Do past returns matter? Does it make any sense to choose a mutual fund that has performed consistently in the past? After all, there is no guarantee that it would continue to perform well in future. Let us try out a simple exercise. Download returns data from Value Research Online of all equity funds currently…

Budget 2014 appears to have struck a cruel blow to debt mutual fund investors and distributors. Here is the latest version of the debt mutual fund vs. fixed deposit calculator to evaluate the utility of debt mutual funds. Update: Ramesh Mangal pointed out an error in the tool and the graphs. So I have pull…

‘Look before you leap’ is simple commonsense that escapes us Homo sapiens in most of our day-to-day activities. From eating, driving, breeding(!), spending, investing …. When it comes to investing, the following pattern appears to be way too common for comfort: A young earner realises the need to saving tax. A couple of months before March, a pension…

Whenever there is a discussion on stocks versus fixed income, someone or the other would say, ‘volatility is short-term but growth is long-term.  One can expect the markets to always rise over the long-term.  So buy and hold’. To this, someone or the other would respond, ‘have you not heard of the Nikkei 225’?  Stop…

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…