Wednesday, November 26, 2014

List Of Shariah Compliant Mutual Funds In India

What is mean of the Shariah-compliant mutual fund?
Islamic law is known as Shariah, and Shariah prohibits interest for Muslims. 
So according to Shariah Muslims also not buy Shares of companies which linked to alcohol, tobacco, gambling and casinos and financial institutions that earn interest. 
BSE launch first Indian Shariah index in may 2013. 
Near about 700-800 companies of the indian stock market are Shariah compliant. 
So today I give you a list of Shariah-compliant mutual funds in India. 
List of Indian Mutual funds and ETF which compliant shariah
There are 2 running mutual fund, one upcoming mutual fund, and 1 ETF in India which name include Shariah but it fact sheet show that this ETF not compliant to Shariah  
1. Goldman Sachs CNX Nifty Shariah Index Exchange Traded Scheme (ETF):- (Not Recommended): - if you read the fact sheet of Goldman Sachs, it clearly states the fund is not Sharia Compliant in Page 8 from the fact sheet: "Investors to note that GS Shariah BeES is not a Shariah compliant scheme."
The link of this .pdf file:
http://www.benchmarkfunds.com/gs/Documents/Factsheet.pdf
The fact sheet is available on the top right corner from following web page.
Source URI:  http://www.goldmansachs.com/gsam/in/advisors/products/exchange-traded-funds/equity/shariah-bees/
2.Tata Ethical Fund 
3.Taurus Ethical Fund 
4.SBI Shariah Equity Fund ( will be launch in December 2014 ) SBI Shariah Equity Fund will be launch from 1 December 2014.
SBI Shariah Equity Fund has got the approval of the All India Muslim Personal Law Board, All India Muslim Personal Law Board is an authority which oversees the observance of Muslim civil laws in India.
Compare Shariah Mutual Funds and ETF in India: - We recommended Tata Ethical Fund (D) among all of these shariah compliant ETF and mutual funds due to largest corpus size and good dividend history. 

Friday, November 21, 2014

How To Become Rich Through Mutual Funds

Mutual funds are very easy tools of wealth creation in a period of time If you adopt a disciplined approach in mutual fund investing then you easily become rich in 10-20 year.
   Today I told you a tested method of wealth creation through mutual funds In this method you require one simple thing ‘’ SAVE 5% OF YOUR EARNINGS ‘’ it mean if your salary is 10000 per month then save only 5% of 10000 (500 rupees)in mutual fund SIP and increase this amount if your salary is increase. 
For example you start a SIP from 500 rupees per month and after 1 year your salary is 12000 rupees then your 5% saving is of 12000 means 600. 
So now increase your monthly SIP amount from 500 to 600 rupees per month. I think saving only 5 % from income is a very easy task it means if you earn 100 rupee then save 5 rupee and spent 95 rupee in your lifestyle maintenance. 
Now I give you a detail illustration that Mr shiv some Sharma was start his job in July 1996 in sale tax department as a clerk and that time his salary was INR 2500 per month. he start save only 5% amount of his salary ( it is INR 125 per month) so he make a SIP in SBI magnum multiplier lius plan 1993 ( this is a real story which inspire me to write this article). 
Now in 2014 he is a accountant and get 31000 per month salary so his salary in increase@15% per annum. He continue save 5% of his salary and invest this amount in above mutual fund scheme (in last of this article I give you a excel file where I show a estimated illustration.). 
SBI magnum multiplier plus give 21.24% annualized return on SIP investment if we divided it from 12 then monthly growth rate is 1.77% Now total value of his holding in near 7 lacks . Since last 18 year of his saving whenever he need money he take it as a loan from his own bank ( Yes he say this is my saving is my bank which give me interest free loan) In September 2004 he want to buy a bike and his holding cost is near 50,000 in September 2004 he sell some of his mutual fund units and get 30,000 ( in 2004 market price of a good bike is 30,000) for his bike. 
Now he assume that he take a interest free loan from his own bank he divided it in 60 installments 30000/60=500 per month now he add additional 500 in his monthly SIP amount means 5 % of his salary + 500 bike loan repaying amount. When he repay his bike loan from his mutual fund saving in September 2009 he again get a loan of 150000 from his saving and buy a residential plot from this 150000 and as I told you earlier he divided this 150000 from 60 as his loan installment 150000/60=2500 per month and repay this 150000 in 60 installments of INR 2500. 
Now his fund value is near 7 lacks and he plan to buy a Maruti swift car from taking a loan of 7 lacks from his own bank of this saving. 
It is also interesting to knew that market value of his residential plot is increase from 150000 to 10,00,000 in last 5 year which he buy from his mutual fund saving.
Here is the link for download estimated investment of shiv som sharma.

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