TDS on Dividend, Repo rates and more!

Our founder and CEO Gaurav (@rustapharian) spoke with Neil Borate of  Mint about the big questions for 2020 – small caps & quality investing, passive funds, debt crisis and the rising role of robo-advisories. Let us know your views.

 

 

In Budget 2020-21, Dividend Distribution Tax (DDT) paid by companies has been scrapped. Tax on dividend from companies to shareholders will now be payable in the hands of shareholders at their applicable slab rates. The budgets proposal to levy 10% TDS on dividend paid by mutual funds had led to some confusion among investors as it was not clear whether this tax would apply to Capital Gains from mutual funds as well. CBDT later clarified that the TDS was applicable only on dividend paid in excess of Rs 5,000.

 

It is hereby clarified that under the proposed section, a mutual fund shall be required to deduct TDS at 10 per cent only on dividend payment and no tax shall be required to be deducted by the mutual fund on income which is in the nature of capital gains.

 

 

The RBI has kept the repo rate unchanged, at 5.15% in its monetary policy, the central bank said that it will maintain an accommodative stance for as long as it is required to revive the economy. The Monetary Policy Committee (MPC) said:

Economic activity remains subdued and the few indicators that have moved up recently are yet to gain traction in a more broad-based manner. Given the evolving growth-inflation dynamics, the MPC felt it appropriate to maintain status quo.”

In addition to keeping the repo rate unchanged, the RBI has projected GDP growth for FY 2020-21 at 6%.

 

Kotak Mahindra Mutual Fund has approved the merger of Kotak World Gold Fund (Merging Scheme) and Kotak US Equity Fund (Merging Scheme) into Kotak Global Emerging Market Fund (Surviving Scheme) with effect from 26 February. Since the merger constitutes a change in fundamental attributes of the merging schemes, unitholders who do not wish to be invested in Kotak Global Emerging Market Fund can redeem their units without any exit load until 25 February 2020.

 

Index Returns

Index 1W 1Y 3Y
NIFTY 50 1.1% 9.3% 11.3%
NIFTY NEXT 50 2.7% 7.7% 6.4%
S&P BSE SENSEX 1.0% 11.3% 13.2%
S&P BSE SmallCap 1.2% 7.7% 3.1%
S&P BSE MidCap 2.9% 9.4% 5.9%
NASDAQ 100 4.6% 36.1% 21.9%
S&P 500 3.2% 22.9% 13.2%

Source: BSE / NSE

 

Top 5 best performing funds

Name 1W 1Y 3Y
Edelweiss Gr China Equity … 4.4% 31.9% 19.8%
Franklin Asian Equity 4.0% 17.0% 12.9%
UTI MNC 3.9% 5.8% 10.5%
HSBC Global Emerging Markets 3.8% 9.1% 9.9%
Invesco India PSU Equity 3.7% 26.2% 5.6%

Source: Kuvera.in

 

Top 5 worst performing funds

Name 1W 1Y 3Y
DSP World Gold -1.5% 23.8% 0.8%
Invesco India Gold -1.4% 20.7% 9.3%
ICICI Prudential Bharat 22 Fof -1.2% -4.7% NA
HSBC Infrastructure Equity -1.1% -0.3% -7.4%
Aditya Birla Sun Life Gold -1.0% 22.5% 10.4%

Source: Kuvera.in

 

What Investors Bought

We saw the most inflows in these 5 Funds –

Name 1W 1Y 3Y
Axis Bluechip 2.2% 21.0% 19.6%
Parag Parikh Long Term Equity 2.3% 16.4% 14.6%
UTI Nifty Index 1.1% 10.5% 12.5%
Kotak Standard Multicap 1.6% 16.5% 13.0%
Axis Small Cap 1.3% 37.4% 16.6%

Source: Kuvera.in

 

What Investors Sold

We saw the most outflows in these 5 Funds –

Name 1W 1Y 3Y
HDFC Hybrid Equity 0.8% 9.5% 6.0%
ICICI Prudential Equity Arb 0.2% 6.7% 6.7%
UTI Arbitrage 0.2% 6.8% 6.7%
HDFC Balance Advantage 0.7% 8.4% 10.5%
Sundaram Mid Cap 3.2% 15.6% 5.8%

Source: Kuvera.in

 

Most Watchlisted Fund

Top 5 funds added to watchlist by Kuverians

Name 1W 1Y 3Y
Axis Bluechip 2.2% 21.0% 19.6%
SBI Banking & Financial Services 1.9% 26.2% 21.2%
Mirae Asset Emerging Bluechip 1.3% 19.5% 15.1%
Axis Focused 25 2.3% 24.6% 18.6%
Axis Long Term Equity 2.6% 23.4% 17.6%

Source: Kuvera.in

 

Top ELSS funds

Name 1W 1Y 3Y
Canara Robeco Equity Tax Saver 3.5% 16.3% 14.6%
BOI AXA Tax Advantage 3.0% 26.4% 14.9%
Invesco India Tax 2.6% 16.1% 14.3%
Axis Long Term Equity 2.6% 23.4% 17.6%
Nippon India Tax Saver 2.3% 8.1% 3.2%

Source: Kuvera.in

 

Movers & Shakers

1/ ICICI Prudential Mutual Fund has announced that Lalit Kumar will cease to be the fund manager of ICICI Prudential MNC Fund. Anish Tawaklay will continue as the sole fund manager of the scheme.

2/ ICICI Prudential Mutual Fund has announced a change in scheme name of ICICI Prudential Moderate Fund (FOF) to ICICI Prudential Income Optimizer Fund (FOF) , with effect from 03 February 2020. There will be no change in the fundamental attributes of the scheme.

3/ BNP Paribas Mutual Fund has approved the change in the name of BNP Paribas Substantial Equity Hybrid Fund to BNP Paribas Equity Hybrid Fund with effect from 17 February 2020. There will be no change in the fundamental attributes of the scheme.

 

Quote of the week:

 

 

An example of how a viral transmission is different than normal information transmission can be illustrated thusly: if information were spread in a memetic fashion, it would infect a subject, and, were the information’s traits conducive to the information’s survival, then the subject would accept the idea. This is strongly contrasted with information theory, in which the information is accepted based on how useful it is to an individual, e.g. the idea is accepted because it helps the subject survive if they accept it. Viruses, being obligate parasites, do not always help their host (in this case, the subject) survive.

: Idav Kelly

 

 

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