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Jul 19 • 4 tweets • 2 min read
Every year produces a new 'star' #mutualfund. A scheme that has outperformed sharply and hence garners the most flows in that year. In this piece, @SatyaSontanam looked at such stars and what happens to them, after stardom.
Their outperformance either diminishes or slips into underperformance. The HDFC and ICICI Schemes that did well in 2014-16, slipped in the growth market of 2018-20 and Axis assumed leadership. This year,ICICI and HDFC have staged a comeback. ABSL AMC has still not recovered.
The lesson from this? You either have a portfolio diversified across investment styles and hope that in aggregate your MFs do well in different market conditions or you go passive and cut out the need to figure out who will come out on top.
livemint.com/money/personal…

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More from @ActusDei

Neil Borate Profile picture
May 25
#Quant MF has come out of nowhere to top the performance charts over the the past two years. It has gone from Rs 250 crore in assets in 2020 to 8k crore at present and from 25k folios to 10 lakh. What is this AMC? Where did they come from? My long story today, sheds some light
It's founder, Sandeep Tandon spent much of his past career in broking or trading in firms like ICICI Sec and his passion was derivatives. And this is the style he has brought with him (more below). He founded Quant Capital in 2007 and after some iterations it became an AMC
What sets it apart? A huge spend on data, a huge reliance on models (as opposed to fund managers) and a model that is constantly refined. Tandon collects data on a huge number of variables, including things like climate change and sentiment and builds it into his software
Read 7 tweets
Neil Borate Profile picture
May 23
Sebi in an informal guidance note to Guardian Capital Investment Advisors clarified some important questions for RIAs today: 1) Can clients can continue to hold regular plans bought before Sep 2020 (segregation circular) even if fresh money is put in direct plans? Sebi said yes
Can RIAs can provide services like offer products like corporate FDs and PE funds which only have regular plans to advisory clients? Sebi said no.
Can RIAs can seperately offer services like tax planning or expenses management to advisory clients and charge a fixed fee for them. Sebi did not answer this question saying the questioner was citing a wrong legal provision for interpretation
Read 4 tweets
Neil Borate Profile picture
May 23
#Sebi is hot on the trail of front running cases. But what's interesting is the regulator's detection software and how it has developed over time.
1) In the old days, front runners used the accounts of immediate family members. The software detected it and caught perpetrators
2) Then insiders discovered that brothers-in-law were outside the legal definition of family. So 'behnois' became extremely popular among them. livemint.com/mutual-fund/mf… Article by @jaysh88 and me
3) When Sebi algos caught on to the behnois, fraudsters found a new mechanism - accounts for hire. HNIs and cos provide demat accounts to them for a fee. As many as 300 can be rented out at short notice. The front running gets sliced and diced among seemingly unrelated parties
Read 4 tweets
Neil Borate Profile picture
May 23
Today, I write on 'Save now buy later'. This is theme on which a growing tribe of startups is based. They say it is the opposite of 'Buy now pay later' because it encourages saving and not spending. How? livemint.com/money/personal…
Let's say you want to buy an iPhone for 1 lakh. You don't have that much money but you can put aside Rs 10k per month. 1) You can buy it by taking a loan. 2) You can buy it by saving money in your bank account or liquid fund.
3) The third option - SNBL lets you pay the money as advances to the merchant. In return for a discount. If you factor the discount as a kind of 'return', the IRR more than an FD. Nice no? Yes, but there are risks like the merchant going bust or not honoring its side of the deal
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Neil Borate Profile picture
May 1
The #Nasdaq 100 is down 22% from thr start of this year. It may have further to fall but for those wanting to invest, #ETF feeder funds are open. Yes, flows into active international funds are stopped. But FoFs into ETFs have a separate limit of USD 1 billion. A tiny 🧵
You may be puzzled because Motilal Oswal AMC, the largest in the passive category has stopped all inflows. This is because Motilal index funds and ETFs directly buy US stocks. They don't get the benefit of the separate ETF limit.
You can buy ETF units of Motilal AMC on the secondary market but since the AMC cannot create fresh units to meet demand, chances are you'll be forced to pay an unnecessary premium to the ETF NAV. Instead you can just go for an fund of funds (FoF) feeding into an overseas ETF.
Read 4 tweets
Neil Borate Profile picture
Mar 1
Trading in US stocks to start in GIFT City from 3rd March. The NSE-owned exchange in GIFT City (NSE IFSC) in Gujarat will start trading in 8 US stocks and add more subsequently. A quick thread below.
1. Initially trading in 8 big tech giants like Alphabet and Amazon will start on 3rd March. Eventually the 50 largest US companies will be listed.
2. Why would US companies list in India? Well they are not doing so. This is trading in 'unsponsored depository receipts'. Meaning that market makers will buy the shares in the US and issue the receipts against them.
Read 7 tweets

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