The year has started well with the domestic equity indices putting up a stellar performance in January. CNX Nifty and S&P BSE Sensex surged 6.35% and 6.12% respectively on the heels of positive domestic and international developments.
One of the key positives for the markets was the RBI’s unexpected decision to cut the repo rate by 25 bps to 7.75%. Sentiments boosted further after the IMF in its January World Economic Outlook said India will grow at 6.5% in 2016, overtaking China's projected growth rate of 6.3%. Hopes of stronger reforms from the government especially in the banking segment, after a two-day bankers’ meet was held on January
2 in Pune, aided market gains. Domestic indices were also boosted by Finance Minister’s comments that India will not stray from a plan to slash its fiscal deficit to 3%
of GDP within two years. Release of positive domestic data on inflation and industrial output cheered investors further. Strong buying by foreign institutional investors (FIIs) augured well for the local indices. On the international front, launch of aggressive bond buying program by the ECB to revive the region's ailing economy cheered the local equities. Further gains were seen after minutes of the US Fed’s meeting held in December wherein it was indicated that the Central Bank is unlikely to raise interest rates before late April.
Market highs attract a lot of investors into equities and equity-based mutual funds buoyed by the expectation of getting high returns but markets do witness corrections for which investors need to be ready. Mutual Funds are an ideal way to participate in the growth of the economy but one can only benefit if committed for the long term and invest regularly through SIPs. A flashback to early 2008 highs comes to mind only for the markets to tumble later. Those who were patient and kept the discipline of investing irrespective of the fall through SIPs would have seen good returns on their investments. Balanced Funds are an ideal mutual fund option for new investors looking for an exposure to equities. They maintain the mix of equities and debt to ensure equity market-linked returns while providing the safety of debt investments. Our balanced fund offering, SBI Magnum Balanced Fund, helps you to get the benefit of balance between equity and debt and is a worthy investment in this category with a proven track record of almost 2 decades.
The last quarter of the year is also the time when we start reconciling our investments for tax filing purposes. Ideally, one should calculate the investment required to save tax at the beginning of the financial year i.e. April after the mandatory PF deductions and invest in an ELSS fund, preferably through an SIP each month. The Finance Act 2014 increased the Section 80C investments for tax purposes to 1.5 lacs which is 50,000 more than earlier assessment years. SBI Magnum Taxgain Scheme has been helping investors save tax for over 20 years and is one of the largest ELSS funds in the country. So if you have not done your tax saving investments already, invest now and save more tax with SBI Magnum Taxgain Scheme.
At SBI Mutual Fund, we remain committed to provide you unparalleled service and cater to your investment needs. Please feel free to call on our dedicated customer care numbers 1-800-425-5425 and 044-28881101/044-28881136 from Monday to Saturday (8am to 10pm) or write to us at email@example.com with your queries. Alternatively, SBI FMPL Branches for any assistance. Investors can also experience the convenience of online investing by visiting our site www.sbimf.com which allows KYC compliant investors to invest in any of our schemes and NFOs in a few minutes.
The New Year is about new beginnings and I urge you to take this opportunity to move
towards financial prudence to secure your future needs.
For SBI Fund Management Private LTD
Dinesh Kumar Khara
Managing Director & Chief Executive Officer