Report Card of 50 Funds that have lasted for 25 Years

 https://m.economictimes.com/mf/analysis/what-is-tax-advantage-of-investing-in-balanced-advantage-funds/articleshow/93892495.cms?utm_source=newsletter&utm_medium=email&utm_campaign=NewsDigest&utm_content=MF&utm_term=2%20%20%20%20%20&ncode=de011d7747e1706e6e95a58801b4862ccf0c9deefee08be5d3823fe9742296683efddda0c489f6361b1cf35adff8be22e6d036614ce4ceda0c1de1f9232680fe678c77b8a101a87ac03cf2d107c4cd35

Thank you CE Swapneil Tamhankar for the above link...

This is so very correct and thank you for sharing it.

Though few of the mutual fund companies have changed hands like Quant and even our dear old HDFC has been taken in over from its previous avtars.

But what is also important to note here is that most of these returns have come from the era of 2.5% entry load and the same amount as exit load.

This list of 50 funds also gives us one very important lesson...

After our wise selection of funds , if in the successive years you find that they are not really the best performing anymore like the recent under performance of Parag Parekh Flexi cap or a little older HDFC equity then you should not get disturbed.

Another lesson here is upon the longevity of AMC itself... No AMC can just close shop and run away. It has to find a buyer who will buy it's business and also pay it a premium for the brand. This has been seen so many times in these 25 years.

For the extremely long time span that you are starting to invest , a  lot of changes will happen in the economy of the country and the mutual fund industry but a diversified equity fund will be capable of handling all those changes.

As a assurance to all the members on this group and even those who have left it now after achieving their financial independence,  I wish to say this-  that mutual fund industry in India is one of the most heavily regulated one's in the world.

The regulation is so heavy that it actually makes the business very unattractive to those who are in the distribution chain.

Since continuously there are people joining this group and leaving after few years I have to keep repeating myself that please start your investment journey as soon as yesterday with a substantial outlay into it if you want some good result.

It pains me no end to see... That those who are earning over 5 lacs a month are investing 5 000 via SIP.

Not starting early and not starting with a noticeable investment amount will make you lose the opportunity as and when it arises.

And as you may have seen in the past few years this opportunity comes overnight and leaves overnight as well.

You may not have noticeable returns for one two or three years but in just one month it may cover for all those years of under performance.

So it is my experience  but your understanding -your money -your decision - your endeavor and your gains.

Why the Passive funds will overtake Active funds Unnoticeably

                           Why the Passive funds will overtake Active funds Unnoticeably

There is a concept of efficient markets in international finance and Capital Markets.

This refers to the  true and transparent valuation of all the companies and the same data being available to everyone who is interested, in real-time across the world.

 In the market there are a lot of stories and rumours and perceptions regarding various policies of the government and the corporate world. In the developing economies like India due to the various Nexus between the corrupt government officials and the corporate world this information is not circulated and rather the Mis information is stored widely.

If you will notice the developed economies do not have many  public sector units like India in fact their Federal Bank which is the central bank like our own RBI is also privately-owned .

This results in fewer people having access to internal happenings of a particular company and even if they have such information, the controls are so strict that no-one would consider indulging in insider trading.

In a developing economy due to absence of sufficient and deterrent penalties even if such practices are uncovered the punishment is largely like a slap on the wrist.

In developed economies like US, the relevant public vigilance body has sufficient incentive to keep snooping upon people with grave misconduct and the penalties are severely and sufficient deterrent. Best example of this is Rajat Gupta the founder of ISB Hyderabad and A very respected name in the US corporate circles and his Srilankan accomplice.

In India so far even if sach malpractices are discovered the penalty is largely monetary as was in the case of HDFC MF front desk trading.

 Because of this information being available to some select people and the fund managers, they tend to leverage this information and hence the active funds which they manage, perform or try to outperform the broader market and the index funds which are dependent on it.

However things are changing and SEBI has become a toothed tiger and has started observing and handing out penalties and in the same fashion RBI is also becoming sufficiently aware.

Recently the prize for reporting (whistle blower) successful insider trading has been raised from 1 CR to 10 CR.

All these small steps will lead to  the information being reported on the portals regularly as is presently being done by every company to the stock exchanges and SEBI.

 PSU companies like IRCTC are reporting even the running and stopping of trains to SEBI and the exchanges.

I distinctly remember as late as 2018, the heads of most of the mutual fund companies and also Dhirendra Kumar of value research used to say that active and will still rule the roost for a decade whereas I was very sceptical of their stand.

 In 2007 when gold bees NFO was introduced, I knew that the change had arrived.

Few of the AMCs who introduced the etf and other passive funds did it in imperceptible way that few noticed the arrival.

Now you can see the steady rise not only in the AUM of index and ETFs but also the trades volume.

Passive funds did take the market by surprise after March last year but me not continue to do so in the shorter term.

And now slowly you will not only have asset funds for equity but also debt securities.

About 10% of the employees provident Fund money is channelled into SBI Nifty ETF.

Even though Nifty BeES is an older ETF, because of the above reason it's AUM is smaller but traded volume is much higher.

Strategies: even with the short history of passive funds now you have various mutations and combinations to think of e.g. whether to go for Nifty and junior Nifty separately or just invest in nifty 100.

All should you invest in nifty equal weight.

Should you invest in NV20 or in Nifty low volume.

Soon the choice will become even more.

With the clear choice of the investor to directly invest because of technology , the process will be simpler too.

So please be vigilant. Something which is simple can also lead to mistakes.

Do your own research; take in the articles that you read as information and not knowledge. Knowledge will be what you will do and achieve on your own.

Since the field is new the advisors will know as much or as less any of you.

God speed thee.

For Finance group ( FINWORLD@SEA ) now on Telegram

For Finance group now on Telegram

Despite all of us being familiar with finance and market requirements there is often need to to repeat oneself for the benefit of those who come later in the day.

Whenever person joins our group we try to introduce him to the basic tenets and options available for Investments. Our focus is not to be a billionaire overnight, Rather to gain experience and wealth slowly and steadily.

Our focus is not to become the know all of the finance world rather to be able to distinguish between the rights and wrong of investment so that the unscrupulous elements in the society do not try to get the better of us and fool us.

During our journey of investment our focus should be to ultimately  become independent financially and not be dependent upon the employer for the unscrupulous companies in the market over whom we have no control.

 I would like to advise all those who have joined later in the day please do not be swayed by empty promises and distant mirages.True wealth grows in an organic way in keeping with the economy of the country.

The basic rules of economics dictate this, that you cannot outperform the economy of a country consistently.

Hence I would like to ask newcomers on the group to please first read the books that I have shared above and visit my blog holisticrajeeve.blogspot.com and also the Facebook page Kaushik's FINWORLD.

Since the book was written quite a few years ago a lot has happened in the financial world which calls for upgradation of our strategy  and priorities.

In view of this I would like to to enumerate the following:

1. Please take a simple clean Vanilla and cheapest term plan early  in life.

2. Take a floater health insurance for yourself and the family irrespective of what the company covers you for. The family may mean your parents before and after your marriage also.

3. Target to keep 8-10% per year in your fcnr or nre fds. However at no stage you need to let it go beyond 50 lacs INR.

4. Open the PPF for spouse and children. Sukanya for daughter below 10.

5. Insure your house against natural causes, fire and theft.

6. Having done the above please distribute your monthly salary between 3 to 4 AMC or asset management companies which is an acronym for mutual fund companies.

Deposit this money  in liquid funds of those companies and plan a STP or systematic transfer plan into  4 or 5 equity funds.

7. Your equity funds can be suggested as follows:

- 1 index fund investing in in nifty or Sensex plan.

- one junior Nifty index fund which is also called next Nifty.

- one multicap fund which at the moment can be PPF flexicap fund or any other suitable one.

- 1 fund investing in the international market like PGIm Global opportunity or most N100 , or S&P500 or PGIM emerging markets fund etc.

- as a personal choice I would also like that you invest in one small cap fund which will be very volatile and aggressive but will give a boost to your portfolio.

Keep your investment ongoing permanently and without any break.

Do not be distracted by the market going up down or sideways. The STP  will ensure that your money is invested round the year 52 weeks.

- all the expenses should be met from the remaining money of your salary after the above investment has taken place.

- for buying or making a house do not hesitate to take a loan from a proper institution. By virtue of any calculations the outgo in form of interest will always be lower than the return on your Investments.

- if you will follow the above path it will only be a matter of time before you will achieve your goal and that is is the financial independence.

One final point I wish to reiterate ...

Very often we asked the question of how much would be sufficient for a retired life. For this I had come up with the figure which many found a little daunting. Truly enough a 30 year old may find it difficult to raise 4 cr before retirement and hence may feel discouraged.

Hence I have a separate parameter to enable everybody the flexibility of age as and when one can retire.

So as per my my experience with self and other colleagues if for three years your CAGR on your portfolio is more than annual expenditure then you can assume that you have sufficient funds to last you till you find another stream of income. However if your responsibilities and goals like children's education and marriage are over then certainly you are financially independent and can pursue what you wish in life.

Amen!!!

REGARDING NEW POSTS AND ARTICLES BY ME

 REGARDING NEW POSTS AND ARTICLES BY ME

My interaction with my fellow Mariners takes place through various social media channels apart from the official Telegram group called FINWORLD@SEA .

Some times I have to repeat myself because lot of Mariners while on ship, exit from the group because of expensive data charges.

So in order to provide them with a singe point of reference where they can check for guidance before asking further questions , I would be posting all those posts on this blog. 

So this just to inform you that you can always come back here to check if you have missed anything.

I would avoid posting any copyright material.

In case you have a question you can reach out to me on Whatsapp (9808640497) or Telegram .