Monday, November 9 2020

How to select equity MF

Remember that you are trying to select for ten years so don't be very picky!

You shouldn't be picking an equity mutual fund for anything less than 8-10 years. During such a long period the fate of any MF can change, so do not be very picky. Go with a rough idea and then live with it. A normal strategy does not involve switching funds frequently and it is impractical after you have accumulated a huge corpus. How do you move a huge corpus into another equity fund quickly without increasing risk? Holding an equity fund for a long duration reduces the probability of loss.

 

The focus is longer than 8-10 years and protection from market fall. You should bear in mind that you will be holding a huge corpus that will not be easy to move into another equity fund. That is why taking high bets on a sector or thematic fund for the long term is risky, it is not easy to time them! A Flexi cap (earlier this was called a multi-cap) allows a better risk-reward scenario in the long run with relatively lesser management effort. Pure equity funds will also give the opportunity of harvesting excess gains from time to time along the journey. That is due to its higher volatility compared to lesser volatile debt funds. Balancing from time to time by hand allows a deeper understanding of investment management and moving funds to suitable known low-risk debt funds is better than relying on the debt component of an aggressive hybrid fund when the goal is coming close. Managing a pure equity fund with debt fund by hand is superior in this way when compared to an aggressive hybrid fund. It also allows you to have clearer management of your debt fund and equity fund. Incidentally, this also allows remaining handy with a low-risk debt corpus if there is a sudden huge opportunity in the form of a severe market crash (which is environmental and expected to recover soon). Most gains in a market are made in the few bull runs after a huge market correction, so this is a significantly important aspect of this strategy and not a trivial one.

 

This is how I filter a Flexi cap fund for the long term, one Flexi cap fund with one ultra-short duration or money market fund from the same AMC is good enough. Maybe an aggressive hybrid fund or a balanced advantage fund (also called dynamic asset allocation fund) instead of Flexi cap fund when you have learned to manage a large corpus in equity for a very long term patiently and want to shift to something less volatile than Flexi cap:

  1. High downside protection (in the category)
  2. Low max drawdown (in the category)
  3. Low expense ratio (below 1.2)
  4. Reasonable PE ratio (not much above nifty)
  5. High fund age (more than 10 years)
  6. Large fund size (more than 2k crore)
  7. less Volatility (less than nifty)

 

Monday, October 26 2020

Actively managing own equity portfolio

This is a simple approach. This approach can be mastered and refined over time.

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Wednesday, September 2 2020

Timing the market

The only thing that can be said with certainty is that it is always a good time to get rid of your poor funds and switch to better funds, they will make up your losses faster. By switching you are not injecting new money but only making your poorly performing investment move to a better investment  […]

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Tuesday, July 14 2020

Long Term Investment Advice

This post will talk about guidelines for managing your investment in the long term (longer than ten years) and what all to bear in mind while planning your long term inflation beating investment.

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Thursday, June 25 2020

Lumpsum versus SIP

In this post, we're going to break the myth that SIP is always superior to Lumpsum. Most likely, it's only as effective as a lump sum investment for long-term investment, but it robs you of the opportunity to think for yourself and sometimes misses that nice lumpsum investment.

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Friday, April 17 2020

Appointment links

 

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Thursday, November 21 2019

MF Rebalancing

Rebalancing is possible only if you have prepared an investment portfolio and its asset-allocation and categories in each asset is also planned.

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MF Empanelment

Once you have an ARN (AMFI Registration Number) you have to empanel with AMC (Asset Management Company) to actually distribute MF.

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Tuesday, November 19 2019

Insurance that encourages healthcare for girls

New India Assurance - Asha Kiran Policy provides insurance of parents and upto two girl child with discounted premium for gilr child and accident cover for parents online.

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Long Term Third Party Only Insurance of vehicles

Recently IRDA has allowed Long Term vehicle insurance. It has come as a boon. It makes the process easy and also provides good discount to the end user.

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Monday, September 30 2019

e-Insurance Account

IRDA or Insurance Regulatory and Development Authority of India has introduced e-Insurance Policies in the interest of the policy holders.

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Tuesday, September 17 2019

Welcome to finance.ekvastra.in!

I am an AMFI registered Mutual Fund Distributor and I also hold a Retirement Advisor license. I would be happy to help you in your financial planning!