CONTENTS
LETTER
ISSUE CONTENTS
18 October 2012
FROM THE
EDITOR
M
Debashis Basu MONEYLIFE | 18 October 2012 | 10
SMART MONEY
Financial Hard-sell: Trust Destruction; Investor Protection: What Investors Want; RGESS: Problems Galore; Collective Investment Schemes: Collective Amnesia
Fundamentally Speaking ost analysts use a flawed method for analysing mutual funds. They use pointto-point or fixed periods for calculating returns (1-year, 3-year or 5-year periods). This can be misleading because, obviously, performance will depend on the start and end date you choose. Investors want schemes which have been consistent over a period without worrying too much about the chosen time frame. Moneylife applies a more rational method which uses rolling returns rather than fixed period ones. The method also focuses on declining market phases, identifying equity funds which have done well during such periods. This is the ultimate evidence of the quality stock-picking. Be sure to turn to page 24 for a refreshing fund analysis—an annual feature that makes Moneylife stand out. In our Fund Pointer section, we cover the best bond schemes. We are not very excited about bond schemes per se, our selection will do better than the others. Sucheta questions why SEBI isn’t pursuing other shady collective schemes apart from Sahara. Financial hard-sell is another issue that needs to be tackled, with the government’s intent on pushing the Rajiv Gandhi Equity Savings Scheme on to hapless investors. She laments that SEBI is acting merely like a ‘post-office’ and hardly protects investors. There is a lot of excitement about shopping online for the festive season. Are you taking enough precaution to protect yourself from dangerous sites on the Internet? Harjot Kaur explains how you can safely shop online. On behalf of Moneylife Foundation, I addressed a special seminar on mutual funds, in the light of SEBI’s recent retrograde move against the small investor. There was only standing room in our Knowledge Centre. Thank you for the overwhelming response. A video will be put up on http://youtube.com/moneylifetv, where you will learn what the SEBI move really means. Engage with us on Twitter (@MlDigital) and Facebook (www.facebook.com/moneylife.in) to share your stories and ideas with us. We are keen to know!
18
HEALTH
False 22 ADawn
and 52 Cancer Common Sense
Don’t get excited by the moves of FIIs and government
Common sense goes a long way in helping tackle the dreaded disease – Pulse Beat: Medical developments from around the world
MUTUAL FUNDS POINTERS DIFFERENT STROKES
20 24 Cover Story Equity Schemes for Any Season Top 20 schemes selected using an improved methodology. These equity schemes have done well in the past, in terms of generating returns as well as holding their ground in a sliding market. A report by Jason Monteiro
13
Your Interest
Bank ATMs stop sucking-in cash after RBI direction; Don’t use Facebook, Twitter e-mail ID for online transactions; No duty on non-subsidised LPG cylinders; Taxes, reforms and oil companies
14
Your Money
Equity: Rajiv Gandhi Equity Savings Scheme; e-Payments: Banks To Cut Cheque Transactions; RBI: Caution against Fraudulent Emails, Financial Products To Check Gold Imports; Credit Cards: OBC Launches RuPay Cards; Survey: We Want Facebook at the Workplace; Choose Your ATM Pin Intelligently
16
Current Account
The American Consumer: Among the biggest item of spending in the US are cell-phone charges
17 Loose Change
Moneylife Quiz; Sound Bites: Stephen King, chief economist, HSBC; Rashid Kidwai, biographer of Sonia Gandhi, SH Kapadia, retired chief justice of India; KC Chakrabarty, deputy governor RBI Disclaimer: Moneylife has a policy of not allowing its editorial staff to buy and sell stocks that are written about in the magazine. All personal transactions in individual stocks are subjected to internal disclosure rules.
PM’s Tough Love
The PM wanted support for tough economic decisions. People want answers to some tough questions
with 23 Bond the Best A review of consistently performing bond schemes by Jason Monteiro
INSURANCE STOCKS
30 Value Picks Power Reforms?
32 Street Beat – Gujarat Mineral Development Corporation – Insecticides (India) STOCK PERFORMANCE: From Smooth Sailing to Better Sailing
38 Which Way One of the two factors behind my asset bubble call is weakening
39 Popular Picks Capital-guzzlers
42 Medium Term BHEL ballooned 24%, Bank of Baroda rocketed 14% while Colgate-Palmolive India dipped 4%
44 Insurance Trends – Endowment Plan: Bharti AXA Life Secure Savings Plan – Term Plan: AEGON Religare Term Insurance Plan – ULIP: Tata AIA Life Suraksha Kosh – ULIP: Edelweiss Tokio Wealth Accumulation
AUTO
46 Adulterated Fuel Veeresh Malik cautions readers about adulterated fuel especially after the recent hike in diesel prices
CONSUMER ALERT
Know the Site 48 5YouWaysAreToUsing Is Safe Online shopping is now a part of our life. How do you find out whether the site you are using is safe enough for making online payments? Harjot Kaur explains – Hyundai & Bharti Axa give the short shrift
SPENDING - AIR TRAVEL
43 Long Term
Planes, 51 New New Air India?
PTC India zoomed 25%, REC shot up 11% while Hindustan Unilever dropped 4%
Air India is raving about its new Boeing 787s.Will the Dreamliner change the airline completely?
LEGALLY SPEAKING
54 NofromProtection Free Goods Sometimes free goods and services are not a good thing CAREERS
To Charge Up 55 5YourWaysResumé The human resource manager will take 30 seconds to evaluate your resumé. Irshad Ahmed Khan shows how you can stand out in that brief time ML FOUNDATION EVENTS
To Choose Your 58 How Insurance? Moneylife Foundation held an exclusive, in-depth session for an overflowing house addressed by Raj Pradhan EARNING CURVE
to 60 Key(nes) Success Global Learning: Studies, surveys, regulation, misconduct and savers’ behaviour from around the world BEYOND MONEY
Vikas Is the 66 Grassroots Way Forward for India Financial inclusion in its true sense is about knowledge and empowerment leading to ‘vikas’ or progress. Harjot Kaur writes about how Vadodarabased Zoher Doctor, is changing lives of the underpriveleged
DEPARTMENTS Letters ............................ 4 Book Review ....................56 Money Facts ....................63