Equity Funds

A scheme with superlative performance hidden away from limelight

Generally, you will not see my notes or recommendations on Equity Schemes. But here I am making an exception and writing about one specific Equity scheme from the stable of PPFAS Mutual Fund viz. PPFAS Long Term Equity scheme. While playing golf with Neil Parikh, one of the Founders of the Fund House, we got to talking about his Scheme performance and philosophy of investment. That conversation intrigued me and on my return to my office, I started doing my own bit of analysis of the said scheme on different parameters. What came to light was nothing short of pleasant shock and surprise. I tried analyzing this scheme from all conceivable angles to find some weakness, some faults, some negative surprises. From all angles I was left disappointed that nothing untoward or negative came out of my research (actually I was happy that this scheme passed all my filters and tests).

Equity Funds

Mid Cap Story – Down but Not Out – Worth Revisiting

Though I have been an advocate of investing in Multi Cap Schemes and move away from Market Cap Biases; I am also a firm believer of investing and disinvesting at right valuations. With that in mind, I need to bring to the notice of readers a story which has been the darling of investors for many years but currently getting hammered. However, this huge correction of almost 18-20% over past year or so has given rise to a great opportunity to revisit this theme. This is the SWEET SPOT which we always look for. Mid-caps have consistently outperformed Large-caps over longer periods of time; albeit with more volatility. They have been genuine wealth creators.

Equity Funds

Dividend Payout Vs SWP

Mis-selling to lure investors to invest funds into such an asset class which is extremely volatile

Equity Funds

Don't Fall for the "Long Term" Argument - Think Independently

One of the simplest measures for understanding whether Equity markets are overvalued or undervalued is the trailing Sensex or NIFTY PE (Price to Earnings)  and/or PB (Price to Book Value). It may not be the most accurate measure as these are trailing PE or PB and not forward looking; nevertheless it still gives a reasonable indication of market valuations. Unfortunately we have never married Fundamentals to Equity investing. At 7,000 NIFTY, we said invest for long term, at 8,000 NIFTY and again at 9,000 NIFTY we repeated the same investment call of investing for long term. Definition of Long Term got stretched (to suit our calls) from 3 years to 5 years to maybe 7-10 years going forward.

Equity Funds

Do Not Chase Themes or Sectors

Vijay (Managing Director, Wealth Forum) had asked me to pen my thoughts on different parameters for Equity scheme selections besides just the quantitative measures. Though I am not an expert on Equity Investing (though Asset Reallocation theme is now what readers relate me with; besides the Bond Markets), I will still give it a try to the best of my ability. To start with, I thought of addressing the issue of what we as Advisors should not fail prey to & thereby narrow our Horizon of Equity Scheme selections. If we do this successfully, half our job would be done. So let us start with What Not to Do rather than What One Should Do.

Equity Funds

Let us Stop Selling Schemes & Start Selling Solutions

Most analysts have been saying that our Stock Market valuations are stretched currently. Some experts on the other hand are saying that India is the only beacon of hope in the Global gloomy scenarios & hence, our markets should be doing well going forward as well. What about the intermittent volatility? How does one manage client portfolios as well as emotions in such circumstances? Is it a liquidity bubble about to burst? Sounds so confusing, right? Let’s play this scenario to our advantage & for the benefit of our investors.

Equity Funds

Smart & Effective Ways Of Investing In Equity Markets

Most times investors are not sure of how the equity markets will perform, what is the direction of the market (upward trend or downward trend), what are the implications of global scenario on our equity markets, etc. In such cases & in almost in all cases, investors need to follow some strategies that can protect them on the downside & participate in the upside of the equity markets. Years like 2008-2009, 2010-2011, & the current year with huge volatility, an investor must tread cautiously & then invest funds in the equity markets. No one can predict where the markets are headed at some points in time. Last year Budget, most experts predicted our Equity markets to be at 30-32000 level Sensex by December 2015; here we are currently between 23-24,000 levels of Sensex. Unfortunately when markets were at 25,000, everyone said invest for long term, same call was repeated when markets started going up to 30,000 levels of Sensex as well. When investors start looking at such huge volatility &

Equity Funds

Investors’ dilemma: invest or pull out?

Black Monday once again? Global markets in extreme volatile mode. Concerns over Chinese devaluing Yuan & their economy in downturn, its implications & forthcoming imminent Fed rate hike are some of the data points which will rock the markets for some more time. During such uncertain times, there is always flight to safety. This is reflecting in appreciation of $ v/s other currencies & Gold prices firming up once again. As far as India story is concerned; it is a mixed bag. On the positive side for the economy, commodity price corrections, crude price corrections, softening of interest rates (& likely cut in interest rates going forward), falling inflation, etc. are extremely positive macro factors. On the other side, Government’s disability to push reforms further (due to Opposition parties) on land bill, GST, forthcoming state elections, Chinese currency devaluation & slow down, likely Fed rate hike, are weighing against the markets going up in a hurry.

Equity Funds

Participate In Equities with Controlled Volatility

Wish you all a very Happy & Prosperous New Year. As I had promised when I launched my blog, I will bring to the table ideas & solutions which will work in favor of the investors. I have always been an advocate of doing away with human bias (wherever possible) even on the fund management side (either debt or equity) & selling solutions to the investors which can generate returns & create wealth on a long term basis. For this to happen, it is important on our part to first understand some of these schemes & strategies & explain the same in simple terms to our investors.

Equity Funds

Smart Way Of Investing In Equities At High Levels Of Sensex

Current turmoil in equity markets have underlined the importance of volatility attached to equity as an asset class. Weakness in global cues due to increase in interest rates by Russia to the tune of 650 bps, devaluation of Russian Rubles, fear of Greece getting out of Euro zone; falling crude & commodity prices affecting economies of countries dependent on commodities & various other factors; have not spared even Indian equity markets. This underlines the importance of disciplined investment & investment with strategy to ensure lower volatility in the portfolio without any undue panic & redemption pressures & with a clear long term view.