Original analysis, reports, reviews and insights on developments in the mutual fund space and in-depth reviews
When it comes to an actively managed market linked instrument, the ideas of downside protection and upside performance are easy enough to understand and expect. In particular, with respect to active mutual funds, downside protection refers to the fund’s losses when compared to benchmark losses. For example, during a period in which the benchmark dropped by…
Continue reading →Last week I had posted a comparison of large cap funds with few relevant indices. This time let us do the same with mid-cap funds – compare SIP and Lump Sum returns over the last 1,2,3,4,5,6,7,8,9 years. As before, a passive mutual fund is just an index (either cap-based or strategic). The expenses associated with…
Continue reading →The corpus obtained when buying “low” or when the Nifty is below its 200 day moving average (dma) is compared with the corpus from buying “high” (nifty above 200 dma). Apologies for yet another post on this subject, but I had to satisfy my curiosity. Kindly bear with me. Before we begin a clarification on nomenclature. As we…
Continue reading →The previous two studies on buying “low” vs. buying “systematically” pointed to the surprising regularity with which systematic investing does better (or at least as well as – good enough). In response to this, many suggested that in order to ensure buying “low” wins, I should ensure the cash that is put away waiting for…
Continue reading →Here is a comparison of SIP and lump sum returns of active and passive large-cap equity funds over the last 1,2,3,4,5,6,7,8,9 years. I shall follow this up with other categories – mid-cap, small-cap etc. and repeat this study from time to time. Before we begin, would like to point out that our new book, You Can Be…
Continue reading →Each December, I conduct a personal finance audit. As part of this years audit, I thought of updating my mutual fund investment journey, in particular, the rise and fall of my retirement corpus. The idea behind this post is not to boast or claim how intelligent my investing strategy is. It is only to study…
Continue reading →A mutual fund is not an LIC policy. One buys an LIC policy for 20 years to receive money-back every 5 years or so. One does not choose a mutual fund to invest for 20 years. A mutual fund is also not a stock. One need not read a balance sheet or understand the business model…
Continue reading →In the second part of the buying “low” vs buying “high” study, I consider return differences for identical investment amounts. And guess what? The results are most surprising! For those who have not read the first part, I request that you head over to Equity: Buying “High” vs Buying “Low” and then come back. Some definitions: 1 Buying…
Continue reading →Suppose you invested in a stock market index only when it was “high” and compared the return obtained with that from an investment made only when the index was “low”, how much do you think the returns would vary? How would these returns compare with an investment made regardless of index levels? Let us find out. In…
Continue reading →“Blessed is he who expects nothing, for he shall never be disappointed”, said British poet Alexander Pope. This applies to investing as well. Low return expectation is the key to minimising effort associated with money management. I have published a series of post on ‘what’ and ‘how’ to expect when you are expecting .. er returns….
Continue reading →I am not a mutual fund salesmen. Therefore I have no problem in pointing out that a mutual fund SIP, in particular in an equity mutual fund does not reduce the risk associated with the equity market in any way. All a SIP does is buy units at different market levels. Some high, some low. No…
Continue reading →“How can I fund my goal if the market crashes a few years before I need the money?” is a question that I have often encountered. In this post (and the next), I address this issue with some specific examples. An exit strategy is more important than an entry strategy Suppose I can invest Rs. 1,000…
Continue reading →Tax savings season is here! No, not for those who integrate tax-planning with goal-based investing and invest throughout the year. This is the season when millions of investors who are not interested in holistic money management, buy random products based on random advice at the last minute. Much of this random advice stems from the media,…
Continue reading →Here are some simple suggestions to ease the process of mutual fund selection. -1: Have a clear objective. Why are you investing? When do you need the money? I am amazed to find that so many people want product suggestions without a clear goal in mind. Without a goal, it is impossible to select any…
Continue reading →Suppose you are coming down to Chennai for a week on work. You are a foodie and would like to try out the local cuisine. What do you do? Ask a friend or relative for good places to dine in? Search for “best restaurants in Chennai”? Yes, that seems logical. What is the worse that could happen?…
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