How to Choose & Invest in Mutual Funds the Right Way ?

I’m assuming you’ve made up your mind to create long term wealth by using mutual fund as a savings instrument. Sure, MFs are supposed to be professionally managed as Indian Capital Market has had a very bad history of cheaters raising money and committing all sorts of fraud (business loss, fraud, regulation, etc). By entrusting your money with professional fund managers who are paid salary in crores, you expect them to mitigate the risk and generate RoI beating the SENSEX / NIFTY returns by at least 2% in the long run. By Mutual Fund investing, you avoid single company risk as you’ll hold a basket of stocks.

I Follow these Rules and (more…)

How to Get More Returns in Mutual Fund SIP with Swing Strategy ?

The Economic Policy Paralysis which started during the Dr Manmohan Singh Government has continued into the Narendra Modi government as well due to vested interests of Politicians and small individual investors like you and me have suffered.

Personally, sick and tired of HDFC Mutual Fund poor performance over the last few years, started exiting in 2018 as disclosed here. I always knew that one earns more only when one books profits, as business always involves 2 components buying and selling. For long however, Distributors and IFAs greedy for their own commission have always made us only invest without asking to book profits. Thus all these factors led to take the (more…)

Max Life Insurance – Revised Deal, Positive for Max Financial

Max Financial Services and Axis Bank have revised their agreement terms, with Axis Bank now to buy a 17% stake in Max Life Insurance versus 29% earlier. From Axis Bank’s perspective, the stake is lower but Axis Bank retains control/right. Axis bank currently holds 1% in Max Life and after the closure of revised deal its stake would go to 18% and Max Financial Services would hold 82%.

Axis Bank – The value accretion reduction for Axis Bank versus the earlier deal could be made up by getting additional payout / commission, which is restricted (more…)

Will the Digital Neo Banking Platforms Succeed in India ?

We credit the Telecom reforms to Mr. Sam Pitroda erstwhile adviser to the Prime Minister of India Shri Rajiv Gandhi. During the UPA 1.0 headed by Dr Manmohan Singh, the Economist PM invited Infosys Co-founder Mr. Nandan Nilekani to Lead and Architect the Unique Identity Project – Aadhar. On the basis of UIDAI, Indian Financial ecosystem has witnessed massive disruptive transformations. The first wave of disruption in financial services was led by digital payment startups, followed by digital lending, wealth management, and Insurance technology startups. As we enter the second wave of disruption in FinTech 2.0, it is led by Neobanks ( Digital Only, over-the-top banks without actual RBI Banking License leveraging on the license of a Traditional Bank) that aim to redefine customer-centric consumer and (more…)

Should you own the Life Insurance Business ?

Protection is the most profitable part of business. Life insurers will benefit from monetisation of opportunity in life-protection with rising awareness in post Covid, favourable demographics and reasonable costs. Penetration of protection is low at 10% of addressable population with scope for market to double in five years (+23% CAGR over three years).

Insurance stocks have fared well in the current environment due to their relative defensive nature as compared to banks/NBFCs. Recent growth trends are encouraging, significantly better than initial expectations. However, ability of insurance companies to deliver yoy stable/increase in VNB (Value of New Business) remains a crucial monitorable. Traction in protection business will provide tailwinds to all players. While capital market inflows / ULIPs will likely remain weak, ability of insurance companies to underwrite/scale up traditional business assumes importance. Better product-mix (higher protection & non-par savings share) should (more…)

Does HDFC AMC deserve High Valuation ? Review

HDFC Asset Management Company – HDFC AMC has a strong brand pull (benefitting from parentage), relatively higher proportion of equity assets and continued delivery on fund performance make it one of the best plays to capitalize on the financial savings opportunity in the country.

Big Opportunity
MF AUM is just c.12% of GDP (vs global average of 62%). Long term AUM growth rates have been healthy (18% CAGR over last 19 years) and we see them sustaining in the future. Importantly, share of individual investors in the AUM has been inching up and the uptick in “sticky retail flows’ should shield the industry from cyclical whipsaws in the market. HDFCAMC is one of (more…)

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