A mutual fund is just a pass through vehicle where a fund (scheme) is money held in a trust. The ‘manager’ (like an architect) need not have a net-worth – after all they are just ‘managing’ the money and not owning the money. Not sure if everybody understands the difference between a bank fixed deposit […]

I had just finished a class on investing, and then the next speaker was to take over. I had to do the follow up lecture too – so some spill over had to happen. I had told the class that to retire one should have equity, and that is the only way. The next speaker […]

If you had just bought the Index in 1979 for Rs. 100 and held it till today…it would be worth Rs. 39000. If you had reinvested the dividends too, it would be worth Rs. 56000. This is a rocking return of 17.3% cagr, The is a far cry from FD, ppf, gold, most real estate, […]

The Mutual funds regulator claims that they want to reduce the cost to the end investor. Great. So you should touch the costs of the manufacturer, instead it touches the costs of distribution. Why the great regulator cannot come with a cost structure for “direct” investors. Whatever you want the cost to be…bring it there. […]

I never liked the dividend option. The only time I preferred the dividend payout option was in ELSS so that there could be some cash flow created from an asset which was locked in and the cash could be re-invested in the same scheme with tax benefits. I used to be dead against the ‘re-invest’ […]

I had just joined a Mutual fund as its Managing Director…after the celebrations were over, I had to make a business presentation to the Board about how we would go from being the 47th fund house to the 5th position in a matter of 5 years. That was not going to be difficult. I was […]

Over long periods of time – say 60+ years if one asset class outperforms (equity) over debt, why should you rebalance? or should you re-balance at all? Re-balancing is not a return enhancing strategy, it is a risk reduction strategy. Risk reduction – at times improves the return, though the logic is IT SHOULD NOT. […]