There is no compounding in mutual funds! Do not get fooled by “power of compounding”, “miracle of SIPs” and “8th wonder of the world” illustrations!  The term “compounding” has no separate meaning than to represent compound interest. Since mutual funds offer no interest, the notion of compound interest or compounding does not apply to them. Here…

The union cabinet today has cleared five changes to the national pension scheme (NPS). The most important of which is that the NPS now has EEE status and the corpus that you can withdraw is tax-free. EEE means, that the money you invest in the scheme (up to a limit) is exempt income tax (1st…

Ever wondered which are the most popular direct plan mutual funds? This is a list of the largest (AUM wise) equity and debt direct plan funds. The data is sourced from AMFI and is as on Sep 2018. The post is inspired by a series of questions by Anath at Facebook group, Asan Ideas for…

Many young mutual fund investors assume that their portfolios should have more of mid cap and small cap stocks or mutual funds because these will outperform large caps over the long run. As usual, such assumptions are based on “intuition” without rigorous data support. In this post, let us compare large cap, mid cap and…

This is a performance review of Mirae Asset Tax Saver Fund and a comparison with the most popular ELSS fund Axis Long Term Equity. If you are looking for an ELSS fund, rather if your portfolio needs an ELSS fund then Mirae Tax Saver might fit the bill. Sometimes, you need to choose mutual funds…

In this post, I discuss how balanced advantage funds are different from aggressive hybrid funds and when and how investors should choose from these categories. One of the wrong questions that investors ask is, “how much return can I expect from this fund or this category of funds?”. Well, they should first be asking, “how…

In this open-letter to mutual fund AMCs, I ask why they not pushing risk-free debt mutual funds when it is so easy to do so?! Yes, a mutual fund with essentially no interest rate or credit risk. In spite of disclaimers and clear wordings in the scheme documents, investors like to assume that the NAV…

One of the most common investor mistakes is to assume that the alpha of a fund or stock or portfolio represents the excess return over a market index or relevant benchmark. This is technically and factually wrong and especially important when someone compares funds or stocks based on alpha or any one of standard metrics…

Yes, that is right!  After 10 years of investing, my equity return is 9%, well 9.46% to be exact. But I am not worried, and I hope you are not too. Here are some takeaways from this journey and a comparison of my retirement equity portfolio with Nifty Next 50 and the Nifty Blend Index…

Here is a list of mutual funds that have outperformed Nifty 200 & Nifty Midcap 150 Total Return Indices as on October 2018. The data is sourced from the October 2018 Equity Mutual Fund Performance Screener. The Nifty 200 is a common benchmark in the ELSS, large and midcap, and multi-cap categories. Nifty 200 consists of…

This is a performance review  (with video) of ICICI Prudential Balanced Advantage Fund ( I Pru Bal Adv) against broad market benchmarks like Nifty, Nifty 100 and 200 and composite benchmarks. I Pru Bal Adv is one of the finest dynamic asset allocation funds and here is why. I thank Ravikiran Suryanarayana for this post idea….

One of the most common investor mistakes is to assume that higher the equity in the portfolio, higher the reward. Studying balanced mutual funds or aggressive hybrid mutual fund will tell you that this is wrong. In this article, I compare the risk vs return of Aggressive Hybrid Mutual Funds vs diversified mutual funds & show…

This is a simple, non-technical description of what are mutual fund star ratings and how they are calculated with the help of an analogy – employee performance appraisal. This is meant for beginners and newbies and I have avoided all jargon. It is only when we understand how star ratings are calculated, can we understand their…