Original analysis, reports, reviews and insights on developments in the mutual fund space and in-depth reviews
Here is how I visualize the growth of an equity portfolio as a tilted pendulum. It is a simple ‘mental model’ that might* aide a new investor with regard to what he/she should expect from equity investments. (*) might because, it makes sense to me, but I am not sure if it will to you….
Continue reading →How many stocks does an equity mutual fund hold? It is related to the assets it is managing? It is related to performance relative to peers (aka star rating)? Let use see if we can get some insights into these questions. I started digging around in this direction because I would like to do (yet…
Continue reading →While recommending equity as an asset class or equity mutual funds as an instrument suitable for newbies, illustrations about the power of compounding, past returns and how they have comfortably beat inflation are typically used. This is followed by caveats (besides past performance disclaimers) that the investor must be ready to stomach the ups and…
Continue reading →So social media is abuzz* that someone called Kenneth Andrade is quitting IDFC amc (update: now official). To be frank, I had no clue who he was, until I saw an AIFW post. When I googled his name, I then remembered seeing his interview at VR and that he is the manager of IDFC premier equity. Perhaps I…
Continue reading →In this third and final part on “how to select an equity mutual fund”, we will consider different ways in which one ‘make a choice’ from a shortlist. Yes, there are several ways to choose from a shortlist, just like there are several ways to make a shortlist. You will have to take your pick….
Continue reading →Any selection process should have three components: (a) an objective; (b) a method to create a shortlist and (c) a method to finalize with the shortlist. Yesterday we discussed the objective. Today we shall consider how to create a shortlist from which an equity mutual fund can be selected. If you have not read yesterday’s…
Continue reading →Over the next few days, I would like to do a series on “How to select an equity mutual fund”. This is the long overdue update to the step by step guide to mutual fund selection. I write this primarily because my understanding about mutual funds has grown significantly since I wrote the pdf guide. I…
Continue reading →Perhaps, “what should be the role of a fund manager?” is a more appropriate question. In an interview to Cafemutual, Mirae assets fund manager, Neelesh Surana said, “The challenging part (of being a fund manager) is the pressure of generating superior performance vis-à-vis markets and peers. The pressure of getting it right consistently is always there”….
Continue reading →Upside and Downside capture ratios are two easy-to-understand measures used to analyze performance of a volatile instrument. I had earlier written a post on how to use them for mutual fund analysis. Suggest you it along with this post: Simplify Mutual Fund Analysis with Upside/Downside Capture Ratios The explanation provided there is quite oversimplified. In…
Continue reading →Balanced equity funds or equity-oriented balanced funds are those with min 65% equity exposure so that they can be classified as equity funds by the taxman. The rest of the portfolio (35-25%) has debt securities (gilts, corporate bonds, money-market instruments etc.). Here is why I think these funds can match the returns of diversified equity Here…
Continue reading →SEBI is a trigger happy regulator. In its desire to help investors, it seems to have thrown a spanner in the works . The actual benefit to the investor from many of its diktats pales in comparison to the havoc created in the financial services. Here is why aspiring to become a mutual fund distributor today…
Continue reading →We all woke up to the shocking news yesterday that Parah Parikh died in a car crash in the US on Sunday (May 3rd). He was not wearing a seat belt. His wife was wearing one, but still sustained serious head and chest injuries and is critical. Yesterday afternoon, the PPFAS management sent an email…
Continue reading →Stop asking for fund suggestions already! Learn how to shortlist funds and have the confidence to pick one! Free lunches will cause serious injuries to your financial health. It is so frustrating and disappointing to see people ask for mutual funds suggestions publicly. It has finally dawned on me that responding to such questions in…
Continue reading →In the second part 2, let us address the ‘kitna milega?’ with a little more analysis. The first part is here. Before we being to answer, what return one can expect, the objective of the study must be clear. We will be using past data to figure out, for a given duration (say 15 years), what is the average return…
Continue reading →Analyse mutual fund performance on year on year basis for the last 8 years with this tool. This is a modified version of the risk return analyzer where investments durations of 1 to 8 years were considered. In this version the duration is fixed at 1 year but it is rolled over. That is risk adjusted performance…
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