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2014 was a landmark year for India with the financial markets and the Indian economy performing much better than what most of us had anticipated at the beginning of the year. The stock markets have had its best run since 2009 and touched new highs. The Sensex ended 6,329 points or 30% higher, while the Nifty closed 1,979 points or 31% higher compared to their respective closing figures as on December 31, 2013. The current account deficit is also getting under control and the pace of disinflation especially in the later part of the year has raised anticipations of an interest rate cut in the first half of 2015. However, the biggest development of 2014 was the election of a new government at the Centre after 10 years with the electorate delivering its most decisive mandate in 30 years.
The new government so far has made the right moves by reaching out to India’s neighbours and global allies, enabling speedy clearance of projects, promoting good governance in all spheres and introducing ordinances relating to important bills like Goods and Services Tax (GST), Coal and Power Sector, Land Acquisition etc. Budget 2015 will be keenly watched to see if any bold measures are taken to boost economic growth as any stop-gap arrangements are unlikely to comfort investors, whether overseas or domestic. On the International front, the Indian economy and markets adjusted well to global developments. The fall in commodity prices especially crude oil was the biggest story and is likely to benefit net importers like India, the extent of the gains though is still being debated. It also remains to be seen if US economy can sustain its growth momentum with a stronger dollar, which will affect exports, and falling oil prices which will affect investments in shale oil. Overall, markets in 2015 are likely to be driven by the ability of the new government to push reforms and international factors such as the fallout from falling commodity prices, geopolitics and the capacity of the US economy to sustain its growth momentum.
The mutual fund industry had one of its best years in 2014 on the back of the gain in the equity markets. The industry added almost 3 lakh crore to its asset base to become a 11 lakh crore market, saw a sharp rise in inflows into equity schemes and an impressive growth in number of equity folios. SBI Mutual Fund as a fund house saw opportunities across the time spectrum and asset class and launched equity-based funds like SBI Equity Opportunities Fund – Series I and II (a 3-year close-ended equity scheme) which allowed investors to participate in the India growth story, and SBI Long Term Advantage Fund – Series I and II (a 10-year close-ended ELSS), offering the opportunity to invest to grow your wealth for the long term along with tax benefits upto 1.5 lakhs under Section 80C of the Income Tax Act as per the Finance Act 2014.
SBI Dual Advantage Fund - Series I, II, III, IV, V and VI (a close-ended hybrid scheme with a tenure of 1111 days) were launched for investors looking for a fund with a mix of equity and debt to generate income and capital appreciation while SBI Inflation Indexed Bond Fund (an open-ended debt scheme), a unique offering in the industry, was launched for investors looking for some stability and inflation-adjusted returns. We urge investors to invest in such close-ended funds keeping in mind the tenure of the fund, their portfolio allocation and their goals. We have a comprehensive range of products suiting investors risk and appetite. Also, as always, investing through a Systematic Investment Plan (SIP) is ideal for the long-term as India’s growth story remains intact and one should not be distracted by short-term market movements.
For the New Year, I urge upon you to update your basic information in your investment folios including your primary email ID and mobile number with all mutual fund houses. Please assign a nominee if not already done and update your address, if you have shifted residence. This allows you to receive uninterrupted service and gives you and your family peace of mind. At SBI Mutual Fund, we remain committed to providing 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 080-26599420 from Monday to Saturday (8am to 10pm) or write to us at firstname.lastname@example.org with your queries. Alternatively, you can also visit your nearest 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.
I would like to wish you and your family a Happy and Prosperous New Year!
Dinesh Kumar Khara