6

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Each week, I try to answer generic questions from readers. Here is this week's edition. You can use the form below to ask your questions. I have also included a video showing how one can login into Value Research via Excel. to use the Excel stock screener.

John Galt: What is the procedure to convert existing Regular MF units to Direct via the MFU portal?

Pattu: You can initiate a "switch" transaction from the regular plan for a fund to its direct plan via the MFU console.

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4

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I discuss ways in which we can visualise and interpret the annualised return, also known as the compounded annualised growth rate or the CAGR and volatility of returns. Franklin India Prima Fund had a NAV of 201.75 on April 3rd, 2006 and a NAV of 878.5 on 12th April 2017. What is the annualised return?

To compute this, we first realise 11 years is the intervening time period - 11.033 to be precise. The annualized return is given by,

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I have updated the two guest posts written by CK Aparna that explain how to e-file income tax returns using ITR1, ITR2, ITR3, ITR5 for AY 2017-2018. Do consider sharing it with assessees who are filing tax return for the first time or filing tax return with capital gains for the first time.

Know which ITR you are supposed to file.

a)If you have an income from just salary, house property and bank deposits (Savings, FD, RD, Flexi RD), it is ITR1 (total income up to 50 L)

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2

Use this Excel sheet to track and compare the annualized return (XIRR) of your mutual fund investments with that of a benchmark. This is the updated version of the Mutual Fund SIP XIRR Tracker thanks to Krishna Chaitanya who pointed out an error in the sheet. The Nifty strategic indices have also be updated up to April 10th 2017.

The sheet includes a 'cumulative outperformance' feature. This gives you the no of times the fund has out-performed its index on a month by month basis. This is a key indicator of a drop in performance. Read more: Should I continue my SIP in HDFC Top 200 Fund?

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4

I would like to compare actively managed mutual funds with a set of indices every quarter to find out how effectively fund managers are able to beat benchmarks after expenses. I consider large cap mutual funds in this post as an update to the previous report published in Dec. 2016.

There is a lot of speculation about the disappearance of "alpha" from actively managed mutual funds. For someone who understands portfolio management, alpha  refers to this:

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