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Kirtan A Shah, CFP®

@KirtanShahCFP

Nov 6

Bond markets are expecting higher inflation with trump winning & hence the yields are going up, not a good sign for India equity. Let me explain (1/4)

(1) If Trump increases duty, it is inflationary as the imports will become costly & hence yields are going up

(2) If trump reduces corporate taxes, it means more stress on the government finances, more borrowings & hence higher yields (2/4)

While FED main continue to lower rates, the rate cut cycle will reduce in an inflationary situation. Remember FED can only impacts the shorter end of the curve with rate cuts. The longer end of the curve is market determined & hence the yields are up because markets feel inflation is coming back with Trump (3/4)

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Kirtan A Shah, CFP®

@KirtanShahCFP

Dec 13, 2023

Continuing our Mutual Fund educational series, here’s the 4th 🧵 in the series,

Topic - “Everything you need to know about Mutual Fund Taxation”

Do ‘re-tweet’ & help us educated more retail investors (1/13)

If you prefer watching a video instead, here’s a link to the 15 minute detailed video on the same topic -

Do subscribe & hit the bell icon to get notified everytime we post an educational video (2/13)

In Mutual Fund taxation, you first have to be able to classify your fund either as,

(a) Fund investing less than 35% in Equity - This fund will get Debt Taxation

(b) Fund investing between 35% - 64% in Equity - This fund will get Debt + Indexation Taxation

(c) Fund investing 65% & more in Equity - This fund will get Equity Taxation (3/13)

Read 13 tweets

Kirtan A Shah, CFP®

@KirtanShahCFP

Dec 7, 2023

Continuing our Mutual Fund Education Series, here’s the 3rd thread; this will demystify the Hybrid Mutual Fund categories for you.

Do ‘re-tweet’ & help us educate more investors to make the right investing decisions (1/9)

(Q1) What are Hybrid Funds?

Hybrid funds are funds, which invest in multiple asset classes like
- Equity
- Debt
- Gold
- Preference Shares
- REITs & InvITs

With an objective to reduce volatility (vs pure equity funds) & try an generate better risk adjusted returns (2/9)

(Q2) Types of Hybrid Funds?

- Conservative Hybrid Fund
- Balanced Hybrid Fund
- Aggressive Hybrid Fund
- Dynamic Asset Allocation (DAAF) or Balanced Advantage Fund (BAF)
- Multi Asset Allocation Fund
- Arbitrage Fund
- Equity Savings Fund (3/9)

Read 9 tweets

Kirtan A Shah, CFP®

@KirtanShahCFP

Dec 1, 2023

Continuing our Mutual Fund series, this thread will focus on ‘Demystifying the Debt Mutual Fund Categories’

Do ‘re-tweet’ & help us educate more investors (1/10)

Debt Mutual Funds have 16 different categories & these categories are differentiated on 3 major parameters,

(1) Average Maturity
(2) Mac Duration
(3) Credit Risk (2/10)

What’s Average Maturity?

Average maturity is similar to your tenure in FD. If your FD has a 3-year tenure, you expect the FD to mature in 3 years. Similarly, if the average maturity of a debt fund is 3 years, it means that all the bonds in which the scheme has invested, their weighted average maturity is 3 years. Open ended mutual funds do not mature as such but Average Maturity gives you an idea that 3 years is atleast what you should have as a time horizon if you want to invest in this scheme with a 3 years of average maturity. (3/10)

Read 10 tweets

Kirtan A Shah, CFP®

@KirtanShahCFP

Nov 30, 2023

"Should we invest or wait now that the markets are at an all time high?" - an investor asked.

I dint want to sound technical & hence told him about India's liquidity story. Do 're-tweet' this quick small 🧵, retail will benefit I think (1/8)

- I remember in the early days of my career, I was told markets fell ~60% during Lehman crises because FII's withdrew $2B
- Go back 10-15 years & FII's were a major reason markets moved in India
- Not any more
- Today FII's have only 16.5% holding in India, a decadal low (2/8)

The biggest reason market falls in India are shallow is the domestic money now,
- $2B is the monthly SIP book of the MF industry (remember Lehman?)
- Plus lumpsum investments in MF
- Plus Insurance & pension money

And still only 5% of India is invested :) (3/8)

Read 8 tweets

Kirtan A Shah, CFP®

@KirtanShahCFP

Nov 29, 2023

There are 1500+ schemes in mutual funds spread across multiple categories. To build the right portfolio, you need to understand the categories well. It’s less about the scheme & more about the category you choose in Mutual Funds.

This 🧵 is all about the Equity Category. Do ‘re-tweet’ & help us educate more investors (1/11)

As per SEBI guidelines, mutual fund schemes are classified as,

(1) Equity Schemes - Investing in Large, Mid & Small Cap Equities
(2) Debt Schemes - Investing in Bonds
(3) Hybrid Schemes - Investing in a mixture of Equity & Debt
(4) Solution oriented Schemes - For retirement & Children planning
(5) Other Schemes - Index Funds, ETF’s & Fund of Fund (2/11)

In this post, we will focus on Equity Schemes. In Mutual Funds there is a clear definition of what is called a large cap, mid cap & small cap.

- Large Cap Stocks are the top 100 stocks by market capitalization
- Mid Cap Stocks are stocks from 101 to 250 by market capitalization
- Small Cap Stocks are 251 & below in market capitalization (3/11)

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