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Aug 2 • 4 tweets • 2 min read
Focused Funds were supposed to be the small investor's PMS. These funds can invest in a maximum of 30 stocks. The idea is to run concentrated portfolios, take higher risk and earn higher returns than a diversified MF. Do they? Not significantly. Story by @SatyaSontanam.
On average, focused have a small outperformance against flexicaps. But if you look at the range of returns between schemes, it is bigger in flexicaps. Why this conservative behaviour in focused? Focused funds tend to be mostly in largecaps, to offset risk of having fewer stocks
How do they stack up against Portfolio Management Services (PMS)? On avg, hardly any difference in returns. Range of PMS returns is wider, so trick is to select the right PMS. If you factor in tough tax regime in PMS and fees, your PMS needs to do REALLY well to justify itself
#mutualfunds #personalfinance livemint.com/money/personal…

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More from @ActusDei

Neil Borate Profile picture
Aug 3
Today we feature @dhirendra_vr. His journey began in the early 1990s when he was a student. Dhiren persuaded his parents to give him money to invest. He put it in close ended funds and saw it go up 16 times in 2 years. This wasn't genius - it was the Harshad Mehta Bull run Image
But by happy confluence of factors, he got out before the market crashed. He was clipping newspapers to track NAVs and he saw prices swing far ahead of NAVs. He had also invested for specific goals - a retirement home for his dad and his sister's wedding and those goals were hit
In the years that followed, Dhiren invested in tax saving funds. There was a limit of just Rs 10,000 for ELSS under Section 88 (the predecessor of Section 80C) back then. However most of his money was not invested in the stock market, but into his business - @ValueResearch
Read 8 tweets
Neil Borate Profile picture
Aug 1
When I watched Shark Tank, I was curious about the entrepreneurs who judged pitches on the show. How did they invest their money? How important were startups to them? Was it just play money and a way to get publicity? For @AnupamMittal, startup investing is serious business
Most of his personal portfolio (93%) is in startups. He tried his hand at listed stocks, but it didn't work. Mittal says his IRR over the past 15 yrs is 40%. But it is skewed. He has invested in 220 startups. Only a handful will succeed. Mittal expects 7-8 unicorns
Who are the winners so far? Mittal counts cos like Makaan.com, Ola and Jupiter among them. Some he has exited while others are still paper wealth. But startups are illiquid. How does Mittal manage liquidity? He says he has a credit line from banks, for 9-10% interest
Read 6 tweets
Neil Borate Profile picture
Jul 21
The big bulls of Dalal Street such as Jhunjhunwala, Radhakishan Damani, Dolly Khanna, Vijay Kedia are hero-worshipped. Every time they invest in a stock, it becomes big news. Many investors follow suit. Today I look at their stories and whether following them is a smart strategy.
Jhunjhunwala himself is the most widely tracked bull of them all. But if you really look at his portfolio - few stocks such as Titan and CRISIL have built his fortune. There are companies like NCC Ltd, DHFL and Autoline Industries where messed up.
Dolly Khanna's husband Rajiv began investing after selling his ice cream biz. Famously, he bought Unitech in 2004, a stock he found while buying a flat. It went up some 250 times in 4 years (now again a penny stock). Other picks were products his wife used - Peter Lynch style
Read 6 tweets
Neil Borate Profile picture
Jul 19
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.
Read 4 tweets
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

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