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Isn't that a good way to invest? To shift to debt funds when the market starts crashing and back to equity when it seems bullish?

Yes, it is. But if you look at the examples I quoted, AMCs - HDFCs vs ICICI/Kotak - have taken two contrasting positions right now. So who will be proved right? I have investments in both HDFC and ICICI dynamic asset allocation funds; So I am hedged :).

There is a lot of fan following for index funds primarily due to 0.5-0.7% lower expenses and fact that many funds are not able to beat indices for same reason. Mostly it comes from developed markets where they have some really intelligent indices and well researched market.

However it is to be noted that most Indian indices are just blind pick of companies in a certain ranked range where companies are ranked by freefloat market cap. Nifty 50(1-50), nifty next 50(50-100), midcap 50(101-150), midcap 150(101-250). Its not built to represent sectors or sector leaders, or their performance or as per any intelligent criteria(for the lack of better word). Like 5 of top 10 and almost 40% of nifty companies are financial service companies. Accordingly the returns are also skewed toward same sectors. A company performing badly like yes bank may move out of nifty 50 only to enter nifty next 50 or nifty midcap 150. I believe its not a good strategy to have an SIP of Nifty 50 and nifty next 50 or any such mcap rank based index. If at all I have to then I would go for smaller range than the bigger one like sensex 30 instead of nifty 50. Please see my intention is not to question the intellect of those investing in index funds. I am just putting this thought of mine out for further brainstorming.

I invested in Nifty 50 and Nifty midcap 150 then I felt that it is waste to keep putting my long term money in PSUs and highly inflated companies running 200 and 300 pe multiples like adani gas etc. Its like throwing money in water no matter how minuscule it is. I mean Nifty 50 still has Coal India ltd which in my opinion is a wealth destroyer and Bharti which has been in the same range since 2007(sans dividends of course).

Another belief is that two funds having same stocks are similar and should perform same. But active portfolio management is also about judicious use of money and buying stocks at fair valuations than at any valuation(index investing). Same amount of money judiciously deployed can bring more number of same scrip. Cash is a strong position in bear market. There are quotes available to justify every approach like "time in the market is better than timing the market" and "better to buy a wonderful company at a fair price than a fair company at a wonderful price". Both the quotes contradict each other and both are given by well known investors. Ditto about the quote saying don't time the market and another one saying buy when everyone is fearful. Isn't buying when everyone is fearful same as timing the market.

An index is not representation of market(economy) if it is not adequately representing all the sectors of the economy. The disconnect between economy and index starts from here. To me MSCI indices make more sense. Anyone who knows about other privately maintained indices which are difficult to beat may please enlighten us. Heard than Vanguard also maintains indices or does it only maintain index funds?

I still feel that the nifty50 index is not difficult to beat by individual DIY investors(dividend tax issue set aside) if they focus just on top 10 or top 15 companies in the index, their valuation profitability and retention ratios.

Index fund vs actively managed fund discussion (post no. 2888 to 2921):
https://www.team-bhp.com/forum/shift...ml#post4758037

Just pick an actively managed fund whose portfolio strategy aligns with your thinking process. Don't bother much about expense ratio.

Another option is this particular NFO from Aditya Birla - an equal weighted NIFTY index fund. Since all NIFTY stocks in this mutual fund will have equal weight, it partly addresses some of your concerns.
https://groww.in/blog/aditya-birla-s...ndex-fund-nfo/

Hello All,

I am a total newbie to mutual fund world. Created account in ET Money to start investing in this. Would like to hear from experts about the best available funds with moderate risk portfolio to invest. Also kindly advise if SIP is a better option or a one time lumsum investment.

Want to have a portfolio for short term(1-2 years), mid term(3-5 years) & long term ( retirement :) )

Thanks in Advance
Venkatesh

HDFC balanced advantage fund does not change its equity allocation at all. Even though it is in the balanced advantage category, it has never since recategorisation in 2018 changed its equity allocation materially. It always has 70-75 % in equity. This can be clearly seen from its standard deviation. It is way more risky than its peers. Other funds in the category go from 30-80% equity while maintaining equity taxation status via arbitrage opportunities. HDFC balanced advantage should be treated as an aggressive hybrid fund with fixed equity allocation. If you are interested in a fund that dynamically manages between equity and debt then you should avoid this fund.

Hi,
First of all I must say I am not an expert; but I can share my own experiences with you.

I have been a MF investor for the last 15 years having moved to MFs aggressively after I realised that direct investing was not my cup of tea. But I can answer your queries only partially because I have a very wide variety of funds accumulated over this period from those days when HDFC and the likes were the star performers and picking funds for the short, medium and long terms is a combination of objective and partially subjective inputs especially since the past performances with star rankings are available across a host of free and paid channels.

My investments have mostly been through SIPs with occasional lump sums, the later when I had surplus money with me but done mostly tracking the respective indices.

In this journey of 15 years, I realised it's a very futile exercise to even attempt to time the market. My PF is witness to long spells of very low returns (read just being able to beat inflation or be even on the negative side). During the Covid meltdown and the previous ones too, I stay put with the SIPs although I know many redeemed their investments, some even incurring losses. During such times when people even started talking about the possibility of indices approaching zero, I thought I should have patience and so stopped looking at my PF every now and then. I vaguely remember my PF taking a hit of some 25-30% or so. So despite all the fear, my SIPs continued. Yes, during those months never had the courage to invest in lump sums although market bounced back quite fast. There was again this prediction about another crash after the pull back because the vaccines were still not available. With lump sums I gathered courage around the month of September. That was also the time when I jumped onto direct investing although most of them through advisors and some selected stocks based on personal researches and also through smallcase route.

Today when I look back, out of all these 15 years, the appreciation that I witnessed after the recovery from the March crash, has been unprecedented and I can proudly say that both mine and my wife's PFs have a CAGR of 20+. Yes, this is profit on paper only and the markets can turn sluggish or negative for the next 2-4 years, we never know. But for sure, this type of bull run is not perpetual. What are the chances of that happening - we need to make our own assessments because things are so dynamic and there are so many variables.

As you are a newbie, I would strongly advise you to go for SIPs alone at this point of time. You may have a look at MF Utilities too as I found that platform an excellent place to find all fund houses under one umbrella and you may chose the Direct Plans for keeping your expenses at bare minimum levels, certainly not the Dividend ones.

Hope my story helps.

Happy investing

Sravan

Hi,

Based on the good feedback for MF Utility in this thread, I am thinking about opening an account with them.

However, when I google for MF Utility, quite a few different web addresses come up. Can someone let me know the correct and authentic web site address of MF Utility?

Thank you.

https://www.mfuindia.com/

Here you go. In the home page, there is a big banner for "eCAN. Open Account Online". This takes you to the new account registration page.

Hello all, need some help regarding mutual funds. I have 3 SIP running for the past 1.5 years, as I was a newbie to MFs then, I got it opened through an agent did not realise that I would be investing in regular funds instead of direct. Now I wish to switch my MFs from regular to direct plan as they offer a slightly better return and I plan to keep these SIPs for long time.
The question I want to ask is, if I switch from regular to direct plan in the same fund using AMC website, the SIPs also shift or they shift only the corpus amount and continue with next month's EMIs in the old fund(Regular). In that case, do I need to close the old (Regular) SIP and start new SIP in the direct plan?

Only the available funds can be switched. You will have to cancel the existing SIP in the regular fund and start a new one in the direct fund.

Also there are Capital gains tax implications when you do a switch from Regular to Direct.

DigitalOne has a very valid point. If you switch from the regular to direct fund, there will be tax implications. I would suggest you first check how much the fund has appreciated. If you have been doing this for 1.5 years, then as there was a big fall in the market within this time frame, you may have some good appreciation and this will attract tax, and STCG tax for the SIP amounts made within the past one year. If you are ok with the taxes, then you may switch.

Otherwise, keep the existing funds in the regular fund and stop the SIP. Start fresh SIP in direct funds.

Redeem the funds from the regular fund in the future when need arises.

Thanks sir for the prompt reply. The capital gain was less than 1L so I think it would be exempted from capital gains tax.
If I close the SIP in the regular fund and start another SIP in the direct fund, will it continue and add to the previous corpus amount or will be separate from it? Thanks

If you use the same folio number for both the switch from regular to direct and for the new SIP, and keep the fund option same (like direct-growth) the SIPs will get added to your already existing amount that got switched to the direct fund. The key is to use the same portfolio number. If you use a different portfolio number for the new SIP, then the amounts will remain separate.