A significant 25 years journey of Mutual Funds

“Active fund managers in India have convincingly outperformed benchmarks over 5, 10 and 20-year time frame.” The industry of mutual fund was open to private sector encounter for the first time in 1993.

The former Kothari Pioneer Mutual Fund which is named as Franklin Templeton MF introduced Prima & Blue chip fund on 1st Dec.’93. Initiating from these two funds, there were 9 equity fund schemes obtainable in India. A total of six schemes were introduced in 1993 and two were introduced before ’93. to develop the assets under their enclosure to nearly ₹7 lakh crores from ₹48,000 crores, it takes almost 20 years of efficiently period.

mf

Indian MFs have multiplied their assets to more the ₹23 lakh crores in the past 5 years without any exertion. Almost ₹70,000 crores of the yearly MF Flows now floats in through the SIP (Systematic Investment Plan). These days the SIPs capture prime recall for the new and upcoming investors but competing with the old preferences like insurance plans and bank deposits have never been such easy-going.

For the current position of the industry, the excellent ones are the asset managers, advisors, and the regulators. The credit must go to these three positives of the MF industry. There was a time when the fund managers have struggled in the developed markets to keep it and match up with the markets, active fund managers in India have definitely outperformed benchmarks over 5, 10 and 20-year time frames. The 10-year category returns on sincerely organized small-cap, mid and large-cap funds are ahead on the Nifty50, Nifty Midcap100 and Nifty Small cap 100 by compelling margins of 100, 300 and 700 basis points even in spite of recent fluctuations. The supremacy of the open-end funds has also made it clear that the worst performing ones lose assets to the good performing ones.

Fact sheet of Women fund managers who have outperformed or Underperform over the long-term

By continuously prioritizing investor’s concerns, SEBI has shown that it’s a strong regulator. SEBI has played a crucial role in establishing MFs by the’ advanced tightening of its rules on revelation, efficient exposures, and governance.

Despite the outstanding performance of the MF industry, there are some misses that should be developed. Indian MF industry is mainly marketed on their current 1-year, 3-year, and 5-year records. According to the sources, approx. 55% of retail investors had only 2-year holding period on equity funds and that time is too less and barely provide the benefits of investing in equity. A large number of domestic equity funds exhibit portfolio turnover ratios of more than 50% that means minimum half stocks are replaced within a year. The industry must shift the goal-line to more long-term performance course to entice better fund managers and more stable assets. The salary of fund managers must benefit into constancy and tenure, and not just to master the 1 to 3-year rankings.

Mutual funds reached to 21% of total bank deposits

In India, Equity MFs are still categorized on the basis of a sole-dimensional market-cap viewpoint which is an idea introduced in 1993 by the Kothari Pioneer MF. Debt funds are even adapted more to corporate treasuries than the new and retail investors. Also, ETFs and good passive funds are lost in action while there is a group of many active funds. In the past years, new launches have focused around common closed-end funds, thematic funds or equity saving funds, intended to utilize tiny loopholes in constantly changing tax laws. Rather than, investors will like to invest in 10 to 15-year debt funds and pension funds that provide tax-efficient income or ETFs with micro-cap or wide-market portfolios.

After putting barriers on liquidity and declaration with their open-end funds MFs have been reverting recently, by turning out series after series of closed-end funds with indefinite instruction. Close-end schemes at 1002 are numerous than open-end schemes i.e. 811.

It can be strange to worry about diminishing competition in an industry with about 2000 schemes and 40-odd players. But the reality is that the industry is rapidly becoming a horse race. Talking about today, the topmost 5 AMC in the industry manage almost 57% of the assets. Moreover, this listing has rarely any changes in the past 10 years with large AMCs easily growing larger.

In addition, it seems to be a far better option that MF industry self-regulates itself on these particular outlooks. Without remaining awaited for the SEBI to add some more pages to its already long rule-book.

 

Note : Past performance of fund does not guarantee the future returns.

DISCLAIMER

No financial information whatsoever published anywhere here should be construed as an offer to buy or sell securities, or as advice to do so in any way whatsoever. All matter published here is purely for educational and information purposes only and under no circumstances should be used for making investment decisions. Readers must consult a qualified financial advisor prior to making any actual investment decisions, based on information published here.

Analysing the Axis Long – Term Equity Fund

Axis Long Term Equity Fund is an ELSS (equity-linked savings scheme) fund managed by the AMC Axis Mutual Funds. It is designed to provide subscribers with tax savings benefits under section 80C of the IT Act 1961. This fund invests exclusively in equity and equity-linked instruments such that it features a high degree of growth with the potential of providing high returns to those investing the Axis Long-Term Equity Fund scheme. Like any other equity mutual fund, the Axis Long-Term ELSS is traded in stock markets, and its unit price is subject to daily change.

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Fund features:

This ELSS mutual fund is an open-end scheme, i.e. investors are free to invest in it or liquidate it as per their investment requirements. Additionally, it is an equity-linked savings scheme (ELSS) hence it provides tax deduction benefits under section 80C with the mandatory 3-year lock-in requirement. It is, however, important to note that investors can choose to remain invested in the scheme beyond the mandatory 3 year lock-in period to make his/her wealth grow even further.

Risk Level:

The expected level of risk undertaken by an investor of this key mutual fund is classified as moderately high due to its high equity exposure. However, this does increase the chances of potentially high returns for those remaining invested in the scheme for a longer tenure.

Facts about the fund:

Launching date- 29th December’09

Categorisation- Equity

Type- ELSS (Equity Linked Saving Schemes)

Average AUM – ₹ 17,299.43 Crores

Benchmark – S&P BSE 200 Index

NAVs {as on 06 Aug ’18}

Growth option – ₹ 45.12

Dividend option – ₹23.53

Minimum investment amount – ₹ 500

Minimum SIP – ₹ 500

Exit load- nil

Manager of the fund- Mr. Jinesh Gopani

Tenancy period- 7 years 4 months

Education (degree)- B.Com (H), MMS

10 things I have learned about investing

Fund manager:

Mr. Gopani is a B. Com (H) and MMS from Bharati Vidyapeeth Institute of Management Studies and Research. Before joining Axis AMC he has worked with Birla Sun Life AMC, Voyager India Capital Pvt. Ltd., Emkay Shares & Stock Brokers Limited and Net worth Stock Broking Limited.

Investment Philosophy:

As mentioned earlier, this scheme is designed to provide income and long-term capital appreciation to investors by investing in a wide range of equity and equity-linked investments. As a rule, this ELSS mutual fund from Axis has focused on organizations that have robust growth prospects or have proven performance track record in their area of expertise. The fund invests in company equities across key segments such as large cap, mid cap and small cap irrespective of the sector the companies belong to.

Performance of the fund so far:

The fund has surpassed the benchmark index (12.07%) and the bracket average i.e., 13.66% providing a return of 19.22% within 7 years. The fund has made an outstanding track record of outshining since the initiation.

BENCHMARKAnnual performance (in percentage):

The fund has provided exceptionally good performance beyond time periods.

axis graph

‘Ujjwal Bharat’: ABSL Resurgent India Fund – Series 6 Review

Year-wise performance (in percentage):

The fund saw a drop in return profile in the past 2 years

axis graph 2Where does the fund make its’ investments?

The fund draws huge positions in its uppermost picks, keeping a compact portfolio.

Latest Portfolio:

portfolio axis

Download the portfolio:

Download (PDF, 115KB)

Risk factor:

ratio final

The fund has appeared to be more vigorous in this year, overcoming all its peers easily after a small drop in the return profile in past two years. The fund manager’s uncompromising attention on the standard of underlying portfolio and leaning towards large caps has improved it to deliver outperformance between the deficiencies in the broader market. The fund takes a top-heavy approach with a huge position in its uppermost picks even it constantly runs a compact portfolio with a gush in its asset base. It also acquires a high benchmark skeptic perspective, comfortable in taking remarkably higher exposure about an index. With its big skew to towards financials, this adds a portion of aggression to the fund even its firm stance on retaining the quality. A supportable pick-up in return profile will show its long-term achievements.

 

Note: Past performance of fund does not guarantee the future returns.

Mutual Fund Investment are Subjected to Market Risks, Read all Scheme Related Document Carefully.

Disclaimer: 

No financial information whatsoever published anywhere here should be construed as an offer to buy or sell securities, or as advice to do so in any way whatsoever. All matter published here is purely for educational and information purposes only and under no circumstances should be used for making investment decisions. Readers must consult a qualified financial advisor before making any actual investment decisions, based on information published here.

 

What are Indian Bond Fund Managers Purchasing Despite Inconstancy?

A rapidly increasing trade war and an escalation-focusing RBI (Reserve Bank of India) is thrusting the local fund and money managers into low-risk and shorter debt securities. Take a look at their plans and what they said about it –

Choose the 3-year segment

Mahendra Jajoo, Head of India Fixed-Income (Mirae Asset Management)

  • “The most appealing segment is the three-year segment because after that there are a lot of riskiness and challenges to face.”
  • The most beneficial thing about the three-year segment is that if you are to manage in a situation where you predict that the macros are somewhat risky and uncertain, but probably have ended being worse, what you think you do in that situation? I things started being worse from here, then you are not freaking out much because, at the very end of 3 years, you will get the capital back.

DEBT

Being defensive is a good option

Lakshmi Iyer, Chief Investment Officer for Debt (Kotak Asset Management)

  • “As there are a plenty of riskiness and uncertainties regarding policy decisions and macros, make your portfolio defensive. By being defensive, I mean purchasing two or three-year sovereign bond i.e. short-duration.”
  • “Short-end of curve provides the most comfort at this point. The delta risk to take for maturities which are long-term is not equivalent to the available return.”
  • She said that she suggests state bonds of the same duration rather than AAA and sovereign bonds.

Want to invest your FD proceeds in mutual funds? Here is how to do it

Liquidity is the key

Suyash Choudhary, Head of Fixed Income (IDFC Asset Management)

  • “Target on sovereign bonds and AAA bond is extremely sharp this year as does not desire illiquidity risk.”
  • “Shifted to standard paper as much as possible. Want to be as much AAA as possible.
  • Stop disclosure to some of the less-rated bonds in some of the portfolios between frights of refinancing shocks.
  • “Government bond return curve is very precipitous until five years and then very flat after that.”
  • The noted correlative value in front-end of the return curve- mostly 4 to 6 govt. bonds, which is the core excessive holding.

Accrual & liquid funds

 Killol Pandya, Head of Fixed Income (Essel Finance)

  • Stick to the briefest possible end of the duration curve like accrual, ultra short-term funds, and liquid.
  • September-October is the month of fund cut duration. Have not included it yet.
  • Wish that investors constantly move towards liquid funds else it will turn out to be a mistake.

What are Dynamic Funds? ( Video )

Upmost corporate paper

 R Sivakumar, Head of Fixed Income (Axis Asset Management)

  • Suggests short-end bonds which are less than 5 years tenor in sovereign and also the corporate space because they provide more value. Prefers AAA-rated paper above sovereign bonds.
  • Sees a more combative RBI and an upright number of rate hikes proceeding.
  • Does not see any onward remarkable selloff in sovereign bonds with markets being much more stable.

Shorter-maturing liabilities

 Rajeev Radhakrishnan, Head of Fixed Income (SBI Mutual Funds)

  • “Rates are only predicted to go up in the upcoming seven to eight months, would be properly conservative in position over a period, liquidity.”
  • “Credit spreads- corporate returns vs. govt. bonds- are fixed and probably remain so in the very near term because of demand and supply issues.”
  • The fund’s portfolio is suddenly changed toward shorter-maturity AA & AAA note, he said.
  • Probably there will be two or three more rate hikes as per recent pricing followed by relatively long pause after that. Additional policy action is on the cards with clarity.

 

DISCLAIMER

No financial information whatsoever published anywhere here should be construed as an offer to buy or sell securities, or as advice to do so in any way whatsoever. All matter published here is purely for educational and information purposes only and under no circumstances should be used for making investment decisions. Readers must consult a qualified financial advisor prior to making any actual investment decisions, based on information published here.

Refrain these mistakes while rebalancing the portfolio

Rebalancing portfolio has its own compulsion as rebalancing can help you to return on the route if you have deviated away from your primary asset allocation. Also, rebalancing can secure your portfolio from the volatility of the market in the case you want to minimize your investment risk. There can be several reasons that may lead you to rebalance your portfolio like a change in your financial situation or in the case if you have acquired your goals, rebalancing the portfolio is a must.

portfolio

But there is a set of rules while rebalancing the portfolio otherwise you will end up going beyond the defined level for your debt as well as an equity component. There are a lot of consequences and implications in terms of taxes, the effect on goals etc. while rebalancing the portfolio.

There are some common and avoidable mistakes that one must not do while rebalancing.

Focusing on the losers only rather than current winners

While rebalancing, it is a most important thing to keep in mind that it is necessary to take a look at the investments that are performing well while it’s alright to replace the investments that are leading you to lose your money otherwise you will end up exposing yourself to a big risk. It’s always a better plan to take a step back if you are willing to reorganize things throughout your portfolio.

LONG TERM AVERAGING OF EQUITY SIP’S IS RAPIDLY BUILDING WEALTH

To manage rebalancing by presumptions

Rebalancing is too important to be done only by one’s presumptions as you may assume that rates are going to get down in upcoming months and you move your debt portfolio in favor of funds that are long-dated. Reversely, you may have a feeling that the equities are going to get overpriced and a result of that you may want to shift more into low beta equities. Both views are based on just presumptions and may vary in reality. So, it is good to do rebalancing according to the rules.

Disregarding the tax factors

It’s very important to rebalance carefully when it comes to the tax bill. One must be attentive to how it might affect. You need to know while rebalancing that even the equity funds have to pay the LTCG tax on profits more than ₹1 lakh per year which is 10%. When you are exiting out of debt funds, tax bills can be higher. The taxes can be at the highest rate that is 20% after evaluating the benefit of indexation if you are selling out in less than 3 years. The tax costs can change the economics of rebalancing the portfolio.

Rebalancing without any supervision

It’s always a great decision to be on yourself and to do things on your own but sometimes a little guidance can take you out of the future risks. Like in rebalancing, it is always a better decision to take an advice of any expert while rebalancing your portfolio. An expert can help you in making quick and fruitful decisions and may tell you the do’s and dont’s of rebalancing. Those will make more comfortable for you to make further decisions about your long-term goals.

Rebalancing without any particular investment goal

One of the most common mistakes is rebalancing without any particular investment goal. Also, It is always a better decision to stay in liquid funds and not to rebalance it when you are close to your goals. Rebalancing is an important decision concerning the portfolio, the only thing is it must always be linked with your long-term goals and the costs do not exceed your benefits of rebalancing.

Conclusion –

Rebalancing portfolio is not as hard as it seems but if one is willing to take proper gains from the benefits it gives, then there is a necessity to follow some rules and take some guidance in order to maximize the returns of your investments and minimize the risk factor.

 

Mutual funds reached to 21% of total bank deposits

Mutual funds are now 21% of the bank deposits. On the other hand, the Indian mutual fund’s industry still has much to gain on with its worldwide squint regarding of the brisk and massive growth in the recent times.

mutual funds

In spite of a massive rise in the equity market and a stable inflow through the SIPs (Systematic Investment Plans), mutual funds had become successful in enticing the trade investors as their equity AUM (Assets under Management) rated for 8% of the bank deposits in the previous fiscal year. According to the data obtained by the RBI, the equity assets of the mutual funds were ₹9.3 lakh crores in averse to ₹115 lakh crores in bank deposits by March end.

10 things I have learned about investing

Progressively, the latest data reveals that the mutual funds are getting well-liked among the investors. The AUM of the mutual funds was counted at 10.44% of the total bank deposits by March 2013. This percentage has increased to 17.44% in March 2017 and then gains a hike to 21% in December 2017. In past 4 and half years, the mutual fund industry has added an amount of ₹ 14.25 lakh crores meanwhile ₹33.79 lakh crores increased the bank deposits.

Also, mutual funds AUM stances at 18% in March 2017, on the other side this ratio was 100% in the US. A huge growth possibility can be seen in India in terms of population dispersion and increasing per capita income from ₹75,000 to ₹2.5 lakhs. The mutual fund industry has attempted several campaigns like ‘Jan Nivesh’ and ‘Mutual Fund Sahi Hai’ to attract the investors towards MF. Also, in the past six years, the mutual fund industry has acquired the growth of 20%. Mutual fund AUM will touch ₹95 lakh crores by 2025 if the industry gets to attain this rate.

mf1Source– RBI, IRDAI (Insurance Regulatory and Development Authority of India)

How to choose the best mutual fund for your portfolio

mf2One of the biggest macroeconomic improvements in MFs is AUM to GDP ratio. Vast change can be seen between the percentage of GDP in FY 2000 and the GDP of FY 2018. Where the GDP was 5.6% in FY 2000, now it has risen to 12.8% and this growth indicates the huge growth potential of the MF industry.

mf3The chart shows that developed countries like the US (101%), France (76%), Canada (65%) and the UK (57%) have listed high-level mutual fund penetration. Similarly, the emerging countries like South Africa (49%) and Brazil (59%) have an outrageous allocation in mutual funds in comparison to India. The distribution of India indicates a significant scope for growth as the average of the mutual fund penetration of the world stances at 62%.

mf4This chart shows that the highest allocation percentage of equity mutual fund AUM to market cap ratio is of Germany that is 51%, the US stands second with 41%. While India has only 4% allocation and such low penetration suggests that there is a steady growth prospect for the MF industry, especially in equity mutual funds.

How to disclose mutual funds capital gains while filing ITR

Here’s what constitutes capital gains for mutual funds and how your existing investments need to be accounted for in your IT return.

Those who’ve sold mutual funds also fall under this ambit and have to declare their gains or losses. Let us find out what constitutes capital gains for MFs and how your existing investments need to be accounted for.

What is Capital Gain?

Capital assets could be any form of wealth like land, building, house property, vehicles, patents, trademarks, leasehold rights, machinery, jewellery, stocks and even mutual funds. Any profit or gain that arises from the sale of any of these ‘capital assets’ is a capital gain. These gains could be taxable in your hands, subject to the taxation rules of the year in which they occurred. The rules of taxation differ from one capital asset to another. For example, the rules for capital gains on equity mutual funds are different from those of debt mutual funds.

Fact sheet of Women fund managers who have outperformed or Underperform over the long-term

Mutual Fund Gains & Losses

Investing in MFs does not immediately concern the I-T Department. However, if you make a profit or loss after redeeming your MF investment, the I-T Department wants to know about it. The nature of the investment, whether it is a debt fund or an equity fund, determines the exact tax impact on the investor.

In a debt MFs, capital gains earned on investments held for under three years are called Short Term Capital Gains. Gains on investments held longer than three years are called Long Term Capital Gains. For equity MFs, gains become long-term if held for one year.

Depending on what your gains (or losses) are, they need to be disclosed appropriately while filing your tax returns.

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All funds will attract tax to some level on redemption. The short-term taxes are higher, of course, as shown in the table above, while long-term taxes are lesser. One can also claim short-term and long-term capital losses incurred during redemption of both debt and equity mutual funds.

Dividend

Mutual fund schemes have dividend plans where the fund house releases dividends to investors periodically. The dividend that is received in the hands of the investor is tax free up to Rs 10 lakh in a year. The dividend earnings of a large majority of retail MF investors would fall within this limit. However, the income still needs to be declared.

10 things I have learned about investing

Listing on the Correct ITR Form

ITR Form 2 is for Individuals and HUF not carrying out business or profession under any proprietorship, but having income from sources other than salary. Make sure to take out FY-2017-18’s transaction statements from all your fund holding platforms before you get ready to file the ITR.

Remember that tax is calculated on the entire value of redeemed funds and not on an individual fund. For instance, you will be liable to pay LTCG of 10% only if gains from your entire portfolio exceed Rs 1 lakh, and not from a single fund.

Unlike ITR-Form 1 and For 4, you cannot file this form online. You will have to download the Income Tax XML for ITR 2 from the Income Tax Department’s website, fill it, and submit a return by logging in and uploading the XML, in the income tax portal.

For those seeking deductions, if you have not claimed the same while submitting investment to your employer, you can do that in the form here. Remember for MFs, only pension and ELSS category of funds can be claimed for deductions under Section 80C up to a maximum of Rs 1,50,000.

Remember that other than MFs if you hold other capital assets like property, gold and more and have made gains by their sale, you will have to list the same in the same XML form. Income accumulated from renting out property also has to be listed on the form.

 

Why too much cash is bad for a mutual funds scheme’s health

With the stock market going through volatile times, many fund managers seem to be moving to cash. According to data from Ace Mutual Fund database, more than 20 diversified equity funds currently have a cash allocation of above 10 percent in their portfolios. While it may seem like a safe call, Many fund manager say that it should depend on the fund’s mandate. Many fund houses have in-house rules that forbid their fund managers from going into cash above five-six percent.

To reduce the mid-cap pain

The ongoing correction in mid- and small-cap stocks has forced many fund managers to seek refuge in cash. “Many funds with a mid- and small-cap mandate and even others that had taken large exposure to these stocks during the rally have been hit in a big way. These funds have moved into cash to reduce the pain from the correction.” Funds that have booked timely profits in mid- and small-cap stocks too have been left holding high levels of cash.

Many funds are still adjusting their portfolios to comply with Sebi’s new categorisation norms. If, for instance, large-cap funds had taken high exposure to mid-caps to boost their returns, they are now selling those stocks to turn compliant with the new norms.

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Another reason is that political uncertainty is affecting sentiment. “Several state elections are due this year, and then we have the general elections next year. Many fund managers are sitting on cash because of the current volatility in the markets, and to see how things shape up politically. Some funds, such as value funds and dynamic asset allocation funds, allocate to equities based on market valuations. When valuations move high, they move into cash.

How to choose the best mutual fund for your portfolio

Steady inflows, but few opportunities

Many fund managers are also facing the problem of plenty. While the industry is receiving monthly inflows of Rs 75 billion through systematic investment plans, there aren’t many opportunities due to the high valuations in the midcap and smallcap segments. Even many large-cap stocks seem overvalued.

1530117850-1841There are risks too

During the financial crisis of 2008, many fund managers had gone heavily into cash to prevent their funds from correcting deeply. However, when the markets rebounded in 2009, these funds were left on the sidelines. Their performance took a knock, and it took them several quarters to catch up with peers who were fully invested. After this, many fund houses introduced internal rules stipulating that fund managers should not gain more than five percent exposure to cash. When fund managers take high cash allocation calls, it implies that they are trying to time the market, a tricky thing for any fund manager to pull off consistently.”

When funds take large cash calls, it also skews the investor’s asset allocation. A simple example will help illustrate this point. Suppose that an investor wants 50 percent equity and 50 percent fixed income exposure in his portfolio. He invests the 50 percent in an equity fund. But the fund manager invests only 70 percent of his fund portfolio in equities. As a result, the investor’s equity allocation falls to 35 percent. This is a more conservative allocation than he desires and could affect his long-term returns. Asset allocation is best left to investors themselves.

Exceptions to this rule

While most equity funds should stay almost fully invested, dynamic asset allocation funds and value funds are exceptions. Dynamic asset allocation funds, as their name implies, take asset allocation calls, often based on a formula. When markets become expensive, as indicated by price to earnings (P/E) or price to book value (P/BV) ratio, they reduce allocation to equities, and vice-versa.

What are Dynamic Funds? ( Video )

Value-oriented funds are the other exception. Quantum Long Term Equity Value Fund, for instance, doesn’t shy of parking a considerable portion of its portfolio in cash if the situation warrants. Says Atul Kumar, head-equity funds, Quantum Asset Management: “If we find value in stocks, we stay invested. But many of the stocks that we held reached the sell limit we had set for them, so we were forced to sell them. We are also finding fewer new opportunities. That is why our cash level has gone up. It is not a tactical call. It comes out of our bottom-up, process-driven approach.”

PPFAS Long Term Equity Fund currently has a cash allocation of 23.28 percent. Explaining the fund’s approach, Rajeev Thakkar, chief investment officer and director, PPFAS Mutual Fund says: “We don’t start off with any target cash position. Our objective is to deploy everything in equities. But if we find stocks worth investing in only up to 77 percent of our corpus, then 23 percent will be the residual cash that will lie around till we find suitable opportunities.”

Going into cash can prove advantageous in certain situations. Says Thakkar: “If there is a significant correction, the cash position could become a significant factor responsible for outperformance.” He adds that being in cash also gives the fund manager opportunities to buy stocks at attractive valuations when the markets or select stocks correct.

According to Radhika Gupta, CEO edelweissamc taking large cash calls in long only funds … something to avoid because it distorts the asset allocation of an investor, given they are investing in a relative return fund.

SBI Small & Midcap Fund to reopen for investments via SIP mode

The SBI Small & Midcap Fund, which was suspended for new investments in October 2015, will reopen for fresh subscriptions through the systematic investment plan (SIP) mode from May 16. It will be called SBI Smallcap Fund and have an investment cap of ₹25,000 per month and per PAN card.

SBI
It is the first fund to reopen for fresh subscriptions after many smallcap funds had put restrictions on inflows because of rising inflows, higher valuations and lower investment opportunities. It was closed for a subscription since it had a capacity constraint of ₹750 crore on its assets under management. 

Download the Factsheet

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Following the introduction of new rules by the Securities and Exchange Board of India (Sebi) for rationalisation of mutual fund schemes, the fund will now fall in the smallcap category. The erstwhile SBI Small & Midcap Fund had emerged from the acquisition of the Daiwa Industry Leaders Fund by SBI in November 2013.

Download the current portfolio

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As per the new rules, a small cap fund can buy stocks beyond 251st stock in terms of market capitalisation. Prior to this, the scheme could buy small-cap stocks only beyond 401st stock in terms of market capitalisation. “These new norms give us 150 more stocks to choose from with higher market capitalisation and hence and we are in the final process of taking internal approvals for opening the scheme for SIPs only.

Download the Fund managers Factsheet

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The fund, with assets of ₹770 crore, is managed by R Srinivasan and is among the best performing smallcap funds. In the past one year, it generated returns of 35.2 per cent, compared to the category average of 17.75 per cent. In the past five years, the fund returned an annualised 36 per cent, compared to the category average of 31.58 per cent. Investors have been flocking to mid-cap and small-cap schemes in the past three years owing to higher returns from such schemes. Several funds in these categories have placed restrictions on inflows because the available stocks are limited and liquidity is low. Reliance Small Cap Fund, L&T Emerging Business Fund, DSP Blackrock Small Cap Fund and Mirae Asset Emerging Bluechip Fund are some funds which have put restrictions on fresh lumpsum investments and SIP inflows into their schemes.

Mutual Fund Investment are Subjected to Market Risks, Read all Scheme Related Document Carefully.

Disclaimer: No financial information whatsoever published anywhere here should be construed as an offer to buy or sell securities, or as advice to do so in any way whatsoever. All matter published here is purely for educational and information purposes only and under no circumstances should be used for making investment decisions. Readers must consult a qualified financial advisor before making any actual investment decisions, based on information published here.

10 things I have learned about investing

Following these simple yet indispensable investment insights can save you a lot of regret and sleepless nights.

You don’t make money by watching TV:

There are many business-news channels now which claim that they help you make money. Ever wondered why they never advertise the track record of the recommendations they make? Or why they only seem to talk about the winning recommendations and not the losing ones? Or why they seem to talk about ‘global cues’ driving the stock market all the time?

Most of the business news TV is best for understanding things in retrospect. In fact, when the business TV wallahs don’t have a reason for what is driving the stock market, they say, ‘global cues’. Also, the short-term orientation of TV channels will essentially make your broker, and not you, rich.

You don’t make money by reading newspapers either:

All the business newspapers these days have a strong personal-finance as well as a stock-market section. But a lot of the analysis on offer is full of hindsight bias, i.e., they come up with nice explanations of things after they have already happened. Further, newspaper reporters can get analysts to say things that fit in with the headline that has already been thought of. Analysts are more than happy saying these things in order to see their name in the newspapers. And it is worth remembering that newspapers have space to fill. So they will write stuff even if the situation doesn’t demand it.

Kirang Gandhi

SIPs work best over the long term:

If you were to ask a typical fund manager about how long one should stay invested in an SIP, the answer usually is three to five years. Honestly, I think that is too low a number. I started my first SIP in December 2005. And more than ten years later, I am actually seeing the benefit of having invested for so long. Also, it is worth remembering that SIPs over the long term are about a regular investing habit which gives reasonable returns than the possibility of fabulous returns that one might earn by choosing the right stock. This is an important distinction that needs to be made.

EMI VS SIP ( Be controlled or take control )

Don’t chase fund managers:

I did this during the 2007-2008 period and lost a lot of money doing it. I think it’s best to stick to investing in good large and mid-cap funds which have had a good track record over a long period of time, instead of chasing the hottest fund managers on the block. The funds with the best returns in the short term (one to three years) keep changing, and there is no way you can predict the next big thing on the block; the point being, investing should be boring. If it is giving you an adrenaline rush, you are not doing the right things.

Endowment policies are not investment policies:

Endowment policies sold by insurance companies are a very popular form of investing as well as saving tax. One reason for this is because they are deemed to be safe. But have you ever asked how much return these policies actually give? If I can be slightly technical here, what is the internal rate of return of an average endowment policy in which an individual invests for a period of 20 years? You will be surprised to know that such data are not available. But from what I understand about these things, endowment policies give a lower rate of return than inflation. So why bother? Endowment policies are essentially a cheap way for the government to raise money, given that most of these policies end up investing the money raised in government bonds. That is all there is to it. If you want to finance the government, please do so, but there are better ways of earning a return on your investment.

LIC Jeevan Labh Plan : Reviews/Features/Return Sheet

What are ULIPs? I am still trying to understand:

ULIPs are unit-linked investment plans, essentially investment plans which come with some insurance. The trouble is if they are investment plans, why are there no past returns of these policies available anywhere? But what are ULIPs? I have put this question to many people, but I am yet to receive an answer. What is the best-performing ULIP over the last five years? No one has been able to give me that answer. This is not surprising, given how complicated the structure of an average ULIP is. Hence, if you want to invest indirectly in equity, it is best to stick to mutual funds.

Sensex/Nifty forecasts are largely bogus:

Towards the end of every year or even around Diwali, all broking houses come up with their Sensex/Nifty forecasts for the next year. Usually, these are positive and expect the index to go up. At the same time, they are largely wrong. You can Google and check. Hence, treat them as entertainment but don’t take them seriously. Stock brokerages bring out such forecasts because it is an easy way to get some presence in the media. Both TV and newspapers, for some reason I don’t understand, are suckers for Sensex as well as Nifty forecasts.

Don’t buy a home unless you want to live in it or have black money:

Much is made about excellent returns from property. The trouble is there are no reliable numbers going around. It’s only people talking from experience. But when people calculate property returns, they do not take a lot of expenses into account. Also, when people talk about property returns they talk about big numbers: ‘I bought this for `20 lakh but sold it for a crore.’ This feels like a huge return, but it doesn’t exactly take into account the time factor as well as loads of expenses and other headaches that come with owning property. Further, these days there are other risks like the builder disappearing or not giving possession for a very long time. This leads to a situation where individuals end up paying both EMI as well as rent. Also, property returns have been negative in many parts of the country over the last few years. And given the current price levels, I don’t think buying a home is the best way to invest currently.

Real estate rental yield is below one percent

Gurus are good fun:

In my earlier avatar as a journalist, one widely followed stock-market guru told a closed gathering of investors that Sensex would touch 50,000 level in six to seven years. He said it very confidently. Confident stock-market gurus make for good newspaper copy. I wrote about it and the story was splashed on the front page of the newspaper I worked for. It was October 2007. Nearly nine years later, the Sensex is at half of the predicted level. The point is that gurus might be good. They might have the ability to predict things in advance. But then, why would they give their insight to the media, and in the process, you, dear reader, for free? Remember this, next time you see a guru making a prediction.

Low interest rates on loans also mean low interest rates on your fixed deposits:

This is something that many people don’t seem to understand. People want low interest rates on their loans, but they are not happy with low-interest rates on their deposits. Banks fund loans by raising fixed deposits. They can’t cut interest rates on their loans unless they cut interest rates on their deposits. It’s as simple as that. Nevertheless, I wonder why people can’t seem to understand this basic point.

 

By Vivek Kaul

Fact sheet of Women fund managers who have outperformed or Underperform over the long-term

Women still constitute only 8 percent of the total number of fund managers in the Indian mutual fund sector but have proved their mettle by delivering significant outperformance.

Altogether 24 women managers manage funds currently, either as primary or secondary managers or as heads of equity or fixed income, compared to 18 last year.

Cumulatively they manage assets worth Rs 3.065 trillion, which equals 15 percent of the total assets under management (AUM) for open-end funds.

The total AUM managed by the women managers has increased in absolute terms, compared to Rs. 2.32 trillion last year.But regarding a percentage of overall AUM, the number remained almost the same as last year.

The number of women in fund management in India has been gradually going up over the years, but the numbers tell us that we still have a long way to go. Many Asian countries have among the highest representation of women in the mutual fund industry.

womens day

61 percent of the AUM managed by women fund managers in India outperformed the benchmark/peer group average over the past one year, 81 percent over past three years, and 86 percent over the past five years, according to the Morningstar report.

Thus, over the long term, funds managed or overseen by women fund managers have delivered significant outperformance based approach. Depends on collective input from investment specialists closest to the source of investment information.

Some women fund manager’s ignored the noise around and proved that career progression isn’t dependent on the gender.

A look at some Women Fund Managers.

Mrs. Swati Anil Kulkarni ( Fund Manager at UTI Asset management.)

Biography

Mrs. Kulkarni is a B.Com (H), MBA (Finance). From Narsee Monjee Institute of Management Studies, Mumbai, CFA and a CAIIB. Prior to joining UTI Mutual Fund in 2004, she has worked with Reliance Industries Ltd.

Summary

Overall, performing about the same as the peer group composite. Nevertheless, over a long track record, the manager has, period by period, consistently managed to outperform the peer group.

Download (PDF, 100KB)

Ms. Roshi Jain ( Fund Manager at Franklin Templeton Asset management.)

Biography

Ms. Jain is a CFA, ACA and PGDM. Prior to joining Franklin Templeton Investments she has worked with Goldman Sachs, London,Goldman Sachs, Singapore, Wipro Ltd. and S. R. Batliboi & Co.

Summary

Overall, performing better than the peer group composite. Over a long track record, the manager has, period by period, consistently managed to outperform the peer group.

Download (PDF, 101KB)

Ms. Jahnvee Shah  ( Fund Manager at Reliance Asset management.)

Biography

Ms. Shah is a B.Sc and an MBA (Finance). Prior to joining Reliance Mutual Fund she has worked with Financial Express.

Summary

Overall, performing worse than the peer group composite. Over a fairly lengthy track record, the manager has underperformed the peer group.

Download (PDF, 96KB)

Ms. Bekxy Kuriakose  ( Fund Manager at Principal Asset management.)

Biography Ms. Kuriakose is a BA (Economics) from Delhi University and PGDM from IIM, Bangalore Prior to joining Principal MF she has worked with L&T MF, Reliance Life Insurance Co. Ltd ,SBI Mutual Fund and Tata Administrative Services.

Summary

Overall, performing about the same as the peer group composite. However, over a long track record, the manager has, period by period, consistently under formed the peer group.

Download (PDF, 102KB)

Ms.Priyanka Khandelwal ( Fund Manager at ICICI Prudential Asset management.)

Biography Ms. Khandelwal is Chartered Accountant and Company Secretary She has been Working with ICICI Prudential Mutual Fund Since October 2014.

Summary

There is an insufficient track record to make any judgment.

Download (PDF, 81KB)

Ms.Payal Kaipunjal ( Fund Manager at Reliance Prudential Asset management.)

Biography Ms. Kaipunjal is an MBA. Prior to joining Goldman Sachs she has worked with Benchmark AMC.

Summary

Overall, performing about the same as the peer group composite. However, over a long track record, the manager has underperformed the peer group.

Download (PDF, 101KB)

Ms.Nidhi Chawla ( Fund Manager at SBI Asset management )

Biography Ms. Chawla holds BBS degree and has also done MBE and CFA. She has over 4 years of experience in mutual fund industry. She is with SBI Mutual Fund since 2007.

Summary

Overall, performing worse than the peer group composite. Over a short track record, the manager has underperformed the peer group.

Download (PDF, 90KB)

Ms.Shalini Tibrewala  ( Fund Manager at JM Asset management.)

Biography Ms. Tibrewala is a B.Com (H), ACA and CS. She has been associated with JM Financials since 2003.

Summary

Overall, performing about the same as the peer group composite. However, over a long track record, the manager has underperformed the peer group.

Download (PDF, 108KB)

Ms.Sunaina da Cunha ( Fund Manager at Aditya Birla Sun Life Asset management.)

Biography Ms. Cunha is a B.Com (H) and MBA from FMS, Delhi. Prior to joining Birla Sun Life Asset Management Company, she has worked with Aditya Birla Management Corporation Ltd.

Summary

Overall, performing about the same as the peer group composite. Nevertheless, over a long track record, the manager has, period by period, consistently managed to outperform the peer group.

Download (PDF, 100KB)

Ms.Ranjana Gupta  ( Fund Manager at SBI Asset management.)

Biography

She is a Commerce graduate from Mumbai University Ms Ranjana joined SBIFMPL in 2008 as Fixed Income Dealer and has over 21 Years of experience in the capital market. prior to joining SBIFMPL, She was heading the broking activities at Twenty-first Century Shares and Securities Ltd from May 1995 to February 2008. She started her career as a dealer in 1995 with OTCEI.

Summary

Overall, performing about the same as the peer group composite. However, over a short track record, the manager has underperformed the peer group.

Download (PDF, 90KB)

What are the Reasons Behind Most Women not Having a Health Insurance Cover?

Ms.Sohini Andani ( Fund Manager at SBI Asset management.)

Biography

Ms. Andani is a Commerce Graduate and C.A. She has over 15 years of experience in financial services. Prior to this, she worked with ING Investment Management Pvt. Ltd., ASK Raymond James & Associates Pvt. Ltd., LKP Shares & Securities Ltd., Advani Share Broker Pvt. Ltd., CRISIL, and with K R Choksey Shares & Securities Pvt. Ltd.

Summary

Overall, performing better than the peer group composite. Over a fairly lengthy track record, the manager has outperformed the peer group.

Download (PDF, 96KB)

Ms.Meenakshi Dawar ( Fund Manager at Reliance Asset management.)

Biography Ms. Dawar is a B.Tech from IGIT New Delhi and PGDM from IIM Ahmedabad. Prior to joining Reliance AMC had worked with IDFC Mutual Fund. She has worked in institutional equities sales and research division on the sell side.

Summary

Overall, performing worse then the peer group composite. Over a fairly lengthy track record, the manager has underperformed the peer group.

Download (PDF, 96KB)

Ms.Khushboo Sharma ( Fund Manager at IDFC Asset management.)

Biography

Ms. Sharma is B.Tech, Post Graduate Diploma in Management (Finance) & CFA Level III Prior to Joining IDFC Mutual Fund she has worked with Franklin Templeton Asset Management India Pvt. Ltd. in Fixed Income Investment Management and Evaluating company Credit and Structured finance deals and has also worked in Thoughtworks Technologies India Pvt. Ltd. in Software Consulting.

Download (PDF, 82KB)

Gargi Bhattacharyya Banerjee ( Fund Manager at Shriram Asset management.)

Biography

Ms. Banerjee is Master of Business Management in Finance and Bachelor of Science with Economics (Hon) from University of Calcutta. Prior to joining Shriram Asset Management Co. Ltd she has worked with Zacks Research Pvt Ltd as Research Head and Shriram Insight Share Brokers Ltd.

Summary

Overall, performing worse then the peer group composite. Over a short track record, the manager has, period by period, over- and under-performed roughly equally.

Download (PDF, 85KB)

Ms.Hetal P Shah ( Fund Manager at Baroda Pioneer Asset management.)

Biography

Ms. Hetal P. Shah is a B.Com, MBA, and JAIIB. Prior to joining Baroda AMC she has worked with Bank of India from may 1999.

Summary

Overall, performing about the same as the peer group composite. However, over a long track record, the manager has underperformed the peer group.

Download (PDF, 105KB)

Ms.Bharti Sawant ( Fund Manager at Mirae Asset management.)

Biography

Ms. Sawant is an M.S. Finance ( ICFAI Hyderabad ), CFA and B.Com. Prior to joining Mirae AMC in September 2013, She was associated with Sushil Finance Securities Pvt. Ltd., Latin Manharlal Securities Pvt. Ltd. and Kabu Shares and Stocking Pvt. Ltd. for Financial Analysis and Research.

Summary

Overall, performing about the same as the peer group composite. However, over a short track record, the manager has underperformed the peer group.

Download (PDF, 93KB)

Ms.Anju Chhajer ( Fund Manager at Reliance Asset management.)

Biography Ms. Chhajer is a B.Com (H) and a Chartered Accountant. Prior to joining Reliance Mutual Fund Ltd. as a fund manager, she has worked with National Insurance Company as a Money Maker Instruments and D.C Dharewa & Co.

Summary

Overall, performing about the same as the peer group composite. Nevertheless, over a long track record, the manager has outperformed the peer group.

Download (PDF, 103KB)

Mrs.Suman Prasad ( Fund Manager at Canara robeco Asset management.)

Biography Mrs. Prasad is B.Sc and PGDMS. She has been associated with Canara Robeco since 1996.

Summary

Overall, performing about the same as the peer group composite. Nevertheless, over a long track record, the manager has outperformed the peer group.

Download (PDF, 103KB)

Real estate rental yield is below one percent

Ms.Chandni Gupta ( Fund Manager at ICICI Prudential Asset management.)

Biography She holds B.E. degree in IT and CFA degree from CFA Institute, USA. She is working with ICICI since October 2012 as Fixed Income Dealer. Prior to that, she has worked with Morgan Stanley, HSBC Bank and Standard Chartered Mutual Fund.

Summary

Overall, performing about the same as the peer group composite. However, over a short track record, the manager has, period by period, over- and under-performed roughly equally.

Download (PDF, 101KB)

Ms.Uma Venkatraman  ( Fund Manager at IDBI Asset management.)

Biography Prior to joining IDBI Mutual Fund, she had worked with B&K Securities, ASK Raymond James, Morgan Keegan and UTI Mutual Fund.

Download (PDF, 79KB)

Ms.Pushpa Rai ( Fund Manager at Escorts Asset management.)

Biography

Ms. Pushpa Rai is a M.Com, MFM (Narsee Monjee Institute of Management Studies) Over 20 years of experience in the financial sector on both, fixed income products as well as equity markets. Previous assignments include Heading Debt funds and managing pension funds, surplus funds with IDBI Capital Market Services (March 2007 – Feb. 2010); Heading Debt and Equity Research at
Mata Securities (Sep 1995 – April 2006).

Download (PDF, 87KB)

Note : Past performance of fund does not guarantee the future returns.

DISCLAIMER

No financial information whatsoever published anywhere here should be construed as an offer to buy or sell securities, or as advice to do so in any way whatsoever. All matter published here is purely for educational and information purposes only and under no circumstances should be used for making investment decisions. Readers must consult a qualified financial advisor prior to making any actual investment decisions, based on information published here.