Mutual Funds - Capitalizing on Real Estate Potential

Mutual Funds - Capitalizing on Real Estate Potential

The real estate stocks are difficult for an average retail investor to read. Wild swings have been the order of the day. However, mutual funds that have 3-4 per cent investments in real estate stocks allow a small investor to benefit from the surges but remain protected from the troughs.

Making an informed decision is necessary for the success of your investment goals. Mutual Funds (MFs) are certainly among the most sought-after investment instruments in the market but since you have to select from dozens of mutual funds and not all funds perform well, here we demystify the world of mutual fund investing for you.

What are MFs?

MFs are the professionally managed funds that invest in the equities of various companies, including real estate, listed on the Indian stock markets. These funds are governed by the Securities and Exchange Board of India (SEBI) that safeguards rights and interests of retail investors. Any citizen of India can buy mutual fund units that are available at certain Net Asset Value (NAV) declared every day by the fund managing company.

Should you invest in MFs?

As an investor you could well think of investing in the stocks of real estate companies directly. However, in order to make successful investment, you must take a look at the kind of volatility realty stocks witness on the stock exchanges. The Realty Index clocked whopping returns of 48 per cent between Feb 7, 2007 and Feb 7, 2008, on Bombay Stock Exchange (BSE) but it’s not that every investor who pumped in his money in realty companies directly into stock markets got such returns. In fact, there would be many who bought shares at the wrong time only to witness substantial erosion in the value of their investment.

Mutual funds, at the other end, are run by fund managers who have specialized knowledge over stock-market investing, and track market movements on professional basis. This way, they are well-positioned to make suitable decisions to invest and de-invest in the markets as per the circumstances. Though mutual funds do not guarantee a win-win situation all the way, investing in proven funds actually has the capacity to meet your objectives. As a matter of fact, the specialized investment management by mutual funds has evidently produced returns as high as 80 per cent a year, which a naive investor rarely achieves in the course of direct stock market trading.

Types of Mutual Fund

Selecting a mutual fund scheme mainly depends on your risk appetite, investment horizon, and future needs. Once you work out these factors, you can choose a suitable scheme for yourself.

Meanwhile, Brix Research brings you the insights on the various types of mutual funds classified on the basis of their investment strategy and time horizons.

Corpus investment Equity or Balanced - Equity funds park their corpus anywhere between 65 and 100% in equities. Balanced funds, on the other hand, maintain a fine balance between equity and fixed income securities. The latter option offers you security and the rate of return is relatively lower than the equity fund.

Growth or Dividend - Under a Growth fund, the returns generated over the capital invested keep on accumulating, and your cost per unit increases in tandem. You can redeem your mutual fund units, in case you want to book profits. Choosing the dividend option, on the flip side, entitles you to receive returns in the form of dividend that is distributed among the investors, on a periodic basis. Although it depends on the company’s policy, dividends are generally distributed 2-3 times a year.

Open-ended or Close-Ended - On the basis of investment horizon, mutual funds are divided into two categories: open-ended and close-ended. Open-ended funds allow you to purchase and redeem units at any time, however, in case of close-ended funds; there is a lock-in period under which you cannot redeem your mutual fund units for a certain period of time.

Specialty or Diversified - A Diversified Fund allocates its corpus into different sectors of FMCG, Auto, Petro, Pharma etc. In the event of slowdown in one sector, the other one may be able to compensate it. This way an investor invests his entire corpus in different companies and enjoys the advantages of diversification.

Get the best and latest deals on India Properties and Real Estate in India.

Jaipur - Emerging Stronger From the Financial Crisis

Jaipur - Emerging Stronger From the Financial Crisis

Jaipur, popularly known as the 'Pink City' is one of the most promising real estate destinations in the country today and is considered to possess one of the best infrastructures.

Jaipur is all set to make a mark in the realm of economic growth in the country. The Jaipur Real Estate sector is looking very bright. The state government has taken various steps to make the city the next big destination for the Foreign Direct Investments. These include widening and improvement of major roads with flyovers and railway over-bridges, regularization of residential colonies on agricultural lands and improvement of overall infrastructure.

Jaipur property prices have shot up over the last couple of years due to an upsurge in demand. This has led to initiatives by developers like Parsvnath, Vatika and Ansal, to set up residential, retail, office and commercial spaces in the city. GE capital has moved into Jaipur and this has paved the way for the entry of a number of IT companies like Infosys and Wipro, which has worked to the city's advantage. Moreover, the real estate in Jaipur is steaming with a suit of mega projects. The largest of them include Mahindra's 3000 acre SEZ (Special Economic Zone), Anil Dhirubhai Ambani Group's (ADAG) Mega City Development Plans, and Hero Honda's Rs 700 crore manufacturing plant.

Jaipur properties today have become immensely popular because of the recent influx of investments in this sector. The reasons for this are manifold -

· Close proximity to the national capital, Delhi and NCR regions.

· Promising infrastructural base, an example of which is the existent 8-lane expressway

· Relatively lower property prices in comparison to adjacent metro cities

However, according to Jaipur real estate brokers, the global financial crisis couldn't have come at a worse time. Due to low liquidity of real estate and high mobility of investor capital, the city is witnessing a price correction. There has been a fall of 20 per cent in Jaipur property prices.

According to media reports, inflation has become all pervasive, and small investors especially will take a beating, because with huge debts and rising prices of home loan interest rates, new ventures are but a distant dream. In the past when markets slowed down, real estate developers held back supply. The difference this time according to Jaipur real estate builders however is that, a lot of private equity money has gone into the development of the real estate, which will lead to softening of prices and a consequent increase in supply.

Thus, even with minor hiccups such as the above stated, Jaipur is the place to be right now. It is the focus area of all major developers and it's essential to invest early to get high returns, feel industry experts.

George Gonigal provides you the best and latest info on Real estate in india. He would also let you know about property in jaipur. To know more, visit Real Estate Jaipur

Mumbai’s Residential Segment - Forever Active

Mumbai’s Residential Segment - Forever Active

Mumbai’s residential market has been active over the past two years. Most of the real estate activity in Mumbai has been in the middle to upper middle class segments, though the premium segment which has limited supply continues to attract buyers. There has been some appreciation in the values of prime properties in South Mumbai, Worli and Bandra areas.

Residential values are on the rise in the premium South Mumbai Properties. Demand continues and there are some new projects coming up in South Mumbai. This includes two towers of 60 stories each known as “S D Towers”.

The North Western and Eastern suburbs continue to be the preferred corporate locations in Mumbai. As a result, the suburban move by corporates has given a boost to residential developments. Mindspace and Hiranandani, on a regular basis, keep coming up with new developments. Relocation of the American School to suburbs has led to many expatriate officials also relocating their residences to the suburbs.

Residential categories all across the city are active. The residential market will see continued activity in the middle-class segment in Rs1-2.5 million (US$ 20,400-51,000) categories. All areas are seeing a rise in values. With office and residential projects going in tandem, real estate developers are now going in for integrated developments. Most large projects have school, college, hospitals etc incorporated as an integral part of the project.

K Raheja Corp, K. Raheja Constructions, Samir Bhojwani, K Raheja Developers, Tata Housing, GESCO, Mahindra & Mahindra, Kalpataru and Godrej Housing are the leading developers active in residential market. Central Mumbai areas such as Wadala (what were they earlier) Sion etc are coming up as preferred residential areas. Navi Mumbai market is witnessing a marginal increase in residential segment due to large off take of residential apartments by Reliance Industries.

George Gonigal provides you the best and latest information on Mumbai Real Estate Builders, If you want to Buy Apartments in Mumbai, he suggests you log on to www.magicbricks.com.

Mumbai Real Estate | Real Estate in Mumbai | Mumbai Properties | Property in Mumbai