Discover and read the best of Twitter Threads about #mutualfundssahihai

Most recents (13)

(1/n) 23 Apr 2020, rcvd this email from @FTIIndia which suggested that my investment with them are accessible anytime anywhere, although the public places are inaccessible. On 24th Apr I recvd another mail from @FTIIndia which said that my money with them has been frozen... Image
(2/n) who m I ? I am one of those unlucky 300,000 Indian investors who were risk averse and chose debt funds over equity to park my hard earned money with this fund @FTIIndia . Now the entire money has been frozen since 24th Apr with no communication on timelines by fund house..
(3/n) I would rather say a mismanaged fund house who mails you in the morning that your money is safe but you receive another mail 3am next day which says that you cant access your money now and even we don't know when you can access it..
Read 16 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
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
Today when Equity Markets have crashed & SIP investors esp. ones who started in last 5 years & are seeing the investments in red are worried. This is an effort to address them through a first-hand story of my SIP in Franklin India Prima Fund. @FTIIndia @Anand_1969 @Sanjay_69 1/21
I started this SIP on 1/10/20013 & the investment values are re based to Rs. 100/- as on that date. There have been 198 months since then & I invested on 186 out of these. There were only 3 small lump-sum investments done outside the SIP installments in these 18 years. 2/21
The 1st installment went in at the NAV of ₹ 52.79 (NAV – 1 in the chart) & the market continued to rise continuously for the next 4.5 years with the Fund hitting an all-time high NAV of ₹ 319.66 (NAV – 2) on 31/12/2007 (reference to my transactions only), a rise of 506%. 3/21
Read 23 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
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
Day 2 on Twitter. Coming to the next set of awards - The "Foot in Mouth" Awards. A clear winner in this category is DSP Mutual Fund. I have shortlisted them for their sheer cockiness. Thread. (1/10)
In September, 2018, the Fund House triggered a panic by selling DHFL bonds at distressed levels. It was a business call; and hence a benefit of doubt could be given. (2/10)
What cannot be forgiven though, is the brazenness with which the Fund house eulogised their portfolio selection capabilities. 3/10
Read 17 tweets
Alright! Here I am, making my debut on Twitter. To mark the occasion, I am handing out the "Lemon of the Year" Award to one of the worst performing Debt Mutual Funds.

A clear winner in this category, by a mile, is BoI AXA Credit Risk Fund. Thread (1/9)
The fund has achieved a rare feat of burning almost 90% of its AUM within a span of last 11 months i.e. the AUM contracted from ~1700 Cr in Aug 2018 to ~200 Cr in Jul 2019.

The one year return is a whopping minus 48%. 2/9
The Fund Managers successfully caught all the lemons that fate threw at them viz DHFL, IL&FS, Kwality, Sintex, Cox & Kings, Coffee Day etc. 3/9
Read 15 tweets
Seeing quite a few msgs on twitter how one bought stocks at 2008 high , stocks went down 80% and then they sold at 5x of buying price . Funny no one bought DLF , Unitech, Suzlon, Rcom etc . Don't jump into buy on this survivorship bias based stories
The amount of mutual fund money which flowed into the bourses based upon the #MutualFundsSahiHai slogan lifted all stocks . Such a liquidity flow might not be repeated in the future if the MFs now take a big hit .
If you want to buy for long term as an investor , wait for the PE ratios to drop further . Sharing a study which I did long ago , but the principles still hold true
Read 4 tweets

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