Vision Mutual Fund Consultancy

Vision Mutual Fund Consultancy Vision Mutual fund Consultancy have gained the specialization in the sphere of Mutual Funds. Mutual

SEBI has changed the guidelines for Multicap funds. There must be 25% in midcap and 25% small cap. How it will an impact...
12/09/2020

SEBI has changed the guidelines for Multicap funds. There must be 25% in midcap and 25% small cap. How it will an impact on markets and MultiCaps? See below the estimated impact.

In 1980 the cost of: -🔸1gm of Gold= ₹133🔸100gm silver= ₹230🔸Sensex was at 129 pointsToday (AUG-2020): -🔸1gm of Gold= ₹54...
16/08/2020

In 1980 the cost of: -

🔸1gm of Gold= ₹133
🔸100gm silver= ₹230
🔸Sensex was at 129 points

Today (AUG-2020): -

🔸1gm of Gold= ₹5480 (9.74%)
🔸100gm silver= ₹6801 (8.84%)
🔸Sensex is at 37877 points (15.26%)

>> Inflation data included for the same time.

Are your funds performing well? Some best performing funds in Covid scenario.
10/06/2020

Are your funds performing well? Some best performing funds in Covid scenario.

Are we going on 2008 scenario??? ... time will give an exact answer.🧐
10/04/2020

Are we going on 2008 scenario??? ... time will give an exact answer.🧐

09/04/2020

*Amazing positive thoughts about why India will survive and make it big —*

1 India’s rural economy is not affected by corona and going on strong

2 India being young people’s nation won’t have must health effect of corona compared to Europe

3 Merchants and small shops are not over leveraged (not too many loans ) so will emerge strong once shops reopen

4 fall in oil prices would lower the inflation and other costs

5 our country’s internal consumption is strong

6 even if we have to keep India locked down for 14 days or 28 days (two cycles) in larger scheme of things it won’t matter

7 even if stock market collapses and has to enforce few circuits closures its mainly because of automated algorithms which are forcing stock selling and nothing to worry

8 work from home is reducing costs for all companies and May the increase profits eventually

In short nothing to worry and time to think positively 😊

Fund performance of Small cap & Multicap, Top to bottom ! Good news! Market to close 10 days during lockdown. See pic....
29/03/2020

Fund performance of Small cap & Multicap, Top to bottom !

Good news! Market to close 10 days during lockdown. See pic.

Feel free to share your feedback / comments.

How did your MF fare in the market crash? Feb -March 2020.
16/03/2020

How did your MF fare in the market crash? Feb -March 2020.

Is this the end of the world ?HDFC Equity Fund started in 1994 has delivered close to 20% CAGR. Rs. 1 lac invested than ...
29/02/2020

Is this the end of the world ?

HDFC Equity Fund started in 1994 has delivered close to 20% CAGR. Rs. 1 lac invested than is now Rs. 63 lacs. What is more interesting is the journey. The funds NAV has fallen

- 10% plus 55 times ( every 6 month)
- 15% plus 26 times ( every 1 year)
- 20% plus 14 times ( every 2 year)
- 30% plus 8 times (every 3 year)
- around 50% 3 times (every 8 year)

The worst this fund has delivered was 54% negative in one year and worst 5 years returns has been around 5% CAGR.

This fund has witnessed the followings:
- earthquakes/ floods/ riots/ droughts
- SARS/ Ebola/ Swine Flu etc.
- Majority/ minority / outside support / weak / strong government.
- assassination of ex- PM/ political leaders.

Rs. 1 lac has become Rs. 63 lacs through this journey only. In equity investments volatility is the only guiding principle. But when this principle reaches us to teach a lesson, we scamper for cover !!!😊

Disclaimer: Views expressed here in this article are for general information and reading purpose only. They do not constitute any guidelines or recommendations on any course of action to be followed by the reader. The views are not meant to serve as a professional guide/investment advice / intended to be an offer or solicitation for the purchase or sale of any financial product or instrument.

Will my losses actually turn into profit in long term? Are your investments giving you negative returns?We have been adv...
13/02/2020

Will my losses actually turn into profit in long term?

Are your investments giving you negative returns?

We have been advising to invest for long term. There might be short term losses, but in long run you are likely to make very good returns.

Now, Some of you asked for a proof.

Well, we may have found an answer.😀

Year 2011 was also like this year. If you had started a SIP of Rs 1000 per month in Jan 2011, then by the end of 2011, you would have made losses. Did those losses continue forever? See the examples of three of the most popular funds.

Example 1: Nippon Small Cap Regular Growth
If you had started a SIP of Rs 1000 per month in Jan 2011, your annual return by Jan 2012 would have been -17.7%, giving you a loss of around 2,200 for an investment of 13,000. Suppose, you overcame the fear of loss and continued the SIP. By Jan 2014, annual return would have been 19.3%. You still continued. By Jan 2016 and Jan 2018, annual returns would have been whopping 35.2% and 33.7% respectively. By Jan 2018, an investment of Rs 85,000 would have become Rs 2.77 Lacs.
On 12 February 2020 Total investment would be Rs 1,10,000 & Market value be Rs 2,67,411 ... 18.8% return p.a.!!

Example 2: Kotak Standard Multi Cap Regular Growth.
Not convinced with just one example? Here’s another one.

A SIP of Rs 1000 per month, started in Jan 2011, would have given a loss of 1500 by Jan 2012. But then by Jan 2014, the annual returns became 13.3%. If you had still continued the SIP, the annual returns would have been 20.4% and 20.5% by Jan 2016 and Jan 2018 respectively.
Just imagine, if you had stopped the SIP by Jan 2012!
On 12 February 2020 Total investment would be Rs 1,10,000 & Market value be Rs 2,28,964 ... 15.6% return p.a.!!

Example 3: ICICI Prudential Bluechip Regular Growth.
Getting convinced? Still not? Well, here’s another example.

A SIP of Rs 1000 per month, started in Jan 2011, would have given annual returns of -3.3%, +13.9%, +15.5%, +17.2% by Jan 2012, Jan 2014, Jan 2016 and Jan 2018 respectively.
On 12 February 2020 Total investment would be Rs 1,10,000 & Market value be Rs 1,97,673 ... 12.5% return p.a.!!

Conclusion
Here, we have taken only three funds as examples. If we do a similar analysis on other funds as well, the story is similar.
And not just for 2011 as SIP start year. 2008 as SIP start year also depicts a similar story.

So, if your investments are negative, don’t worry. They are likely to turn positive in long run. Just make sure that your portfolio is well diversified and you have invested in RIGHT FUNDS. Schedule a portfolio review with our investment team to make sure that you are invested in right funds.😀

Thank you for reading. Please feel free to share your thoughts, comments and feedback.

Will Rs 1 crore be enough to take care of all your needs after 15 years???Typically, many investors want to create a cor...
12/02/2020

Will Rs 1 crore be enough to take care of all your needs after 15 years???

Typically, many investors want to create a corpus of Rs 1 crore after a decade or more. In some cases, the corpus is to take care of retired life, whereas in others, it is mean for children’s education or marriage. Some investors just like the idea to have a corpus of Rs. 1 crore after some years. This raises many questions in our heads: has the person just picked up a random number? Or has he/ she worked with real numbers? Has the person accounted for inflation?

Many investors have an affinity towards round figures and Rs 1 crore tops the list of such numbers.

Is a big, round number sufficient?
A figure that appears big today may not be sufficient to take care of all your future financial needs. This is important because the value of money does not stay same forever. For example, if the course fee Rs 20 lakh today. It would not remain the same after 15 years. Because of the impact of inflation, it would cost much more. First, you may find out how much your daughter’s education cost now. Then you can find out how much it would cost after 15 years. To understand the impact of inflation, ask yourself ‘How much I used to spend 10 or 15 years ago?’. Once you answer this question, you will realize that inflation erodes the real value of your money and a big figure will not be worth the same after a few years.

Let us see how much 1 crore is worth in 10, 15, 25 and 30 years’ time.

In 10 years

In 15 years

In 25 years

In 30 years

Worth

50 lakhs

36 lakhs

18 lakhs

13 lakhs respectively.

Division Factor

2

2.8

5.4

7.6

Impact of inflation on Rs. 1 crore. Inflation is assumed to be 7%.
For example, to find how much is Rs. 1 crore in 15 years use the division factor of 2.8. That means, Rs 1 crore today will be worth (1 crore/2.😎 approximately Rs. 36 lakhs after 15 years.

Assessing the Impact of Inflation
Let us see how much you would need in 10, 15, 25 and 30 years’ time to have an equivalent wealth worth Rs 1 crore today.

In 10 years

In 15 years

In 20 years

In 30 years

Equivalent Corpus in Multiplication Factor

2 2.8 5.4 7.6 respectively.

Equivalent of Rs. 1 crore today in future. Inflation is assumed to be 7%.
For example, take your child’s higher education. Let us assume that it costs Rs 20 lakh today. Let’s assume again that he would go to college in 15 years. Now you need to determine how much this education (which costs Rs. 20 lakhs today) is going to cost after 15 years. Use the multiplication factor of 2.8 from the above table. That means, after 15 years you will need a corpus of (Rs. 20 lakhs * 2.😎 = Rs. 56 lakhs to fund your child’s higher education.

Assuming education inflation is 7 per cent, the same education course will cost Rs. 56 lakhs after 15 years.

Conclusion
From the above discussion, we clearly understand that it is wise to add a realistic inflation figure to all your future financial requirements. If you are planning to create a sum for post-retirement life, you have to be more calculative and cautious. Apart for inflation, you must consider possibility of your outliving your expected age and change in interest rates post retirement.😀
Feel free to share your suggestions, comments & thoughts .Thank you.

Mutual funds performance in the last 20 years... You might have read that you should invest in mutual funds for the long...
03/02/2020

Mutual funds performance in the last 20 years...

You might have read that you should invest in mutual funds for the long term. Have you ever wanted to test the reality of this statement? In this article, we will find out how mutual funds have performed in the last 20 years in India.

Let me start with the example of one of India’s most popular mutual funds, HDFC Top 100 (earlier HDFC Top 200).

Shubham Mehta started a modest SIP of ₹5,000 per month in this fund 20 years ago. Mr. Mehta’s small monthly investment has grown to a massive ₹1.24 crore today. Ever dreamt of becoming a crorepati from a total investment of just ₹12 lakh spread over 20 years? And what if I told you that HDFC Top 100 is even the best performing mutual fund over this period? Sounds unbelievable? Read on to find out.

Some of the oldest mutual funds in India have made its investors millionaires. While some old funds have not performed this well, there are many funds which have given more than 20% returns since their inception 20-25 years ago. This is against NIFTY Index returns of 12% during the same period. During the last 20 years, we have also witnessed market crashes like the Dot Com Bubble and the Global Recession. These stellar mutual fund returns have come even after facing such hostile market events.

World’s most famous investor Warren Buffett said “Someone is sitting in the shade today because someone planted a tree a long time ago.” This is truly the case with equity mutual funds. The longer you stay invested, the better your chances of getting high return on your investment. Also SIP investment in equity mutual funds is a brilliant method to build wealth in the long run.

In this article, we will look at some of the famous mutual funds which have existed for more than 20 years. To name a few, we will look at Franklin India Prima Fund, HDFC Top 100 Fund (earlier HDFC Top 200 Fund), Aditya Birla Sun Life Tax Relief 96 and Franklin India Bluechip Fund.

SIP and Long-term investing
SIP is the best method for long term investment and wealth building. They have generated outstanding returns for investors and thus built wealth. Major benefits of SIPs for investors are
1 Bring Discipline into investing: Since the SIP amount is deducted automatically from your bank account every month, SIP bring out the much required discipline in investing.
2 Prevent the problem of Market Timing: Since SIP gets you more units when markets are down, they lower the average cost of investing. This brings higher returns in the long term.
3 Flexibility – You can stop, pause, change the amount and withdraw any amount from a SIP.

Snapshot of Mutual Funds performance in the last 20 years
In the following table, we will see how an SIP of ₹5,000 per month over last 20 years would have performed in different mutual funds. We would be looking at a total investment of ₹12 lakh over 20 years.

Name
Inception Date
AUM (Rs Cr)
Returns for last 20 years (%)*
Worth of Rs 5,000 SIP since the last 20 years (Rs)**

Franklin India Prima Fund
November 30, 1993
6,602 Cr
25.65%
1.89 Cr

Reliance Growth Fund
October 8, 1995
6,873 Cr
25.16%
1.72 Cr

Aditya Birla Sun Life Tax Relief 96 Fund
March 29, 1996
6,102 Cr
24.20%
1.22 Cr

Reliance Vision Fund
October 7, 1995
3,199 Cr
21.15%
1.18 Cr

HDFC Top 100 Fund
October 11, 1996
14,789 Cr
20.65%
1.24 Cr

DSP Black Rock Equity Fund
April 5, 1997
2,595 Cr
20.42%
1.19 Cr

*These returns are point to point (lumpsum) returns

Stretching the point even further, an SIP investment of ₹5,000 per month (₹14.80 lakh total) in Franklin India Prima Fund made since its inception in 1993 is worth ₹3.89 crores now!

It is important to note that the past returns may repeat in the future. Still, long and medium term performance is a good way to judge the performance capability of a fund. You could use these returns along with other indicators to decide where to invest. If you need help, please feel free to contact a good financial advisor for investment advice.😀

Ways to make your Portfolio Work In Troubled Times...Having a well-designed portfolio isn’t enough. Investing job doesn’...
26/01/2020

Ways to make your Portfolio Work In Troubled Times...

Having a well-designed portfolio isn’t enough. Investing job doesn’t end here. You need to understand market dynamics and review your portfolio regularly. Be it a bull phase or a bear phase, portfolio reviewing has to follow. As the saying goes, better late than never, regular reviewing will help in making investment decisions before its too late.

Here are 4 ways to make your portfolio work in troubled times:

Monitor regularly
How many of us are actually doing that? Monitoring doesn’t mean you check your portfolio every day. Checking every day will just make you an unstable investor because reacting to daily market movements will result in huge losses. Therefore, have a plan, be it quarterly, half-yearly or yearly, make sure you review your portfolio and make the necessary alternations to it. While making the decision to stay invested or to withdraw, make sure you consider other factors like risk, business cycle, future growth potential, in addition to returns. Even in troubled times, making decisions without completely reviewing your portfolio and analyzing the market conditions is the biggest mistake that you can make.

Capital protection
In a volatile market scenario, every investor’s prime consideration is to protect their capital. Be it shares, mutual funds, real estate or any other asset class preserving capital is of utmost importance. With increasing defaults in fixed income instruments, the markets have been very unstable. All that investors can do is try to have a plan to safeguard their capital at least. Analyze the markets, see if there is a growth potential even during troubled times for your investments. In the case where there is an adverse impact on your holdings, it’s better to get rid of them before it eats up the returns and the capital invested.

Sell to make profits
Selling the assets is as important as buying them. It’s important to book profits at the right time or stopping the losses. More than timing the buying, it’s important to know when to exit. Even before investing, have a target to earn a certain percentage of return or have a stop-loss limit.

Fearing the downturn and stopping your SIPs isn’t correct. SIPs actually help you average out the cost of investing. When the NAV of a fund is low, more units are earned for the same SIP as opposed to when the market is high. Therefore, SIPs done through different market cycles will help you in earning high returns than in any other. Also, if the market is completely against the fund that you have invested in, there is no point in having your investments in it. Understand whether the fund’s investment objective is still aligned to your investment objectives. Don’t be greedy to earn more returns, have a set target for your return expectations and sell them once you achieve them.

Realign the portfolio
Investing is a continuous process. Investing, reviewing and rebalancing. After investing you cannot leave them unattended. Investors need to continuously review their portfolios and make necessary adjustments. Again, reviewing doesn’t end the process, you need to realign the portfolio in a way that it suits your current investment objectives. Identifying funds and investing in the right one is a big task. Not everyone has the time to do this. Here’s when Financial Advisors come into play. Hiring an advisor will help you in assessing the current funds and rebalancing your portfolio with better funds to achieve your goals faster.

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