Team-BHP - The Mutual Funds Thread

Quote:

Originally Posted by vaibhav_a_a (Post 5802135)

So the news two days ago was that HDFC restricted new SIP regns into this fund : https://www.business-standard.com/fi...1000716_1.html

If you read this and other related articles, it says the SIPs are capped at 10K INR per month but no details on lumpsum.

Lumpsum investments were stopped long back in this scheme.

For those interested in such a scheme, MOTILAL OSWAL DEFENCE INDEX FUND was launched recently and it's not having any such restrictions imposed yet.

Quote:

Originally Posted by Fx14 (Post 5802321)

That's an index fund. HDFC is actively managed MF. Same industry but quite different schemes IMHO.

In a new mail received today, quant MF has made a significant change to its FAQ regarding the ongoing SEBI enquiry on front-running.

Earlier FAQ mail q#1 :

Quote:

1. Has the SEBI enquiry concluded? : No, it a regular ongoing process globally by regulator to collect data and analyze it.

Today's mail (emphasis mine) :

Quote:

This has reference to question 1 of the FAQs in the trailing email. We have been receiving further queries in this regard. We would like to clarify that the data collected by the regulator was not part of any regular process but was part of a court approved search and seizure operation with respect to an ongoing investigation initiated by SEBI.”

In other words, this is not just a fishing expedition; SEBI seems to have something concrete.

More news on Quant, some good, some not so much.

1. Quant's AUM hits an all-time high of 94000 Crores.

https://www.cnbctv18.com/personal-fi...e-19443215.htm

2. Overdependence on a single individual puts the fund at risk, as covered in this longish article. In the same article, different funds with different themes carry same stocks with same exposure!

Quote:

According to other mutual funds, the driver of quant is not a team of professionals but Sandeep Tandon, a maverick. quant has a team of just four in research and fund management compared to 40 in peers like HDFC Mutual Fund and 25 in Kotak Mutual Fund. Its three fund managers Ankit Pande, Vasav Sahgal and Sanjeev Sharma manage all the schemes. Mr Sharma, one of its equity fund managers, specialises in debt securities. The fund managers take home between Rs15 lakh - Rs40 lakh pa (per annum), which is a fraction of the market rates, according to media reports. According to industry sources, all investment decisions are taken by Mr Tandon. Investors certainly cannot complain, though.

Quote:

Right now, in a fund called 'momentum', the top two holdings accounting for 21% of the assets are HDFC Bank and Reliance Industries. In a scheme called value (which is often the opposite of momentum strategy, the top two holdings are the same two stocks HDFC Bank and Reliance Industries, with a combined exposure of the same 21%.

https://www.moneylife.in/article/qua...ion/74663.html

Quote:

Originally Posted by DigitalOne (Post 5799352)

Below is for information purposes only and not investment advice.

Recently, as an existing investor of Nippon India Multi Asset Fund, I got an email stating they are changing the fundamental attributes of the fund to include Silver ETFs. There are also changes in the name of the fund, and the limits they will invest under different asset classes.

With this change effective 24th July,....

This fund is efficient from a taxation perspective also. This fund holds between 35 to 65% in Indian equity, which means the STCG (<3 years holding) tax is based on your income tax slab and the LTCG tax is 20% with indexation. Over a long term, in combination with a SWP, this fund can be a good tax-efficient diversified addition to your portfolio.

The changes are effective from July 14, as per https://economictimes.indiatimes.com.../111088945.cms

I'm not sure that the taxation part you mention, is correct. Since the scheme plans to invest 50-80% in equity, we can't definitely be sure that equity is maintained between 35% and 65% - which essentially means that we can't guarantee LTCG tax at 20% with indexation.

Quote:

Originally Posted by PearlJam (Post 5807725)

The changes are effective from July 14

The changes are effective from July 24th only. The 14th date in the ET report is a typo, since the report also says the following:

Quote:

The fund house also stated that they are offering an exit window to the unit holders of 30 days from Monday, June 24, 2024 to Tuesday, July 23, 2024 (both days inclusive).

Quote:

Originally Posted by PearlJam (Post 5807725)

I'm not sure that the taxation part you mention, is correct. Since the scheme plans to invest 50-80% in equity, we can't definitely be sure that equity is maintained between 35% and 65% - which essentially means that we can't guarantee LTCG tax at 20% with indexation.

You are right. It is not guaranteed that it will always have LTCG tax at 20% with indexation. The current portfolio has 68% equity including 14% of Foreign equity, which means Indian equity is 54%. Historically, I have seen this fund maintain similar ratio.

Wanted to check with fellow investors that how do they handle investments in funds that have been underperforming for quite some time now. I for example started SIP in Axis Bluechip when it was doing fairly well but when it's performance went down I stopped the SIP and started another one in a new fund. My question is what to do with the already invested amount in Axis Bluechip. Till now I have never switched investments just because one funds starts to underperform since the tax implications come into picture and complicates the whole process. Wanted to check what is the recommended approach in such cases?

Quote:

Originally Posted by Maverick Avi (Post 5823267)

My question is what to do with the already invested amount in Axis Bluechip.

It invests in bluechip stocks. So just let it be for now. You have stopped SIP which is a good thing. Exit or lighten Axis Bluechip only when you want some money for any purpose (eg: downpayment on your next car!).

Do not exit Axis Bluechip to invest in another equity fund. With the kind of luck we generally tend to have with investments, your old fund might start galloping ahead and the new fund might start underperforming. lol:

Quote:

Originally Posted by Maverick Avi (Post 5823267)

Wanted to check with fellow investors that how do they handle investments in funds that have been underperforming for quite some time now.

Have been on a similar boat with a couple of my funds.

1. Axis Focussed 25 Fund - Started in end of 2019 and did well during the pandemic years. But became a laggard around 2023. Sold it all by using the 1 lakh exemption on LTCG taxation. Reinvested the proceeds into my other existing funds. Did not start a new fund altogether.

2. UTI Flexi cap fund - This has been a laggard as compared to my other funds since the past 2-3 years. But unable to exit completely due to the size of the investment. But stopped all SIPs in this fund about 10 months ago. So considering holding on for a while for a couple of reasons - (1) In the past UTI Flexi cap performed better than my other large cap, so acted as a counter weight. (2) Still my returns are 14% XIRR on this fund, which is not bad. If it fell below 12%, when others are doing well, I may exit even with tax implications.

Quote:

Originally Posted by SmartCat (Post 5823273)

Do not exit Axis Bluechip to invest in another equity fund. With the kind of luck we generally tend to have with investments, your old fund might start galloping ahead and the new fund might start underperforming. lol:

Have the exact same fund and had the exact same hope and have done nothing for 2 years now :unhappy

Should have exited at least on principle when the insider trading charges came up

Quote:

Originally Posted by LonelyPlanet (Post 5824106)

I need to park 6Cr in funds for my retirement in 2 years time and start SWP. need 1.5L/ month and looking for a 30 yr time horizon

- Invest Rs. 3 cr in a portfolio of equity funds (direct/growth)
- Invest Rs. 3 cr in a portfolio of debt funds (direct/growth)
- Do NOT opt for SWP. Instead, manually redeem units.
- When selling, choose either debt funds or equity funds, based on whichever value is higher.

For eg, after month 1,

- let's say equity fund value is Rs. 3.1 cr because markets moved up
- Let's assume debt fund value is Rs. 3.02 cr

In this case, pull out your monthly expenses (say Rs. 1 Lakh) from equity fund portfolio. If there is a big market crash, equity fund value might fall below that of debt fund value. During that entire bear market phase, redeem units of debt funds.

Quote:

Originally Posted by SmartCat (Post 5824141)

Thanks for your inputs
I am looking at the following potential options - suggestions Welcome

Debt Focussed
- ICICI Pru Equity & Debt Fund
- HDFC Balanced Advantage fund

Equity Focussed
- Nippon India Nifty 50 Index
- Parag Parikh Flexicap
- Motilal Oswal Midcap
- Quant Small Cap

Quote:

Originally Posted by LonelyPlanet (Post 5824240)

What SmartCat means as debt funds are proper debt funds without equity exposure - liquid, short or ultra short term, gilt, banking & PSU, corporate bond funds etc., not the hybrid funds that have both equity and debt exposure.

Quote:

Originally Posted by LonelyPlanet (Post 5824240)

Parag Parekh has a lock in of 2 years. I am not sure if it is applicable in case of SWP.

I guess with a 6 CR capital and monthly need of 1.5L with no other debts, you should look at:

1. SGB (8 years lock in) 50L (check your limit and divide among family)
2. Pure Debt Funds (Liquid Funds etc) 2 CR
3. Balanced Advantage Fund / Aggressive Allocation Funds 2CR
4. Index Fund 1 CR
5. Small Cap Fund 50L

Do not do a SWP rather a manual redemption.
1. Priority of redemption should be Debt Funds > Balanced Advantage Fund > Index Fund (reverse in case of a bull run)
2. SGB has lock in for 8 years which shall be your hedge for Small Cap Funds
3. Try not to touch Small Cap Funds for another 8 years till your SGB matures.

Basically think that you need to manually redeem 1.5L per month out of 5CR which is 3.6% annual growth which is pretty much doable.

P S: Start with 18L for 1 year in your bank account / liquid fund out of the 6 CR and still try to get 1.5L per month.