Go Back   Team-BHP > Around the Corner > Shifting gears


Reply
 
Thread Tools Search this Thread
Old 26th February 2017, 09:36   #1366
Distinguished - BHPian
 
sgiitk's Avatar
 
Join Date: Dec 2007
Location: Kanpur
Posts: 7,134
Thanked: 3,733 Times
Default Re: The Mutual Funds Thread

My own folios have grown recently with the addition of about four more funds (not fund houses). I was advised that some of the popular funds which have lost performance of late, have become gargantuan and unwieldy. So I have added these newer funds, and will (after March 31) exit some of the funds. The portfolio (remember I am managing over half a dozen folios if the family) is becoming unwieldy. However, exits will need some serious thought.
sgiitk is offline   Reply With Quote
Old 26th February 2017, 15:51   #1367
BHPian
 
Join Date: Jun 2012
Location: Gurgaon
Posts: 91
Thanked: 82 Times
Default Re: The Mutual Funds Thread

I took one big exercise last week to select and rank all categories of equity diversified funds based on consistent return over long period of time.
Selecting funds pose a real challenge as the number of funds in each category keeps on increasing.
Also over different period of time there is huge variation in returns for Mutual Funds.

For example a fund with great 1 year or 3 year returns may not perform good over a 5 year or 10 year period .
Therefore I laid down some criteria to pick the fund taking into consideration returns for all possible periods from 1 year to 10 year, with higher weight for long term returns.
This way we can filter signal from the noise and also overcome our inherent biases.
The criteria and methodology is listed below.
  1. The fund should have at least 10 years of history.
  2. The data from value research is used which lists returns over 1-year, 3-year, 5-year and 10-year periods.
  3. The returns are as on date 24-Feb-2017.
  4. The weighed average return is calculated by assigning higher weights to longer period returns.
.

The results are as follows, the full report is published on my blog.

http://moneybhasa.blogspot.in/2017/0...s-in-each.html

Large cap funds
Name:  Large cap .PNG
Views: 1200
Size:  52.9 KB

Multi cap funds
Name:  Multi Cap.PNG
Views: 1199
Size:  57.4 KB

Mid/Small Cap
Name:  Mid small.PNG
Views: 1195
Size:  39.2 KB

Tax savings
Name:  Tax saving.PNG
Views: 1192
Size:  59.1 KB
born_free is offline   Reply With Quote
Old 26th February 2017, 21:16   #1368
BHPian
 
akshay87kumar's Avatar
 
Join Date: Jan 2014
Location: Bhagalpur
Posts: 71
Thanked: 21 Times
Default Re: The Mutual Funds Thread

I am looking to start investments in mutual funds, and wanted to get an opinion on which is the best route for investments. My initial thoughts, along with the positives and negatives are:
1. Through Demat Account
+ Easily track investment across all mutual funds
- High transaction/brokerage charges, demat maintenance charges
- Unable to perform STP, Switches, etc (I have an HDFC Demat Account)
2. Through MyCamsOnline
+ Easily track investment across all mutual funds
+ Direct mode of investment
+ Ease of performing investments throgh SIP, STP, SWP, Switches, etc
(unknown) Transaction and brokerage charges
3. Through Mutual Fund houses (e.g. HDFC Fund, ICICI Pru, etc)
- Able to track only mutual fund house investments. Need to separately track across different mutual funds
+ Lower transaction charges, direct mode of investments
+ Able to perform STP, SWP, SIP, Switches

Can the experience folks please help me understand if I am overthinking investment options like STP, SWP and switches? The reason I wish to choose atleast STP is because I have lumpsum amount which I propose to invest in a liquid fund and start an SIP. I do not wish (or capable of) timing the market.

Please also advise if there are any disadvantages of using one-stop solution like MyCamsOnline, or any other aspect that I may not be aware of.
akshay87kumar is offline   Reply With Quote
Old 27th February 2017, 00:26   #1369
BHPian
 
Join Date: Jan 2015
Location: Bangalore
Posts: 78
Thanked: 83 Times
Default Re: The Mutual Funds Thread

Quote:
Originally Posted by akshay87kumar View Post
I am looking to start investments in mutual funds, and wanted to get an opinion on which is the best route for investments.
If I understand correctly, you are looking for:
-> Ease of tracking all your investments (consolidated statements)
-> Lower transaction charges (direct mode)
-> Ease of doing transactions (SWP/STP)

Tracking your investments is quite easy. CAMS provides you a consolidated mailback statement of *practically all* your MF investments across fund houses and folios.
Investing directly with the fund houses means you can opt for the direct schemes.

Wrt STP/SWP/SIP, some amount of manual intervention might be required, although not too complicated. Instead of relying upon the fund house or some other intermediary to perform a transaction on a specified date, you would have to manually login to their website and initiate the transaction yourself. This need not be timed to the rise and fall of the market, it could be something as simple as logging in every Monday morning and initiating a withdrawal from one fund and investing in another.

If you have already sorted out the list of funds you would like to invest in, then great. If you need some help with it, look at services offered by FundsIndia or Money life smart savers network. They give out periodic recommendations on which funds/stocks to buy.

You could also consider arbitrage funds for a lumpsum investment. These come with a minuscule downside risk for capital, but work out better in terms of taxation as they are treated on par with equity funds.
perty is offline   Reply With Quote
Old 28th February 2017, 17:20   #1370
BHPian
 
Join Date: Oct 2004
Location: Pune
Posts: 280
Thanked: 68 Times
Default Re: The Mutual Funds Thread

Hi,

Please read these articles:

https://www.advisorkhoj.com/company/...p-mutual-funds

http://smartinvestor.business-standa...s_for_2017.htm

To compare funds from the same fund house, during the 2008 US mortgage subprime crisis, SBI Magnum Midcap tanked by -72%, SBI Bluechip Fund (large cap) by -55%, SBI Magnum Balanced Fund by -44%, and SBI Magnum Gilt Fund by -13%.

Thanks,

Pradeep

Quote:
Originally Posted by bullrun87 View Post
Small and mid cap funds have given tremendous returns over the past two to three years and with people investing heavily in them some of these funds have become unmanageable hence I appreciate this move to protect investor interests.
should an investor focus more on large cap funds now? An increasing percentage of fund managers believe that mid caps are quite expensive at current levels. Should a long term investor orient his portfolio more towards large cap funds for a few years and if so what should be the percentage of large cap funds and mid/small cap funds for a long term investor? I currently invest equally in large cap funds, multi cap funds and mid/small cap funds on a monthly basis. Should I increase allocation to large and multi cap funds?

Last edited by pradkumar : 28th February 2017 at 17:42. Reason: Too much white space
pradkumar is offline   Reply With Quote
Old 28th February 2017, 18:08   #1371
Distinguished - BHPian
 
sgiitk's Avatar
 
Join Date: Dec 2007
Location: Kanpur
Posts: 7,134
Thanked: 3,733 Times
Default Re: The Mutual Funds Thread

One question for @Shishirbn; and other guru's. Why is the rupee becoming stronger? It did crash a bit after the Demonetization. However, with the $ strengthening against most currencies the Rupee seems to be getting a bti stronger. What can be the reason?
sgiitk is offline   Reply With Quote
Old 7th March 2017, 11:40   #1372
BHPian
 
gupta_chd's Avatar
 
Join Date: Nov 2009
Location: Ludhiana/Chandigarh
Posts: 157
Thanked: 39 Times
Default Re: The Mutual Funds Thread

Quote:
Originally Posted by akshay87kumar View Post
2. Through MyCamsOnline
+ Easily track investment across all mutual funds
+ Direct mode of investment
+ Ease of performing investments throgh SIP, STP, SWP, Switches, etc
(unknown) Transaction and brokerage charges
No transaction and brokerage charges of any sort through camsonline.
gupta_chd is offline   Reply With Quote
Old 7th March 2017, 20:27   #1373
BHPian
 
Join Date: Jan 2010
Location: Trivandrum
Posts: 216
Thanked: 57 Times
Default Re: The Mutual Funds Thread

I was nastily surprised by the NAV difference between Regular and direct plans of MF schemes. Even in a slightly low value NAV's, difference of 20%.
Reliance Growth-Dividend-Regular scheme is Rs68.69 whereas Reliance Growth-Dividend-Direct is Rs 81.88 .Lay investors are never told about such a wide gap! This is 20%. I checked other fund houses, the difference is not this much. This amounts to shady dealing by MF house, isn't it? I had reliance growth which I completely redeemed!
srikanthns is offline   Reply With Quote
Old 7th March 2017, 21:28   #1374
Distinguished - BHPian
 
swiftnfurious's Avatar
 
Join Date: Sep 2009
Location: Chennai
Posts: 6,433
Thanked: 6,382 Times
Default Re: The Mutual Funds Thread

Has anyone invested into Reliance Money Manager fund? Its a kind of Debt fund and from what I understand, very similar to Savings bank account with better interest. The performance has been consistent over the last few years & the fund yields around 9% interest. There is no exit & entry load, no lock in period. With Scripbox's subscription, one is also provided a HDFC Debit card which could be used in any ATMs and no charges either. Double checking here before I take the plunge in the new financial year.
swiftnfurious is offline   Reply With Quote
Old 7th March 2017, 21:55   #1375
Distinguished - BHPian
 
saket77's Avatar
 
Join Date: Dec 2012
Location: Ranchi
Posts: 3,167
Thanked: 4,068 Times
Default Re: The Mutual Funds Thread

Quote:
Originally Posted by swiftnfurious View Post
Has anyone invested into Reliance Money Manager fund? Its a kind of Debt fund and from what I understand, very similar to Savings bank account with better interest. The performance has been consistent over the last few years & the fund yields around 9% interest. There is no exit & entry load, no lock in period. With Scripbox's subscription, one is also provided a HDFC Debit card which could be used in any ATMs and no charges either. Double checking here before I take the plunge in the new financial year.
Hi!

It's an ultra short term debt fund. Not totally risk free but ultra short term is the way to go in the current scenario. It's a fair balance between risk and return for the time being.

Birla cash manager, Franklin ultra short bond fund are its direct peers.

If you want to reduce the risk further, at the cost a some gains, you can also go for pure liquid funds which give returns similar to a bank FD without any lock-in or entry/ exit load.

Redemptions in both funds will take one business day (credit of funds on next working day) if order is placed before 3 pm; so you can place your idle funds in such funds.

Regards,
Saket.
saket77 is offline   Reply With Quote
Old 8th March 2017, 08:39   #1376
Senior - BHPian
 
ghodlur's Avatar
 
Join Date: Sep 2009
Location: Thane
Posts: 4,995
Thanked: 2,007 Times
Smile Re: The Mutual Funds Thread

Experts,

Have a query.

I have 1L surplus funds with me earmarked to be used to pay the annual life, medical and car insurances which will be required in Sept 2017, Dec 2017 and Jan 2018 respectively. The present alternative with me is to create 3 FD's in my savings account. I am more inclined to invest where taxation does not eat into my earnings on the surplus fund. Kindly suggest me the way ahead.

Do I invest in a single debt fund (and which one?) or invest for the three separately?
ghodlur is offline   Reply With Quote
Old 8th March 2017, 09:31   #1377
Senior - BHPian
 
hserus's Avatar
 
Join Date: Sep 2014
Location: Chennai
Posts: 1,860
Thanked: 1,889 Times
Default Re: The Mutual Funds Thread

See if you can pay some of those early, some insurance companies accept premia a few months in advance
hserus is offline   Reply With Quote
Old 8th March 2017, 09:40   #1378
Distinguished - BHPian
 
saket77's Avatar
 
Join Date: Dec 2012
Location: Ranchi
Posts: 3,167
Thanked: 4,068 Times
Default Re: The Mutual Funds Thread

Quote:
Originally Posted by ghodlur View Post
Experts,

Have a query.

I have 1L surplus funds with me earmarked to be used to pay the annual life, medical and car insurances which will be required in Sept 2017, Dec 2017 and Jan 2018 respectively. The present alternative with me is to create 3 FD's in my savings account. I am more inclined to invest where taxation does not eat into my earnings on the surplus fund. Kindly suggest me the way ahead.

Do I invest in a single debt fund (and which one?) or invest for the three separately?
Since you have to meet some fixed expenses in a few months time, I would not suggest you to venture into equities with this fund. I suggest you liquid funds as it meets your criteria pretty well. No lock in, returns more than bank FD for smaller time frame & safe. Your 5-6 month bank FD rate will not be probably more than 5%. On the other hand, these liquid funds should generate at least 7% (annualised).

However, please note that the gains made are taxable according to your income slab. I don't really see any investment, in this time frame, which is safe and tax- free at the same time.

Trust that helps.

Regards,
Saket
saket77 is offline   Reply With Quote
Old 8th March 2017, 10:03   #1379
Senior - BHPian
 
ghodlur's Avatar
 
Join Date: Sep 2009
Location: Thane
Posts: 4,995
Thanked: 2,007 Times
Smile Re: The Mutual Funds Thread

Quote:
Originally Posted by saket77 View Post
However, please note that the gains made are taxable according to your income slab. I don't really see any investment, in this time frame, which is safe and tax- free at the same time.
Thanks Saket for the info.

The gains made in the Liquid funds are subjected to STCG if withdrawn within 3 yrs of investment which is equal to tax slab I am in right now. So I am paying the same tax rate for income earned from Liquid funds a or FD's. The only difference is in the income earned in Liquid funds is higher than that of FD's. The liquidity in both cases is same. Please note that I am not too worried about the returns since its the capital which is essential for me. If the money earns over and above the capital, that would be bonus.

The only thing that is holding back from investing in FD's is creating 3 FD's for 3 goals.

Your thoughts please.
ghodlur is offline   Reply With Quote
Old 8th March 2017, 13:37   #1380
Distinguished - BHPian
 
saket77's Avatar
 
Join Date: Dec 2012
Location: Ranchi
Posts: 3,167
Thanked: 4,068 Times
Default Re: The Mutual Funds Thread

Quote:
Originally Posted by ghodlur View Post
Thanks Saket for the info.

The gains made in the Liquid funds are subjected to STCG if withdrawn within 3 yrs of investment which is equal to tax slab I am in right now. So I am paying the same tax rate for income earned from Liquid funds a or FD's. The only difference is in the income earned in Liquid funds is higher than that of FD's. The liquidity in both cases is same. Please note that I am not too worried about the returns since its the capital which is essential for me. If the money earns over and above the capital, that would be bonus.

The only thing that is holding back from investing in FD's is creating 3 FD's for 3 goals.

Your thoughts please.
Since you will pay taxes on FD and liquid funds at the same rate as per your income slab, I suggest you go for pure liquid funds (not debt funds) where your capital is almost risk free.

For liquidity, I would vote for liquid funds again because you don't need to specify the term while entering it unlike FDs. You just place the redemption order a day before the requirement of money. You don't get this flexibility in bank deposits. You are penalized if you break your FD before it's full term.

But if you want an assured return and know when exactly you require the money, you may go for bank deposits, but since your horizon is less than a year, you will have to settle for lower rates.

Regards.

Last edited by saket77 : 8th March 2017 at 13:39.
saket77 is offline   Reply With Quote
Reply


Thread Tools Search this Thread
Search this Thread:

Advanced Search


Similar Threads
Thread Thread Starter Forum Replies Last Post
The Team-Bhp thread of shame (Pray you arent mentioned in this thread ) speedsatya Street Experiences 10 24th February 2012 14:27
Aravali Auto Gurgaon (Chevrolet Dealer) - embezzled the funds given as booking amount SushantV Indian Car Dealerships 15 18th February 2012 00:16


All times are GMT +5.5. The time now is 10:08.

Copyright 2000 - 2017, Team-BHP.com
Proudly powered by E2E Networks