As we aware that RBI cut repo rate by 200 basis points – from six per cent to four per cent over the last one year.
“The cut in policy rates and abundant liquidity in the financial system has led to a crash in short-term interest rates and hence the mutual fund schemes investing at the short end of the yield curve are reaping low returns,”
Hence, Question is – Should you switch to ultra short-duration funds for parking your emergency corpus?
As you know that Ultra short duration fund portfolios typically have 3-6 months duration, Low duration schemes the period is 6-12 months. And liquid and overnight funds invest in securities maturing in 91 days and one day, respectively, interest rate risk is limited.
If you are ready to take risk and have specific time period to invest then our recommendations is go with Ultra Short Term Funds or Low Duration funds according to your risk profiling.
Also recommends investing in schemes backed by leading fund houses with a good track record and good quality portfolios. Additionally, we suggest you stick to larger schemes, as such funds are likely to be well-diversified and less concentrated.
You may visit our website www.agindiaonline.com for get best funds choice.
Large Cap in portfolio is very important. I have given some of fund house Large Cap with Beta, Standard Deviation and Sharpe Ratio.
If you can the below table you will find that Axis Blue chip is very good. as Sharpe ratio of Axis is very good.
Usually, any Sharpe ratio greater than 1.0 is considered acceptable to good by investors. A ratio higher than 2.0 is rated as very good. A ratio of 3.0 or higher is considered excellent.
Large Cap Mutual Funds
When you are investing for create wealth then you have to first create your portfolio and that portfolio should be according to your requirements.
My personal recommendation is maximum investment in Large Cap. I have given one idea about how to create and how much should be in where ?
One best Idea to Create Aggressive Portfolio of SiP not less than 7-10 Yrs.
Large Cap – 60% Mid Cap- 25% Small Cap- 15%
Because money safety and your happiness is more important for your future.
Conservative Portfolio
Debt – 80%
Equity- 20%
Debt- Bond 30%
Debt- Short Duration 30%
Debt- UST 20%
Equity- Large Cap 20%
Moderate Portfolio
Debt – 70%
Equity- 30%
Debt- Bond 25%
Debt- Short Duration 30%
Debt- UST 15%
Equity- Large Cap 25%
Equity- Mid Cap 5%
Balanced Portfolio
Debt – 50%
Equity- 50%
Debt- Bond 20%
Debt- Short Duration 25%
Debt- UST 5%
Equity- Large Cap 30%
Equity- Mid Cap 15%
Equity- Small Cap 5%
Dynamic Portfolio
Debt – 25%
Equity- 75%
Debt- Bond 10% Debt- Short Duration 12.5% Debt- UST 2.5% Equity- Large Cap 50% Equity- Mid Cap 15% Equity- Small Cap 10%
for more about creating portfolio, you may right to [email protected], visit to my youtube channel AGInvestment, Join telegram https://t.me/mfpathshala, whatsapp @ 9891423442
In last 5 years, I have seen attraction and choice of all young generation in Mutual Funds. Create wealth SIP – Systematic Investment Planning is very popular now a days. I also appreciated this decision but Are you really wants to create wealth from Mutual Funds ? then Systematic investment plans (SIPs) have emerged as a popular vehicle for investing savings in equities. Among the diversified, actively-managed equity mutual fund schemes, the ones that delivered the best returns were focused on growth and quality.
Behaviors of Investor’s
It’s true Equity investment is one of best investment and start investing from SIP is one of best vehicle. But according to all research we found that all SIP’s get terminated and cancelled in maximum 5 years. This is very dangerous situation for young generation. SIP /Equity can only give returns in long term and if you are looking for short term then please don’t use Equity Funds. Also if you want to exit in short term from Equity Funds-SIP then my personal recommendation is NOT START SIP‘s. To know SIP VALUE please visit SIP Calculator then only can you find the different between SIP tenure benefits.
Recommended Fund for Start up You can choose any one from below and start instant after clicking on fund name. but please make sure your SIP investment horizon not less than 10 years to get better retuns.
Ultra Short Duration debt funds invest in bonds maturing in 3 to 6 months’ time. They aim to earn slightly better returns than what you can get from a bank account or a short duration fixed deposit. The risk of incurring a loss in these funds is negligible.
Franklin or Any AMC who is investing in Bond fund, they are very much aware about Paper of Company. After all calculations of Risk etc they added particular company bond in his portfolio for get better returns.
What happened with this fund –
In all these AMC Franklin, UTI, Nippon, Aditya Birla etc has taken bond Paper of Vodafone Idea Limited (VIL) according to his decision and calculation of Risk.
Frankln exposures was 4.4% in Ultra Short Term Bond fund. Now Supreme Court has reject the case of VIL. so Franklin has immediate marked down to Zero the Debt Security of VIL. Due to this NAV on 16th Jan 2020 has down.
According to me its very good decision from Franklin for Retail Investors. Scenario, if Franklin not take this action, then all Institutional investor book profit in his portfolio on higher NAV and Retails investors get penalized. Now this is win-win situation for all.
What to do now ?
HOLD 3 months
Franklin has now marked Zero that Does not means they have sold Paper. Bond Paper of Franklin maturity is in July 2020 and Sep 2021. Also VIL has not given any statement that they are not going to pay back of money of Bond Paper, means still value of paper is continue till maturity. Now 23rd January is last date given by Supreme Court to pay amount of Licence fee, Spectrum charges, if by any chance VIL declare Bankrupt then the current NAV is continue, Else there is no any tension. In all Cases, I can say that Gov will not going to loose VIL etc but pressure to be on head of VIL to pay such amounts. This is not happening with Franklin or other AMC is first time, you must heard ABSL Dynamic Bond Fund, ABSL Credit Risk fund. Nippon India Equity Saving Fund etc recently has created Segregated folio. Franklin has marked Zero but ABSL, Nippon has created segregated folio both are same case. Suppose any one hold investment in above fund and due to any reason, holder quite before maturity of paper and after maturity of paper company get his amount back with maturity value. In that case company refund the complete value to investor Bank Account. Therefor I will recommend to not exit from this Fund and continue till 3 months more, Franklin has taken this step and cease daily investment upto Rs.200000 only to win-win situation for our retails investor.
To gain maximum Franklin taken pain maximum, As in his folio there are lot of paper is AA- rating. Pls visit www.agindiaonline.com to get all details of paper or you may reach us at my telegram – https://t.me/mfpathshala, reached on whatsapp at 9891423442
