Buying Digital Gold, Rs 5000 Cr AUA & More!

Allocating a percentage of your portfolio to an alternate asset like gold is one of those rare things that your FD-loving parents and a financial advisor would both agree upon. Digital Gold is like physical gold, but without the worry about purity, making charges, safe storage or ease of selling.  In our recent blog “Digital gold for smart investors”, we highlighted how a portfolio having a combination of gold and equity gives highly superior risk-adjusted returns as compared to an all-equity portfolio. 

 

 

Let’s look at a portfolio that is 50% gold and 50% nifty 50 at all times:

From 1990 Monthly Gold Nifty50 50 – 50
Return 10.7% 15.6% 13.1%
StdDev 15.9% 27.2% 15.8%
Return / StdDev 0.67 0.57 0.83
Max DrawDown -25% -55% -27%

 

The risk-adjusted return of a 50-50 portfolio is 0.83 compared to only 0.57 for Nifty 50. This is driven by the low correlation of Gold and Nifty 50 which over the last 29 years has been 0.3%. And also by the fact that gold outperforms exactly when you need it to – i.e when the equity markets are tanking.

 

Like during the Global Financial Crisis: 

 

Or during the dot com bust: 

 

We have been proponents of index first approach to portfolio construction since the start. In positive news, the choice of index funds available to Indian investors continues to increase. Axis Mutual Fund has launched an NFO for Axis Nifty 100 Index Fund. This NFO will be open for subscription until 11th October. You can find NFOs on Kuvera here.

 

PMC Bank has been put under regulatory curbs by the RBI for the next six months, with withdrawal limits for customers capped at Rs 10,000 (increased from Rs 1,000) due to irregularities in lending. The Board of the PMC Bank was superseded and the central Bank nominated an administrator for the Bank. RBI specified that the steps were necessary on account of major financial irregularities, failure of internal control and systems of the bank and wrong or under-reporting of its exposures under various off-site surveillance reports.Prior to this, RBI has taken similar steps with co-operative banks like Mumbai-based Kapol Cooperative Bank, CKP Cooperative Bank, among others. 

 

Rana Kapoor has sold part of his stake in Yes Bank through his holding companies, MPCL and YCPL. Kapoor family’s holding in the Yes Bank now stands at 5.58%. The proceeds from the 2.3% stake sale though Morgan Credits Pvt Ltd was  “solely utilised to prepay a substantial portion of outstanding non-convertible debentures (NCDs) of MCPL subscribed by various schemes of Reliance Nippon Life Asset Management Company,” as per a release by the company. The sale proceeds of 1.8% stake by Yes Capital (India) Pvt Ltd will be utilized to prepay entire (100%) balance outstanding non-convertible debentures (NCDs) of YCPL subscribed by various schemes of Franklin Templeton Asset Management (India).

 

And another milestone for us. Thanks to the support and feedback we get from our community we now advise on over Rs 5,000 crores in assets on Kuvera. It would not have been possible without all the #HappyKuverians

 

 

 

Index Returns

Index 1W 1Y 3Y
NIFTY 50 2.1% 4.9% 9.8%
NIFTY NEXT 50 1.5% 0.7% 6.3%
S&P BSE SENSEX 2.1% 6.9% 11.2%
S&P BSE SmallCap 1.0% -10.7% 1.1%
S&P BSE MidCap 1.0% -4.9% 2.4%
NASDAQ 100 -1.8% 0.7% 16.4%
S&P 500 -1.0% 1.6% 11.1%

Source: BSE / NSE

Top 5 best performing funds

Name 1W 1Y 3Y
DSP Natural Resources & New… 8.9% -9.2% 9.7%
HSBC Solutions India Growth.. 5.6% 3.6% 7.2%
PGIM India Credit Risk 5.0% 4.5% 6.3%
Taurus Banking & Financial … 4.7% 26.0% 16.2%
HSBC Solutions India Moderate 4.5% 4.2% 6.8%

Source: Kuvera.in

Top 5 worst performing funds

Name 1W 1Y 3Y
Reliance Equity Saving -5.4% -6.6% 3.2%
Franklin India US Opp… -3.3% 0.2% 17.3%
JM Low Duration -3.2% -7.4% 1.8%
Kotak World Gold -3.1% 33.2% -3.0%
Franklin India Europe… -3.1% -16.9% 1.9%

Source: Kuvera.in

What Investors Bought

We saw the most inflows in these 5 Funds –

Name 1W 1Y 3Y
Mirae Asset Large Cap 1.7% 8.3% 12.7%
Kotak Standard Multicap 2.1% 9.6% 11.6%
Axis Bluechip 3.7% 18.7% 16.5%
Parag Parikh Long Term Equity 0.8% 5.6% 12.6%
UTI Nifty Index 2.1% 6.1% 10.9%

Source: Kuvera.in

What Investors Sold

We saw the most outflows in these 5 Funds –

Name 1W 1Y 3Y
Edelweiss Arbitrage 0.1% 7.2% 6.9%
SBI Banking & Financial Services 3.6% 23.2% 17.5%
L&T Emerging Businesses 1.6% -7.2% 8.9%
Edelweiss Large & Mid Cap 2.4% 7.7% 10.3%
Motilal Oswal Multicap 35 2.4% 7.9% 9.9%

Source: Kuvera.in

Movers & Shakers

1/ Reliance Mutual Fund has announced that Kanu H Doshi and S C Tripathi have resigned from their posts as an Independent Directors on the Board of Reliance Nippon Life Asset Management Limited. Mahadevan Veeramony has been appointed in their stead.

2/ Franklin Templeton Mutual Fund has appointed Pyari Menon as the fund manager of Franklin India Feeder Franklin US Opportunities Fund and Franklin India Feeder Franklin European Growth Fund. Srikesh Nair will cease to be the fund manager of these schemes.

3/ Edelweiss Mutual Fund has announced that U R Bhat has ceased to be an Independent Director of Edelweiss Asset Management Limited.

 

Quote of the week:

 

Labour was the first price, the original purchase – money that was paid for all things. It was not by gold or by silver, but by labour, that all wealth of the world was originally purchased.

: Adam Smith

 

 

Start investing through a platform that brings goal planning and investing to your fingertips. Visit kuvera.in to discover Direct Plans and start investing today.

#MutualFundSahiHai, #KuveraSabseSahiHai!

1 Responses

  • Vinod patel

    September 30, 2019 AT 08:48

    Vinod patel