais-
term vision and ing fears of rural poverty. We can blame
demonetisation and increased curbs on use
commitment to set
of cash, since a significant portion of agricul-
the economy on
tural transactions happen in cash. It accentu-
a stronger path,
ated other problems that have not been fixed
building block by
in a very long time.
block. Or we need a
We have two layers of anarchy in this seg-
bottom up corrective ment—the first is the government-sponsored
action that puts program of buying agricultural produce at
every fresh block pre-fixed prices. This skews everything from
on sound footing what is produced, how and in what quanti-
and resurrects the ties. It has also led to mono-cropping, poor
system over time. water management, overuse of chemicals
and largescale wastages at FCI. The lack of
formal markets for agricultural produce
is further accentuated by systems like the
APMC, where fair price to farmers outside
GETTY IMAGES
government procurement has been denied
for years. Add to it the lack of adequate credit
systems and insurance, the agricultural
economy is set up to fail.
The second layer is the dominance of
feudalistic landlords. Apart from being the
sole lenders at usurious rates, local mafia
controls everything from fertilizer, seed and
pesticide distribution, to the APMC yard
and ownership of co-operative banks. Since
agriculture is still not taxed, the income
inequality among rich and poor farmers is
deep. Pulling the plug on cash simply led to a
collapse of an already weak system.
There are marginal farmers bleeding from
the want of adequate credit, insurance and
fair price for their produce. Long-term struc-
turally bold solutions will antagonise exist-
ing rent seekers and face difficulties in tak-
ing the unorganised majority along. Reforms
need government action and thought leader-
ship from the agricultural community. We
still do not know how that will happen.
Indian industry has always been an op-
portunistic player. From the early days of
trying to work around license and permits, to
the liberal era of toll roads, mining and spec-
trum, fair game, ethics and problem-solving
have seldom been at play.
Wasteful investments in far-flung areas
just to take advantage of tax breaks, unrelat-
ed diversification and expansion that wastes
capital; formation of multiple entities to
indulge in creative accounting; scouting for
ways to cheat the system in collusion with po-
litical powers; and accessing finances from
institutions and banks with the intent to
default, while manipulating stock markets
have all been practices many businesses
have indulged in. That these activities re-
main unchecked is a matter of concern.
To ask why investments by industry are
low is to forget that industry does not see an
opportunity at this time that can be exploit-
ed with other people’s money.
When the foundations are so weak, it only
takes one measure that asks all businesses
to declare revenues in full to shake it all up.
Impound some of that revenue as tax, and
add to it complexity, confusion and opera-
tional bottlenecks, you have the recipe for
disruption. GST now holds the blame for
stalling the business environment.
The problem is lack of innovation, dyna-
mism and problem solving as the core driver
of business. Perhaps we are a nation of sly
traders more willing to turn money and
goods around, than build lasting value.
Many blame the banking system. Before
nationalisation, we had a local community-
based system, but it was built on sound
lending practices. Our private banks were
led by shrewd lenders who knew how to lend
and recover. We now have a credit system
in shambles, since we replaced that system
of sound banking with a system that lacked
accountability. After being tested by many
reckless governments and politicians, and
moving from one crisis to another, we have
now reached disintegration.
From ILFS to PMC, the underlying story
is the same. Depositors’ money has been
used to favour poor quality borrowers,
through a network of collusion and corrup-
tion that sidestepped every rational credit
process. Weak balance sheets lead to stalled
credit and the economic engine halts.
Consider the construction company that
is wreaking havoc currently. The builder
sells property to individuals willing to fund
a portion of it in black, and the rest with
home loans. They are willing to pay in ad-
vance and wait for delivery. Prices skyrock-
et from a combination of eager buyers and
easy credit. The builder collects advances,
funds a bunch of projects using a part of this
money as seed capital, and seeks bank loans
for the balance. The property the buyer
mortgaged and funded, is now re-mortgaged
and re-funded against inflated prices. When
it collapses, it takes everyone down. Add
lower employment and stagnant income of
buyers, the weakness is complete.
This is just a glimpse of the rot. We have a
broken structure. We need long-term vision
and commitment to set the economy on a
stronger path, building block by block. Or
we need a bottom up corrective action that
puts every fresh block on sound footing and
resurrects the system over time. Without a
national ethos for industry, ethics and fair
play, how would we fix this rot?
Please send your feedback to
etwealth@timesgroup.com
 financial planning
The Economic Times Wealth October 14-20, 2019 17

Don’t fall for sales pitches

Make sure that the benefits are real and tangible and not just marketing gimmicks.
PAPER WORK
:: Document overhaul
While you take up cleaning for your
home ahead of festivals, it makes
sense to carry out a similar activity
with financial assets such as bank
accounts, demat accounts, mutual
fund investments and insurance
policies. This will not only ensure
good maintenance of finances but
also provide a consolidated view
your financial status.

Bank accounts
Bank accounts that are not
being used for a long time
should be closed as they are
designated as dormant and may invite
penalty. Any balance should first
be transferred to an active account.
Account closure can be done by
visiting the home branch and filling up
the form for closure and returning alll
cheque books, ATM cards, debit cards
and credit cards linked to the account.

Demat accounts
Investors can consolidate
their demat holdings into one
demat account by placing
an off-market transaction request.
An off-market transaction is carried
out using the Depository Instruction

GETTY IMAGES
Slip (DIS) to be filled up for all the
holdings that need to be transferred.
An account closure request needs
to be submitted with the DIS,
requesting transfer of securities to
Rati is the owner of a

startup in the cookery
business. She is being
approached by a number
of banks, all trying to woo
her with women-oriented
schemes like special credit
cards, attractively-priced
loans etc. She is impressed
and some of the offers seem
rather enticing. However
she wonders if there
are any issues that she
should be aware of, while
evaluating these products.
Will she be really served
well by such products?
smart things to know
R
ati must carefully read the lit-
erature on such women-oriented
products to see if there are any
special benefits available to
her compared to standard
accounts–a lower average quarterly balance
requirement or add-on benefits such as con-
cessional loans, credit cards or some form of
insurance. Most importantly, these freebies
should serve her purpose.
Also, she must pay attention to the fine
print on the debit and credit cards to see
whether there is a catch in terms of a limit or
a pre-condition.
If a specific benefit such as a lower rate on
loan for buying jewellery is offered, she must
assess whether it is actually useful for her,
Content on this page is courtesy Centre for Investment Education and Learning (CIEL).
Contributions by Girija Gadre, Arti Bhargava and Labdhi Mehta.
Core & satellite strategy of building portfolio
or simply a hook to reel her in. Is it the type of the designated demat account.
loan she is looking for? Or would she rather
take a concessional home loan, car loan, or
Mutual Fund folios
even a personal loan? If she is offered a loan
for women entreprenuers at special discount- Investors can get a
ed rates, she should conduct a comparative consolidated view of their
study to see whether the ‘special discounted holdings across mutual funds
rate’ is a benefit or a sham. Similarly, for with the Consolidated Account
Statement (CAS) sent on a monthly
loans, it would be wiser for her to see if there
is a material difference in what the product or half-yearly basis. They can
offers. combine all their holdings (with
similar pattern, order, tax status)
Rati must carefully evaluate these bank-
with a particular mutual fund under
ing products to make sure that they are bene-
a single folio. A folio consolidation
ficial for her overall finances. She also needs
to check if the benefits that these banks ad-
form needs to be signed and
submitted to the fund house.
vertise are real and tangible and do not prove
to be just marketing gimmicks later on.
Insurance policies
Insurance policies held
across insurance companies
can be consolidated
into a paperless form by opening
an e-Insurance account. Form
can be accessed at https://nir.
ndml.in/pdf/ndml-form-opt2.pdf.
Alternatively, one can fill up an online

4
1
Core portfolio is e-Insurance account opening form

2
In this geared to meet at https://nironline.ndml.in/NIR/
approach, the long-term Transaction cost onlineEiaApplicationHome.html. Upon
investors goals. It forms is low as core verification of KYC documents, the
differentiate about 60-70% The satellite portfolio portfolio is not insurance repository will open the
between Core portfolio provides of the portfolio. forms a smaller part of the churned frequently

3 5
online account and communicate login
two stability and long- Index, diversified portfolio and is tactically and so is volatility id and process to set your password.
segments term appreciation. The equity or large managed to benefit from of the overall Existing physical insurance policies
in their satellite portfolio offers cap equity and economic and market portfolio. The can be converted to electronic policies
portfolio, an extra risk-adjusted short-term debt conditions. Long-term liquidity needs can by filing up a conversion form.
core and return that pushes up funds make up gilt funds, sector specific be met through the
satellite. overall returns. this portfolio. funds are some examples. satellite portfolio.
 family finance
18 The Economic Times Wealth October 14-20, 2019

Stagger goals, SANTOSH J., 31 YEARS, SALARIED, NAVI MUMBAI

How to invest for goals

cover risks GOAL
FUTURE COST (`) /
TIME TO ACHIEVE
RESOURCES
USED
INVESTMENT
NEEDED
(`/MONTH)

Due to an early start, Navi Mumbai-based Santosh Emergency fund 85,000 Cash, stocks 1,000
will be able to achieve all his goals with ease.
Buying a car 13.1 lakh / 7 yrs - 5,000
by Riju Mehta
Portfolio Child’s education 1.9 crore / 18 yrs - 4,000*

S
antosh J. lives with his home-
maker wife and three-month-old CURRENT VALUE
ASSET
child in his own house, in Navi (`)
Child’s wedding 1.1 crore / 26 yrs - 5,000*
Mumbai. He has taken a home
Real estate 35 lakh
loan of `15 lakh, for which he is
EPF, PPF,
paying an EMI of `24,500. He brings in a Retirement 6.7 crore / 26 yrs 15,000*
Cash 25,000 insurance
salary of `55,000 a month, and after consid-
ering all expenses, he is left with a surplus Investible surplus
of `6,667. His portfolio worth `24.5 lakh Debt 6,000**
needed
comprises `35 lakh of real estate, cash of
`25,000, debt in the form of EPF (`2.5 lakh) EPF 2.5 lakh * Investment for child’s education goal will start from next year, for the child’s wedding after five years,
and PPF (`1.3 lakh), and equity in the form and for retirement after nine years.
** He should continue to invest `100 in the PPF every month.
of stocks worth `50,000. His goals include PPF 1.3 lakh Annual return assumed to be 12% for equity, 8% for debt funds. Inflation assumed to be 7%.
building an emergency corpus, buying a
car, saving for the child’s education and Equity
wedding, and retirement.
Chintan Vora of 5nance suggests that
Stocks 50,000
Insurance portfolio
Santosh build an emergency corpus of
`85,000, which is equal to four months’ EXISTING SUGGESTED
EXISTING
expenses. He can allocate his cash and Total 39.5 lakh MONTHLY MONTHLY
INSURANCE COVER SUGGESTIONS
stocks, and save `1,000 every month for PREMIUM PREMIUM
(`)
(`) (`)
one year. This amount should be invested
in a liquid fund. He also wants to buy a car LIABILITIES CURRENT VALUE (`)
worth `13.1 lakh in seven years, for which Life insurance
he can start an SIP of `5,000 in a diversi- Home loan 15 lakh
fied equity fund, and increase the amount Term plan - - Buy `1 crore plan 1,000
with the rise in income. Total liability 15 lakh
For the higher education of his child in Traditional
18 years, he has estimated a need of `1.9 6 lakh 2,083 - 2,083
plan
crore. For this, he will have to start an SIP Net worth `24.5 lakh
of `4,000 in a diversified equity fund from Ulips - - - -
next year onwards, and do so for 16 years.
He will also need to increase the amount
to `65,000 from the seventh year onwards.
TOTAL 6 lakh 2,083 `1.06 crore 3,083
For the child’s wedding in 26 years, he will Cash flow
require `1.1 crore. For this, he will have Health insurance
EXISTING SUGGESTED
to start an SIP of `5,000 after five years in (`) (`)
a diversified equity fund. He should raise
Employer’s 2 lakh - - -
this amount to `15,000 after six years and Income 55,000 55,000
continue to invest for 16 years.
Buy `5 lakh family
For retirement, Santosh will need `6.7 Outflow Own - - 1,000
floater plan
crore in 26 years, and can assign his EPF,
Household 17,250 17,250
PPF and insurance maturity value. He expenses TOTAL 2 lakh - `7 lakh 1,000
will also have to start an SIP of `15,000 in
a diversified equity fund after nine years. Contribution 3,000 3,000
to dependants Critical illness
He should invest for 14 years and increase
& accident - - - -
the amount with a rise in income. After in- Loan EMI 24,500 24,500 disability
vesting for all the goals, he will be left with
a surplus after 12 years, which he can in- Insurance 2,083 4,083 TOTAL - - - -
vest for wealth creation in an equity fund. premium
For life insurance, Santosh has a tradi-
Investment 1,500 6,100 Insurance cost - 2,083 - 4,083
tional plan of `6 lakh, which he can retain
as a debt component of his portfolio. He Premiums are indicative and could vary for different insurers.
should, however, buy a `1 crore term plan Total outflow 48,333 54,933
for himself, which will cost him `1,000
a month in premium. For health insur- Surplus 6,667 67
ance, he has a `2 lakh plan provided by his Write to us Looking for a professional to analyse your investment
portfolio? Write to us at etwealth@timesgroup.com with
employer. Vora suggests he buy a family
floater plan of `5 lakh, which will come for
Financial plan by Chintan Vora, for expert ‘Family Finances’ as the subject. Our experts will study
your portfolio and offer objective advice on where and
a premium of `1,000 a month.
Vice-President, 5nance.com
advice how much you need to invest to reach your goals.
SMART STATS
The Economic Times Wealth
October 14-20, 2019

In This Section
MUTUAL FUNDS - P20
LOANS AND DEPOSITS - P22
ALTERNATE INVESTMENTS- P23

ET WEALTH TOP 50 STOCKS

Every week we put about 3,000 stocks through four key filters and rate them on a mix of factors. The end result
of this is the listing of the top 50 stocks based on the composite rating to help ease your fortune hunt.
RANK PRICE ` GROWTH%* VA LUAT I O N R AT I O S RISK R AT I N G
Current Previous Stock Net Div Downside Bear No. of Consensus
Rank Rank Price Revenue Profit PE PB Yield PEG Risk Beta Analysts Rating

Apar Industries 1 1 506.40 19.15 52.71 14.24 1.61 1.87 0.27 1.11 1.04 10.00 4.90
1 Fast growing stocks
KEC International 2 2 270.20 23.85 31.48 14.28 2.85 1.01 0.47 1.46 0.96 31.00 4.84
Top 5 stocks with the highest
JK Cement 3 3 1040.40 22.56 70.45 28.17 2.97 0.96 0.32 1.12 0.96 22.00 4.50 expected revenue % growth
Aurobindo Pharma 4 6 465.15 31.23 25.39 11.53 1.96 0.53 0.42 1.80 0.89 36.00 4.56 over the previous year
Gujarat Gas 5 4 169.85 37.28 92.93 27.94 5.30 0.57 0.34 1.36 1.15 28.00 4.61 Sterlite
41
Technologies
HG Infra Engineering 6 5 208.40 33.86 39.93 10.67 2.05 0.23 0.26 1.98 0.99 13.00 5.00
Gujarat Gas 37
Engineers India 7 7 111.00 27.83 38.60 18.97 2.99 3.67 0.74 1.56 0.45 17.00 4.35
HG Infra
Zensar Technologies 8 8 200.75 20.93 25.95 2.88 2.33 1.38 0.12 1.52 0.73 16.00 4.56 Engineering 34

Ipca Laboratories 9 9 856.50 22.62 44.56 24.32 3.47 0.35 0.56 1.11 0.58 26.00 4.42 Aurobindo 31
DB Corp 10 10 142.90 5.34 32.77 9.33 1.37 7.06 0.26 1.27 1.16 15.00 4.13 Pharma
Info Edge India 31
Petronet LNG 11 -- 258.65 1.97 27.23 17.39 3.79 3.88 0.53 1.15 0.40 40.00 4.32
Sun Pharmaceutical 12 12 387.05 20.81 46.16 34.87 2.24 0.72 0.77 1.68 0.85 43.00 3.54
Ahluwalia Contracts 13 11 275.20 22.72 33.78 15.73 2.51 0.11 0.47 1.51 1.23 16.00 4.81
2 Least expensive stocks
Oberoi Realty 14 13 495.40 22.44 40.90 21.73 2.24 0.40 0.45 1.75 1.46 25.00 4.08 Top 5 stocks with the lowest
price-earnings ratio
Grasim Industries 15 35 696.60 15.31 48.01 25.84 0.82 1.04 0.55 1.55 1.50 13.00 4.54
Zensar
Emami 16 21 300.15 14.45 85.79 44.92 6.56 1.33 0.51 1.30 0.78 34.00 4.21 Technologies 2.88
Sobha 17 17 429.85 17.09 21.31 13.72 1.83 1.53 0.56 1.66 1.31 23.00 4.65 Jagran 6.48
Prakashan
UltraTech Cement 18 16 3976.30 26.57 80.84 44.82 3.84 0.28 0.58 1.31 1.52 40.00 4.13
NTPC 7.65
Power Grid Corp 19 19 199.10 10.22 12.51 8.29 1.76 4.21 0.60 0.96 0.54 28.00 4.32
Power Grid
8.29
Allcargo Logistics 20 18 98.30 16.01 17.19 9.98 1.21 3.51 0.45 1.37 1.12 11.00 4.73 Corp
Lupin 21 25 690.95 15.87 71.93 51.52 2.28 0.73 0.70 1.16 0.71 47.00 2.91 Redington 8.45
India
Parag Milk Foods 22 15 159.25 22.77 23.48 11.03 1.61 0.66 0.46 1.72 1.15 15.00 4.40
Alkem Laboratories 23 20 1929.00 18.57 39.45 30.33 4.24 0.83 0.78 0.81 -0.28 18.00 4.56
3 Best PEGs
Bharat Heavy Electricals 24 14 43.05 7.45 32.43 15.49 0.49 4.58 0.48 1.83 1.64 34.00 3.06
Top 5 stocks with the least
Century Plyboards 25 24 161.60 16.03 43.82 24.19 3.68 0.60 0.55 1.77 0.87 19.00 4.68
price-earnings to growth ratio
Redington India 26 32 108.40 16.32 17.50 8.45 1.08 2.99 0.49 1.85 0.85 11.00 4.73 HG Infra Apar Industries
Engineering
Rallis India 27 22 168.85 18.67 30.12 21.13 2.55 1.49 0.71 1.11 0.57 19.00 3.89
HeidelbergCement 28 23 182.60 13.11 40.14 18.75 3.53 2.16 0.46 1.59 1.84 15.00 4.33
0.12 0.26 0.26 0.27 0.32
CCL Products India 29 26 239.60 25.48 27.04 20.58 3.80 0.76 0.71 0.96 0.44 10.00 4.70
NBCC India 30 27 33.65 26.08 37.93 16.18 4.02 3.58 0.48 2.35 2.72 13.00 4.00
Zensar DB Corp JK Cement
Jagran Prakashan 31 30 56.05 5.43 20.21 6.48 0.89 5.93 0.32 1.61 1.01 14.00 4.36 Technologies
Larsen & Toubro 32 29 1425.10 20.76 22.48 22.44 3.20 1.26 1.06 1.04 1.21 39.00 4.64
4 Income generators
Narayana Hrudayalaya 33 31 235.00 21.30 135.75 80.63 4.42 0.43 0.58 1.36 0.46 11.00 5.00
NTPC 34 28 117.25 13.98 6.17 7.65 1.05 4.68 1.00 1.11 0.92 26.00 4.85 Top 5 stocks with the highest
dividend yield (%)
Reliance Industries 35 34 1362.75 10.99 30.87 20.39 2.09 0.49 0.71 1.14 0.67 36.00 4.28
DB Corp 7.06
Sterlite Technologies 36 36 144.15 41.15 22.00 10.16 3.37 2.46 0.51 2.47 2.01 12.00 4.42
Jagran 5.93
ITC 37 43 243.20 15.15 24.99 23.61 5.04 2.33 1.01 0.91 0.93 37.00 4.73 Prakashan
NTPC 4.68
JSW Energy 38 33 61.30 5.12 38.36 14.46 0.85 1.62 0.36 1.31 1.34 16.00 3.25
BHEL 4.58
Zee Entertainment 39 39 245.00 19.26 26.32 15.01 2.64 1.42 0.54 2.81 1.95 30.00 3.87 Ashok Leyland 4.49
Hexaware Technologies 40 38 357.15 25.96 23.07 18.15 4.19 2.52 1.02 1.29 0.45 28.00 3.79
Info Edge India 41 37 2283.65 31.10 62.61 46.11 10.96 0.22 0.38 1.73 0.33 29.00 3.52
5 Least risky
Ashok Leyland 42 40 68.85 18.14 11.37 9.72 2.31 4.49 0.85 1.81 1.04 49.00 3.43 Top 5 stocks with the lowest
Mphasis 43 41 909.20 19.14 12.67 16.22 3.23 2.91 1.07 1.23 1.10 33.00 4.30 downside risk
Jubilant Life Sciences 44 42 469.95 8.46 23.82 12.75 1.56 0.93 0.51 1.67 1.42 13.00 4.77 ITC CCL Products India

Mahanagar Gas 45 46 917.55 7.79 17.36 16.59 3.78 2.19 0.86 1.10 0.64 27.00 4.48
CG Consumer Elect 46 44 257.60 21.64 26.30 40.15 14.68 0.77 1.25 1.25 0.57 36.00 4.53
0.81 0.91 0.96 0.96 1.04
VRL Logistics 47 -- 267.25 13.08 93.84 26.07 3.71 2.10 0.71 1.42 1.32 14.00 3.79
Cipla/India 48 47 422.15 11.03 25.20 22.25 2.27 0.71 0.85 1.12 0.68 42.00 3.67
Alkem Power Grid Larsen &
Dr Reddy's Laboratories 49 48 2633.50 16.82 23.15 23.25 3.12 0.75 1.03 1.11 0.21 45.00 3.44 Laboratories Corp Toubro
SEE DOWNSIDE RISK AND BEAR BETA COLUMNS
IN THE ADJACENT TABLE.
*REVENUE AND NET PROFIT GROWTH IS BASED ON CONSENSUS ANALYSTS' EXPECTATIONS. NR: NOT IN THE RANKING. DATA AS ON 10 OCT 2019. SOURCE: BLOOMBERG
 smart stats
20 The Economic Times Wealth October 14-20, 2019

ETW FUNDS 100

BEST FUNDS TO BUILD YOUR PORTFOLIO
LAGGARDS & LEADERS
Taking a long-term view of fund returns, here is a list of 10
funds in each category—five leaders (worth investing) and
five laggards (that may be a drag on your portfolio).

LAGGARDS LEADERS

ET Wealth collaborates with Value Research to identify the top-performing Equity: Large-cap 5-year returns
funds across categories. Equity funds and equity-oriented hybrid funds are
4.18 11.58
ranked on 3-year returns while debt-oriented hybrid and income funds are Principal Nifty 100 Equal Weight Mirae Asset Large Cap
ranked on 1-year returns. 5.55 11.51
Taurus Largecap Equity JM Core 11

Value Research Net Assets

RETURNS (%)
Expense 5.67 11.5
Fund Rating (` Cr) 3-Month 6-Month 1-Year 3-Year 5-Year Ratio (%) JM Large Cap Axis Bluechip
6.11 10.98
EQUITY: LARGE-CAP 14.2% Baroda Large Cap Quant Focused
Axis Bluechip Fund*  7005.1 4.92 7.76 22.22 14.17 11.5 2 THE 3-YEAR 6.64 10.56
Sundaram Select Focus Fund*  972.51 -1 0.65 12.25 11.65 8.61 2.38 RETURN
OF AXIS IDFC Large Cap Motilal Oswal Focused 25
HDFC Index Fund*  467.63 -1.13 -1.36 12.16 11.64 8.48 0.3
BLUECHIP IS
Mirae Asset Large Cap Fund  13946.19 -1.75 -1.96 12.03 10.36 11.58 1.68 THE HIGHEST
Canara Robeco Bluechip Equity Fund*  220.65 1.48 2.96 15.36 9.75 9.46 2.65 IN ITS
ICICI Prudential Bluechip Fund*  21672.64 -1.51 -1.91 9.21 8.83 9.2 1.78 CATEGORY. Equity: Multi-cap 5-year returns
Edelweiss Large Cap Fund  155.04 -0.28 -0.11 11.07 8.62 9.16 1.99
Motilal Oswal Focused 25 Fund*  1059.55 4.14 5.18 18.21 8.54 10.56 2.23 4.7 14.07
JM Core 11 Fund  49.56 5.66 -2.29 18.31 8.49 11.51 — LIC MF Multicap Fund Motilal Oswal Multicap 35
Nippon India Large Cap Fund*  11819.31 -5.94 -6.81 7.96 8.38 9.35 1.86 4.72 13.56
SBI Bluechip Fund*  21483.76 -1.11 0.33 14.2 6.41 9.88 1.89 Taurus Starshare (Multi Cap) Axis Focused 25

11% 5.43 12.32

EQUITY: LARGE- & MID-CAP
Union Multi Cap Fund Tata Retirement Savings
Sundaram Large and Mid Cap Fund*  720.99 1.33 0.54 14.03 11.03 11.76 2.6 THE 3-YEAR
Invesco India Growth Opportunities Fund*  1658.8 1.64 -0.38 12.42 10.46 10.83 2.07 RETURN OF 5.43 12.1
Mirae Asset Emerging Bluechip Fund  7759.44 -0.8 -1.52 15.53 10.42 16.05 1.78
SUNDARAM ICICI Prudential Focused SBI Magnum Multicap
LARGE AND
LIC MF Large & Mid Cap Fund*  509.41 3.44 3.02 15.77 8.57 — 2.77
MID CAP 5.83 12.07
Canara Robeco Emerging Equities Fund  4668.59 -2.63 -4.38 9.07 7.55 12.77 2.07 FUND IS THE HDFC Focused 30 Kotak Standard Multicap
DSP Equity Opportunities Fund*  5166.21 1.47 -0.55 13.5 7.11 11.02 1.95 HIGHEST
Kotak Equity Opportunities Fund*  2487.55 -1.16 -2.52 12.45 6.94 10.43 2.17 IN ITS
Principal Emerging Bluechip Fund  2057.33 -0.89 -3.19 7.16 5.95 12.3 2.07
CATEGORY.
Equity: Mid-cap 3-year returns
EQUITY: MULTI-CAP
Axis Focused 25 Fund*  7841.41 4.3 5.82 15.62 12.64 13.56 2.03 -2.23 11.29
Tata Retirement Savings Fund  632.32 1.13 1 16.04 10.08 12.32 2.45 SBI Magnum Midcap Axis Midcap
SBI Focused Equity Fund*  5127.07 -0.54 0.61 18.18 10.01 11.7 2.09
-1.09 5.88
Parag Parikh Long Term Equity Fund  2066.68 -0.15 -0.05 7.09 9.99 11.26 2.07
PGIM India Midcap Opportunities Invesco India Mid Cap
Edelweiss Multi Cap Fund  417.73 -1.41 -1.81 9.41 9.39 — 2.48
Kotak Standard Multicap Fund*  25381.36 -1.76 -0.99 13.21 9.14 12.07 1.75 -0.46 5.76
SBI Magnum Multicap Fund*  7549.36 0.27 1.1 15.92 8.41 12.1 2.07 Motilal Oswal Midcap 100 ETF Tata Midcap Growth
Motilal Oswal Multicap 35 Fund*  12693.11 0.52 0.36 14.2 7.9 14.07 1.75 -0.4 5.59
Quant Active Fund*  6.27 -4.75 -5.07 3.68 6.82 9.51 2.48
Aditya Birla Sun Life Mid Cap L&T Midcap
Franklin India Focused Equity Fund*  7981.32 -6.79 -5.36 12.92 6.55 9.74 1.85
Aditya Birla Sun Life Equity Fund*  10652.87 -1.28 -4.39 8.72 5.42 10.54 1.96
-0.15 5.39
ICICI Prudential Multicap Fund*  3990.54 -4.93 -6.38 3.66 5.4 8.91 2.08 UTI Mid Cap DSP Midcap

EQUITY: MID-CAP 11.3%

Axis Midcap Fund*
L&T Midcap Fund


2819.12
4905.48
5.29
-2.82
4.44
-7.36
17.37
1.96
11.29
5.59
11.5
11.19
2.17
1.98
THE 3-YEAR
RETURN OF
Equity: Small-cap 3-year returns
DSP Midcap Fund*  5920.68 -0.21 -2.09 13.32 5.39 11.55 1.95
AXIS MID-
Kotak Emerging Equity Scheme*  4469.53 -2.05 -3.06 11.4 5.05 11.96 2.04
CAP FUND IS -7.35 9.96
THE HIGH- Quant Small Cap Axis Small Cap
Franklin India Prima Fund*  6694.33 -1.64 -4.96 8.34 4.36 10.94 1.88 EST IN ITS
HDFC Mid-Cap Opportunities Fund*  20943.79 -4.39 -9.51 3.67 2.65 9.53 1.85 CATEGORY. -4.07 9.76
Sundaram Small Cap SBI Small Cap
EQUITY: SMALL-CAP
Axis Small Cap Fund*  885.44 4.66 8.66 22.86 9.96 12.18 2.48
-2.47 6.25
SBI Small Cap Fund*  2413.24 1.48 -1.67 8.81 9.76 16.52 2.31 Aditya Birla Sun Life Small Cap HDFC Small Cap
HDFC Small Cap Fund*  8208.77 -8.79 -15.01 -5.4 6.25 10.25 2.1 -2.04 5.55
Nippon India Small Cap Fund*  7491.46 -4.85 -9.37 -1.84 5.55 10.57 2.19 DSP Small Cap Nippon India Small Cap
L&T Emerging Businesses Fund  5638.54 -6.21 -11.23 -4.45 5.11 11.4 2.01 -1.93 5.11
EQUITY: VALUE-ORIENTED HSBC Small Cap Equity L&T Emerging Businesses
Kotak India EQ Contra Fund*  818.74 -0.28 -1.34 10.51 10.26 10.08 2.58
Invesco India Contra Fund*  3991.92 -1.9 -4.37 6.34 8.64 11.09 1.9
Tata Equity PE Fund*  5208.24 -1.02 -2.92 7.42 7.63 10.98 1.9 Hybrid: Aggressive 5-year returns
L&T India Value Fund  7633.41 -5.55 -6.34 3.76 4.45 10.65 1.87

1.87 11.38
EQUITY: TAX-SAVING 12.1% JM Equity Hybrid Tata Retirement Savings
Mirae Asset Tax Saver Fund  2305.59 -1.52 -1.29 13.01 12.06 — 1.86
THE 3-YEAR
Axis Long Term Equity Fund*  19236.11 3.23 5.25 18.32 11.37 12.49 1.76 RETURN OF 5.53 10.69
JM Tax Gain Fund  30.64 4.91 4.03 21.44 9.97 11.07 — MIRAE ASSET PGIM India Hybrid Equity SBI Equity Hybrid
Motilal Oswal Long Term Equity Fund  1389.39 4.16 2.16 14.83 8.9 — 2.11 TAX SAVER
FUND IS THE
5.63 9.69
Tata India Tax Savings Fund*  1814.81 -2.45 -0.77 16.31 8.2 12.07 2.12
HIGHEST IN LIC MF Equity Hybrid Canara Robeco Equity Hybrid
Invesco India Tax Plan*  859.03 -0.4 -1.88 8.52 8.14 10.1 2.35
ITS CATEGORY. 5.89 9.4
DSP Tax Saver Fund*  5482.26 0.8 0.8 17.1 7.65 11.14 1.88
Kotak Tax Saver Regular Plan*  895.56 -2.92 -1.12 12.44 7.41 10.55 2.4 Baroda Hybrid Equity HDFC Children's Gift
Aditya Birla Sun Life Tax Relief 96*  8561.62 -1.09 -6.09 4.35 6.74 10.89 2.07 6.1 9.38
IDFC Tax Advantage (ELSS) Fund*  1876.67 -6.98 -8.04 2.86 6.71 8.95 2.15 UTI Hybrid Equity HDFC Hybrid Equity
Quant Tax Plan*  9.36 -6.11 -5.55 3.21 5.76 12.09 2.48
ANNUALISED RETURNS IN % AS ON 9 OCTOBER 2019.
 smart stats
The Economic Times Wealth October 14-20, 2019 21

ETW FUNDS 100 Top 5 SIPs

Value Research
Fund Rating
Net Assets
(` Cr) 3-Month 6-Month
RETURNS (%)
1-Year 3-Year 5-Year
Expense
Ratio
1 Top 5 equity schemes based
HYBRID: EQUITY SAVINGS 6.9% on 10-year SIP returns
Kotak Equity Savings Fund*  1949.79 0.86 1.54 7.31 6.98 — 2.16 THE 3-YEAR SBI Small Cap
Edelweiss Equity Savings Fund  118.82 0.44 1.43 6.51 6.66 — 1.74 RETURN OF
ICICI Prudential Equity Savings Fund*  1530.42 0.36 2.18 8.89 6.57 — 1.34 KOTAK EQ- 19.56
HDFC Equity Savings Fund*  4909.64 -1.21 -0.5 5.6 6.25 7.66 1.93 UITY SAVINGS Canara Robeco Emerging Equities
FUND IS THE
HYBRID: AGGRESSIVE (EQUITY-ORIENTED) HIGHEST IN 17.63
SBI Equity Hybrid Fund*  29353.7 1.19 3.45 15.9 8.99 10.69 1.65
ITS CATEGORY.
Principal Emerging Bluechip
Mirae Asset Hybrid Equity Fund  2429.15 -2.25 -1.52 10.99 8.84 — 1.98
15.45
Tata Retirement Savings Fund  1048.75 1.03 -0.7 12.06 8.62 11.38 2.26
HDFC Retirement Savings Fund  312.73 -1.92 -2.59 8.9 8.06 — 2.64 SBI Focused Equity
Canara Robeco Equity Hybrid Fund*  2341.39 -0.06 0.46 11.91 7.79 9.69 2.15
15.25
HDFC Children's Gift Fund*  2780.12 -1.84 -2.07 8.74 7.65 9.4 2.13
Kotak Emerging Equity Scheme
Principal Hybrid Equity Fund  1558.56 -3.23 -6.19 1.68 7.07 9.21 2.09
ICICI Prudential Equity & Debt Fund*  23288.42 -3.81 -4.14 6.13 6.73 9.23 1.73 14.83
HDFC Hybrid Equity Fund*  20695.95 -3.03 -3.13 9.27 6.69 9.38 1.77
SIP: SYSTEMATIC % ANNUALISED RETURNS
HYBRID: CONSERVATIVE (DEBT-ORIENTED) INVESTMENT PLAN AS ON 9 OCTOBER 2019

Tata Retirement Savings Fund  130.42 1.17 2.94 11.07 6.34 8.39 2.23 11.1%
ICICI Prudential Regular Savings Fund*  1639.51 1.22 2.92 10.01 7.68 9.51 1.94 THE 1-YEAR
Top 5 MIPs
Aditya Birla Sun Life Regular Savings Fund*
Indiabulls Savings Income Fund*


2003.6
18.86
0.21
-0.43
1.79
1.68
7.6
7.08
4.27
8.02
8.56
—
1.86
2.22
RETURN OF
TATA RETIRE-
2 Top 5 MIP schemes based on
UTI Regular Savings Fund*  2379.01 0.41 -1.7 3.78 5.02 7.42 1.79
MENT SAVINGS
SBI Magnum Children's Benefit Fund*  62.31 -0.86 -3.21 2.94 7.75 10.26 2.26
FUND IS THE 3-year SWP returns
HIGHEST IN ITS
DEBT: MEDIUM- TO LONG-TERM CATEGORY. Indiabulls Savings Income
IDFC Bond Fund Income Plan*  673.28 1.69 7.83 14.62 7.17 9.04 1.89 8.37
ICICI Prudential Bond Fund*  3318.48 2.24 5.66 11.75 6.48 8.6 1.08 ICICI Prudential Regular Savings
SBI Magnum Income Fund*  1204.3 2 6.36 11.67 7.18 8.76 1.47
8.21
DEBT: MEDIUM-TERM
Baroda Conservative Hybrid
SBI Magnum Medium Duration Fund*  1841.93 2.25 5.73 11.32 8.34 9.3 1.09
Indiabulls Income Fund*  21.87 1.21 4.3 9.84 7.23 8.52 0.76 6.78
Franklin India Income Opportunities Fund*  3587.02 0.63 2.22 7.58 7.58 8.36 1.71 Canara Robeco Conservative Hybrid
Axis Strategic Bond Fund*  1185.13 2.05 2.28 7.56 6.72 8.65 1.05
6.23
DEBT: SHORT-TERM
Axis Short Term Fund*  2153.68 2.35 4.84 10.21 7.22 8.09 0.9
10.2% BNP Paribas Conservative Hybrid
THE 1-YEAR 6.02
HDFC Short Term Debt Fund*  8487.64 2.35 4.78 10.09 7.55 8.32 0.4
RETURN OF
Baroda Short Term Bond Fund*  297.92 1.86 4.63 9.35 7.72 8.4 1.3 AXIS SHORT SWP: SYSTEMATIC % ANNUALISED RETURNS
Franklin India Short Term Income Plan*  13155.95 0.67 1.69 7.8 7.79 8.43 1.49 TERM FUND WITHDRAWAL PLAN AS ON 9 OCTOBER 2019
Indiabulls Short Term Fund*  67.78 0.24 2.31 7.35 6.56 7.74 1.48 IS THE HIGH-
EST IN ITS
DEBT: DYNAMIC BOND CATEGORY.
Edelweiss Dynamic Bond Fund
SBI Dynamic Bond Fund*
PGIM India Dynamic Bond Fund



54.25
1126.07
41.37
1.14
1.73
1.52
7.01
8.09
6.97
16.03
14.09
13.84
6.98
7.62
8.13
8.06
9.37
9.5
1.01
1.66
1.64
3 ELSS Cash holdings
19.54
Kotak Dynamic Bond Fund*  790.76 1.46 6.18 13.3 7.92 9.2 1.08
ICICI Prudential All Seasons Bond Fund*  2779.93 1.36 5.09 10.28 7.16 9.64 1.32 15.71
Franklin India Dynamic Accrual Fund*  3981.43 1.17 2.67 8.89 7.96 9.27 1.68 13.38
DEBT: CORPORATE BOND
HDFC Corporate Bond Fund*  12910.11 2.08 5.39 11.53 7.65 8.7 0.45 8.69 8.25
Aditya Birla Sun Life Corporate Bond Fund*  16274.98 2.11 4.93 10.71 7.65 8.67 0.39
Franklin India Corporate Debt Fund*  1033.42 1 4.09 10.59 7.93 8.66 0.87
Kotak Corporate Bond Fund*  2447.6 2.45 4.87 10.11 7.89 9.23 0.59
Expense as on 30 September 2019
ICICI Prudential Corporate Bond Fund*  9002.07 2.22 4.81 10.07 7.34 8.27 0.56
*Expense as on before 30 September
Nippon India Prime Debt Fund*  1139.9 2.08 3.38 8.3 7.02 7.91 0.71
2019 Parag Shriram Quantum LIC MF BNP
All equity funds ranked on 3-year returns. Debt funds ranked on 1-year returns. Returns as on 09 October 2019 Parikh Long Term Tax Sav- Tax Plan Paribas
Assets as on 31 August 2019 Tax Saver Equity ing Long Term
Rating as on 30 September 2019 Equity
Did not find your fund here?
Log on to www.wealth.economictimes.com for an exhaustive list.
% AS ON 31 AUGUST 2019

Methodology EQUITIES (figures over the past one year)

The Top 100 includes only those funds that have a 5- or
4-star rating from Value Research. The rating is determined
Large-cap: Mostly invested in large-cap companies.
Multi-cap: Mostly invested in large- and mid-cap
4 Debt: Expense ratio
by subtracting a fund’s risk score from its return score.
The result is assigned stars according to the following companies. FUND
distribution:

  Top 10%

Mid-cap: Mostly invested in mid-cap companies.
Small-cap: Mostly invested in small-cap companies.
RAISER 0.45
0.49 0.50 0.51

0.39
  Next 22.5% Tax planning: Offer tax rebate under Section 80C.
(Not covered
  Middle 35% in ETW Funds International: More than 65% of assets invested abroad.


 Next 22.5%
 Bottom 10%
100 listing) Income: Average maturity varies according to objective.
Gilt: Medium- and long-term; invest in gilt securities.
`1.52 lakh cr
Fixed-income funds less than 18 months old and equity funds Equity-oriented: Average equity exposure more
is net outflow* from the
less than three years old have been excluded. This ensures than 60%. total schemes of mutual
that all the funds have existed long enough to be tracked for Debt-oriented aggressive: Average equity exposure funds for the month of
consistency of performance. Given the focus on long-term Aditya Bir- HDFC DSP UTI Cor- Sundaram
investing, liquid funds, short-term funds and FMPs are not
between 25-60%. September 2019.
la Sun Life Corporate Corporate porate Corporate
part of the list. For the same reason, we have considered only Debt-oriented conservative: Average equity exposure Corporate Bond Bond Bond Bond
*funds mobilized minus the
the growth option of funds that reinvest returns instead of less than 25%. Bond
redemptions.
offering dividends that increase the NAV of funds. Arbitrage: Seek arbitrage opportunities between equity
Despite these rigorous filters, the list includes 2/3 funds of and derivatives. % AS ON 31 AUG 2019
% EXPENSE RATIO IS CHARGED ANNUALLY.
each category to maximise choice from the best funds. Asset allocation: Invest fully in equity or debt as per
METHODOLOGY OF TOP 100 FUNDS ON
The fund categories are: market conditions. WWW.WEALTH.ECONOMICTIMES.COM
 loans and deposits
22 The Economic Times Wealth October 14-20, 2019

LOANS & DEPOSITS

ET WEALTH collaborates with ETIG to provide a comprehensive ready reckoner of loans and fixed-income
instruments. Don’t miss the information on investments for senior citizens and a simplified EMI calculator.

Top five bank FDs

TENURE: 1 YEAR
Interest rate (%)
compounded qtrly
What `10,000
will grow to
HOME LOAN RATES
IDFC First Bank 8.00 10,824
With effect from 1 October, all banks have made the transition to external
RBL Bank 7.60 10,782 benchmarks for pricing new home loans. Most banks have picked the RBI
Indusind Bank 7.50 10,771 repo rate as the external benchmark.
Lakshmi Vilas Bank
Yes Bank
7.50
7.25
10,771
10,745
REPO RATE: 5.40%
BANK RLLR (%) FOR SALARIED (%) FOR SELF EMPLOYED (%) WEF
TENURE: 2 YEARS
IDFC First Bank 8.00 11,717 Punjab National Bank 7.80 5 Oct
RBL Bank 7.65 11,636 Karur Vysya Bank 7.95 7 Oct
DCB Bank 7.50 11,602 SBI (Max Gain) 8.05 8.45 to 8.80 8.60 to 8.95 1 Oct
Lakshmi Vilas Bank 7.50 11,602 UCO Bank 8.05 5 Oct
AU Small Finance Bank 7.50 11,602
Bank of Baroda 8.10 8.10 to 9.10 5 Oct
TENURE: 3 YEARS United Bank of India-RLLR 8.15 8.15 to 8.30 1 Oct
DCB Bank 8.00 12,682
Bank of Maharashtra 8.20 8.20 8 Oct
AU Small Finance Bank 7.77 12,597
Oriental Bank of Commerce 8.20 8.30 to 8.80 5 Oct
Lakshmi Vilas Bank 7.50 12,497
IDFC First Bank 7.50 12,497
SBI (Term Loan) 8.20 8.20 to 8.55 8.35 to 8.70 1 Oct
Indusind Bank 7.35 12,442 Central Bank of India 8.25 8.25 to 8.55 1 Oct

TENURE: 5 YEARS
Indian Overseas Bank 8.25 8.45 to 8.70 1 Oct
DCB Bank 7.75 14,678 Syndicate Bank 8.25 8.25 to 8.45 8.30 to 8.50 1 Oct
IDFC First Bank 7.50 14,499 Union Bank of India 8.25 8.45 to 8.60 1 Oct
RBL Bank 7.50 14,499 United Bank of India-EBLR 8.25 8.25 to 8.40 1 Oct
AU Small Finance Bank 7.50 14,499 Canara Bank 8.30 8.30 to 10.30 1 Oct
Indusind Bank 7.35 14,393
Bank of India 8.35 8.35 to 8.65 8.35 to 9.25 1 Oct
IDBI Bank 8.50 8.50 to 8.85 8.60 to 9.05 1 Oct
ICICI Bank 8.65 8.65 to 9.25 8.85 to 9.40 4 Oct
Top five senior citizen bank FDs South Indian Bank 8.75
Interest rate (%) What `10,000
TENURE: 1 YEAR compounded qtrly will grow to Federal Bank 8.80 8.80 to 8.90 8.85 to 9.00 1 Oct
IDFC First Bank 8.50 10,877 Axis Bank 8.85 8.85 to 9.30 8.90 to 9.50 1 Oct
Lakshmi Vilas Bank 8.10 10,835 City Union Bank 9.00 1 Oct
RBL Bank 8.10 10,835
Indusind Bank 8.00 10,824
Bandhan Bank 8.00 10,824

TENURE: 2 YEARS Your EMI for a loan of `1 lakh

IDFC First Bank 8.50 11,832 TENURE 5 YEARS 10 YEARS 15 YEARS 20 YEARS 25 YEARS
RBL Bank 8.15 11,751
@ 8%
Bandhan Bank 8.15 11,751 2,028 1,213 956 836 772
Lakshmi Vilas Bank 8.10 11,740 @ 10%
2,125 1,322 1,075 965 909
DCB Bank 8.00 11,717 @ 12%
TENURE: 3 YEARS @ 15% 2,224 1,435 1,200 1,101 1,053
DCB Bank 8.50 12,870
AU Small Finance Bank 8.27 12,784
2,379 1,613 1,400 1,317 1,281
Lakshmi Vilas Bank 8.10 12,720 FIGURES ARE IN `. USE THIS CALCULATOR TO CHECK YOUR LOAN AFFORDABILITY.
FOR EXAMPLE, A `5 LAKH LOAN AT 12% FOR 10 YEARS WILL TRANSLATE INTO AN EMI OF `1,435 X 5 = `7,175
Bandhan Bank 8.10 12,720
IDFC First Bank 8.00 12,682

TENURE: 5 YEARS
Post office deposits Interest (%)
Minimum
invt. (`)
Maximum investment (`) Features
Tax
benefits

DCB Bank 8.25 15,043

Senior Citizens' Savings Scheme 8.60 1,000 15 lakh 5-year tenure, minimum age 60 yrs 80C
IDFC First Bank 8.00 14,859
RBL Bank 8.00 14,859 Sukanya Samriddhi Yojana 8.40 250 1.50 lakh One account per girl child 80C
AU Small Finance Bank 8.00 14,859
Bandhan Bank 8.00 14,859 Public Provident Fund 7.90 500 1.50 lakh p.a. 15-year tenure, tax-free returns 80C

5-year NSC VIII Issue 7.90 100 No limit No TDS 80C

Top five tax-saving bank FDs Time deposit 6.90-7.70 200 No limit Available in 1, 2, 3, 5 years 80C#
Interest What `10,000
TENURE: 5 YEARS AND ABOVE rate (%) will grow to Single 4.5 lakh 5-year tenure, monthly returns Nil
Post Office Monthly Income
DCB Bank 7.75 14,678 7.60 1,500
Scheme
Joint 9 lakh 5-year tenure, monthly returns Nil
IDFC First Bank 7.75 14,678
Indusind Bank 7.50 14,499 Kisan Vikas Patra 7.60 1,000 No limit Can be encashed after 2.5 years Nil
RBL Bank 7.50 14,499
Recurring deposits 7.20 10 No limit 5-year tenure Nil
AU Small Finance Bank 7.50 14,499
Savings account 4.00 20 No limit `10,000 interest tax free Nil
ALL DATA SOURCED FROM ECONOMIC TIMES INTELLIGENCE GROUP
(ETIGDATABASE@TIMESGROUP.COM) Data as on 10 Oct 2019 # Benefit available only for 5-year deposit
 non-traditional investments
The Economic Times Wealth October 14-20, 2019 23

ALTERNATIVE INVESTMENT
RETURNS MONITOR
The scope and attractiveness of alternative investments is increasing. Here’s a weekly tracker of returns from such investments. But don’t
compare these with returns from traditional investments since the proportion and purpose of alternative investments is vastly different.

Diamond Index Precious Metals Index Wine Index Coin Index

120.85 116.45 1,549.69 1,951.04 358.78 349.45 18,890 23,301
9 OCT 2018 8 OCT 2019 9 OCT 2018 8 OCT 2019 9 OCT 2018 7 OCT 2019 8 OCT 2019
9 OCT 2018

CHANGE
X I WEEK 0.66% I WEEK -0.23% I WEEK 0.17% I WEEK -4.11%
X I YEAR -3.64% I YEAR 25.9% I YEAR -2.6% I YEAR 23.35%
Overall Diamond Index is based on The S&P GSCI Precious Metals Index The Liv-ex Fine Wine 50 Index tracks The Krugerrand Coin index represents
actual transactions from 20 different comprises gold (91.33%) & silver (8.67%) daily price movement of the most the denomination of a 22 carat gold
market players and reflects price & provides a benchmark for investment heavily traded commodities in the wine bullion coin weighing one troy ounce
movements in the global diamond performance in the precious metals market. It includes only the 10 most that is listed for trading on the
market. The index is updated daily. commodity markets. It is updated daily. recent vintages and is updated daily. Johannesburg Stock Exchange.

PENNY STOCKS UPDATE

Penny stocks as a recommended non-traditional investment? Not exactly. ET WEALTH
neither has the expertise nor does it recommend investing in such stocks. But since the
relatively ‘low’ cost of investment attracts some investors to penny stocks, we provide
a weekly snapshot of this most volatile and uncertain type of stock investing.

Top price gainers Top volume gainers

MARKET 1-WEEK (%) 1-MTH (%) 1-MONTH AVG 1-MONTH AVG MKT CAP MARKET 1-WEEK (%) 1-MTH (%) 1-MTH AVG 1-MONTH AVG MKT CAP
STOCK PRICE (`) CHANGE CHANGE VOL (LAKH) VOL CHG (%) (`CR) STOCK PRICE (`) CHANGE CHANGE VOL (LAKH) VOL CHG (%) (`CR)

Reliance Naval & Engine 1.69 14.97 131.51 9.64 5.52 124.65 BT Syndicate 9.90 0.51 4.21 1.25 7,91,331.30 101.67
IL&FS Transportation Net 3.59 9.12 124.38 0.49 162.82 118.10 Hexa Tradex 7.36 10.51 -27.13 0.40 4,279.88 40.66
Frontier Informatics 4.94 5.78 96.03 0.06 3,684.65 25.19 Frontier Informatics 4.94 5.78 96.03 0.06 3,684.65 25.19
Shree Global Tradefin 3.10 10.71 68.48 0.01 95.82 353.25 Digicontent 6.00 3.27 -1.96 0.26 2,477.72 34.92
Satkar Finlease 2.40 3.90 47.24 0.00 -97.62 52.90 CNI Research 2.04 0.49 -0.49 0.80 2,390.01 23.42
Setubandhan Infrastru. 1.70 -6.08 44.07 0.32 -21.19 21.37 Bombay Rayon Fashion 4.98 3.75 -6.04 0.36 1,449.96 158.11
Country Condo's 2.19 -1.79 39.49 0.03 403.14 16.99 Gold Line International 1.32 4.76 -33.33 0.03 1,261.29 68.77
Starlite Components 9.55 0.53 38.61 0.02 -74.50 16.33 MSR India 7.01 -10.70 3.39 0.19 1,203.45 44.08
Vikas Multicorp 3.88 -4.43 38.57 1.16 59.69 257.44 Mercator 0.95 -13.64 -29.63 15.35 1,121.45 28.74
SAL Steel  3.00 -0.33 33.33 0.17 329.80 25.49 Diamond Power Infrastr. 0.48 -7.69 -11.11 0.11 832.47 12.85

Top price losers Top volume losers

Manpasand Beverages 7.10 4.72 -52.35 1.69 238.97 81.27 BC Power Controls 9.07 -2.47 -6.59 1.19 -64.73 53.33
Housing Development 3.02 -13.71 -50.17 4.17 -14.11 143.15 GTL Infrastructure 0.59 3.51 5.36 3.29 -60.62 726.83
Reliance Home Finance 3.28 -5.20 -42.36 1.59 54.25 159.10 Karuturi Global 0.26 -10.34 -21.21 1.15 -56.70 38.94
Sanwaria Consumer 1.75 -11.17 -41.47 10.83 25.46 128.82 Toyam Industries 1.65 -13.61 -36.78 3.63 -53.92 35.06
Alok Industries 1.64 14.69 -38.81 36.21 228.28 225.88 Reliance Communications 0.77 8.45 1.32 30.57 -39.62 212.95
Toyam Industries 1.65 -13.61 -36.78 3.63 -53.92 35.06 Ram Minerals and Chemi. 0.68 1.49 -10.53 6.15 -37.79 13.99
Sintex Plastics Technol. 2.80 -13.85 -36.51 2.75 -21.02 176.68 Vikas Ecotech 3.61 -5.00 -6.23 1.03 -36.89 110.32
Unitech 0.48 -11.11 -35.14 11.61 -24.13 125.58 Cox & Kings 3.01 -13.75 -7.67 12.07 -28.68 53.14
Sintex Industries 1.44 -13.25 -32.39 3.36 21.99 85.55 Bajaj Hindusthan Suga 6.12 -7.27 -16.16 2.36 -27.31 693.76
BAG Films & Media 1.45 -9.38 -31.60 1.66 6.06 28.70 Orient Tradelink 3.65 -3.69 -9.65 1.05 -24.52 20.02

THE STOCKS HAVE BEEN SELECTED USING THE FOLLOWING FILTERS: PRICE LESS THAN `10, ONE-MONTH AVERAGE VOLUME GREATER THAN OR EQUAL TO 1 LAKH AND MARKET
CAPITALISATION GREATER THAN OR EQUAL TO `10 CRORE. DATA AS ON 25 SEPTEMBER 2019. SOURCE: ETIG DATABASE AND BLOOMBERG.
 QA
your queries
24 The Economic Times Wealth October 14-20, 2019
I want to invest a lump sum of `2
lakh. The money should generate a
monthly income for me when I
retire in 5 years with other
benefits. I don’t want to invest in
Ulips. Should I opt for mutual funds?
Since you
have a
five year horizon, you could invest in an equity
mutual fund now, redeem after five years and
then transfer the accumulated corpus into a
bank fixed deposit, Senior Citizens’ Savings
Scheme or small savings schemes like Post
Office Monthly Income Scheme or National
Savings Certificate. While no mutual fund
guarantees safety of capital nor assures fixed
return, the horizon you have in mind gives you
a fair chance of earning a reasonable return.
Invest in a index fund / ETF if you wish to keep
it simple. Alternatively, you could opt for a
multi-cap equity scheme as it
contains a mix of both
large and small sized
companies.
Jayant R. Pai
CFP and Head of Marketing,
PPFAS Mutual FUND
I will take VRS in Sept 2021. I will
receive `10 lakh as compensation. I
have `8 lakh in my savings account
and `2 lakh as loans to relatives. I
have MF investments worth `30
lakh, `2 lakh in bonds, `13 lakh in In your
deposits, `4 lakh in stocks and `2 retirement,
lakh in NPS. My retiral benefits you can
would add up to `45 lakh. I earn generate a
`15,000 in rent every month. How monthly
should I invest the money I will get? income by
investing
`15 lakh in
in the SCSS, `4.5 lakh in Post Office Monthly
Income Scheme and `10 lakh in tax-free bonds.
Your fund portfolio should be aligned towards
safer debt options and facilitate a Systematic
Withdrawal Plan. A MF portfolio of `60 lakh
should ideally be a mix of Franklin India Short
Term Income Plan, ABSL Liquid Fund and SBI
Magnum Ultra Short Duration Fund. Create an
emergency corpus by parking `5 lakh in a bank
account or in liquid funds and `20 lakh in FDs
for senior citizens. Buy a joint health
insurance for yourself and your
wife. The rent and MF yields
should give a monthly income
of `60,000.
Raj Khosla
Founder and Managing Director,
Mymoneymantra.com
My brother is a Canadian citizen.
What are the investment options
available to my mother, an Indian
citizen, if she wants to make my
brother a joint holder or nominee?
Adding your brother as a nominee would be the simplest option as
having a Canadian citizen as a joint holder will mean stricter KYC and
other regulatory requirements. Your mother can be the single holder and as she is an
Indian citizen she will be able to access all investment options like mutual funds, stocks
and bonds. Your brother can be the nominee in all investments. After your mother’s
demise, these investments can be transferred to the nominee.
& My mother retired recently and
Our panel of experts will
answer questions related to
any aspect of personal
finance. If you have a query,
mail it to us right away.
QUESTION OF THE WEEK
I purchased a DDA flat in August
2016 for `21 lakh. I took a home
loan of `17.7 lakh and availed
tax breaks between Sept 2016
and March 2019. In April 2019, I
prepaid the loan. I bought this
flat from someone who bought it
from DDA for `12 lakh in 2012. If
I sell my flat today for `21 lakh,
what will be my tax burden?
How can I reduce my tax burden?
The flat will qualify as a long term
capital asset as you have held it for more
than two years. If you are selling the
asset at the purchase price even after
three years, this transaction will result
in long term capital loss as the purchase
price will be indexed to the cost inflation
index. The home loan benefit claimed
under Section 80C will be reversed in
the year of sale and added to your
income if the flat is sold before five
years of purchase. The cost to original
buyer is immaterial in this transaction.
Since your transaction will result in long
term capital loss if sold at purchase
price, there will be no taxability. Hence,
there is no need to look at investment
avenues. If you manage to sell the
property at a higher value and that
results in a capital gain, you
may invest the same in
avenues prescribed
under Section 54 of
the Income Tax Act.
Shubham Agrawal
Senior Taxation Advisor,
TaxFile.in
Ankur Choudhary, Co-Founder and CIO, Goalwise
gifted me a chunk of her PF kitty. I
have an ongoing home loan. Should
I use this money to repay the loan
or invest it to increase my savings?
It’s always good
to clear one’s
debts before investing. However, a home loan
provides some tax benefits. You have not quantified
any figures, so here’s a broader check list of the
things you should consider while deciding. If having
a loan doesn’t stress you, then you can do the math
to check if it is benefiting you in terms of tax relief. A
home loan tenure is structured in a way that in the
initial years, a higher percentage of EMI goes as
interest payment and with time, the principal
component begins to increase. Thus, the time of
repayment is an important factor as it will impact
the tax benefits availed under Section 80C and 24
(b). The other crucial variables to calculate the
taxation benefit are the occupancy of the house
(rented or self-occupied) and loan holding (single or
joint). The choice further depends upon your overall
financial position, what part of your income
constitutes the loan, and so on. Finally, compare the
effective cost of loan vis-à-vis the post-tax
returns on the proposed investment. If
there is no clear winner, go with
repayment of loan.
Prableen Bajpai
Founder, Managing Partner, FinFix
Research & Analytics
I am 32. I have a `1 crore term plan. I
am planning to get `50 lakh- `1 crore
critical illness and accidental disability
plan. Based on my income, insurers
have asked me to get a `2crore policy.
Do I need more insurance cover? Do I
Ideally, your
need critical illness and accidental
disability cover too? Aren’t they a part term insurance
cover should
of medical insurance?
be 15-10
times your
annual income. If your existing policy fulfills the need,
don’t go for a separate term insurance plan. However,
if your current term cover does not add up to 15-20
times your annual income, consider buying an
additional term plan. To cover yourself for critical
illness and accidental disability, you could opt for
individual policies. You can consider Future Generali’s
Heart and Health Plan covering 59 critical illnesses
and any good personal accident plan available in the
market. It’s always advisable to have a basic health
insurance policy. Most health insurance plans do not
provide any fixed benefit on critical illness and
accidental disability. They cover hospitalisation only.
You can consider ICICI Prudential Life Insurance’s
iProtect Smart, HDFC Life Insurance’s Click2Protect or
Max Life Insurance’s Smart Term Plan if you need
additional term cover. Consider Religare Health
Insurance’s NCB Super Premium, Max Bupa
Health Insurance or Star Health
Insurance’s Medi Classic for your
health cover.
Yashish Dahiya
Co-Founder and CEO,
Policybazaar.com
Ask our experts
Have a question for the experts?
etwealth@timesgroup.com
 pick of the week
The Economic Times Wealth October 14-20, 2019 25

Ashok Leyland: At better risk-reward ratio

Current low share prices have already factored in the negatives and thus offer good entry point for long term investors.

T
he auto sector is reeling under a severe slowdown With the share price reaching lower levels, analysts say that
and heavy commercial vehicles segment is the the negatives around commercial vehicle cycle are already
Fundamentals
worst-affected. In addition to the weak freight factored in and therefore, offer good entry point for long-term CONSENSUS
ACTUAL
ESTIMATE
rates triggered by a weak economy, the heavy investors. Its debt-free balance sheet and healthy return ra-
2017-18 2018-19 2019-20 2020-21
commercial vehicles segment has also been af- tios should also provide some support to the counter.
Revenue (` cr) 29,240.61 32,753.24 38,203.60 40,134.00
fected by the increase in axle load for existing vehicles (ie Some of the recent actions by the government will also be
amount to an automatic capacity addition of around 30%), beneficial to the commercial vehicles segment in the long Ebitda (` cr) 3,602.54 4,234.44 5,379.10 5,650.90
high fuel prices, low demands etc. Even heavy discounts of term. For example, reduction of corporate tax rate to 22% Net profit (` cr) 1,738.49 2,042.06 2,283.40 2,347.50
around 25% are not able to attract will release the additional fund- EPS (`) 6.02 7.08 7.78 8.00
f leet-owners. As a result, vehi- ing, which is needed for the tech-
cle dealers are stuck with heavy Analysts’ views nology upgradation linked to BS-6 Valuations PBV PE
DIVIDEND
YIELD (%)
inventory. launches. The automobile industry Ashok Leyland 2.31 11.30 4.50
Considering the current market 12 24 is also expecting some more sops in
Tata Motors 0.56 -1.10 0.00
situation, Ashok Leyland decided the form of reduction in GST rates
Sell Buy Mahindra & Mahindra 1.76 21.93 1.44
to go for a planned shutdown of its and scrappage policy for very old
Eicher Motors 5.53 23.71 0.69
plants and a bigger sales volume fall vehicles to reduce pollution. Ashok
Escorts 2.77 16.38 0.41
during September (domestic sales Leyland will also be a key ben-
volume of Ashok Leyland crashed eficiary of the expected revival in
by 74% y-o-y compared to 43% fall capex cycle, triggered by 15% tax for Latest brokerage calls TARGET
of all commercial vehicles) was be- new manufacturing facility. RECO DATE RESEARCH HOUSE ADVICE PRICE (`)
cause of that. With this big cut in
September, sales volume of Ashok
13 S ele c t ion Met ho dolo g y : We
9 Oct ’19 Motilal Oswal Sec. Buy 88

Hold 7 Oct ’19 Reliance Securities Buy 111

Leyland during first half of 2019-20 pick up the stock that has shown
7 Oct ’19 Nomura Buy 84
declined by 27% y-o-y. Since realisa- maximum increase in “consensus
22 Sep ’19 Kotak Securities Buy 120
tions are also taking a beating due Ashok Leyland’s risk–reward ratio has turned favourable analyst rating” in the past month.
to higher discounts, its revenue is after the recent big correction. Also, the companywill be Consensus rating is arrived at by 12 Sep ’19 Goldman Sachs Buy 87
a key beneficiary of the expected revival in capex cycle,
expected to fall by around 50% y-o- averaging all analyst recommen-
y in the second quarter of 2019-20.
triggered by 15% tax for new manufacturing facility. This
has made the company a favourite of analysts. dations after attributing weights Relative performance 83.64
SENSEX
Since BS-6 norms will come into ef- to each of them (5 for strong buy, 100 MARKET PRICE: `68.90
1
108.97
fect from April 2020 and the inventory needs to be cleared 4 for buy, 3 for hold, 2 for sell and 1 for strong sell) and any
before that, the production cuts and heavy discounts are ex- improvement in consensus analyst rating indicates that
pected to last till March. the analysts are getting more bullish on the stock. To make
Though the commercial vehicle space is going through a sure that we pick only companies with decent analyst cover-
rough patch, analysts are getting bullish on Ashok Leyland age, this search will be restricted to stocks with at least 10
because its risk–reward ratio has turned favourable after analysts covering it. You can see similar consensus analyst 60.25
the recent big correction (Ashok Leyland lost 40% during rating changes during the last one week in ETW 50 table. 10 OCT 2018 ASHOK LEYLAND ET AUTO 10 OCT 2019
the past one year compared to 16% loss in ET Auto index). —Narendra Nathan Ashok Leyland compared with ET Auto and Sensex. Stock price and index values
normalised to a base of 100. Source: ETIG and Bloomberg.

WHAT EXPERTS ADVISE

BUY *STOCK PRICES AS ON 10 OCTOBER

RESEARCH STOCK 1-YEAR TARGET POTENTIAL

STOCK ADVICE COMMENT
HOUSE PRICE* (`) PRICE (`) UPSIDE (%)

The demand-supply situation in global PET thin and thick films market has improved during the
Polyplex Corporation Edelweiss Buy 439 687 57 year and is expected to balance out further in the near future.

Maintain buy because at present it is trading at historic low valuations (ie 1 times its
NTPC Emkay Buy 117 146 25 expected book value in 2020-21).

Though accelerated provisioning of `360 crore led to a sequential decline in IndusInd's Q2

IndusInd Bank Anand Rathi Buy 1,229 1,500 22 earnings, special mention accounts (SMA) disclosures and stressed pool suggest no major risk.

Due to slowdown in sales, assigning historical valuation may be unreasonable. However, company
Eicher Motors Nirmal Bang Buy 18,060 21,127 17 is taking promising initiatives to address the declining sales performance.

Though TCS is likely to report single-digit growth in 2019-20, maintain buy because it will continue
TCS Jefferies Buy 2,004 2,300 15 to outperform tier-1 peers on growth and margins in the medium term.

SELL RESEARCH STOCK 1-YEAR TARGET POTENTIAL

STOCK ADVICE COMMENT
HOUSE PRICE* (`) PRICE (`) DOWNSIDE (%)

Slower headline growth is likely to keep operating margin under pressure, which may further lead
Jubilant FoodWorks Reliance Sec Reduce 1,325 1,050 (21) to download trajectory of return on equity (RoE).
Maintain reduce rating on NMDC, as the adverse changing business environment would outweigh
NMDC Prabhudas Lilladher Reduce 96 90 (6) any benefit from the recent change in policy to accommodate mine renewal.
 career strategy
26 The Economic Times Wealth October 14-20, 2019
Use emotional
intelligence to
succeed
Apply your EQ tools to eliminate shortcomings,
says Devashish Chakravarty.
Y
ou believe professional out-
comes depend on your cognitive
skills and results you deliver.
Then where does emotional
intelligence or EQ (emotional
quotient) fit in? Since you are dealing with
your internal emotional state as well as
that of other human beings, an inability to
understand and manage emotions slows
you down or prevents you from achieving
outcomes you desire. Thus, your success
is driven not just by your intelligence and
skills but also by the emotional tools at
your disposal. Your emotional intelligence
lies in self-awareness/perception, self-reg-
ulation/control, motivation, empathy and
social skills. However, the following nega-
tive behaviours could be holding you back
at work, reducing your productivity.
Finding meaning
Human brains are meaning making ma-
chines. You are meant to seek meaning and
patterns in random events. Take this to
the workplace and you can assign a lot of
meaning to the money you earn and link it
to your confidence, social status and per-
sonal judgments of good and bad. With this
inbuilt prejudice, it is easy to get biased
where you take everything personally and
attribute intent to people and incidents
where none exist and thus take wrong
decisions. Recognise that everyone is too
focused on their own world to think about
you or plot how to make you fail. Each time
you are agitated by others, remind yourself
of your bias and subtract intent from your
calculations to take better decisions.
Looking good
Do you have a persistent need to appear
smart, intelligent, powerful or important
at work? This colours all your conversa-
tions and actions, creating a distance
between you and your colleagues, leading
to poor outcomes. Recognise that your
human bias to look good and feel needed
makes you constantly try to display your
importance. Unfortunately, this reduces
your impact. Instead of using words,
choose to demonstrate worth by deliver-
ing outcomes. Recognise that people
respond better to supportive behaviour
than authoritative and they connect better
through authenticity and vulnerability
than through the mask of importance.
Mistaken identity
Who are you? If your answer is VP Sales or
Manager, Finance – you are wrong and are
also sabotaging your future. Like almost
everyone else, you are used to equating
your personal identity with the profession-
al role you are currently in. This leads you
to make terrible decisions and choices in
your career because you are over-anxious
about every little incident or outcome that
could be remotely threatening to your job
or performance. When you create your
identity through your job, your primary
underlying emotion is fear which blinds
you to good opportunities. Firstly, rede-
fine who you are—where your skills (and
not your job) are merely a part of your self-
image. Secondly, recognise that a loss can
never be an absolute judgment of you as a
person and you can reframe it as an oppor-
tunity to change behaviour and discover
your best future.
Emotional compensation
As an emotional human, are you demand-
ing respect or money based on what you
feel? The hard thing about respect is
that you need to give it first to get it back.
Demanding respect on account of your po-
sition, expertise or experience squelches
communication and self-expression of
others and thus ultimately backfires. If
you want the support of others to get work
done, begin with respecting their ideas
and contributions even when they disa-
gree with you. Now you are likely to get
reciprocal respect from them. Similarly,
recognise that workplace compensation
flows from revenues earned by your firm
and value delivered by you. Your feelings
about what you deserve have little impact
whereas the numbers and tangibles you
bring to the table will drive money to you.
Righteousness
Do you want to grow in your career or do
you want to be right? The two are mutually
5 STEPS TO
RETAINING
CONTROL
SAY THANKS
1 Incorporate practices to
control negative emotions. Each
day think of three things you
are grateful for. Then, at work,
express thanks to your helpful
co-worker. Gratitude releases
dopamine and serotonin—the
happiness hormones—in your
brain, reducing negative
emotions, increasing empathy
and energising relationships.
GETTY IMAGES
DESCRIBE
2 EMOTION
Label your emotion to instantly
reduce your overwhelming
feelings. By recognising and
exclusive. The need to be proven right in describing your emotion as
arguments and discussions results in out- anger, anxiety, resentfulness
bursts, unjustified blaming and stonewall- etc, you activate the language
ing requests for information. This shuts centre in your brain and thus
you out to learning and course correction shift control to your pre-frontal
while you come across as arrogant. The op- cortex—the seat of regulation—
posite is your need to grow that makes you and away from your amygdala
open to suggestions, different ideas and —the seat of emotion.
criticism—some of which will add to your
learning while leading to better results. DECIDE
So, remind yourself each time that you are 3 Are you unable to control
better off being wrong and learning some- your stress because of incessant
thing new for the future instead of being worry and anxiety? Make quick
perceived to be right temporarily because decisions. Decisions trigger
you drowned out everyone else’s voice. the achievement chemical of
Every learning has a positive compound- dopamine which increases
ing effect on your growth and success. feelings of control, pleasure
and motivation, thus regulating
Inconsistent outcomes unwanted stress. The opposite is
Reliability is the strongest indicator of suc- waiting to take perfect decisions
cess in your career. Consistently deliver- which reduces control and
ing what you said or what is expected of you increases anxiety.
gets you the promotions and compensation
you deserve. However, if your best efforts WALK OUT
result in inconsistent outcomes, examine 4 Do you regret your
what happened, through the framework of behaviour after a confrontation?
emotions. Are you failing in tasks that in- Unpleasant situations release
volve communication and emotions of oth- cortisol in your brain as part of
ers? For colleagues to trust you, they need your survival response where
to see your ability to handle stress and you cannot think or speak
control emotional responses. Similarly, straight. Instead, learn the art of
they will respond better to loyalty and con- walking out of the situation. By
scientiousness from you. To improve your taking time out, you can bring
expression and thus persuade people bet- down your cortisol level, regain
ter, increase your empathy by imagining control and then continue the
yourself in their shoes and feeling the emo- discussion.
tions they may be going through. Finally,
in your communication, combine logic
FOCUS ON
with your understanding of your own and
their emotions to influence and evoke the
5 CONTENT
right feelings that will drive desired behav- What if you cannot walk out
iour and consistent outcomes. Changing of a confrontation? The way to
your bias for emotion-less communication regulate is to label and observe
will come only from constant practice. The the cortisol driven responses
price is well worth paying to become a con- of the other person—“He is
sistently successful professional or leader. currently angry, has lost control
and hence is attacking me
personally”. Now ignore his
emotional words and focus and
THE WRITER IS FOUNDER respond to the rational part of
AND CEO AT QUEZX.COM the discussion to maintain
AND HEADHONCHOS.COM. self-control.
 your feedback & more...
The Economic Times Wealth October 14-20, 2019 27

Readers’ response, online and in print, to ET Wealth stories has been enlightening.
We pick some that add information and perspective to our articles from previous issues.
This refers to the cover story, ‘The
best new home loans’. The best is yet
to come. It will happen only when the
banks actually pass on the reduction
in rates to customers without undue
delay.
Dilip Mitra
This refers to the article, ‘Don’t fall for
this KYC scam’. The government should
take appropriate steps to nip such
scams in the bud. It should also aid in
recovering the money lost due to the
misuse of technology by scamsters.
Md Aftabuddin
Apps are dangerous. Very few people
know what an app is capable of doing
in the background. Apps also request
access to practically everything
that is on your phone. People should
minimise the use of apps up to the
greatest possible extent.
Swati Mankar
This refers to the article, ‘Slay these 10
demons’. The old proverb ‘Don’t put all
eggs in one basket’ always hold right.
In the stock market, contrary option is
parents need to play to educate their adult
children about finances and independence.
Financing the education of children, up to a
Banks will bend certain extent, is acceptable. However,
financing higher studies or business ventures
new rules can exhaust all the savings of a parent.
Sasmita Jana
The cover story, ‘The best new home
loans’, was timely. No matter how The column was thought-provoking. I liked
much RBI tries to rein in banks and the way the writer highlighted certain
their undue profit making ways, the points on how children should fend for
banks will always find some way or themselves. Children should be
the other to bend rules and deprive accountable to parents for the decisions
customers of benefits. they take. I liked the second point that
says, “Outline responsibilities the child
Dilip Parnajape
will have to bear”, the most. It rightly
points out that adulthood is about dealing
with the world on your own. I wish to see
more such informative articles.
J.A.S. Sarvani
a safe route. When in doubt, one has to be health insurance, given the high
calm and stall. Profit may be the reward for premiums. I think the government should Uma Shashikant has rightly pointed out that
risk bearing. However, it depends on one’s provide medical facility free of cost to we live in the era of indulgent parenting. By
resources, age and needs. everyone. overdoing it, we are sowing the seeds of
Mohan Raman Rakesh Singh financial hardship for our children when they
grow up. We need to learn the fine art of
This is in reference to the article, ‘Can’t This refers to Uma Shashikant’s column, ‘Let saying ‘No’ to unreasonable financial
reject claim if cover for 8 years’. Many children build themselves’. The article was demands from our children.
middle class working people can’t afford worth reading. It highlighted the role Nandu Venkatachary

REALTY An area close to job, retail hubs

HOT SPOT This Bengaluru locality is much in demand among homebuyers because of multiple reasons.
Sadaramangala
WHITEFIELD Hoodi
Industrial Area Kadugodi
Koralur
Soukya
Holy
Trinity
HIGHLIGHTS Consumer preference by
budget segment (`)
BENGALURU Basavanna
Nagar
Chapel Presence of major IT & business parks such as International
12% Below 50 lakh
ITPL Bus
Chansandra Samethanhalli
Tech Park, EPIP Zone etc 19%
PRICE RANGE Vijayanagar
Stand
13%
50-75 lakh
SJP Layout Presence of various known malls including Inorbit Mall, The 75 lakh-1 cr
`3,500-8,200 Whitefield Immedihalli Forum Neighbourhood Mall & Ascendas Park Square Mall
per sq ft Kundanhalli Khane 21% 35% 1-1.25 crore

Brookefiled
Ganesh Temple Renowned hospitals including Columbia Asia Hospital & Above 1.25 cr
Demand: HIGH Narayana Multi-speciality Hospital
Supply: HIGH Lake Khanekandaya Honnamma Devi
Marathahalli Temple Muthkur Good connectivity through major road networks of
RamaGondanahalli Velapura Consumer preference
Whitefield Main Road, ORR & Old Madras Road
r
by BHK
thu
Yemalpur
Sai Sai Baba Var e Kotur Metro connectivity by 2023 with extension of Purple Line 2% 7%
Kempapura Mandir Ker
Kaveramma under Phase 2 of Namma Metro
Kariyammana Varthur 1 BHK
Balagere Varthur Police Temple
Agrahara
Station 2 BHK
Bellandur LOCALITY SNAPSHOT 38% 3 BHK
53%
Distance from: Schools 18+ Hospitals 16+ Restaurants 20+ 4 BHK

Airport: 38 km Railway
Railway
station:
station:
6 km45 km NH-648: 5 km Banks 18+ Grocery Stores 14+ Petrol Pumps 12+

VALUES Consumer preference by

covered area (sq ft)
PROPERTIES AVAILABLE LOCALITY Price Rental Below 1,000
(`/sq ft) (`/month) 8% 9%
1,000-1,250
10%
1 BHK: 630 (sq ft) 3 BHK: 1,690 (sq ft) Whitefield 3,500-7,400 16,900-40,000 1,250-1,500

` 35 lakh (avg) ` 1 crore (avg) Varthur 4,100-7,000 11,500-29,300

18% 40% 1,500-1,750
1,750-2,000
15%
Above 2,000
Kadugodi 3,800-6,100 12,700-24,100
2 BHK: 1,160 (sq ft) 4 BHK: 2,890 (sq ft)
` 65 lakh (avg) ` 1.90 crore (avg) ITPL 5,200-8,200 25,600-40,100
In dia’s No. 1 P ropert y Sit e

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reserved. RNI No.: MAHENG/2014/57046. VOLUME 06 NO. 41