In the first of our updates in this review cycle, we explained the changes we have made to Prime Funds, our recommended fund list. In this second update, we thought to cover two different aspects: one, changes we made to our MF Review Tool, in the way we call out our recommendations. Two, trends we have observed unfolding over the past couple of quarters that we’re keeping a watch on.
We are living in strange times. No, I am not talking of Covid-19. Your one-year returns of equity funds (across categories), at an average 31% between January to March 22, 2021, zoomed to an average 69% since March 23, 2021. In other words, 1-year returns suddenly doubled from March 23, 2021. If you recall, March 23 2020 was a market low. So, 1-year returns from March 23, 2021, have started looking abnormally high.
Rolling returns forms the base for several other ratios and metrics that are used frequently in understanding a fund’s performance. You know them – we talk about it when we write on funds, you see them in fund details pages. We are, of course, referring to the Sharpe ratio, alpha, beta, standard deviation and the like.
If you are new to mutual fund investing, it ta¬kes a while before you can come to terms with the multitude of terms used to showcase mutual fund returns. There is, for example, absolute returns, annualized returns, CAGR, IRR and so on. And to top it, folks like us keep talking to you about rolling returns and chide you for looking at trailing returns (or point-to-point returns)
SEBI has come out with its order regarding l’affaire Franklin Templeton debt funds. The 100-page document is categorical in its indictment of the AMC and the ways in which these debt funds were managed. 2 messages are clear from the order: One, investor protection is paramount to the regulator. Two, fund managers and AMCs cannot take their fund management responsibility lightly.
With interest rates being where they are – i.e., stable with no clear signs of a move upwards or downwards – you would wonder where you could hold investments meant for a 2-3 year timeframe. And many of you also wonder if the best option you have is to go for floating rate debt funds as they would have an edge over other debt fund categories.
The concept of a ‘permanent portfolio’ has been gaining interest in the past few years, likely driven by the influx of new investors in the market who are looking for zero or low maintenance investment solutions. The term itself has meant different things and these different meanings have varying degrees of ‘permanence’ about each of …
Could upping the frequency with which you run your SIPs net you better returns? The primary aspect you look at in SIPs is that it helps invest across different market levels and therefore averages your investment cost down. If that’s the case, it follows that making very frequent investments will help capture more market volatility than just once-in-a-month investing.
If there’s one thing all mutual fund investors are clear about, it’s that SIPs are a great thing. Every time you have money to invest, it is not a given that you use SIPs (or STPs). There are times when it’s perfectly fine to be making lumpsum investments.
Updated on 9th July, 2021 Franklin Templeton has made another tranche of repayment to investors in its six shuttered funds. Each of the six schemes
There’s another index that gives mid and small-cap funds a good run for their money while housing far bigger names. This is a high return index if highly volatile one, and can be used in long-term portfolios to give returns a boost.