[pradkumar]

Hi,

You can look up Beta, Sharpe, Sortino, and Alpha on Google.

Here is a basic explanation:

Sharpe and Sortino ratios measure how well the fund has performed vis-à-vis the risks taken. While Sharpe calculates both upward and downward deviation, Sortino calculates only the downward deviation. The higher the Sharpe and Sortino ratio, the better. A large Sortino ratio indicates there is a low probability of a large loss.

• A beta of 1.0 indicates that the fund NAV will move in same direction as that of benchmark index. The fund will move up and down in tandem with the movement of the markets (as indicated by the benchmark).
• A beta of less than 1.0 indicates that the fund NAV will be less volatile than the benchmark index.
• A beta of more than 1.0 indicates that the investment will be more volatile than the benchmark index. It is an aggressive fund that will move up more than the benchmark, but the fall will also be steeper. For example, if the beta of ABC-Equity (G) is 1.4 - then it’s considered as 40% more volatile than the benchmark index (beta of benchmark index being 1).

A positive alpha of 1.0 means the fund has outperformed its benchmark index by 1%. Correspondingly, a similar negative alpha would indicate an underperformance of 1%. For investors, the more positive an alpha is, the better it is. Alpha is often used with beta, which measures volatility or risk.

For NAV, this is a must read: https://www.valueresearchonline.com/...lc=1&str=10287

See the example (attached image).

Pradeep

Originally Posted by mayankjha1806

When choosing a fund i look at a long term fund (5 years or above) and look at their NAV, CAGR, Now i hear that there is something called Beta and some other indicators in deciding the quality of fund. Would someone explain what this exactly is.

Also whats the experts take on NFO's. I do invest sometimes in them and have been mostly lucky. I am now sitting on mostly 20%+ CAGR on all my NFO's

[sgiitk]

#Brexit ; seems to be here for real. So we are in for volatile times. All bets are Off.

Some quick observations

1. £ crashes. ₹ is also down by almost 90p to the $.

2. Cameron resigns

3. #Brexit may take at least a year. EU will play hardball to i. 'fix' GB and ii. prevent copycats.

3. Strong possibility that the canny Scots (and N Irish), both of whom voted to stay in the EU, may try to quit GB!

4. Many London/UK based Indian firms may now think of moving to Europe.

5. Financial capital of Europe may shift to Frankfurt from London.

6. Many firms may consider shifting manufacturing from GB to the EU. With the erstwhile Eastern Europe both skilled labour and resources may be cheap.

[inder]

Investing in Axis long term equity fund direct plan (growth) today.
50% of my 1.5 limit.

[sgiitk]

As expected. the market does no like uncertainty. As long as it knows it can sup with the devil. markets stabilizing today. The long weekend helped in crystallizing thoughts.

[Abeer]

Is anybody using https://www.fundsindia.com/ as a platform for MF investments? Can you please share the feedback?

[praveen_v]

Originally Posted by Abeer

Is anybody using https://www.fundsindia.com/ as a platform for MF investments? Can you please share the feedback?

This has been discussed a few pages back in this thread. If you are a beginner and need to get used to handling the folios then fundsindia is a good platform to start with. You can start your investments here and get a folio number created with the fund house. Once you have the folio number you can then either continue buying via fundsindia or go to the fund house website and start buying direct plans.

I have fundsindia account and their services are very good. I have however not used their fund advisory services or trading account.

[saket77]

I have a feeling that we are near the peak of the market for the time being. There may not be much upside in the equity investments for now. With this view, I have switched some of my equity funds to debt/ liquid. Some are under lockin (ELSS) and some are still less than an year old (approaching) hence I have held them for the time being to avoid STCG tax and exit loads. My view is to avoid fresh equity purchases at this point.

[sgiitk]

@ssaket77; I will put it differently. the markets are volatile. My Arbitrage funds are liking it. At the moment Brexit seems to have been absorbed, but until some direction emerges this may be a lull before a storm. I am still being cautious, and not investing for the time being. if I invest it will be in a balanced fund.

[deepv]

Originally Posted by saket77

... I have switched some of my equity funds to debt/ liquid. ... My view is to avoid fresh equity purchases at this point.

Saket .. I would agree with you about fresh equity investments, but for existing ones I would prefer to continue with the holdings.
Markets have been making quick up moves post Brexit/Rexit/etc. which lot us would not have expected, but this is what happened last year when Sensex went till around 30K.
You may want to keep some holdings to catch such moves and gains, in any case your fund managers should take care to exit individual stocks as valuations go overboard.

[nowwhat?]

Originally Posted by saket77

I have a feeling that we are near the peak of the market for the time being. There may not be much upside in the equity investments for now. With this view, I have switched some of my equity funds to debt/ liquid.

Please note that stock market strategies rarely equate into equity MF strategies.

In an overheated market, a stock market investor simply sells part or all of his/her portfolio and sits on cash. In Equity MFs, the Fund Manager does that for you. (S)he may simply shift over to debt (up to 35%) and/or invest in conservative stocks that may buck the market.

With Equity MFs, it is always about "Time in the market", not "Market Timing".

Your approach may work for you, it will not work for most others. If you are pessimistic, I suggest you continue your SIPs and not aggressively invest additional funds in Equity MFs.

The only time you should be pulling money out wholesale is when say you are nearing retirement at which time you should stop SIPs and preferably set up an SWP to withdraw cash over a 2/3 year time frame.

As far as outlook is concerned, I see no reason to feel blue. Lower interest rates from a new RBI Governor will be a double whammy: Any lowering of interest rates always results in capital market inflows, plus the interest burden of leveraged companies will reduce resulting in stellar results next year. Moreover GST also seems round the corner.

[ghodlur]

Experts,

I have recently completed 1 yr SIP in a Franklin Templeton MF. The returns are less than average. Hence not thinking of continuing with the same MF but a SIP in a different Equity fund within same MF house. The question is can I do a STP from my existing equity fund to the new equity Fund in which I am planning to start SIP? I was told by MF house that I cannot do so until I complete one year on first SIP investment i.e in August 2016. If I do before that the STP will be subjected to exit load plus the STCG. Is that correct?

Also any advice on how many months should i do STP? The MF house confirmed that STP would be on fixed amount and not units. If it had been on units, I could have done STP every month equivalent to applicable units to avoid STCG. Since it is on Amount, any additional units transferred more than the applicable, will invite STCG.

[sgiitk]

@ghodlur; What was the minimum period in the first investment, if a dozen installments they have a right to block the next one. Some MFs have a commitment of six, and others of twelve installments.

[nowwhat?]

Originally Posted by ghodlur

The question is can I do a STP from my existing equity fund to the new equity Fund in which I am planning to start SIP? I was told by MF house that I cannot do so until I complete one year on first SIP investment i.e in August 2016.

This is news to me and I suspect untrue.

Originally Posted by ghodlur

If I do before that the STP will be subjected to exit load plus the STCG. Is that correct?

Yes.

Originally Posted by ghodlur

Also any advice on how many months should i do STP? The MF house confirmed that STP would be on fixed amount and not units. If it had been on units, I could have done STP every month equivalent to applicable units to avoid STCG. Since it is on Amount, any additional units transferred more than the applicable, will invite STCG.

Units also would not have worked out for you as the number of units would have changed every month depending on how the market was doing back then.

At one time, I used to have a spreadsheet which gave me the exact units invested each month which I would then switch into the new fund and I would keep doing this manually each month until I finally extinguished the old fund.

These days I bite the bullet on exit fees, but try and make sure STCG is negative so that I do not have to take the effort to calculate and pay additional income tax. I would prefer you take the spreadsheet approach I mentioned earlier as that works best.

Also do bear in mind, you do have the option of investing in a new fund house instead. The convenience of a switch should not be the only factor in deciding which fund to invest into.

[ghodlur]

Originally Posted by sgiitk

@ghodlur; What was the minimum period in the first investment, if a dozen installments they have a right to block the next one. Some MFs have a commitment of six, and others of twelve installments.

The period of SIP was for 12 months, Started in August 2015 and last SIP was in July 2016.

Originally Posted by nowwhat?

This is news to me and I suspect untrue.

If the first investment was in August 2015, then STCG will be applicable if I transfer the units before August 2016 i.e completion of one year.

At one time, I used to have a spreadsheet which gave me the exact units invested each month which I would then switch into the new fund and I would keep doing this manually each month until I finally extinguished the old fund.

I do have the details of exact units allocated every month since August 2015, account statement gives those details. Manually switching every month calls for timing the market, STP saves you that.

Also do bear in mind, you do have the option of investing in a new fund house instead. The convenience of a switch should not be the only factor in deciding which fund to invest into

.
Thats there. But switching to a new fund means redeeming the units, will have to be shown in the ITR. Instead if I switch within fund house and ensure STCG is not applicable, I dont need to show in ITR. This was told by a CA friend. Dont know how true. STP is a form of redemption, isnt it?

I need advise to choose between Franklin Templeton Blue chip fund, Opportunities Fund or High Growth companies fund for my next SIP.

[sgiitk]

@ghodlur; Many fund houses do not penalise you if you switch within the same type of funds, inside the fund house. However, where STCG is concerned you are bending the rules, and know it.

I have been a firm liker of the FI BCF though over the past year it has not done that great in terms of returns. In fact large cap funds have been having a tough time.