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Jul 15, 2022 12 tweets 4 min read Read on X
If it looks like a duck, swims like a duck, and quacks like a duck, then it probably is a duck!

The duck test, which shows how apparent things can be, fails when it comes to data.📊

A 🧵 on dealing with #MutualFund numbers, so you don’t commit financial mistakes.👇
1⃣ Same returns from different funds don’t mean the similar performance

Say, 2 funds have delivered 10% average annual returns in the past 10 years.

If you would pick a fund on these numbers, there are 50% chances of you going wrong.❌

The chart explains the difference. 👇 Image
A volatile fund would have some phases of high performance and extended periods of underperformance. 📈📉

It doesn’t make sense to go for the volatile fund, as it would pose problems when you want to exit the fund.

Also, you are taking unnecessary risks to get the same returns.
2⃣ Long-term returns can be misleading!

Typically, long-term returns show a comprehensive picture of a fund’s performance.

But if you simply make a decision by looking at 10-year or 15-year #returns, you may end up picking funds not suitable to your risk appetite.
The table shows that 3 of the top 5 categories are either thematic or sectoral.

But these returns are not useful for assessing sectoral and thematic funds.

These funds are extremely volatile. And you don’t know when the cycle will turn in their favour or against them. ⏬ Image
For e.g., now technology funds are topping the charts for 10-year returns.

But in 5 out of the last 10 years, the index has underperformed #NIFTY50.

The point is sectoral funds manage these outsized returns during their cycles, and it reflects in their history. Image
3⃣ Low NAV doesn’t mean it’s cheap.

Many think a fund with a low NAV is better.

Such investors feel low NAV will help them get more units and that can translate to higher returns.

Following the same logic, may buy NFOs as they get each unit of a scheme at Rs 10
The truth is high or low NAV doesn’t matter.

Here’s a real-life example.

Say 3 years ago, on July 1, 2021, you invested in 2 Flexi Cap Funds:

👉Axis Flexi Cap Fund (lower NAV)
👉PPFAS Flexi Cap Fund (higher NAV).

See how your investments would have panned out ⏬ Image
In Axis Flexi Cap Fund, you got more than 2X units than PPFAS Flexi Cap Fund!

Yet, gains are considerably higher in PPFAS Flexi Cap Fund.

It shows low or high NAV has nothing to do with a fund’s potential. The rate of return you get from a scheme is all that matters.✅
4⃣ Index Funds vs ETFs

ETFs are a great product to follow an index (passive investing).

In fact, some ETFs are better than index funds as they have a lower expense ratio and lesser tracking error. Image
However, there are a few times when ETFs turn out to be more expensive.

Some niche ETFs don’t have enough demand. So they trade at a premium which can add to their cost.

Take this into consideration, especially before investing in a niche ETF.
If you learned something new, like, share, and retweet the first tweet to help us reach more readers.😇

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More from @ETMONEY

Aug 17
Parag Parikh Flexi Cap is the most popular fund today.

We interviewed its CIO, Rajeev Thakkar.

He shared his views on:
- Where would he invest for long term
- How to spot business trends early
- How to be a better investor
- India’s growth story
- Fav books

..& much more.🧵
1. WHERE WOULD HE INVEST FOR HIS GRANDCHILDREN?

He surprised us with the answer.

He would prefer a diversified scheme or an index fund for such a long-term investment.

Reason? Businesses that look great today may not be relevant in 5 years.
Thakkar of ..@PPFAS has been managing money for 22 years.

He still holds stocks that were bought at the start of his career.

However, things have started to change now.

Today, he ends up selling a lot of stocks in two to three years due to the fast-changing world.
Read 17 tweets
Aug 9
Reliance’s stock commands a ₹19 lakh crore market cap.

But to buy the entire business, you’d need ₹21.6 lakh cr.

On paper, its worth is just ₹8.4 lakh cr.

Three numbers. Three very different meanings.

Here’s what every investor should know. A🧵
What is Market Value?

It tells you what the stock market thinks a company is worth today.

For example:

Reliance’s share price on 24th July is ₹1,403

It has issued 1,353 crore shares

So Market Value = ₹1,403 × 1,353 = ~₹19 lakh crore
What is Enterprise Value?

EV = Market Cap + Total Debt – Cash

It shows the true cost of buying a company.

Why? Because if you buy a business, you also take on its loans (debt) and get whatever cash it has.

So EV tells you what you’re paying to own 100% of the business.
Read 11 tweets
Aug 6
Birla & Adani rule India's cement industry.

Now, another big business group is planning to make its mark in this competitive sector.

JSW will soon launch a ₹3,600 cr IPO for its cement arm.

It wants to increase capacity & strengthen the balance sheet.

Should you apply? A🧵
We will cover 5 key aspects in this analysis:

- Business Model of JSW Cement
- Financials
- Competitor Analysis & Valuation
- Key IPO details
- Strengths and challenges

Let’s start.
1. BUSINESS MODEL

JSW Cement is India’s largest GGBS maker, with 84% market share.

GGBS is a strength-boosting, eco-friendly material used in cement.

It also makes blended cement, clinker, construction chemicals, waterproofing compounds & more.
Read 13 tweets
Jul 20
SEBI just proposed sweeping changes to mutual funds.

These will make mutual funds easier to understand and safer to invest in.

Here are the 8 big changes that could redefine mutual funds as we know them.🧵👇
Over time, mutual funds have gotten a little crowded.

Funds with different names often ended up doing the same thing. And for the average investor, navigating this landscape is a nightmare.

SEBI noticed and is now stepping in to fix it.

Here’s what it proposes to change.👇
1. Fund houses can offer both Value & Contra funds

Until now, fund houses were allowed to offer either a Value fund or a Contra fund, not both.

The reason: While these funds follow different investment styles on paper, in reality, many ended up holding the same set of stocks.
Read 25 tweets
Jul 16
Small-cap funds have been investors’ favourite.

But each scheme has a distinct style.

Nippon Small Cap: Diversified Portfolio + downside protection

Bandhan Small Cap: Bull-run performer + high cash calls

Which one suits you the best? We analysed them all.

A🧵
We analysed every small-cap fund across 6 key dimensions:

-Allocation to small-cap stocks

-Frequency of buying and selling

-Portfolio diversification

-Cash exposure

-Bull market performance

-Performance during tough times

Here’s what we found.👇
ALLOCATION TO SMALL-CAP STOCKS

These schemes must invest at least 65% in small caps.

Some funds stick close to this lower limit. Some don’t.

.@EdelweissMF Small Cap, for example, has averaged 66.75% since inception, allocating significantly to midcaps (28.35% in May 2025).
Read 19 tweets
Jul 13
Elon Musk doesn’t take a salary. He doesn’t sell stock when he needs cash.

He borrows against his assets to let his wealth compound.

This isn’t just a billionaire playbook.

Even retail investors can do something similar with mutual funds. A 🧵
People often look to redeem their mutual fund investments when they need money for emergencies, big-ticket purchases, or to settle short-term liabilities.

But this could be one of the costliest financial decisions you’ll ever make.

Why? 👇
Every time you sell, you’re not just withdrawing money.

You’re triggering taxes. You’re interrupting compounding.

And you’re pulling yourself out of the market, often at the wrong time.

All for a short-term need that could’ve been managed smartly.
Read 17 tweets

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