Investors often wish to classify mutual funds beyond the SEBI designated categories. A natural way to do this is to try and classify them in term of returns: high-return funds, medium-return funds and low-return funds. With low, medium and high defined in terms of say, an SBI fixed deposit account. Will this work? Immediately a…
Continue reading →Rental income is immediately appreciated by one and all as a form of passive income – perhaps the oldest. Real estate has an undeniable charm associated with it and it is quite natural to ask if it can be used as a source of passive income particularly after retirement. We had discussed how passive income…
Continue reading →The Government launched an LTC (Leave Travel Concession) Cash Voucher Scheme for Central Government employees on 12th October 2020 to enable employees to purchase goods and services instead of availing LTC & leave encashment. This is a reimbursement scheme for LTC expense to revive the economy. Details and FAQ about the scheme are presented. About…
Continue reading →“How much money do I need to retire comfortably?” is the central question of retirement planning. Comfortably refers to (1) generating an income that will keep pace with inflation; (2) having some buffer in the corpus to handled unexpected expenses (recurring or one-time). However, there is more to retirement planning than just money and that…
Continue reading →Govt of India (GOI) has announced the sale (Re-issue) of 6.80% Government bonds maturing in 2060. Retail investors can participate in this sale via the NSEgoBid platform on 20th and 21st Oct 2020 (10 am to 5 pm). The auction will be conducted by the RBI on 23rd Oct. Details of the 6.8% GOI Bond: …
Continue reading →ICICI Prudential Freedom SIP also known as Freedom SIP is a combination of systematic investing (SIP) in certain source schemes (equity-oriented or hybrid) followed by a switch to a target scheme (hybrid) and systematic withdrawal (SWP) from it. Here is what you need to know about the freedom SIP and why you should avoid it….
Continue reading →These are the 30 Sensex stocks with weights for September 2020. Sensex is the oldest stock index of India. It has the top 30 stocks by market capitalization trading in the BSE. Notice the huge allocation to RIL and HDFC Bank which can result in concentration risk: Do index fund returns depend upon just a few…
Continue reading →Arbitrage mutual funds invest a predominant part of their portfolio in derivative and arbitrage instruments associated with the stock and bond markets. Aside from unnatural events (see below), their day to day volatility is similar to ultra-short-term funds. Thus typically arbitrage funds have debt fund-like NAV fluctuations and equity-fund like taxation. This makes it appealing…
Continue reading →A common question investors have is, “should I use the Nifty or the Sensex for passive investing?” In this article, we report the return difference between the Sensex and Nifty for various durations to appreciate how a 30 stock index can differ from a 50 stock index. Sensex is the oldest stock index of India….
Continue reading →We present the result of SIP returns comparison: Nifty 50 vs active mutual funds (large cap, large and mid cap, mid cap, small cap and multi-cap) over the last fifteen years. The dramatic drop in outperformance seems to have started seven-eight years ago and not just from Feb 2018 as earlier believed. We had earlier…
Continue reading →“What return can I expect from a Nifty 50 SIP over the next 10 years?” This is a typical newbie question. We have pointed out that no one can or no one should expect returns from mutual funds. Yet we still see statements on social media that 10-12% return is “easily possible”. On what basis…
Continue reading →The freefincal Equity Mutual Fund Performance Screener (October 2020) is now available. Use it to screen for consistently performing equity mutual funds. You can screen based on fund category & benchmark and spot mutual funds that have got a higher return than a benchmark at a lower risk. Inside, you get ~ 40% discounted links…
Continue reading →In this article, we present results from an analysis of the NIfty 50 portfolio over the last ten years. We find that the weight of the top five stock is currently the highest and six stocks dominate the top five positions. We use the portfolio of Nippon India ETF Nifty BeEs as a proxy for…
Continue reading →Govt of India (GOI) has announced the sale (Re-issue) of 7.16% Government bonds maturing in 2050. Approximately Rs. 400 crores of these can be bid by retail investors via the NSEgoBid platform on 13th and 14th Oct 2020 (10 am to 5 pm). The auction will be conducted by the RBI on 16th Oct. Details…
Continue reading →A combination of Nifty (N50) and Nifty Next 50 (NN50) index funds is enough for investors to create a well-diversified equity portfolio – large cap heavy (more of Nifty) or a midcap-heavy (significant exposure to Nifty Next 50). What if one avoids Nifty and invests 50% in Nifty Next 50 and 50% in debt? This…
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