[deepakshenoy]

Originally Posted by Fx14

Warren Buffett — ‘Wall Street is the only place that people drive to in a Rolls Royce to take advice from people who ride the subway.’

Sadly finance is a world now where people who ride the subway give their money to people who have Rolls Royces

But that is true democratisation of finance - when anyone can get good asset managers, regardless of how much money you have.

Originally Posted by DigitalOne

As I wrote just yesterday, I have gained immensely from your blogs and newsletter. I started investing in Momentum MFs (though very late and missed most of the 2022-23 gains) after reading blogs in CapitalMind.

Many thanks

We'll take time to get a SIF going, it's a whole new process. We are active managers so for the time being we will be mostly Active. Thanks a ton, and hopefully our MFs will be of help!

[pradster]

Originally Posted by deepakshenoy

I'm here

Welcome to the forum Deepak. As someone who has known you and about you for a while (and as a capitalmind Subscriber) super happy to see you here!

[FAIAAA]

Originally Posted by prajwalmr62

I'm currently investing in Parag Parikh Flexi Cap fund and Quant Small Cap fund in 80-20 ratio. I was exploring momentum funds to diversify a bit and hopefully to get a better return.

I'm a very passive investor and do have a long time frame for equity. I re-balance funds once a year, and do not monitor fund performances frequently. I'm thinking of using momentum funds for shorter duration, preferably 3 year time frame for re-balancing. Would you suggest momentum funds for someone like me? If so, what is the ideal percentage according to you?

Hi, this has been discussed multiple times on this thread earlier. You can refer those.

Before I reiterate some of the principles, a disclaimer - neither am I associated with the Financial Services I Industry or Capital Markets in any way or am I a RIA. Just a fellow BHPian who has studied enough to have a view and sharing it for educational perspectives of all here in the forum -

1. More than fund selection , Asset allocation is key and makes most of the returns. A) different asset classes perform differently in different market and time cycles. ( example - last one year Indian equity markets have taken a breather due to global macro factors and domestic factors such as high valuations and slowdown in earnings growth. In such a scenario, all equity MFs have given similar returns. It's Gold and Debt ( long duration, dynamic) that has outperformed) B) Since one doesn't know what will fire when, it's prudent to have your asset allocation across - Equity ( Domestic and Global), Debt, Gold, Real estate or REITs etc. I will focus here on the first 3. Decide yourself or in discussion with your financial advisor. C) Another way to do asset allocation is fund requirement across various time frames - 0-2 years in Debt /Arbitrage funds, 2-5 years in Gold, Hybrid including multi asset funds, >5 years in diversified Equity MFs

2. For equity MFs, I prefer diversified MFs like Flexi and Multi Caps- why go for select caps, sectors/themes when you can have all covered under one fund. You can pick up max 2-3 diversified flexi caps from reputed houses. You already have PPFC which is considered a great fund. Stick to it.

And consider maybe another flexi cap from reputed fund houses such as HDFC, SBI, ICICI etc. Check for portfolio overlap on sites like fundoo.com if you invest in too many funds. You can find their star rating ( looks at performance and inherent risk/volatility) and factors like Beta and PE ( lower the better), Sortino and Alpha ( higher the better) from GROWW /Value Research / ET Money /Money Control.

3. Check long term performance/rolling returns/downside protection of active vs passive /index funds and within active funds. There is clear outperformance in the better managed active diversified MFs over 5/7/10 years. That's why I prefer active to passive and within active, Flexi Caps.

4. Momentum/Alpha funds work only when equity markets are in a general up cycle. And should be exited as markets start going down. Ofcourse no one can time perfectly but it needs one to track and have a view. Currently markets are seeing value and time correction. Invest when the uptrend becomes clear. If you cannot track it etc., then stick to asset allocation and diversified equity Mutual fund strategy.

All the best.

[deepakshenoy]

Originally Posted by pradster

Welcome to the forum Deepak. As someone who has known you and about you for a while (and as a capitalmind Subscriber) super happy to see you here!

Cheers, and lemme also participate here. Looks like some awesome comments here already!

[thirugata]

Originally Posted by deepakshenoy

I'm here

Happy to answer any questions and would love to hear from all of you on what you miss and want in the MF industry.

I know all fund houses use inputs from TA though no one mentions about that part of research when they explain their strategy to public.
Me being a pure TA guy would like to see a MF purely based on TA, say something like Nifty 500 Golden Cross Fund.

[deepakshenoy]

Originally Posted by thirugata

I know all fund houses use inputs from TA though no one mentions about that part of research when they explain their strategy to public.
Me being a pure TA guy would like to see a MF purely based on TA, say something like Nifty 500 Golden Cross Fund.

Would be dangerous, because for one, such a fund going entirely to cash (or hedges) on a pre-defined strategy would cause issues like others can front run it.

Another thing is that it will create a lot of weird funds - the Nifty MACD fund, the Nifty RSI3080 fund, the 20PercentRetracement Fund etc.

[xway]

There were not even a few options when I wanted a Mutual Fund which invests in S&P or CSI index.

The advantage that would be is to get appreciation on INR devaluations.

So, if I invest 85 Rs. today as 1 USD even if US market gives zero returns but the USD exchange rate goes to 90 I will still get around 7%. Not to mention if index also returns it would be double celebrations.

Please share if anyone has any ideas on such funds and options.

Would love if someone starts this it seems like a goldmine.

[DaptChatterjee]

Originally Posted by xway

There were not even a few options when I wanted a Mutual Fund which invests in S&P or CSI index.

There are quite a few funds that follow the US indices. Unfortunately, the indian mutual fund industry had reached RBI’s overseas investment limit in 2022. Hence, most of these have stopped taking lumpsums and new SIP. My SIP in ICICI nasdaq 100 fund is still active but I haven’t been allowed to increase my contribution. A few fund of funds with underlying US active funds are accepting fresh investment like Franklin US opportunities, Edelweiss US technologies etc.

Other option is through LSR. A few indian apps like indmoney, vested as well as international brokers like interactive (IBKR) provides access to US and many other markets. I have heard that exchange costs, delivery charges are quite high but I could be wrong (no first hand experience, please do your own due diligence). Another concern would be the reliability of the apps and added complexity while filling ITR.

[Fx14]

Originally Posted by DaptChatterjee

My SIP in ICICI nasdaq 100 fund is still active but I haven’t been allowed to increase my contribution.

If you are ok with ETFs, then you can try 'MON100' to increase your exposure to the index.

Note that the ETF trades at a premium to its NAV though, due to the very reason you mentioned.

[whitewing]

Originally Posted by xway

...
The advantage that would be is to get appreciation on INR devaluations.

So, if I invest 85 Rs. today as 1 USD even if US market gives zero returns but the USD exchange rate goes to 90 I will still get around 7%. Not to mention if index also returns it would be double celebrations.
...

The USD may move either way, given how things are going, the dollar could even have a devaluation.
Also, bear in mind that there is an additional cost of remittance (both ways), so your effective arbitrage probably would be closer to 4%, and comes with the additional headache of providing the overseas holding+transactions during your income tax submissions.
That said, having an overseas trading account will allow you to invest whenever you want - the recent crash turned out to be such an opportunity.

[DaptChatterjee]

Originally Posted by Fx14

If you are ok with ETFs, then you can try 'MON100' to increase your exposure to the index.

Note that the ETF trades at a premium to its NAV though, due to the very reason you mentioned.

I do have ETFs (sold all my stocks and bought ETFs last year) but am not comfortable with the 20-30% premium at which they are trading. We had discussed about the US funds and ETFs in this thread recently on page 342.

On a separate note, Deepak Shenoy has uploaded a fantastic podcast on international investing today.

[deepakshenoy]

Originally Posted by Fx14

If you are ok with ETFs, then you can try 'MON100' to increase your exposure to the index.

Note that the ETF trades at a premium to its NAV though, due to the very reason you mentioned.

Better would be to just open an international account (vested, stockal, indmoney) and buy the QQQ.

No premium there.

[jeetumg27]

As I read many of the posts in the thread, a lot of us are "late" in re-starting our MF investments after the age of 40. It feels eerily similar to be in the same boat - probably that is an age when a lot more seriousness kicks in and reality hits you that most likely you are at 50% of your expected life span

But on a serious note - I believe we might have missed out on the magic of compounding by not starting early and staying disciplined, but 40 is not too bad a place to start too - we should try to map investments as per our goals and try to do an SIP for as large an amount as possible. A bigger SIP amount is all it takes to make up for the lost time earlier. Apart from this, it is critical to stay invested, NOT watch your portfolio everyday, ignore market crashes, separate your emotions from investing and most importantly work with a financial advisor. Direct investing probably gets you .5 to 1% better returns, but a good financial advisor will help you set proper goals, review them periodically and most importantly, stop you from redeeming / exiting when you will feel like doing it the most.

Wishing everyone the best on the Finjourney!

[DigitalOne]

Originally Posted by DaptChatterjee

Unfortunately, the indian mutual fund industry had reached RBI’s overseas investment limit in 2022. Hence, most of these have stopped taking lumpsums and new SIP. My SIP in ICICI nasdaq 100 fund is still active but I haven’t been allowed to increase my contribution. A few fund of funds with underlying US active funds are accepting fresh investment like Franklin US opportunities, Edelweiss US technologies etc.

I still have not understood this. If this is an industry wide limit how some funds are still accepting fresh investments?

ps - An industry wide limit seems anti-competition and unfair to new entrants. Wondering why the AMCs are not objecting to it.

[DaptChatterjee]

Originally Posted by DigitalOne

I still have not understood this. If this is an industry wide limit how some funds are still accepting fresh investments?

They are adjusting the new investments against redemptions so that the amount invested overseas remains unchanged.