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The current situation
As a stock market investor, you would agree that
equities have good long-term growth potential,
and well-managed diversified equity schemes offer
an easy and convenient access to this asset class.
However, the two concerns you probably have are
volatility and fluctuations, and finding answers
to questions such as :
- Should I book profits?
- Should I enter the markets?
- Should I invest in debt or equity?
Here is a scheme designed to take care of these
concerns and provide your investment a smoother
ride through the ups and downs of the stock markets
- FT India Dynamic PE Ratio Fund of Funds (FTDPEF).
FTDPEF - An open end fund of funds, with a
dynamic PE ratio based asset allocation strategy
FT India Dynamic PE Ratio Fund of Funds is an
open end fund of funds, which invests in Franklin
India Bluechip Fund (FIBCF), an open end diversified
equity scheme and Templeton India Income Fund
(TIIF), an open end income fund. Both these schemes
have a solid performance track record which can
be seen from the table below:
| Performance Snapshot (FIBCF) |
|
Last 6 Months |
Last 1 Year |
Last 3 Years* |
Last 5 Years* |
Last 7 Years* |
Last 10 Years* |
Since Inception* |
| FIBCF
(G) |
65.36% |
21.01% |
16.62% |
26.52% |
33.55% |
26.69% |
26.26% |
| FIBCF
(D) |
65.37% |
21.02% |
16.62% |
26.52% |
33.55% |
26.70% |
26.26% |
| BSE
Sensex |
66.28% |
9.16% |
13.39% |
24.80% |
26.69% |
13.17% |
10.47% |
| Past performance may or may not be sustained in the future.
* Compounded and annualised. As on July 31, 2009. |
| Performance Snapshot
(TIIF) |
|
Last
6 Months |
Last
1 Year |
Last
3 Years* |
Last
5 Years* |
Since
Inception* |
| TIIF(G) |
3.76% |
11.25% |
7.59% |
5.87% |
9.56% |
| TIIF
(D) |
3.76% |
11.25% |
7.59% |
5.87% |
9.68% |
| Crisil
Composite Bond Fund Index |
2.55% |
11.59% |
6.77% |
5.50% |
N.A |
|
Past performance
may or may not be sustained in the
future.
* Compounded and annualised. As
on July 31, 2009.
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Investment
Strategy
What
is unique about FTDPEF is its dynamic and systematic
asset allocation strategy. The allocation to
FIBCF is determined based on the month-end weighted
average PE ratio of the NSE Nifty Index, as
shown below; and the balance is invested in
TIIF.
|
Weighted
average PE ratio of NSE Nifty
|
Equity
Component (%) |
Debt
Component (%)
|
|
Upto
12
|
90-100
|
0-10
|
|
12-16
|
70-90
|
10-30
|
|
16-20
|
50-70
|
30-50
|
|
20-24
|
30-50
|
50-70
|
|
24-28
|
10-30
|
70-90
|
|
Above
28
|
0-10
|
90-100
|
Price to Earnings Ratio (PE ratio) is the ratio
of the stock price of a company to its earnings
per share. In other words, it is the price one
pays for every rupee of earnings. The higher
the PE ratio, the more expensive the stock or
market is, because one is paying more for the
same level of earnings.
The PE ratio of the index is the weighted average
PE ratio of the constituent stocks of the index,
which in the case of FTDPEF is the NSE Nifty
Index.
Thus, by following the dynamic asset allocation
strategy, FTDPEF increases the allocation to
FIBCF when markets are down, i.e when PE ratio
falls to help you capitalise on the upside potential,
and reduces the allocation to FIBCF when markets
are high, i.e when PE ratio is high to limit
the downside risk.
| Performance Snapshot (FTDPEF) |
|
Last 6 Months |
Last 1 Year |
Last 3 Years* |
Last 5 Years* |
Since Inception* |
| FTDPEF |
47.11% |
21.12% |
16.96% |
24.17% |
23.51% |
| BSE
Sensex |
66.28% |
9.16% |
13.39% |
24.80% |
22.36% |
| Crisil
Balanced Fund Index |
39.62% |
11.65% |
12.59% |
16.79% |
15.64% |
| Past performance may or may not be sustained in the future.
* Compounded and annualised. As on July 31, 2009. |
Highlights
- Daily
NAV
- Choice:
Growth Plan (Reinvestment & Payout options)
- Easy
liquidity: Transactions are processed within
4 working days normally
- Convenience
of Systematic
Investment Plan: The ideal way to accumulate
wealth over the long term
- NRIs can invest on a fully
repatriable basis
Fund information
| Net Asset Value |
Calculated and disclosed on all business days |
|
Minimum Investments :
|
|
New Investment
Additional Investments |
Rs.
5,000
Rs. 1,000 |
|
Load
|
| Amount (Rs.) |
Entry Load |
Exit Load |
|
Any Amount
|
Nil
|
In respect of each purchase of Units - 1% if redeemed within 1 year of allotment
|
|
| Tax Benefits |
Indexation Benefits
Units are not liable to wealth tax and
gift tax.
No TDS on Redemptions for resident investors |
Summing Up
With strong corporate and economic fundamentals,
the Indian stock markets are well positioned
for a sustained long-term rally, although there
could be some volatility along the way. FT India
Dynamic PE Ratio Fund of Funds, with its inbuilt
buy sell discipline can help you make the most
of this growth opportunity, while providing
a smoother ride to your investments.
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