Discover and read the best of Twitter Threads about #mutualfunds

Most recents (24)

All categories of #mutualfunds (including ETFs) would be covered under #stampduty charges for units issued in demat & non-demat form. It will cover equity, derivatives & currency trades. Stamp Duty = Direct Tax levied by the govt. u/s 3 of Indian Stamp Act, 1899. @AmarUjalaNews
#StampDuty charges:

Equity (delivery) - 0.015% or ₹1,500 per crs on buy-side

#Equity (intra-day) - 0.003% or ₹300 per crs

#Futures (equity & #commodity) - 0.002% or ₹200 per crs

#Options (equity & commodity) - 0.003% or ₹300 per crs

#Currency - 0.001% or ₹10 per crs
- The #stampduty will also be applicable on #AlternativeInvestmentFunds (AIFs)

- Impact is more on the short term #investments by the #investors

- No stamp duty on #redemption of #mutualfund units.

- Impact at #portfolio level too i.e when fund manager executes transaction.
Read 7 tweets
#SiyaramSilkMills.
1. Siyaram Silk Mills is engaged in the business of Fabrics, Readymade Garments. It has a 5% branded fabrics market share. With revenue mix as 74% fabrics, 23% Garments. India comprises of 91.5% of revenue and the rest is from exports.
2. Brands owned by Siyram's are #J.Hampstead #Oxemberg #RoyalLinen #Siyarams #Unicode & #Cadini. They have well-known brands, diversified product line, strong distribution network, and presence across the textile value chain.
3. Best part about the company is they have an asset light model where they have outsourced 40% of it's manufacturing capacity so COVID will have relatively lesser impact. And currently all the manufacturing operations have been partially resumed as on 14th May 2020.
Read 12 tweets
Factsheet of a Mutual fund scheme is the most important document which should be read by an investor before taking a call on investing in it.

A thread on "How to read a Factsheet of Equity Scheme"

#mutualfunds
Investment Objective: This indicates the objective of the scheme and also gives an idea about where the scheme is going to invest. In above case, the scheme is planning to invest predominantly in large cap stocks as it is a Large cap category fund.
Date of Allotment: Launch date or NFO date of the scheme.

AUM: Asset Under Management is the total amount of money being managed under the scheme.
Read 10 tweets
(1/n) NSE Listed universe ownership trends:
- Total promoter ownership in NSE-listed #stocks⬆️by ~110bps (QoQ) to near 5 yr high of 50.9%
- FII ownership⬇️133bps (QoQ) to a 5 qtr low of 20.8% (highest sequential decline on a qtrly basis over last 19 yrs)
Src: NSE

#investments
(2/n) Top 20 companies by value of shares bought by promoters in the March quarter.

#investments #investors #stockmarkets #stocks #NSE #economy #lockdown2020
(3/n)
Ownership trend across key stakeholders by TOTAL market cap over last 3 years &
Ownership trend across key stakeholders by FLOATING stock over last 3 years

#investing #stockmarkets #investments #stocks #Nifty50 #Nifty #equities #trading
Read 7 tweets
THREAD 1/4
Update from @FTIIndia
- Continue to receive inflows regularly
- See marked reducaiton in borrowing levels of some funds
- Attempt continues to sell down securities before maturity date
#mutualfunds #FranklinTempleton #investing #COVID
@FTIIndia update 2/4
- Liabilities will be discharged before returning money to investors
- Discharge of liabilities ahead of repayment to investors DOES NOT mean that returns will be diminished
- Unit holders have to authorise trustees regarding next steps
@FTIIndia update 3/4
- Independent advisor will assist in liquidation process
- investors will receive e-notice for voting
- voting for each scheme to be held separately
- money can be returned only after voting process is complete
- winding down CANNOT be reversed
Read 4 tweets
Gilt MFs - Busting the Trader’s myth

These days many debt MF investors are looking at GILT funds for investment purpose - lets decode the GILT Funds (1/n)

#mutualfunds #gilt #debt
These funds invest in government securities of various maturity periods - thus too less credit risk but factors such as change in interest rate and gsec valuation etc. drive the volatility in NAV of these funds. (2/n)
When Govt of India needs money, the RBI issues fixed-term government securities. These are picked up by the gilt fund manager - he plays on coupon, duration and interest rate outlook. (3/n)
Read 14 tweets
Arbitrage seems to be good alternative to investors pulling out their money from debt mutual funds. Investors need to know that arbitrage funds can give negative returns in short term and approx. 6% annualized return if held for a year
#mutualfunds #mutualfundssahihai
(1/4)
These category gives tax advantage as compared to a debt fund, for those who want to invest for less than 3 years.
Arbitrage is an equity oriented scheme with returns similar to a debt fund. So, it will long term if held for more than 1 year.
(2/4)
Long term capital gain in arbitrage is 10% if gain is more than 1 lac for that particular year.
Whereas for debt funds it is 20% with indexation after 3 years and as per tax slab if redeemed before 3 years.
(3/4)
Read 4 tweets
RBI has announced Rs 50000 Cr #SpecialLiquidityFacility for #mutualfunds,to ease redemption pressures

#RBI will conduct #Repo operations of 90 days tenor at fixed repo rate

This Special Facility is on-tap,open-ended&will particularly help #DebtSchemes of MFs,witnessing outflows
#SpecialLiquidityFacility for #mutualfunds is available from today,April 27,2020 till May 11, 2020,or up to utilization of allocated amount of Rs 50000Cr whichever is earlier

@narendramodi govt's calibrated approach to calm down frayed nerves,is timely&noteworthy

#coronavirus
Funds availed under this facility shall be used by banks solely for meeting #liquidity requirements of #mutualfunds by 👇

Extending loans

Outright purchase of #Repos

Or against collateral of corporate bonds,commercial papers, debentures&certificate of deposits,held by #MFs👍
Read 6 tweets
Franklin has shut down 6 debt mutual fund schemes due to illiquidity in market stopping buy/sell of units in these funds. Doesn't it put q on experts who suggest to hold just 3-4 scheme in portfolio. True saying - Never keep all eggs in one basket. #mutualfunds #market #franklin
Put together, almost 26000 crore rupees of investors are stuck in these 6 schemes. These all belong to debt schemes so higher chances that most of the money stuck belongs to retail investors. (2/n)
All these 6 funds are rated with 5 stars by Morningstar rating agency. In 2008 crisis all mortgages and CDO were triple ace rated by S&P, Moody's & Fitch. History repeats itself and average customer is trapped. Sad story #MutualFundsSahiHai ? #franklintempleton #mutualfunds (3/n)
Read 28 tweets
Corporate earnings across sectors may deteriorate in next 2-3 quarters. This would weigh on #stockmarkets & #mutualfunds. Expect subdued returns for next few months. #Investors must recall markets history & it rewards those who exercise patience & make the best of opportunities.
Opportunity to deploy in #mutualfunds & create #wealth for future at attractive valuations with better margin of safety, if #investors have investible surplus & long tenure. #investing #MMFA @Sanjay_69 @NileshShah68 @iRadhikaGupta @Anand_1969 @sundeepsikka @MFBALA @fifaindiaorg
#Investors must remember that some process-driven #mutualfund houses have the ability to beat #stockmarkets & #benchmarks over a period of time & can create significant alpha. @FTIIndia @hdfcmf @abcabslmf @MiraeAsset_IN @SBIMF @NipponIndiaMF @invescoindia @KotakMF @amfiindia
Read 5 tweets
Fixed Maturity Plans (FMPs)

Thread

FMP Vs. open-ended debt fund
life cycle of a FMP
no of FMPs Launched & AUM Mobilized
taxation & indexation
Once the darling of AMCs, Mutual Fund Distributors, Wealth Management firms, HNIs & Corporates, why it has lost its sheen.
#mutualfunds
Let’s start by looking at the difference between a fixed maturity plan and an open-ended debt fund.
life cycle of a Fixed Maturity Plan
Read 15 tweets
category wise mutual fund schemes performance.

Thread

Please note, most of the investors do investing using rear view mirror (past performance).
look at the size of front windshield (it tells you what is coming) Vs. rear view mirror which tells you what has passed.
#mutualfunds
large cap funds:

post the SEBI categorization & rationalization, large cap schemes have to maintain minimum 80% of total assets in large cap companies

the circular also defined the definition of Large Cap.
Large Cap: 1st -100th company in terms of full market capitalization
going forward my view is that it will be difficult for large cap MFs to beat their respective benchmark:
1) previously there was no definition of large cap
2) information asymmetry has reduced many fold
3) cost of active funds vs passive

Read 21 tweets
1. In the back drop of @YESBANK Bank fiasco and total write off of AT1 Bonds issued by them, it is necessary to understand what is AT1 (aka Perpetual Bonds) and what should the Investors expect. This crisis will have far reaching implications for all future AT1 issuances as well
2. What is AT1 Bonds? An AT1 bond constitutes direct, unsecured and subordinated debt in the issuing bank, ranking junior to the claims of all creditors (including all subordinated creditors) and only senior to common equity. Please remember this
3. Total outstanding of all AT1 issuances by all Banks is close to 91,000 crores (including Rs.38,000 crores by Private Sector Banks like ICICI Bank, HDFC Bank, Axis Bank, Yes Bank, etc.). These figures are as of 23-02-2020
Read 15 tweets
#MythBuster - A thread - Yesterday, when markets were up and are up today, have seen numerous messages as to how #LIC has been put to work to prop up the markets and also how #LIC Ipo is a risk as their investments need to be sold or they will have to be independent ...
Lets take it through the numbers as to how relevance of #LIC in the #Equity Markets has detoriated. 1) #LIC puts in a net of 50-60k crores a year on an average. #MutualFunds in last few months hold 25-40k crores of cash and 8000 crores of monthly inflow through #SIP.
2) Total Value of #MutualFunds in #Equity has surpassed #LIC value quite some time back. 3) #SIP at almost 90-100k crore is double the money #LIC can deploy. 4) #EPFO averages 25000-30000 cr will soon cross #LIC. Thanks to it #SBI Nifty 50 ETF is now 66000 cr and largest #MF sch
Read 6 tweets
When someone says the word #SIP, most of us associate it with equity #mutualfunds. But did you know that SIPs are possible in the fixed income asset class as well?
#Debt SIPs can be one of the most useful ways to meet your short term goals, recurring goals, and asset allocation needs.
SIPs in #debtfunds can be used to meet yearly school fees, build an emergency reserve, your annual vacation, regular recurring expenses, working capital, etc.
Read 8 tweets
There are 1000s of companies listed in #NSE & #BSE, but how many of these companies were able to make at least more than 10% returns on yearly basis? Here's the details
There are always certain stocks that makes multi fold returns in short span of time, for example all Tech stocks were making huge returns during 1999–2000 period and all real estate stocks were making huge returns during 2006–2008 and NBFC recently.
So when you calculate annualized returns of all stocks, such bubble stocks can also come into list.
Instead I calculated all stocks yearly returns since listing and checked how many times, they were able to make at least 10% returns on yearly basis.
Read 5 tweets
(1/n) •Domestic company corp tax cut from 30% to 22 % percent if
they don't avail any exemptions or incentives from FY20
• Effective tax for these companies rate 25.17 percent inclusive of all
surcharge and cesses. Applicable for current fiscal
(2/n) *listed companies which have announced buyback of shares prior to July 5 will not be charged with super rich tax
*All the measures announced will give relief of 1.45 lakh crores annually
(3/n) *Roll back of enhanced surcharge introduced in Budget on capital gain arising from sale of equity shares in a company liable for STT .
* super-rich tax will not to apply on capital gains from sale of any security including derivatives for FPIs.
Read 15 tweets
After the buildup and the crash-course in my last post, here is my post analysing Promoter Financing market in India. The analysis attempts to explain the slowdown in promoter financing in India and brings out some interesting facts. Read on to know more. Thread 1/12
As per BSE data, the aggregate value of promoters' pledged shares was ~1.85 lakh crore as at Aug 23, 2019. In comparison, the value of promoters' pledged shares stood at ~Rs 2.5 lakh crore as at Aug 30, 2018. The fall in pledge levels indicate slowdown in promoter financing. 2/12
An ET article (July 22), observed that 'pledging of shares by promoters of NSE companies dropped to a six-year low'. Another ET article (Aug 15), noted that 'interest rates on loans against shares (LAS) have surged by about 300 basis points in the past 3 months'. 3/12
Read 18 tweets
This post is a crash course on promoter funding, which serves as a bedrock for my next post.

Promoter funding/ financing, is the colloquial term used for raising of debt funds by Promoters of companies usually against the security/ comfort of shares. Thread 1/13
A promoter, many a times, needs money for (a) equity infusion in a new/ growing business, (b) personal use (c) enhancing stake in established business (d) family settlement etc.

If he doesn't have enough cash at his disposal, he borrows from finance firms. 2/13
The most liquid and widely accepted collateral/ security for these borrowings are shares of established (usually listed) companies.

These shares are pledged to the financing firm (or a trustee) to avail of the debt facility. 3/13
Read 18 tweets
(1/n) Among many things addressed today in Finance Minister's Meet with Press, she addressed there will be development of Credit Default Swap (CDS) Markets in consultation with @SEBI and @RBI RBI. This step was taken following the credit events of IL&FS, DHFL etc in past yr
@sebi @RBI (2/n) Now what is Credit Default Swap (CDS)/ Markets?
CDS is kind of an insurance against a risk of default on a loan by a company. Company – reference entity, default – credit event.
@sebi @RBI (3/n)Why will a seller do that? Coz under such contract buyer will pay a regular amt to seller 4 protection he has bought for his bond, incase of a credit event. Seller will gain incase there is no credit event since he has got regular payment from buyer for his ‘protection’.
Read 17 tweets
8 questions to ask before you invest in a Credit Fund.

Q1) How much yield should the fund offer?
A) The principle of 'higher-the-better' does not apply to credit funds. Higher yields come with disproportionately higher risks. Funds offering 11%+ are a clear avoid. Thread 1/8
Q2) How diversified is the fund?
A) A fund with higher diversification is less risky. As per regulations, exposure in a company cannot exceed 10%. Well managed funds cap exposure in one company to 5% or lower. Lower exposure means lower hit on return if an accident happens. 2/8
Q3) Does the fund have high exit loads?
A) Usually exit loads ensure that investors allow fund managers time to execute strategies. However, very high exit loads often result in debt-traps restricting investors' exit even when there are glaring mistakes made by fund-managers. 3/8
Read 12 tweets
The Yes Bank scare for Mutual Funds (MFs)

Some MFs have significant exposure to subordinated/ perpetual bonds of Yes Bank. These MFs stare at huge valuation losses if the credit rating of these bonds is cut below investment grade. Thread (1/9)
The following MFs have major exposure to Basel II/ Basel III, subordinated/ perpetual bonds of Yes Bank (market value as at 31st July, 2019) -

a) Reliance Nippon ~ Rs. 2150 Cr.
b) Franklin Templeton ~ Rs. 540 Cr.
c) UTI ~ Rs. 445 Cr.
d) Kotak ~ Rs.115 Cr.

2/9
The Credit Rating of Yes Bank Basel III Perpetual (Tier I or AT1) bonds have been downgraded thrice by ICRA in a span of 9 months.

a) Nov 24, 2018 - downgraded to AA- from AA.
b) May 03, 2019 - downgraded to A from AA-.
c) July 24, 2019 - downgraded to BBB from A.

3/9
Read 13 tweets
I am revisiting the topic of Public Issue of Non-Convertible Debentures (NCDs) covered a couple of days back. Only this time, I am focusing on Subordinated (Tier II) NCDs that are slipped in (sometimes slyly) along with senior secured NCDs of NBFCs. Thread (1/9)
Refer to the picture, below (the pic is representative only). A subordinated NCD (circled in red) appears as one of the many maturity options. A naive investor may think that it is similar to other NCDs on offer, just that it has a longer maturity. (2/9)
What many investors are unaware of is the fact that subordinated NCDs are paid after senior NCD holders in-case the company goes into liquidation i.e. subscribers to option I to VIII NCDs, in the pic above, would be paid before payments are made to option IX to XI NCDs. (3/9)
Read 13 tweets
Here is a list of lemons (troubled assets) held by debt schemes of various Mutual Funds -

Qualification - at least 3 lemons post Aug 2018

1. BoI AXA - 6
a) Sintex
b) DHFL
c) Kwality
d) ILFS
e) Coffee Day
f) Avantha Holdings

Thread (1/10)
2. Reliance Nippon - 6
a) ZEE LAS
b) DHFL
c) Morgan Credit (Yes Bank promoter)
d) Reliance Commercial Finance (ADAG)
e) Reliance Home Finance (ADAG)
f) Avantha Realty

(2/10)
3. Birla Sunlife - 5
a) ZEE LAS
b) Wadhawan Global (DHFL Promoter)
c) ILFS Tamil Nadu Power
d) Jharkhand Road Project (ILFS)
e) ILFS Education

(3/10)
Read 14 tweets

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