Share this page!

Artificially intelligent fool 🧠 Profile picture
Twitter logo
19 Jan, 9 tweets, 2 min read
Trickle and then a deluge 👇
Slow but steady growth in index fund AUM. for all those people crying about then, there's about 1.5 lakh cr in large funds and just 12000 cr index funds for comparison. Excluding g the EPFO ETF allocations.
I don't think this number will dramatically change until we have a mega market crash. Crashes are the only things that seem to remind investors how most actively managed mutual funds are useless.
It took 2008 for Index fund/ETF adoption to see a hockey stick growth globally. And it will the same here. Given the steady rise since 2014, most investors have seen some green in their portfolios which means they haven't looked closely at the performance they're getting.
But the other issue is that every AMC is now filing to launch index funds and ETFs seemingly undercutting the other. This will be a net negative. These people seem to be launching these funds because they've done well.
And this good performance of index funds will reverse. This might mean that these guys will again abandon these products like ugly ducklings and we'll see another batch of terribly managed index funds and ETFs that track poorly.
Next thing. There have been 7 straight months of net outflows in mutual funds. And is this market party stops, this will get uglier. If active focussed AMCs aren't taking in enough fees money, will the low expense ratios on index funds continue?
We're already seeing AMCs raise expense ratios across most of the debt fund categories. Select AMCs have raised on equity funds. Only a matter of time before equity expense ratios rise too.

Lastly, if you hate index funds a d are a salaried employee, congrats you're an index fund investor in your EPF, 😂
Just so we're clear at 12000 cores nobody cares about index funds and ETFs. Without advisors to push them, this won't change in a hurry. Nothing makes a product popular like a 80bps commission. Unfortunately index funds are below poverty to line to pay high commissions

• • •

Missing some Tweet in this thread? You can try to force a refresh
　

Keep Current with Artificially intelligent fool 🧠

Artificially intelligent fool 🧠 Profile picture

Stay in touch and get notified when new unrolls are available from this author!

Read all threads

This Thread may be Removed Anytime!

PDF

Twitter may remove this content at anytime! Save it as PDF for later use!

Try unrolling a thread yourself!

how to unroll video
  1. Follow @ThreadReaderApp to mention us!

  2. From a Twitter thread mention us with a keyword "unroll"
@threadreaderapp unroll

Practice here first or read more on our help page!

More from @passivefool

Artificially intelligent fool 🧠 Profile picture
21 Jan
Investors might make money or lose money in this rally. But all the snake oil salesmen and gurus will make a killing off all the unwitting traders and investors who are driven by greed and are desperate to make money.
Several scammy profiles have have 50K, 100K+ followers and are just blatantly peddling stock tips, options calls etc and all these traders and investors are flocking like flies to a piece of turd.
And it's working so far, but when this party ends, whenever it does, all the people who followed these illiquid small-cap gurus will be in deep trouble unable to find a bid even if they want to sell.
Read 5 tweets
Artificially intelligent fool 🧠 Profile picture
16 Jan
It's a beautiful Saturday on this Corona riddled planet. It's a good day to do the following:

1. Open your account statement and find out how much commissions you are paying. You'd be paying anywhere between 0.7% to 1.3% extra over direct plans.
1.5 You can download your statement on CAMS, KARVY, NSDL etc.
2. If you are one of those Robinhood Traders and you started mistakenly investing in mutual funds instead of trading mutual funds, commissions can kill you! A simple 1% difference in commissions can add over 10-15 years. This comparison has been done to death but once more.
Read 26 tweets
Artificially intelligent fool 🧠 Profile picture
14 Jan
What a story this is. Global ETF and ETP assets at US$7.99 trillion. Millions of small investors across the world getting low-cost diversified access to stocks, bonds and Marijuana ETFs and savings billions in fees.

etfgi.com/news/press-rel…
Although ETFs are orphan products in India, one day in the next 7 to 10 years, ETFs will surely see growth in India. Won't happen before the next beat market happens though.
From about 50 ETFs 2-3 years ago, we're ate 100 ETFs now. We're seeing new bond ETFs aper from those 10 year gilt ones, we now have an emerging line up of smart beta ETFs. That's progress.
Read 5 tweets
Artificially intelligent fool 🧠 Profile picture
14 Jan
This 👇

This might seem like another "we need financial literacy" tweet. But to me, it's not, here's my theory:

This speaks volumes about the existing system. It's clearly not working for a whole lot of people, particularly the non English folks and young people.
The product sellers are partially to blame. The nonsense they spew in the name of "financial education" is an insult. All those god awful videos and nonsensical garbage masquerading as "content" is enough to make you wanna gouge your eyes out.
This is even worse in the insurance industry where selling trumps everything. And given that banks are the only source of financial advice most people have access to, the problem has reached nightmarish proportions.
Read 11 tweets
Artificially intelligent fool 🧠 Profile picture
26 Dec 20
Holy shit. 8000 crores raised IN NFOs in a month. Look at the schemes, all pointless garbage!

m.economictimes.com/mf/analysis/eq…
If you look closely, 4 out of the 6 top NFOs in terms of money raised are from bank owned NFOs. These AMCs are notoriously skilled at selling garbage funds through their banking channels. They've turned mis-selling into an art. They're are Picasso's of mis-selling
One would be excused for thinking these are intent based allocations by investors which isn't the case. These funds would've been sold mis-sold by any way possible. Bank RMs are incentivized to do so.
Read 10 tweets
Artificially intelligent fool 🧠 Profile picture
25 Dec 20
Wow, this NFO gravy train isn't stopping

BNP Paribas Mutual Fund has filed to launch BNP Paribas Aqua Fund of Fund. Underlying fund - BNP Paribas Aqua, which invests in companies with a focus on water. Clearly playing off on the hotness of ESG and global

sebi.gov.in/filings/mutual…
The fund has marginally delivered over the benchmark. But the questions is, is it really worth all the hassle? Taking a fund manager risk, theme risk, style risk etc. Sure, you may get paid for it. But it's a hit or a miss.
In my it often pays to keep costs low and keep things uncomplicated as possible. One thing investors might not realize is that this trend of AMCs with foreign parentage or affiliations launching FOFs for useless global funds will pickup steam if the US performance continues.
Read 9 tweets

Did Thread Reader help you today?

Support us! We are indie developers!

This site is made by just two indie developers on a laptop doing marketing, support and development! Read more about the story.

Become a Premium Member ($3/month or $30/year) and get exclusive features!

Become Premium

Too expensive? Make a small donation by buying us coffee ($5) or help with server cost ($10)

Donate via Paypal Become our Patreon

Thank you for your support!

Follow Us on Twitter!

Like this author's thread?

Get emails when @passivefool has new unrolls!

Check out other threads from @passivefool!

Read all threads by @passivefool