[sgiitk]

My own folios have grown recently with the addition of about four more funds (not fund houses). I was advised that some of the popular funds which have lost performance of late, have become gargantuan and unwieldy. So I have added these newer funds, and will (after March 31) exit some of the funds. The portfolio (remember I am managing over half a dozen folios if the family) is becoming unwieldy. However, exits will need some serious thought.

[born_free]

I took one big exercise last week to select and rank all categories of equity diversified funds based on consistent return over long period of time.
Selecting funds pose a real challenge as the number of funds in each category keeps on increasing.
Also over different period of time there is huge variation in returns for Mutual Funds.

For example a fund with great 1 year or 3 year returns may not perform good over a 5 year or 10 year period .
Therefore I laid down some criteria to pick the fund taking into consideration returns for all possible periods from 1 year to 10 year, with higher weight for long term returns.
This way we can filter signal from the noise and also overcome our inherent biases.
The criteria and methodology is listed below.

1. The fund should have at least 10 years of history.
2. The data from value research is used which lists returns over 1-year, 3-year, 5-year and 10-year periods.
3. The returns are as on date 24-Feb-2017.
4. The weighed average return is calculated by assigning higher weights to longer period returns.

.

The results are as follows, the full report is published on my blog.

http://moneybhasa.blogspot.in/2017/0...s-in-each.html

Large cap funds


Multi cap funds


Mid/Small Cap


Tax savings

[akshay87kumar]

I am looking to start investments in mutual funds, and wanted to get an opinion on which is the best route for investments. My initial thoughts, along with the positives and negatives are:
1. Through Demat Account
+ Easily track investment across all mutual funds
- High transaction/brokerage charges, demat maintenance charges
- Unable to perform STP, Switches, etc (I have an HDFC Demat Account)
2. Through MyCamsOnline
+ Easily track investment across all mutual funds
+ Direct mode of investment
+ Ease of performing investments throgh SIP, STP, SWP, Switches, etc
(unknown) Transaction and brokerage charges
3. Through Mutual Fund houses (e.g. HDFC Fund, ICICI Pru, etc)
- Able to track only mutual fund house investments. Need to separately track across different mutual funds
+ Lower transaction charges, direct mode of investments
+ Able to perform STP, SWP, SIP, Switches

Can the experience folks please help me understand if I am overthinking investment options like STP, SWP and switches? The reason I wish to choose atleast STP is because I have lumpsum amount which I propose to invest in a liquid fund and start an SIP. I do not wish (or capable of) timing the market.

Please also advise if there are any disadvantages of using one-stop solution like MyCamsOnline, or any other aspect that I may not be aware of.

[perty]

Originally Posted by akshay87kumar

I am looking to start investments in mutual funds, and wanted to get an opinion on which is the best route for investments.

If I understand correctly, you are looking for:
-> Ease of tracking all your investments (consolidated statements)
-> Lower transaction charges (direct mode)
-> Ease of doing transactions (SWP/STP)

Tracking your investments is quite easy. CAMS provides you a consolidated mailback statement of *practically all* your MF investments across fund houses and folios.
Investing directly with the fund houses means you can opt for the direct schemes.

Wrt STP/SWP/SIP, some amount of manual intervention might be required, although not too complicated. Instead of relying upon the fund house or some other intermediary to perform a transaction on a specified date, you would have to manually login to their website and initiate the transaction yourself. This need not be timed to the rise and fall of the market, it could be something as simple as logging in every Monday morning and initiating a withdrawal from one fund and investing in another.

If you have already sorted out the list of funds you would like to invest in, then great. If you need some help with it, look at services offered by FundsIndia or Money life smart savers network. They give out periodic recommendations on which funds/stocks to buy.

You could also consider arbitrage funds for a lumpsum investment. These come with a minuscule downside risk for capital, but work out better in terms of taxation as they are treated on par with equity funds.

[pradkumar]

Hi,

Please read these articles:

https://www.advisorkhoj.com/company/...p-mutual-funds

http://smartinvestor.business-standa...s_for_2017.htm

To compare funds from the same fund house, during the 2008 US mortgage subprime crisis, SBI Magnum Midcap tanked by -72%, SBI Bluechip Fund (large cap) by -55%, SBI Magnum Balanced Fund by -44%, and SBI Magnum Gilt Fund by -13%.

Thanks,

Pradeep

Originally Posted by bullrun87

Small and mid cap funds have given tremendous returns over the past two to three years and with people investing heavily in them some of these funds have become unmanageable hence I appreciate this move to protect investor interests.
should an investor focus more on large cap funds now? An increasing percentage of fund managers believe that mid caps are quite expensive at current levels. Should a long term investor orient his portfolio more towards large cap funds for a few years and if so what should be the percentage of large cap funds and mid/small cap funds for a long term investor? I currently invest equally in large cap funds, multi cap funds and mid/small cap funds on a monthly basis. Should I increase allocation to large and multi cap funds?

[sgiitk]

One question for @Shishirbn; and other guru's. Why is the rupee becoming stronger? It did crash a bit after the Demonetization. However, with the $ strengthening against most currencies the Rupee seems to be getting a bti stronger. What can be the reason?

[gupta_chd]

Originally Posted by akshay87kumar

2. Through MyCamsOnline
+ Easily track investment across all mutual funds
+ Direct mode of investment
+ Ease of performing investments throgh SIP, STP, SWP, Switches, etc
(unknown) Transaction and brokerage charges

No transaction and brokerage charges of any sort through camsonline.

[srikanthns]

I was nastily surprised by the NAV difference between Regular and direct plans of MF schemes. Even in a slightly low value NAV's, difference of 20%.
Reliance Growth-Dividend-Regular scheme is Rs68.69 whereas Reliance Growth-Dividend-Direct is Rs 81.88 .Lay investors are never told about such a wide gap! This is 20%. I checked other fund houses, the difference is not this much. This amounts to shady dealing by MF house, isn't it? I had reliance growth which I completely redeemed!

[swiftnfurious]

Has anyone invested into Reliance Money Manager fund? Its a kind of Debt fund and from what I understand, very similar to Savings bank account with better interest. The performance has been consistent over the last few years & the fund yields around 9% interest. There is no exit & entry load, no lock in period. With Scripbox's subscription, one is also provided a HDFC Debit card which could be used in any ATMs and no charges either. Double checking here before I take the plunge in the new financial year.

[saket77]

Originally Posted by swiftnfurious

Has anyone invested into Reliance Money Manager fund? Its a kind of Debt fund and from what I understand, very similar to Savings bank account with better interest. The performance has been consistent over the last few years & the fund yields around 9% interest. There is no exit & entry load, no lock in period. With Scripbox's subscription, one is also provided a HDFC Debit card which could be used in any ATMs and no charges either. Double checking here before I take the plunge in the new financial year.

Hi!

It's an ultra short term debt fund. Not totally risk free but ultra short term is the way to go in the current scenario. It's a fair balance between risk and return for the time being.

Birla cash manager, Franklin ultra short bond fund are its direct peers.

If you want to reduce the risk further, at the cost a some gains, you can also go for pure liquid funds which give returns similar to a bank FD without any lock-in or entry/ exit load.

Redemptions in both funds will take one business day (credit of funds on next working day) if order is placed before 3 pm; so you can place your idle funds in such funds.

Regards,
Saket.

[ghodlur]

Experts,

Have a query.

I have 1L surplus funds with me earmarked to be used to pay the annual life, medical and car insurances which will be required in Sept 2017, Dec 2017 and Jan 2018 respectively. The present alternative with me is to create 3 FD's in my savings account. I am more inclined to invest where taxation does not eat into my earnings on the surplus fund. Kindly suggest me the way ahead.

Do I invest in a single debt fund (and which one?) or invest for the three separately?

[hserus]

See if you can pay some of those early, some insurance companies accept premia a few months in advance

[saket77]

Originally Posted by ghodlur

Experts,

Have a query.

I have 1L surplus funds with me earmarked to be used to pay the annual life, medical and car insurances which will be required in Sept 2017, Dec 2017 and Jan 2018 respectively. The present alternative with me is to create 3 FD's in my savings account. I am more inclined to invest where taxation does not eat into my earnings on the surplus fund. Kindly suggest me the way ahead.

Do I invest in a single debt fund (and which one?) or invest for the three separately?

Since you have to meet some fixed expenses in a few months time, I would not suggest you to venture into equities with this fund. I suggest you liquid funds as it meets your criteria pretty well. No lock in, returns more than bank FD for smaller time frame & safe. Your 5-6 month bank FD rate will not be probably more than 5%. On the other hand, these liquid funds should generate at least 7% (annualised).

However, please note that the gains made are taxable according to your income slab. I don't really see any investment, in this time frame, which is safe and tax- free at the same time.

Trust that helps.

Regards,
Saket

[ghodlur]

Originally Posted by saket77

However, please note that the gains made are taxable according to your income slab. I don't really see any investment, in this time frame, which is safe and tax- free at the same time.

Thanks Saket for the info.

The gains made in the Liquid funds are subjected to STCG if withdrawn within 3 yrs of investment which is equal to tax slab I am in right now. So I am paying the same tax rate for income earned from Liquid funds a or FD's. The only difference is in the income earned in Liquid funds is higher than that of FD's. The liquidity in both cases is same. Please note that I am not too worried about the returns since its the capital which is essential for me. If the money earns over and above the capital, that would be bonus.

The only thing that is holding back from investing in FD's is creating 3 FD's for 3 goals.

Your thoughts please.

[saket77]

Originally Posted by ghodlur

Thanks Saket for the info.

The gains made in the Liquid funds are subjected to STCG if withdrawn within 3 yrs of investment which is equal to tax slab I am in right now. So I am paying the same tax rate for income earned from Liquid funds a or FD's. The only difference is in the income earned in Liquid funds is higher than that of FD's. The liquidity in both cases is same. Please note that I am not too worried about the returns since its the capital which is essential for me. If the money earns over and above the capital, that would be bonus.

The only thing that is holding back from investing in FD's is creating 3 FD's for 3 goals.

Your thoughts please.

Since you will pay taxes on FD and liquid funds at the same rate as per your income slab, I suggest you go for pure liquid funds (not debt funds) where your capital is almost risk free.

For liquidity, I would vote for liquid funds again because you don't need to specify the term while entering it unlike FDs. You just place the redemption order a day before the requirement of money. You don't get this flexibility in bank deposits. You are penalized if you break your FD before it's full term.

But if you want an assured return and know when exactly you require the money, you may go for bank deposits, but since your horizon is less than a year, you will have to settle for lower rates.

Regards.