Amit Kumar Gupta Profile picture
Apr 24, 2020 6 tweets 2 min read Read on X
In an unprecedented move, a Mutual fund declared winding up 6 credit risk funds (CSF) overnight having 26,000 crore in AUM. This has caused undue anxiety amid investors as they cannot buy, sell or redeem their units.
(a) Liquidity, Maturity profile and #Credit quality for CSFs should be checked thoroughly before investing. This particular MF had redemption issues earlier with Essel, #ADAG and #Vodaphone exposure. This is not a new issue, but extension of previous investment calls.
(b) #Emergency fund cannot be invested in debt funds specially credit risk funds. If you were doing this, it's time to get a financial advisor on board. If he has recommended these funds, time to change your advisor.
(c) Not all CSFs are same. There are high risk- high return- relatively illiquid #concentrated funds and low risk- low return- relatively liquid- diversified funds. A thorough research and monitoring is required for investment in these funds. They are NOT as safe as FDs
(d) Check how much of your credit risk portfolio investment is in companies below AA- or equivalent ratings. Anything more than 10% can be considered risky and hence, avoidable.
(e) Check how much is borrowing by the MFs against the AUM of schemes. Some have ZERO borrowing which is a good sign.

In case of Franklin, the borrowing will first be settled against redemption. Only then the investors will be repaid.

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More from @amitgupta0310

Jan 5
SEBI has shared new framework for short selling in Indian financial markets and allowed both institutional and retail investors to short sell.

“Short selling” is selling a stock which the seller does not own at the time of trade.

🧵 on the details.
Naked short selling shall not be permitted.

All investors would be required to mandatorily honor their obligation of delivering the securities at the time of settlement.

Otherwise Securities will go in auction and sellers need to find buyers there.

It means Intraday selling and then squaring off positions is OK for retail investors, carry forward is NOT.
Securities Lending and Borrowing (SLB) shall be put in place to provide the necessary impetus to short sell.

The introduction of a full-fledged SLB shall be simultaneous with the introduction of short selling by institutional investors.

Date of launch not yet decided.
Read 8 tweets
Sep 8, 2023
Markets had an extremely smooth run-time in last 5 months, much ahead of everyone's expectations.

Older and wiser investors are unduly cautious while newer and bold investors with YOLO approach wants more.

Time for some investment lessons learned from past cycles 🧵
(1) Define your investment objectives and goals clearly.

Success in investment depends largely on clarity in investment O&G. Factors like growth, yield, income, risk, are dynamic & will keep on changing every year.

Investors must periodically re-evaluate objectives.
(2) Forming a solid investment team is critical to successful investment strategy.

Carefully assess the honesty, competence, and objective of those giving you investment advice & services.

DIY investors need to make sure they have sufficient time and skill set to execute.
Read 11 tweets
Dec 24, 2022
A thread of the 10 best podcast episodes (& series) I listened to this year #2022inreview

PS : I use @Spotify as my platform, so hyperlinks are from there. In the case of the series, I have shared a link to the first episode.

This is across genres. RT for wider benefit.
(1) For over ~4hrs, @amitvarma and @BShrayana discuss the complexities of being a woman in India. Context is the latter's wonderfully written - "Desperately Seeking Shah Rukh" which is a cleverly disguised economics book talking about movies.

open.spotify.com/episode/5JVmQU…
(2) Summarizing gist of the business is a forte of @bizbreakdowns and this one chronicling GE's dominance and decline is a treat, specially inputs coming from Josh Aguilar, @MorningstarInc analyst who has tracked the company closely for many yrs.

open.spotify.com/episode/50CTSn…
Read 15 tweets
Nov 29, 2022
Certain business channels allowing ONLY SEBI registered analysts & advisors to come on their shows from NOW ON after all this brouhaha is just hogwash.

This should have been done always in the past but that's not how money is made on channels.
Eventually all business channels need to survive which means more hits and clicks across various social media platforms. So called finfluencers provided that on a platter, regulation be damned.

So now following the RA (2016) or RIA (2013) regulations smells of hypocricy.
Every finfluencer has been blantantly disregarding RA/RIA regulations for years in the name of 'only for educational purposes'.

Regulations are clear, if you want to talk about stocks across ANY platform, get a license from SEBI. But this has been rarely practiced.
Read 9 tweets
Mar 7, 2022
Quite a lot of investors are worried about the FPIs dumping Indian equities and concluding that this is the prime reason for the ongoing correction in stock prices.

A 🧵 to understand details about FPIs buying and selling in financial markets before jumping to conclusions
(1) FPIs are NOT a uniform class of investors.

Some examples:

Pension funds - very long term horizon (multi-decades)
Hedge funds & AIF - very short term horizon (3-6m)
EM funds - buy/sell as basket including India
ETFs - MSCI, iShare EM, iShare Asia, FTSE
(1a) All these investors differ in Investment:

- Horizon
- Objectives
- Strategies

They rarely act in unison as the universe of investible stocks is also different.

To assume that all FPIs are selling at the same time violating the mandate & exiting India is bit overdramatic.
Read 19 tweets
Mar 5, 2022
A good article on the challenges of working as SEBI registered Investment advisor (RIA). The new norms have come from Oct-20 and it has caused more harm than good.

A short thread 🧵
(1) The 2yr PG in "relevant stream" clause is filled with roadblocks (Earlier it was only PG). Forcing RIAs to do a PG degree that too of 2 yrs is bizzare. Many professional certifications like CS were removed from the equivalent PG category overnight.
(2) Foreign PG degrees of 2 yrs require equivalent certificate from Indian authorities which is a pain specially if considerable time has passed for PG. Its like running from pillar to post. Proving "relevant stream" again has been an uphill task.
Read 9 tweets

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