How do you trace assets of a deceased family member? Say your aunt names you as heir in a Will but you don't know about her investments. What to do? Or your dad leaves you stocks, but you don't know the demat number. @maulik_madhu has a roadmap. Read here: livemint.com/money/personal…
First things first. A Will is ideally supposed to contain all this info. But often there is no Will. Or the Will doesn't have enough details. Or the Will is outdated. It may be made 5 or 10 yrs ago when the person's investments were quite different. What do you do?
1) Look for a doc that would have most of the person's assets. For example, the Annual Information Statement (AIS) which can be accessed through the Income Tax Portal. However for that you need to know the deceased's PAN and have access to their Aadhar-linked mobile phone
2) Look for ancillary documents like the Consolidated Account Statement (CAS) for #mutualfunds. You can request a consolidated CAS from the CAMS/Kfintech website which will be sent to the deceased person's email. You will need access to this email.
3) In the worst case scenario, you can get a court order directing MF (RTAs) and depositories to tell you account details. But this means lawyer's fees and it can be extremely time consuming. To avoid this, just have a frank conversation with your family - awkward but important
Weekend read from @jashkriplani. How investor returns differ from #mutualfund returns (from Morningstar study). First reaction from many of you would be, hain? What? Short answer: The study calculates loss from chasing performance and exiting early. More: livemint.com/market/market-…
Returns since launch on MFs generally look very good. Take ABSL Frontline. Launched in 2002, its returns since inception are around 19%. It got really popular in 2016-17 and I expect a lot of investors would have entered it then - only to see underperformance in subsequent years
Morningstar tried to capture the 'collective experience' of investors via money flows in and out of funds. That's how it gives you 'investor return.' In technical terms it is Money Weighted Return. In most categories it is lower than fund return. Worst deviations in sector funds
Utpal Sheth, CEO, RARE Enterprises delivered a facinating presentation on investment mistakes at a @CFASocietyIndia Event. In particular the presentation outlines the mistakes that Rakesh Jhunjhunwala and RARE made in cos like CRISIL,A2Z and Bilcare. I've highlighted a few below
The anecdote about Rakesh selling CRISIL shares to buy a house is well known - the house appreciated in value at a much lower rate than CRISIL stock. But the presentation also highlights the he could've bought back CRISIL shares after selling to S&P to enable its acquisition
With a company like Praj, the sector's appeal dimmed over time even though it continued to be a good business, a sector leader
Today was Prashant Jain's last day at @hdfcmf and he's written a beautiful letter, setting forth his journey. The letter is quite comprehensive, so I'm going to summarize it here and add some comments on it at the end
PJ began career with SBI MF in equity research (and small stint in fixed income). Then, along with others he set up 20th Century MF in 1993. Later became Zurich India MF, then ITC Threadneedle and HDFC MF in 2003. In Century MF, he started managing Century Prudence, now HDFC BAF
Also managed HDFC Flexicap and HDFC Top 100 for a long time, with quite glorious returns - 18.6% and 18.9% CAGR respectively, beating benchmarks
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
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
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
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