In the third part on portfolio diversification, we shall study the correlation among stock sectors. Part I covered the diversification among asset classes and market caps, and part II covered international equity indices. Regular readers may recall that we already saw how to build a diversified equity portfolio with sector mutual funds. The mutual chosen…

I am doing a series on portfolio management strategies in the hope that it would lead to some Excel tools for the same.  In the first part on portfolio diversification, we looked at correlations between equity and debt, equity and gold, large cap and mid/small cap. In this post, let us consider the correlation between…

Risk adjusted return is a measure of the risk involved in producing a return. In this post we try and understand this concept using  PPFAS Long Term Value Fund which has recently completed one year in existence. Kindly note that this is not a review or a recommendation of the fund. I am only using…

Mutual fund investing can be stressful for many investors. The Ulcer index offers a way to measure this stress!bv The mutual fund risk and return analyzer now has a separate sheet for Ulcer index analysis. In this post, we evaluate the utility of this risk-return metric by considered a few popular mutual funds. The standard…

A few months back we saw what a compounded annual growth rate (CAGR) is and how it is calculated in the case of a lump sum investment. In this post, let us consider a mutual fund SIP and calculate the associated return. First a quick recap. Lump sum investment: Non-volatile instruments When a lump sum…

This is a guest post by Ramesh Patil who runs a website offering information about IFSC and MICR codes. Education is perhaps an individual’s most precious resource today. In fact, nowadays education is at times equated to an investment, which in all truth it is. However, if we purely take perspective at education as an…

Sooner or later mutual fund investors recognize that there is more to a mutual fund than the return it generates. Analysing a mutual fund when one wants to begin investing, or when one wants to evaluate current holdings, requires a comparison with the funds benchmark. Some questions to ask and answer: How consistently has the…

Tired of confusing and ever-changing mutual fund star ratings? Would you like to rate and rank a mutual fund with respect to its benchmark for investment durations ranging from 1-8 years on your own? Here is a risk and return analyzer for equity mutual funds with which you can Determine SIP and lump sum returns…

Here is a set of simple steps that might help young earners minimise their taxes and take control of their financial life. This post is based on a request from one of my students who started out on an IT job some months ago. Tax planning  – a set of actions designed to  save tax…

In a classroom, the power of simplicity and clarity is valued above all else by students.  Unfortunately, many academics unknowingly abandon these virtues as they latch on to jargon, secondary details and an obsession to ‘cover’ a syllabus. A teacher is recognised as ‘good’ and their contributions remembered fondly, if they demystify the subject.  This…

Does size matter? Does the size of a mutual influence its performance? Do funds begin to underperform when the assets under management (AUM) increase beyond a certain point? Be it copulation or investing, questions on size vis-à-vis performance have troubled us forever! This post is not an attempt to answer this question one way or…