The category of Large and Mid cap fund has been long in existence but as the mid cap were under performer for long duration this category did loose its steam and was out of flavour for long period. The Last few years growth in mid cap fuelled its growth. But he category had few leaders like Mirae asset large & Midcap fund and Kotak Equity opportunities fund which were found to be in lots of portfolio even now. Fund Name Year Of Inception Fund rating ( Crisil rated ) Portfolio Size ( In Cr ) Expense ratio PE ratios Turn over Bandhan Core equity fund 2005 5 4,394.78 1.89 21.22 71% ICICI Pru large and midcap fund 1998 5 13,117.39 1.72 18.99 58% Quant large and midcap fund 2006 5 2,535.89 1.96 20.52 179% Motilal oswal large and Midcap equity fund 2019 4 4,036.22 1.86 36.02 69% HDFC large and midcap fund 1994 4 18,691.62 1.7 19.06 2% Kotak Equity opportunities fund 2004 3 21,495.8 1.62 21.52 16% SBI large and midcap fund 1993 3 22,689.5 1.65 22.99 52% Axis Growth Opportunities fund 2018 3 12,096.56 1.7 27.56 23% Canara Robeco emerging equities fund 2005 2 21,508.53 1.63 21.64 19% Mirae asset large & Midcap fund 2010 2 34,974.46 1.55 19.30 52% Bandhan Core equity fund : Bandhan core equity is a 5 star rated fund, it has kept a very high turnover ratio, fee is bit on higher side , it has decent PE as on date. ICICI Pru large and mid cap fund : ICICI Pru large and mid cap has a decent fund size, the expense ratio is also decent. Even the PE 18.99 shows the fund has wise stocks selection. Quant large and mid cap fund : Quant is the smallest fund in the list , so has the highest expense ratio, highest turnover which is normal for quant AMC. Decent PE of 20. Motilal oswal large and Midcap equity fund : Motilal Oswal large and midcap equity fund has small fund size , high expense ratio and turn over ratio , the fund seems the same as that of bandhan Core equity fund but the PE of 36.02 is very high. HDFC large and mid cap fund :One of the oldest funds, HDFC Large and Mid cap fund has decent fund size, The expense ratio is normal in line with the fund size. The fund has kept its turnover at just 2% and a great PE of 19%. Kotak Equity opportunities fund : Kotak Equity Opportunity fund is one of the biggest funds in the category. It used to be a favorite investment option a while back. Low expense ratio , low turnover and the PE seems in line with the category. But very low turnover in the stocks. The fund is 3 rated SBI large and mid cap fund : Another giant fund in the category with low expense ratio. The fund is Crisil rated 3 at the moment, Decent turnover ratio of 52% and low expense ratio.The PE of 23 is a bit on the high side. Axis Growth Opportunities fund : Axis Growth opportunity fund 3 star rated fund with decent fund size , expense ratio is also decent, high PE is seems quite dangerous. Low turnover ratio. Canara Robeco emerging equities fund : Another Giant fund in the category is the Canara Robeco emerging equities fund, it is a 2 star rated fund. Expense ratio is Low. PE seems in line with the fund category. Turnover is low. Mirae asset large & Midcap fund : The Mirae asset Large & mid cap fund has been the biggest fund now earning a rating of 2 star. Lowest Expense ratio. Low PE and turnover is decent. Trailing Returns : 1 year Trailing Return : Quant large and MidCap lead the category with 67.55% return, Second quartile with 54.86% of Bandhan Core Equity fund and Motilal Oswal large and Midcap fund 51.39%. Third quartile HDFC Large and mid cap fund , ICICI Pru Large & Mid Cap fund and Kotak Equity Opportunities fund Fourth quartile was the lowest star rated fund Canara Robeco Emerging Equities and Mirae Asset Large and Midcap fund. Last quartile for our discussion was taken by SBI large & MidCap fund and Axis growth Opportunities fund. 3 year Trailing Return : Quant Large & Midcap were the leader again in the category with 28% return. Second quartile range between 24-26% ICICI Pru Large & Midcap fund, Motilal Oswal Large & MidCap fund, HDFC Large & MidCap fund , Bandhan Core Equity fund Third Quartile was taken by SBI Large & Midcap fund and Kotak Equity Opportunities fund. Last in the category was the Axis growth Opportunities fund, Canara Robeco Emerging Equities and Mirae Asset Large & Midcap fund. 5 year Trailing Return : Quant Large & Midcap Was the leader in 5 years trailing return Next in Quartile for returns above to between 22-23% HDFC large & MidCap and ICICI Pru Large and Midcap 3rd quartile 21-22 % Kotak Equity Opportunities fund, Bandhan Core Equity fund, Axis growth Opportunities fund. 4th quartile of 20-21% SBI large & MidCap fund and Mirae Asset Large & Midcap fund Last were below 20% Canara Robeco Emerging Equities Motilal Oswal Large & MidCap fund was not launched 10 year Trailing Return : Top quartile is maintained by Quant Large & Midcap fund and Mirae Asset Large & Midcap fund. The 2nd quartile is Canara Robeco Emerging Equities and Kotak Equity Opportunities fund. 3rd quartile 15-17% SBI large & MidCap fund, Bandhan Core Equity fund, ICICI Pru Large & Mid Cap fund. 4th quartile HDFC Large & MidCap fund 14.46%. Motilal Oswal Large & MidCap fund and Axis growth Opportunities fund do not have that long history. General observation : This category has been very unique in the sense, if we look at the returns in the last 1 or 3 years, the returns are very divergent but the they tend converge in range
Equity-Linked Savings Scheme (ELSS) is an equity mutual fund investment that invests at least 80 per cent of its assets in equity and equity-related instruments. ELSS can be open-ended or close ended. Tax Deduction under Section 80C: This is the main tax benefit of ELSS. Up to ₹1.5 lakh of your investment in ELSS can be deducted from your taxable income under Section 80C of the Income Tax Act. Think of it as reducing your taxable income by the amount you invest in ELSS. This translates to a lower tax bill. Lock-in Period: There’s a catch – you can’t withdraw your ELSS investment for at least 3 years. This is called the lock-in period. It’s important to consider your investment horizon (how long you plan to invest) before choosing ELSS. It’s best suited for long-term financial goals. Potential for Higher Returns: ELSS invests in the stock market, which carries risk but also has the potential for higher returns compared to other tax-saving options like PPF or FDs. Fund Name Fund rating ( Crisil rated ) Portfolio Size ( In Cr ) Expense ratio PE ratios Turn over HDFC ELSS tax saver fund 5 14,474.85 1.73 19.86 22% SBI long term equity 5 23,411.67 1.62 20.09 15% Quant ELSS tax saver fund 4 9,360.89 1.76 17.73 130% Bank of India Tax saver fund 4 1,297.72 2.11 17.73 73% Motilal Oswal ELSS tax saver fund 4 3,402.11 1.85 35.02 74% Franklin India ELSS tax saver fund 4 6,383.38 1.81 21.59 20% Kotak ELSS tax saver fund 3 5,608.21 1.77 19.21 13% DSP ELSS tax saver fund 3 14,859.56 1.66 16.59 35% Mirae Asset ELSS tax saver fund 2 22,471.76 1.57 21.18 84% Canara Robeco ELSS Tax Saver Fund 2 7,760.97 1.76 23.08 24% Axis ELSS Tax saver fund 1 35,641.94 1.53 34.07 17% Trailing Returns : 1 Year Returns : Quant ELSS tax saver , Bank of India ELSS, SBI long term Equity fund and Motilal oswal ELSS tax saver had been the front runner in one year above 50% . HDFC ELSS tax saver, Franklin India Tax saver, Kotak ELSS tax saver and DSP ELSS tax saver were the next category to have returns in the range of 40%. Canara Robeco ELSS tax saver, Mirae Asset ELSS tax saver fund , Axis ELSS tax saver were the last range of 30% 3 Years Returns : SBI long term Equity Fund , Quant ELSS tax saver, HDFC ELSS tax saver returns were in range 26-27%. Next close were Motilal oswal ELSS tax saver and Bank of India ELSS fund which came close to 23-24% range Franklin India Tax saver fund , DSP ELSS tax saver fund and Kotak ELSS tax saver fund were returns 20-21% Mirae Asset ELSS tax saver fund, Canara Robeco ELSS tax saver fund gave return in 16% Axis ELSS tax saver fund were the last in the category 10% 5 Years Returns Quant ELSS tax saver was leader in 5 years return with 31.53% followed by not to close but at 25% Bank of India ELSS fund. SBI Long term equity and Motilal Oswal ELSS tax saver were in next category to give returns 20% DSP ELSS tax saver fund, Kotak ELSS tax saver fund and Mirae Asset ELSS tax saver fund gave 19% returns. Canara Robeco ELSS tax saver, HDFC ELSS tax saver, Franklin India Tax saver fund gave returns of 18% Axis ELSS tax saver fund gave return of 13.75% 10 Years Returns Quant ELSS tax saver in 10 years returns had the given the 24.79% Bank of India ElSS fund was next in the category 18.34% DSP ELSS tax saver and Kotak ELSS tax saver gave return of 17% SBI Long term equity fund ,Franklin India Tax Saver fund, Canara Robeco ELSS tax saver and Axis ELSS Tax saver fund around 15-16 % HDFC ELSS tax saver fund was around 14.09 Motilal Oswal ELSS tax saver , Mirae Asset ELSS tax saver fund did not have that much history. Rolling returns : We have considered rolling returns of 5 years as ELSS has a lock-in of 3 years . As an ELSS we generally consider returns above 15% to be a good return delivered by the fund, So any fund which have been able to generate rolling return for 5 years period of 15% and above, for maximum times should be considered a stable fund We see Quant ELSS Tax saver fund and Mirae Asset ELSS tax saver are in the first quartile, also the Negative side has been limited for both of these funds. Bank of India ELSS , Canara Robeco ELSS tax saver , DSP ELSS tax saver and Kotak ELSS managed to be above 50% of times in the above quartile. They also managed to be not negative in this period. Franklin India ELSS Tax saver ,Axis ELSS tax saver fund could keep this returns for almost close to 50% of times. Franklin did Deliver negative return but Axis managed to avoid the negative. SBI Long term equity, Motilal Oswal ELSS tax , HDFC ELSS fund saver fund have not been consistent in the category of 15% above. HDFC ELSS and SBI long term equity funds had delivered negative returns. The negative return percentage might be ignored since it was very low.So in this category we need to see which funds are maintaining the highest number in 0-12% . Motilal Oswal ELSS tax fund , HDFC ELSS Tax Saver fund, SBI Long term fund and Franklin India ELSS Tax Saver for close to 50%of times delivered returns in range of 0-12% . Which shows they have not been very consistent in return. Axis ELSS tax saver was for at least 30% of time in this range. Bank of India Tax saver fund , Kotak ELSS Tax saver fund , DSP ELSS tax saver were close to 25 % times in this range . Canara Robeco ELSS tax saver was almost 20% of the time in this range. Quant ELSS tax saver and Mirae Asset
In the aftermath of the COVID-19 pandemic’s economic disruptions, the Indian market has embarked on a remarkable recovery journey. This article delves into the nature of this resurgence, explores investor behavior, and examines the investment channels currently favored by Indian participants. A Post-Pandemic Bull Run The Indian market has witnessed a sustained uptrend since the second quarter of FY2022, marking a clear departure from the initial pandemic-induced downturn. This bull run, lasting for at least three years, signifies a robust recovery and renewed investor confidence. Investor Behavior: Responding to the Uptrend The market’s positive trajectory has influenced investor behavior. We’ve observed a surge in investor activity, with individuals actively seeking investment opportunities to capitalize on the growth potential. This shift reflects a growing risk appetite and a willingness to participate in the market’s upswing. Market Performance: Year Opening Closing %antage 2023-24 58,991.52 73,651.35 24.85 2022-23 58,568.51 58,991.52 0.72 2021-22 49,509.15 58,568.51 18.30 2021-22: This year marked a strong rebound for the Indian stock market after the initial shock of the COVID-19 pandemic. It delivered a return of 18.30%, indicating a significant bull run. 2022-23: The market performance in this year was more subdued compared to the previous year. It witnessed a flat return of around 0.7%, suggesting a period of consolidation or slight correction. 2023-24: The market regained momentum in this year, delivering a robust return of 24.85%. This signifies a continuation of the bull run that began in 2021-22. FY 2021-22 The year after covid, FY 2021-22 the following the gains were delivered by the market Index Opening Closing Return % Sensex 49,509.15 58,568.51 18.30 Nifty 50 14,690.70 17,102.55 16.42 Nifty Bank 33,303.90 36,373.60 9.22 Nifty Midcap 100 23,693.15 29,692.30 25.32 Nifty Small cap 100 8,113.15 10,436.25 28.63 Broader Market Performance It’s important to consider how the broader market performed beyond just the headline index. While you mentioned a point-to-point return, including specific details (e.g., percentage increase) would offer a more complete picture. Did all segments outperform the previous year, or were there any variations? Did smaller or mid-cap stocks outperform large-cap stocks, indicating broader market participation? Government Stimulus and Inflation Injections of money into the economy by governments worldwide likely played a significant role in the stock market’s initial rebound after the pandemic. However, such a stimulus can also contribute to inflation if not carefully managed. The observation about inflation not being felt in 2020-21 but rising in 2021-22 aligns with this notion. The effects of stimulus programs often take time to manifest, and the rising US inflation by year-end 2021 (at 8.5%) suggests a potential consequence of the earlier measures. The article above states how the US Fed reserve helped to create cash and help the country from going into recession (https://www.brookings.edu/articles/fed-response-to-covid19/). Which was invariably linked to high inflation in the countries. But there were many reasons why the inflation increased in the economy , As discussed the world over we are discussing a few reasons which caused the inflation All-in money printing totaled $13 trillion: $5.2 for COVID + $4.5 for quantitative easing + $3 for infrastructure. The money supply normally grows about 7% per year but quantitative easing (QE) of more than $4 trillion has increased money supply by 14% per year over the past decade. The $5 trillion in COVID relief increases the money supply by 27% and does so very quickly – the floodgates are open. Quantitative Easing did not bring inflation as measured by the Consumer Price Index (CPI), so that experiment has been declared a success, but the reality is that QE did inflate stock and bond prices, so there was inflation but not in the usual metric. By contrast, much of the COVID relief money will go directly into the hands of the consumer, so CPI will increase. Supply Side bans imposed on China by the US on manufacturing of Semiconductor , led to rising commodity prices, while at the same time caused a serious disruption of the world’s supply chain. There were the shipping snarls and bottleneck in global supply chain industry caused by Covid-19, worker shortages , the labor market tightened during 2021 and 2022, core inflation rose as the ratio of job vacancies to unemployment increased, The spikes in energy and food prices caused by the invasion of Ukraine Russia The multiple reasons stated above lead to inflation. Inflation started increasing after the first quarter of the financial year in the world. First of all it was thought to be transient in nature due to shipping bottlenecks which were created , towards the latter part of the year the other issues also caught up. Towards the end of this year the inflation has reached its highest levels and even the major conflict dented the sentiments which caused markets to close at level lower in the last few months. FII Equity inflow But we see that during the year the FII were net sellers throughout the year, and toward the end of the year the maximum outflow happened. The selling pressure further intensified as the oil prices increased towards the year end as war signals intensified. So even with the high selling from FII, the DII continued buying throughout. And the market was supported by the heavy DII and retail buying. So the question that we need to answer in context of Indian market for the year 2021-22 Why did FII were net sellers in the Indian Market ? One reason was tapering in the US market – It was only in the November 2021 meeting that the Fed took a decision and began reducing the monthly pace of its Treasury purchases by $10 billion and its MBS purchases by $5 billion in November and December. The Fed doubled the pace of tapering at its December 2021 meeting, and Fed Chair Jerome Powell confirmed in January 2022 that the plan is to end asset purchases in early March 2022. The Fed has made clear that tapering will precede any increase in its target for short-term interest
Fund Name Year Of inception Fund rating ( Crisil rated ) Portfolio Size ( In Cr ) Expense ratio PE ratios Exit Load ITI Mid Cap Fund Reg (G) 2021 5 1,085.02 2.13% 25.50 1% for redemption within 1 year Motilal Oswal Midcap Fund Reg 2014 5 14,445.55 1.66% 57.08 1% for redemption within 1 year HDFC Mid Cap Opportunities Fund 2007 4 75,382.3 1.39% 23.55 1% for redemption within 1 year Nippon India Growth Fund 1995 4 32,970.78 1.59% 30.36 1% for redemption within 30 days Edelweiss Mid Cap Fund 2007 4 6994.17 1.75 33.31 1% for redemption within 90 days SBI Magnum MidCap Fund Reg (G) 2005 3 21,127.45 1.66 40.57 1% for redemption within 1 year HSBC Midcap Fund Reg (G) 2004 3 11,882.09 1.72 37.31 For units in excess of 10% of the investment, 1% will be charged for redemption within 365 days Quant MidCap Fund 2008 3 9,282.92 1.73% 31.19 0.5% for redemption within 90 days Kotak Emerging Equity (G) 2007 3 50,601.84 1.42 30.57 For units in excess of 10% of the investment, 1% will be charged for redemption within 365 days Axis Mid cap fund(G) 2011 2 30,854.63 1.57 35.59 For units in excess of 10% of the investment, 1% will be charged for redemption within 365 days PGIM India Mid Cap Opp Fund Reg (G) 2013 1 11,216.06 1.7% 41.54 0.5% for redemption within 90 days ITI Mid Cap Fund Reg: The fund is currently 5 star rated , and has a very high expense ratio of 2.13% with low portfolio size 1,085 cr. The fund is a very recent entry in th category in 2021. Current PE of the fund is 25.50. MotilalOswal Mid cap fund: Crisil has rated this 2014 launched fund as 5 star. The fund has a decent size of 14,445 cr with an expense ratio of 1.66%. It has the highest PE among the funds considered. HDFC Mid Cap Opportunities Fund : The fund was launched in 2007, Currently rated as 4 star by CRISIL. This is the biggest fund in the category at 75,382 cr. The lowest expense ratio of 1.39%. The fund has PE 23.55 inline with the category. Nippon India Growth Fund : This is one of the oldest funds in the category 1995. Currently rated by CRISIL as 4 star. The fund is 3rd highest fund size in the category with 32,970 cr. The expense ratio is decent with 1.59%. PE is bit high with 30.36 Edelweiss Mid Cap Fund : The fund was launched in 2007. CRISIL has rated it as a 4 star fund. FUnd size small at 6994.17cr. So the expense ratio is high at 1.75%. The fund PE is 33.31 a bit high. SBI Magnum MidCap Fund: The fund was launched in 2005, Currently CRISIL rated 3. A decent fund size of about 21,127 cr. With expense ratio of 1.66. Fund PE of 40.57 is a bit high. HSBC Midcap Fund : The fund was launched in 2004, CRISIL rated as 3. Portfolio size of 11,882.09 cr with expense a bit high of 1.72%. PE is high on 37.31. Quant MidCap Fund: The fund was launched in 2008, it was run by escorts mutual fund under the name of escort opportunities fund. It was changed to quant AMC took over the business of escorts , in 2018. The fund size is small 9,282 cr. With a high expense ratio of 1.73%. Currently CRISIL is rated as 3 star. The fund has a bit high PE of 31.19 Kotak Emerging Equity : The fund was launched in 2007. Currency CRISIL rated as 3 star. The fund is Second largest fund size of Rs 50,601,84 cr. Low expense Ratio 1.42. Current PE of 30.57. Axis Mid cap fund Fund: The fund was launched in the year 2011. Currently CRISIL is rated as 2. This is the 4th largest fund size in the category with a size of 30,854.63. The Fund has a high PE of 35.59. PGIM Mid cap fund Fund: The fund was launched in the year 2013, CRISIL rated as 1, The fund size is low at 11,216 cr. High expense ratio 1.7%. High PE of 41.54 Trailing Returns : Scheme 1 month 3 months 6 months 1 year 3 years 5 years 7 years 10 years 15 years 20 years Axis Midcap Fund (G) 7.18 11 27.29 44.72 18.62 26.54 20.6 18.09 Edelweiss Mid Cap Fund Reg (G) 9.08 15.29 28.84 57.53 26.95 32.74 21.34 20.71 21.23 HDFC Mid Cap Opportunities Fund (G) 4.89 10.98 20.1 46.64 29.04 31.24 20.04 19.68 21.53 HSBC Midcap Fund Reg (G) 7.21 10.47 24.22 56.55 23.96 27.21 16.52 18.67 18.75 19.56 ITI Mid Cap Fund Reg (G) 5.55 7.88 24.81 62.87 24.46 Kotak Emerging Equity (G) 7.25 12.95 29.65 47.54 24.16 30.6 20.19 20.62 19.91 Motilal Oswal Midcap Fund Reg (G) 7.15 21.07 33.24 61.92 37.28 34.58 22.26 21.35 Nippon India Growth Fund (G) 5.93 12.25 25.84 51.06 27.46 32.12 21.29 19.57 17.6 21.44 PGIM India Mid Cap Opp Fund Reg (G) 6.4 12.5 20.71 33.35 16.2 32.56 19.51 17.26 Quant MidCap Fund (G) 2.34 0.52 13.91 51.46 29.7 37.15 24.75 20.2 16.31 14.24 SBI Magnum MidCap Fund Reg (G) 6.08 10.81 20.98 36.09 23.07 30.08 17.97 18.04 18.21 1 year trailing 1st quartile : 55.5- 63%: ITI Mid Cap Fund Reg (G), Edelweiss Mid Cap Fund Reg (G), HSBC Midcap Fund Reg (G), Motilal Oswal Midcap Fund Reg (G) 2rd quartile : 48- 55.5% : Nippon India Growth Fund (G), Quant MidCap Fund (G) 3rd quartile : 40.5- 48% : HDFC Mid Cap Opportunities Fund (G), Kotak Emerging Equity (G), Axis Midcap Fund (G) 4th quartile : 33- 40.5 % : PGIM India Mid Cap Opp Fund Reg (G), SBI Magnum MidCap Fund Reg (G) 3 years trailing return 1st quartile : 32.5-38 %: Motilal Oswal Midcap Fund Reg (G) 2rd quartile : 27%- 32.5%: HDFC Mid Cap Opportunities Fund , Nippon India Growth Fund (G),Quant MidCap Fund (G) 3rd
Expansion/ Recovery During expansion, the economy experiences relatively rapid growth, interest rates tend to be low, and production increases. The economic indicators associated with growth, such as employment and wages, corporate profits and output, aggregate demand, and the supply of goods and services, tend to show sustained uptrends through the expansionary stage. The flow of money through the economy remains healthy and the cost of money is cheap. However, the increase in the money supply may spur inflation during the economic growth phase. Peak/ Growth The peak of a cycle is when growth hits its maximum rate. Prices and economic indicators may stabilize for a short period before reversing to the downside. Peak growth typically creates some imbalances in the economy that need to be corrected. As a result, businesses may start to reevaluate their budgets and spending when they believe that the economic cycle has reached its peak. Contraction/ Recession A correction occurs when growth slows, employment falls, and prices stagnate. As demand decreases, businesses may not immediately adjust production levels, leading to oversaturated markets with surplus supply and a downward movement in prices. If the contraction continues, the recessionary environment may spiral into a depression. Trough / Slump The trough of the cycle is reached when the economy hits a low point, with supply and demand hitting bottom before recovery. The low point in the cycle represents a painful moment for the economy, with a widespread negative impact from stagnating spending and income. The low point provides an opportunity for individuals and businesses to reconfigure their finances in anticipation of a recovery. Different phases have different sectors or stocks that can give performance . Your portfolio can be aligned and understood with the same investment styles. ( https://wealthinn.in/investing-strategy-value-vs-growth/)
The concepts of value and growth were first introduced by Eugene Fama and Kenneth French in their 1992 Three-Factor Model 1 to help explain long-term investment returns in excess of the market. Growth Growth stocks as those that have low book-to-market-value ratios. The benefit of Growth stocks is the ability to potentially grow their cash flows over time and generate a higher return on assets in a way that’s less representative of the current book value of their assets.They are by nature have high P/E , RoE , P/S, Profit margins. Growth stocks often derive a bigger portion of their value from cash flows farther out in the future, so they may exhibit more sensitivity to changes in underlying interest rates, which affect the denominator in the discounted cash flow calculation. Value Value stocks as those equities that have high book-to-market-value ratios. The intuition is that Value stocks have low prices relative to their “intrinsic” value, i.e., their book value, but are characterized by high dividend yields and are therefore perceived to be undervalued, they have by nature low P/E , RoE , P/S Profit margins. Value stocks’ cash flows are typically more evenly spread out, and so are less sensitive to changes in interest rates. So , in Crux when capital is inexpensive, investors tend to invest in the future, i.e., Growth stocks, but if capital is expensive—which is normally the case when the inflation rate is high as central banks raise rates to fight it—investors generally prefer to focus on companies that have a shorter duration, i.eValue stocks. The post-pandemic environment of firmer inflation, higher yields and, until recently, above-potential growth has seen the resurgence of Value investing after 15 years of underperformance, prompting many commentators to herald the beginning of a long period of Value dominance. How Macros have affect Growth and Value ? We see that the value regime is favoured with high inflation , high growth and high bond yield . The growth is favoured with low inflation , low growth times and low bond yields. Historically Looking at Value and growth For a long time, value investing was the king of the investment game. The Slowdown and Growth’s Rise: The 2008 financial crisis brought on a period of sluggish economic growth. This slow growth environment favoured companies expected to grow quickly (growth stocks). Why Growth Became King: Low inflation and central bank actions like keeping interest rates super low made things even better for growth stocks: Basically, borrowing money was cheaper than inflation, making future earnings from these fast-growing companies more valuable. Since growth was hard to find, any company showing promise became super attractive. The Tables Turn: Value’s Comeback? With COVID vaccines and economies reopening, inflation spiked. This inflation, along with events like the war in Ukraine, forced central banks to raise interest rates again. Higher interest rates tend to help value stocks because they make those future earnings from growth stocks less valuable Economic Style Rotation model According to this model value and growth cycle have six phases in which they act early expansion, ( Recovery / Expansion phase ) mid expansion, ( Recovery / Expansion phase ) late expansion, ( Peak/ Growth ) early pause, ( Peak/ Growth )( Contraction/ Recession ) mid pause, (Contraction/ Recession ) late recession.(Trough / Slump) The phases are measured by the level of the PMI First 3 phase PMI increases Second 3 phases the PMI Falls During the “risk-on” phases (dark blue, phases 1 and 2), investors rotate to value stocks which may be or are about to generate above-average earnings growth. However, as the expansion ages and late cycle arrives (phase 3), fewer and fewer companies can deliver high rates of growth. During these periods, the market may narrow, M&A and IPO activity often heats up, and a smaller group of hot growth stocks (and other growth stocks) that “excite” investors may lead the market averages higher. Then, as the economy begins to slow and growth becomes scarce (phases 4 and 5), investors are more willing to pay up (higher price multiples) for growth stocks that continue to deliver. Finally, late during a recession or slow down (phase 6), value stocks may outperform as investors forecast the next recovery. Where is INDIA currently For years starting 2014 the Manufacturing PMI was in the range < 55 which was the risk off stage Second phase of the economy. So we had the Growth Stocks performing . and after stage 6 which was during the COVID value investment had started performing . Even if we look at the inflation data, the 2014 era was marked by the beginning of easing of inflation in the Indian economy , and thus favouring the growth investment period . The 10 year bond yield had remained stable at around 7-8% in the period of 204-2020, which was a period of easing of rate of interest market by low rates as per those times. The rates as on today in the range of 7-8% is quite high favouring a value outlook. Currently we are in a phase somewhere between early expansion to mid expansion phase, where we have high inflation rates and the government is trying to control the same with high rates of interest. Also the country is growing at a high rate of growth . The bond prices are a bit on higher side and money flow is good. So a lot of growth in the economy is available at cheap prices, no one is ready to pay price high valued assets and thus the cycle for Value investing is going good and thus sectors and stock which have been value orientation or early recovery stage are showing positive outlook.
Section 54F of the Income Tax Act, 1961 provides a welcome tax break for 1. Individuals and 2. Hindu Undivided Families (HUFs) looking to invest the profits from selling long-term capital assets into a new residential property. Let’s delve deeper into the conditions and benefits of this section. Capital Gains Eligible for Exemption: This section applies specifically to long-term capital gains, which arise when you sell a capital asset other than a house property and have held it for more than two years. Common examples include Mutual funds, stocks, bonds, gold, jewellery, and even certain types of business assets. By reinvesting the proceeds from these sales into a new residential property, you can potentially offset the capital gains tax liability. Investment Requirements and Timeframes: To claim the full exemption, the taxpayer must invest the entire net sale proceeds from the original capital asset into the new residential property. The Act offers some flexibility regarding the timing of this investment: Purchase: The rule is clear: You can purchase the new house within one year before or two years after selling the original asset. Construction: If the taxpayer intends to build a new residence, construction must be completed within three years from the date of sale. Partial Exemption and Other Considerations: If you’re unable to reinvest the entire capital gains amount into the new property, the exemption is available proportionately. For instance, if you invest only 70% of the proceeds, you’ll receive a tax exemption on 70% of the capital gains. It’s important to remember that you shouldn’t own more than one residential house at the time you sell the original asset to claim the exemption under Section 54F. Additionally, selling the newly acquired house within three years of purchase can lead to a reversal of the exemption. The capital gains from that sale would then be taxed. Maximizing the Benefit of Section 54F: Given the intricacies involved, consulting a tax advisor is highly recommended. They can assess your specific situation, ensure you meet all the eligibility requirements, and help you strategise the investment process to maximize the tax benefit offered by Section 54F. By carefully planning your investment and adhering to the timelines, you can significantly reduce your tax burden while making a significant investment in a new residential property. Saving on taxes is half the battle. The other half is living on less than you make
Rating : 2 star Fund size : 7332.91 cr Expense ratio : 1.72% , seems a bit higher Trailing Returns Based on the past returns we see that it has been giving good returns Rolling Returns Rolling returns show that for around 77% of times the fund has given returns more than 12 % and around 50% of times returns more than 15 % for a rolling period of 5 years. Which is a normal result. It is to be observed that the fund has never given negative returns in 5 years period. The average returns is also decent for the fund at 14% Benchmark return : The fund is benchmarked against S&P BSE 500 TRI. The fund started with weak performance but had recovered since then. And has been above the benchmark for all these years. Vs Other ELSS fund : When we see the performance compared with other funds we see that the fund is not performing as compared Ratios The fund has std. deviation of 12.46 which shows the returns are stable, the beta is high of 0.91 but the fund has not been able to deliver any alpha, which is negative. The Sortino ratio which shows how much the downside the fund can protect is not good. Fund manager : The fund had a lot of changes in fund manager till 2020 , which may have caused a lot of trouble for the fund. The new fund manager seems to be loaded with a lot of funds to manage . Only Vishal Mishra even though new is trying to manage the fund. But his fund performance is still below the benchmarks. Fund strategy and fund style : Fund is growth oriented fund with fair orientation to large caps , limited allocation to id cap and very small allocation to small. So it may be one reason that it has underperformed the other ELSS funds in the market. This is the reason for the fund to be much more stable. The sector allocation of the fund is aligned with the benchmark to financial , technology and Automobiles. Conclusion The fund has some stable results and can be part of portfolio if you do not want to take much risk in your portfolio. But still better ELSS fund are available in the market.
Ben Graham the inventor of the phrase “margin of safety” defined investment as “ An investment operation is one which, upon thorough analysis, promises safety of principle and satisfactory returns. Operations Not meet these requirements are speculative” Investing can be an exciting journey that allows you to grow your wealth and achieve your financial goals. But before you dive in, it’s essential to equip yourself with a solid understanding of core investment principles. These fundamental concepts provide a roadmap for navigating the financial markets, making informed decisions, and building a successful investment portfolio. Whether you’re a seasoned investor or just starting out, a grasp of these core principles empowers you to take control of your financial future and make smart choices with your hard-earned money The fundamentals are very easy to grasp and may work as a guiding principle for anybody investing. They do not change for your Mutual fund investing too. Assigning goals: Every investment you make should be tied to a specific financial goal. This goal could be as simple as growing your money by a certain percentage over time, or it could be something more substantial like buying a house, funding your children’s education, or securing a comfortable retirement. Risk : Understanding your risk tolerance is crucial before investing. Mismatching your risk profile with an investment’s risk level can lead to a negative experience. Imagine a conservative investor placed in a small-cap fund, like the Nippon Small Cap Fund, which experienced a significant downturn of -36.19%. This could cause them considerable anxiety and potentially derail their investment plans. Conversely, an aggressive investor stuck in an equity-saving fund during a strong market might feel frustrated watching others earn higher returns . Horizon : Time horizon in investing refers to the amount of time you plan to hold onto an investment before you need to access the money. It’s a crucial factor in determining your investment strategy and risk tolerance Common Time Horizons: Short-Term (0-3 years): Focuses on preserving capital with minimal risk. Examples include savings accounts, money market funds, and short-term bonds. Medium-Term (3-10 years): Aims for a balance between growth and stability. Examples include balanced funds, index funds, and some corporate bonds. Long-Term (10+ years): Prioritizes long-term growth with the ability to handle volatility. Examples include growth stock funds, small-cap funds, and real estate investments. Current asset allocation: Having your asset allocation analyzed is a critical step in successful investing. This process helps you understand the current makeup of your portfolio and how different assets within it have historically behaved. By analyzing your asset allocation, you can identify any areas where you might be overweight or underweight in certain asset classes. This knowledge empowers you to make informed decisions and potentially adjust your portfolio to better align with your risk tolerance and financial goals( i have written about the concept in my blog https://wealthinn.in/asset-allocation-guideline-for-investment/) Diversification : Diversification in investing is a fundamental strategy that involves spreading your investments across various asset classes, industries, and even geographical locations. The core principle is to avoid putting all your eggs in one basket. By diversifying, you aim to reduce the overall risk of your portfolio without sacrificing potential returns. Asset allocation tends to take care of your diversification needs Emergency planning : Building an emergency fund is a crucial principle of sound financial planning. It’s a safety net that can cover unexpected expenses, such as job loss, medical bills, or car repairs. Aim to save 6-12 months of your living expenses in this fund. This amount can be adjusted based on your circumstances. For example, if you have a steady job and good health insurance, you might target 6 months. Conversely, if you’re self-employed or have high healthcare costs, consider saving closer to 12 months. You can store your emergency fund in a highly liquid account like a Fixed deposit account or a money market fund. Remember to regularly review and adjust your emergency fund as your income and expenses change. Insurance planning : Insurance planning is the process of strategically choosing insurance policies to financially protect yourself, your loved ones, and your assets in case of unforeseen events. It’s about identifying potential risks and finding insurance plans that can mitigate the financial burden they might cause. You should at least run one term plan and one health insurance policy apart from your corporate policy if you are salaried . These profiles prepare you and arm you with necessary steps to investment, i always say that products are last to be selected. Once the profile is clear things are done we can move to look into the products and select the products as per the guidelines given below Past performance : Past performance is a tricky concept in investing. While it can provide some insights, it’s not a guaranteed predictor of future results. But we do need to check how the funds are performing as compared to other funds in the category. Rolling returns : Rolling returns are a valuable tool for investors looking to understand the historical performance of an investment over various holding periods. Unlike traditional point-to-point returns, which show the change in price from one specific date to another, rolling returns provide a more nuanced picture. Benefits of Rolling Returns: Provides a Smoother Picture: Rolling returns smooth out short-term fluctuations, offering a better understanding of how an investment performs over different holding periods. Helps Analyze Risk: By analyzing rolling returns across various holding periods, you can gain insights into the investment’s potential volatility and risk profile. Informs Investment Decisions: Understanding how an investment has performed for different holding periods can help you make informed decisions about your own investment horizon and risk tolerance. Ratios : Mutual fund ratios are like little keyholes that give you a glimpse into the inner workings of a fund. They offer valuable insights into a fund’s performance, cost structure, and risk profile. Here are some key ratios to understand: Expense Ratio: This is the annual fee a fund charges investors to
What are flexi cap Lets start with the definition, Flexi Cap mutual funds offer several advantages for investors, making them a compelling option for many. Here’s a breakdown of their key benefits and how they compare to other mutual fund schemes: Advantages of Flexi Cap Funds: Diversification and Risk Management: Flexi caps invest across companies of all market capitalisation (Large, Mid, and Small). This spreads your investment across different segments, mitigating risk compared to focusing on a single cap size. If a particular market segment (like small caps) underperforms, the fund’s exposure to other segments can help balance the portfolio. Growth Potential: Flexi caps allow you to tap into the potential of high-growth mid and small-cap companies alongside the stability of large caps. This combination can offer the potential for better returns compared to pure large-cap funds. Flexibility for Fund Managers: Unlike multi-cap funds that have mandated allocations across market caps, Flexi caps offer more flexibility. Fund managers can dynamically adjust the portfolio based on their assessment of different companies and sectors. This allows them to capitalize on opportunities across the market spectrum. Comparison with Other Schemes: Large Cap Funds: Provide stability and consistent returns but may limit growth potential. Mid Cap Funds: Offer higher growth prospects than large caps but come with increased volatility. Small Cap Funds: Even higher growth potential but with significant volatility and risk. Fund Name Year Of inception Fund rating ( Crisil rated ) Portfolio Size ( In Cr ) Expense ratio PE ratios JM flexi cap fund 2008 5 star 3,855 1.83% 21.32 HDFC Flexi cap 1995 4 star 61,572 1.45% 20.85 Franklin India flexi cap fund 1994 4 star 16,677 1.72% 17.40 Motilal Oswal Flexi Cap fund 2014 4 Star 11,466 1.74% 45.70 Parag Parikh flexi cap fund 2013 3 Star 75,956 1.33% 16.55 Kotak Flexi Cap 2009 3 star 53,783 1.44% 22.14 DSP Flexi Cap 2007 3 Star 11,879 1.72% 21.70 ABSL Flexi Cap fund 1998 2 Star 22,792 1.66% 24.95 PGIM India flexi cap fund 2015 1 star 6,418 1.77% 29.94 Quant Flexi cap fund 2008 – 7,436 1.76% 22.21 Invesco India Flexi Cap 2022 – 1,985 2.03% 28.29 JM flexi cap fund The fund was launched in the year 2008, Currently CRISIL rated 5 , The fund has an expense ratio of 1.83% as the current fund size is very low. The PE of the fund is 21.32 HDFC Flexi cap This is one of the oldest funds in the category launched in 1995, So a long history for the fund. Currently CRISIL is rated 4 Star. The fund enjoy’s one of the highest portfolio size of 61,572 cr , with a low expense ratio of 1.44%. The current PE of the fund is 20.85. Franklin India flexi cap fund This is the oldest fund in the category launched in 1994, Crisil rated 4 star. Due lack of distribution and loss of reputation during the debt crisis the fund size is low 16,677 cr , expense ratio is 1.72%. With a very good PE of 17.40. Motilal Oswal Flexi Cap fund The fund was launched in 2014, it is rated by Crisil as 4 star. The fund has a fund size of 11,466 cr with expense ratio of 1.74%. The current PE is 45.70 Parag Parikh flexi cap fund The fund was launched in 2013, Currently CRISIL rated as 3 star, has the highest AUM in the category of 75,956 cr, the lowest expense ratio of 1.33%. THE current PE of the fund is 16.55. Kotak Flexi Cap The fund was launched in the year 2009, currently CRISIL rated as 3 star. It has AUM of 53,783 Cr, 3rd largest AUM in the category. Low expense ratio of 1.44% . The current PE is 22.14 DSP Flexi Cap The fund was launched in the year 2007, Currently CRISIL rated 3 star. The current AUM is 11,879 Cr, with expense ratio of 1.72%. Current PE is 21.70 ABSL Flexi Cap fund Another fund with a long history launched in 1998, Currently rated 2 star. The portfolio size of 22,792 cr, expense ratio is 1.66% . The Current PE is 24.95. PGIM India flexi cap fund The fund was launched in 2015, currently rated as 1 star. The fund has a small fund size of 6,418 cr. Expense ratio of 1.77%. PE of the fund is 29.94 Quant Flexi cap fund The fund was launched in 2008 , currently not rated by CRISIL. The fund has AUM Of 7,436 Cr. Expense ratio of 1.76%. PE of the fund is 22.21 Invesco India Flexi Cap The fund is a recent addition to the category, launched in the year 2022. Currently not rated by CRISIL . The fund size is small of 1,985 cr. The PE of the fund is 28.29. Trailing Returns : Scheme 1 month 3 months 6 months 1 year 3 years 5 years 7 years 10 years 15 years 20 years Aditya Birla SL Flexi Cap Fund Reg (G) 1.45 11.61 17.85 39.16 17.24 20.98 14.36 15.46 15.01 DSP Flexi Cap Fund Reg (G) 1.59 11.62 21.74 37.53 16.94 21.92 16.4 15.51 15.23 Franklin India Flexi Cap Fund (G) 1.59 11.05 18.44 44.68 23.46 24.9 16.83 16.44 16.38 19.1 HDFC Flexi Cap Fund Reg (G) 0.55 9.06 17.06 43.12 27.8 24.62 17.94 15.69 16.36 19.79 Invesco India Flexi Cap Fund Reg (G) 2.99 12.72 21.91 52.08 JM Flexi Cap Fund (G) 0.23 12.28 23.93 62.01 30.85 27.98 19.71 19 14.82 Kotak Flexi Cap Fund Reg (G) -0.44 6.42 18.06 36.84 17.99 19.48 14.73 15.82 15.13 Motilal Oswal Flexi Cap Fund Reg (G) 2.24 12.58 24.14 58.07 18.68 18.62 12.4 16.82 Parag Parikh Flexi Cap Fund Reg (G) 2.03 8.46 14.14 39.97 19.45 26.47 20.66 18.61 PGIM India Flexi Cap Fund (G) 2.45 11.66 15.28 29.91 12.48 23.42 15.9 Quant Flexi Cap Fund (G) -0.58 7.56 14.81 57.42 27.08 37.05 22.85 21.42 13.81 1 year trailing 1st quartile : >54, The first was JM flexi cap fund, Motlia