Udaan India Foundation believes in providing equal opportunity through education to children from disadvantaged backgrounds. N Madhavan and Aditya Govindaraj write about how the Foundation is making a difference
Did you know that 37% of global illiterates live in India? According to latest Global Monitoring Report, a whopping 2.3 million Indian children have never been to school. The future of the Indian economy hinges on our young population; most of them are poor and unskilled. They do not get what they deserve—their fundamental right to education; access to quality education remains a dream. Our country has the dubious distinction of having one of the highest school dropout rates and child labour levels in the world! Mumbai is no exception. Mamta Rangan, founder and trustee, Udaan India Foundation (UIF), followed her belief that ‘education is key to change’ and set up Udaan in 2004 to help children of construction workers to enrol in mainstream schools.
Udaan, a project that started as an informal initiative, is now a registered trust with 800 students, 15 full-time teachers and over 25 volunteers under its wings. Most children who come to Udaan are from families with little or no formal education. Education is not a priority in such families; it is commonplace for children to drop out of school to contribute to the family income. Udaan is sensitive to the fact that the girl child is usually the worst victim of poverty and, often, forced to drop out of school. Hence, UIF pays special attention to the girl child—evident from the girl:boy ratio at their centres.
A child’s journey at UIF begins with the Kindergarten programme and continues through the learning years, steadily taking her/him towards employability and a better life.
Udaan’s learning centre lays the foundation of a child’s holistic development and imparts learning that ranges from the scholastic to the co-scholastic. Beyond this, children are guided, mentored and provided financial support on an equal opportunity basis, to meet his/her true potential. To open the world of books for children and supplement their language skills, UIF runs a community library that implements the ‘GROWBY’ reading programme of the Hippocampus Reading Foundation. Children are taken through a structured programme to become confident and eager readers. Under the guidance of qualified staff, the library brings relevant and meaningful literature within the reach of children who cannot afford to buy books. Udaan also has a computer centre that provides computer literacy to children. Through a defined curriculum, students from the eighth grade onwards undergo training in basic computer skills and learn the use of Internet which will equip them for skilled jobs. Udaan, through its work, hopes to see a perceptible change by way of increased enrolments in schools, decrease in school dropout rates and better job opportunities for the underprivileged. But, beyond that, Udaan aims to groom children to become confident young adults equipped to tackle various challenges in life.
Udaan welcomes volunteers to engage in a range of activities that include teaching, assisting the Saturday Club activities (such as art, music, drama and sports), managing events (like Annual Day, Sports Day), reading at the community library, organising health camps, field trips and fund raising. You can also be a part of a child’s journey by donating to Udaan. Your contributions wouenrld help Udaan-supported children realise their dream and help it reach out to many more children in need of quality education. All contributions to Udaan India Foundation are tax-exempt under Section 80G of the Income Tax Act. Payments can be made by cheque, favouring Udaan India Foundation or by remitting HDFC Bank account no. 02392000004643.
Udaan India Foundation
2202, Odyssey II Hiranandani Gardens, Powai
Mumbai - 400076 Phone: 022- 40000392
Email : [email protected]
The majority of the investors buy when the market has already run up and is valued expensively. This often leads to disappointment when the market either goes down or sideways for years. If you avoid doing what others do and invest regularly in top fund schemes, you can easily make money from your mutual fund investments
Indian equity mutual funds have delivered excellent returns over the past 10 years or so. Their returns on a point-to-point basis may not have been great but investing in top funds through Systematic Investment Plans (SIPs) would have delivered good returns. And yet, over the last six months more than Rs10,000 crore has flowed out of equity mutual funds. Many are selling because they have made losses or meagre profits? It has been the same story in previous market cycles. Why do investors lose money in mutual funds? The main reason is that they put money into equity mutual fund schemes at the wrong time. In an interview with CNBC-TV18 on Friday, Prashant Jain, chief investment officer of HDFC Mutual Fund, said that “almost 80%-85% of the equity mutual fund inflows came in when the market was highly valuated at a price-to-earning (P/E) ratio of 17-18. This is one of the reasons investors tend to get disappointed when the market declines subsequently and it becomes frustrating for investors to hold on to their investments. So, when the market finally rises, after they have broken even or made some money, they pull out their investments. Therefore, we never see inflows at low P/Es and when the market begins to recover.”
Read about the outflows from mutual funds in November 2012 here.
Getting their timing wrong or going in and out of their investments is not limited to Indian investors. It is the same story in the US. One of the most widely cited studies on investor behaviour is a study by DALBAR, a research agency. DALBAR’s Quantitative Analysis of Investor Behaviour compares the investors’ returns against market returns. The most recent DALBAR study found that in the 20 calendar years ending in December 2011, the Standard & Poor's 500 Index had a 7.8% compound rate of return. In the same period, the average investor in US equity mutual funds earned just 3.5%. Even in the five-year period ending December 2011, mutual fund investors went in and out at the wrong times, resulting in inflows when the market declined and outflows when the market rose.
When it comes to systematic investing, the study showed that for the 20-year period the average equity investor earning $9,853 against a systematic investor’s earnings of $8,665, for a total investment of $10,000. This just the second time in history, since 1994 when the DALBAR study was first published, when the average equity investor outperformed the systematic equity investor. The average systematic fixed income investor overwhelmingly outperformed the average fixed income investor over the twenty-year period by earning over four times as much.
Buying when the market is rising and selling when it is down is true of every investor in every country and every period. Here is some information Thomas Gibson’s classic investment book titled “The Facts about Speculation”, published in 1923. Gibson found analysed around 4,000 accounts (a high number in those days) and states, “The most glaringly apparent cause of loss revealed by the investigation of these accounts was the almost universal habit of making purchases at high prices after a material rise had already occurred. This error is of a wholly psychological character” (emphasis ours). Fast forward almost 100 years later, it is exactly the same.
Gibson found out that majority of the investors bought right at the top of the cycle, with the average price of all purchases being within about 4 points of the extreme high. The price and value disconnect is so great that few investors pay attention to fundamentals and recognizing value and were solely focussed on price action. He found that 90% of the investors who relied on charts and other mechanical systems suffered losses. Investors usually bought on slight declines from high prices and sell on slight advances from low prices. This is a classic losing strategy.
Another folly, according to Gibson, is impatience. It is pertinent to note that humans are a fickle lot and overreact when markets crash (especially when it has been purchased right on the top). When the market is rising, everyone rushes in—investors, mutual funds, advisors and so on. Advisors erroneously tell investors to buy. Investors get carried away instead of thinking hard before putting bucket-loads of money into an investment.
The way to address this is to invest regularly, which is technically called SIP. While SIPs can sometimes lead to negative returns over a long period of time, over longer periods the number of periods of negative returns reduces (Read: SIP Smartly) Systematic investing also helps to navigate volatile markets and negate negative returns. Take a look at the returns over the past five years ended November 2012. Had you invested Rs20,000 in an index fund based on the Sensex in November 2007, your investment would be worth just Rs19,976 at the end of November 2012. The Sensex has moved nowhere from the start of November 2007 to November 2012. A quarterly systematic investment of Rs1,000 over this period would be worth Rs24,838, up 24.19%. Therefore one should not undermine the benefits of systematic investing and should continue even through the volatile market movements. However, according to the recent Computer Age Management Services (CAMS) data we have seen many investors exiting their SIP accounts before completion of the tenure. Net SIP registrations have been negative each month from April 2012 to September 2012.
The ground-level infrastructure for Aadhaar-linked direct cash transfer is not yet ready. The base for this scheme, the UID project is surrounded with controversies. And yet the UPA government is pushing hard both the UID and the direct cash transfer scheme with an aim to lure voters for next general elections