ICICI dynamic fund has now become a mutli-asset fund. Is this a huge change from an equity to a debt fund? Should you now consider exiting or hold on? If you download the ICICI Mutual Fund Notification for changes in its hybrid and its equity scheme you might notice some amusing patterns. For eg. (1) ICICI Select Large Cap is now Focused Equity and it is investment objective is to invest in “30 companies across market capitalization i.e. focus on multicap.”. (2) ICICI Multicap fund now has an objective to invest “across large cap, mid cap and small cap stocks of various industries.” (3) ICICI Top 100 is now ICICI Large and Midcap but can hold up to 30% of other than large and mid-caps (and 30% debt). So that is a total of three multicap funds after conforming to SEBI categorization! And I thought it would be easy to build a diversified portfolio now! read more

Regular readers may be aware that I have repeatedly pointed out how hard it is for mutual funds to beat the NIfty Next 50 (NN50) index in terms of absolute return* and that no active mutual fund uses it as a benchmark! In this post, I classify NSE indices in terms of risk and point out the unique position of the Nifty Next 50. Let us try to answer two questions: (1) Which index has a risk-return profile similar to the NN50? (2) Is there any index that has offered better returns at lower risk than the NN50? This post is inspired by Subrat Dash who asked this question in FB group Asan Ideas for Wealth. read more

Finally, HDFC announced its first batch of changes in its equity schemes to fall in line with SEBIs scheme categorization rules. While we wait for changes in its hybrid schemes including the much-awaited fate of HDFC Balanced and Prudence, one of the most prominent changes was HDFC Top 200 being renamed as HDFC Top 100 and it will now be classified as a “large-cap fund”. In this post, I discuss what current HDFC Top 200 investors should consider before “staying put” or moving on during the exit-load-free period. read more

Here is a simple way to understand how grandfathering works when calculating LTCG tax on equity instruments. Download a free equity LTCG tax calculator to estimate the tax to be paid before you withdraw from an equity mutual fund, You can also use it to calculate STCG, and it will work with debt mutual funds also. The calculator presented here is an update to the Mutual Fund Capital Gains Calculator. The main advantage of this calculator is that you can estimate LTCG or STCG tax to be paid before you make a withdrawal. read more

Most readers may be aware that SEBI has laid out norms for mutual fund categorization and many AMCs have fallen in line. It is frustrating that the big AMCs like ICICI, HDFC, Franklin and others have delayed conforming to this order. Makes me want to speculate that they have deliberately waited for the financial year to end to avoid mass switching or redemption. In this post, I discuss why and how mutual fund selection is affected by these rules and what existing investors should do if a scheme announces a fundamental change in attribute. read more