A nobody cares thread.

Nobody cares about the things that matter - getting investors in, helping new distributors advisors, making things (Slightly) easier for investors, honest mis-selling etc.
Nobody cares about direct plans of mutual funds
Nobody cares about about mutual funds either

Very few care about mutual funds. Just 2.1 crore unique investors. If you probably take out HNIs/institutions in this, that's maybe 20-30%, what's left are the common gareeb folks.
Nobody cares about direct equity investing either.

Next time when someone says, people are moving away from mutual funds to direct equities, show them this and punch them in the throat.

Only 1.5 cr active demat accounts. If you remove duplicates, maybe 60% of this?
Nobody cares because very few people have money to care either?
That begs the question, who cares? About what?

Nobody seems to be bothered about about bringing the next 1-2 crore Indians who invest something into the markets.
What AMCs etc care about?
1. Launching 100 NFOs instead of fixing performance including garbage like ESG
2. Tweeting pointless #Tags
3. Raising expense ratios to protect margins due to outflows
4. 27 "New Normal" and "India growth story" webinars
Nobody gives a shit about:
1. Bringing new investors into the markets. It's just milking the existing whales
2. Bringing new distributors and advisors into the market. Why do that when we can tweet #Advice something random
Please care about things that matter.

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More from @passivefool

30 Nov
HDFC makes over Rs 400 crores in fees (direct plan) from just two of Prashant Jain's schemes. And then add another Rs 300 crores odd as commissions in regular plans.

All this for underperforming Nifty 50 by 4-5% in the last 5 years.
Being a large AMC is a license to print money. After a while stories and fund manager cults dwarf brute numbers and facts.
85% of industry AUM is in regular plans. By my guesstimate, over half of the AUM is not getting the right advice or worse yet is being scammed into useless costly funds.
Read 21 tweets
9 Oct
On second thought, making young people feel guilty about not saving or starting investing can be harmful. When young people are starting their careers, odds are they won't be making much, they should be spending what they can in experiences rather than invest or save.
I used to feel guilty about not starting investing early but on second thought, I probably couldn't have because I wasn't making enough. A good chunk of the financial services industry is based on making people feel like shit for not investing in their mostly scammy high fee
products. I think this has played a big part in deterring investors - the anxiety caused by the money shamers, the guilt of not knowing how to invest, the intimidation and the ensuing guilt as a result of 1000s of funds, platforms, guides, books, gyan, gurus and shit.
Read 10 tweets
16 Sep
Today in re-learning. Most of active fund returns can be explained by factor exposures - Value, Quality, Momentum, Low-Volatility etc.

msci.com/documents/1019…
You can assemble these funds for less than 50-60bps. You can replace all those costly, mostly useless discretionary active funds which most likely are doing what a smart beta ETF (UGG, disgusting term) does and charging on an average 1.2%-1.5%.
Anybody who predicts things is either lying or making a fool oh himself. So I'll make a fool of myself. Globally smart beta ETFs have become replacements for traditional active funds. I predict that this trend will only pick up pace over time.
Read 8 tweets
25 Jul
You'd be excused for thinking mutual fund mis-selling happens only India and not in the US and UK because they are developing countries. But you'd be WRONG!

It's the same everywhere. AMCs handsomely compensate distributors to hawk funds.

thetimes.co.uk/article/advice…
Foreign trips. Expensive gifts are the norm. I can't even count the amount of money that is paid by AMCs to distributors in the name of "Investor Education. SEBI said you can't do this. So now AMCs pay them as" marketing expenses".
So if an AMC pays a distributor for shoving funds down an investor's small intestine, he gets an all expense paid trip to Thailand and a relaxing Thai massage. This is also, in the industry parlance know as "investor education"
Read 12 tweets
22 Jul
Ok, slight correction, this is exchanges directly. Both NSE and BSE had launched a platform called Request for quote (RFQ). So, the Indian bond market is a bunch of pieces across multiple regulators. Corporate bonds are regulated by SEBI. G-Secs, Money market instruments by RBI
For G-Secs there's a platform called Negotiated Dealing System (NDS) for all secondary market trades. But there the minimum order size is Rs. 5 crore and multiples. There's an odd lot market as well but not much trading happens. So this is off-limits for small retailers.
This is why direct investing in G-secs was notoriously difficult and was only possible through G-Secs or Gilt funds. The way G-Secs are issued is that there is an auction and the yield is determined there. So, in 2018 the exchanges introduced something called
Read 13 tweets
21 Jul
Investing in mutual funds schemes because of some tax-advantage has to be right up there with investing in schemes with good past performance. It's utterly and completely stupid!

Taxation can change bases on the whims of policymakers, your investing plans don't.
This is why categories like Equity Savings - which was born solely because of a tax change are as useless as a torn underwear in a hot summer.

This is a particularly inept fund category that combines equity, debt, and arbitrage to accomplish nothing.
An equity savings fund is no different from a conservative hybrid fund except, it uses arbitrage to get equity taxation. But the good thing about the category is, it does, none of the things right.
Read 4 tweets

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