Exercise prudence through Asset Allocation - ICICI Prudential Mutual Fund
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IPRU
Insights
AN INVESTOR EDUCATION INITIATIVE BY
Issue 01,2021
Exercise prudence
through Asset Allocation
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INDEX
CEO Letter: Exercise prudence through asset
allocation 02
CIO Letter: Asset Allocation Schemes
Decoded 03
Infograph: What is Asset Allocation? 04
Checklist : 5 investment resolutions for 2021 06
Fundaclear : Investment framework for a new
07
investor
TAX Corner: Know how profits on
09
ETFs are taxed
Quiz : Are You Ready to Test 11
Guest Column: Why mindset matters in 12
investing
Storyboard: Don't panic amidst the
pandemic, invest more 14
Parenting & Money: Teaching kids to save more 15
in that piggy/money bank
Crossword 17
Travel: Tips for safe travel 18
Recipe: Gajar ka Halwa (without Mawa/Khoya) 19
Fitness: How to remain fit in a Covid
environment 20
Book Review: 'The Psychology of Money' 21
Movie Review: Bhaag Beanie Bhaag 22
Disclaimer 23
CEO Letter
Exercise prudence
through asset allocation
Mr. Nimesh Shah, MD & CEO, ICICI Prudential AMC
Post experiencing the bumpy ride in 2020, we have stepped into 2021, with equity markets touching
all-time highs. One could have cursed himself staying invested in equities while the markets corrected
heavily in March 2020. The investors who sold equity during that time and shifted to debt may again be
disappointed. Similarly, the yellow metal, Gold, had an eventful year as the investors were seeking shel-
ter in the safer commodities during the pandemic outbreak. As the emotions play heavily on the inves-
tors’ psyche, the year gone by highlighted the need for diversification across different asset classes
within the investment portfolio.
Different asset classes tend to react differently to different macroeconomic events. As such, investing
across different asset classes can help the investors balance the investment risk. This is because the
underperformance of one asset class may be compensated by other outperforming asset class. Similarly,
no single asset class has been a winner consistently across the years. A winner in a single year may be the
underperformer in the later years. Similarly, the underperforming asset classes may outperform during
conducive economic conditions. As such, it is always prudent to stay invested in different asset classes
through asset allocation.
As one diversifies the investment portfolio across different asset classes and further into the different
sub-categories within the asset classes, the investment risk reduces significantly due to the lower
concentration risk. For example, one may diversify across equity, debt, real estate, gold, etc. Within equity
options, one may invest across large-caps, mid-caps, small-caps, etc. Similarly, within debt, one may
choose to invest across different credit ratings, varying tenors, etc. Such a diversified portfolio enables
the investors to benefit from the market rallies in different asset classes instead of staying dependent on
a single asset class.
Further, different asset classes can be linked with varying risk-reward trade-offs. One can also align their
risk profile with that of the portfolio risk using an optimal asset allocation strategy. For example, a
conservative investor may like to hold a higher proportion of debt in his/ her investment portfolio. Simi-
larly, an aggressive investor may like to have a higher weightage of equity into the investment portfolio
to benefit from long-term wealth creation amidst short-term volatility. However, one should also appre-
ciate that asset allocation is not a one-time exercise at the time of investment. Instead, one must periodi-
cally review the investment portfolio and rebalance with the desired asset allocation strategy.
Asset allocation helps the investors to lower the investment risk and reasonably stabilize the investment
returns. Cushioned with a pleasant investment experience, one can be expected to move consistently
through their investment journey and achieving their financial goals over the desired time frame. As
such, one should continue to maintain an optimal asset allocation strategy and continue to stay on track
to achieve their financial goals effortlessly.
02 IPRU Insights
CIO Letter
Asset Allocation Schemes
Decoded
Mr. S. Naren, ED & CIO, ICICI Prudential AMC
Different asset classes tend to react differently to even similar macroeconomic events. For example, a
liberal fiscal stimulus to the pandemic outbreak may be positive for the consumption sectors. However,
such steps may result in a higher fiscal deficit, leading to higher borrowings and corresponding higher
yields. Such movement can be negative for the existing investors in debt markets due to the prevailing
interest rate risk. The investment portfolio must remain diversified across different asset classes to
capitalise on different market events and compensate for the underperforming investments across
different market cycles. Different asset classes have historically generated varied returns and reflect
different risk-reward trade-offs for the investors.
While Asset allocation is one of the most important components of a prudent investment strategy, it is
often neglected. Holding different asset classes within the investment portfolio in different proportions
can also help the investors align their risk profile with the investment portfolio's risk profile. This is where
asset allocation schemes approach. Such schemes are classified as hybrid schemes that can invest in both
equity and debt and gold, etc.
Such schemes can vary the proportion of debt and equity within the investment portfolio as per their
relative valuations. When equity seems relatively inexpensive, the scheme carries the flexibility to increase
its allocation. Similarly, when the equity rides high on valuations, the fund may reduce the equity allocation
and increase debt allocation. Such schemes adopt the rebalancing mechanism by judging the relative
valuations through scientific/ statistical models, thereby eliminating the fund managers' emotional bias.
Such funds aim to follow the 'buy low and sell high' approach, wherein the investments are made at
relatively lower valuations. In comparison, profits are booked at higher valuations due to rebalancing.
Warren Buffet once said, "one should be greedy when others are fearful, but be fearful when others are
greedy." This quote indirectly points towards taking a contrarian view over the long term, as it calls for
booking profits when the markets are going higher and investing higher when the markets are correcting
and moving towards reasonable valuations.
While such an investment strategy can be implemented even manually by the investors, it can often be
tedious and inconvenient. This is because the investors may need to review the portfolio performance and
rebalance their investment portfolio regularly. This may also call for tax liability each time such rebalancing
is done by the investor. In contrast, if such rebalancing is rendered automatically by the mutual funds, no
tax incidence arises for the investors until the investments are redeemed.
Asset allocation schemes make this task easier for the investors. The investors may consider automating
their asset allocation through asset allocation schemes, as maintaining an optimal asset allocation helps
the investors continue to stay on track to achieve their financial goals effortlessly.
03 IPRU Insights
Infograph
What is
Asset Allocation?
Asset Allocation Is The Investment
Strategy To Invest Across Different
Asset Classes.
INVESTORS CAN INVEST IN THE FOLLOWING
PRIMARY ASSET CLASSES:
Real
Debt Estate
Equity Gold
04 IPRU Insights
Infograph
No single asset class is
1 winner consistently
WHY IS ASSET Mitigating the
ALLOCATION 2 investment risks
IMPORTANT?
Balancing portfolio
3 risk profile
FACTORS ON WHICH PROPORTION OF DIFFERENT
ASSET CLASSES IN THE PORTFOLIO MAY DEPENDS
Emotional value of the financial goals
Investment Horizon
Age of the investor
Investor’s Risk Appetite
Note - The above factors are only indicative and not exhaustive.
Mutual funds provide varied investment options through different mutual fund schemes, thereby helping
the investors to choose optimal asset allocation for their investment portfolio suiting their risk appetite and
financial goals.
05 IPRU InsightsChecklist 5 investment
resolutions
Goal planning and for 2021
2020 was not that great a year, but luckily, it pointed out some flaws in the way the world has been running.
So, now, you and I together can work on improving the world as well s our lives. However, the biggest changes
start at home, and money is the biggest facilitator.
It's hard to change the world if skipping two salaries can leave you under stress, and this is what happened
when people got fired or underpaid during the worldwide lockdowns.
However, it isn't how much you earn, but how much we save that comes to your rescue during such
pandemics. So, your first resolution this year needs to be financial management, and here are 5 investment
hacks that will help you do that:
Invest more: 1
Why just save, when you can invest!
Plus, given the current inflation rate, your money is losing value every year it stays idle. So, it's best to put it in
instruments that can give you some value to make up for the depreciation.
Set up an emergency fund: 2
Let's assume the vaccine backfires and we enter a bigger apocalypse. The Governments will shut down and this
may lead to job losses. You need funds that will survive you in such emergencies too. So, you need to make space
for emergency funds, which shall only be explored at times of crisis.
The rule here is to have enough savings to last yourself six months without a job.
Clear off your debts: 3
This is crucial! You may be earning well but if you have loans and credit pending on your name, all that earning
vanishes too fast, we bet!
This is why it becomes important for you to retire your debt. With every passing second, it gets more expensive
because of the interest rates attached to it. There may be some added charge if you retire them early, but in the
long run, it will always be feasible.
Understand your financial goals and risk appetite for investments: 4
Although it's wise to invest, we must speculate on where to invest beforehand. Depending on what you are saving
for, you will need to choose the right assets. For instance, when saving for a house, you want to go for more profita-
ble mutual funds, which may also come with a significant higher risk. Thus, you should try understand your risk
appetite too.
Monitor your investments periodically with a financial advisor: 5
Not everyone has the financial knowledge to choose their own portfolio! It's fine, hire a trust-worthy financial
advisor, who can protect your best interests through financial ups and downs and deliver on your financial goals
expectations, and make it your monthly ritual to sit with them and discuss the progress.
Doing so will ensure your future ahead is financially sound.
We wish you a happy new year.
06 IPRU InsightsFundaclear
Investment framework for a new investor
While the bulls are riding the markets, it is obvious for new investors getting attracted towards
the markets and taking their first step into the markets. This was also evident from the data
released by Central Depository Services Limited (CDSL) which reflected that 11.2 lakh demat
accounts were opened in September 2020 which is the highest in the history for the
Company.
Investing into the Equity Markets
Requires Financial acumen to Professional fund managements
understand stock fundamentals for the investors
Regular monitoring for buying and Wide range of investment options for
selling stocks at the right levels the investors to choose from
Direct Stock Investing thorugh
Investing mutual funds
Different Categories of Investors
as per their Risk Appetite
AGGRESSIVE INVESTORS
Investors who may aim for higher returns from their investments, but by
taking higher risk
MODERATE INVESTORS
Investors who are willing to balance their investment risk to moderate
levels, but with commensurate return expectations
CONSERVATIVE INVESTORS
Investors who prefer safer investing, which may even result in lower
returns
07 IPRU InsightsFundaclear
Here is how the mutual funds are Different Categories of
beneficial for the new investors: Mutual Funds
Equity funds
Benefit from
professional fund
management Debt schemes
Hybrid Funds
Transparency
in scheme Regular
performance
investing
and expenses Solution oriented schemes
to enable through
regular Systematic
portfolio Investment Other funds - ETFs/ FoFs
review Plans
Taxation of Mutual Funds
Equity oriented schemes Other than equity schemes
Short Term Capital Gains from units Short Term Capital Gains from units held
held for less than 12 months - 15% for less than 36 months - Regular tax rates
Long Term Capital Gains from units Long Term Capital Gains from units held
held for 12 months or more - 10% for 36 months or more - 20%
No tax on aggregate LTCG of Indexation benefit allowed on
Rs. 1 lakh in a year LTCG
08 IPRU InsightsTax Corner
Know how profits on
ETFs are taxed
Balwant Jain
Increasingly, retail investors are warming up to the concept of ETF investing. ETFs are simply a type of
investment fund or basket of securities that are traded on the stock exchange. ETFs are index based (Nifty
50, Bank Nifty etc), i.e. they hold the same securities as a stock market or bond market index and that too in
the same proportion. By doing so, the Index ETF aims to replicate the performance of the underlying index,
i.e., generate returns similar to the underlying index, subject to trackig error.
How the ETFs are taxed
For the purpose of taxation, let us divide ETFs into two categories - equity based and non-equity based ETF.
The non-equity ETF universe consists of debt market based ETFs and commodity ETFs such as the gold ETFs.
Here too, based on the holding period, one can further divide investments as long term (more than one year)
and short term (less than one year).
In case of equity ETF, one can classify the gains as long term (with holding period of one year or more) and
short term with holding less than one year. Short Term Capital gains are taxed at flat 15%. Long Term Capital
Gains from equity ETFs and are taxed at a flat rate of 10% after an initial exemption of one lakhs rupees for
equity shares and equity funds taken together.
Capital gains on non-equity ETFs are classified as long term if held for more than 36 months else it gets taxed
as short-term capital gain. Short term capital gains on non-equity ETF is treated as regular income and taxed
at the regular applicable rates. However, when it comes to long term capital gains, the investor gets the
benefit of indexation. Such indexed long term capital gains (difference between indexed cost and sale price)
are taxed at flat 20%. However, the investors should also note that unlike long term capital gains on equity
ETF where one gets an initial exemption of Rs. one lakh, the long term capital gains on non-equity ETFs do
not enjoy any exemption.
Benefit of set off of shortfall in basic exemption limit and tax rebate for
capital gains
The setoff arrangements can be best explained with the help of an example.
Suppose, you are a senior citizen and have interest income of Rs. 2 lakhs and long term capital gains on
equity ETF of Rs. 5 lakhs after adjusting the initial exemption of Rs. 1 lakh. Since your other income (Rs. 2 lakh)
09 IPRU InsightsTax Corner
is below the basic exemption of Rs. 3 lakhs, as applicable for a senior citizen, you are entitled to adjust the
short fall of Rs. One lakh (3 lakhs – 2 lakhs) against long term capital gains of Rs. 5 lakhs. So, you will have to
pay tax at flat 10% only on the balance Rs. 4 lakhs as long term capital gains. The higher exemption limits for
senior citizens as compared to normal Rs. 2.50 lakhs as well as the benefit to set off the difference is available
only to resident individuals.
In case your total income after all the deductions and exemptions is Rs. 5 lakhs or less, you are also entitled
to a rebate of upto Rs. 12,500/- against your tax liability. This rebate is available against taxes of all nature
except those applicable on long term capital gains from listed equity shares or equity funds including equity
ETFs.
Here, please note two points very carefully:
In case of any long-term capital gains on equity product, you will have to pay tax at flat rate of 10% even if
your net taxable income is below Rs. 5 lakhs.
The rebate of Rs. 12,500/- is available against short term capital gains on equity products but not against
long term capital gains from such investments.
Exemptions
You can claim exemption against any long-term capital gains tax liability if you invest the net sale proceeds
of such capital asset for buying a residential house within two years or get a residential house constructed
within three years from the date of sale of such asset. One can claim this exemption even if you have already
purchased a house within one year prior to sale of long-term capital gains asset.
The writer is a tax and investment expert and can be reached through @jainbalwant or
jainbalwant@gmail.com
10 IPRU InsightsQuiz
can apply lessons from Union Budget-making to your
own finances.
Are You Ready to Creating
Test Yourself ? budget
a household
Q1. A debt security with an AAA At fund
Q2. Riskometer for mutual the government,
Q3. A preparations forcannot
mutual fund house the Union Budget
credit rating is considered the schemes must be reviewed on offer Value fund and Contra
exercise in February usually begin many months in
safest in terms of credit risk. a semi-annual basis. fund both.
advance. The process kicks off with all the Ministries
A. True A. True A. True
under the government being asked to present their
B. False B. False B. False
‘Demands for Grants’ to the Centre. Demands for Grants
are the lists of expenses for the upcoming year broken
Q4. This is the latest addition to the Q5. Maximum limit for investment Q6. Mutual funds can invest in IPOs
category of equity funds within in ELSS funds duringdown into individualonly
a financial heads.
as anchor investors.
the classification of mutual year is Rs. 1.50 lakh.
In the December 2019
fund schemes issue
notified by of I-Pru
SEBI? Insights, we took A ‘demand for grants’ A. True
A. True can be a good starting point for
B. False
you onA.a quick walk-through
International of the ten B.
equity funds unmissable
False steps your household budget too, though you would need it
you need to Cap
B. Flexi take to create wealth through financial with a monthly and not yearly frequency. Get the
funds
planning. This Equity
C. Hedged month, we kick off a more leisurely members of Q9.
funds yourWhich
household to list
of the following is notdown
a facilityall the
D. Tax-free funds
journey through each of those ten steps. Q8. Liquid
Here’s funds
the can
firstinvest in short to make automatic transactions
expenses that they expect to incur in the coming for month,
term NCDs of up to one year. mutual fund investments?
one on budget-making. 3 months, 6 months and 1 year. When doing this, don’t
Q7. An equity Fund of Fund A. True Systematic
stick only to theA. spending onInvestment
products, Plan
include services
investing in other equity B. False B. Systematic Transfer Plan
Come February 1, most of the
funds is taxed as non-equity financial press change too. An urban family in India today spends far more on
C. Systematic Redemption Plan
tuning into, dissecting
mutual funds forand analysing the Union Budget intangible services
taxation such as mobile
D. Systematic data
Withdrawal bills, Swiggying,
Plan
for 2020-21purposes.
presented by the Finance Minister.
Q10. Now, if ofUber
The classification and Ola rides and streaming content than it does on
equity
the Indian
A. TrueGovernment which rakes in Rs 20 lakh as
shares crore in roti
large-cap, mid-cap,
kapda makaan. To be sure you’re not missing out on
and small-cap is updated by
revenues every year, accesses market borrowings on tap big items, collect all your family’s monthly bills – Kirana
B. False
AMFI annually.
and has money-printing powers needs to prepare a store bills, utility bills and credit card statements for a
Budget every year, shouldn’t you be doing A. Trueit too? You month before you start on the budget.
B. False
should.
You can then get down to classifying these expenses
Answers: Q1:A, Q2:B, Q3:A, Q4:B, Q5:B, Q6:B, Q7:A, Q8:B, Q9:C, Q10:B
But not everything the all-powerful Government does into absolute essentials, indulgences and luxuries.
can apply to your personal budget. So, here’s how you House rent payments, conveyance, school fees, medical
11 IPRU InsightsGuest Column
Why mindset matters in investing Aarati Krishnan
First-time investors often believe that it takes a truckload of your goals within the next three years. If possible, read the
money or a genius IQ to become a stock market millionaire. history of past boom-bust phases in the market to know
But one quality that every successful investor demon- how to spot bubbles.
strates, which is more important than both factors, is the
right mindset. Permanent pessimist
Warren Buffett was really not downplaying his investing Unlike incurable optimists, permanent pessimists are
skills when he said – “The most important quality for an destined to sit out every good opportunity. All of us will
investor is temperament, not intellect. You need tempera- know someone who scoff at stock market investing. They
ment that neither derives great pleasure from being with point to sporadic instances of market manipulation or
the crowd or going against the crowd.” Buffett’s ability to insider trading to hang on to the notion that all stocks are
apply common sense to the business of stock picking, his rigged by unseen forces. They revel in a 5 per cent Sensex
willingness to buy stocks when there are doomsday predic- dip, after sitting out a 90 per cent gain.
tions doing the rounds, and to exercise extra-ordinary
patience in holding on to his good picks for years, are the If you belong to this category, then it is time to revisit this
keys to his investment success. All of this has more to do mindset. Over the last two decades, S&P BSE Sensex has
with temperament than intelligence. made higher highs in every new bull market. Rolling return
analyses of Indian indices show that investors invested in
So, do you have the right temperament to succeed at equities for ten years plus have never made a capital loss
equity investing? If not, what can you do to rectify this? and had a high probability of getting double-digit return.
Well, knowing thyself is the first step. Staying off equities
can apply lessonsbased
from on the Budget-making
Union notion that market is
to your
rigged or it is
own finances. difficult for a retail investor to make good
Incurable optimist returns can hurt your wealth creation ability in the long run.
Creating a household budget
Even as experts were debating whether the markets were What you should do: Read about the success stories of
too expensive with the Sensex at 50K, some were busy legendary investors like Peter Lynch/ Warren Buffet or talk
At the government, preparations for the Union Budget
running polls on how soon the bellwether could be expect- to friends who have benefited from long-term equity hold-
ed to breach 100K! If you belong to this camp or were exercise
ings. in February
Fight your usually
fear of market begin many
correction months
by investing in ain
busily searching for new buys that can double your money advance. The
disciplined process
manner kicks off
through SIP with all the
route. Ministries
Start with
from here, you probably are an incurable optimist. balanced/asset allocation funds to get acclimatizedtheir
under the government being asked to present to
‘Demands
equities and for
addGrants’
to yourtoinvestments
the Centre. Demands for Grants
as your experience
Make no mistake. Making long-term money from equities are the lists of expenses for the upcoming year broken
improves.
does require you to be an optimist at heart. Without believ- down into individual heads.
ing in a bright future for the country, economy or business- Activity junkie
es, itInisthe
hardDecember 2019orissue
to pick stocks of I-Pru
stick with themInsights,
throughwe took A ‘demand for grants’ can be a good starting point for
thick
and you
thin.on a quick
Warren walk-through
Buffett owes a lot ofof
the
histen unmissable
wealth to keepingstepsWhenyourthe household
Sensex hitbudget
50k, weretoo,you
though
busy you would
asking need
around forit
his faith on American
you need to take businesses even when
to create wealth they financial
through were advice?
with Do a monthly
you checkand not portfolio
on your yearly frequency. Get to
every weekend, the
livingplanning.
through dark
This hours
month,suchweaskick
9/11offandathe sub-prime
more leisurelyseemembers
what you need of yourto buy or sell? While
household to portfolios
list downdoallneedthe
crisis.
journey through each of those ten steps. Here’s the firsttending to, hyper-activity is a sure way to sub-par
expenses that they expect to incur in the coming month, invest-
one on budget-making. ment results. 6 months and 1 year. When doing this, don’t
3 months,
But there’s a distinction between being positive about the stick only to the spending on products, include services
economy
ComeinFebruary
general and lookingofatthe
1, most every marketpress
financial phasechange
with If you talk to investors who owned multi-bagger stocks, you
too. An urban family in India today spends far more on
rose-tinted glasses.
tuning into, In the last
dissecting andcouple of years,
analysing BuffettBudget
the Union has will find that they didn’t really expect the stock to be a
intangible services such as mobile data bills, Swiggying,
been consistent about warning folks that it is hard to find blockbuster when they purchased it. Instead, most of their
for 2020-21 presented by the Finance Minister. Now, if Uber and Ola rides and streaming content than it does on
good stocks in American markets at these valuations, wealth was created during periods when they firmly resist-
the Indian Government which rakes in Rs 20 lakh crore in roti kapda makaan. To be sure you’re not missing out on
which is why he’s happy holding on to cash.
revenues every year, accesses market borrowings on tapedbig the temptation to sell because it had delivered a 20 per
items, collect all your family’s monthly bills – Kirana
cent return, or there was a temporary setback to the busi-
and has money-printing powers needs to prepare
What you should do: Decide on a fixed allocation to equities ness. a store bills,often,
utilitymoney
bills and creditoncard statements for a
Most is made equities from doing
Budget every year, shouldn’t you be doing it too? You month before you
suited to your risk profile when the markets are not in a nothing for long periods, based on conviction.start on the budget.
should.
euphoric mood. Be disciplined about your allocations never
exceeding those limits. No matter how difficult it is book Constantly then getthe
You can chasing down to classifyinginvestment,
best-performing these expenses
can
profitsButonnot everything
stocks or equitythefunds
all-powerful
if you areGovernment
about to reach doesleadintoto absolute
your jumping essentials, indulgences assets
into outperforming and luxuries.
at the
can apply to your personal budget. So, here’s how you House rent payments, conveyance, school fees, medical
12 IPRU InsightsGuest Column
Why mindset matters in investing Aarati Krishnan
wrong time and missing out on upside from beaten-down assets and products. For example: The choice of fixed
assets. High transaction costs, securities transaction tax income options in a rising rate cycle will need to be very
and capital gains tax attracted, is sure to take a big bite out different from what it was during a falling cycle. Three,
of your hard-won returns. financial products which are a part of one’s portfolio may or
may not be delivering to your requirements. If a fund/stock
What you should do: Make it a habit to check on your is underperforming it may need to be replaced. Similarly, an
portfolio only at fixed intervals (say once a quarter) or at outperforming asset may also require early profit-book-
key milestones. Don’t obsess over every nugget of informa- ing/re-balancing. All this calls for a periodic portfolio
tion on the company or equity fund. Set your eyes on review.
specific financial targets for your portfolio and assess your
portfolio performance against that target. In the interim do What you should do: Consult a qualified financial advisor
not get swayed by acquaintances’ portfolio performance or who can monitor your portfolio regularly and suggest
social media chatter. changes on your behalf, if necessary.
Procrastinator Doubting Thomas
The opposite of activity junkie, this type of investor believes If you’re skeptical by nature, the sheer volume of informa-
that as long as they have SIPs in various funds/stocks, they tion available today, from various sources can freeze you
need not do anything more to meet long term financial into inaction, especially at a time when opportunity knocks
goals. Whether the S&P BSE Sensex tumbled 40 per cent or at your door. Some investors, true to the doubting Thomas
has risen 90 per cent, this investor would just ignore the nature will not take any decision unless they have consult-
portfolio, hoping that doing nothing will get them to their ed multiple sources and cross-checked the advice several
long-term goals. This fill it, shut it, forget it approach to times. Stock markets, especially during sell-offs, often do
investing can leave one well short of the desired invest- not wait for such detailed due diligence.
ment results because a portfolio, like a garden cannot deliv-
er without weeding, pruning and replanting. What you should do: Prepare a wish-list of investment
worthy equity fund/stocks based on detailed research
Long-term portfolios need periodic maintenance for three during bull market. When a correction arrives, it is time to
reasons. One, the life situation and risk profile that dictated execute what is on the wish list. At such time, it is important
initial asset allocation and products choices can change as to tune out noise emanating from various sources and pay
our income levels and family status change. Two, shifting attention only to what needs to be done.
market conditions can invalidate our original choice of
13 IPRU InsightsStoryboard
Don't panic amidst the
pandemic, invest more
You know this pandemic It showed me how
Hahah, that's debatable.
was good for one thing. important savings can be!
Then?
Hmmm!
Let me guess, it showed
you that your wife is actually
fun and maybe spending
time with her is not so bad.
Well, I agree with you that money is Wow, I married a sadhu. Dear wife, it's money that helped us
needed at such times, but savings... survive the pandemic. Both of us lost our jobs but we survived
because we had savings. Thus, we need savings.
I don't think so!
It's true money helps but savings
That's a cold reaction. are not the most you can do.
Think about it. When you just Inflation affects the real
Then? We should have savings, you lose value value of your money.
invest. with passing time.
Oh God! Okay!
So, you suggest we double it This sounds practical, but
we don't know anything Seems like you did a lot
up via risky investments. of reading in the lockdown.
regarding investments!
Not all investments are risky. Physical assets like
metals and land, they cost a lot but give decent We can hire a Haha, what to do, I figured
returns, however, we can invest in financial assets financial advisor my husband isn't fun!
like mutual funds in much lesser money and gain
heavily. We only need to invest in the right funds.
IPRU Insights
14
11Parenting & Money
Teaching kids to save more in
that piggy/money bank
Lisa Pallavi Barbora
Did you know that the term piggy bank comes from the word ‘pygg’ which is a type of clay used to
make pots a few hundred years ago? Back then money was routinely stored in these pots and over-
time they became popular as piggy banks. Historically, piggy banks weren’t just for children as they
are now. Adults too used them for storing excess money. Today there are many shapes and sizes
that piggy banks come in, but no matter what it looks like its purpose remains the same and sacro-
sanct.
There is no better way to teach your child to save money than a piggy bank which has no way of
being opened other than to break it. Don’t get ones with a key, it will be too tempting! Making it hard
to take money out is the deterrent you need to make savings last.
Why should your child save?
Have you ever bought something at your child’s insistence, which came about only because her
friend has it too? Or ever heard the words “…. But his/her parents are buying it for him/her, I want
it too…”. It’s common for children to desire what they see is making their friends happy. As parents,
the conflict of how much to indulge with material gifts remains paramount.
Saying ‘no’ to some things can be easy if you use the age argument, but for some other indulgences
like toys or sports kits or craft or shoes, it gets harder each time. Children can be persistent; they
won’t ask you just once, it will happen again and again till you are exhausted of the word ‘no’. These
days even travel destinations are decided on the basis of what their friends are doing on summer
break. Many a times, it is easier to give in and buy instantly what your child desires. Now, imagine
if they had money saved up, if not the vacation atleast some other requirement would easily be
taken care of.
Piggy banks can also make you less exhausted
When you always give into a child’s want of buying something, they realise that being persistent
gets them what they want and you saying no is merely for the time being. Ultimately, the child fails
to understand the value of money and also won’t value your word. Using a piggy bank to help chil-
dren save can overcome this conflict to a great degree.
To begin with, start a monthly pocket money which goes straight into the piggy bank. Let your chil-
dren pick up (with permission) lose change lying around the house and put that in their piggy bank.
They can even put any birthday cash or if you give them money for chores, all in the piggy bank.
Over time, they will realise that they are now the owners of money and may not need to plead with
you for what they want. You will also not be exhausted saying ‘no’.
The content of this page does not form part of Investor awareness initiative.
15 IPRU InsightsParenting & Money
Teaching kids to save more in
that piggy/money bank
Lisa Pallavi Barbora
Saving, teaches children the value of money and decision making. Children rarely want just one
thing at a time. Using their ‘own’ money will force them to choose between what they want to buy
today versus what they can leave for a later date when they have a bit more saved up. It encourages
children to rationalise and make choices. They won’t always get it right, but this is also a way to
learn from their mistakes and the importance of decision making.
You can step in to gently encourage a balance between spending and saving, but try to let them
make their own decisions. The failures and successes they have with using money will be their
lessons for a lifetime.
Graduating to a real bank
Last year, when my children completed ten years, we gifted them a minor bank account each. Minor
accounts are linked with one parent and you have full control. This decision propelled the kids to
request relatives and grandparents for cash deposits into their accounts instead of other gifts on
occasions such as birthdays. This made the kids very happy as they kept calculating a higher
balance in their account. Now they are free to gift themselves what they want. However, amazingly,
they are not keen on emptying their accounts in a hurry. It’s also nice to see the excitement of using
their own debit cards for purchases, although I must admit it wasn’t heartening to be asked for their
own credit card now that the accounts are in place!
School teaches children maths and science, as parents we teach them values. Saving money, first
through a piggy bank and then graduating to a real one teaches kids several life skills. The primary
skill being learnt here is to understand the value of money and how one can accumulate more
simply by saving. Do not deprive your children of this life skill. Sign them up with a piggy bank and
monthly pocket money starting today!
The content of this page does not form part of Investor awareness initiative.
16 IPRU InsightsCrossword
1 2 3 4 5 6 7 8 9
B O O M E R A N G
HORIZONTAL
Term being used for the employees who were fired in March/April 2020 as an Covid-19
outbreak after-effect and being rehired by the same company
VERTICAL
1) 26th December, the next day after Christmas, is celebrated as ______ day.
2) Mumbai has two cricket stadiums – Wankhede and _____________.
3) This foundation is founded by the cricketer, Yuvraj Singh.
4) Which Indian state has its tourism tagline, “Small but beautiful”?
5) This word has been announced as the Word of the year 2020 by Merriam-Webster Dictionary.
6) Mrs. Bector’s Food Specialities Ltd., which came up recently with its IPO, own this biscuit brand.
7) This Bollywood Actress has recently launched a kidswear brand ‘Ed-a-mamma‘.
8) This country has the highest holdings of US Treasury Securities.
9) ___________ Funds is the most popular equity fund category as on 30 November 2020.
Take a picture of the solved crossword , and mail it to jinsy_mathew@icicipruamc.com to win a
prize! You could also write to find out the correct answer.
The winners of this crossword will receive a copy of an interesting bestseller !
17
06 IPRU InsightsTravel
Tips for safe travel
By Juhi Kapoor
We could all use some time off the beach
or up the mountains right now, especially
after the year that 2020 has been. In all
probabilities, you too, are one of the few
people who has made a list of places to
visit as soon as this thing called Coronavi-
rus allows us to. Well, the truth is that we
are all a little tired of being at home work-
ing out of the bed, but apprehensions don't
let us step out.
None the less, if you want to read better
and get an understanding of what could
make you travel during COVID easier, and
precautions that you must take, we are
here to help!
For starters, get yourself tested for COVID-19 48 hours ahead of travelling. You can opt for an
at home testing and they will ensure minimum contact happens. While that's a start, other pre-
cautions to be taken like wearing a mask, regular sanitisation of hands among other things
must also be followed. If necessary, use a PPE kit and get yourself tested upon arrival and wait
to hear about the reports.
As for your stay is concerned, read up about the hotel that you plan to stay at. If you can
gather some first hand information then that is only an add on. However, you can always read
up about them as for what are the people saying on social media. In fact, places with open
spaces and airy rooms are advisable during these times.
As for your stay time is concerned, try to avoid crowded places, visit during off peak hours,
carry a disinfectant spray and use it wherever you feel necessary. Also carry all your essen-
tials, especially water and food. Make use of toilet seat disinfectants all the time, carry sanitary
products, and take special care of your personal hygiene.
Finally, though this is the top priority, you must make sure that the places you pick are not
very crowded, pick more open spaces, and read well about the Covid situation in the city/state
that you are looking to visit.
It is extremely important to understand that most of our safety is in our hands, and so long as
we keep a check, follow rules and regulations while maintaining hygiene, we’ll be good to go!
Amid all of this, quarantining yourself is also important post the trip to ensure that there is no
possible way to infect anyone, if by chance, you are carrying the virus.
The content of this page does not form part of Investor awareness initiative.
18 IPRU InsightsRecipe
Gajar ka Halwa
(without Mawa/Khoya)
By Darshini Bhuta
Preparation time – 15 mins
Cooking time – 30 mins
Total Time – 45 mins hour
Makes 2 servings
We all love hot Gajar Halwa in winters. It is a
slow cooked traditional Indian pudding made Ingredients:
by simmering carrots with milk. This sweet
dish is immensely popular. This recipe is easy 2 cups thickly grated carrots
to make and is made without khoya/mawa. 2 tbsp ghee
This gajar ka halwa without mawa has the
1 ½ cup milk
perfect amount of sweetness and the flavor is
very delicately enhanced by cardamom ¼ cup sugar
powder. ¼ tsp cardamom (elaichi) powder
1 tbsp grated almonds for garnish
Method:
Heat the ghee in a pan and add the thickly
grated carrots to it and sauté on medium flame
Let the milk also evaporate
for 2 mins while stirring occasionally
Add the cardamom powder and mix well
Add milk well and saute till the mixture is
thickened
Garnish with almond silver
Once the mixture is thick add sugar
Serve hot
Mix well and let the water from the sugar get
evaporated
The content of this page does not form part of Investor awareness initiative.
19 IPRU InsightsFitness
How to remain fit in a
Covid environment
By Juhi Kapoor
Did you know that an average adult body needs about 150 minutes i.e., 2 and a half hours of basic
physical activity per week? If that's not enough, the body must also have muscle-strengthening
activities on a minimum of 2 days per week! These are just a handful of things that concern our
health and we often don't pay heed. Given the Covid-19 times that we are stuck in, fitness is
extremely important, and hence, it is necessary to stay active in order to stay fit!
We can adopt very simple habits in our everyday routine lives and that will help one stay fit, espe-
cially now, when most of us our stuck to the desktops and multiple other screens. So here are
some basic things to keep in mind and stay healthy!
Ensure movement every half an hour! Go for all those healthy concoctions and
You must take a break ever 20-30 minutes warm water!
from sitting around, doing your daily job and Another of the must do things is to have those
take a walk. If nothing, just put your phone 'kadas' and ginger lemon liquids that everyone
screens among others aside and move around keeps raving about. This might be a great time
for a bit. It could be as simple as just folding to make these habits a part of your routine
your clothes and keeping them away or doing activity and help you keep up later.
a quick daily chore that takes 5-10 minutes.
Do anything that needs you to move your
Ditch the lift! body!
Unless you stay in sky high buildings, take the You can go for cycling, or take a run in the
stairs. The next time you are headed to a mall park early morning, or just about any other
or you visit someone, opt for the stairs instead activity that allows you to engage in some
of the lift. If you feel that you cannot go the physical movement. While most of the
whole way through the stairs, divide them aforementioned activities allow you to stay fit
into both. It is supposed to be one of the most with every day habits, you can develop more
effective ways to keep up with your fitness personalised ones and incorporate them into
and also something that can help you on a your routine!
day to day basis.
Just be at it and don't stop. you will notice
If you enjoy dancing, do it! how little things can make so much of a
difference not just in terms of fitness but also
Free style dancing can be quite the breath of
act as major motivators and energy boasters.
fresh air and in addition, it also allows you to
release stress. Dance like there is no one
watching and you can work on the intensity as
per your wish. Apart from the benefits in
terms of physical improvement, it also helps
you clear your mind and keep up during the
difficult times we are in!
The content of this page does not form part of Investor awareness initiative.
20 IPRU InsightsBook Review
'The Psychology of Money'
(Author: Morgan Housel)
Review by Juhi Kapoor
Being a regular columnist at the Wall Street Journal and the Motley Fool, Morgan Housel is a
well-known name in the United States' financial markets. His book 'The Psychology of Money' is a
focused approach to the role of emotional and personal biases in dealing with money.
Investing is indeed an art and not a science, as the outcome cannot be calculated with linear formu-
lae but depends upon different actions across the investment journey. Spanning across 252 pages
and several chapters showcasing small stories and anecdotes, this book comes as an effortless
read simply explaining complicated financial concepts. It is indeed an interesting take on the con-
cept of saving and investing and how different circumstances tend to impact investing decisions.
The power of compounding is often underappreciated by the investors, as the urge and temptation
to book profits frequently shorten the investment horizon. In contrast, compounding gets activated
often with extended investment periods. The book shares an interesting example of storage devic-
es where the growth in the storage technologies saw almost linear growth for almost five decades
and thereafter grew exponentially during the current century. From the 3.5 MB hard drive in the
1950s, a typical PC in the 1990s had a hard drive of 200 to 500 MBs. Now, people talk about tens
and hundreds of TBs (TeraBytes, i.e., 1024 X 1024 MB) in just around 20 years. Investors often tend
to ignore the power of compounding, and Morgan does a great job in helping the investors under-
stand this basic concept with practical examples.
The success of Warren Buffett and his investing philosophy attracts several investors to attend
Berkshire Hathaway's AGM to listen to his pearls of wisdom. While herd investing is often advised
to be avoided, people tend to flock in herds to this event, undermining the same advice. One must
appreciate that investing is relative, and one should not try adopting the strategies that worked for
others and then expecting that it should work for them.
The book further talks about another important perception about wealth. Investors, especially the
millennials, aim to accumulate wealth to be empowered to spend it to their command. However,
wealth is indeed something that cannot be seen. It is built with the jewelry that you didn't buy, with
the cars you did not purchase, the high-cost vacations that you ignored for better moments, and
the list goes on.
One can read through such examples and more in the book. It is particularly helpful for beginners
as it focuses on staying focused and concentrated on the basic principles of investing. Read this
book for its practical utility and, more importantly, the simplicity of thoughts from Morgan Housel.
You will end up enriching yourselves with a new perception of money and investing.
The content of this page does not form part of Investor awareness initiative.
21 IPRU InsightsMovie Review
BHAAG BEANIE BHAAG
Streaming on: Netflix
Creators: Ravi Patel and Neel Shah
Cast: Swara Bhaskar, Varun Thakur, Dolly Singh,
Ravi Patel, Mona Ambegaonkar and Girish Kulkarni
Rating:
Emotions – Funny, Entertaining, Romantic, Comedy
Review by Darshini Bhuta
humour that works is courtesy Ravi
Bindiya Bhatnagar aka Beanie (Swara Bhasker) is leading Patel, who plays a comic from LA trying
a comfortable life till her boyfriend of 3 years proposes to make it big in Mumbai. The easy
marriage. Suddenly she realizes that she wants to pursue camaraderie he instantly strikes with
her lifelong dream of becoming a standup comic. So she Beanie is fun to watch. You will come
calls off her engagement after deciding to pursue across clichés from time to time but
stand-up comedy seriously, leaving her fiancé (Varun Swara Bhaskar's acting is a saving grace.
Thakur) and parents (Girish Kulkarni and Mona Ambe- Some of the jokes in her stand-up sets
gaonkar) baffled. Beanie also quits from her day time job are actually funny but Swara doesn't
at the same time. Her best friend Kapi (Dolly Singh) have the best delivery.
encourages her to pursue comedy and Beanie meets
another aspiring comic Ravi (Ravi Patel from LA who With 6 episodes, each one around 30
wants to become a comic in Mumbai) in her journey to minutes long, you can easily
become a successful standup comic. binge-watch Bhaag Beanie Bhaag. It
offers something new and will be suc-
However, a career in stand-up comedy, like any other cessful in putting a smile across your
creative career, has its own set of challenges including face, even during these trying covid
parental and societal disapproval and how Beanie tackles times. If you are looking for light-hearted
those forms the rest of the story. feel good series that doesn't demand
commitment from you, this is it. The
The story is about facing disapproving parents, a knotty execution could have been better as
love life and the protagonist own inner critic, while aspir- some scenes and dialogues seem
ing to have a career in standup comedy. For a film about superficial and too easy to be true.
standup comedy the jokes aren’t that funny but they
manage to put a smile on your face. Overall it is entertaining, a well concep-
tually created comedy series is of
Coming to performances Swara Bhasker as Beanie is top Beanie who aspires to become a
notch. The highlight of Swara’s performance is when a stand-up comedian lives to the fullest of
particular act takes her comedy career to new heights but her desires. Will be awaiting the second
also brings ‘disgrace’ to her parents. Dolly Singh as Bean- season of this rom com style web series.
ie’s BFF and Varun Thakur as her dumped fiancé shine in
their roles, Ambegaonkar and Kulkarni deliver immensely
as Beanie’s harried yet wholesome parents. A lot of the
The content of this page does not form part of Investor awareness initiative.
22 IPRU InsightsDisclaimer
Know Your Customer (KYC)
To invest in Mutual Funds, you will need to complete your Know Your Customer (KYC) require-
ments. You can do so by visiting any AMC branch or nearest Point of Service and submitting the
completed KYC Form along with all the required self-attested documents.
Individual investors would be required to submit the following documents –
• A recent passport sized Photograph
• A Proof of identity – A copy of your PAN card
• A Proof of Address – A copy of your Voter ID card, Passport or Driving License
If you are already KYC Verified and would like to update any of your information, you can submit
a completed KYC Details Change Form with the required self-attested documents at your nearest
AMC branch or Point of Service.
SEBI registered Mutual Funds
We advise investors to make informed decisions and are cautioned to invest only with SEBI reg-
istered Mutual Funds. List of Registered Mutual Funds is available at
https://www.sebi.gov.in/intermediaries.html
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For any queries, complaints & grievance redressal you can reach out to us at enquiry@iciciprua-
mc.com or call us on 1800222999.
If you are unsatisfied with the resolution or wish to escalate the matter, you may write to Investor
Service Officer at servicehead@icicipruamc.com. For this purpose, Mr. Rajen Kotak is the Inves-
tor Relations Officer of the Mutual Fund. He can be contacted at 2nd Floor, Block B-2, Nirlon
Knowledge Park, Western Express Highway, Goregaon (East), Mumbai – 400 063. Tel
No.:022-2685 2000, FAX No.: 022 -2686 8313.
In case the investor is not satisfied with the resolution given by AMC, he can approach SEBI by
registering his complaint on SCORES (SEBI Complaints Redress System) through
https://scores.gov.in/scores/Welcome.html
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