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Table of Contents:

July 2006
- July 24 - Minyanville's Five Things You Need to Know to stay ahead of the pack on Wall Street
- July 23 - Sharpe ratio, key hedge fund risk gauge ‘flawed’
- July 13 - American's Goldstine Beats Pimco, Vanguard With Junk (Update1)
- July 13 - Should you invest in software funds?
May 2006
- May 9 - 3 balanced funds to invest in
- May 5 - Buffett's Batting Average Is Sinking
April 2006
- April 26 - Rating your options
- April 21 - Understanding Asset Allocation: In Search of the Upside
January 2006
- January 25 - Daman announces positive overall returns for 2005
- January 25 - Investment options galore for you
- January 24 - BluMont Canadian Opportunities Fund Reaches Five-Year Performance
- January 19 - 6 equity funds for 2006
- January 16 - NFO: New financial objectives
- January 6 - All about GREAT tax-saving funds
- January 2 - The top 5 equity funds

Minyanville's Five Things You Need to Know to stay ahead of the pack on Wall Street

July 24, 2006

From Minyanville:
1. But Every Girl's Crazy 'Bout a Sharpe-Dressed Man!

The Sharpe Ratio, a measure of risk-adjusted return widely used by hedge funds as a key selling point, is deeply flawed, according to Nassim Nicholas Taleb, author of "Fooled by Randomness."

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Sharpe ratio, key hedge fund risk gauge ‘flawed’

July 23, 2006

From Gulf Times:
The Sharpe ratio, a key measure of performance used by hedge funds to sell themselves, is flawed and tells investors nothing about the risks they are taking, an investor said.

The Sharpe ratio is a measure of risk-adjusted return. It is the difference between returns and a risk-free interest rate - often the yield on US Treasury bills - divided by the volatility or range of possible returns.

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American's Goldstine Beats Pimco, Vanguard With Junk (Update1)

July 13, 2006

From Bloomberg:
American Funds' Bond Fund of America produced higher returns than its biggest competitors, including Bill Gross's Pimco Total Return Fund, after manager Abner Goldstine and his team increased their stake in junk bonds.

Bonds held by the $24 billion fund, which Goldstine has helped run since its inception in 1974, had an average credit rating of A as of March, according to Morningstar Inc., as managers boosted their holdings of corporate debt rated below investment grade to 9.3 percent from 8.9 percent at the end of 2003. The average rating for bonds owned by Pimco's $93 billion fund is AAA, and the median for rival debt funds is AA.

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Should you invest in software funds?

July 13, 2006

From Rediff News:
Sector funds have always a much-discussed mutual fund category. The reason for this has been the misconception that they can clock impressive growth in a short time-frame.

Sector funds mainly invest in companies from a single sector like pharma or technology, for instance. Although this helps the fund to tap the potential of a particular sector, this investment style goes against the basic philosophy of mutual fund investing i.e. it deprives investors of diversification across sectors. Thus although the principle of diversification does not work across sectors, this principle is evident across companies in a particular sector.

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3 balanced funds to invest in

May 9, 2006

From Sify Business:
Balanced funds have been in the news recently on account of the Budget proposal which will force them to hold a higher equity component to be eligible for tax benefits associated with equity-oriented funds. While some fund houses are likely to change the investment mandates of their existing schemes to permit a higher equity allocation; others have indicated that they would launch new schemes to comply with the new regulations. This augurs well for investors who will have more options available at their disposal.

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Buffett's Batting Average Is Sinking

May 5, 2006

From The Wall Street Journal:
Is Warren Buffett losing his touch?

Berkshire Hathaway's faithful thousands have descended on Omaha for its annual meeting. Unlike many chief executives these days, Warren Buffett can expect an easy ride from his adoring shareholders.

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Rating your options

April 26, 2006

From Star-Telegram:
With interest-rate concerns hanging over the markets, what should small investors do?

Higher interest rates increase borrowing costs for businesses and consumers. For businesses, that eats away at profits, undermining stock prices.

Share prices also are hurt because some money that would otherwise be invested in stocks is, instead, drawn to generous interest-paying investments, such as Treasury securities.

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Understanding Asset Allocation: In Search of the Upside

April 21, 2006

From informit.com:
It is striking how little most people understood about risk as recently as three decades ago. Risk, of course, is that piece of information all investors need to know—and should desire to keep as low as possible in relation to the returns they expect to see on their investments. Fortunately, developments in modern portfolio theory provide a framework for addressing the ways risk can affect expected returns.1 The developments have been nothing short of dramatic.

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Daman announces positive overall returns for 2005

January 25, 2006

From Strategiy:
Announcing the results for the year 2005, Mr. Shehab Gargash, Managing Director, Daman, said: “The year has been a good one. We are particularly pleased that our flagship DUV fund closed 2005 by registering a growth of 92.02%. Since its inception in July 2001, the Fund has given shareholders a remarkable 435.06% returns.”

“The returns clearly indicate the fund’s outstanding performance. We have once again demonstrated that our strategic portfolio management policies are built to maximize shareholder returns while still building residual core value in each fund we manage” added Mr. Gargash.

The Daman UAE Value Fund (DUV) a specialized mutual fund which invests in UAE stocks, declared a fourth quarter dividend of AED15, taking the total annual dividend paid for the year 2005 to a record AED40 against AED15.75 for 2004, a year-on-year increase of 153.96%.

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Investment options galore for you

January 25, 2006

From Rediff.com:
Stock markets inched up further over the previous week. The BSE Sensex ended the week at 9,521 points, up by 147 points (1.57%). The S&P CNX Nifty closed at 2,901 points up by 1.75% (50 points). The CNX Midcap index closed higher by 12 points (0.28%) for the week to close at 4,224 points.

The week gone by was a good one for funds from the diversified equity segment. Birla Sun Life Equity (2.86%) emerged as the topper in this segment. It was closely followed by Sundaram India Leadership (2.70%).

Category leaders Sundaram Growth (2.00%) and Franklin India Bluechip (1.50%) had a good week. However, HSBC Equity (-0.46%) languished in negative terrain. While midcap majors Magnum Global (2.01%) and Sundaram Select Midcap (1.43%) had a decent week, Franklin India Prima (0.23%) turned in an ordinary performance.

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BluMont Canadian Opportunities Fund Reaches Five-Year Performance

January 24, 2006

From CCN Matthews:
BluMont Capital Inc. (TSX VENTURE:BCC) and its wholly-owned subsidiary, BluMont Capital Corporation ("BluMont") are pleased to announce that the BluMont Canadian Opportunities Fund (the "Fund"), which employs multiple investment styles with low correlation to one another, has reached its five-year performance anniversary. Established January 1, 2001, the Fund has produced an annualized return of 13.02% (since inception) versus 6.62% for the S&P/TSX Total Return Index Value and 7.97% for the HFRI Fund Weighted Index over the same period. Moreover, the Fund has produced positive returns each of the past five calendar years with annualized volatility of 9.82% (versus 14.00% for the S&P/TSX TRIV) and a Sharpe Ratio of 1.07.

The BluMont Canadian Opportunities Fund is the 9th-ranked alternative strategies fund in the 5-year category on GlobeFund.

The Fund strives to deliver consistently positive returns each year independent of the performance of the S&P/TSX Index by investing in multiple investment styles with low correlation to each other that also mitigate the overall risk of the portfolio through various hedging strategies by combining complementary and non-correlated strategies currently managed 45% by BluMont Capital, 25% by Hillsdale Investment Management, 10% by SciVest Capital Management, 10% by Integrated Managed Futures Corp and 10% by Orchard Asset Management.

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6 equity funds for 2006

January 19, 2006

From Sify Business:
Make that - 6 ‘evergreen’ equity funds. In our view these funds have done enough for us to believe that they will be relevant for some time to come, unless of course there is a fundamental change in the way they are going to be managed.

The Personalfn Research Team makes its business to comb the hundreds of mutual funds in the industry to identify the best. Our list of preferred equity funds have been subjected to the most stringent selection guidelines before graduating to the ‘preferred’ list. In addition to considering everyone’s favourite ‘NAV (net asset value) return’ criterion, we probe a lot deeper into the processes and investment style of Asset Management Companies (AMCs). We prefer AMCs that put the onus to perform on their processes and not on an individual/fund manager. Equity funds from process-driven AMCs tend to do better over the long-term and negotiate stock market ups and downs better than their peers. The last criterion in particular is very significant in our view; most equity funds tend to do well during a rally, but only the very best can cope with a market downturn.

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NFO: New financial objectives

January 16, 2006

From Sify Business:
That is precisely what you should be concentrating on in the New Year. Instead of blindly following the other NFO (New Fund Offer) craze, we recommend that you set yourself new financial objectives and work towards achieving them. We will discuss this in detail, later in the article.

It was a mixed week at the markets as the broader indices closed in negative terrain while the mid cap index posted a minor gain. The BSE Sensex shed 2.76% to close at 9,374 points, while the S&P CNX Nifty ended the week at 2,851 points (down by 2.16%). Conversely the CNX Midcap rose by 0.21% to close at 4,212 points.

Funds with predominantly mid cap holdings ruled the roost in the diversified equity funds segment. Standard Chartered Premier Equity (3.04%) surfaced as the top performer, followed by Can Emerging Equities (2.50%). Funds from SBI Mutual Fund, Magnum Midcap (1.59%) and Magnum Comma (1.46%) also featured in top performers list.

It was a poor week for the category leaders – Sundaram Growth (-0.35%), HSBC Equity (-0.98%) and Franklin India Bluechip (-1.94%). Among the mid cap majors, Franklin Prima (-0.13%) and Magnum Global (0.39%) had a mediocre week, while Sundaram Select Midcap (1.12%) delivered a good performance.

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All about GREAT tax-saving funds

January 6, 2006

From Rediff.com:
Section 80C has come as a boon to investors who have an appetite for risk. Until the previous year, investment in tax-saving funds (otherwise known as Equity-Linked Savings Schemes) for the purpose of availing a tax benefit was restricted to Rs 10,000 per year.

In the current fiscal year all such restrictions have been done away with; an individual assessee now has the flexibility to invest the Rs 100,000 that is allowed under Section 80C in any proportion that he wishes (only in PPF is there an upper limit of Rs 70,000 p.a.) in specified instruments.

Naturally, those with a risk appetite should be looking at increasing their exposure to tax-saving funds.

Tax-saving funds are simply equity funds that have a mandatory lock-in of three years. The lock-in is one of the key strengths of such funds; it allows the fund manager to invest for the long-term and also saves him from the pressures of managing fund inflows and outflows on a day-to-day basis. In case of a tax-saving fund, the fund outflows are known relatively well in advance and therefore can be planned for.

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The top 5 equity funds

January 2, 2006

From Rediff India Abroad:
2005 is likely to be remembered as a year when the two major mutual fund segments, i.e. equity funds and debt funds, pitched in starkly divergent performances. While equity funds (much to the glee of investors), rode the bull run, investors in the debt funds segment had little reason to cheer.

Equity markets took off from where they closed last year and continued to scale record highs. The BSE Sensex appreciated by more than 40% during the year and even breached the 9,000 points mark. Equity funds benefited from the rally to clock impressive returns.

Fund houses made the most of the rising markets by launching a number of new fund offers. For the uninitiated, NFO is a new term coined by the mutual fund industry after the regulator objected to fund houses referring to new launches as IPOs.

The year began with mid cap stocks outperforming large cap stocks. Fund houses were busy launching NFOs of the mid cap and flexi cap variety. This was followed by a slew of theme-based funds. Every opportunity right from growing consumerism to competitive strengths in outsourcing and manufacturing among other areas, was presented as an attractive 'investment theme.'

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HEDGE FUND RISK AND OTHER DISCLOSURES

Hedge funds, including fund of funds (“Hedge Funds”), are unregistered private investment partnerships, funds or pools that may invest and trade in many different markets, strategies and instruments (including securities, non-securities and derivatives) and are NOT subject to the same regulatory requirements as mutual funds, including mutual fund requirements to provide certain periodic and standardized pricing and valuation information to investors. There are substantial risks in investing in Hedge Funds. Persons interested in investing in Hedge Funds should carefully note the following:

Hedge Funds represent speculative investments and involve a high degree of risk. An investor could lose all or a substantial portion of his/her investment. Investors must have the financial ability, sophistication/experience and willingness to bear the risks of an investment in a Hedge Fund.
An investment in a Hedge Fund should be discretionary capital set aside strictly for speculative purposes.
An investment in a Hedge Fund is not suitable or desirable for all investors. Only qualified eligible investors may invest in Hedge Funds.
Hedge Fund offering documents are not reviewed or approved by federal or state regulators
Hedge Funds may be leveraged (including highly leveraged) and a Hedge Fund’s performance may be volatile
An investment in a Hedge Fund may be illiquid and there may be significant restrictions on transferring interests in a Hedge Fund. There is no secondary market for an investor’s investment in a Hedge Fund and none is expected to develop.
A Hedge Fund may have little or no operating history or performance and may use hypothetical or pro forma performance which may not reflect actual trading done by the manager or advisor and should be reviewed carefully. Investors should not place undue reliance on hypothetical or pro forma performance.
A Hedge Fund’s manager or advisor has total trading authority over the Hedge Fund.
A Hedge Fund may use a single advisor or employ a single strategy, which could mean a lack of diversification and higher risk.
A Hedge Fund (for example, a fund of funds) and its managers or advisors may rely on the trading expertise and experience of third-party managers or advisors, the identity of which may not be disclosed to investors
A Hedge Fund may involve a complex tax structure, which should be reviewed carefully.
A Hedge Fund may involve structures or strategies that may cause delays in important tax information being sent to investors.
A Hedge Fund may provide no transparency regarding its underlying investments (including sub-funds in a fund of funds structure) to investors. If this is the case, there will be no way for an investor to monitor the specific investments made by the Hedge Fund or, in a fund of funds structure, to know whether the sub-fund investments are consistent with the Hedge Fund’s investment strategy or risk levels.
A Hedge Fund may execute a substantial portion of trades on foreign exchanges or over-the-counter markets, which could mean higher risk.
A Hedge Fund’s fees and expenses-which may be substantial regardless of any positive return- will offset the Hedge Fund’s trading profits. In a fund of funds or similar structure, fees are generally charged at the fund as well as the sub-fund levels; therefore fees charged investors will be higher that those charged if the investor invested directly in the sub-fund(s).
Hedge Funds are not required to provide periodic pricing or valuation information to investors.
Hedge Funds and their managers/advisors may be subject to various conflicts of interest.

The above general summary is not a complete list of the risks and other important disclosures involved in investing in Hedge Funds and, with respect to any particular Hedge Fund, is subject to the more complete and specific disclosures contained in such Hedge Fund’s respective offering documents. Before making any investment, an investor should thoroughly review a Hedge Fund’s offering documents with the investor’s financial, legal and tax advisor to determine whether an investment in the Hedge Fund is suitable for the investor in light of the investor’s investment objectives, financial circumstances and tax situation.

All performance information is believed to be net of applicable fees unless otherwise specifically noted. No representation is made that any fund will or is likely to achieve its objectives or that any investor will or is likely to achieve results comparable to those shown or will make any profit at all or will be able to avoid incurring substantial losses. Past performance is not necessarily indicative, and is no guarantee, of future results.

The information on the Site is intended for informational, educational and research purposes only. Nothing on this Site is intended to be, nor should it be construed or used as, financial, legal, tax or investment advice, be an opinion of the appropriateness or suitability of an investment, or intended to be an offer, or the solicitation of any offer, to buy or sell any security or an endorsement or inducement to invest with any fund or fund manager. No such offer or solicitation may be made prior to the delivery of appropriate offering documents to qualified investors. Before making any investment, you should thoroughly review the particular fund’s confidential offering documents with your financial, legal and tax advisor and conduct such due diligence as you (and they) deem appropriate. We do not provide investment advice and no information or material on the Site is to be relied upon for the purpose of making investment or other decisions. Accordingly, we assume no responsibility or liability for a ny investment decisions or advice, treatment, or services rendered by any investor or any person or entity mentioned, featured on or linked to the Site.

The information on this Site is as of the date(s) indicated, is not a complete description of any fund, and is subject to the more complete disclosures and terms and conditions contained in a particular fund's offering documents, which may be obtained directly from the fund. Certain of the information, including investment returns, valuations, fund targets and strategies, has been supplied by the funds or their agents, and other third parties, and although believed to be reliable, has not been independently verified and its completeness and accuracy cannot be guaranteed. No warranty, express or implied, representation or guarantee is made as to the accuracy, validity, timeliness, completeness or suitability of this information.

Any indices and other financial benchmarks shown are provided for illustrative purposes only, are unmanaged, reflect reinvestment of income and dividends and do not reflect the impact of advisory fees. Investors cannot invest directly in an index. Comparisons to indexes have limitations because indexes have volatility and other material characteristics that may differ from a particular hedge fund. For example, a hedge fund may typically hold substantially fewer securities than are contained in an index. Indices also may contain securities or types of securities that are not comparable to those traded by a hedge fund. Therefore, a hedge fund’s performance may differ substantially from the performance of an index. Because of these differences, indexes should not be relied upon as an accurate measure of comparison.