[download2live]

Originally Posted by MT_Hyderabad

I lost a lot in stocks (never realised the loss, it is on paper).

I started investing in Bharat22 ETF also called Icicib22 ETF. The money is safe and growing gradually, even with wars and elections and what not.
I intend to pull out all my money from stocks and put it in Etfs going forward, just want to reduce my loss somewhat more before going full throttle on ETFs.

Welcome to the world of Bogleheads !
In case you have not heard of the term, it is the term used for people who follow the philosphy of John Bogle.

[SmartCat]

Originally Posted by MT_Hyderabad

I started investing in Bharat22 ETF also called Icicib22 ETF. The money is safe and growing gradually, even with wars and elections and what not.

Over a long period of time, index ETFs will do quite well because they follow 'momentum investing' strategy. Undeperforming stocks are booted out while outperforming stocks make an entry. That is, index ETF stock composition is changed frequently.

However, both Bharat22 ETF and its close cousin CPSE ETF are "disinvestment ETFs". They are not like index ETFs (Nifty, banknifty, next50, midcap, nasdaq, s&p500 etc). Bharat22 ETF and CPSE ETF composition will not change much. This is a vehicle for GOI to offload the shares of companies they own. So invest in these two ETFs if you want to get exposure to PSU sector.

I intend to pull out all my money from stocks and put it in Etfs going forward, just want to reduce my loss somewhat more before going full throttle on ETFs.

Yes, you can have a well diversified portfolio now with just ETFs. You can now get exposure to:

- Indian equities (Largecaps & Midcaps, sectoral ETFs)
- World equities (S&P500, NASDAQ, Hongkong)
- Precious metals (Gold, Silver)
- Fixed income (Liquidbees, Bharatbond, Govt bonds)

https://www.nseindia.com/products-se...aunched-on-nse

[alphamike_1612]

Can someone clarify about ETF(MON100) vs FoF in regards to Motilal Oswal Nasdaq 100?

The expense ratio for the ETF is 0.54% and that of the FoF is 0.2%.
99.97% of the FoF holdings is MON100.

To me this means that it is more expensive to buy the FoF than the ETF, since the Expense Ratio is only 0.54 for the former whereas for the latter it's 0.74.

Am I making a mistake in my calculations?

If this is correct, why would someone want to invest in the FoF and not the ETF?

Thank you.

[SmartCat]

Originally Posted by alphamike_1612

The expense ratio for the ETF is 0.54% and that of the FoF is 0.2%. 99.97% of the FoF holdings is MON100.
To me this means that it is more expensive to buy the FoF than the ETF, since the Expense Ratio is only 0.54 for the former whereas for the latter it's 0.74.

Am I making a mistake in my calculations?

When you invest in FoF, you pay 0.54 + 0.2 = 0.74%. The ETF will treat the MF like any other investor and charge 0.54%

[alphamike_1612]

Originally Posted by SmartCat

When you invest in FoF, you pay 0.54 + 0.2 = 0.74%. The ETF will treat the MF like any other investor and charge 0.54%

Thank you.
But this brings forth the next question,
What, if any, benefits are being provided by the MF for the extra 0.2%, other than there being a fund manager?

Since it is eventually tracking the index, it is a passive fund and doesn't need to be actively managed, would this assumption be correct?

[saket77]

Originally Posted by alphamike_1612

Thank you.
But this brings forth the next question,
What, if any, benefits are being provided by the MF for the extra 0.2%, other than there being a fund manager?

Since it is eventually tracking the index, it is a passive fund and doesn't need to be actively managed, would this assumption be correct?

For buying or selling the ETF, you will need liquidity in the same. For eg. if there are no buyers for the ETF, you will not be able to sell it on terminal. But if going by FoF route, the AMC is liable to pay you on the basis of applicable NAV for the T day.

Plus holding the ETF manndatorily requires you to have a Demat account (an expense) which is not the case with FoF.

Hope that clarifies.

[SmartCat]

Originally Posted by alphamike_1612

What, if any, benefits are being provided by the MF for the extra 0.2%, other than there being a fund manager?

Originally Posted by saket77

For eg. if there are no buyers for the ETF, you will not be able to sell it on terminal. But if going by FoF route, the AMC is liable to pay you on the basis of applicable NAV for the T day.

ETF investing has something called 'impact cost' and this cost is invisible but borne by the investor.

Let's say MON100 ETF price is Rs. 100 and you want to invest Rs. 500,000. Naturally, you would expect to own 5,000 units of ETF after executing the trade. However, when you actually execute the trade, you might get only 4,975 units because the trades are executed at Rs. 100.5 instead of Rs. 100. In this trade, the impact cost of the trade is 0.5%. You pay this both at entry and exit, depending on the liquidity of ETF at the time of execution. This cost is higher for exotic/less popular ETFs but will be negligible for something like NIFTYBEES.

You can also try to reduce the impact cost of investing in less popular ETF using limit order, but such orders might not be executed at all. You have to manually cancel the order and enter again frequently. But when you invest in ETFs via a mutual fund, this impact cost will be reduced drastically. The mutual fund will use 'order execution software' to split orders into smaller units at different prices (decimals like 100.05, 100.10, 100.15 etc) across time.

[DigitalOne]

If I am not wrong, an FoF is taxed like a debt fund, even though the underlying fund(s) may all be equity funds. That's a minus for an FoF.
FoF investing does not need demat and trading accounts. So that's a plus.

[yadunath]

Originally Posted by sandeepmdas

tsk1979, Actually I've been thinking about opening a thread in TBHP regarding finance and investment. Thanks for posting.

Few online communities have the passion and sincerity of our members. I think we need a channel to discuss stock and investment matters online. After all cars are owned and driven by money....

IMHO, opening a demat+savings account in ICICI bank is the best way to start.
The following are the leading online broker sites that I visit.

ICICIdirect.com - see the online university and demo
sharekhan.com
motilaloswal.com

Actually, that's a great idea. (referring to opening a channel on finance and investment). You will never learn anything from the brokers' websites. Those are very basic things. It's important to get a good grip on technical analysis and more importantly on the wave model and cycle analysis. I am quite deep into those subject myself and I am thinking to start a paid web-site where I like to share the long and medium term direction of the market. I am an author too. I had written a book titled "Great Reset" on the stock markets released in the year 2000 post Mar' 20 crash. The crash of 2020 was expected and predictable based on cycles. I had personally advised people in Nov'19 that markets had topped and it was dangerous to invest. I had also posted on LinkedIn at that time.

[sandeepmdas]

Originally Posted by yadunath

Actually, that's a great idea. I am an author too.

That was a post from 2006, and what I told in the post has never happened. A kid was born in 2006 and that kiddo is now about to sit for his higher secondary exams. Enuff said.

No kidding, with a resume like that you are 100x more qualified than I to do the job. I'm sure you'll find a lot of followers and tons of queries.

[deetee]

Generally it is believed that Market (Nifty ) and INR are inversely related. That is, if INR falls , NIFTY goes up and vice-versa. But, now, it seems like both are likely to fall. What does that mean? Can someone shed some light on these currency and market relations.

[SmartCat]

Originally Posted by deetee

Generally it is believed that Market (Nifty ) and INR are inversely related. That is, if INR falls , NIFTY goes up and vice-versa. But, now, it seems like both are likely to fall. What does that mean? Can someone shed some light on these currency and market relations.

USDINR rises and falls primarily because of dollar outflows/inflows. If dollars are rushing into the country, Rupee will strengthen (meaning USDINR will fall). That's because they are selling their dollars and buying Rupees.

Now Dollars rushing into our country is invested as FDI or into stocks, bonds etc. So NIFTY tends to go up. And the reverse too happens - USDINR is rising means FIIs are probably selling stocks/bonds, converting their rupees into dollars and fleeing the country.

But there is never a perfect negative correlation between NIFTY/USDINR. For eg: FIIs might be buying NIFTY, but HNIs/DIIs/Retail might be selling stocks.

[yadunath]

Originally Posted by deetee

Generally it is believed that Market (Nifty ) and INR are inversely related. That is, if INR falls , NIFTY goes up and vice-versa. But, now, it seems like both are likely to fall. What does that mean? Can someone shed some light on these currency and market relations.

When INR goes down (becomes weaker), any appreciation in the stock (which is happening in Rupee terms) gets neutralised in dollar terms. If the stock doesn't perform well, the loss gets exacerbated in dollar terms because the investor takes the hit both on stock performance and currency weakness. That should explain the inverse relationship.

Nothing can be generalised 100% of the time. Indian stocks are highly overvalued and will go through correction. Based on cycles, my assessment is that stock markets won't get interesting until 2024.

[thirugata]

Originally Posted by deetee

Generally it is believed that Market (Nifty ) and INR are inversely related. That is, if INR falls , NIFTY goes up and vice-versa. But, now, it seems like both are likely to fall. What does that mean? Can someone shed some light on these currency and market relations.

When the pessimism/fear is at its peak, every asset class gets sold (including gold) and all the money rushes to $. So when you see sharp fall in market this phenomenon occurs.

[BaCkSeAtDrIVeR]

How serious are the issues raised against Adani group? I have ignored the group shares so far but the price for looks tantalizing. Have avoided politically connected groups so far - Birlas, Ambani, Bajaj, all airlines, sugar, alcohol, etc. But in a still over-regulated legal framework, political connections are inevitable.

I can't figure out whether my approach is vindicated by these events, or whether there is a real buying opportunity.