Know Mutual Funds Commissions and Charges

In India, Mutual Funds companies charge various commissions and pass on to the agents and distributors. And it is essential to know about them as these are either charged directly to you or indirectly charged by deducting from Funds value.

 

Given below are details about them:

 

1. Direct Commission to Agent - SEBI has allowed agents to charge fees to the customers for the service they are giving to them. Though it is optional, but it can be charged from 0.5 to 2% of the investment you are making. Earlier, Mutual Funds companies used to charge "Entry Load" and those were passed on to the agents. SEBI banned it in 2010 and since then, it has allowed agents to charge to the customer directly.
2. Upfront Commission -  This is commission paid to agents / distributors out of your first year investments in a particular scheme. This is usually high in equity based schemes and low in debt schemes.
3. Trail Commission - This commission is paid out of your investments done in subsequent years, after completion of first year. This commission is paid out of your total Asset Under Management (AUM) with that scheme. It is deducted indirectly from your investments by charging it from Scheme NAV. This commission is different for each scheme and one must enquire about it from your sales agents to ensure he is not pushing your investments into schemes that pay higher commission.
4. Total Expense Fee - the total expenses which will be paid out from the fund is defined as Total Expense Fee. The fees may include Funds Management Fees, Marketing  / Selling expense, audit fees, registrar fees, trustee and custodian fees. SEBI has put a cap on the expense fees which a mutual fund scheme may charge which is around 2.5% for equity schemes and 2.25% for debt schemes.

 

TDS now applicable at 2% for pay out above 1 Lac and above

For everybody who has taken a life insurance, please note:

As per Finance Act 2014, TDS at 2% will apply on life insurance policies, if the total payouts received across all your policies in FY 2014-15 is Rs.1 lakh and above. If the PAN details are not updated on the policy, TDS at 20% will be deducted.

This will apply if you receive payouts of Rs. 1 lakh and above across all the policies in a financial year.

TVS Motors launches new scooty Zest 110. No impact on stock

TVS Motors has launched a new scooty called "Zest 110" priced in 40-43K range.

The stock likely to react sentimentally on the news but should not help the company grow its sales as this range already has ample variety by all two-wheeler manufacturers.

Don't trade, riding Zest 110 else you may fall.
 

Watch Ultratech Cements Closely as it approaches resistance

Watch out for Ultratech Cements closely as it is fast approaching resistance zone around its upper trend line.

RSI too is close to 80 which indicates over bought scenario as of now.

Do not Sell until and unless one may see sharp sell off.

Buy IFCI as it reaches consolidation range - 23 March 2014

1) IFCI seems a nice bet from technical charts point of view. On the daily chart, it has seen some correction coming in the stock which has put it favorable on risk-reward ratio.

2) The charts indicate that IFCI is still in bullish range but the recent correction has helped it reached the consolidation range of 23.6-24.30 Rs. At 23.80 Rs, we may also see long term average trend line converging which will further provide impetus to the stock to go up.

3) We may see atleast a small technical bounce from 23.80 Rs levels to 24.25 Rs in a day or two. Please trade cautiously and do not attempt this small technical bounce more than 2 times.

4) Similarly, if it is able to cross 25.10 Rs on the upside, then again one may go long with stop-loss of 24.70 and target levels of 25.60 Rs where stands the long term resistance line.

5) For reference, the daily chart is given below:

Straddle in Karnataka Bank for 105 Strike Price - 13th March 2014

1) Karnataka Bank has too risen along with other banking stocks in the last week or so.

2) The stock has some serious Call and Put Open Interest addition in the last week. Today also, 110 Call has seen tremendous amount of Open Interest which indicates shorting happening below 110 Rs.

3) Technical charts though are showing positive picture, and hence, we decide to take Straddle approach tomorrow in the stock. 

4) Buy both 105 Calls and 105 Puts, if it come for not more than 8 Rs combined. Buy the position and close it, if it goes to 98 Rs level on the downside or 114 Rs on the upside.

Buy Hexaware as IT stocks regain momentum - 12 Mar 2014

1) Information Technology stocks have been under pressure for last few days as institutions churn portfolios and move from defensive sectors like IT to high beta sectors such as Banking, Real Estate and Infrastructure.

2) Hexaware though, has bounced back from lows of Monday to close up 2%. Open Interest has gone up by 5%. 150 and 160 Strike Price Calls have seen unwinding indicating the strength in the stock.

3) Trading Volumes and Delivery Volumes have gone up by around 2 times and 1.3 times respectively from its 1 Week average.

4) On the technical charts, one may seen a break out after consolidation around 154 on Monday. The resistance can be seen around 163 Rs.

5) On the daily charts, one may see that momentum still exists.

6) Hence, one may buy Hexaware around 157 Rs with stop-loss at around 152 and target levels of 163.

Indian Oil may see trend reversal - 07th March 2014

Indian Oil Corporation (IOC) has rallied sharply from 200 Rs to 265 Rs in last two months.Yesterday also, it was up 3.5% to close at 265 Rs. 

Open Interest is up 33%. Now looking close at the derivatives data, it can be found that 250 Put and 240 Put saw the maximum addition and that too at higher closing price, despite stock going up (Put indicates weakness in the stock). 250 Put saw new positions of 1.4 Lacs shares and 240 Put saw new positions of 2 Lacs shares.

Trading & Delivery volumes indicate exhaustion as they trade 40% below 1 week average and almost 50% below 1 Month average.

On the charts, we can see long term resistance in 265-275 Rs range which can be ideal level to sell the stock. Keep stop-loss around 281-282 Rs.

Where to book profits? On the short term 5 Day chart, one may see two levels where support may come. One at 258 Rs and another one at 252 Rs. Book profits in between these ranges.

Apollo Hospitals showing weakness in strong equity markets - 07th March 2014

On the day when Nifty is just on the verge of its all-time highs, Apollo Hospitals showed weakness. The stock was down 1% in Thursday's session.

Open Interest went up by 20% on Thursday. It is now at 1 Month High and just 6% below the 3months high.

Trading and Delivery Volumes in the stock are lesser than 1 week average which provides some comfort to the stock.

On the charts, the stock is very very close to a breakdown. The levels in this case to watch out for is 894 on closing basis. If the stock closes below this level, then we may see it correcting sharply to 870 Rs levels where we have long term support coming up.

For intraday traders, one may sell around 905 Rs levels with stop-loss at 909 and targets of 898 Rs.

Buy India VIX as it inaugurates trading on NSE - 27-Feb-2014

1) India VIX (India Volatility Index) is available for trading on Indian bourses from tomorrow onwards. The traders can go long on India VIX due to following reasons:

2) India VIX is trading close to its all time lows, which is around 13. Also Nifty is fast approaching its crucial resistance zone of 6285-6350 where volatility is likely to increase. See the daily charts for India VIX and Nifty below:

3) On 5 Day chart also, it is approaching a state of exhaustion and likely bounce is expected.

Buy PNB as shorts unwind - 16th Feb 2014

1) PNB was up 1.5% on Friday after falling consistently for last few days.

2) Derivatives data indicate that unwinding happened in Futures and Puts which is bullish sign for the stock as it is falling consistently after last peak formation on 4th Feb.

3) Volume was also above 1 week average which indicates that this short covering is likely to sustain in the coming days.

4) On 5 Day chart, it has broken the downtrend around 528 Rs which can be taken as support level. The same can also be seen in daily charts as well.

5) On daily chart, one may see resistance coming around 550-555 Rs levels where traders can book profits.

Buy Crompton Greaves as it picks up momentum - 13th Feb 2014

1) Crompton Greaves was up 5% yesterday, supported by some positive indicators, which makes it a buy recommendation.

2) Open Interest in the stock has gone up by 22% yesterday. Futures Open Interest went up by 15%.

3) Call / Put Ratio for Fresh Open Interest addition stands at 0.45. Gross Call / Put Ratio is above 1 (at 1.14). This means that we still have scope of further increase in Open Interest.

4) Volume based indicators are also positive. Trading Volume went up by close to 2.5 times of Monthly Average while Delivery Volume is also up by 2.7 times of its monthly average.

5) On technical charts, one may see that before making this move, the stock consolidated in 118-120 Rs range. (below given is 5 Day chart)

6) One may go long on declines, preferably around 123 where it stopped yesterday before making further up moves.

7) Where should be the stop-loss? It can be placed below 118 where we have seen consolidation happening.

8) And what should be my target price? The first target price can be placed at 133 where double tops were made during last up moves.

9) If the same is breached, then the next target arrives at 155 Rs where exists the three beautiful peaks.

Have a profitable trading!

Sell Ashok Leyland as institutions offload - 11 Feb 2014

1) Ashok Leyland on Monday, has shown weakness accompanied by heavy trading & delivery volumes and addition of Open Interest, which further indicates weakness in the stock.

2) The share accumulated 47 Lakhs shares of Open Interest. Out of the same, 41 Lakhs shares have been added in Feb contract and 1.8 Lakhs in 15 Put.

3) Trading Volumes and Delivery Volumes have doubled and trebled respectively from its 1 Month average which indicates institutional based selling. The share was closed 2.5% yesterday.

4) On the technical charts, we have seen institutional selling coming yesterday around 15.9-16 Rs level after which stock tried taking support around 15.7 Rs levels. We feel that these are the levels to get short.

5) If we look at the daily charts, the last support now stands at Rs. 15.3-Rs. 15.1. If that is broken, then no major support seen before 13.5 Rs which makes the stock more attractive to go short.

6) So, our recommendation is to Sell Ashok Leyland and keep stop-loss at 16.25 Rs. for intraday and 16.45 Rs for positional trades. The positions can either be covered at 15.1 Rs or if that too is broken, then one may wait for the levels of Rs. 13.5 to cover the shorts.

Buy Crude Oil around 6200 - 10 Feb 2014

1) Crude Oil has gained momentum on Friday gaining further strength on the upside. The cues are strong from the rising demand in West as it comes out of Cold Weather prevailing in the Northern American countries and Europe.

 

2) Open Interest in Crude has increased by 21% on Friday. The price went up by 1%. Volumes sustained around 1 Month average which is a bullish sign as it is not showing signs of abate.

 

3) On the technical charts, Crude is trading above the moving averages. This move likely to find first hurdle around 6260 where stands the previous high made in the last week of December.

 

 

4) Positional traders can go long around 6180 if it consolidates around 6180-6220 Rs levels. One may put stop-loss at 6060 Rs where stands the previous low and target level at 6360 where exists the multiple peaks made during the last year.