What moved my market? (Issue #5: Finity Weekly Updates)

“Risk comes from not knowing what you are doing.”

— Warren Buffett

This festive season, many would have purchased gold assuming it to be a high-quality asset while the others would have deposited more into their bank’s fixed deposit accounts considering it as the safest way to let your money grow. We don’t mean to spoil the party, but this festive season had a different story to tell – like all evil, it is time a few myths are busted!

Gold rates fell by INR.150 to INR.32,250 per 10 grams, extending losses for three days in a row and the steepest decline since August 2017.

Here’s an interesting analysis which will help you look at asset classes from a whole new perspective:

Asset Allocation: Historical Performance

Notably, though equity performance is indicated by SENSEX, it is a passive index – most actively managed mutual funds have delivered way above this passive index.

A key category that is best structured to reflect active management is Equity Linked Savings Scheme (ELSS). The category is popular among investors due to its active management, long-term performance and tax advantage of over INR 45,000 under section 80C.

Historical Performance of Top Rated ELSS funds

Source: Finity Research, Morningstar | Funds considered: Axis LTE, ICICI LTE, Birla Tax Relief 96, L&T Tax Advantage, IDFC Tax Advantage)

Equity Linked Savings Scheme mutual funds is by far the most efficient product category from a tax-saving, tax-optimal return and superior returns perspective. As compared to other tax-saving investment avenues qualifying under section 80C, ELSS mutual funds are the only options to offer the lowest lock-in and highest prospective returns – while giving you a tax-break today and tax-efficient gains tomorrow.

Here’s a 2.5-minute video by Karan Batra, Head of Alliances at Finity that will help you understand everything you need to know about ELSS mutual funds.

Click here to watch now!

Meanwhile, headline equity indices came above water to breathe a sigh of relief as INR appreciated and FIIs were seen returning to the Indian debt market, albeit minimally.

Performance of headline equity indices

Yes Bank has been swinging wildly since the past couple of months and has gained the most this week by 11.52%.
Arbitrage funds & Banking Funds have emerged as the biggest beneficiaries of the uptick.

Arbitrage and Banking Funds

Fund News:

  • Tata Mutual Fund has decided to change the fund manager of following schemes with effect from Nov 09,2018
    Changes in Fund Managers of Tata Mutual Funds
  • Tata Mutual Fund has decided to change the exit load of Tata Large Cap Fund, Tata Large & Mid Cap Fund, Tata Midcap Growth, Tata Hybrid Equity Fund, Tata Medium Term Fund to 1% if redeemed within 1 year. While for Tata Equity P/E Fund, the new exit load structure shall be 1% if redeemed within 18 months.
  • ICICI Prudential Mutual Fund has decided to change the fund manager of ICICI Prudential Small Cap Fund to Sankaran Naren & Haresh Bihani from Sankaran Naren & Atul Patel and of ICICI Prudential Long Term Equity (tax-saving) to Sankaran Naren & Harish Bihani from George Heber Joseph with effect from Nov 05,2018.

That’s all folks! See you again same time next week in our next week’s weekly update.

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