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I never said that the government does. It is LIC’s track record of managing debt funds (one of the highest ROI across NPS fund managers) and the fact that they are owned by the government which helps me sleep better every night.

Infact the reasons that you quoted do not make a strong case to invest in tier 2 NPS funds:
1. Low expense ratio - this does not have any relevance without comparing the returns. I would pay higher management fees if fund house has better track record
2. Ability to switch ratios - This can be easily done even without NPS
3. Unable to peek in the portfolio of NPS investments - No need to say anything here :)

Morningstar says that the expense ratio is the most proven indicator of future returns. Here is the link to the article - https://www.morningstar.com/articles...ess-or-failure. Not sure how relevant it would be in Indian context though.

In multicap category, expense ratio ranges from 1.7% to 2.7% per year for regular funds (not direct). Just eye-balling the data, there doesn't seem to be any clear link between expense ratio and long term performance though. I mean, there are poor and good long term performers in both low/high expense ratio funds.

They considered only 2011-2015 time frame for their research. The results may differ if another time frame, especially a longer one that includes a downturn, is considered. It may not hold in emerging markets at all. It's really hard do believe that ER can be the "most proven" predictor. But Morningstar has started to use a new rating framework placing more emphasis on fees and also bumped up the previous ratings (on older framework) of cheaper funds.

I don’t follow Morningstar - so not sure on the quality of their articles in general but their claim on this one is not very accurate (SmartCat already provided some data points to refute their claim).

Looking at it from a philosophical perspective, what they are claiming does not tie out to how things work in real world as well.
Take example of car service - The rational in the article can be extrapolated to say that any car mechanic who charges higher fees is predicted to provide better services. We all know that just looking at the fees isn’t a good way to find the best mechanic. One will need to check a few other factors, the past record of the mechanic (through reviews mostly) being an important one. For me, higher fees is ok if it is backed by higher performance and quality standards.
Same way for mutual funds, a higher management fees shows that the fund managers are confident of the returns they intend to deliver and are charging a premium for their services. But will it really lead to higher returns, their is no way to predict it.
I usually look at a combination of things when selecting mutual funds:
1. Expense Ratio
2. Returns
3. AUM
4. Directional alignment to underlying instruments

Despite this, I have gone wrong multiple times so there is surely a better way of doing this. But just looking for high expense ratio funds would not make the cut in my opinion.

Totally agree with you. The article also mentions "That’s not to say investors should use them in isolation. There are many other things to consider, but investors should make expense ratios their first or second screen." Though the research is for US market, I found it intriguing and thought worthy of sharing here. Morningstar is a well respected investment research company in the US.

Got a call from FI this morning. He said that the Franklin India Ultra Short Bond Fund - Super Institutional Plan had turned 'cash positive' after repayment of some Rs 207 cr to banks if i heard him right. He further said that voting for managing ( the winding up of) the funds would he held shortly, an email for which could be expected in a day.

Upon my pointed question whether there are any defaults of the corporate papers held; he said and i quote: "No defaults till date".

Maybe we would not only get our principal back, but may even expect some interest?

I need to switch from old investments into regular tax saver funds of AMCs like ICICI, HDFC, Sundaram and Tata into any of their best performing direct funds. So, could you please advise on top 2 funds from these AMCs.

It is very difficult to answer that question without knowing your investment goals, risk appetite and timeframes. Do you want to invest in equity oriented funds (more risk/more reward), Long term debt funds (more credit risk but slightly more returns possible, Medium term debt funds, short terms debt funds, liquid funds etc.

If you can give a bit more information, I can suggest a few based on my experience of having invested in mutual funds for over 10 years.

What I found out from experience was the ELSS or tax saver funds are not needed if you use other (better) tax saving instruments. Namely : EPF / VPF / PPF and NPS. Once EPF/ VPF / PPF is maxed out along with NPS, you can go ahead and look at Mutual Funds as wealth creators, instead of tax savers.

PS: I still do run my first mutual fund from franklin a tax saver fund, along with the one from Mirae. I always felt that I should stop these and switch to funds that have better wealth gain potential. The 1.5L is easily recouped from EPF/VPF/PPF and NPS adds another .5L plus another 10% of basic as deductions - 80CCD 1 & 2. So no more avenues left.

Recently started on the Motilal Oswal S&P500 fund, which directly invests in US markets and another fund which is pharma oriented.

So my take would be to rethink how you utilize the 80C section to the max on instruments which are in the EEE category.

The intent of switch is to diversify into best performing direct growth funds of respective AMCs. I would NOT be needing to redeem these investments for minimum 5+ years.

The intent here is to switch(NOT redeem) from tax saver funds into best performing funds of the respective AMCs. All other investment opportunities are running in parallel. This is the equity section of the asset portfolio.

FT has asked for voting from unit holders of their debt funds which were wound up recently.

The voting email reads:

Any informed opinion on what to take into consideration before voting would be welcome. Continuing with FT or Deloitte?

Yes. As per latest maturity profile published on May 29 by FT, Outstanding borrowings have been fully repaid in FIUBF on May 26, 2020 and in FIDA on May 11, 2020.
Reference: https://www.franklintempletonindia.c...nd-up-kautxx90

Also, quote from Sanjay Sapre's interview to ET on 1st June - Two of the six schemes have already repaid their bank borrowings and are cash positive now. These schemes can start repayments to investors shortly, subject to a successful unitholder vote.
Reference: https://www.franklintempletonindia.c...-2020-kautxyp3

Got a mail from FT saying, Vodafone has paid back one security due in July 2020 and investors will get back some part of the money back from the segregated Low Duration Fund and Ultra Short Term bond funds.

Thank God for small mercies !!

Do all MF's of a Fund house show up in our cams account automatically or do we have to add them manually. I am having two funds from ABSL ,one I directly invested (ELSS) which shows up in cams and the other a Debt fund invested through a broker which does not show up in the cams account.