Conversations about trading, investing, and personal finance with the smartest people in the industry.
The right way to invest in ELSS mutual funds with Amit Grover
We recently did a Twitter live session with Amit Grover, the Head - Learning & Development, DSP Mutual Fund on the right way to invest in Equity Linked Savings Schemes (ELSS) or tax-saving mutual funds. When you invest in an ELSS mutual fund, you can claim a tax deduction on investments up to Rs 1.5 lakhs and you can save up to Rs ₹46,800 in taxes.
In this chat, Amit answers:
What are ELSS funds and how do they work
For how long should you invest in an ELSS mutual fund
ELSS funds vs other tax saving options like PPF, tax-saving fixed deposits etc
How to analyse an ELSS fund
The important factors to keep in mind when choosing an ELSS mutual fund
You can visit Coin to explore ELSS Funds.
If you have any questions about investing in ELSS Mutual Funds, you can post your queries here and we'll answer them. You can keep track of all the live weekly Coin Chats on Twitter.
Introduction to momentum investing with Aman Singhania
Thought the momentum effect is widely known in developed markets like the US, it's still relatively unknown in India. Over the past few years, there's been growing interest in the momentum style of investing. UTI Mutual Fund recently launched India's first momentum index fund which tracks the Nifty 200 Momentum 30 Index. But investors often extrapolate the past returns of momentum as a style and tend to think that momentum will always deliver superlative returns. So we caught up with Aman Singhania, the Vice President & Head of Index Development & Research at NSE India.
In this conversation, we talk to Aman about:
His journey into the markets
What is the momentum style of investing
Why does the momentum effect persist
How is momentum measured
How have momentum investing fared historically in the Indian markets
Are market capitalization-weighted indices momentum oriented in disguise?
How should investors think about momentum
His investing philosophy
You can check out this Varsity chapter on momentum for an understanding of how to implement a momentum strategy.
You can also follow Aman on Twitter @Aman_Singhania_ for more of his perspectives.
If you have any questions, please do post them here.
Introduction to floating rate funds with Arvind Subramanian
With interest rates at all-time lows, these are tricky times for fixed income (debt) investors. The consensus view seems to be that we are done with the rate cut cycle and the RBI may gradually start increasing rates. Most debt fund categories have delivered handsome returns in the past 2-3 years given the series of rate cuts. But if the rates start increasing, investors will have to moderate their return expectations. Given this backdrop, a lot of people have started talking about floating rate funds and how investors can use them in a rising rate environment. But the reality is that it is not quite that simple. Coincidentally, IDFC Mutual Fund has just launched its floating rate fund. So, we caught up with Arvind Subramanian, fund manager & head of credit research at IDFC Asset Management to learn how these floating rate funds work and if how investors should think of them in a rising rate environment. In this conversation Arvind talks about:
How his journey in the markets began
The current Indian interest environment
What are floating rate funds?
How do they work
What are interest rate swaps and how are they used to create synthetic floating rate bonds
Investment universe of floating rate funds
Role of a fund manager
How floating rates perform in rising and falling rate environments
Whether floating rate funds are a perfect hedge for rising rates
Where does a floating rate fund fit in a debt asset allocation framework?
Risks in these funds
His personal investing philosophy and how he invests
We also highly recommend you listen to this conversation with Suyash Choudhary of IDFC Mutual Fund on how to get your asset allocation right when investing in debt funds. This conversation perfectly compliments the conversation with Arvind on floating rate funds.
If you have any questions about floating rate funds or debt funds, do post them here.
We'd love to hear your thoughts on this conversation. Hit us up on Twitter.
An asset allocation framework for debt mutual funds with Suyash Choudhary
All the issues in the debt mutual fund space in the past 3 years have highlighted just how important it is to get your debt allocation right. But unfortunately, a lot of investors spend a lot of time thinking about equity in when deciding their asset allocation but take the debt part of the allocation for granted. And this has come back to haunt a lot of investors ever since the IL&FS crisis.
In the previous episodes, we have spoken at length about why you need debt in your portfolio and the right way to think about debt. But we figured investors need a framework on how to go about getting their debt asset allocation right. So, we caught up with Suyash Choudhary, the Head of Fixed Income at IDFC Asset Management. In this absolutely brilliant conversation, Suyash talks about:
How his career in the markets started
How the Indian debt markets and debt mutual funds have evolved throughout his career
The core reason for having debt in a portfolio
Core and satellite approach to debt asset allocation
Pitfalls of diversification in debt
Is it wise to rely on common rules of thumb when investing in debt
Should investors invest in credit risk or high yield funds?
Biggest lessons for investors in the last 3 years
How should savers and retirees think about the current challenging low-interest rate environment?
His personal investing philosophy, investing mistakes, lessons and favourite books
You can check out these previous conversations on investing debt:
Understanding what's happening in the debt markets with R Sivakumar, CIO of debt at Axis Mutual Fund
Should you invest in debt mutual funds with Arvind Chari of Quantum Mutual Fund
If you have any questions on the topics discussed in the episode, do post them here.
You can also check out the Varsity module on personal finance to learn more about the basics of debt mutual funds
Understanding how debt & equity ETFs work with Pratik Oswal
Motilal Oswal AMC is launching a new 5-year constant maturity G-sec ETF, the first one in India. It’s an interesting product for a lot of reasons. And also given that ETFs have been around for a while and investors have a lot of misconceptions. Today, we caught up with Prateek to talk him about how ETFs works and the new Motilal Oswal 5 Year G-Sec ETF.
In this conversation Pratik talks about:
What ETFs are and how they work
Difference between ETFs and mutual funds
Do's and don'ts when buying and selling ETFs
The Motilal Oswal 5 Year G-Sec ETF and what makes it unique
Role of debt in a portfolio
Common mistakes investors make when investing in debt funds
Historic performance of the 5 Year G-Sec index across cycles
Risks in the ETF
Taxation of the new ETF and a whole lot more
If you wish to invest in the ETF: https://coin.zerodha.com/etf-sgb
Earlier episodes with Pratik:
Should you invest in index funds? - https://link.chtbl.com/owrqKj2y
The need for global diversification - https://link.chtbl.com/-NE9Jqzf
The right way to invest in mid-cap funds and small-cap funds with Rahul Singh
One of the things that investors struggle with the most is with having the right expectations when investing and we've talked about this in the previous episodes as well. Mid-cap funds and small-cap funds tend to have higher returns than large-cap funds. But what most investors don't realize is that those higher returns come with a cost - that is higher risk or volatility. Most often than not, they just look at line charts comparing large-cap funds with mid and small-cap funds without looking at the deep and sharp drawdown and invest. If you look at the inflows and outflows of mid-cap and small-cap funds, you can clearly see that most retail investors tend to invest in these funds when they have already gone up and sell when they crash. So, in this conversation, I caught up with Rahul Singh, the Chief Investment Officer (CIO) of Equities at Tata Asset Management. In this conversation Rahul talks about:
Whether the Indian markets are too small enough for good opportunities the nature of mid and small caps and how should investors think about them and allocate to them.
His own investing philosophy and that of Tata Mutual Fund
His thoughts on the current market phase
Current market valuations
Large-caps vs mid-caps.
Is it the right time to invest in mid-caps and the case for investing in mid-caps and small-caps
How to invest in mid-caps and small-caps
His own investing philosophy
Investing mistakes and lessons
Prateek Singh is the founder of LearnApp, an online learning platform with courses on investing, personal finance, trading and more, do check it out.
Exactly what retail investors in India need - kudos to the Zerodha team!
As always, great initiave on investor education and awareness - kudos to the Zerodha team!
Ps - would love to listen to a podcast on Monetary Policy and tools central banks can use
Thank you very much... for me it is a lot useful session