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Nishant Batra CWM® 🇮🇳 Profile picture
Nishant Batra CWM® 🇮🇳
@stepbystep888
Goal is to help as many families as possible to manage their finances better Connect with us for - Ethical, Competent and Personalized Financial Planning
2 subscribers
Mar 12, 2023 • 9 tweets • 2 min read
Case Study:

Let's say Amit, buy a home for ₹1.15 Crore and take home loan for ₹1 Crore at 6.40%

The EMI for a 30 years loan comes out to be ₹62551

1/n Every EMI will have two components
1) which goes on repaying the loan and
2) which reduces the principal outstanding

The first monthly EMI of ₹62551 will have

~ 52333 as interest cost
&
~ 9217 as principal paid

2/n
Aug 21, 2022 • 25 tweets • 5 min read
8️⃣ Common Mistakes you must avoid while managing your finances
Generation Z & Millennials must read this.

In personal finance avoiding big disastrous mistakes will have a very positive impact on overall financial health.

Please retweet to increase the reach
🧵 1️⃣
Do not buy traditional insurance policies. It's a combination of insurance and investment AND none of the purpose get solved

👉 insufficient life cover
👉 sub optimal investment

keep investments and insurance separate. Do not buy these toxic policies for tax saving.
Aug 15, 2022 • 28 tweets • 6 min read
8️⃣ things you must know about National Pension Scheme (NPS).
Generation Z & Millennials must read this.

Please retweet to increase the reach
🧵 1️⃣
First and foremost, sole reason for investing in National Pension Scheme:

💡tax saving and there by a place in retirement portfolio.

If you are investing in NPS for any other purpose, you are doing it wrong.
Aug 7, 2022 • 15 tweets • 3 min read
8️⃣ things you must know about Health Insurance
Generation Z & Millennials must read this.

Please retweet to increase the reach
🧵 1️⃣
First and foremost, term insurance is to cover the immediate and medium term risk of death.

Whereas, health insurance is to cover the longer term risk of falling sick. (immediate and medium term risk is also covered).
Jul 31, 2022 • 11 tweets • 3 min read
8️⃣ things you must know about term insurance
Generation Z & Millennials must read this.

Please retweet to increase the reach
🧵 1️⃣
First and foremost, you need term insurance to cover the immediate term risk of loss of income due to death.

AND

You absolutely do not need term insurance for your 60s, 70s, 80s & beyond.

Inflation (6%) adjusted purchasing power of ₹ 2 Crore after 40 years = ~ 19.44 lakhs
Jan 17, 2022 • 25 tweets • 4 min read
Property Market is buzzing once again, and investor activity has gone up. But there are risks.

Seven Risks of buying under construction property (UCP)
Thread🧵

Do retweet to increase the reach I am not a real estate expert, then why I am writing something on a very complex topic.
Oct 5, 2020 • 9 tweets • 3 min read
With effect from 01st January'2021, all the existing schemes and all schemes to be launched on or thereafter will follow the new guidelines for product labeling (Risk-o-Meter)

Sixth level of Risk added as "Very High Risk"

Old and New Proposed Riskometer in image

(Small Thread) Risk-o-meter shall be evaluated on monthly basis & AMC shall disclose it along with portfolios on website and on AMFI website within 10 days from the close of each month

Changes shall be communicated by way of Notice cum Addendum & by way of an e-mail or SMS to unitholders.
Aug 9, 2020 • 4 tweets • 1 min read
I have read a lot of criticism for Dynamically Managed Equity Funds.

Small Thread

Debate is asset allocation at scheme level or Asset Allocation at Client (Advisor) level.

I think, instead of choosing one, both can be a good choice. Asset Allocation at scheme level
+pass through taxation for rebalancing
+ no exit loads for rebalancing
+ No emotions involved, model based.
+ Higher risk adjusted returns
- fixed income allocation has no mandate
Jul 12, 2020 • 6 tweets • 2 min read
Thread

Second Order effect on Fund of Funds of @FTIIndia due to Wind Up of 6 debt schemes

An accident or an opportunity

Valuation Committee decided to provide an illiquidity discount and fair value these 6 fixed income schemes at 50% of their daily NAV, held in FoF structure. NAVs for FoFs were marked down on 24th April'2020, just a day after the decision to wind up six schemes was taken.
Below tables highlights the single day impact on NAV in these schemes: Image
May 4, 2020 • 4 tweets • 1 min read
Investors have seen what illiquidity in underlying instruments can do in debt schemes

Please note same applies to small/mid cap equity schemes

Biggest scheme by AUM in these categories will find it difficult in case of sustained redemption pressure. small schemes in these categories should be choosen over branded Big Elephants.

Fund managers have already over diversified in those schemes, look number of securities in those schemes

Look average daily volumes of top 10 holdings and see how many days will it take to liquidate
May 2, 2020 • 6 tweets • 2 min read
RBI Cancels Licence of CKP Co-operative Bank; Depositors to Get Up to Rs 5 Lakh news18.com/news/business/… 👇 Image
May 1, 2020 • 4 tweets • 3 min read
#mutualfunds

As we all were discussing franklin saga, another accident was waiting to happen. Principal Mutual Fund, marked down the DHFL to zero. ImageImageImage DHFL was downgraded to D on 04th June'2019

All AMCs took 75% haircut as per the standard haircut for sub-investment grade securities finalised by the @amfiindia valuation committee

on 7th June, @utimutualfund marked down their DHFL exposure to zero. ImageImage
Apr 30, 2020 • 7 tweets • 2 min read
Relaxation in compliance with requirement pertaining to mutual funds

Small Thread

On 20th Sept'2019, @SEBI_India came up with decisions for Risk management framework for liquid and overnight funds. The provision were to be effective from 1st Apr'2020

sebi.gov.in/legal/circular… following was decided:

1) Liquid funds shall hold at least 20% of its net assets in liquid assets (Cash, Gov Sec, T-bills and Repo on Gov Sec)

2) Liquid Funds & Overnight Funds shall not park funds pending deployment in short term deposits of scheduled commercial banks
Apr 29, 2020 • 5 tweets • 2 min read
Through a notice dated April 23 the Trustees of @FTIIndia announced their decision to wind up 6 schemes, by now, we all know the scheme names.

FOF schemes of the same AMC also got affected as these were holding 1 or more schemes that are in winding up Investors/distributors soon started redeeming across most of the categories of debt schemes, PANIC !

Credit Risk Schemes were worst affected specially after the Franklin event.
Below are the scheme wise AUM for credit risk category on different dates. Image
Apr 25, 2020 • 8 tweets • 3 min read
debt funds

small thread

Investors believed debt mutual funds are safe and can be replaced with Fixed Deposit. In September 2018, after the IL&FS fiasco, Indian investors realized how debt mutual funds are different than fixed deposit & there are risk associated.

#mutualfunds Since September 2018 a lot of issuers have been downgraded to D by the rating agencies. D means default, it means payment has not been made on time. Please note mutual funds follow “one day one rupee” default rule. Following is the list of default from September 2019. Image
Apr 15, 2020 • 15 tweets • 5 min read
Fixed Maturity Plans (FMPs)

Thread

FMP Vs. open-ended debt fund
life cycle of a FMP
no of FMPs Launched & AUM Mobilized
taxation & indexation
Once the darling of AMCs, Mutual Fund Distributors, Wealth Management firms, HNIs & Corporates, why it has lost its sheen.
#mutualfunds Let’s start by looking at the difference between a fixed maturity plan and an open-ended debt fund.
Apr 8, 2020 • 8 tweets • 2 min read
The Finance Act, 2020 has removed the levy of DDT in the hands of the Mutual Fund and adopted the
classical system of dividend taxation under which the Mutual Funds would not be required to pay DDT.
The dividend shall be taxed only in the hands of the unitholders.

#mutualfunds w.e.f. April 1, 2020 for FY 2020-21, all types of mutual fund schemes under dividend payout and dividend reinvestment option shall be required to deduct 10% TDS on the dividend income at prescribed rates for all unitholders i.e. resident/non-resident/FII/FPI.
Apr 4, 2020 • 4 tweets • 3 min read
ELSS offers an investor to claim tax deduction under section 80C. Please note this is not an additional deduction it is within the limits of 150,000 per annum.

lets now deep dive into the category wise (retail, HNIs and Corporate) plan wise (direct & regular).

#mutualfunds
#80C 18530 crore retail AUM have decided not to invest in PPF/EPF/VPF but to allocate in ELSS.

opportunity cost & what retail can do: explained👇



Asset Weighted Expense for these schemes (regular mode)👇
Image
Apr 2, 2020 • 21 tweets • 8 min read
category wise mutual fund schemes performance.

Thread

Please note, most of the investors do investing using rear view mirror (past performance).
look at the size of front windshield (it tells you what is coming) Vs. rear view mirror which tells you what has passed.
#mutualfunds large cap funds:

post the SEBI categorization & rationalization, large cap schemes have to maintain minimum 80% of total assets in large cap companies

the circular also defined the definition of Large Cap.
Large Cap: 1st -100th company in terms of full market capitalization
Mar 30, 2020 • 12 tweets • 4 min read
my random thoughts on small & midcap mutual fund schemes:

1) I do not know why a small cap fund has so many stocks, 111 to be exact, looks like the Fund Manager is firing all over the place.

now read the famous quote of Sir Peter Lynch ImageImage below is the performance comparison of small cap schemes from 01 Jan'2018 to 29th March'2020.

larger AUM schemes have performed poorly, reasons:
1) Impact Cost
2) constrained inability to exit illiquid stocks
3) not enough flexibility in portfolio construction Image
Mar 11, 2020 • 5 tweets • 2 min read
they are lucky enough that closed ended funds don't need segregation ;-) Image @NipponIndiaMF is leading ;-) Image