A reader wants to know, “I have just started a SIP in an equity mutual fund. I plan to continue this for 15 years. Can I expect a 15% return?”. The honest answer is, “No idea. No one knows”.  We have discussed this at length before. Do not expect returns from mutual fund SIPs! Do…

We are happy to announce a long-standing bug in the Freefincal Google Sheets Mutual Fund, and Stock Tracker has been resolved. This bug is not a formula or coding error on the sheet but due to an inherent deficiency in Google Sheets. The latest versions of the trackers have been updated with this resolution. Existing…

A reader asks after looking at the Sensex chart in the article – Do not stop or redeem your equity investments! Now is the best time to invest! (also shown below), “Why did you draw the Sensex chart in logarithmic scale? What is the benefit of doing so?” Let us start with what a logarithm is….

SEBI has created a new class of intermediaries called execution-only platforms (EOPs) for direct plan mutual funds. This will differentiate between an EOP and an RIA and provide clients with a clear grievance redressal mechanism. Those offering direct mutual fund investment portals are currently registered as investment advisors (RIA). SEBI defines an EOP as “Any…

A reader says, “You strongly recommend index funds for new investors. Why do you not recommend switching to index funds to other active fund investors? (Also wondering why you do not do it yourself)”. “Is it to avoid paying taxes on current gains if the size of the corpus is already substantial? I have also…

A reader asks,” Sir, almost my investment decisions are due to FOMO (fear of missing out). This has led to multiple stocks, mutual funds, fixed deposits, bonds and chit funds. I am ashamed to disclose the number. After reading your articles, I have understood that my approach is wrong. Can you please write an article…

Dr Rajesh Mevada writes, “What are debt fund / fixed income options for non-salaried, self-employed professionals and businessmen? For salaried investors, it is compulsory to contribute to EPF/ VPF, or NPS, which automatically takes care of its debt component. But for non-salaried investors, choosing debt fund investment is a bit difficult. So another relevant question…

A reader says, “I get the rebalancing and how the backtests prove how it works for most market conditions. But what about the quality of the assets we have chosen for investment?” “For example, if an Adani like situation arises for a fund house? How do we handle that? Well, one may say we must…

A member of the freefincal investor circle asks, Can we use the information ratio to analyze index funds? What is the information ratio? It is a measure of outperformance per unit risk associated with the outperformance. In other words, the information ratio is a risk-adjusted measure of the fund manager’s effectiveness in beating the benchmark. How…

A reader asks, “How important is turnover ratio in choosing a mutual fund? While selecting an index fund, should Turnover ratio be considered?” The portfolio turnover ratio is the lower of the total of new stocks purchased or sold over 12 months, divided by the fund’s average assets under management (AUM). For example if a…

A reader asks,  “If I pick any so-called large or mid cap schemes and if I check returns more than ten years, they have at least 12% CAGR and above. If my time horizon is above ten years and I’m happy with a 12% CAGR, can I stick to only one good fund and do…

A reader wants to know if he can expect “10% per annum” if the investment period is a “minimum of five years”. Again, regular readers of freefincal might dismiss this as a newbie mistake, but it is a common mistake and deserves some attention. The first point to appreciate is unless we are investing in…

A reader asks, “In your experience, what is the biggest mistake mutual fund investors make? Can you write an article about this?” This can be answered in three words! Shiny Object syndrome – most mutual fund investors, suffer from this, which is their biggest mistake. The trailing one-year return is often the only factor an investor…

A reader wants to know if investing in an ESG-themed mutual fund is worth it. So some numbers and some discussion. In general, all thematic funds are unnecessary. The same logic applies to ESG, which gives off a “saving the planet vibe”! What is the Environmental, Social and Governance (ESG) investment theme? It involves choosing…

A reader says, “Please advise which small cap mutual fund I should include in my portfolio?” The short answer: There is no need for small cap funds in any investment portfolio! Regular readers are maybe aware of our stance on small cap mutual funds: Why a SIP in Small Cap Mutual Funds is a waste…