Mirae Asset AMC has announced to change the current Multi Cap category to Large Cap with effect from 1st May 2019.
Today’s blog is all about performance, risk rating and takeaways for existing or new investors of this fund.
Reasons for change to Mirae Large Cap Fund
CEO Mr. Swarup Mohanty’s arguments are:
- The fund was managed as Large cap for last 4 years.
- The fund will hold midcaps according to SEBI rules, i.e. 15% – 18%
- Growing AUM (Assets Under Management)
A Multi Cap Fund is an Open Ended Equity Scheme investing across Large Cap, Mid Cap and Small Cap stocks. Now, the CEO says from last 4 years, the fund was managed as Large cap, which also means the fund manager has not exercised his right to invest across sectors.
Does’nt sound convincing
For eg:- If I wanted to buy this fund, then i would had gone through scheme document, key information memorandum, one pagers, amc classification, rating portals etc, I would have got impression as a Multi Cap fund.
So, when i had a look at portfolio nearly 87% is in Large cap, 11.5% in Midcap and sparing allocation to small cap.
Many investors will have to re-jig their portfolios now due to change of the scheme mandate which is a frustating job.
Rolling Returns and Risk (5 years)
Rolling Returns and Risk (2 years)
2 and 3 years
New Investor: Should I Stop / Exit?
If you have another Large cap fund, then decide which one you want to hold. All large cap fund performance will be approx same…(just few % more or less)
Existing Investor: Should I Stop / Exit?
If you have a major allocation in this fund, kindly review the situation and act upon what suits you the best.
Evaluate your position carefully. Focus on risk management instead of aggressive returns.
Investors willing to Exit from this scheme can do it freely in April 2019. No Exit Load will be levied.
Investors who cannot evaluate their scheme’s performance based on risk analysis can reach us. We will be happy to help.
Sundaram Midcap Fund
Sundaram Mid Cap Fund, previously known as Select Mid cap is one of the consistent performer in mid cap space since its launch in July 2002. Total AUM (Assets Under Management) is 5700 Crores, makes it stand at 4th position which has comfortably outperformed the Nifty Midcap TRI Index.
The fund uses 5 S approach alongwith Growth at reasonable valuation.
- Simple Business
- Scalable Opportunity
- Sound Management
- Sustainable Competitive Advantages
- Steady & Sustainable Cash-Flow
Morningstar Risk & Return Rating
Over the last 3, 5 and 10 years we see that the fund has a higher upside capture than the category but poor downside protection. So existing and potential investors should keep in this mind. See the change in numbers when you change settings to 3Y and 5Y.
Sundaram Mid Cap has an impressive long-term record, comfortably outperforming mid cap index, Franklin Prima and L & T. HDFC Mid Cap Opportunities has outperformed in its shorter history both in terms of risk and reward.
Over five years too, Sundaram Mid Cap has consistently beat Nifty Midcap 100 which is difficult to do.
Summary – Should I Invest?
Newer investors must understand that this fund can test your patience and take time to deliver. So use it only for truly long-term goals.
This is a consistent performer in the mid cap space, but do not expect downside protection from it. When the index falls, this is likely to fall more and make up for it when the cycle reverses. So unless an investor has the right mindset to weather such storms, they should consider this fund.
One of my friend (Akshay) asked if he can buy car on Loan?
Car value = 10 lacs
Down payment = 1 lac
Loan = 9lacs
Monthly EMI = Rs 20,000 for 5 years
Akshay asked if his decision is right in buying car in above calculated approach
I said, You are buying a liability on another liability
Akshay – How, please explain.
I – Car is a liability, we need to keep spending on car monthly for fuel and maintenance and its value decreases over time.
Akshay – Acha Ok.
I – And you are buying a car (liability) with a loan (another liability), which is not a good approach.
Akshay – Ok, but my wife started working last month and she is earning 20-25k approx monthly and we thought to buy car with her salary.
I – So, when your income increases, you buy things which you dont need on loan?
Akshay – No, but we want Caaaaar.
I – How much will be your daily usage of car?
Akshay – We will not use it daily, may be monthly twice or thrice during weekends or holidays.
I – Ohh, then you can make use of cabs like Ola or Uber.
Akshay – Yes; but it doesnt give feel of owning a car.
I – Oh, I think you dont know, until loan is cleared CAR will not be yours’.
Akshay – Hmm yes, but it will be with us 🙂
I – You are getting emotional.
Akshay – Please tell me if my logic is correct, shall I buy car with calculations mentioned above?
I – As I said earlier, it is not a wise approach to buy car on loan. By the way, bank will not give loan to your wife as she just started earning and also nobody will give loan upto 80-90% of income going as EMI.
Akshay – I thought about it, so what I will do is, I will take loan on my name and pay emi from my account and will adjust with my wife salary.
I – Ok, what if your wife stops working after couple of years?
Akshay – Why will she stop working?
I – Consider for suppose
Akshay – It may become tight for me to pay EMI, I dont have much emergency fund also.
I – Hmm…thats risky.
Akshay – Please tell me if my decision is fine?
I – I have been telling since beginning, that this decision is not wise, but what are you expecting from me?
Akshay – I want you to tell me that my decision is right.
I – Then; why are you asking me if you have pre-decided?
Akshay – I want to confirm with you.
I – I can give opinion if you can listen open-mindedly. If you have pre-decided then whatever I say doesnt’ matter to you.
Above discussion happend about 8 to 9 months ago with one of my friend (name has been changed for privacy reasons) and no conversation happend after that
Today he pinged me and asked if we can meet over coffee and when we met;
Mr. Akshay looked unusual and was uncontrollable with his emotions. Upon discussing with him, following is the summary,
He bought the car on the loan, then after 4 months his wife had to stop working as it became difficult for her to manage work at office and son (2yrs old) at home as Akshay’s mother went back to their hometown who used to take care of his little son.
Akshay, in his words whatever you told became reality. After my left to hometown, We have decided and asked my wife to stop working and car EMI became a big burden now. I thought of informing you at that time itself but I did’nt know how to show my face to you, all these days that’s why I did not communicate to you.
Today I thought, Kaustubh was able to analyse and tried to advice me not to buy car at that time itself but I did’nt listen to him.
I dont know how many more mistakes i m doing which I did’nt ever thought of, so I kept my ego, shyness aside and messaged you. Now, I want your advice on all my financials and tell me what actions should I take to ease out my financial burden.
Kaustubh – My Final words – Financial Planning is all about managing RISK and ensuring we achieve our Dreams and Aspirations by not falling as trap to RISK by avoiding / mitigating it
Long real life story, please read at your convenience. Hope you all learn out of it 👆🏾👆🏾👆🏾👆🏾
Let’s start a Positive #MeToo for Investing
Have you invested your Savings? #MeToo
Have you invested for the Long Term? #MeToo
Have you done your Asset Allocation? #MeToo
Have you invested in Equities? #MeToo
Have you invested via Mutual Funds? #MeToo
Have you started an SIP? #MeToo
Have you consulted a Financial Planner for all of this? #MeToo
And if any of the above replies are in the negative…
God will help you!
The more time you give to your children, the better they grow;
The more time you give to your Money, the better they grow.
- Open a Savings A/c on your child’s name. Guide him how to save money he receives on birthday or any other occasion in his savings account.
- Make him understand the difference between Saving & Investing.
- Don’t take your child along with you in ATM to withdraw money as they might mistaken that they will get money whenever required.
- Make them understand the educational expenses you are paying on monthly or early basis.
- Ask them to write / maintain the monthly household expenses book.
- Invite them to hear the financial discussions, they cannot express their views but can logically think on it.
- Make them understand why the loans has been taken for Home, Car or Education, the breakup of EMI’s, Prinicipal & Interest.
- Visit an orphanage & donate some with your child through which he will understand the things he uses are not available to them.
- You have started the Journey of becoming a Smart Investor, its your duty to train your child to become a smart investor by teaching him about financial literacy, products like mutual funds, stocks etc.
Financial Literacy is need of the hour, moreover staying happy in any situation & changing the view towards Money is required.
Happy Children’s Day
#kaustubhdeole, #artharthifinancialservices, #theequitylearners
People fail to believe or have trust.
We, the people, make same mistakes again and again, yet never learn from it.
Why do people take undue advantage of us?
Any Guesses…..Because we give them the sole right to take from us.
Have a look at these headlines & try to understand our behavior.
Sanskar Investor Scam – 100 Crs
Saiprasad Group of Companies Fraud – 4000 Crs
Maple Group fraud – 400 Crs
Q-Net Multi Level Scam – 2 Crs
Janata Sahakari Co-operative Bank Fraud – 5 Cr
Defence Personnel Co-operative Hsg Society Scam – 3500 Crs
The Royal Twinkle Star Club & Citrus Check Inns Scam – Over 8000 Crs
DSK Scam – 2043 Crs
Rose Plotting Scam – 400 Crs
Amit Bharadwaj’s Bitcoin Ponzi Scheme – 2000 Crs
Rs. 20000 Crs Scam in Pune in 5 yrs
A Dombivli Jeweller duped people of 15 Crs
According to Financial Stability Report released by RBI on June 26 says, In 2018, there are more than 6000 registered fraud cases amounting to losses of more than 30000 Crs.
In my understanding, people are growing impatient & lack three important virtues of investing – Contentment, Pragmatism & Contemplation.
Contemplation states that Blindly chasing investments for Windfall Returns has its pitfalls.
In current market situation, not a single entity or person can assure or guarantee you extra-ordinary returns.
Patience is a good virtue.
Please remember the fact:
Great Returns / Success is derived from Long Term Patience, Contentment, Pragmatism & Contemplation.
Ask Yourself – “Do you Really want to get rich / wealthy”?
Is it on your priority list OR are you happy going through life living salary to salary and retiring at 58 and then wondering how to spend the next 20/30/40 years of your life?
Not many people are cut out to create wealth. In fact most people do not.
How much time do you spend each day thinking about it?
You don’t even think about financial independence once a day and you expect to get there in your 40s?
Forget about it.
You think you CANNOT resist spending Rs. 200,000 on that bike that you are dreaming off or on a car costing Rs. 12,00,000 when you have not thought about Investing for Financial Independence?
Forget financial independence in your 40s, after all you do not want it as badly as you want your car or house, do you?
Likewise, what are you willing to sacrifice to build your Retirement corpus? It takes some sacrifice, and the longer you delay that sacrifice, the larger the sacrifice becomes.
If you are 33 yrs, and not yet set up any SIP for retirement, and all your money is in Bank FD, Real Estate, ULIPS, LIC etc, kiss your early retirement / wealth creation dreams a Happy Goodbye.
Cost of Delay:-
The longer you delay the lesser the chances of you being able to create any wealth.
The longer you delay, the lesser retirement corpus.
The longer you delay, the longer you have to work.
The longer you delay, higher chance of you working forcefully even if your health doesn’t support.
The longer you delay, the sooner your happy retirement dreams will fade away.
P.S- Interested people can contact us for Financial Independence Program.
A conversation between a Client & Financial Planner.
Mahesh : Happy Diwali Dr. KD. I checked today’s Money control. It says..next diwali..45k and sent top 15 stocks to invest.
Dr. KD : Happy Diwali to you and your family.
Do you know, last year prediction from money control. Check following details.
Mahesh : Oh…
Dr. KD : Even they recommended top 10 stocks.
Note: PAL – Price at Last diwali
Target – Given by moneycontrol
Actual – today’s price
BATA/ 800/925/ 1022
KARUR V B/110/180/79
Mahesh : Oh.. Except one or two, all are down. Then why do they predict?
Dr. KD : Because it is their business and they earn from it. We should believe in our financial advisor not the online companies.
Mahesh : Yes Dr. KD, There is no short cut to become wealthy. We have to give time.
Recently I purchased a Verna from a Hyundai dealer. The cost came about 15.20 lakhs. When I checked the invoice, the insurance component alone was 73K. I found that it was on the higher side.
When I checked with one of my friend in the Insurance industry, he said he can do it for 53K for 12 Lakhs IDV (Insured declared Value), with the same insurance cover, which includes bumper to bumper with consumables.
If the difference value was 2K or 3K, I could have gone with the dealer itself. But when the difference value was about 20K, I was not able to digest.
I inquired with the Sales Manager of the showroom, why there’s a huge difference between your insurance with the other insurance companies.
He said, we will cover everything boss including consumables whereas other insurance companies will not cover those. Since this insurance comes from Hyundai; you will not have any problem in the claims.
I was little confused, again and went back to my close friend and inquired about that. He told that, the Sales will get a kickback from their company for promoting their own insurance. Hence they will say all cock & bull stories. If you are ready to fight it out, I will back you for getting the insurance.
Still I was not convinced. I thought it was prudent to clarify this issue on my own. I googled it to find out the truth, the motor vehicle insurance act, the law clearly says that, one cannot force the buyer to buy the insurance from them. It’s absolutely the discretion of that individual to choose the insurance company.
I decided to speak with CRM of Hyundai. Got a reply stating that, since you are buying the car from us, you need to take the insurance from our company only? The moment when I talk about the Motor Vehicle Insurance Act, she kept quiet and said, I will ask the concern person to speak with you sir!!
Since there was no revert for my calls, I wanted to document the same and I wrote couple of mails, but it remained unanswered. The delivery date was scheduled; the sales manager was pressing me for the remaining payment. The situation was forcing me to take decision. The difference amount of 20K was still stitching my mind continuously.
I called the Hyundai Customer care number in New Delhi. The executive who spoke to me was very clear in her statement. We will not force any customer rather we cannot force any customer to buy insurance from us. He requested me to take the Sales Manager on con-call.
I called the Sales Manager; I once again started the story from the start. Because I wanted them understand the entire story. I allowed him to talk more; he went on to say, as per Hyundai Policy, the new customer has to take the insurance from the dealer only. Otherwise the customer would face a problem if any claim arises in the future. The Sales Manager not aware that, the customer care executive is over hearing the entire conversation.
Suddenly the customer care officer, interrupted the conversation and asked the Sales Manager, gentleman can you please quote where it was mentioned in the policy.
The Sales Manager was bamboozled with that intervention of Hyundai people. When he understood that it was Hyundai people, he assured that he will do the best to satisfy the customer.
I must appreciate the courtesy and professionalism with the Hyundai customer care people.
Later the dealer accepted to take insurance from outside and I saved about 20K for myself.
On the following day, the Sales Manager had called me and gave a nice compliment in a sarcastic way – I never seen a customer like you sir!!
Jokes apart, with a little rigidity, I saved my money.
When I shared this information with my friends, surprisingly no one aware of that, we can take the insurance from outside as well, this made me to dig deeper about this insurance fraud.
Since I live in a large gated community; I get an opportunity to see all brands of cars, every week I use to see a newly registered car in our community. Out of curiosity, I started checking with new car buyers about this. Shockingly no one was aware of such things. They all told me, we thought it was a package.
So next time, if your friend or relatives buy a new car for themselves. Please share this info with them, help them to save their money and demand for a big treat.
For a matter of fact, it’s happening with all familiar brands. The awareness has to come from the people.
In 2017, over 32 lakhs of car were sold in India. Even if you keep the insurance margin to 10K per car, you may need a calculator to calculate the swindled money from the public. It was staggering 320 crores of money has been looted from our pocket.
Every month, the corporate is pocketing 26 crores of rupees from us. This is only the car segment alone. There are some other segments like commercial vehicle, Agri-vehicles, two wheelers and many others.
We can keep this atrocity in one side and we talk about another atrocity which people are doing to themselves.
Only 4 out of 10 people take the car on every day basis. Which directly translates around 60% people is not doing any justice to the EMI they are paying.
For a 12 lakhs car, you pay an EMI of Rs. 25K per month, which translates about 3 lakhs per annum. Apart from that, you have fuel cost, insurance cost, depreciation cost and service cost.
For 20,000 kms, let’s take average mileage of 12 km/per litre. Which directly translate into Rs. 1,33,000 (11K per month), then insurance amount of Rs. 40K (3333 pm), then 10% depreciation of 1,20,000(10k p.m.) and service cost of 20K (1600 pm)…. Which all adds up to Rs. 25933.
And it doesn’t stops there; you add up your EMI of Rs. 25,000 then add the other component of Rs. 25933 = 50933.
Hence your spent per month is Rs. 50933.
Based on your car value, you can calculate it accordingly.
If you are not driving anything less than 20,000 kilometres, we can charge a criminal case against you.
Now again who is helping the corporate, the same ignorant people. My request is, if you are going to drive less than 20,000 kilometres per year, please don’t buy a car. Instead hire a Merc, wherever you go. It works out much cheaper than owning a car.
Per annum spent Kms ran Rs spent per km
635196 30000 21 Rs.
635196 25000 25 Rs.
635196 20000 31 Rs.
635196 15000 42 Rs.
635196 10000 63 Rs.
635196 8000 79 Rs.
635196 5000 127 Rs.
** Per annum spent derived from 52933*12
** Rupees spent was calculated kms ran / pa spent
I can keep adding another atrocity by the consumer. Only 50% of the car owner washes their car everyday. Out of which only 10% cleans the interior.
I have seen many people were driving their NEW car with the polythene cover in the seat. They are trying to safe guard the seat. The R&D team works very hard to give a comfort for the car owners to give a pleasant experience to drive their cars. But we are not enjoying it, in spite of paying money for that car.