Vipin Khandelwal

Vipin is a SEBI Registered Investment Adviser, entrepreneur and is currently building Unovest. He is involved in enabling individuals to lead empowered lives by providing learning and actionable ideas on financial planning, investments and mutual funds.

Worst Performances of Equity Funds

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worst performances of equity funds

Most probably, you now know that there are over 300 equity mutual fund schemes. Some of them have managed to attract the largest investments from you. I call them the popular funds.

Typically, a scheme attracting more assets/investments due to its recent performance ( last 1 year, 3 year or 5 year). That is when the ranking and rating agencies put them up on the pedestal with high star ratings or No. 1 ranks.

Not to forget that even the fund begins chest thumping and lets the world know the champion it is. As a result, investors take notice and pump in more money.

I remember a conversation, from years ago, with a friend, who worked with a Mutual Fund. He mentioned that when the markets are rising the funds don’t need to do anything and when the markets go down, they can’t do anything.

I laughed out when I heard that.

Well, what I realise years later is that the true test of the fund is not as much about how it does in rising markets but how it does when the markets are on a slide.

Interestingly, no fund talks about its worst performance. Of course, it would also be foolish of it to do so!

The fund may not talk but you and I can.

I looked at some of the most popular funds and how they fared in their worst times. This is how I went about it.

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Registrations Open for Delhi/NCR – “Money and You” Workshop

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Investing Workshop - Money and You - Vipin Khandelwal

Yes, the 4th Money and You workshop is happening in Delhi on Nov 27, 2016. If you are from Delhi & NCR region, you can register your interest now.

More than an year ago, I started this blog with a simple objective –

to share simple actionable ideas on money and help you become a smarter investor.

Thank you for being a reader of this blog. The truth is you are the one who has made it worthwhile.

It has been an exhilarating journey over the past 1 year. I believe now it’s time to take it to its next level – to come and meet you – face to face.

There is different power in personal interactions – it propels our thoughts into actions. It provides room for discussion and discovery.

With that perspective in mind, I am happy to announce my fourth investing workshop – “Money and You” in Delhi/NCR. 

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Monthly Income Plan – Alternative to Bank Fixed Deposits?

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monthly income plan investment

Query:

I was looking at a Monthly Income Plan (MIP) both conservative and aggressive as an alternative to FDs. Is that also a good option?

My goal is to distribute my Debt portfolio from Bank FDs. Debt funds are as good as FD but with TAX benefit.

I believe because of the small equity component ( 0% to 30%) in Aggresive MIPs they can offer a good return in debt portfolio with low risk which makes it better than Balanced Equity Funds and Debt Funds on either side of investments.

Hence I believe along with Bank FDs, Debt Mutual Funds a person should also diversify and invest in Aggressive MIPs as one of the debt instruments.

What is your thought on this?

– Investor

Here’s my response:

To begin with, let’s do an overview of a Monthly Income Plan or MIP.

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Rule no. 9 – Character Counts

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CHARACTER COUNTS - MUTUAL FUNDS

A few months ago, I wrote a post on 8 rules to build your mutual fund portfolio. These 8 rules are laid down by John C Bogle, the renowned founder of the Vanguard group, in his book “Common Sense on Mutual Funds”. These rules apply to those who would want to select non-index, actively managed funds.

The 8 rules to build a mutual fund portfolio are:

  1. Select low cost funds
  2. Consider carefully the added costs of advice
  3. Do not overrate past fund performance
  4. Use past performance to determine consistency and risk
  5. Beware of stars
  6. Beware of Asset Size
  7. Don’t own too many funds
  8. Buy your fund portfolio and hold it

In the post, I had mentioned about one more rule which I had promised to share on a future date. Here it is.

Rule #9 – Character Counts.

Bogle wrote a book called “Character Counts“, which contains 25 of his speeches that he gave at Vanguard. They are an insight into how Vanguard was built to grow into the largest ‘no-load’ mutual fund group in the world.

Let’s understand why character counts in selecting your mutual funds.

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How to build a winning mutual fund portfolio? (plus a Sample Portfolio)

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mutual fund portfolio

You and I face the same problem

There are more than 500 mutual fund schemes in India. They come in a variety of investment styles, investment objectives and options. In fact, the total number of mutual fund options that you have to choose from turn out to be more than 3000. It’s baffling.

How do you go about choosing the best ones for your portfolio that will help you meet your goals?

Given the wide range of choice, many well-meaning organisations and individuals have come up with ways to help you select the best mutual funds that channelise your savings with an intent to grow them at a reasonable risk.

This help comes in the form of ratings, rankings and opinions. Unfortunately, none of them makes your job to select mutual funds absolutely easy. At best, they act as first level filters. You still have to make choices from the reduced list of options.

What to do?

Which funds should you pick? How do you build a decent portfolio that puts your money to work while you focus on what you are good at and growing your income?

As I said, I face this issue too. And I worked to solve it for myself.

The result was a small eGuide, which takes you through the entire process of building a winning mutual fund portfolio.

I use, as my guide, my experience of helping over 500 investors, small and big, to invest their savings in a mutual fund portfolio that has helped them move closer to their financial goals. 

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