How have the Factor Indices performed since launch?
Personal Finance Plan » Mutual funds
by Deepesh Raghaw
2w ago
Over the past few years, NiftyIndices and S&P have launched various factor indices (Value, Momentum, Low Volatility, Quality, Alpha, or multi-factor) for Indian stocks. And the AMCs have launched various index funds on such indices cashing in on the popularity and the latent demand from the investors. So far, so good. When any index is launched, there is a launch date and there is a base date. Launch date is the date on which the index was launched. And the live data for the index is available after the launch date. Base date is an old date from which the index provider has provided the ba ..read more
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Which should be your first Equity Mutual Fund?
Personal Finance Plan » Mutual funds
by Deepesh Raghaw
1M ago
Which was your first equity mutual fund? Mine was an equity fund from Fidelity about 17-18 years ago. I picked up this fund after reading the best-selling book “One up on Wall Street” by legendary fund manager Peter Lynch. During 80s and 90s, Lynch worked as a fund manager with Fidelity. I was so impressed with his writings that I picked up a fund from Fidelity AMC in India. Yes, Fidelity had presence in India and later sold their business to L&T MF. I don’t remember when I exited this fund but am sure the fund helped me learn a few things about how markets work. Well, at least for us (exi ..read more
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Life Insurers launching Index Funds? Where is the catch?
Personal Finance Plan » Mutual funds
by Deepesh Raghaw
4M ago
Recently, I read about a couple of life insurance companies highlighting the launch of small cap index funds.  Link 1 Link 2 This is a new phenomenon. You don’t often see a life insurance company launching index funds. Usually, mutual fund companies do that. Hence, this came as a surprise to me. However, there is a catch. To invest in that small cap index fund by a life insurance company, you will need to invest in a ULIP (Unit-Linked Insurance Plan).  A life insurance company can add an index fund to its suite of ULIP funds. But you can invest in these funds only if you invest in a ..read more
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Which factors drive your Portfolio Performance? How to find and deal with an underperformer?
Personal Finance Plan » Mutual funds
by Deepesh Raghaw
7M ago
Worried about a poorly performing equity mutual fund in the portfolio? Before you answer the above question, I have a basic question. How do you decide that a fund has underperformed? Do you judge based on returns you have earned in the fund (your returns experience)? OR Do you measure based on 3-year, 5-year, 10-year returns or rolling returns? Do you compare with other equity funds in the portfolio? OR Do you compare performance against the respective benchmark? Do you use just focus on returns or do you use a risk-adjusted measure? Do you focus on XIRR or absolute returns? In this post, let ..read more
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Nifty 50 and Sensex at all-time highs: How to approach investments?
Personal Finance Plan » Mutual funds
by Deepesh Raghaw
8M ago
The Indian stock markets hit all-time highs on Friday (July 14, 2023). The bellwether indices Nifty 50 and Sensex closed above 19,500 and 66,000, respectively. If your portfolio had a decent equity allocation, you would be a happy investor today. Your portfolio must be showing healthy gains. However, your investment journey is not yet complete. A bigger question bothers you: What to do now? How to invest when the markets are at all-time highs? Should you sell all (or a part) of your portfolio and reinvest when the market falls? OR Should you stop SIPs and restart when the markets have correct ..read more
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After change in Tax rules, Are Debt Mutual Funds still better than Bank FDs?
Personal Finance Plan » Mutual funds
by Deepesh Raghaw
1y ago
Any gain on a mutual fund with less than 35% exposure to domestic equity will be considered short-term capital gain, irrespective of your holding period. This new tax rule has been introduced as an amendment to the Finance Bill, 2023 and has come as a shock to investors. In this post, let’s understand the change and how this affects your investment planning. This change in tax rule takes away the biggest advantage of debt funds over bank fixed deposits. Do we still have aspects where debt funds score over bank fixed deposits? Which fund categories are affected? An obvious answer here is debt f ..read more
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Don’t compare: 1-year Bank FD Interest Rate against Past 12-month Debt Fund returns
Personal Finance Plan » Mutual funds
by Deepesh Raghaw
1y ago
Where do you prefer to make fixed income investments? Bank Fixed Deposits or a debt mutual funds? How do you decide which is better? The one that offers higher returns, right? And how do you find that? A common way is to compare the current 1-year bank FD interest rate with trailing 12-month returns of a debt mutual fund. However, that’s not the correct approach. And in this post, we will see why. Now, if that’s not the correct approach, what do you compare 1 year FD returns against? Before we get there, a quick comparison between Bank FDs and Debt Mutual Funds Bank FDs vs Debt Mutual Funds Sa ..read more
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Tata Nifty Midcap 150 Momentum 50 Index Fund: Review
Personal Finance Plan » Mutual funds
by Deepesh Raghaw
1y ago
Tata MF has launched Tata Nifty Midcap 150 Momentum 50 index fund. Picks momentum stocks from the midcap universe. The back test results are stunning, far better than any of the factor products I have reviewed so far. But and there are always buts. Usually, I add the warnings/caveats towards the end of product review post. However, the back test results for Nifty Midcap 150 Momentum 50 index are so good that I thought of starting with the caveats first. Here you go. Past performance may not repeat in the future. For this index, there is no past performance in the first place. The entire data ..read more
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HDFC Nifty Growth Sectors 15 ETF: Review
Personal Finance Plan » Mutual funds
by Deepesh Raghaw
1y ago
HDFC has launched 3 smart-beta (factor) ETFs. HDFC Nifty 100 Quality 30 ETF: While I have not written a dedicated post on this index, I have compared the performance of a Quality index (albeit a different one. Nifty 200 Quality 30 index) in many posts. I do not expect the performance to be too different. HDFC Nifty 50 Value 20 ETF (NV20): Have reviewed the performance of this index (Nifty 50 Value 20) before and the findings were favourable. You can read about this index and how it is a mix of quality and value factors here. HDFC Nifty Growth Sectors 15 ETF: We have never discussed this index ..read more
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For Equity Investments, How long is long term?
Personal Finance Plan » Mutual funds
by Deepesh Raghaw
1y ago
Consider giving your equity investments a longer rope. Data suggests 7-year and 10-year investment horizon and SIP tenure increase chances of “good” returns. Longer is better. With shorter durations, you are leaving a lot to chance. Additionally, the performance of the small cap index fails to impress. Equity investments do well over the long term. We read and hear this all the time. Don’t we? Fine. Equity investments have indeed done well in India over the long term. However, there is still one question that we must answer. For equity investments, how long is long term? As per tax laws, a hol ..read more
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