Approaches to how Equity Mutual Funds invest your money?

This is a question that many mutual fund investors have in their mind. How do fund managers decide what stocks to buy and sell and how do they execute them? What are the approaches that they follow to allocate to stocks, themes and sectors? Broadly, there are 4 key decisions that fund managers need to take when they allocate money to equities. These 4 decisions form the cornerstone of how they allocate your money across stocks. The final portfolio that you get to see in the MF disclosures has a series of decision steps that lead to the final portfolio. Here are 4 of them… Continue reading

Understanding Duration and its impact on your debt funds…

When we talk of bond funds, we often get to hear the word Duration used commonly. What exactly is this duration and how does it affect your decision about debt funds. Interestingly, complex as it may seem, the concept of duration is actually quite simple. For bond traders, it is a useful tool for trading across bonds. For mutual fund investors it is not necessarily to get into those complexities. A basic understanding of the concept of duration and its implications would be more than sufficient. Continue reading

How will the Fed rate hike impact your mutual funds portfolio?

With the long awaited Fed rate decision going through there is finally certainty on the rates front. The Fed rate has been hiked by 25 basis points and there is the possibility of another 100 basis points hike in rates next year. Contrary to expectations, the Indian markets did not react too negatively to the rate hike. But there is room for caution. This was the first rate hike and further rate hikes next year will surely exert pressure on emerging markets including India. It would be interesting to note how this rate hike will impact your mutual funds portfolio. Continue reading

Equities in 2016

It will largely be a stock-specific game

With the Fed rate hike out of the way and its future trajectory almost clear the key question is what will this hold for Indian equities in 2016. There are 4 broad trends that could help us understand how equities will perform in the next calendar year. Continue reading

Fiscal Deficit

The question is; what happens to fiscal deficit next year?

The finance minister was emphatic in underlining that the government will meet its 3.5% fiscal deficit target in the fiscal year 2015-16. He is probably right. At the current juncture, it does look like he will be able to meet the fiscal target for the year 2015-16. There are worries on the disinvestment front. Against the target of Rs.69,500 crore, they have garnered less than half the amount. Even in the collection of direct taxes, the FM has admitted that there may be a shortfall of Rs.40,000 crore. So how will this be bridged? Continue reading

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