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Mutual funds & ETFs

What to do if your MF holds perpetual bonds?

Perpetual bonds have caused some sleepless nights for fund managers after SEBI’s circular earlier this month. On March 10th, SEBI issued a circular capping the debt scheme exposure to perpetual bonds at 10% and also laying down new rules how these bonds should be valued in debt scheme portfolios. We wrote a short take on it last week suggesting that you wait for clarity. SEBI has now come up with one more circular offering some clarification.

Vidya Bala March 23, 2021 8 Comments

General

Monika talks money

A good way to gauge the state of personal finance books that are India-centric would be to visit the ‘Book’ section of Amazon’s India website.

If you go to the American Amazon.com, you will find the ‘Business and Money’ section, under which you will find ‘Personal Finance’. Boom, done – you have access to a treasure trove on all topics PF.

If you go to the Indian Amazon.in, you will find a ‘Business and Economics’ section, and under that, you will find ‘Analysis and Strategy’, ‘Economics’, and ‘Industries’. If you, by power of logical reasoning and elimination, go into the first category, you will find, along-side books about American personal finance and self-help (Dale Carnegie!), a smattering of books by Indian authors to help Indian investors.

A handful, at best.

No doubt, this is an emerging section, but the current state of limited selection is properly captured by just browsing through these aisles.

Monika Halan’s ‘Let’s talk money’ is, especially in this context, a much-needed publication that addresses a sore need in the Indian market.

Srikanth Meenakshi March 22, 2021 4 Comments

Mutual funds & ETFs

Which debt funds to hold now and other questions, answered

Debt funds are back to worrying many of you. Returns are dipping, there’s a lot of talk on yield movements both at home and in the US, there’s the question of where rates will head now. Over the course of the past several weeks, we have fielded several questions from you on what this means and what you should be doing with your debt funds.

We’ve written extensively on the developments in the debt space in different articles. But here’s answering the questions that appear to worry you the most.

Bhavana Acharya March 21, 2021 23 Comments

Mutual funds & ETFs

Mutual fund expense ratio – what it is, how it works

The mechanism of expense ratios in mutual funds is a befuddling topic for many investors. Over the years, questions associated with expense ratios have been among the most frequent that I have answered.

This essay is an attempt to answer questions on this topic in a patient and clear manner. But before we find out how it works, let’s understand a bit of what it is.

Srikanth Meenakshi March 20, 2021 No Comments

Mutual funds & ETFs

2 target maturity government bond fund NFOs – Should you invest?

Target maturity funds invest with a stated maturity and pay you back when the maturity is reached. You can call them an FMP but one that is open-ended and takes fresh inflows and outflows.
With yields beginning to move up, more funds are now beginning to talk about ‘roll down strategy’ or a strategy where a maturity date is fixed thereby ensuring that the portfolio’s average maturity steadily falls as it nears maturity. For example, a 2027 target date fund will have a 6-year maturity now and a 5-year maturity in 2022 and so on, until the maturity reduces to near zero in 2027.

Vidya Bala March 18, 2021 12 Comments

Short Takes

Investing and watching India play cricket

I like to approach my investing with the same mindset that I approach watching India play cricket abroad. The keyword there is ‘abroad’.

See, when India plays abroad (and I mean the SENA countries – South Africa, England, New Zealand and Australia), my expectations are low. When they do better, I am elated, and when they lose, I don’t get too depressed.

I think watching our investment portfolio should be the same. Having realistic expectation means, a boom market (like now) makes us real happy, but a downturn does not faze us much. There is, let’s just say, downside containment of our disappointments 🙂

On the other hand, if we look at our portfolio like watching India play at home (like right now), we expect too much, every defeat is a an unexpected disaster, and a win feels like just ok.

Not good feelings; And makes us act rashly with our portfolio (like ‘resting’ Rohit Sharma :-/ )

How do we form the right expectations, you ask? Glad you did – please read this article from our archives – it’ll set you right!

Srikanth Meenakshi March 18, 2021 1 Comment

Stocks

Suryoday Small Finance Bank IPO – Invest or avoid?

Small finance banks, with their focus on small ticket loans for urban and semi-urban India, are a play on the underpenetrated market for financial products in India. Yet, after stellar performances soon after their IPOs many of these stocks have seen their valuations levelled. So, when a new candidate – Suryoday Small Finance Bank IPO (Suryoday) comes out in an overcrowded primary market, how should it be judged? Read on.

Vidya Bala March 16, 2021 4 Comments

Stocks

Kalyan Jewellers’ IPO – Should you invest?

Kalyan Jewellers’ IPO is upon us and Aarati is here with the most detailed analysis and opinion piece on the offering – Should you buy or not? Either way, read this article first!

Aarati Krishnan March 15, 2021 12 Comments

Short Takes

Prof Scott Galloway

It’s not easy to impress me.

OK, that’s not true. I am not that hard to impress; so let me rephrase that.

It’s not easy to impress me a lot in a short time.

But that’s what happened today – I did not wake up on a Sunday morning looking to get impressed by the writings of a boomer professor in New York.

First, I watched a clip from Friday’s Bill Maher show (big fan) – one guy that spoke was very animated, and very impressive.

Srikanth Meenakshi March 14, 2021 2 Comments

Short Takes

Short take: What the SEBI’s circular on perpetual bonds means

SEBI’s recent circular on restrictions on both valuations and holdings of perpetual bonds by mutual funds has created a storm – not just among the fund manager community but all the way up to the Ministry of Finance.

Vidya Bala March 13, 2021 No Comments

Mutual funds & ETFs

Best ELSS Funds – 5 factors to consider

What are the best ELSS funds?
There’s a lot of research work that needs to be done when finding the best ELSS fund. You need to look at factors such as:
Consistency in performance against peer group and benchmark
Volatility in performance
Ability to contain downsides in a correction and ability to deliver in bull markets.
Investment strategy across market cap
Expense Ratio (the lower, the better)

Gaurav Menon March 12, 2021 No Comments

Mutual funds & ETFs

Hybrid funds: Should you invest in them?

“Can I invest in hybrid funds” is a question that we often get. Ranging from the aggressive equity-oriented funds to arbitrage funds, the broad term is ‘hybrid’. We have already discussed some of the key categories of hybrid funds in our earlier articles.
However, this one will cover all of them in a single essay and let you know when and whether you need them.

Vidya Bala March 11, 2021 No Comments

PrimeInvestor - Articles and Reports

What to do if your MF holds perpetual bonds?

Monika talks money

Which debt funds to hold now and other questions, answered

Mutual fund expense ratio – what it is, how it works

2 target maturity government bond fund NFOs – Should you invest?

Investing and watching India play cricket

Suryoday Small Finance Bank IPO – Invest or avoid?

Kalyan Jewellers’ IPO – Should you invest?

Prof Scott Galloway

Short take: What the SEBI’s circular on perpetual bonds means

Best ELSS Funds – 5 factors to consider

Hybrid funds: Should you invest in them?

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