Saturday, March 24, 2018

Time To Start Long Term Investment In Bank Nifty ETF Or Reliance Banking Fund (G)

Respected Readers,
Thank you for your continuous love and support to this blog. In my earlier article of 27 Aug 2017, I told that nifty is overvalued and I closed my SIP due to overvaluation of stocks.
If you do not read this earlier article then before continuing with this article, I advise reading the earlier article carefully, please read it here:- 
You find at the final conclusion in above article, I told 
"You no need to close your existing SIP, Simply run your SIP when market will down and SRNTV touch 0.94 I will inform you through this blog or through my app so that time simply add some more units in your portfolio and whenever SRNTV going above 1.12 then I again inform through this blog and my app so you can book partial profits in your units." 
Now I am happy to inform you that bank nifty SRNTV is touch to 0.94 So this is the time to start an SIP in bank nifty.
Here I share the Excel sheet of bank nifty historical data where you find how I calculate bank nifty SRNTV:-
Now I Chose "Reliance Banking Fund (G)" for our long-term investment because of this mutual fund based on Bank Nifty and launched on 21 May 2003.
As per my mutual fund selecting criteria's ( Read here:-How To Select Best Mutual Funds Or ELSS: Top Mutual Funds Schemes, ELSS )
Reliance Banking Fund (G) has largest fund size in banking and financial sector mutual funds.
So as per my rule of SRNTV, I invest 1/5 of my desired investment amount in this mutual fund.
Here I want to invest total 1,00,000 rupees in Indian banking sector because I think bank nifty corrected till my SRNTV level and now SRNTV of bank nifty is 0.94 then this is the best time to invest in the banking sector.
Now I further divide this money into 2 parts I want to invest my  INR 50000 in the banking sector mutual fund and want to invest 50,000 in banking sector ETF.
So I invest 1/5 of 50000=10000  lum sum in Reliance Banking Fund (G) plan.
Now as per rule given in SRNTV article I need to wait for more correction when this ratio down till 0.85, 0.76, 0.67,0.58 to invest my next 10-10-10-10 thousand parts.
But what happens if bank nifty recover from here?
I think you knew I am so clever to deal with market uncertainty, so I am also starting an INR 2000 per month SIP for next 10 months.
If bank nifty will recover from here and my next trigger levels of SRNTV will not come then due to this 2000 per month SIP (of 10 months) my 20000 also invested gradually in this banking mutual fund.
Now with remaining 20000, I wait for these levels of  0.85, 0.76, 0.67, 0.58 and invest 5000-5000-5000-5000 lump sum amount if these levels come.
Otherwise, I am happy with my SIP, and if 10 months complete and these levels do not come then, I increase the time period of this SIP  for further 10 months so as this is a total 20 months (near 2-year time frame investment plan) in bank nifty.
Now we choose one Bank Nifty ETF, ETF means the exchange-traded fund which holds bank nifty companies in same constituents of bank nifty.
We again use same rule " Select ETF with largest asset size."

And we find that Kotak Banking ETF has the largest asset size of  3676.59cr. So peoples who invest 3676.59 crores in banking ETF are not foolish.
I again follow the same processer means invest 10,000 lump sum in Kotak Banking ETF.
I start a 2000 per month SIP for 10 months and if SRNTV of bank nifty down at levels of 0.85, 0.76, 0.67, 0.58 then I again invest 5000-5000-5000-5000 lump sum amount in every point otherwise increase SIP period with the remaining amount.
Watch this Video (With English CC) for more details ( If you do not understand Hindi Please Enable English Subtitles):-

After 2 years in April 2020, I again update on this blog that what I earn or lost with this method.
Now It is your turn to share your views in comments.
Discloser:- Author of this article is not a registered mutual fund adviser but I Mahesh Chander Kaushik Author of this article is an existing research analyst and passed NISM certification for research analysts. I am also registered with SEBI(RESEARCH ANALYSTS) REGULATIONS, 2014 ( SEBI Registration Number INH 100000908 ) hereby disclose about my financial interest in the subject company and the nature of such financial interest:- 1 I am also investing in same ETF or mutual fund  so my personal interest is included in this fund 2. Me and my associates or relatives have not any actual/beneficial ownership of one percent or more securities of the subject company ( Kotak Banking Fund or Reliance Banking Fund  ). 3. Me and my associates or relatives have not any other material conflict of interest at the time of publication of the research report. 4. Me and my associates or relatives have not received any type of compensation from the subject company(  Kotak Banking Fund or Reliance Banking Fund  ) in the past twelve months. 5. I am not served as an officer, director or employee of the subject company( Kotak Banking Fund or Reliance Banking Fund  ). 6. I have been not engaged in market making activity for the subject company( Kotak Banking Fund or Reliance Banking Fund)

Disclaimer:- This is not an advisory service to buy or sell. The contents of “this research report” are only for educational purposes. No liability is accepted for any content in “this research report”. The author is neither a registered stockbroker nor a registered advisor and does not give investment advice. His comments are an expression of opinion only and should not be construed in any manner whatsoever as recommendations to buy or sell a stock, option, future, bond, commodity, index or any other financial instrument at any time.The author recommends that you consult with a qualified investment advisor, one licensed by appropriate regulatory agencies in your legal jurisdiction, before making any investment decisions. Please read full disclaimer at the bottom of my blog.

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