Biggest Mutual Fund Investment MISTAKES & How to Avoid Them
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- เผยแพร่เมื่อ 19 มิ.ย. 2024
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Investing mistakes and errors are a part of one's learning curve. In this video, I shall take you through 8 mutual fund mistakes .. most of which I have committed myself 😭 and some I have observed others making it 😈
In my experience, beginners make investment mistakes due to a lack of awareness, too much trust in the advisor (incl. family member) or errors in interpretation. I'm sure all of us have been through this cycle in our early days as an investor. But then some mistakes I've listed in the video are what even experienced investors fall folly to. These include blunders like overthinking, overconfidence and taking too much risk without receiving commensurate return from the investment
Video Chapters:
00:00 Here We Go
00:41 1. Regular Plans
02:08 2. New Fund Offerings (NFO)
03:30 3. Sectoral Funds
04:46 4. Credit Risk Funds
06:00 5. Low AUM Debt Funds
06:54 6. Actively Managed Large Cap Funds
07:46 7. Fund of Funds
09:20 8. Cool But Clueless Funds
👉 The SIP calculator shown in the video can be accessed using the link: docs.google.com/spreadsheets/...
#shankarnath #mutualfundsforbeginners #investingmistakes
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Disclaimer: I am not a SEBI registered investment advisor or research analyst. The content posted on this platform is purely for educational purposes and none of it constitutes investing or trading advice. Viewers should do their own research and diligence before investing or acting on the information presented
I’ve committed 6 out of these 8 mistakes 😳 :
Pt. 1 (regular plans)
Pt. 3 (sectoral funds)
Pt. 4 (credit risk funds)
Pt. 6 (actively managed large cap funds)
Pt. 7 (fund of funds)
Pt. 8 (cool but clueless)
Of these, I have completely exited points 1, 4, 7 & 8 while points 3 & 6 have a minimal share of my portfolio (less than 0.5%)
Would ❤ to know where you stand with these mistakes? Or if you have made some other mistakes specific to mutual funds?
Loved ur description.....keep it up
My investment journey started 3 years ago after watching all your ETMoney videos and it helped me avoid all the mistakes you have covered in this video. Really grateful to all the wisdom you have been imparting to us over the last few year. I never miss a video from you 🙏
Apart from 1 and 8 have made all other mistakes 😅. Good thing started rectified those also.
I do have actively managed large cap. While I haven't sold it, but buying index to reduce the % of that. Others, thanks to videos like this in TH-cam, fortunate enough to not make those mistakes
@@yezdighost 6/8. Good, so I have company. We both have sinned too much :)
Loved the Thumbnail😂
Ouch 😂
🤣
Watching this video, I just analysed my portfolio, and I think I had been doing it wrong. Even though the basket was performing decently, now I now why it hasn’t performed as per standard. My allocation in thematic funds were high, which amounted to fluctuations. Thanks for helping, as now I have to balance my portfolio accordingly.
Most welcome, Ritwik. Happy to play a small role in your ever-improving financial journey
Great advice as usual. Unbiased unlike others who don’t support index funds due to personal gains. The reality is there is hardly any fund that can beat the index funds.
Thank you. On your last point, the data shows that 35-40% of the actively managed funds do beat the benchmark-based index fund in any given year. Ofcourse the active ones may not do it consistently in all years but that's fine .. it's OK to have 3, even 4 years of below benchmark performance as not everything travels in a straight line. In my opinion, this should not become a firm rule .. and having a mix of active and passive funds is one strategy that an investor can examine.
@@shankarnath great advice. I agree to that. I liked your research insights that you used to present before. Expect more like that especially in these current challenging conditions how are the different mutual funds performing.
@@shijotg Also Active Bluechip funds helps when a market is going down for long term for if something bad happens
You provide the best genuine advice. Thank you. Looking forward to your videos
I appreciate that! Thank you
I tried to follow. Several jargons went over me. Same time it created curiosity in me to learn more. Thanks for the video. Useful.
Glad I could help!
Thanks for making this video. Very Informative!
My pleasure!
Great video Shankar. Happy to have found your channel and subscribed immediately. Hope to learn from the best😍
Hello Sachin. Welcome! Wonderful to have you on my own channel .. and expecting the same fervour of feedback & suggestion you used to give on the ET Money channel. Thanks for your appreciation!
Thanks!
9:53. One reason not to invest in NFOs, I expected Axis Special Situation Fund has companies that fit the description. The portfolio they published is different. I waited for an year to avoid Exit load and exited after. Luckily the returns were good despite of the mistake in choosing fund. Doesn't happen always.
Most welcome. There are no odds during NFOs so I skip it. The only exception can be index funds but here too, it's better to go for funds that have an AUM of atleast 100 crores as it means the tracking error can be better managed and there will be a dedicated desk for the workings of that scheme
Helpful! Sir could you please make a 5-10 video series from basics of stock market to picking up good stock and some analysis. It will be really good to learn from a expert like you.
Thanks
🙌 Will try. Thanks for the visit
Hello Shankar, such a nice explanation for analyzing MF portfolios.
I am looking for a video that explains MF investments for NRIs esp. for those with US/Canada addresses. I couldn't find any good one that explains a long-term taxation perspective. It would be great if you consider this in one of your future videos. Thanks!
Thanks for the suggestion, Yukteshwar. It's a good topic to talk about.
I will be surprised if there isn't an India specific mutual fund or ETF that's offered by financial institutions. If I remember right, Kotak has a tieup with ALPS on some India-only MF. These will ofcourse be denominated in USD/CAD. Maybe you can enquire from there + they should have a clear idea about taxation aswell.
Lack of music less distracting and high quality content as always. Thumbnail hit the nail 🙂
🙌
Another good one , i feel FOF also has another added disadvantage of being tax inefficient, like they are taxed at 20% instead of 10% LTCG and short term gains as per one's tax bracket. But I couldn't find a single non FOF China oriented fund and have invested in Edelweiss Greater China Equity fund which is a FOF investing in one fund JP Morgan greater china equity fund...So although a poor option but sometimes there is no other choice atleast in MF space. Now recently I found that there is an ETF available called Hangseng bees which replicates the Hong Kong makt index...that probably be a cheaper option..
Thanks for sharing Anujoy 🙌 .. I use Hangseng bees ETF myself (not because of expense ratio but more tactically in assessment of the Chinese market)
@@shankarnath is Hangseng ETF good investment at present?
I was about to do atleast 2 mistakes of these 8 mistakes . Thank you Shankar for sharing this wd us . This will really help me 🙏
All the best Shriraj. Happy to be of help in your financial journey
Thanks Shankar, Great editing, thumbnail and presentation. Pls do consider making a video, on books that you have found useful and have helped you.
Thank you so much, Raul. It's a great suggestion, I'll certainly work on it
Loved ur videos from etmoney time onwards and now it is more fun and more knowledge . Thank you for this sir.
Glad to hear that. Thank you very much!
Thank you so much for such informative videos. 🙏 . I have been investing on mutual funds through SIP from past 5 years and it has given decent returns . However all of them are regular mutual funds as I took help of an agent 5 years ago . Unfortunately I was not aware of direct funds and i came to know about them recently. So should i continue with existing SIP or can I switch to direct mutual funds ? Also I am planning to increase my SIP from next year onwards and I am super confused whether to switch or continue. So please provide your valuable inputs.
Hello Pavan - In my opinion, the regular plan SIPs should be stopped immediately. The cancellation can be done online via the AMC website, MyCAMS or MFCentral.
Next and almost immediately, start an SIP under a direct plan. Again, this can be done online using the 3 platforms I mentioned or platforms like ET Money, Groww, Zerodha, IndMoney etc.
There is a lot of material on this over the Internet and on TH-cam. Do read up more. Wishing you the best
Hi Shankar, thank you for the informative video. Does the fof expense ratio also include the fees of its constituents when both fof and mfs are managed by the same fund house?
Thx Amit. I've observed some AMCs give combined expense ratio while others don't reveal underlying asset expense ratio. I had made a video on this some 18 months back on the ET Money channel. There was an excel sheet I had painstakingly compiled with this including-excluding information. Have a look at that, it will give you some useful insights. Link: shorturl.at/cCOU0
Very good information Sir.
It's very helpful for retail investors. I learned lot of to watch various video.
Now I am investing in direct plan n simply 5-6 funds directly in different amc. I invest index fund - large n midcap fund - midcap fund - smallcap fund - flexicap n tax sever fund.
Thank you very much Jayash ji. Happy to play a small part in your financial journey
Agree with u on all points..I learnt these points thru experience I did course correction.
Thanks for sharing 🙌
Glad to have discovered this channel, missed you videos on ET! Thanks
Welcome aboard!
Wow Shankar! You are on roll! Always loved your deep insightful videos.
Thanks a ton, glad you liked it
Points well taken. Although I do not invest in mutual funds, will keep in mind. Let me commend you on taking the pains of replying to each and every comment. It really helps a lot understanding and boasts the confidence. Appreciate.
Thank you Anil, glad to be helpful. I like replying to comments .. it also gives a glimpse into how individuals think i.e. are they coming from a positive/negative framework, how trusting are they of you, are they point based or story based, are they looking for motivation or answers etc. With enough comments from an individual, a pattern emerges.
Sir, Very informative video.
Request you please make video on how to search good mutual fund and what are sources which we look to enhance our knowledge about mutual fund
Thank you Gunjan 🙌 I'll add it to my content queue, thanks for the suggestion.
My MF knowledge gained through your videos on ET Money. Good to see you on your own channel, and continued efforts to bring fin. Literacy to investors, as always a follower
Thank you Srinivas
Perfect.. not crossing 15 mins. Can you make a series on books.. special reference to Indian market
Thx. I'll add your suggestions in my content queue
Shankar sir, great video as usual. Could you please help with some tools where we can view rolling/trailing returns for the funds. Thanks in advance.
Thank you Abhijit.
1. Trailing returns can be found on any platform (ValueResearch, ET Money, Groww, Zerodha Coin, Upstox, Fisdom etc.)
2. Rolling returns are not that common. VRO offers it but I think its behind a pay-wall. Pls try out AdvisorKhoj .. they were giving rolling return (without charge) on their website.
As always, very informative video from Shankar 👍. I have a question related to strategy to switch from large cap active funds to index funds, should I do that all at once and at any point of time (irrespective of market trend) or should I try to time it and should I do it in staggered manner? Also, should I be concerned about LTCG while switching? We can't escape LTCG and need to pay it today or tomorrow. I am already harvesting rebate on 1 lakh of capital gains every year. Thanks in advance, please keep educating us all 🙏.
Thank you very much
1. No, please dont do it all at once. In my scenario, I eased my way into it. It's not like summer and winter. You shed your T-Shirt for a sweat-shirt, then a sweater and then you go for a jacket. Hot to cold to hot will make your condition worse .. so I'll prefer as glide path.
2. No, don't worry about LTCG. You will eventually have to pay LTCG so paying now when the odds are in your favour is better than paying when it is not as rosy
Hope this helps.
@@shankarnath Thanks for showing the way, so happy to hear from you 😊🙏
Loved the video and going to utilize it to the fullest. Remember this 21 yr old student being your one of the earliest subscribers 😂 and wish you good luck for the great journey ahead.
Thank you very much, Bhuvan. Happy to play a small part in your financial journey through these videos. You're young, you'll make mistakes along the way .. but good investing (and living) is about falling 8 and rising up 9 times. Wishing you the best!
@@shankarnath Thanks 😀
Hi Sir, Happy to see you. Kindly do a video about ELSS in brief when possible
Thank you 🙌 . Will try to do that video, thanks for the suggestion
Very informative video. Thank you for creating this. Looking forward to more informative videos from you.
Most welcome! Glad to have you onboard this channel
Thank you for sharing your experiences. I have committed 3/8.
May be my score is less as i am a novice investor
Most welcome. Yes, my count is higher
@Shankar Nath Can you also suggest your choice of best mutual funds of 2022-23 in a video
Apologies, you are not likely to see a video from me on "BEST" mutual fund .. even if that costs me a lot of views and subscribers. Two reasons:
1. I can't predict with any level of certainty what the fund manager will do in the future
2. More importantly, over longer periods of time, I have seen that this "best MF of the year" doesn't add as much value as one expects from it
As a matter of fact, I approach my investing in terms of choosing the best portfolio i.e. the ideal mix of large, mid, small, debt, gold & international equity. This opens up more opportunities in terms of choosing index/active/factor-based funds .. based on what my portfolio needs are.
As usual cool and informative.. Thanks Shankar Nath sir..
So nice of you. Most welcome Vinod
You are such an inspiration…always a fan!
Thank you very much. Happy to be a small part of your financial journey
Great content, as always...
Thanks Shankar!
My pleasure! Thanks Ranjeet
Thank you for this video. Very helpful
Most welcome. Glad you liked it
Sir, I thoroughly enjoyed all of your ET Money TH-cam videos. Sir, I have a request: Could you please make a video on "how to read annual reports," as they are 250-300 pages long? Which sections should we read and which should we skip? I liked very much the production quality of all your videos!
Thank you Sayed. I'll queue it up, thanks for your suggestion
@@yviruss1 .. th-cam.com/video/V28LpTApAww/w-d-xo.html
Wonderful video. Now can you pls share the right way to go category wise in purchasing mutual fund.
Thank you. There are many videos on how to select a mutual fund across categories on TH-cam. Is there a particular question that you are seeking an answer to which is not available or hasn't been answered sufficiently?
Very informative.
Thanks, Shankar.
My pleasure
Hi shankar nath ji... I am your follower and i have benefited from your videos a lot.. I have seen most youtubers talk ill about NPS..Would like to hear from you regarding NPS. Please do a video on it. Thanks
Thank you very much. I'll add this to my content queue. Thx for the suggestion
Very informative video sir. Thanks. would you suggest a mutual fund or index fund for a 2-3 year term starting now in 2023? Pls let me know.
Most welcome. Apologies, I don't operate in terms of specific schemes so won't be of much help here. However there are dozens of websites and youtubers who are giving this information which you can access. I build my wealth as a portfolio which looks at goals, returns, volatility etc. and in a manner I am comfortable. You can examine that approach here : th-cam.com/video/bN5QdxY3RVs/w-d-xo.html
Thanks for very useful advice. Most of the investing advice in mutual funds is focussed on SIP but what about non SIP investing in funds? What is a good time to enter? And is there a fund that automatically shifts from equity to debt etc based on market conditions
Thank you! Yes, a category of funds called the balanced advantage funds does that i.e. move from equity to debt if valuations are out-of-whack and vice-versa.
@@shankarnath Thanks
@@shankarnath For a BAF to have any effect on the portfolio level, one would need to invest most or all of their money in one BAF. If there are four or five equity funds along with it, how useful is the movement for that smaller amount?
@@meghanaabhyankar9151 You have a point. However BAFs have some constryct issues too that you will still have to consider like 1. no international equity exposure and 2. large cap heavy exposure
Nice video, if I'm investing in a mutual fund, how to know that it's time to shift the AMC, let's say I'm investing in SBI small cap every month, how do I know that now it's better to invest into Axis small cap now?
should I simply compare previous timeframe results(3mo, 6mo??) or is there a better technique? (obviously I can't say by seeing allocations, otherwise I would have directly invested in stocks myself!)
Thank you. I'll certainly come up with a video on selecting mutual funds for long-term returns in due time.
However flipping of mutual funds & predicting which MF will do better in the future is something I don't really understand. I find it remarkable that some people can even claim knowing that.
@@shankarnath sure, will wait for the video. But just to clarify, my doubt is not deciding when will small cap beat index and vice versa, it’s about choosing AMCs within given category of mutual fund.
Yes Mayank, I understood your question. Choosing which AMC's fund will do better the next year is a remarkable skill in itself. Btw, I did a small exercise last week -- very relevant to your point.
As you know, lots of brokerages make stock recommendations during Diwali. It got be intrigued .. and I picked over 200 such recommendations spread over the last 7 Diwalis. This study covered 150 different stocks and 30 different brokerages. I've put it together in a video which I'll release next month. The results were quite interesting and surprising .. do look out for it!
Hello Shankar, your videos are very informative including this one.
Hardly any information available on Bond purchase, ETF creation redemption with its inav and nav.
So if possible can you please make a video on these topics?
Thank you for your suggestions Ashwin
I learned a lot because of your videos. You are my financial guru
Glad to hear that. Very happy to play a small part in your financial journey
Good insight... Thank you 👍🙏
My pleasure. Much appreciated!
Great Video Shankar. Thank you so much 🙏
My pleasure
1 large cap fund - invest 2x
1 mid cap fund - invest x
1 small cap fund - invest x
1 flexi cap fund - invest x
- Direct plans
- Track record of at least 8-10 yrs return that consistently beat the benchmark
- Expense ratio < 1
- Alpha and sortino higher than category
- Less std deviation/volatility than category
- AUM size < 10k cr (there can be exceptions) and actively managed
@Shankar Tata Ethical fund invests according to the Shariah index. It seems to be the only option apart from Taurus Ethical fund for those who don't want to invest in companies producing liquor or tobacco or other sin stocks. It has given better CAGR over 3, 5 & 7 years than Nifty 50 index. Can you please justify considering it to be clueless? Thanks.
Hello Saj - I nailed it! Let me use this as an illustration to the three things I said in the video:
1. More marketing -- I hope you can see the marketing angle now. Tata & Taurus have used the 4Ps brilliantly here - positioning, product, promotion and populace.
2. Reasoning & story-telling -- Every individual has some reasoning for investing into a scheme. If a story is said well & repeated often, people start adapting to it. In my view, life before a Make-in-India, Ethical, Next-Superpower fund was complicated as it is. But that's my view.
3. Extra Care -- And I concluded the point by saying in cases where funds are non-standard in nature, one has to be more careful in it's evaluation.
At the end of the day, it has & it will come down to what you think. I even know people who categorize "large cap funds" into cool & clueless -- and its impossible to change their mind. Now, I don't even try & I let it be.
Hope you see the content for what it is
Hi Shankar Sir, Thank you for the informative video. Have heard a lot about you from my friends who are following ETMoney.
I request you explain the strategy for investment into debt mutual funds. How to identify and shortlist which MF one needs to go for in case of 1-3 yr investment horizon.
Most welcome. Thanks for your suggestion, I'll add it to my content queue
Hi Shankar, can you let me know what value can a broker/banker add to my investment journey?
Hi Abhishek - I've not had a particularly good experience with relationship bankers due to the frequent churn amongst them. Very rarely has the RM assigned to me lasted an year so there is no follow-up or review of portfolio and the schemes are all regular plans
In my opinion, what one needs to be moving towards (if one can't DIY) is a fee-only financial advisor i.e. someone who works for you in a format that he/she gets a fixed sum of money for advisory service. This means no commission which means the funds advised will be direct plans and the advice would be without any bias towards active/passive plans or particular AMCs. There is a chance of this prejudice creeping into a for-commission regular plan advice because of the old adage -- incentives determine behaviour (you would have seen it at home, in office, in policitcs and elsewhere)
Financial advisors can help with financial planning, retirement planning, taxation matters, product advice (like gold, government bonds, sukanya samriddhi) etc. They are very patient people & help clients from understanding smaller matters and to not make ad-hoc moves.
Can explain us once fund is selected and invested 3-5 year. Whether continue or change the fund. How to review mutual funds.
Hello Praveen - I think there are 6-7 reasons why redeeming or switching funds are warranted. Just because the scheme has crossed 3 to 5 years is definitely not one of them. I'll take this as a content idea and queue it in my videos-to-create list. In the meantime, may I request you to check some articles on the Internet on this. It's an important point you have raised
Ur explations r just amazing
Thank you so much, Rahul
I see ICICI Bharat 22 fof fund, which has really less expense ratio of 0.08% , and of course it's investing in 22 large cap funds, the returns are good, but the beta is high of 1.1, and generated good alpha of 17 approx. Can this till be avoided, what's your thoughts?
Very informative 🙏🙏🙏Thank You
Most welcome. Glad it was helpful!
Highly informative! Keep it up! 👍
Thank you very much, Tissy
Super awesome information, especially on FoF :-) with example 😁💡
Also, got confused why TH-cam suggesting me to watch some injury 🤕 face .. didn't recognised earlier hahaha I skipped it atleast 5 times in the past 😂
Most welcome. I (not TH-cam) created a thumbnail with an injured face .. it matches the title of the video i.e. mutual funds are INJURIOUS to your wealth
@@shankarnath Yeah :-), Since I watches your TH-cam videos on a regular basis; The algorithm suggested this video, but I didn't recognised it was from you 😁 as I quickly skipped 🤕😁
Insightful Video, can you please make a video on Debt or Bond investing
Will try .. thanks for your suggestion
Quite analytical. Subscribed 👍
Thank you
Well done. Thanks for the sincere approach and sharing your experience.
My pleasure! If you found it useful, do spread the word by sharing this video with your friends, relatives and colleagues over whatsapp, facebook, twitter etc. Thanks!
@@shankarnath already shared with my daughter. Thanks.
@@balasubramanians7886 Thank you very much, appreciate it
Excellent Video, thanks a lot🤩
You are most welcome! Glad you liked it
Many old funds like Axis long term equity (elss) fund are not performing well, even et money shows that it's poor performance and look for other funds. Should I stop this fund or wait to improve its performance?
Hello Mithun - I haven't done any research on this scheme recently but here's something that has helped me when I face such a situation:
1. I try to understand in which periods has a fund (like Axis LT equity) performed better than benchmark. This will help you gauge if there are certain times (bull market, bear market, market shock, range-bound market etc.) when the fund manager's strategy does wonders
2. I also try to understand the other side of the coin i.e. if this fund is performing poorly then which fund is performing well & why is it doing well i.e. which stocks was it invested into and therefore what is the fund manager's investing strategy
I should also mention that it is very difficult for a fund manager to try out a different strategy. E.g. Axis mutual funds have a reputation of investing in growth stocks & you'll generally see them having high PE ratio/high ROCE stocks in their portfolio. And on the other end, Prashant Jain would lean more on the value style of investing. It's next to impossible for Mr. Jain to suddenly change course and become a growth investor -- so you might want to factor this when you do your assessment.
Useful and sensible advice.
Glad you found it helpful
Awesome man..!!! Subscribed too
Thanks for the sub!
Excellent analysis! Thanks
My pleasure!
which MF shud 1 go into? was thinking axis blue cap..is it a good option? is there any actual benefit in investing in MF instead of FD?
Hi,
1. The decision on "which MF" will depend on your goal, time horizon, risk capability and fitment in portfolio. Many investors (me included when I was younger) make this mistake of adhoc selection of funds which later leads to unnecessary irritation. Due to lack of details, I don't have an answer for you .. but there are many videos on TH-cam who claim to have figured out the "best mutual funds" formula, maybe those might help.
2. I have not researched Axis Blue Chip Fund
3. In my opinion, if wealth building and retirement corpus building is the goal and one has 10+ years, then mutual funds is a better choice of investment than fixed deposits. Ofcourse start with MFs, track the valuations periodically and when one is approaching the last 2 years of one's goal tenure then start moving money from equity MF to debt MF/fixed deposit.
Excellent information Sir.
Shared.
Much appreciated
Thanks for the info, nice video
Most welcome!
Luckily I did not commit any mistakes in MF. All Direct Nifty 50 passive, Nifty next 50 passive, Kotak small cap, Kotak emerging equity. Thanks.
Most welcome
Dear Shankar
Your videos are very helpful but think it over when it comes to demonizing the regular plans of mutual funds. I am a mutual funds distributor so yes I may sound selfish. But please also make a video on why there maybe a large set of investors who should not invest in direct plans. Even though there is no dearth of guidance on wealth management and financial planning thru various sources free or paid but having a personal advisor has an absolute advantage and the outcome which they can potentially deliver (not to be confused with higher returns) more than justify the fees they charge via regular plans of mutual funds. I do agree there may be some investors who may have the required frame of mind but THIS IS NOT AN ERA OF AVOIDING THE ADVISOR TO SAVE HIS FEES. Times are changing and it is behavior and psychological barriers which need to be eliminated to create wealth rather than driving the investors away from advisors.
Dear Amit - thanks for being upfront about your status. As an educator, I have the option of not taking sides but yes, I will have my preferences and biases. But please allow me to elaborate my views.
1. Let's start with my video and at 01:56, I said "I'm not saying an agent has no value to add in my financial journey" and I stand by it. I often suggest investors to take the services of a fee-only financial advisor to get things started with financial planning, taxation, retirement goals etc.
2. I also believe a financial advisor is a great asset to:
a) help with unplanned infusion of money e.g. annual bonus, proceeds of sale of property, ESOP cashing out etc. Typically, the investor is confused what to do with the money esp. which debt fund or hybrid fund to apply
b) help the investor with asset allocation, annual rebalancing and tax harvesting. In my view, bankers are not adept at this and an FA is the ideal person to fill that gap
3. The only area where I think the FA/agent's role is exaggerated is with selection of SIPs for long-term wealth building. The data shows that over a 10 year period, the performance of most funds converge. For example - in case of flexicaps, barring Quant Flexi which is an outlier, the next 10 Flexicap SIPs have delivered between 16.3% to 14.5% over 10 years (source:AdvisorKhoj). A good FA/agent will advice investors to keep money in SIPs over the long run but with performance numbers so tight, I can't see why the advice requires 10 to 12% of the capital gains generated to go to the distributor as regular plan commissions
I think you and I have the investor's same best interest in mind. You are doing it using 1-to-1 interactions while I've taken the 1-to-many approach. I always love to understand the other point of view .. and thanks for sharing your views on it.
PS: I'll make some videos around investor experience and how they achieved their wealth. These will be actual investor interviews and I'll be sure to talk to both sets of people i.e. a) help of an advisor and b) DIY. Thx for the suggestion 🙌
Thanks Shankar
Your response is mature and reasonable. The problem I see is that outcome of efforts being made is often judged mostly on the basis of investment returns. The fees being charged is often extrapolated over several years in future but value an advisor brings is not. Over my 15 years of experience as a mutual fund distributor I have learnt that product is not important but fundamental and sound investment processes are much more important for wealth creation. Humans are slave to their emotions which also affects investment outcome so my point is that I agree that not everyone needs an advisor BUT most of the investors do require an advisor no matter how much fees is involved and no matter how much return advisor can potentially generate. I have lost aprox 5% clients to direct plans but I observe that they are doing worse than regular plans because they fail to handle the challenges of investment process. They seem to believe that chasing the best returns is the essence of investing efforts which you must agree is not true.
You are doing absolutely amazing job, no doubt about that, but a reasonable comparison should be made between direct and regular plans. Direct plan is not win win situation. Not returns or expense ratios but overall outcome and its quality is what matters..
Thanks
Amit
@@amitgulati2726 I guess this is a part & parcel of an investor's evolution. Just like some clients might move from regular to direct plans .. the reverse will also happen as some investors find that direct plans are not working out. Likewise something different might show up like a fee-based financial advisor. Or a fourth options like an artificial intelligence based platform. As an educator, it will be my privilege to watch all these developments in action and help investors understand the pros and cons.
Thank you very much for your kind wishes.
Thanks Shankar, I believe if you make a dedicated video on the need and pros and cons of engaging an advisor will be very helpful for investors..
All the best for your future endeavors..
@@amitgulati2726 Thank you very much!
Suppose after shortlisting two funds which are very similar in every aspect to meet My needs, if the 1st fund is 5 years old while 2nd fund is 10 years old.
Is it ok to invest in a fund which is already 10 years old ? Or is the 5 year old fund the better option !
I am new to space so I may be very naive to ask this doubt.
Hello. I have not come across any research or study on whether older funds do better than more recent schemes. Personally and ceteris paribus, I'll lean on the 10 year scheme as the fund/fund manager would have seen more booms and busts along the way and would have learnt from that experience. Ultimately, when one invests in a fund .. the investor is actually investing in the fund manager's intuition and experience
@@shankarnath Thank you so much for the quick revert.
May i know which one is better for 25 years of SIP investing for building a retirement corpus - Multi asset funds or Index funds
Hi, while I can't generalize or speak for other ... I prefer keeping the retirement corpus in equity (aka index) instruments given the long 25 year runway. Ofcourse, I'll have a glide path once 20 year are up & over the next 4-5 years, I'll focus on reducing volatility which might need apportioning money to other assets like debt & gold.
@@shankarnath Thank you so much.
I was about to get back to you until 0:22 😂😂 awesome comeback sirji 😅
Thank you!
Very informative. What about quantum liquid fund Sir. Aum is 500 crore approx. Any views?
Thank you. Apologies, I have not analysed that particular scheme
Very interesting and funny video. Since you spoke about actively managed large cap funds, what is your take on the talks of an index bubble coming up due to too much passive investment?
Is it yet another noise that long term investors must ignore or wisely avoid all eggs in a single passive basket?
Hello.
1. I don't think that far as an index bubble. As long as the underlying asset is companies which continue to earn profits (which is the case), I don't see any reason to worry.
2. Yes, I prefer to diversify across assets (domestic equity, international equity, debt, some gold, some real estate) and even within assets. For instance - I have a 50:50 mix of active and passive funds.
@@shankarnath thanks for replying.
Hi Sir, with reference to your First video, is there any way that we can time a Mutual Fund and rotate the fund when it is at peak and continue the SIP when it comes down. ( As you've shown in the video it gives maximum return ).
Hi Chirag. I think timing the market is a very complicated phrase. Let me try to make it easier to understand (for a younger me).
So logically more T-shirts are sold in summers and in winters, more sweat shirts are sold. This is something you and I know. The question is - how do we know when to buy a T-shirt and when to buy a sweat-shirt before the season has arrived?
The method I prefer (which is what I explained in the video) is to go with any understanding of temperature and what people do. For example - historical data tells me that people start buying T-shirts when the temparature starts crossing 20 degree celcius (so it is not summer yet) and they start buying sweat shirts when temperature goes below 25 degrees (so it's not winter yet). This is the same principle I used in the large cap, small cap video. Now, because this was done over many years, you are likely to be ahead of the curve in most occasions.
To put it differently, don't work on a 20% probability of being exactly right. Instead work on an 80% probability of being almost right. This is what investing really is .. and as Led Zeppelin almost said, it's the stairway to financial heaven
Hope this helps.
@@shankarnath Damn. Amazing Explanation Sir. Very hopeful for 21yr old. Hoping to learn a lot from you. Thank you very much Sir.
@@chiragsanwal2789 Most welcome. Ab isko Instagram ya Linkedin mein mat copy karna :)
@@shankarnath Haha, arey nahi sir. Abhi tho aapse aur seekhna bhi hai, looking forward for it! 🙌🏻
Are FoFs a bad option even for international allocation? Also we have very little other options for it.
I think we should not generalize anything in terms of good or bad. If it helps improve your portfolio returns/volatility, then it's good .. but if that comes at a 2.5% expense ratio then it may not be that good. As an investor, we need to examine them for its pros & cons.
Ok. Then I think my holdings are fine.
Having HDFC Developed World Indices FoF - 0.21 ER and ICICI Global Adv FoF - 0.44 ER. Holding both the funds for global diversification the with former having higher (almost double) weightage
Very helpful information 👌
Thank you 🙌
Thats informative Shankar 👍
Glad you liked it, Charanjeet. Kaise ho? Long time!
Detailed analysis and precise details for viewers. Well crafted content to save investors money.
Question- Is it good practice to get Top up home loan and invest in MF for 15 years?
Thank you very much Anand. I wouldn't encourage anyone taking a loan for pursuing a speculative activity like equity investing.
The reason here is a bit analytical .. and shows a risk-return mismatch. Like the premise for you would be to take top-up at say, 10% and earn 12% over the next 15 years -- so the gains are not high on the additional capital invested. Now on top of it, there are other potential risks like emergencies, change in loan rate (MCLR increases), stock market lull periods etc.
In my view, use leverage when the value one gets out of time is excruciatingly high & one would regret missing out on it. Meaning .. if I take a 10 lakh loan for growing wealth, it better be able to deliver me 5 crores over 15 years.
Very nice👌👌God bless 🙌
Thank you so much
Good information Sir.
Glad you liked it
How much allocation as per you should be kept in mid , large and small cap funds . I Prefer 50 in large and 25 each in mid and small for long term . Is it Ok ?
It's your call but my allocation is a lot similar
@@shankarnath thanks i prefer the same allocation
@@ameymohal8791 Check out my video on "My Long Term Investing Portfolio" (the thumbnail of me wearing a monk's clothes) .. for more specifics on my allocation
@@shankarnath sure thanks
Hello Sir,
I am a big fan of you. You videos on ETMoney channel motivated to start my MF investing journey couple of months back. Your calm presentation style backed by hard data is something that i admire a lot. I am a complete newbie when it comes to MF investing , and i will be highly obliged if you can shed some light on a question that i have.
If i am buying MF from different 3rd party apps like GROWW, ETMONEY from different AMC's , is there any way to track my investments directly by going to the AMC portal or something. My only concern is how can i track my MF investments , if these apps some day in the future goes for a toss. Is my investment in MF in some way tied to these platforms ?
Thanks.
Thanks Ranadeb and welcome to my new channel
With re your question:
1. My own investments I've made via ET Money and MyCAMS are very much visible in the AMC's portal.
2. For tracking my mutual funds, I use ET Money or ValueResearchOnline.
3. An app's closing down is not a botheration unless there is some fraud. You see, the MF units you own are in a central repository which is managed by CAMS and Karvy. Infact, you can go to camsonline.com anytime and download the consolidated account statement (this is something I do every month now). If the units are there, then the transaction has taken place properly. Please have a check yourself and if there is any discrepency then connect with the respective platform and in a worse case, you can always complaint to SEBI
Hope this helps.
@@shankarnath
Hello Sir,
Firstly thank you for your response. This is exactly what i was hoping for , somewhere where i can track my MF units allocation made across different apps and something which is independent of these platforms. I will surely make a point to cross verify my allocation from camsonline with the allocation made via the apps. Thank you very much sir.
How to properly choose funds for long-term instead of looking at their historic returns.Please advise.
Hi Nishant - In all honesty, we don't really choose a fund. You are actually choosing the fund manager's investing style .. so that's the first step. Be comfortable with his/her investing style .. everything wont work every single time. There was a time when every fund of Axis was assumed golddust & HDFC MF esp. Mr. Jain's funds were looked down upon. But those were a function of the times but it doesn't take time to the winds to change direction. For me, this is selection criteria number 1.
@@shankarnath Thanks
Absolutely loving it... 🤩
So glad! 🙌
Nice to see your separate channel apart from ET money.
Thanks a lot 🙌
What about international FOF ? Should they be part of our portfolio?
Yes, they should be. Just understand the charge structure properly.
I did an analysis of expense ratio some 17-18 months back on international funds for ET Money. The link (excel sheet) is still active although the data is not updated. This will still give you an idea .. you can download it here: shorturl.at/cCOU0
Excellent analysis
Thx 🙌
Another great video....❤️
Thank you, Akhil 🤗 .. happy to know you're liking the content. If you have any feedback or suggestions for me, do type them in the comments box. I read and reply to most comments.
Haha nice thumbnail and very informative video. Thank you
Glad you liked it! Thanks
Very useful information
Thanks a lot, glad you liked it
love the analysis
Thank you!
Can you please tell your secret of how you're always so calm?? Watching your videos is like meditation 🙏🏻🙏🏻🙏🏻🙏🏻
Sleep in the afternoon
Play a sport (football in the evenings)
:)
Very good Explain
🙌
I was wondering why I didn't see you lately on my YT recommendations. Turns out you have your own YT channel. Very nice video looking for more to come.
Would love to hear from you on ESG companies and does a MF based on this theme really makes money.
Will try, thx for the suggestions
I have exited most of my MFs except Quant Tax plan ELSS. After experiencing 10yrs with MFs making only AMCs, Banks and Managers rich. Now I'm investing directly in stocks for long term.
Thanks for sharing
Which funds you invested in ?
@@Ishaajaytravelvlogs ABSL pure value fund, HDFC midcap opportunities, MO focused 35 now it's Flexicap fund🙂😌😥
Very informative vedio
🙌 Thanks
I too had made a mistake by investing in digital India fund.. holding to see upside
I think many people had done that mistake in Sep 2018 and the returns were 0% until Feb 2020. And again some investors would have bought it in Jan 2022 which is a -20% return until now
@@shankarnath exactly..just investing based on past results is not advisable.. learning from mistakes 😀
Amazing Thumbnail 😀
Thank you Neeraj. For the record -- main kahin maar khake nahi aaya 😂