[sgiitk]

Unless you are sporting. I will wait for the budget before touching Mutual Funds. Just a word of caution no more

[hothatchaway]

Originally Posted by sgiitk

Unless you are sporting. I will wait for the budget before touching Mutual Funds. Just a word of caution no more

Anything in specific you are apprehensive of? Should people with a horizon of >5 years be bothered?

[SmartCat]

This NBFC issue is rearing its ugly head again. Debt fund investors should check the attached PDF file.

DHFL fails to pay Rs 1,000 cr interest on bonds, talks on
http://economictimes.indiatimes.com/...w/69658664.cms

Mutual Funds will have to mark down investments. The delay in payments will require MFs to mark down their Net Asset Values (NAVs) by about 75% in the DHFL instruments in order to avoid any redemption pressure by wealthy investors

[Santoshbhat]

Originally Posted by SmartCat

This NBFC issue is rearing its ugly head again. Debt fund investors should check the attached PDF file.

DHFL fails to pay Rs 1,000 cr interest on bonds, talks on
http://economictimes.indiatimes.com/...w/69658664.cms

Just checked the NAV of DHFL Pramerica Medium Term fund (the fund with maximum exposure in terms of asset percentage), and value research shows that NAV has fallen by 52% on one day . Wonder how many more skeletons will tumble out in the next few days. Investors have a rough ride ahead.

[carboy]

Originally Posted by Santoshbhat

Just checked the NAV of DHFL Pramerica Medium Term fund (the fund with maximum exposure), and value research shows that NAV has fallen by 52% on one day .

Sold my DHFL pramerica medium term fund holdings on 24th May! They had sent an email that they were going to merge it with another fund which triggered me to sell it.

https://www.livemint.com/mutual-fund...622922251.html

But still haven't got the money.

[SmartCat]

Originally Posted by Santoshbhat

Just checked the NAV of DHFL Pramerica Medium Term fund (the fund with maximum exposure in terms of asset percentage), and value research shows that NAV has fallen by 52% on one day . Wonder how many more skeletons will tumble out in the next few days. Investors have a rough ride ahead.

Here is the full list:



What a bunch of jokers masquerading as professional fund managers. Basic financial risk management calls for diversification which means investing funds in different companies. SEBI should bring out a rule limiting maximum exposure to companies to 5% per fund.

If anybody has invested in the above mutual funds, do NOT sell in panic. This fall is likely to be reversed sometime in the future when DHFL pays back. DHFL can "bundle" their home loans made out to customers and sell it to banks - this is called securitization. But do check all your debt MF portfolios on valueresearchonline. If the fund manager has invested more than 6% in any security, exit those funds.

[Santoshbhat]

Originally Posted by SmartCat

Here is the full list:


What a bunch of jokers masquerading as professional fund managers. Basic financial risk management calls for diversification which means investing funds in different companies. SEBI should bring out a rule limiting maximum exposure to companies to 5% per fund.

Another set of jokers are so called investment advisors from Banks etc... whose only job is to trap hapless retail investors. They abuse their position of trust and thrust some of these useless schemes on innocent customers. They call themselves 'relationship managers' and find some or the excuse to meet you and then start marketing useless ULIPs and MFs.

[sunilch]

Originally Posted by Santoshbhat

Another set of jokers are so called investment advisors from Banks etc... whose only job is to trap hapless retail investors. They abuse their position of trust and thrust some of these useless schemes on innocent customers. They call themselves 'relationship managers' and find some or the excuse to meet you and then start marketing useless ULIPs and MFs.

Hehe, I am thankful to my family for this. A bit but I feel the need to share. My father taught me this when I was a school going kid and had opened my first bank account at a very young age:

1) If anyone makes an extra effort to come to you and start selling you any financial product with all the USPs at the tip of his tongue, stay away from him at that moment. There is always a hidden benefit for the seller and it will not harm you from delaying your decision. There is no harm in postponing the decision until you fully understand what you are buying/investing in. There was no dearth of insurance agents selling Endowment plans those days

2) The simplest and the best products available for you won't warrant any selling and you won't see many folks selling them to you. Some simple reading should suffice to identify what those are.

Valuable life lessons from a simple man

[ghodlur]

Originally Posted by SmartCat

But do check all your debt MF portfolios on valueresearchonline. If the fund manager has invested more than 6% in any security, exit those funds.

Luckily none of my debt funds figure in that list. Phew.
So should I be relaxed?

[SmartCat]

Originally Posted by ghodlur

Luckily none of my debt funds figure in that list. Phew. So should I be relaxed?

Last year, I moved all my debt investments from corporate debt/liquid funds to gilt/overnight funds as soon as murmurs of NBFC crisis hit the news. But then, I'm extra careful about where I invest my money. I might have over-reacted.

But as Warren Buffett says, there is usually never just one cockroach in the kitchen.

Stick to debt funds from respectable fund houses, 5000 cr plus assets in the fund you have invested, long 10+ history, atleast 75+ securities in portfolio and not more than 5 to 6% holdings in each security. All this data is available at valueresearchonline.com

[aravindkumarp]

Originally Posted by SmartCat

Here is the full list:

Attachment 1881993

What a bunch of jokers masquerading as professional fund managers. Basic financial risk management calls for diversification which means investing funds in different companies. SEBI should bring out a rule limiting maximum exposure to companies to 5% per fund.

Just unbelievable that a debt fund can invest > 40% in one instrument. Several of these funds have multiple stars misleading a lot of investors who go by star ratings. Great eye opener this!!

[DigitalOne]

Originally Posted by SmartCat

This NBFC issue is rearing its ugly head again. Debt fund investors should check the attached PDF file.

DHFL fails to pay Rs 1,000 cr interest on bonds, talks on
http://economictimes.indiatimes.com/...w/69658664.cms

Originally Posted by SmartCat

Here is the full list:

Attachment 1881993

Burnt my fingers again . ABSL FMP being the culprit. Down by 7-8%. This same fund was affected earlier by ILFS default also. 1 Lakh investment couple of years back is now at 90k.

Basic financial risk management calls for diversification which means investing funds in different companies. SEBI should bring out a rule limiting maximum exposure to companies to 5% per fund.

Originally Posted by aravindkumarp

Just unbelievable that a debt fund can invest > 40% in one instrument. Several of these funds have multiple stars misleading a lot of investors who go by star ratings. Great eye opener this!!

I read about this. SEBI does mandate a maximum cap per fund on companies/instrument. What happens is at the whiff of first trouble, savvy investors (or those with inside information) start redeeming from the affected fund. And the fund house starts selling the higher rated/more liquid bonds to pay for the redemptions. This leads to the vicious cycle of lower rated bonds getting more and more weight in the fund.

SEBI has proposed something called 'side-pocketing' (not as bad as it sounds ), which kind of isolates the bad bonds from the good ones. I have not understood this yet, but from what I read this may help a bit.

[SoumenD]

Originally Posted by carboy

Sold my DHFL pramerica medium term fund holdings on 24th May! They had sent an email that they were going to merge it with another fund which triggered me to sell it.

There was a similar merger last year in HDFC balanced fund. I was just 1 year old into it (via SIPs), so stuck around. NAV went down substantially but the no. of units were multiplied accordingly. It's now called HDFC hybrid fund & have seen it in red only for a couple of months when market was really down, rest its mostly been in green. I continued with my SIPs and current market value stands at some 7% in the green. Have no plans of exiting for next couple of years though.

Point being, am not sure if merger of funds is a bad thing always. Maybe initially, but overtime wight recover as well.

Any idea what's up with L&T emerging business fund? Its been in red for more than a year now. No plans of exiting but after 2 years I expected it to atleast be at break-even if not more, but that hasn't been the case so far. Am waiting to see if the new budget changes anything. If not, will stop my SIPs for now. Won't exit but won't invest any further.

[saket77]

Originally Posted by SoumenD

There was a similar merger last year in HDFC balanced fund. I was just 1 year old into it (via SIPs), so stuck around. NAV went down substantially but the no. of units were multiplied accordingly. It's now called HDFC hybrid fund & have seen it in red only for a couple of months when market was really down, rest its mostly been in green. I

That merger was an intiative by SEBI where many similar schemes of AMCs were merged to simplify and bring down the number of schemes offered to investors which in turn used to confuse them. That is why you could see the units balancing the NAV of the fund. No one suffered any loss during that merger.

[ghodlur]

Originally Posted by SmartCat

Going by ICICI Pru Value Discovery fund's portfolio, it seems to be a contrarian fund. That is, the fund manager has picked stocks that are out of flavor

My recommendation:

- Hold on to this fund for a long, long time. This fund's investment strategy is very unique.
- Keep maximum 20% of your capital in this fund. Not more than that, because this fund's strategy can test your patience. If your allocation to this fund is more than 20% of your capital/portfolio, then either stop SIP or sell some units.

Smartcat,

With a returns of 3% over the past 2 yrs, this fund has indeed tested my patience. I was doing a SIP in this scheme and its time to renew the SIP, hence giving a second thought. I am thinking of shifting to a Hybrid aggressive equity fund. Any views on this and any suggestions if the move is right.