Mid Cap & Small Cap schemes have delivered stellar returns.

But imagine an index beating 80% of them in the last 1 year.

It has also beaten other indices. (Table)

Enter @MiraeAsset_IN's new factor fund – Nifty MidSmallcap400 Momentum Quality 100.

Should you invest? A 🧵 We will cover 4 key aspects in this analysis:

- Unique build of this index

- Performance against other indices

- Performance vs. active mid and small-cap funds

- Performance vs. a similar factor fund from Mirae

Let’s start. 👇

3 BIG changes in health insurance from Apr 1, 2024:

1. No disputes in claims after 5 years of policy coverage

2. Shorter waiting period for pre-existing and specified illnesses

3. No age limit to buy health insurance

Details in the thread. 🧵 1. Dispute-free claims after 5 years

Insurance companies can deny claims alleging a policyholder hid some key health issues.

But this cannot happen once you have paid premiums for 8 continuous years.

Good news: This period has now been reduced to only 5 years.

PPFAS Flexi Cap manages over Rs 60,500 cr.

Its AUM has grown nearly 35 times in the last 5 years.

But, many investors now worry that performance might suffer due to its colossal size.

Does this really happen?

Is there a link between size and performance? A 🧵 We looked at 4 categories:

Flexi cap, Large Cap, Mid Cap & Small Cap.

We observed 2 trends:

1. The biggest fund in each category has been among the top performers

2. In most funds that grew quickly, AUM size didn’t necessarily impact their performance (Analysis from tweet 6)

PSU stocks have witnessed a dream run recently.

Last 1-year returns:

Nifty 50: 30%
Nifty PSE: 94%
Nifty PSU Bank: 85%

But now, they seem overvalued. (Data in following tweets)

While some stocks are still attractively priced, there are many concerning signs. Details in🧵 Let’s start with why PSU stocks seem a bit pricey now.

We looked at the Nifty PSE index's PE ratio, which can suggest if it's undervalued or overpriced.

A quick peek shows its current P/E (9.63) is higher than its median of 8.4 since April 2020, indicating overvaluation.

If returns are the same, how do you choose a fund?

Example:

ICICI Pru Bluechip Fund: 42%
Taurus Large Cap: 45%

Both schemes have similar one-year returns. But which one is better?

Let’s compare them on 5 parameters to get the answer. A🧵 1. Standard Deviation

It shows the ups and downs an investor would experience by investing in a fund.

The higher this number, the wilder the ride.

ICICI Pru Bluechip’s standard deviation: 11.59%
Taurus Large Cap: 15.81%

So, the Taurus’ fund is riskier.

REITs & InvITs are on fire.

They gave up to 23% returns in the last year, according to an Economic Times report.

No wonder mutual funds’ holdings in them have doubled in 1 year.

So, let’s take a crack at them. A 🧵

Bonus: We’ll cover how to pick the best REITs & InvITS. First, the basics.

‘REIT’ stands for real estate investment trust.

It is like a mutual fund that invests in real estate - not real-estate stocks but real property.

In most cases, this piece of real estate is commercial. Examples: Offices, malls, etc.

Are small-cap stocks nearing a crash?

There is a lot of noise around this.

So, we’ll lean on 3 crucial parameters to get an answer.

We will also answer how you can invest in small-caps now.

Let’s start.👇A thread 🧵 1. PE RATIO OF NIFTY SMALLCAP 250

This ratio tells you how much investors are willing to pay for earnings of Rs 1.

So, we looked at the current PE of the index & compared it to the long-term average.

What did we find?

The index appears overvalued.

Check some numbers. 👇

Only 7 out of 22 mid-cap funds have beaten NIFTY Midcap 150 in the long run.

HDFC Midcap Opportunity is one of those stand-out performers. (See image)

It has done it despite its huge size (the biggest pure equity fund).

We analyze its performance & strategy. A 🧵 PERFORMANCE

HDFC Mid Cap has beaten its benchmark & peers over the past 3, 5 & 10 years.

This is an achievement, as most mid-cap funds struggle to do it.

The category average, for example, has been typically lower than the benchmark.

Two fund houses with a massive fan base:

1. @PPFAS Mutual Fund
2. @quantmutual

Both now manage over Rs 60,000 cr of investor money.

But their investment philosophy & styles couldn't be more different.

We dissect their strategies & see how investors can benefit from both. A🧵 WHAT WILL WE COVER IN THIS ANALYSIS?

- Dive into the key differences between PPFAS and Quant Mutual Fund.

- Uncover what factors have worked for both of them.

- Finally, we'll see how investors can make the most of these two AMCs.

Let’s start. 👇

Last 3-year returns:

Flexi-cap funds = 20.2%

A little-known category = 27.1%

Which is this category? Is it a worthy alternative to Flexi-cap schemes?

Let’s dig in. 👇

Retweet this 🧵 to educate more investors. The category we are talking about is Dividend-yield funds.

In this explainer, we will cover their 3 key aspects:

- Investment universe

- Performance against Flexi-cap funds

- Secret sauce of Dividend-yield funds

Let’s start.

How long is long-term in small-cap funds?

Is it 3 years, 5 years, or something else?

We examined the data for nearly 15 years to answer this question.

(The answer is in Tweet 3, with reasons 👇)

Let’s jump into the analysis. A 🧵 When we say long-term, what exactly do we mean?

We're looking at a timeframe during which two things must happen:

1. The instances of negative returns should be zero

2. A high chance that you would earn more than 10% returns

Imagine you invest Rs 5,000 a month with a jeweller.

Pay for 11 months = Rs 55,000

The retailer adds a month’s instalment = Rs 5,000.

So, you get to buy gold worth Rs 60,000.

You earn nearly 16% XIRR.

But there are 5 details you need to know. A 🧵 1. ALL SCHEMES DON’T SHINE EQUALLY

Most jewellers offer the 11+1 type scheme explained above.

But there are many variations to such plans.

While some add an entire month's instalment, some offer to pay only 55%-75% of one month's instalment as a discount.

Examples 👇

BREAKING NEWS

Many small-cap and mid-cap funds may restrict SIP and lumpsum investments.

They may also limit how much you can withdraw.

Reason for all this?

SEBI wants fund houses to stay alert amid crazy inflows to small-cap schemes.

More details are in the thread. 🧵 What exactly has happened?

SEBI has acknowledged that there's froth building up in the mid and small-cap space.

So, it has asked all fund houses to develop policies in the next 21 days to protect investors.

Here are some proactive steps that SEBI has suggested. 👇

SBI vs Nippon Vs Quant Small Cap: Which is better?

We have analyzed the performance and strategies of these 3 popular funds.

Here’s a thread🧵to help you choose the right one. 👇 We will cover 3 key aspects here:

Returns of these funds
Ability to protect losses
Investing style

We have analysed data since 2019.

Why? Checking data before 2019 won’t give an accurate picture, as Quant’s scheme was a debt fund.

And SBI Small Cap was a small & midcap fund.

SEBI is concerned about Small Cap funds.

Their inflows are on the rise while stock valuations turn expensive.

Redemption pressure can make things ugly if markets fall.

SEBI is taking measures to avoid this.

But you must also keep a check on your fund.

A 🧵on how to do it. You can look at 3 parameters to understand how your fund is managing risk:

1. Cash holding
2. Allocation to large caps
3. Diversification

Let’s look at each of these in detail.

Less than 2 months since launch.

And it’s already handling ~Rs 250 crore from investors.

The Liquid ETF from @ZerodhaAMC is off to a great start.

It offers 2 key benefits:

- Easier performance tracking
- Greater tax efficiency

Is this fund right for you? A 🧵 First, the basics.

Zerodha’s Zerodha’s new ETF (LIQUIDCASE) tracks the ‘Nifty 1D Rate’ benchmark.

So, basically, your money is mainly invested in govt debt papers maturing in 1 day.

This is what all Liquid ETFs do.

But LIQUIDCASE stands out because of how it's managed.

Small-cap schemes are on fire lately.

But imagine a passive scheme beating 80% of active funds over the last decade.

Enter @MiraeAsset_IN's latest fund – Nifty Smallcap 250 Momentum Quality 100.

This index outperforms most other indices. (See image)

Should you invest? A 🧵 Let’s start with the fund’s unique build.

This scheme picks 100 stocks from the NIFTY Smallcap 250 universe.

How does it select these companies?

First, it eliminates illiquid stocks by checking multiple parameters:

Turnover ratio, daily trading volume, etc.

Fixed Maturity Plans (FMPs) were considered a superior option to FDs.

Investors lost money in them after default by Essel Group companies in 2019.

They have remained unpopular since then.

But, 5 fund houses have launched 11 FMPs in the last 3 months.

Why this sudden rise? A🧵 Let’s start with the basics.

FMPs are close-ended funds.

So, you can invest during the new fund offer and exit on a fixed maturity date.

Technically, you can sell them on exchange before maturity, but low liquidity doesn’t allow it.

NIFTY 50 returns in 2023 = 21.4%.

But if you had invested 2% in each of its 50 stocks via the NIFTY 50 Equal Weight index…

…you would have earned 31% returns. That’s nearly 10% points more.

We saw this trend in 2020, 2021 & 2022.

So, is this index better than NIFTY 50?

A🧵 Why are we discussing this index?

India’s biggest fund house (@SBIMF) has launched an index fund mirroring the NIFTY 50 Equal Weight (NIFTY 50 EW) index.

It comes at a time when the index has beaten NIFTY 50 in 4 of the last 5 years.

So, we dived into it.

Most active equity funds have struggled to beat their benchmark.

For instance, 84% of Large Cap funds underperformed in 2022.

But 2023 was different.

We checked the 5 BIGGEST categories. In 3 of them, the majority of funds have outperformed.

Which are these funds? Check in🧵 Let’s start with categories that did well.

Around 90% of Large Cap funds surpassed NIFTY 50 TRI in 2023.

Categories like ELSS & Flexi Cap also did well.

ELSS: 68% of funds outperformed

Flexi Cap: 66% outperformed

Check the top performers in these 3 categories. 👇

2023 was a dream run for investors.

Nifty 50 rose over 20%.
Mid and small caps gave crazy returns.
PSUs had a blockbuster year.
Will this momentum continue in 2024?

We analyzed 4 factors and leaned on data to find answers.

Details in thread 🧵 FACTOR 1: Will markets fall in 2024?

Let's start by looking at Nifty’s valuations.

Nifty 50’s median P/E over the last 10 years = 23.4
Current P/E = 22.81

So, if we go by Nifty 50’s P/E, markets look fairly valued.