Portfolio Clutter, Forex, SEBI & Other MF News

All that you need to know about Mutual Funds this week

Tax Harvesting is a technique that utilises the ₹1 Lakh annual LTCG exemption by selling and buying back part of your investment such that you “realise” gains and not pay taxes on them. At a 10% LTCG tax rate, you could save up to Rs 10,000 in LTCG taxes every year by doing this diligently. You can learn the details here.

Too many funds make it harder to manage and rebalance your portfolio to efficiently reach your goals. But is it true that the ease of online investing nudges the investor to invest in too many funds? We looked at our data to answer this recently. Investors who come to Kuvera import their entire transaction history with us. So we have insights into who started investing when and how many funds their portfolio had over time. Below is the data.

We note –

  1. Prior to 2011, there were no online platforms. Post-2011 clutter in the portfolio is coming down. The relationship is weak though.
  2. There is a weak positive correlation between the age of the portfolio and the number of funds in the portfolio.
  3. Investors who started with us have fewer funds on average and it will be interesting to see how this data matures.

Our findings suggest that advisory led online platforms can lead to better consolidation of portfolios and thus fewer funds in an investors portfolio.

India’s forex reserves are at an all-time high at $426.42 billion on 21st June, surpassing the previous high of $426.1 billion in April 2018. 

Key market indices broke their three-week losing streak to end the week with modest gains. Sensex and Nifty rose 0.51% and 0.55% to settle above 39,000 and 11,700 respectively. BSE Mid-Cap and BSE Small-Cap indices outperformed the Sensex this week.

SEBI has amended the risk management framework and investment norms of Liquid Funds. The market regulator has tightened the investment scope and directed the valuation method to be Mark to Market only. Liquid funds can now invest a maximum of 20% of assets in a single sector as against the previous cap of 25%. Further, the Board has laid down instructions for graded exit load if liquid fund units are redeemed within 7 days of investment.

“The measures we have taken will help revive the confidence of investors, especially those investing in debt MFs,” – Ajay Tyagi, SEBI Chairman. 

DHFL Mutual Fund has informed their unitholders about the proposed change in Controlling Interest of the AMC. Prudential Financial, Inc (PFI), the current co-sponsor, intends to increase their stake to 100% in DHFL Pramerica Mutual Fund (DPMF). Unitholders (as on 25th June) who do not wish to retain their holdings in schemes of DHFL Mutual Fund can redeem their units without any exit load between 29th June and 28th July 2019.

Index Returns
Index Weekly open Weekly close Change
BSE Sensex 39,194.49 39,394.64 0.51%
Nifty 11,724.10 11,788.85 0.55%
S&P BSE SmallCap 14,084.24 14,239.33 1.10%
S&P BSE MidCap 14,624.59 14,808.34 1.26%

Source- BSE/NSE

 

Top 5 best performing funds
Name Week 3Y Category
IDBI Ultra Short Term 4.7% 5.6% Ultra Short
BNP Paribas Medium 3.3% 3.8% Medium Duration
HDFC Infrastructure 3.2% 5.8% Sectoral
DSP Srategic Bond 2.8% 6.7% Dynamic Bond
BNP Paribas Bond 2.7% 5.5% Corporate Bond

Source – Kuvera.in

 

Top 5 worst performing funds
Name Week 3Y Category
BOI AXA Credit Risk -29.6% -13.5% Credit Risk
BOI AXA Short Term -7.9% 3.9% Short Duration
BOI AXA Conservative -5.7% 2.8% Hybrid
BOI AXA Equity Debt -5.2% 3.8% Hybrid
HSBC Brazil -3.3% 16.3% Fund of Fund

Source – Kuvera.in

 

What investors bought

We saw the most inflows in these 5 Funds –

Name 1Y 3Y Category
HDFC Small Cap -1.1% 17.4% Small Cap
Kotak Standard Multicap 11.2% 16.6% Multi Cap
PPFAS Long Term Equity 5.9% 14.6% Multi Cap
UTI Nifty Index 12.1% 14.7% Index Fund
Mirae Asset Large Cap 14.3% 17.4% Large Cap

Source – Kuvera.in

 

What investors sold

We saw the most outflows in these 5 Funds –

Name 1Y 3Y Category
Axis Focused 25 5.5% 18.4% Focused
SBI Blue Chip  9.0% 12.2% Large Cap
IPRU Balanced Advantage 8.9% 11.6% Balanced Adv
ABSL Equity Advantage 1.6% 12.0% Large & Mid Cap
HDFC Balance Advantage 17.7% 16.8% Balanced Adv

Source – Kuvera.in

 

Movers & Shakers

1/ L&T Mutual Fund has announced the change in scheme name of L&T Dynamic Equity Fund to L&T Balanced Advantage Fund, with effect from 01 August 2019. 

2/ Aditya Birla Sun Life Mutual Fund has announced that Harish Engineer has been appointed as an Independent Director on the board of the AMC.

3/ LIC Mutual Fund has announced that Shefali B Suri has ceased to be the Key Personnel of the AMC. Y V Padmavati has been appointed in her stead.

 

Quote of the week:

Never lie in bed at night asking yourself questions you can’t answer.

: Charles M. Schulz

 

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.

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