IPRU

Insights
AN INVESTOR EDUCATION INITIATIVE BY

Issue 02,2021

The SIP way of

Investing
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 INDEX
CEO Letter: The SIP way of Investing 02

CIO Letter: Patience: The secret

ingredientin Investing 03

Infograph: 5 Thumb rules of investing 04

Checklist : 5 investment related changes

06
in this Budget to keep in mind
Fundaclear : Tax Planning Simplified
07
with Mutual Funds
TAX Corner: What does grandfathering
08
mean in terms of capital gains taxation

Quiz : Are You Ready to Test 10

Guest Column: Prepare for what you can’t 11

predict
Storyboard: Don't panic amidst the
pandemic, invest more 13

Parenting & Money: Why gifting cash on

14
occasions can be a powerful tool in money lessons

Crossword 16

Travel: The world of Virtual TRAVEL -

17
a new travel trend in COVID times

Recipe: Cheesy Jacket Potatoes 18

Fitness: Setting up your own workout at

home during the pandemic 19

Book Review: My First Book of Money 20

Movie Review: Gunjan Saxena – The Kargil Girl 21

Disclaimer 22
 CEO Letter

The SIP way of Investing

Mr. Nimesh Shah, MD & CEO, ICICI Prudential AMC

What you should do about your SIPs in a downturn

Investing is an exercise, both rewarding and challenging. When done in haste and worry, it can ruin even
the best game plan. But with patience, the game can swing in your favor, resulting in long-term wealth
creation. Systematic Investment Plans (SIPs) are, in fact, one such tactical tool for the investors to swing
the investing game. How you use it, though, holds the key to smart investing.

Market Correction: Flight Mode On

SIPs help an investor to craft an investment strategy through regular investments in mutual funds. SIPs are
most effective when investors can see through both an ‘up’ and a ‘down’ cycle. But it’s challenging to
continue SIPs when the markets correct, as our emotions come into play. We turn risk-averse with our
long-term investments, forgetting that such correction times are precisely when the SIP needs to be
continued.

One principle to remember is that when markets are down, one can accumulate more units for the same
SIP investment. Often, investors make a costly mistake to terminate their SIP investments in a market
downturn that snatches away the opportunity from them to invest at lower valuations.

Advantage SIP
Stock markets tend to work counter-intuitively. You should see your SIPs through a complete market
cycle, no matter how long the uptrend or downcycle lasts. The best time to invest is when the markets
have or are in a correction phase. This allows an investor to essentially buy low and sell high, which should
be an investor’s mantra when investing. This is not just an investing cliché but a serious investment strate-
gy.

Logic behind SIP

Stock prices are a reflection of earnings and growth, but in the short run, prices tend to fluctuate depend-
ing on news, rumors, emotions. If the markets are doing well, enthusiasm persists, and if the sentiment is
negative, investors worry. Such sentimental swings often lead to pulling out or stopping SIPs, thereby
ruining the game-plan.

If one sees through the history of Indian markets, markets have recovered from all major corrections.
When investing through SIPs, an investor can invest through the downtime leading to the accumulation
at low prices. Even though bear markets are tougher to deal with, these are suitable times to invest fresh.
One should instead try increasing the SIP amount, which helps when the inevitable rebound occurs.

The one thing to avoid here is the temptation to trade in and out of SIPs. Remember, long-term invest-
ment plans needn’t be tinkered with unless warranted and advised by a financial advisor. Invest regularly
in a SIP; then invest some more when markets correct. Keep doing this until the next upturn, and you can
master the investing game.

02 IPRU Insights
 CIO Letter

Patience: The secret

ingredient in Investing
Mr. S. Naren, ED & CIO, ICICI Prudential AMC

Happy New Year! It is important to remember that the crests and troughs do
tend to even out as the period of investment
Over the course of my career in stock market, I have learnt increases. Also, when one remains invested patiently over
that intelligence alone does not guarantee long term success. long term, histori-cal data thus far, clearly indicates
Often leaning on to intelligence causes one to be over that Indian markets have rewarded the patient
confident which sets the stage for future error. investors over long term. (Past perfor-mance may not
be indicative of future results). Remember, one cannot
In our strive to get the investment choices right we tend control nor predict the market direction. Hence, it is
to forget that true key to successful investing lies in the advisable to be disciplined and patient in one’s approach
virtue of patience, which is often in short supply. Investors towards investing. Buying and selling frequently or
generally tend to want quick returns, but ironically that’s churning one’s portfolio often does not always
not how it works. Some of the notable returns on ensure superior returns.
investment comes when one patiently waits for the entry
investment story to play out, over time. To resist temptation
“Opportunity may knock only once, but temptation leans on
Two roles of Patience the doorbell.”
It’s good to study stocks but buying and selling frequently is
usually not the best approach to investing. It is This is an oft referred line which is true when it comes to the
generally observed that when a particular theme is under world of investing. Investors generally are besieged with the
spotlight, retail investors tend to get swayed by the herd temptation to both buy and/or sell at varying points in time.
mentality and rush into the theme without thinking much At such times it will be useful to remember what legendary
about the fundamentals. Patience and logical thinking here investor Warren Buffett said - Pretend that you can make only
can help the investor to not only to invest in the theme at an 20 investments in your lifetime.
appropriate price but also make reasonable gains as well.
This restriction ensures that an investor does thorough
The second role of patience comes in the form of time invested. research before moving forward in the transaction. Adhering
Most often there is a mismatch between the price of a st ock to such a policy will invariably push the investor to be patient
and the value of its underlying business.. In some cases it may with their investments rather than succumbing to short term
take several years for the markets to discover the real value of dents. Remember for successful investing the investor needs
the stock. In such situations, it is advisable for investors to stay to be patient to grow. As Buffet puts it - Successful investing
with the investment to ride the entire cycle of the price takes time, discipline and patience. No matter how great the
movement. talent or effort, some things just take time.

The same is true while investing for financial goals.

Investors constantly keep track of their investments on a daily
basis, which sometimes may turn out to be tedious process.
At the same time, when the returns turn volatile, investors Opportunity may
lose hope and tend to take irrational decisions which can
prove to be an erroneous decision for a long term
perspective. Another fallout of this activity is that it
knock only once, but
encourages one to sell whatever has recently
underperformed, even at a loss and buy more of what has
temptation leans on
outperformed, at a high price. And it’s not just investors;
even experienced market participants tend to feel the doorbell.
the short-term pressure. This is not to mean that portfolio
review is not necessary but keep watch that you are not over
analysing on a daily, weekly or monthly basis.
03 IPRU Insights
 Infograph

5 THUMB RULES
OF INVESTING
INSTANT GRATIFICATION IS A FOLLY

`
The investors these days wish for some quick money. A couple of your
investments may also help you earn returns over a small period of time but
desiring the same for all of your investments is not wise. Paul Samuelson once
said, “Investing should be more like watching paint dry or watching grass grow.”
This captures the essence of investing and one must indeed give time for the

SEEK ADVICE FROM RIGHT PEOPLE

One must always seek advice and guidance from the right people. Make sure when you
make decisions about your hard-earned money, you consult someone who knows about it.
That’s why it is always advised to consult financial advisors. Financial advisors take note of
your incomes and future goals and guide you on the suitable way to achieve those goals.
Also, make a habit to stay aware of your investments and discuss your financial goals
regularly with your financial advisor.

AGE IS AN IMPORTANT ASPECT OF INVESTING

Managing finances is easier as one can easily set aside investible money when
one is young. As one grows old, with a growth inearnings, the expenses grow
multifold due to increasingresponsibilities like kid’s education, family vacations
etc. Mostyoungsters, especially in their 20s, think that there is no need to save
currently as there’s a long time to their retirement. However, they
forget that the early you start investing, bigger the corpus you may have at the
time of retirement. For example, if you invest Rs. 10,000 every month for your
retirement since you are 25, the retirement corpus shall swell to Rs. 6.50 crores assuming a return of 12%
p.a.However, delaying to start investing for just 10 years will make your retirement corpus to be only Rs. 1.90
crores. This is precisely the power of compounding.

04 IPRU Insights
 Infograph

5 THUMB RULES
OF INVESTING

TAX PLANNING IS NOT FINANCIAL PLANNING

The month of March usually sees a high jump in the investments being made
in the tax saving instruments. Even while we may say that any savings are
good savings, one must not consider the investments made in pursuance of
tax planning to be the only investments required for a healthy financial
future. Financial planning goes far ahead in terms of the determination of
goals and then taking necessary steps to achieve those goals over a period of
time. Financial planning is indeed a journey that one must undertake with
determination and consistency so as to reach the destination within the
desired time period.

I'LL DO IT LATER MINDSET IS DANGEROUS

Deferring any decision regarding investments is indeed dangerous for

your financial future. Such a mindset gets injected into us during school
times when we tend to postpone our studies until the time we have our
exams. Similarly, we tend to care about our finances, only when our goals
are nearby. When it comes to investing, getting started is the hardest part
for most of the investors. The thumb rule to investing asks to start early,
invest regularly and keep reinvesting the returns. With the power of
compounding, one can indeed reap much larger benefits in the long run.

05 IPRU Insights
 Checklist

Goal planning
5 investment and changes
related
to keep in mind
Source: Budget 2021
www.unionbudget.gov.in

Advance Tax Relaxation for Dividend Income 1

Since dividend income cannot be predicted in advance, Budget has proposed to relax advance tax
requirements for such income. Source: Budget 2021 www.unionbudget.gov.in
Investors are now liable to pay advance tax only post the dividend declaration.

Pre-filling Income Tax Returns 2

ITRs to carry pre-filled details of capital gains from listed securities and dividend income
A step towards easing the compliance burden for the taxpayers.

An Investor Charter 3
An investor charter to enlist rights of the investors proposed.
Such investor charter to encapsulate all the financial products.

Interest Taxable on PF Contribution beyond specified limits 4

Interest on Statutory/ Recognised PF account exempt
Budget taxes interest on more than Rs. 2.50 lakh contribution
Such interest on excess amount will be taxed each year

ULIP Taxation rationalised 5

Maturity proceeds of ULIPs taken on or after 1 Feb 21 exempt only if the annual premium upto Rs. 2.5 lakh
Non-exempt ULIPs brought at par with MFs for tax purposes

06 IPRU Insights
 Fundaclear

Tax Planning Simplified

with Mutual Funds
Mutual funds are specialized investment vehicles aiming to provide professional fund management to
the investors. While this makes mutual funds preferred investment options to beginners, they can also
simplify the tax planning process.

EQUITY LINKED SAVINGS SCHEME (ELSS)

One of the eligible options under Section 80C of the Income Tax Act 1961
Investors can avail tax benefits for investment upto Rs. 1.50 lakh per year
Lowest lock-in period of 3 years amongst the eligible investment options under Section 80C
Convenient investing across the year through Systematic Investment Plans.
Investors can continue to stay invested even after expiry of 3-year lock-in

TAX RATES FOR EQUITY FUNDS

15% rate for Short term Capital Gains from equity funds
Lower cut-off period of 12 months for classification as Long Term Capital Gains (LTCG)
Rs. 1 lakh exemption per year for LTCG from equity shares and equity funds
Lower tax rate of 10% (post Rs. 1 lakh exemption) for LTCG from equity funds

INDEXATION BENEFIT FOR GAINS FROM DEBT FUNDS

Special tax rates of 20% post indexation on LTCG from Debt funds
Investors can take indexation benefit for Long Term Capital Gains (LTCG) from Debt Funds
Indexation effectively results in taxation of Real Returns only instead of absolute returns
With indexation, the effective rate on LTCG on debt funds is even lower than 20%

Additionally, the fund manager may continue to book profits within the investment portfolio; such gains
continue to be accumulated in the portfolio valuation and eventually the Net Asset Value (NAV) of the
units. The gains from mutual fund investments are taxed only when the mutual fund units are redeemed.
This reflects another important tax-efficient feature of the mutual funds for the investors. Thus, with
Mutual Funds, it becomes convenient for the investors to plan their taxes. Happy investing!

07 IPRU Insights
 Tax Corner
What does grandfathering
mean in terms of capital gains
taxation
Balwant Jain

Budget 2018 introduced long term capital gains (LTCG) tax on listed equity shares and units of equity
oriented schemes or business trusts (referred to as “equity products” hereinafter). Earlier the same were
exempt under Section 10(38) of the Income Tax Act. However, the profits accrued on “equity products” till
the date of presentation of the budget were “Grandfathered”.

What is grandfathering?

Wikipedia defines grandfathering as under:

“A grandfather clause (or grandfather policy or grandfathering) is a provision in which an old rule
continues to apply to some existing situations while a new rule will apply to all future cases. Those exempt
from the new rule are said to have grandfather rights or acquired rights, or to have been grandfathered in.”

Budget 2018 presented on February 01, 2018, introduced Section 112A making LTCG on “equity products”
acquired before this date taxable prospectively while retaining the exempt character of the profits accrued
till January 31, 2018. The provision of making the profits, accrued till January 31, 2018, exempt is nothing but
grandfathering provisions of Section 10(38).

Taxation changes for equity products

LTCG on equity products, on which Securities Transaction Tax (STT) was paid, were fully tax free under
Section 10(38) of the Income Tax Act since 2004. The short term capital gains on such assets were taxed at
flat rate of 15%. Budget 2018 removed the complete exemption on such LTCG while leaving short term gains
as it is by introducing Section 112A. Under this provision, LTCG on equity products upto first Rs. 1 lakh were
to be treated as fully tax exempt and the balance gains were only to be taxed at a flat rate of 10%. However,
while computing LTCG, profits accrued till January 31, 2018, were protected by grandfathering.

How grandfathering provisions for LTCG on equity products work

The grandfathering provisions provided that for the purpose of computing LTCG, fair market value (FMV) of
such an asset as on January 31, 2018, was to be taken as cost. The FMV for listed shares and units was the
highest of the prices quoted on both the stock exchanges (NSE and BSE). In case the shares/units were not

08 IPRU Insights
 Tax Corner

traded on January 31, 2018, then the last quoted price on these exchanges were to be taken. For units of
unlisted equity schemes, the Net Asset Value (NAV) as on January 31, 2018, was to be taken as its FMV. This
would ensure that only the LTCG accrued after January 31, 2018, will get taxed. In case the sale price is lower
than the original cost, the difference would be long term capital loss and in all other situation it would be
LTCG.

For computing the exact amount of LTCG or long term capital loss, chart the following steps:
Step 1: First find out the lower of the FMV and the Sale value.
Step 2: Find out the higher value of actual cost of acquisition and lower value of the above two (FMV and sale
price) which is to be treated as cost for computing LTCG.
Step 3: From sale price, reduce the result of second step to arrive at the value of LTCG. If the result is a posi-
tive number then it is gain while a negative number denotes long term capital loss.
The same is explained with a few examples for better and comparative understanding.

S. N. Description 1st 2nd scenario 3rd scenario 4th scenario

scenario Value Rs. Value Rs. Value Rs.
Value Rs.
1. Cost acquired on 1st 100 100 100 100
April 2016
2. FMV on 31-01-18 200 200 50 200
3. Sale Price 250 150 150 50
4. Step 1 (Lower of 2 & 3) 200 150 50 50
5. Step 2 (Higher of 1 & 4) 200 150 100 100
6. Step 3 Long Term 50 Nil 50 (-) 50
Capital Gains/(Loss) (3-
5)

Though while computing LTCG, you are allowed to avail the benefit of indexation on all assets generally,
there is no benefit of indexation available in case of equity products. Since there is an initial exemption of Rs.
1 lakh, you have to pay tax only if the aggregate of LTCG on all such equity products exceeds Rs. 1 lakh in a
year and that too at a flat rate of 10%.

In case you are investor in unlisted mutual funds, you need not worry about actual working as mutual fund
houses and registrars generally tend to provide readymade working of grandfathered capital gains. In case
of listed shares, you will have to do this working yourself.

The writer is a tax and investment expert and can be reached on [email protected]

09 IPRU Insights
 Quiz

can apply lessons from Union Budget-making to your

own finances.

Are You Ready to Test Yourself

Creating ? budget
a household
Q1. Dividend income from equity At the
Q2. A focused fund can have a government, preparations
Q3. An investor for the
can register a Union Budget
funds is taxable at 10% for maximum of 30 stocks in its Systematic Investment Plan
exercise in February usually begin many months in
individual tax payers. portfolio. (SIP) for a maximum amount
advance. The process kicks off with all the Ministries
of Rs 25,000.
A. True A. True
under the government
A. True being asked to present their
B. False B. False
‘Demands for Grants’
B. Falseto the Centre. Demands for Grants
are the lists of expenses for the upcoming year broken
Q4. Asset Management Q5. The due dates for filing the
Companies (AMCs) will be Income Tax Return havedown
beeninto individual
Q6. Fundheads.
managers can choose stocks
contributing _______ to the proposed to be changed in the upto 20% of the investment
portfolio in the index funds.
In the December
share capital2019 issue of I-Pru Insights,
of Limited we took
Union Budget 2021. A ‘demand for grants’ can be a good starting point for
Purpose Clearing Corporation
you on a quick walk-through of the ten A. unmissable
True steps your household True
A. budget too, though you would need it
(LPCC), an entity which is B. False
you need to take to create
being setup by SEBI with an wealthB. through
False financial with a monthly and not yearly frequency. Get the
planning. This tomonth,
objective we kick off a more leisurely members of your household to list down all the
develop the
Q9. Which of the following is not a risk
journeyCorporate
through Bond
eachMarket?
of those ten steps. Here’s theFund
Q8. A Multi-Asset firstmust
expenses
invest that they expect
grade to incur
specified in the in the coming month,
RIskometer
one A.
on budget-making.
Rs. 10 crores in at least 3 asset classes.
3 months, 6 months guidelines
and notified
1 year. by SEBI?doing this, don’t
When
B. Rs. 50 crores A. True stick only to the
A. spending
Low Risk on products, include services
Come February 1, most of the financial
C. Rs. 100 crores B. False press change too. An urbanB.family High Risk
in India today spends far more on
Rs. 150
D. into, crores C. Very
tuning dissecting and analysing the Union Budget intangible services such risk
low as mobile data bills, Swiggying,
D. Very high risk
for 2020-21 presented by the Finance Minister. Now, if Uber
Q10. The gains from equity funds areand Ola rides and streaming content than it does on
Q7. Funds
the Indian Government
investing in which rakes in Rs classified
20 lakh crore in rotiCapital
as Long Term kapda makaan. To be sure you’re not missing out on
revenues international
every year,equities are market borrowings
accesses Gains if theon tap period
holding of
required to mandatorily
big items, collect all your family’s monthly bills – Kirana
the units is 12 months or more.
and hashedgemoney-printing powers
the currency risk for needs to prepare a store bills, utility bills and credit card statements for a
Budget theevery year, shouldn’t you beA.doing
investors. True it too? You month before you start on the budget.
should. B. False
A. True
B. False You can then get down to classifying these expenses
Answers: Q1:B, Q2:A, Q3:B, Q4:D, Q5:B, Q6:B, Q7:B, Q8:A, Q9:C, Q10:A
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

10 IPRU Insights
 Guest Column
Aarati Krishnan
Prepare for what you can’t predict

Many investors who are new to investing think that Mr Raman: Now that your financial goal is on the hori-
succeeding at investing requires the ability to make zon, I would say it is time to rebalance portfolio. This
great predictions – where markets will head, whether means it is time to book profits on equity funds and
interest rates will rise or fall, what will be the outcomes start moving money to other relatively less volatile
of macro/political events etc. But as this conversation options such as liquid funds to protect your corpus. In
between three smart friends reveals, the secret to an equity investing journey, bull and bear phase is a
investing success does not lie in being a Nostrada- given and no one can predict when it likely to play out.
mus, but in preparing well for what you can’t predict.
Dr Jaishree: Oh, thanks Mr Raman. This is very helpful.
Mr Raman – a registered investment advisor, Dr Mr Shah: Well, I guess it is time for me to rebalance my
Jaishree - a general physician and Mr Shah – a civil investments in equities as well. I don’t want to lose
engineer, were slightly early for their building society any
meeting on Sunday. Munching chai and samosas, money I have made. Moreover, it is a fairly large port-
they struck up a conversation. folio of nearly Rs. 2 crs build over the years and it is
going to take some doing to move it.
Mr Shah: Hello, Mr. Raman and Dr. Jaishree. I hope
you are doing well. Mr Raman: No wait, Mr Shah. The advice I gave Dr
Jaishree is as per her goal and life situation. You
Mr. Raman and Dr. Jaishree: Fine, thank you! shouldn’t
can applybe doing from
lessons the same
UnionatBudget-making
all. Rememberto your
your
equity portfolio started over 15 years ago is for retire-
own finances.
Dr. Jaishree: Just hoping that Covid wave subsides ment and to leave your married daughter a legacy.
and vaccines prove to be effective against multiple Creating a household budget
variant. Mr Shah: You are right. But my concern is that since
Mr. Raman: I got my vaccine shot last week. We must At the
there is government,
a fair chancepreparations
of a market for the Union
correction, Budget
why take
prepare for what we can’t predict. exercise
risk? in February usually begin many months in
advance. The process kicks off with all the Ministries
Dr Jaishree: Mr Raman, in fact, isn’t this exactly what under
Mr Raman:the government
The point herebeing asked
is no one to
canpresent
predicttheir
the
you shared when we reached out to you last time ‘Demands for Grants’ to the Centre. Demands for
timing of a market correction. I personally know sever- Grants
regarding stock markets? You had refrained from alare the listswho
investors of expenses for the in
booked profits upcoming
the fear year broken
of elevated
trying to predict the market direction and had asked down into
market individual
valuation andheads.
have been waiting on the side-
us to prepare our financial plan in such a way that we lines since several months hoping for a market correc-
In the December 2019 issue of I-Pru Insights, we took A ‘demand for grants’ can be a good starting point for
can withstand volatility tion to deploy cash. They never got that chance till
you on a quick walk-through of the ten unmissable steps your household budget too, though you would need it
date. By booking profits too early, they have lost out on
you need to take to create wealth through financial with a monthly and not yearly frequency. Get the
Mr Raman: Yes! Happy that you remembered! It is a wealth creation opportunity of a lifetime.
planning. This month, we kick off a more leisurely members of your household to list down all the
best to be prepared rather than speculate about how it
journey through each of those ten steps. Here’s the first expenses that they expect to incur in the coming month,
willone
panonout.
budget-making. Mr Shah: But given that markets have nearly doubled
3 months, 6 months and 1 year. When doing this, don’t
Dr Jaishree: Now that we’re on the subject, do tell me from March 2020 lows, I worry that a sharp correction
stick only to the spending on products, include services
MrCome
Raman, what I 1,
February should
most doof to
thethe portfolio
financial I’ve change
press been may be just around the corner. I cannot digest that
too. An urban family in India today spends far more on
building
tuning for
into,my daughter’s
dissecting and medical
analysingdegree?
the UnionAsBudget
per kind of a loss.
intangible services such as mobile data bills, Swiggying,
your
for advice,
2020-21I presented
have beenbyinvesting for Minister.
the Finance 15 yearsNow, and if Uber and Ola rides and streaming content than it does on
have saved a sizeable amount, thanks to my equity
the Indian Government which rakes in Rs 20 lakh crore in Mr rotiRaman: No problem,
kapda makaan. To beMr Shah.
sure This
you’re notconcern
missingcanout be
on
SIPs. The chatter
revenues around
every year, equities
accesses suggests
market borrowingsthaton
the
tap addressed by wayallofyour
big items, collect asset allocation.
family’s monthlyFigure out
bills – two
Kirana
ride
andahead
has ismoney-printing
likely to be rough. My daughter
powers needs toisprepare
already a things – how
store bills, much
utility billstime
and you
credithave
cardleft to meet for
statements youra
15Budget
years and has just 3 years to go for her degree. I two goals and how much
every year, shouldn’t you be doing it too? You month before you start on the budget. losses can you bear. The
realize I cannot take much risk now and surely don’t answer to these will aid in creating an asset allocation
should.
want a crash to wipe out her medical education fund. plan You where
can then yourgetinvestments will be these
down to classifying spreadexpenses
across
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 Insights
 Guest Column
Aarati Krishnan
Prepare for what you can’t predict

various asset classes and not equities alone.

Mr Raman: Good! That would be your allocation for
Mr Shah: Hmm, I would like to retire in 6-7 years’ time retirement portfolio. Given that you have many more
and that’s when I would need my retirement portfolio. years to go, especially when it comes to leaving a
As for my daughter’s legacy, she will receive it only legacy, I would say that you can afford a higher equity
when I die. I have many years left in me Ramanji, as allocation for that requirement, maybe 80-90%. Even if
you can see; I’m fit as a fiddle! the market were to crash, there would be enough time
to recoup it.
Mr Raman: Well then Mr Shah, I would advise that you
move to a more conservative equity allocation for your Dr Jaishree: Well said! That is a much nuanced view of
retirement portfolio – maybe an allocation split of where things stand.
60-40 or 55-45. Your asset allocation should depend
on your appetite for losses. I will give you my own Mr Shah: Well with life, as with your finances, if you
example. I hold only a 50-50 allocation between equity prepare enough, you don’t have to worry about adver-
and debt in my retirement portfolio because I feel that sities which could come your way.
even in the worst-case scenario of equity market
correcting by 50%, I’d lose only 25% of my corpus. I’m Dr Jaishree: Rebalancing, asset allocation and your
quite prepared for that given that I am not very far previous advice of building a robust emergency fund…
from my retirement goals. I think I know almost all the financial steps that one
needs to take. Thank you Mr Raman! And do not
Mr Shah: I’m not so risk-averse, so I will go with 60-40 forget to vaccinate yourself and your family!
for allocation.

12 IPRU Insights
 Storyboard

Don't panic amidst the

pandemic, invest more
What, no! This is your childhood gullak.
You have been putting a coin in it daily
You're going to break it since you were 2.
now. Don't play with it!
Stop it! That must be a lot of
Maybe I wanna break money by now!
What ?
it, mommy!

But, that is a very little amount,

Yes, let it stay there, we'll break How? where do you invest 365 rupees!
it when you need the money.

But it's not going to

be useful then!

Let us calculate. We have put a rupee

coin every day for the last 22 years. That
In mutual funds, you can start with
means it has roughly 7500 rupees. What
even 100 rupees. Now that I am
value does it have now? If you had
working and earning also, I can do a
invested 365 rupees every year in
lot more than just 365 rupees.
something useful, it would be a lot
more money.

Well, I guess money lying idle in

And the risk?
that gullak isn't increasing!
Fine, bring that hammer. Let's break
another one of your chldhood toys.

Well, if you choose the right Mutual funds will deliver more
instruments and stay regular, than savings account ratigs
there is no risk. usually, so why not go for that.

13
 Parenting & Money

Why gifting cash on occasions can

be a powerful tool in money lessons
Lisa Pallavi Barbora

It was their 5th birthday and we had decided to finally give in to a big birthday bash inviting all their
friends and classmates. You may have guessed I’m talking about a pair of twins, which means, double
the number of children to be invited and to joy of the twins’, double the number of gifts!!

The excitement of ‘double’ was short lived for us as parent. As it turned out, it was the first and the
last time we accepted gifts for the twins’ birthday celebration. Why, you wonder?

With close to 80 children who turned up (remember double the number with two full classes invited)
and double gifts, there were some unique problems we faced. Firstly, it’s rare that with so many gifts
there won’t be duplicates and we had many. Duplicate gifts are problematic because you simply don’t
need them. Secondly, it’s not humanly possible to use all the gifts simultaneously, hence, they need
to be stored and we quickly ran out of space in our limited Mumbai apartment. Recycling those gifts
is out of question as it too tedious a task to keep track of who gave what such that we do not end up
re-gifting the same person who gave it! For the children too, the most exciting part was meeting their
friends and then later tearing apart the wrapping paper. The excitement around the gifts themselves
was rather limited and short lived.

Can cash replace the traditional gift wrapped toy?

Ultimately, receiving so many gifts turned out to be a wasteful affair with little benefit. From the
following year, whenever there was a birthday celebration for the children, invites always went out
with a side note of – ‘No Gifts Please’.

We soon discovered that, not many parents are comfortable sending their children to birthday parties
empty handed; it was hardly surprising that as a fallout of our ‘no gifts’ request, people started to
send small cash amounts in decorative envelopes.

While not everyone likes to receive cash as a gift, there are many advantages to it; not only is it easier
to store but also it’s a lot more efficient as a useable gift.

“Bacche ko paisa nahi dena chaiye.” That’s the general outlook. Most people assume that money
gifted to a child, will simply go to the parents; but it needn’t be so. With all the advances in technology
and information available, your child is better equipped than you were at their age to make certain
decisions with money given to them.

The onset of online transactions right from spending to investing has meant that children can see the
impact of their money choices immediately and sitting at home. With their cash birthday gift, they can
now decide how much they want to spend or save. Easy online price comparisons can be made by
kids themselves before they spend. There is a fair probability that they will end up buying only those
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14 IPRU Insights
 Parenting & Money

Why gifting cash on occasions can

be a powerful tool in money lessons
Lisa Pallavi Barbora

items that they really want rather than buying everything together, of which some will not be looked
at beyond the first few days of purchase.

Realising that they can save some for later is also liberating. Children don’t want everything all at
once; instead they like to spread it out so that the gratification of getting something new keeps
repeating itself.

How to show them the usefulness of having cash

Cash gifts are useful not just in making better spending choices on toys and other stuff children like,
but also its helpful when you want to start teaching them about saving and investing. These sound
like big tasks for a child, you may think. However, once they see the difference a simple thing like
accumulated interest makes to one’s bank balance, they will understand very quickly that the entire
balance needn’t be spent.

Take small steps. First begin with a piggy bank at home. Let your children collect any cash gifts in a
piggy bank for at least a year. Usually you won’t end up taking out any money, because breaking into
a piggy bank seems rather terminal until it is so full that you can’t place another coin or note in it.

Once the piggy bank is full, break it open and let you child buy the top two affordable things on their
list of demands. Take the rest and open a bank account in their name. Several banks now permit
minor bank accounts to be opened, with you as the adult guardian managing the account. Any addi-
tional cash that is gifted to your child can be added to this bank account. Next, introduce kids to the
account statement/passbook which captures the deposits and withdrawals made. This will aid in
helping them understand the changes occurred in the account based on what they purchased or
saved. Plus the excitement of accumulating interest will keep them hooked on to saving more. Do this
for a year and after that when your child still sees money in the bank; nudge them towards making a
small investment. While our perception may suggest that the whole of this may sound too tedious for
a kid, my experience was otherwise. So, be prepared to be surprised by their understanding and
inquisitive queries which are bound to come your way in the days ahead once you introduce kids to
savings.

In effect, cash gifts are not just simpler but they also help children in becoming money wise. Being
money wise is not about trying to get rich or being miserly, instead it is about knowing how to be pre-
pared for the future. These are simple lessons through simple tasks, but important enough for the
effect to last a lifetime. Next time you are thinking of which toy to get for your daughter or niece, why
not pick up a decorative or playful envelope and give her a head start on the money journey.

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15 IPRU Insights
 Crossword

1 2 3 4 5 6 7 8 9

L I Q U I D I T Y

HORIZONTAL
This is one of the investment risks which may result in higher impact cost due to lesser
turnover of the securities on the stock exchanges.

VERTICAL
1) This denim apparel brand is owned by Kontoor Brands, an American Clothing Company.
2) This is the new digital currency proposed to be introduced by Facebook.
3) ________ brands are not allowed to run TV Ads for their products.
4) India’s largest nuclear power plant is located in Kakrapar. In which state is this place?
5) Aishwarya Rai Bachchan has recently invested Rs. 5 crores in this Nutrition-based Healthcare Co.
6) This bank has the highest number of rural branches amongst private sector banks.
7) This Company has recently announced its foray into Paints business with an initial investment of
Rs. 5,000 crores.
8) This is the first Indian insurance Company to be a Unicorn after Policybazaar.
9) Janet ________ is first Woman Treasury Secretary of the United States.

Take a picture of the solved crossword , and mail it to [email protected] 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 !

16
06 IPRU Insights
 Travel

The world of Virtual Travel -

a new travel trend in COVID times
By Juhi Kapoor

The Coronavirus has indeed brought about

a change in everything we do, and how
long are we going to remain stuck at our
homes, no one can say. Though travel is
opening up, it is rather difficult, uncomfort-
able as well, for many to indulge in travel
right now. And so, virtual reality aka VR has
been taking over.

Though the trend is not completely new

and has been around for a while now, it is
only now that the trend has gained momentum and how. For a handful of us, it seems to be the
same monotonous routine over and over again, being at home, trying to make our days inter-
esting, while we make attempts at indulging in new habits and trends.

And well, as it turns out, we can after all have a wonder time from the comfort of our homes and
have an experience that might feel like out of the world at that very moment. We all have been
craving to just step outside and take a holiday, and virtual travel is indeed making that come
true in all the aspects that it can. Looking at the beaches or a view amidst the valleys could pos-
sibly be the big thing that we need right now.

Though most of us need to keep our wanderlust in check at the present moment, we can still
enable ourselves to come around the digital alternatives that seem to have found a place in the
world of travel right now. The idea of virtual travel is to help people not feel stuck anymore, and
it is the trend that is taking over.

Much like most of the things that we know of and have heard about, this is also a trend that isn't
very inexpensive after all. However, apart from the money problems, it may also be far away
from a real time experience, and it might or might not be very reliable. Having spoken so highly
of virtual reality, looking at far-away places from the comfort of our homes, the question also
lies as to how it does not give the real sense of feel, in any possible aspect. There are websites
and VR set that allow us to transcend ourselves to a new place all together, but it is also only a
trend that is just picking up.

With travel now opening up, many have been resuming traditional travel after all. Whether of
not the trend of virtual travel be able to come around even close, continues to be a far-sighted
reality, however, it is picking up and could be the go-to option for people who are trying to
reduce carbon emission footprints via travel or aren’t very huge fans of flights.

At a time when everyone is looking to get an escape from the four walls of their room, virtual
reality could be a temporary solution to have a feel-good environment around us. However,
whether it will continue to be a trend that lasts in the future, in what we believe will be the
post-covid era, continues to be something to watch out for.

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17 IPRU Insights
 Recipe

Cheesy Jacket
Potatoes
By Darshini Bhuta

Preparation time – 10 mins

Cooking time – 45 mins
Total Time – 55 mins
Serves 4 people

Jacket potatoes are a great side dish or you can

Ingredients:
have it as a meal itself served with cream of
mushroom or tomato soup. It is traditionally an 4 potatoes sliced in half
English recipe and the Britishers take great care 2 tbsp butter
when it comes to their potatoes and the results 2 tbsp corn flour
really are much crispier on the outside and 1 ½ cup milk
fluffier on the inside than the typical American Finely grated cheese
variety. I have modified the method in which it is Add salt, pepper, chilli flakes and
cooked to a more Indian way by using pressure oregano to taste
cooker which helps it to cook faster. Enjoy this ½ cup boiled sweetcorn (optional)
cheesy dish on a cool winter night. ½ cup mushrooms (optional)
½ cup finely chopped capsicum
Method: (optional)
Pressure cook the potatoes for three whistles

For the filling we will make a thick white sauce – Once the potatoes are cooled, scoop them from
add butter in a pan, add corn flour and mix proper- the middle and add white sauce mixture into the
ly. Now add milk to the mixture and stir till there are potatoes.
no lumps and the mixture is sufficiently thick, so
that it stays inside the potatoes Pre heat the oven for 10 minutes at 150 degrees
and then put in the potatoes for 20 minutes at 150
Now add grated cheese, salt, pepper, chilli flakes degrees
and oregano to the white sauce mixture
Once baked, removed the potatoes and serve
Add sweetcorn, mushrooms and capsicums to the them hot
white sauce and stir properly. You can add any
ingredients/vegetables you wish to. Even if you
don’t add anything it is fine

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18 IPRU Insights
 Fitness

Setting up your own workout

at home during the pandemic
By Juhi Kapoor

The last year taught us way too many lessons, and we are still processing quite a few. I, for one,
learnt it was important to understand the unpredictable nature of life. So many things we took for
granted - friendships, finances, families - had us know their importance.

However, the most important lesson was that health comes first, even when you have to choose
between living and surviving, maintaining a healthy lifestyle is prioritized!

Hence, people quickly adapted to this new disruptive lifestyle of working from home. They soon got
everything home, from their entertainment to their spa.

The gym too wasn't left behind. It followed suit and found a place indoors. There are various advan-
tages to this. You need a good immune strength to counter the harsh virus. You would also be in
shape when this is all over and you plan your travel. Moreover, staying physically active will help
your mental health as well. However, the question remains: How do we start?

Following will be some of the many ways you too can bring the workout sesh at home:

Get smaller accessories: Go machine free:

We don't have to go overboard with setting up a Not all workouts need gear also! Stretching,
home gym. A simple Pilates ball, a yoga mat, and yoga, jogging, and brisk runs don't need any
a few dumbbells may be all the help you need. investments. Although they are great ways of
This absolutely is about your comfort. You can staying fit, they would require your dedication
go for a small treadmill or bicycle too. Even after and patience. Luckily, most of them come as
we are safe to step out, we can still make use of natural instincts to us humans or can be
these machines. acquired like most skills with the help of a little
research.
Frequent workouts:
Our lifestyles have become sedentary and we Dance a lot:
need to move. Make sure you spend 15 minutes Perhaps, there is no workout greater than a
every hour walking or just getting up and giving fun one that also helps you feel good, and so,
your hands and legs a good break from rest. we highly recommend dancing! High on bene-
fits- It can help your family have a good time
Eat but with care: as well. Zumba is also a great way to exercise
We have all been trying crazy food recipes. All and have fun, moreover, it's a new dance form
that can pile up in the calorie count and also lead you can add to your knowledge.
to obesity, which, everyone knows, is the first
step towards most heart and immunity problems.
Eat healthy and make sure to digest it well. Base
your diet on raw vegetables and fruits more than
processed junk foods with a lot of sugar.

With vaccines on the go, we may be near the end of this chapter of corona virus. However, it's
important we practice caution nonetheless.

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19 IPRU Insights
 Book Review

'My First Book of Money'

(Author: Ravi Subramanian and Shoma Narayanan)

Review by Juhi Kapoor

Ravi Subramanian is a well-known name for the readers who love to read crime thrillers. A
banker by profession, his writings have been keeping banking and the financial world in the
center stage. However, the transition has been quite interesting, with his writings turning from
serious and engrossing crime thrillers to a lighter version to improve the children's financial
quotient. The co-author of the book, Shoma Narayan, has also been a banker in her early
career.

With a piggy bank drawn on the book cover, it can be easy to guess that the book is focused
on the younger residents on the planet. The book has been structured duly considering their
target audience, who should learn basic money concepts. Simultaneously, enough care
seems to have been taken to keep the conversations interesting with easy and relatable analo-
gies. The book, spanning 128 pages, is an interesting read for the little children as they read
through the conversations of little kids, Aman and Arya, with their parents and grandparents.
Instead of following a text-book approach, the book takes the kids on the journey of learning
financial concepts in easy-to-understand and easy-to-visualize jargon-free talks.

It talks about banking, credit cards, incomes, savings, etc., and with the demonetization and
Digital India into the trends, it also focuses on being cashless and the consequent benefits.
The concepts have been explained thoroughly with small exercises following each chapter
considering the need to reinforce such concepts into the minds once the chapters have been
completed. With the bankers doing the writing for the kids, the book is full of small and rele-
vant facts related to the concepts being explained in the chapters.

Teaching the money concepts to the kids is always a desirable activity but often taken serious-
ly by the parents. Only once the child has started living on their own like for higher education
or after joining the job, they focus on learning such concepts as and when they have some
money to manage. The book serves as a handy tool for such parents to help their children
learn the money concepts as a fun activity. Once you read through the book, the conversa-
tions and talks seem very personal and relatable, which makes this book a quick and interest-
ing read for the children.

If you are looking to educate your kid about the basic concepts, this book hits the right spot
with a clear focus on simplification and de-jargonization of such concepts. The book can also
be a great gift for the kids in your social circle.

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20 IPRU Insights
 Movie Review

Gunjan Saxena – The Kargil Girl

Streaming on: Netflix
Director: Sharan Sharma
Cast: Janhvi Kapoor, Pankaj Tripathi, Angad Bedi,
Rating:
Emotions – Inspiring, Touching, Entertaining

Review by Darshini Bhuta

From a young age Gunjan (Janhvi Kapoor) wanted to fly a
plane and become a pilot. Beginning in Lucknow, 1984, the
story begins with young Gunjan Saxena in a flight along
with her older brother, Anshuman (Angad Bedi). Gunjan versation. While the film compels you to
wants to look out of the airplane window, but Anshuman redefine patriotism and battle patriarchy,
doesn't let her. A kind air hostess tends to the problem and at heart, it is a poignant ode to a
takes Gunjan to the cockpit. Looking at the cockpit immedi- father-daughter relationship. Two people
ately sparks a desire in her mind to become a pilot as she who never give up on each other. Their
feels enthusiastic about the plane's features. respective roles fit Pankaj Tripathi and
Janhvi like a glove. They convince you
A few years later, Gunjan is congratulated for her academ- that there couldn’t have been a better
ic excellence with her proud parents, Anup (Pankaj Tripa- pair to essay these roles. While Tripathi
thi) and Kirti, planning to send her to high school. Gunjan, brings in his famous effortless brilliance,
however, wants to drop out of high school to become a Janhvi Kapoor is a revelation. Not only is
pilot. Anshuman feels that women should not be in the she age appropriate for her role, her eyes
cockpit, but Anup strongly disagrees. A firm believer of mirror Gunjan’s childlike exuberance as
gender equality, he allows Gunjan with her desire to well as shades of sorrow and anger at
become a pilot. Gunjan makes multiple attempts, but these being conveniently side-lined by her
are thwarted by concerns regarding her educational quali- sexist superior (Vineet Kumar Singh as
fications and high costs, causing her to return home the Wing Commander). The actress is
dejected each time. While her parents differ in their impeccable as Gunjan Saxena. Vineet
outlook towards her dream, with Kirti hoping her daughter and Angad Bedi get one-dimensional
would soon be wary and Anup insistent on allowing his characters with limited scope, yet, they
daughter to pursue her dreams relentlessly, an advertise- aren’t forgettable.
ment in a newspaper for acceptance into the Indian Air
Force provides Gunjan just the right opportunity for All in all, this is a story of a first Indian Air
making an effort to enter the air force. Anshuman, who is Force woman pilot who was part of the
himself serving in the army, completely disapproves and 1999 Kargil. It is a deeply moving tale of
tells Gunjan that the Air Force isn't a place for women. She, a feminist father and his feisty daughter,
however, ignores him, and goes ahead with the formali- Gunjan. It wages war against patriarchal
ties, later finding out on the day of the results that she is mind-set and discrimination, and identi-
the only female who got accepted. fies it as a bigger threat to progress than
the one we perhaps tackled in 1999. The
The film captures the gender dynamics with honesty and film is a good one time watch and man-
poise. The film calls out the sexism faced by Gunjan in the ages to be inspirational yet entertaining
Armed Forces not to exploit her story but to begin a con- at the same time.

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21 IPRU Insights
 Disclaimer

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

Complaint Redressal

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 [email protected]. 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

22 IPRU Insights