Apr 29

PPFAS LONG TERM VALUE FUND

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For all of you who have been patiently waiting for the “new fund offer” of a mutual fund I had advised earlier in my blog, the wait is over. PPFAS has opened the new fund for sale of units wef 13 May 2013. All readers of fauji finance are advised to take the “Direct Investment” option. This cuts out the commissions paid by the AMC and benefits the investor.

The first investment can be by cheque filled with the form and deposited either directly with the Mutual Fund/AMC at their Mumbai address or deposited at the nearest CAMS centre near your town/city. After you get the folio number and you are registered as a customer with the Mutual Fund, you may go in for a Systematic Investment Plan (SIP) with a fixed amount per month which you can invest for at least ten years without the pressure of withdrawing.

Although the AMC states “Scheme shall be investing in Indian equities, foreign equities and related instruments and debt securities. Buying securities at a discount to intrinsic value will help to create value for investors. Our
investment philosophy is to invest in such value stocks. Long Term refers to an investment horizon of 5 years and more.”

 I again reiterate, as per faujifinace long term in Stock Markets implies at least 10 years  ie at least one recession and boom cycle in the economy. Though sometimes recessions or depressionscan be as long as 15 years. Check out the great depression of 1929. So beware.  But I am quite hopeful of decent returns in the long term from this fund.

Download Form for PPFAS Long Term Value Fund

Disclaimer: I am personally investing in this Mutual Fund.

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    • sundar on December 27, 2015 at 6:53 am
    • Reply

    Hello sir,

    I am a late entrant ie 2014.. After my VRS, i have begun investing with 60% in ppf and FDS and 40% in mutual funds. Out of 40%, 20 % is in FT balanced direct dividend, 10% in FT blue chip dividend direct and 9% in hdfc top 200 dividend direct, 1% in ppfas which i have started recently.

    Now sir, pl advise whether this portfolio diversification is correct. Should i do some amendments such as transfer FT mutualfunds/ HDFC funds into PPFAS .

    Also i am now working in the corporate sector and have the capability to invest 1 lac per month. Should i invest this in PPfas per month or break my other mutual funds and invest one time a large sum in ppfas due to the power of compounding.

    pl advise

    rgrds

    sundar

      • Fauji on December 30, 2015 at 5:18 pm
        Author
      • Reply

      Hi Sundar,

      It does not matter whether you are a late entrant into this asset class. Though, earlier the better but “jab jaago tabhi savera”.

      If you are putting 60% of your funds in PPF/FDs, it implies that you do not need the money invested in PPF for atleast 15 years( lock in period for PPF). Now that is a fairly long time for money to grow in equities or mutual funds.

      You may like to reorient your allocation. Put 10% in Post Office Monthly Income Scheme (POMIS). 30% in FDs as you may require that amount. And balance instead of PPF, invest in mutual funds provided it is not needed for another 10 years or so.

      Now coming to the various schemes.

      FT Balanced Direct Dividend Plan(43 shares in portfolio) and FT Bluechip Direct Dividend Plans(40 shares in portfolio) are clones of each other. 90% stocks are common in the portfolio. It is nothing new. Most mutual funds have this problem. So, diversification amongst schemes is a misnomer. You can keep investing in just three schemes FT Balanced Direct Dividend, HDFC Top 200 Direct Dividend and PPFASLT VAlue Fund Direct Growth.
      Your money will only grow in growth option. The other schemes will keep giving Dividend from your money and appreciation in NAV will be very minimal.
      Look at it this way, go for growth option. As and when you need money(after 10 years), sell some units. Buffett does the same with Berkshire stock. He does not pay dividends to shareholders. He tells them, “If you need money sell 1 share.”

      In case you require a constant stream of money flow then Dividend option is worthwhile or else put into growth options.

      You may like to keep one scheme out of the two Franklin Templeton schemes. And increase a little allocation in PPFAS fund.

      Hope it helps.

      • SUNDAR on January 19, 2016 at 9:04 am
      • Reply

      THANK YOU SIR FOR YOUR VALUABLE ADVISE.

      RGRDS

        • Fauji on January 19, 2016 at 11:14 am
          Author
        • Reply

        You are welcome Sundar.

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      • Fauji on December 5, 2013 at 2:04 pm
        Author
      • Reply

      Thanks. Will look into it.

    • Mandar on June 23, 2013 at 5:35 am
    • Reply

    How do I invest in the scheme at this stage? Is it advisable at this point of time?

    1. Hi Mandar,
      Sorry for the delay. I think you will not get a better opportunity to invest in this scheme than now. The NAV was Rs9.93 per unit when I checked last. If your KYC is verified, check on the CVL site, in my blog a link exists. Then all you have to do is send a cheque for the amount you wish to invest with a filled up application form at the nearest CAMS centre. Happy Investing.

    • Raju on May 1, 2013 at 2:25 pm
    • Reply

    What is the expected date of launching

    1. Hi
      The date of launch is 13 May 2013 and it is open for subscription till 23 May 2013. Please use the direct option so that you save 0.5% on costs and that benefits your NAV.

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