A recent query we received from a customer concerned Aditya Birla Sun Life Frontline Equity. Our MF Review tool throws up a sell on this fund. The questions raised were: Why, since it was a fund that had been delivering returns and was considered among the best funds and was highly rated.
Over the course of the last 2 weeks, following the Franklin debt funds’ fallout, many of you (our subscribers) have written to us seeking answers to a number of questions on the debt funds you hold.
For a long-term investor, is an ETF a better or poorer option compared to index funds? Which is more expensive in the long term? Can one replace your recommendations of index funds (or FoF, like Motilal Oswal Nasdaq 100 FoF) with the corresponding ETF? It’s a little confusing because your Prime Funds and some of your portfolios recommend ICICI Prudential Nifty Next 50 Index fund, but ICICI Prudential Nifty Next 50 ETF is not recommended in Prime ETFs or portfolios. Shouldn’t the performance be same? And what is the impact of tracking error on investor returns?
After the Franklin Templeton debacle, CEOs of asset management companies have been out in big numbers across media to reassure investors that this was an isolated case and that there’s no crisis for the debt fund industry itself.
Kotak Flexicap fund suits any investor with a timeframe of 4 years and above. Here’s why the fund makes a good investment. When stock markets are volatile and there’s uncertainty all around, you need an option that can navigate across markets, that’s steady in strategy, and that is large-cap based.
Question
I have invested some money into Franklin Savings.
I was going through the fund disclosure for the month of March 2020 and saw negative cash balance. Does this mean they have borrowed to honour redemptions?
The winding up of Franklin Templeton’s debt schemes has proved how credit risk and liquidity risk can be a lethal combination. While the funds’ closures are an extreme event, this may be a good opportunity for you to take a relook at your portfolio – without panic, that is.
Franklin India AMC has announced that it is winding up 6 of its schemes – Franklin India Ultra Short Bond, Franklin India Short Term Income, Franklin India Dynamic Accrual, Franklin India Credit Risk, Franklin India Low Duration Fund and Franklin India Income Opportunities Fund. These are some of the most popular funds managed by the AMC.
Our quarterly review and changes end with the review of the 18 unique portfolios we have for 35 different needs. We had already changed some of the portfolios that had fixed deposits in late March/early April when deposit rates underwent changes and when we completed the Prime Deposits review.
Our MF Review Tool is a recommendation tool providing our view on funds. That is – whether a fund is a buy or hold or sell. We do a quarterly review of these views or change them as appropriate. Our first quarterly review is complete and at the end of this report we have highlighted some of the interesting and important changes.
Warren Buffett never fails to recommend it and 90% of US fund managers struggle to beat it. If you’re wondering what this miracle investment is, it’s the US S&P 500 index. Indian investors will soon have the opportunity to buy this US benchmark locally with Motilal Oswal AMC launching an open-end index fund replicating it.
When uncertainty is the name of the game today, investing in an equity fund may not be at the top of your to-do list. But for long-term investors, markets like these offer good buying opportunities. For such investors, a multi-cap fund that uses a core of large-cap stocks and adds returns by selectively picking mid-cap and small-cap stocks will serve well.
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