PrimeInvestor - Articles and Reports

Quarterly Review - changes to recommendations in Prime Funds and Prime ETFs
Mutual funds & ETFs
PrimeInvestor Research Team

Quarterly review โ€“ Changes to recommendations in Prime Funds and Prime ETFs

Prime Funds is our list of recommendations in equity, debt, and hybrid mutual funds that are worth investing in. Prime Funds narrows down your choices from the thousands of funds that there are, into a concise list of funds that span different styles. Prime Funds are selected based on performance, portfolios, and investment strategies.

In this quarterโ€™s review, we have made limited additions to our list of Prime Funds but have some updates to give on performance of the existing funds. We also suggest buckets that are worth entering now. So do read it!

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Tax changes in mutual funds: How to manage your investments now
Mutual funds & ETFs
PrimeInvestor Research Team

Tax changes in mutual funds: How to manage your investments now

Changes in tax rules at the end of a financial year is not something that you routinely expect. And not when it is a sweeping change on taxation in your mutual fund! In this article, we are going to discuss the tax changes in mutual funds in 4 parts:
One, the changes effective April 1, 2023 and the categories impacted
The tax impact for you and what you can do to plan better
What should you do with your existing investments?
How should you plan your fresh investments?

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Low returns from debt funds? know how to manage this risk
Mutual funds & ETFs
Aarati Krishnan

Low returns from debt funds? Know how to manage this risk!

Low returns from debt funds? Know how to manage this risk!
After Silicon Valley Bank revealed large losses on its US bond portfolio that had eaten into its capital, thereโ€™s been a lot of social media outrage. Some folks are shocked that banks can make losses on a cast-iron investment such as US treasuries. Others seem to be appalled that Silicon Valley Bank is not alone and that many other global banks are in the same boat. This shows that investors at large have only a vague understanding of what rising interest rates do to bond portfolios.
You have also been bombarding us with questions on how interest rate risks can play out for debt funds, particularly target maturity, constant maturity and gilt funds. We try to address them here.

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Debt funds for double indexation and high returns
Mutual funds & ETFs
Bhavana Acharya

Debt funds for double indexation and high returns

If there is one thing that has dominated the new fund offer space, and your collective interest, it is target maturity funds. Over the past year, the debt market has dealt with a swift rise in interest rates and we have issued multiple strategies to alert you on opportunities that presented themselves.

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Nifty Next 50 - what should you do with your investments?
Mutual funds & ETFs
PrimeInvestor Research Team

Nifty Next 50 – what should you do with your investments?

The Nifty Next 50 houses the 50 top companies by market capitalisation, after the Nifty 50. This index caught the limelight over the past month for featuring a handful of the Adani group stocks.

As we had pointed out a couple of weeks ago in our write-up on Adani stocks and index funds, the presence of a few shaky stocks in an index is not reason enough to exit it. But even before the Adani-fuelled upheaval, the Nifty Next 50โ€™s once-outstanding performance was being eroded.

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4 easy steps to picking good mutual fund schemes
Mutual funds & ETFs
Vidya Bala

4 easy steps to picking good mutual fund schemes

The top-used product at PrimeInvestor, our MF Review Tool, is good for anyone who wants to know our call on your fund (buy/hold/sell) and the reason for the same. It also helps you pick the funds we have a buy on, if you want to go beyond Prime Funds.
But for those of you who want to see the evidence backed by data or wish to do your own filtering, then Prime MF Screener is the only tool available today in town for you to do this evidence-based investing. If you are a subscriber โ€“ well, whatโ€™s stopping you from empowering yourself using our MF Screener to pick good mutual fund schemes?

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NFO review: IDFC US Treasury Bond 0-1 year Fund of Funds
Mutual funds & ETFs
Aarati Krishnan

NFO review: IDFC US Treasury Bond 0-1 year Fund of Funds

US stocks and US equity funds have been quite a hit with Indian investors in recent years. Indians invest in these funds to gain exposure to global businesses (Amazon, Alphabet, Mastercard etc). More importantly, they would like to gain an exposure to the US dollar which has appreciated steadily against the Rupee over the years.
But the risks in owning US equities have become apparent lately, with the Fed on a rate hiking spree and the US economy flirting with a recession. US stock indices have lost 12-15% in one year, while US equity funds have seen losses of 6%-12%. But there has been a sharp rise in yields on US government bonds (treasuries).

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Prime recommendation: Commodity and the rise of the old economy
Recommendations
Vidya Bala

Prime Recommendation: Commodity and the rise of the old economy

In March 2021, our call on the commodities fund we added panned out well. But we decided to issue a book profit call in June 2022, as we wanted to preserve some of the profits given the cool off that was visible then in commodity prices.
And as anticipated, commodities cooled off a fair bit globally. Triggered by inflation-driven rate hikes and recession fears, pre-emptive physical destocking (reducing inventories anticipating higher cost of holding inventories) resulted in lower prices. The traded Goldman Sachs Commodity index graph below will tell you that our call was largely in line with this indexโ€™s move.

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Adani stocks and index funds: cause for concern?
Commentary
Aarati Krishnan

Adani stocks and index funds: cause for concern?

After the Hindenburg bombshell tanked Adani stocks, the faith that some investors placed in index investing seems to have been shaken. With the Nifty 50 and Nifty Next 50 featuring seven Adani group stocks between them, PrimeInvestor received many queries soon after the news broke.ย 

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Build your own portfolio with PrimeInvestorโ€™s super tool
General
Bhavana Acharya

Build your own portfolio with PrimeInvestorโ€™s super tool

PrimeInvestorโ€™s super new tool, Build your own portfolioย is a simple and powerful solution for your need to customise your portfolio the way you wish to, but without choosing the wrong funds nor going wrong on allocation! It guides you into designing a portfolio for yourself using Prime Funds, based on your inputs. Hereโ€™s more.

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FAQs: What does the recent rate hike mean for your debt funds?
Mutual funds & ETFs
Bhavana Acharya

FAQs: What does the recent rate hike mean for your debt funds?

We bet you must be tired of hearing about rate hikes and debt funds and strategies! But if your queries, comments and activity on our newly-launched PrimeInvestor Community are any indications, there are still several questions many of you have over your funds.

So, hereโ€™s collecting them all and explaining what you should be doing with your debt funds and if you need to do anything different in light of the latest round of rate hikes.

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5 reasons to avoid PSU ETFs
Mutual funds & ETFs
Aarati Krishnan

5 reasons to avoid PSU ETFs

The list of top performing equity funds for the past year features a couple of unusual entries. With a return of 18-21 per cent, CPSE ETF (managed by Nippon India Mutual Fund for the government of India) and the Bharat 22 ETF (managed by ICICI Prudential Mutual Fund) are top rankers among equity funds.
This has many investors asking if they should add these passive funds to their portfolio. The portfolios of CPSE and Bharat 22 ETFs are made up of the PSU oil, energy and financial giants which are the flavour of the season. These ETFsโ€™ costs are ultra-low because they are used as divestment vehicles. Both ETFs would also seem to be โ€˜value buysโ€™ if you go by their ultra-cheap valuations. The CPSE ETF trades at a portfolio PE of 7 times and Bharat 22 ETF at about 11 times. This is a fraction of the current Nifty50 PE at over 21 times.
But does this make them worth betting on? There are five good reasons for long-term stock investors to steer clear of these ETFs.

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