My Top 10 favorite A R Rahman songs

On the day A R Rahman received the Golden Globe Award, I decided that, if Rahman went on to win the Oscars, I would blog about My Top 10 Favorite A R Rahman tracks. So here they are.

The first comment I received from most of my friends, is that, Top 10 is too small a thing to contain the full Rahman. Even the Oscars had to catch up so late, so what can you say about an upstart blogger's ad-hoc listings ? So so true, I knew it before I listed them. When I pulled a piece of paper and went on to scribble 'top-of-mind-recall' tracks, the list came to 35, in the first two minutes. Yet, there are so many Top 10 lists, let me just add one more. Not that my list matters, particularly since my music sense is well-documented on this blog before. But after all, as Munnabhai put it, apun public hai public, kya ?

If you don't like Rahman, simple, I don't like you. :) :) . But, since the world is so vast and has unnecessary room for all of us, and I also want to pride about balanced perspectives even when they are irrelvant, I still have stuff for people who don't like his music: I'll make a mention of the few things that I don't like about ARR's music, towards the end. It so happens, some of my favorites in this list are from Tamil, because I also relate to the lyrics. But, I am sure, most of these are equally enjoyable in their Hindi and Telugu or even Swahili equivalents.

Most links point to : Wikipedia/Youtube/Dhingana

10. Kannum kannum kollai adithal... The Artham Song from Thiruda Thiruda....

I can only start from the time I started listening to A R Rahman's music. Unlike so many others who proudly mention today that they knew him from the good old days when he was known as Dileep, like this movie director I had dinner with. I arrived rather late into that world. Life had been busy, juggling between college, part-time/summer jobs, service activities and competitive exams. I hadn't watched movies for the previus 7 years. The comfort of touching a 4-digit salary for the first time (particularly when you started with 2-digits) allows you certain indulgences. Roja, in all its glory, had come and gone, taking the music world by storm while I was busy in chinna chinna velai. I would catch up with it later.

I was staying at my friend's place, who was preparing for PG Medical Entrance and I was surprised to see that, about once in two hours or so, he would, take a break, play a couple of songs, jump around and get back to serious study. One of them was, Kannum kannum kollai adithal. It's exam time, try it out, may be with companion track, Putham pudhu bhoomi vendum. When I last heard, my friend had made it big, both in medicine and in music. :) :) If you try it with some other song, I am not responsible. (As if otherwise I am).

9. Radha Kaise Na jaley.. from Lagaan...

There are some tunes which infect you and infect all others who come in contact with you all through the day. Because, you began your day singing it when you came out of the bathroom, having taken your cool time, insensitive to the subtle needs of the waiting roommates. It used to be Hariharan's 'Pachai Niramey' for one of my friends, and the hum for him and haunt for the others used to be so much that, others would cry out and plead for change of track or change of bathroom ... 'hey.. please da.....' . For me, it is Radha Kaise na Jaley.. Oh, how many times, I have looped and looped and listened to this....

8. Nilaa Kaaykiradhu... from Indira

If you are still under the myth that Rahman is all about Shivamani's drums and western-sounding music, you should hear this kiddu song from Indira, almost carnatic piece. So melodious, so soothing, so relaxing, you won't read the rest of this post because you will fall asleep. If you are the fast-track type, replace this rank with Kannodu Kaanbhathellam from Jeans.

7. Pachai Kiligal Tholodu... from Indian...
There was a time, for 10 months, when I was (literally) jobless, and if carrom board can be considered keeping busy, one of my hobbies (?!) was to re-write the lyrics of my favorite Rahman tracks to my favorite devotional themes and share it with friends. One from that time, is this, rendered by Yesudas, who, well, actually knew ARR from the time when he was Dileep. I would love to give this remix-friendly slot to Oruvan Oruvan Mudhalali, which even the Japanese liked, but, no, this is not about Kamal vs. Rajni or about SPB vs. Yesudas, its ARR vs. ARR.

6. Bharat humko jaan se bhee pyara hai.... from Roja

It's now well-known that Patriotism is Rahman's best and favorite forte. No cultural event or a programme on patriotism would be complete without this piece from Roja. For a change, I like the Hindi version much better, because it sounds much more unifying. I have heard it being used and re-used again and again in patriotic plays and everytime it sounds as inspiring as it did the first time.

5. Bombay - Theme Tune - Instrumental :

There are some tunes for which you don't need lyrics. It's as if the tune can convey the context and the sentiments of the moment. The theme tune instrumental of Bombay is one such. Less luck for Kadri Gopalnath's saxophone, because I had to push out Mettu Podu from Duet and make way for this popular choice for the instrumental slot.

4. Yeh Tara Woh Tara... from Swades...

If there can be a very simple-sounding tune, as if straight out of a school annual day programme, yet one that flows gentle and cool like a river into your ears and make you forget those 7 minutes and 53 seconds, and bring with it a message for change, you need a track like this.

3. Maa Tujhe Salaam from Vande Mataram :

If someone could re-ignite the interest of youth in patriotism through modern music, ARR would be sure on the list. The rendering of Vande Mataram, should make you join the crowd and hum or sing out aloud. If it doesn't, you could have been born anywhere, not necessarily in India. :) :) Even the halls in Los Angeles do it, when ARR performs it live, though he mostly does it as Maa Tujhe Salaam instead of Thai Manney Vanakkam which has equally inspiring lyrics.

2. Iswar Allah Tere Jahan mein.... from 1947 Earth...

This is one song that mesmerized me when I heard it the first time, introduced by a friend. It was much before I saw the movie, even before I knew it was composed by A R Rahman. It still has the same effect on me.

And the Nams-car award goes to... :)

1. Pray for me, Brother

The best track, gets the least number of words in tribute, because, when you listen to good music, you don't talk about it, you don't blog about it, you don't go gaga about it and jump about it. You just listen. If you have done all that, you come back and listen once again. And may be pray thereafter. Silence can bring out the music in you, and, such music, can bring about a silence in you. This is one such piece.

-------------------------------------------------------------------

Irony, no ? Jai Ho is not among the Top 10. I think, far greater music has been composed by A R Rahman, and the worldwide recognition was long due. It had to happen through Jai Ho, and it did, because of the movie's Englishwala visibility or whatever. I do like the track a lot, however. I agree once again with the many-faced blogger, who is attributed to have said, that if ARR gets the Oscar for Jai Ho, it would be like Einstien getting the Nobel Prize for explaining Photo-Electric effect.

Even for my own favorites, the list is grossly incomplete. There is no Sapnay, no Rhythm, no Taal, no Water, no Jeans, no Guru, no Yuva, not even Alai Payudhey? What kind of a funny list is this, without Chikku Bukku Railey, Muqabla and Masti-ki-Pathshala ?

Change the topic....

Jaane Tu is not there, because I was put off by the accidental, but obvious, resembling in the first few seconds of the song had with 'Appudo Eppudo' from Bommarillu. That the rest of the song follows a totally different tune should, of course, be mentioned in the same beat.

I don't like when the excellence of lyrics in one language gets diminished when it's re-written in another language. Vennilave Vennilave's is way better than Chanda Rey
, but no other language could match Rangeela Re in Hindi, with which Rahman made his Hindi debut. I also don't like it when Rahman, re-uses one of his earlier tunes in a different context, for the sake of adapting it to Hindi or English, particularly when the earlier version was so wonderful. 'Poraley Ponnu thaayi' in Karuthamma was so beautiful, demonstrating ARR's music for a rural setting. Gurus of Peace in Vande Mataram is good, but I think the Karuthamma song was better though it may not have had the same reach as Vande Mataram. Taal's famous Ishq Bina ,reworked for "Love isn't so easy" in Bombay Dreams, made it only worse...

I also like it better when old friend Shivamani is felt but contained, like in Roja jaaneman, though the roaring success of a lot of songs including Azeem-o-shan-shahenshah and Chaiyya chaiyya, is precisely because of the domination and flawless delivery of drums.

Put your agreements and disagreements, your choices that were left out, and my choices that look like eccentricities.... May be we should have a commenters' (or dissenters' ??) Top 10....

Layoffs and Scams...

Hate as I do to post forwards on my blog, here is a "value-added" exception :) :)

Someone sent me a funny story as forwarded email, and I kinda continued the story....

(Part 1 is the forwarded story on Layoffs, Part 2 is my addition....)

Part 1 :

Once upon a time the government with Ruling Party XYZ.. had a vast scrap yard in the middle of a desert. Ruling Party XYZ Said..
- "Someone may steal from it at night."

So they created a night watchman position and hired a person for the job. Then Ruling Party XYZ Said..
- "How does the watchman do his job without instruction?"

So they created a planning department and hired two people, one person to write the instructions, and one person to do time studies. Then Ruling Party XYZ Said..
- "How will we know the night watchman is doing the tasks correctly?"

So they created a Quality Control department and hired two people. One to do the studies and one to write the reports. Then Ruling Party XYZ Said..
- "How are these people going to get paid?"

So they created the following positions, a time keeper, and a payroll officer, then hired two people. Then Ruling Party XYZ Said..,
- "Who will be accountable for all of these people?"

So they created an administrative section and hired three people, an Administrative Officer, Assistant Administrative Officer, and a Legal Secretary. Then Ruling Party XYZ Said..
- "We have had this command in operation for one year and we are $18,000 over budget, we must cutback overall cost."


So ....

.
.
.
.
.
.
.

They lay off the night watchman.

Part 2 :

Irritated, the night watchman stole things from scrap yard and vanished.

So, the CEO sacked all the rest of the staff for dereliction of duty.

The shareholders were happy that the CEO has taken stringent action. Share prices went up.

The company had excess cash and wanted to diversify into "security agency" business to de-risk the "scrap" business and also to find a good watchman, because HR companies were having a bull run.

The insitutional investors found out that the security agency was owned by the night-watchman and they raised serious corporate governance objections and stalled the deal. Share prices tanked.

Within a week, the CEO resigned, admitting deliberate fraud to the extent of 7000 nuts and bolts in the scrapyard.

The government arrested the CEO and put him behind steel bars (recycled from scrap) and directed the Economic Offences Wing to investigate the matter.

By the time they discovered the whole truth, the scrapyard had vanished, no, actually the desert had vanished, i mean rivers flowed, civilisations flourished and apartments were built.

However, for the record, let us state the truth they discovered : that the scrap yard never belonged to the CEO and he stole it from the night watchman in the first place.

What they didn't discover was : the CEO and night-watchman partnered once again and started a real-estate business and software companies, which were now flourising in the now-green-but-once-barren desert.

And then, it all started once again.... Jai Ho !!!

The value of Tenacity in Youth

Recently, I had attended a Music Programme by the University Brass Band of my alma mater. The programme, I think, might have been, part of the farewell season. The stadium stage was very elegantly decorated. Lemon juice was being served optionally, to riverside walkers like me who insist that music, cool winds, gang chat and late evening moonlight should always be accompanied by a glass of drink. I thought of insisting on pop-corn, but I dropped the idea, thinking that they may be forced to put a footer in the email invitation next time, saying attendees may please bring their own pop-corn. The performance was electrifying and included a couple of spiritual remixes of my favorite Rahman tracks, and was probably one of the biggest in the few years. In the end, they invited one of the veteran singers in the community, to speak a few words. I think, he must have been invited ad-hoc from the stage after the performers spotted him in the audience. He was full of praise for the way in which the Band has consistently grown over the years saying 'We may not participate in the inter-collegiate competitions which is held elsewhere, but the talent we have at the Hostel is one of the best.' However, this post is not about how great a particular band is and some other is not. It's about the connection between music and college education in our times.

Many of these students hadn't had a formal training in music before they were picked up to train for the band, that's the beauty of the event and a demonstration of the value of tenacity in a right learning environment. There is usually a little test of music sense held a couple of weeks after you join the degree course. If you clear the test, you would be picked up for being groomed for the brass band or other music groups. I remember very well how I flopped terribly at this test, for all the music I thought I always had in my heavy head. While I had conjured up non-existent questions like the difference between Ada Taalam and Adi Taalam, the test turned out to be a simple but effective one, just to quickly check whether you had a music sense, not whether you were a musician. The examiner asked me to sing or hum the first few lines of a popular Ganesh Bhajan, which he confirmed from me that I was familiar with. I messed up the beat right in the opening word. The next flop was even stupid. He asked me if I can hum a tune that is played by a band during March Past. As I raked my brain to recollect that tune which was just below my throat but refusing to bubble up, he probably thought I didn't know what a March Past was, and helpfully hinted "you know, the music they play when they march left-right". Hehehehe, I had heard it, but again hehehehe, I sheepishly gave up. He didn't have to comment regarding the result. That day, I also understood the inner significance of why my violin teacher, eight years earlier, had told me that I will flourish well in tabla instead of violin. Ahaaa, why did he have to be so diplomatic to a teenager ? May be, he didn't want to hurt the sentiments of someone who purchased a second-hand cycle and a second-hand violin and travelled 3 km each way for 3 months to find out that certain areas of interest should be earmarked for future births. However, this post is not about the ones who failed, but about the ones who succeeded by their tenacity.

I remember my room-mate and classmate during my MBA, who went through the same test. No one even faintly guessed he had a musical streak in him but he was selected to train for the band, on cymbals. I am not sure if he still continues his interest in music while working with SAP. I used to admire the way in which these guys would apply themselves regularly and consistently, starting almost from nothing. Most of the time, the 'teacher' would be mostly a college senior, a member of the band who plays the same instrument and may be in his final year. Other times, you were your own teacher. They would be found practicing in groups or repeating and perfecting what they have learnt earlier, sometimes near the library, sometimes at the stadium, sometimes on the Hanuman Hill and all the time humming at their cupboards. Their public performances would have to be of impeccable quality and they would leave no stone unturned to see to it that it was. Not that the hostel schedule was any lighter, they would have to go through what we called "life is an interval between two bells". Starting from nowhere, from a hum test, by the time their stay for 3, 5 or 7 years in the Hostel gets over, they would have mastered the instrument, become adept at performing as a band and given quite a few public performances in glory. Quite often, at the farewell functions, both the artists who performed for a jugalbandhi would be introduced as "both learnt the instrument on their own after joining the first year".

Youth is clay. It gets moulded the way you shape it. It applies itself to what you point to it. It succeeds in whichever skill you inspire it to learn. Our small towns have lots of it and waiting for the proper direction and bringing together. If the best of our institutes can incubate the start-ups seeded by their management graduates, in the small towns, all the hidden potential talent in music, sports and literature can and should be incubated and groomed in those three years, the best prime time of our youth. I know students who joined as dwarfs, literally, but would apply themselves at sports so rigorously and regularly, finding time between Yoga and learning Vedam and few other varied skills, and would finish by captaining Basketball and the Volleyball teams in their final year. Application, Focus, Tenacity, the mantras of success, are sown, learnt, tested and demonstrated, best when you are in college. This is true, not just about music, but about any area which you choose for yourself. Like in this post from Randezvous Perceptions which mentions decoration.

I remember the small town college in which I had done my UG. For a sleepy little tobacco town, we had all kinds of extra-curricular associations, the Toastmasters Club, a Tamil literature club called Thamarai Vattam, a Personality Development course all of which I would juggle with. There were many after-college courses, in addition to the village camps of NSS, the Adult Education campaigns and the free eye camps organised by Arvind Hospitals with volunteering from students. Some colleges had courses on Arabic, Gandhian Economics and Agarbatti making. I remember explaining about a computer and taking Rs.100/- from my mother for a WordStar course, for this "new computer cheej", 100 rupees for 10 days-10 classes, everyday one hour. It might have been glorified typing at the time, but it led me to the next Rs.100/- course in the Basic language, a field that would catch my fascination and I would settle in. In contrast, however, the band wasn't a great place. It would mostly consist of people who already knew how to perform, played a few jumping numbers and the only occasion I remember they played seriously was after the college union elections. That I failed at the music test even there is something you should not ask about. If you conduct a test now, I would fail, but I would show up again at the next test, until you notify Security to disallow losers. Even then, since I wouldn't call myself one, I might take a printout of this post and try to convince the gatekeeper.. May be I believe, if I fail all tests in this birth, success will be instantaneous in the next birth and my opening cry will be a Thyagarja Kirtan ??

It's not just about extra-curricular interest and development of a versatile personality, it's also about the direction at which these talents are directed and the shapes they take after the skill is mastered. The value of tenacity invested at that time of life, is invaluable in the later years. Ironically, as life would have it, those who skipped it would realise it only in the later years and those who apply themselves in concerted self-development will fondly remember those days as the most productive as well as enriching phase of their lives. The excellence streak in Youth is ready to proliferate if we can create a culture that promotes positive action and a formal or informal reward environment that recognises positive application of such effort. This YouthCurry blog post makes a passing reference on how bands in colleges have a short, rocky existence and interest wanes after a while. May be there is nothing much we can do, is it ? No. Band or not, one of the things that a college or university, should do, is to create an environment or culture that promotes versatility, tenacity and recognising the value of higher inspiring goals for application of such effort, whatever you define such noble goals to be. If our colleges continue to just exploit the energy and passionate zeal of the youth to the benefit of frivolous areas, waste them into controversies and be chaltha-hai about irresponsibility, instead of focussing on developing richness in their thinking patterns and preparing them to be responsible citizens, desh ka band bajega.

P.S. As to those millions of readers who are pining to know the answer to why I haven't blogged for long... I won't feel off as if I was Stephen King and attribute it to Writer's Block. I would instead take refuge in this many-faced fellow blogger's succinct reference to a famous punch dialogue : Sneeze, Cough, Hiccup, Yawn, blah blah blah and Blogging Ideas do not come when we demand it. We cannot stop it when they come and we cannot hold them back when they leave.

how to buy a mutual fund and how to tell when to sell

If you need to know what you are putting your head into, you must have read Parts 1 and 2 of this 3-part series on investing in Indian Mutual funds. This is Part 3, and quite consolingly, the last part.

How to buy ?

There are 3 ways to do this :

1. Download the application form online, take a print out, attach a draft as specified and courier it across to the address mentioned.

(Note: You are going to have an advantage in this option. Mutual funds usually have something called an Entry Load, usually 2.25%. Means, if you invest Rs.5000/- you may get units worth only Rs.4887/- the rest goes as some kind of "handling charges/commission". If you send your application directly to the company and not through a broker/distributor, you will be exempted from this and you will get units for all of Rs.5000/-). Many agents do not, naturally, mention this to their customers. Also, don't think that a downloaded applicable is not good enough, because it does not have a pre-printed application no. like the one from the broker. Application no. is good, but not mandatory. Broker is good too :), but not mandatory.

2. You can approach the nearest mutual fund distributor and ask for a form, attach a draft and submit it to him. No Cash. Ensure you fill the form yourself or is filled in your presence and verified by you.

3. If you have an online account in which mutual fund investments are enabled (like ICICI Bank 3-in-1 account or HDFC bank), you can invest online. This is the easiest and hassle-free method, involving little paperwork and felling fewer trees. :) :) But, note that, in methods 2 and 3, you are not exempt from entry loads.

I have tried all three a bit, and of late, settled for the third option. You call it laziness, I call it concern for the environment.

SIP : Systematic Investment Plan : This is similar to the Recurring Deposits in banks. You can opt to invest a smaller amount every month on a given date. Works for small-time salaried guys whom the FM regularly targets, you know. You have to issue post-dated cheques for the specified amount and it will be collected from your bank account and the units will be bought in the scheme. Monthly instalments mostly start from Rs.1000/- per month, there are couple of funds where the monthly instalment is Rs.500/- . This is considered, an easier and a healthy option to invest. While you should also know that a SIP does not mean better returns, it may sometimes have some merits like Cost Averaging. Also, it brings some discipline to your investing and puts it on autopilot. Someone has even come up with a Daily SIP !!

How long should I stay invested in a scheme ?

No one knows, actually. But they say (who?), a minimum 3-5 years is a good period to leave your investments untouched. If your fund is doing reasonably well and is well-placed among its peers, one should leave it at that, even if it's not right on top. It's good to review your schemes once in 6 months, and if they are dismally lagging, then probably consider a switch to another fund. No, I won't go on more on this, I don't know how the machine works. I will get back on this after 7 years :) :) . I do hope this blog will be around, and you, the loyal reader will be around too, but I can't assure whether your money will still be around.

How to Sell :

Why to sell ? :) :) Okay, you've decided to sell or redeem. If you've invested online, click-click-click. If you polluted the environment by investing in paper form, then you would have received your account statement with a portfolio number on it. Somewhat like an account number. That statement copy will also have a tearable portion below where you can place instructions of sale or change of address or whatever and sign. If you haven't stayed with the same bank account, you can specify the new bank account. And send it across to the MF company or give it to the broker. Your money should reach in less than a couple of weeks, since there is a nice stipulation that mutual fund service requests be fulfilled within a few business days of receipt. Also, know that dividends from all mutual fund investments are exempt from tax in the hands of the investor. Only because they are already sufficienty (t)axed. Sale within one year will attract short-term capital gains tax.

Also, contrary to insistence by some dealers, the form is not sacrosanct. Photocopy will do. Or even a signed letter on plain paper giving all information will do. If they are denying your request (for example, a nomination request), they will also send you the appropriate form.

What if you are disorganized like me and lost the account statement ? I hope you will also be partially organised like me and noted the folio number and scheme name somewhere. That should do. Also, remember to enter your email address while applying. There will be "Save Trees" checkbox, by which you can opt to receive account statements by email. :) If you do that, and if the scheme is one of those serviced by CamsOnline.com, then you don't even need to remember the folio no. (Why am I giving tips to become more disorganized ?). If you just mention your email, they can send you statements for all your investments in MF companies on their service list. The site doesn't require registration, yes it's all legit, they are the guys servicing many mutual fund companies on paper work, and, of course, you will be asked to specify a password of your choice, with which they will encrypt the PDF and send it to your mailbox. Cool !!

My picks ? :

Oh, why should it always lead to this ? I have just advocated data impersonalisation and now, this ? Okay, here it goes, but only if you promise me that you won't listen to me:
HDFC Equity, SBI Magnum Contra, SBI Magnum Balanced, Sundaram Select Midcap, Sundaram India Leadership, Reliance Vision, Franklin India Prima Plus and Birla Sunlife Index.

You must have guessed it right by now, a beginner's guide often means, that the writer is a beginner, not the reader. And if you haven't figured that out, you are probably a beginner in figuring out things for what they are worth.

Happy interesting investing.

How to choose a mutual fund lazily and hazily

Didn't they teach you at school that you shouldn't be lazy ? Anyway, it's your decision to be lazy and, entirely your decision to invest in a mutual fund, but if you want to do both together, then you are not alone and you have come to the right blog.

This is the 2nd part of a 3-part guide to investing in Indian Mutual funds. The other parts are linked from here.

Time period of investment :

Unlike bank deposits, you don't "contract" a mutual fund investment for a particular pre-defined period. (Except in cases where there is a lock-in period like 3 years). You put money whenever you want, this is called "buying a certain number of units in a mutual fund scheme". You can take your money out whenever you want. That is called "Redemption of units" or "Selling of units of a mutual fund scheme". Usually speaking, the longer you stay invested in a scheme, the better it would be for you. (That is, assuming, the scheme is doing reasonably well than its peers). Because the main returns potential of equity lies in the long term.

The Million Dollar Question:
Is my money safe, will I atleast get back the principal ?

No, It's gone forever to charity. Jus kidding. :) :) Yes, it's pretty safe, as safe as it can get these days in these parts of the universe. There is an element of risk on how a scheme will perform and there is this usual disclaimer of "past performance not indicative of future returns, consult the offer document and don't consult a blog before investing". But there is nothing phoney or hush-hush about it, nor is there guarantee promises of sky-high returns. But if you are an average-risk-taking youngster with an eye on long-term, reasonable wealth creation, then it's meant for you. Also, no one will deny the money due to you except in case of national financial calamities (Just threw that word, I don't even know what it is). At the least, whatever is the current market value of your investment will be given to you. Of course, the basic assumption is that everything is dependent on the stock markets and more specifically, on the stocks that your scheme has bought. The market value of your fund on any given day, is derived from the market value of the stocks that it has invested in. Heheheh, the stock market is itself dependent on a million parameters, including the flap of a butterfly in Timbuktu. :) It's not much different, for example, from investing in gold or in real estate as an investment option.

How to choose a mutual fund :

There are many ways ranging from a lot of work to a lazy click. Since laziness is relative and changes behaviour according to the observer, It's better I'll explain what I usually do at my level of laziness. I like to keep choices simple, without going into detailed statistical analysis. And as far as possible, I want to keep it "impersonal", that is I would rather look at data than fall for someone's marketing speech. If a distributor tries to talk me into a new fund offering, why do I get that faint suspicion :) :) that he has no clue how the scheme is going to perform and his eye is on the 6% commission. How so mean of me! Aren't they humans too and don't they have families to support ?

I usually go to Value Research Online, they have rated the funds as 5-star, 4-star, 3-star and so on. Have a look at the 5-star or 4-star funds. In fact, keep looking at it from time to time, to spot and register names in memory over a period of time. I usually go in only for the equity funds. So I just pick one of them and invest. And try to pick a different fund house or a different scheme every time. Of course, this is anything but time-tested, since I am pretty young in the investing arena, just 3 years. And this is put right in the middle, because it applies to the whole article. This is not professional financial advice and if by any stroke of imagination, you thought it is, then you need professional counselling, psychiatric. If you haven't read the save-skin disclaimer, you haven't read anything at all. :) :) And hello, I am in no way connected to the owners of any of the links, except for the fact that we all share the same vast, wide, internet.

But, you don't have to go by that one site. There are other sites, which my friends find useful. Like PersonalFn , MyIris and mutualfunds.moneycontrol.com. I am also a fan of CRISIL's Quarterly ranking of mutual funds. Rediff Money , Yahoo Finance India and LiveMint also seem to do a good job in data presentation and tutorials on the various aspects but they do a simple ranking based purely on returns. The one good thing that attracted me to ValueResearch and CRISIL, is that their rating is based on risk-adjusted return, means, they prick the returns generated with the risk it has taken and then rank them. You should also know that such a rating methodology might itself be a subject of criticism. There is also this Association of Mutual Funds website, more of an official kind.

Net Asset Value :
It shows the value of your money on a given day. It's declared every day for most schemes. If you had bought some scheme for Rs.200 per unit, last year same day and it's net asset value today is Rs.230 then your investment has grown at 15% p.a. This calculation applies only for the Growth Option, we'll skip other options for later.

What's about this Growth option or Dividend option :

There are three options when you are buying any scheme. In dividend option, the you get dividends on your investment, from time to time, as and when dividends are declared. Growth option, is somewhat like a Cumulative Interest Fixed Deposit, when you choose to sell, you get your "grown-up-value" of your investment. There is a third option called "Reinvest Dividends", that means, dividends will be declared, but for that amount, units of the same scheme will automatically be bought at that day's rate. Usually, dividends suit elders who are dependent on periodic income. Youngsters are better off with the Growth option.

Can anyone invest in mutual funds ? What will I need ?

If you want to invest more than Rs.50000 in a single go, you need a PAN. In fact, even otherwise, you are better off having a PAN, because I think they might make it mandatory for a lot of other things shortly, like sneezing in front of a bank :) or marrying a banker. You would also need to mention your bank account number and probably attach a copy of a cancelled blank cheque leaf bearing your account number. When you sell, they'll give you a cheque for the proceeds and you will be allowed to deposit that cheque only in this bank account. Of course, in the meanwhile, if you change your bank, you can intimate them.

Investments above Rs.50000 also require you to get something called a "KYC Clearance for Mutual Funds". (Know Your Client). It's a one-time thing like PAN and it's pretty simple procedure.

Every scheme has a minimum investment amount. Most equity funds require you to invest a minimum of Rs.5000/-. Some funds also have something called an Exit Load (something like handling charges for exit). Means, if your units are worth Rs.5000 and the exit load is 1% , you get only units worth Rs.4950/-

You won't need a proof of address. For investments below Rs.50000/- Id proof is not required. (Please note that this rule may change after this web page is published)

What range of returns can one expect ?

God knows. But if you want some information from lesser beings, some of the best diversified equity funds fetched between 13-18% p.a. if you look at the last 3 years and between 30-35% if you look at the last five years. Obviously, I have a way of presenting whichever data is presentable and giving a limited picture of the unlimited chaos. Also, depending on where you stand, this might be the wrong time or the right time to look at how the market has performed. As someone put it, the sensex is back to where it all began, at 13000. You should have seen my face when it touched 21000. Anyway, look at data for the last 5 years, impersonally, here.

No, you want to quit, without reading Part 3. Because you may not emerge with your wallet intact. Thats okay, looking at that much data makes me dizzy too, but, by now you must have realized, the whole point of this guide is the wry humour and poor jokes that are embedded here and there.

Look for those in Part 3, that explains : How to buy and how to sell.

A beginner's guide to Investing in Indian Mutual Funds - Part 1

This is the first part of a 3-part guide to investing in Indian Mutual Funds. The other parts are linked at the bottom of this post.

Let's assume you already know about what a mutual fund is. Let's also assume I don't know much :) , and, in fact, I mix up things a lot, but yet I might want to share whatever I mix up. Let's also assume you read disclaimers diligently, even if they are not there and fully understand the implications of asking the half-baked guys about your hard-baked money. Now if thats some average behaviour you come across in life and average information is quite okay with you, join hands, let's get in.

Mutual Fund companies (also called Asset Management Companies or AMC) run different schemes. Investors invest money in one or more of these schemes belonging to the AMC. Ex: HDFC Mutual Fund is an AMC that has schemes like HDFC Top 200, HDFC Tax Saver and so on. Sundaram Mutual Fund, for example, has its own tax-saving scheme called Sundaram Tax Saver.

There are many kinds of Mutual Fund schemes. Let's focus on a few major categories, assuming we intend to generate a substantially higher return, in the long run, than we do from, say, bank deposits.

1. Equity funds - that invest all of their money in stocks of companies - considered relatively higher risk than the other two.
2. Debt funds - that invest in other types of investment instruments, for example, in bonds and fixed income instruments. Considered relatively lower risk among the three. Of course, return potential will accordingly be lower.
3. Balanced funds - A kind of hybrid, investing a portion of the money in equity and the rest in debt. The proportion varies from scheme to scheme. Considered medium risk compared to the other two.

There are such organisms called gilt funds, liquid funds, monthly income plans etc. We'll skip those and reserve for a later lesson.

Among the three, we'll mainly handle equity funds of different subcategories. Why only equity funds, are they not high risk ? Okay, thats relative to the other types of funds. Also, among the three, equity funds are the only ones capable of generating higher returns in the long run, than all other forms of investment. As this rediff page says:

If you look at the market over 25-30 years, the average annual return would be around 15-18 per cent. Data on global markets will indicate that equity will deliver around 12 per cent.

These categories are based on the objectives, restrictions and approach of the scheme as stated in the scheme's prospectus. For example, we have this Banking Sector Fund, which announces that it would be investing only in bank stocks. Are you someone, who believes that the financial services is poised for a growth run in the next 3 to 5 years ? Then thats for you.

Equity Funds

1a. Sectoral Funds : Funds that proclaim to invest in companies in a particular sector, for example, the power sector, the financial services sector or the Oil-Gas-Petrol sector. Among the subcategories of equity funds, considered high risk. Why ? Because, it seeks to put all eggs in a single basket, that is from a single sector. If that sector goes phut, you know what. Of course, if that sector booms, it can outperform other categories. High risk, high potential for return. You have to be like Mark Twain, keep all your eggs in one basket, but keep a watch on it.

1b. Diversified Equity Funds : These are 'Go Anywhere' funds. Means their prospectus doesn't restrict them from buying or selling X or Y types of companies of A or B size. They can buy the stocks of small companies or blue-chip companies or somewhere in the middle. They can buy stocks from different sectors in whichever proportion they want. Discretion is left to the fund manager. Relatively low risk. Why ? Because the investment is spread across different sectors and different companies. Some may do well at some times and others at different times. So the risk is said to be "diversified".

BTW, Diversification would indeed be one of the basic lessons in Personal Finance. Even within a person's money bag of investments, ideally, one should have, some in Fixed Deposits, some in property, some in gold, some in debt funds, some in equity funds and so on.

1c. Size-based funds : You typically come across names like Midcap funds, Smallcap funds, Blue-chip or Large-cap funds and so on. Cap here means market capitalisation, not as in 'Topi Daalna' :). It roughly indicates the size of the company. You can see the exact definition here. So companies like Tata Consultancy Services, Infosys and Airtel and considered huge, some like Lakshmi Machine Works and Balaram Chini Mills are considered Mid-cap and Bachcha companies like Balaji Telefilms and Gitanjali Gems are considered small-cap.

Again, large-cap companies are considered low-risk, mid-cap companies are of slightly higher risk and small-cap companies are considered high-risk. Why ? Because of a word called "Liquidity". Liquidity roughly means 'en-cash-ability' : If you suddenly want cash and want to sell a company's stock, will many people be available to bid and buy ? Large-cap company stocks are traded all the time, there are more buyers and sellers, so their liquidity is higher. We'll leave it at that for the moment. If we have the knack to spot that potential small-cap company of today, which has got the performance drive to become the giant large-cap company of tomorrow, you have just spotted the next Google or the next Infosys. If you had invested just Rs.10000 in Infosys in the year 1994, that Rs.10000 would have been worth Rs.1.5 crore in 2007. Juicy, no ? Have some pickle to contrast the fascination , mitigate the enthusiasm and understand the risk and patience involved.

1d. Lifesytle-based or Thematic Funds : Some like Sundaram Rural India Fund, Kotak LIfestyle fund etc. come up with unique differentiating objectives and seek to find good performance in such investing styles.

1e. Index funds : My latest fad. These are funds that invest according to a particular index. For example, Birla Sunlife Index fund, invests, in all the X number of stocks comprising the sensex, in the same proportion in which they comprise the sensex. So sensex goes up, your money goes up that much, sensex comes down, it comes down as much. Considered low-risk for three reasons : 1. Unlikely a fund manager will mess it up for you, because his is a passive role. Also the fund management fees are lower. 2. These indices usually comprise of large-cap or liquid stocks and are automatically diversified across sectors. 3. For a small investor, if you put Rs.5000, you get to invest in all those big companies (somewhat like that) and mirror their collective performance.

1f. Tax-saving funds: These are funds that are similar to diversified equity funds in terms of investing style. But they have a 3-year lock-in period. Means, you can't take your money out for three years. The merit is, if you are looking to save tax, this is one of the avenues to do so.

Balanced Funds:

For a beginner, these are a nice place to start. They invest only a portion of funds in equity and the rest in debt instruments, so they have a mix of low risk and slightly higher risk. Their returns are also slightly reduced than that of equity, but as a beginner, if you want to start small with something, you can choose one of these. My first investment was for Rs.1000 in SBI Magnum Balanced Fund in December 2005. It has given an average annual return of 12% till now. Even 1000 rupees can cause a lot of pride, you see. I don't want to take it out for atleast 10 years, just want to see what on earth would happen. It can't go into minus and they can't fine me for investing, right ? :)

Do you get similar ideas ? Then read on for the next part, Part 2 that covers :
How to choose a mutual fund without having to revise your lessons on standard deviation.

If you still haven't given up on me and decided to part with your dough, I won't stop you from going on to Part 3 : on How to buy and how to sell.