Dynamic equity funds or dynamic asset allocation funds change their equity:fixed income allocation depending on market conditions. Here is why those who wish to chase returns should not invest in such funds. Dynamic equity funds could either invest directly in a mix of stocks, arbitrage opportunities and bonds (in which case they will be classified as…

There seems to be a common perception that those who invest via SIPs are expected to do nothing else but invest systematically.  Thanks to certain “advisors” many investors believe that all one has to do to get “good returns” from equity is to continue a SIP through market ups and downs. Then it will all…

Use this sheet to gauge the performance of equity mutual funds on a risk-adjusted basis for investment durations ranging from the past 1 year to the past 10 years. Version 6 now includes six nifty strategy indices (smart beta) for analysing mutual fund performance. The Nifty strategic indices are tougher benchmarks for mutual funds to beat….

The average, also known as the arithmetic average or the mean of a set of values is a nice and simple number that is easy to calculate and interpret. However, it not valid under all circumstances and must be used with caution. Given a set of numbers, we cannot blindly calculate the average – take the…

Are you worried the high expense ratios of active mutual funds? Are you looking for an index fund that has performed reasonably well with low expenses? Then you can consider a Nifty Next 50 index fund instead of active funds in the multi-cap category. Why? As pointed out in a series of posts on the Nifty Strategy…

Never hold your mutual fund units in demat form! In this post, Anish Mohan draws from personal experience to explain why dematerialisation is a terrible idea with no benefits whatsoever! What is Dematerialisation? Dematerialisation is the process by which a physical certificate of holding a share or bond or mutual fund unit is converted into an “electronic…

The expense ratio of direct mutual fund plans is a subject of debate among those who do not benefit from it. In this post, Balaji Swaminathan digs deep into the annual reports from three AMCs to understand how the expense ratios compare and whether the absence of commission is the only reason for the lower expense ratio…

In this post, let us discuss mutual fund exit strategies. In particular, the oft asked question, “when should I exit an equity mutual fund”. It is obvious that in order to know when to get rid of a mutual fund, one should know how to review a portfolio of fund holdings.  In an earlier post…

Have you ever wondered how the total expense ratio (TER) of a mutual fund is calculated? Or what the constituents of the TER are? The most authentic publically available source for understanding the TER is the annual report released by AMC. Yesterday, Franklin Templeton announced to its investors that the abridged annual report for 2015-2016…

Use this sheet to automatically track the XIRR of your mutual fund SIP month by month and compare its performance with a benchmark index. In this updated version, the Nifty strategic indices have been included for comparison. The sheet includes a ‘cumulative outperformance’ feature. This gives you the no of times the fund has out-performed its index…

It is possible to build a beautifully diversified equity portfolio with only sector mutual funds. The data first published with this idea in April 2014 has now been updated. Note: what is presented below is an investment idea presented with academic curiosity and not a recommendation to abandon your existing diversified mutual funds. Investing for long-term…