Understanding Upside and Downside Capture ratios

Upside and Downside capture ratios are two easy-to-understand measures used to analyze performance of a volatile instrument.

I had earlier written a post on how to use them for mutual fund analysis. Suggest you it along with this post:

Simplify Mutual Fund Analysis with Upside/Downside Capture Ratios

The explanation provided there is quite oversimplified. In this post, I explain how they are calculated and interpreted.

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Freefincal turns 3!

Freefincal was born this week three years ago! A post to say ‘thank you’ to all readers and supporters who keep it alive and reflections on the journey so far.

Thank you

A blog cannot survive without readers, without interaction, feedback, appreciation, motivation and criticism.  I am more than confident that freefincal readers are some of the most intelligent people to have ever opened a personal finance blog. Not flattery, but fact. The content here is a bit more ‘advanced’ than what is found in a typical personal finance blog. I have the motivation to produce it and push the envelope only because of you.

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Do not invest in dynamic bond funds!

Dynamic bonds are debt mutual funds with a flexible investment strategy. There is a perception that they funds can be used to take advantage of interest rate movements to maximise gains.  Unfortunately, these funds do not reward investors enough for the effort and risk involved in its investment strategy. Which is why I believe that one should not invest in dynamic bond funds.

Investment strategy: Typically, when the interest rates are expected to fall, the fund manager will increase exposure to long-term bonds. When the interest rates are expected to increase, the fund manager will move to short-term bonds.

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Mutual Fund Review: Mirae Asset India Opportunities Fund

Mutual fund reviews at freefincal primarily serve as an advertisement for RIY (review it yourself) with avaiable risk-return analysis tools.

This time, let us look at Mirae Asset India Opportunities Fund (MAIOF) – large and mid-cap fund

Mirae asset has only two equity funds. The other fund is a mid and small-cap fund (emerging blue chip)

Although MAIOF has the flexibility to invest across “across sectors, themes, styles and market caps”, I think  it is primarily a large cap fund with decent mid-cap exposure.  However, it can invest up to 50% in derivatives to hedge risk.

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Money Kraft videos on macroeconomic indicators

Here is a collection of money kraft videos on macroeconomic indicators – a set of metrics  that can be used to understand the state of the economy.

Money Kraft is an educational initiative of Centre for Investment Education and Learning Pvt Ltd (CIEL) . Money Kraft aims to empower investors and intermediaries to make better personal finance decisions. The objective is to provide unbiased, simple, conceptually correct, practical and useful educational content. Moneykraft is not a producer or seller of financial products, nor does it undertake financial advisory or distributional services for a fee or commission.

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