A reader asks, “I notice that many large cap mutual funds have five-star ratings now. This was not the situation before the March 2020 crash. Can you please do a study on this?” Results of active large cap funds vs benchmark study will depend on the duration of the returns considered and when the return…

Somnath is 30 and salaried and hopes to retire by 55. In this case study, we shall find out how he can plan for financial freedom in retirement.  That is, we shall find out how Somnath can derive an inflation-protected income and be financially free after retirement. What is inflation-protected income? A retirement income that…

Days after we predicted (for once rightly!) “Parag Parikh AMC might rethink their foreign equity investment strategy. After all, the flexicap is their flagship fund and main profit source. They would not like prolonged or repeated disruption to their income”, the fund house has announced that Parag Parikh Flexicap will reopen for investment from March…

In this article, we discuss the difference between risk and volatility and why one must not misinterpret the difference! What is risk? Risk can be defined as any factor that can result in a loss of value. For example, if you buy something for Rs. 10 and after a year its market value is Rs….

In this article, we trace the growth of passive fund AUM in India over the last 10 years. Since 2015, the EPFO is a major investor in the Nifty and Sensex ETFs run by SBI and UTI. So we shall exclude these funds from the study. The total AUM of  ETFs and Index funds (excluding…

As readers may be aware, other than existing SIPs, Parag Parikh Flexi Cap Fund is closed for subscriptions from Feb 1st 2022, to avoid breaching the overseas investment limit set by RBI. This restriction is for all mutual funds invested in foreign equity except ETFs. Many investors (who do not use SIPs) would like to…

From time to time we keep pointing out that there is nothing special about a mutual fund SIP. It neither enhances returns nor reduces risk. It is merely an automated way of buying mutual fund units on the same day of each month. In response to our latest article and video on the topic – What…

A reader wants to know, “I have just started a SIP in an equity mutual fund. I plan to continue this for 10 years. What return can I expect?”.  The reader later clarified that he has no other investment planned for this goal. The honest answer to “What return can I expect from a 10-year…

Suresh asks, “Can you please write an article on which type of debt mutual fund should be used for a long-term financial goal? Can we use liquid funds for these?” For those who make the effort to understand how they work, debt mutual funds offer unique benefits. That said, most retail investors can stick to…

With the suspension of investments in most MFs holding international equity: What next? Can I now invest in Fund of Funds that buy US ETFs as an alternative? Will Fund of Funds investing in overseas ETFs become popular now? A discussion. Note: This is a developing story and the recommendations or opinions expressed may require…

In this article, we cover the essentials of a mutual fund systematic withdrawal plan (SWP) by answering some frequently asked questions. 1: What is a Systematic Withdrawal Plan? The SWP is the opposite of a SIP. In a SIP, you invest a fixed amount each month (the most frequently used interval) and build up a…

The absence of fund manager risk and lower fees are the two main reasons for choosing passive funds (index funds or ETFs). However, beyond the “normal” Sensex and Nifty passive funds, the remaining choices in this segment are quite expensive and comparable to the costs of active funds. Investors must be wary of this or…

We study 39 ELSS funds to find out which of them have consistently outperformed the NIfty 200 Total Return Index (dividends included) using the Jan 2022 equity mutual fund screener. Nifty 200 is a representative benchmark of the ELSS category in which funds are typically large cap oriented. since it is market capitalization-weighted, the index…