#Based on the Current Portfolio at the Current Prices
|Dec 11||Dec 12||Dec 13||Dec 14||Dec 15||Dec 16||Dec 17||Dec 18||Dec 19||Dec 20||YTD|
|Benchmark Returns (%)||-31.00||39.16||-5.10||55.91||6.46||7.13||47.26||-15.42||-4.32||21.87||35.50|
|Fund Returns(%) Bole Toh: Its 3-year performance is Very Good and has consistently outperformed its benchmark. data-placement=bottom>||-27.21||45.00||1.69||70.50||7.26||11.44||39.81||-10.15||9.20||23.65||25.85|
|9 Year||5 Year||3 Year||1 Year|
|Implied Investor Returns||19.28||16.85||19.08||54.13|
Rolling Alpha (Returns Over Benchmark)
Underlying Asset Quality & Valuation
Underlying Asset Quality (%) Bole Toh: Funds portfolio quality is Very Good. It has 84% Green stocks, and 65% Large-cap stocks data-placement=top>
Underlying Asset Valuation (%) Bole Toh: Funds future returns likely to be low, as 80 % of its portfolio is over-valued. data-placement=top>
|Over Valued |
|Fairly Valued |
|Under Valued |
- How is MoneyWorks4mes way to select a Sahi Fund is different than the Traditional Way?
- Currently, MF Investors look at the past performance to compare and select a Fund to invest in. This is grossly inadequate. In addition to that, theres always a risk of being misguided by MF Sellers due to their vested interest. Hence, we as a Fiduciary Advisor set to find the Sahi way to invest in Funds
Traditional Way MW4mes Sahi Way Sahi Funds? Suggested based on past returns and Expense Ratio Kuch Hi Mutual Funds Sahi Hai (Only few Funds are Right). You must look at quality of underlying assets and future returns of a Fund Funds Sahi for you? Funds are suggested as a combination, customisation is nil to low Kuch Hi Mutual Funds Aapke liye Sahi Hai (Only a few are Right for You). You must look Sahi Funds that are aligned to your risk profile and complements your existing portfolio Sahi method to buy a Fund? No active support to indicate right time or price to buy a Fund There is a Mutual Funds Kharidne ka Sahi Tarika (Right way to Buy). We recommend buying Funds at an attractive price, i.e. when a Funds Potential Upside is higher than the Benchmark Index Fund. Also, you must buy a Direct Plan to save costs and earn higher returns. SIP? SIP recommended to ensure discipline to invest While the discipline of SIP is imperative for success in investing, committing money to a specific Mutual Fund, immaterial of its price and market levels, can be very sub-optimal. We recommend smart asset allocation and selecting the specific asset that gives the best risk-adjusted returns every time you invest. Vested interest? Yes No. We are a Fiduciary Advisor. We do not take any brokerage or distributions commission from anyone. You can be 100% sure that, whatever advice we give you is always in your interest, and there is no conflict
- How does one decide which Fund is Sahi to buy, when and how much?
- Sahi Fund: Looking at past returns and investing in todays top performers, i.e. the traditional way of selecting Funds, is a recipe for disappointment. To find the Sahi Mutual Funds, you must look at its performance over 10 years for
- Quality of the Underlying Assets (Quality-Cap mix)
- Consistency of returns generated over the Benchmark
- Expense Ratio
Sahi Allocation: You must look at investing in a Sahi Mutual Fund as much that complements the existing portfolio to ensure a diversified portfolio to reduce risk while enhancing returns.
- How does MW4me assign colour-code to a Fund?
- Colour-code is provided to help Investors to shortlist Sahi Funds. Colour-code is assigned to a Fund based on
- Quality of the Underlying Assets in its portfolio: Weve a method of fundamental analysis to ascertain quality of stocks based on their 10-Year performance on key parameters and market-capitalisation risk
- Magnitude and deviation of Funds Alpha (Fund Returns-Benchmark Returns) as compared to category peers and
- Expense ratio charged by the Fund to generate that extra return (i.e. over & above the Benchmark Returns)
- How does the Potential Upside indicate the Sahi Price/Time to enter a Fund?
- Potential Upside indicates returns a Fund is likely to generate over next 5 years with the current portfolio from the current prices. Future returns can be computed using our estimates of earnings growth of the companies over next 5 years. Thus, we can estimate Potential Upside from the underlying stocks in the Fund portfolio provided the Fund Manager retains the same portfolio.
When a Fund has many stocks at attractive prices, its Potential Upside is high. When the prices of the underlying stocks increase substantially, the Funds Potential Upside starts diminishing or may completely vanish. This is not a bad thing for the Fund owners, as they would have seen positive returns. In such cases, a smart Fund Manager would assess future returns and reshuffle the portfolio, by selling high-priced stocks with low future returns, and buy available good stocks with higher future returns. When this is done, the Fund would again see higher Potential Upside. This may take time, and hence, you must not be hasty in taking sell decisions.
Thus, Potential Upside acts as a ballpark indicator to know, if its a good time to enter a Fund. However, if a Fund frequently reshuffles its portfolio substantially, then the Potential Upside may change significantly, thus making it very difficult to assess the Fund. We recommend avoiding Funds with high trading activity (i.e. high Turnover Ratio), due to unpredictability of its performance.
- Why is the current fixation of Alpha not good enough for taking decisions?
- Alpha is the difference between the returns earned by a Fund and its Benchmark Index over a given period. Mutual Fund Distributors (MFDs) and media refer to the Alpha i.e. Fund Returns over its Benchmark, for past 1Y, 3Y, 5Y, 7Y. However, their end-point is the current price which may be elevated or subdued. So, if a Fund has been performing good in recent times, its past Returns for various periods will always look good, and vice versa. The Alpha doesnt give a true & complete picture, and therefore, its not good enough to look at only Alpha for taking decisions.
The correct method to identify a Sahi Fund is to look at Alpha over a period, but with different start dates. Its called Rolling Alpha. Rolling Alpha helps analyse Fund Returns over Benchmark across cycles for period of 1Y, 3Y, 5Y and 7Y irrespective of start and end date. This helps you identify long-term & consistently performing Funds. Alongwith the Rolling Alpha, you must also look at Implied Investor Returns while assessing Sahi Funds.
- What is the Benchmark?
- Benchmark is typically a popular, market-wide index (e.g. S&P BSE 200) that reflects general markets performance or particular part of the market. A Fund chooses a Benchmark based on the part of the market it wishes to invest in. It is expected that a Fund should earn more than its benchmark returns over 3-5 years.
- How should one decide if the Fund Returns are good?
- Fund Returns is the returns generated by the Fund over a given period. If the Fund Returns are higher than Benchmark Returns in a year, it is colour-coded as green or else its red for that year. If the Benchmark Returns are negative, but Fund Returns are less negative (i.e. higher than the Benchmark Returns), it is still considered as better performance, hence, marked as green. While finding Sahi Funds, you must look at how consistently the Fund has given better returns as compared to its Benchmark Index. Therefore, we have provided this data for 10 years, with colour-codes. If a Fund has Fund Returns mostly green in 10 years, then you can short-list it for the further analysis.
- Why is it important to look at the Implied Investor Return?
- Implied Investor Return (IIR) is the approximate actual returns made by Individual Investors based on their entry & exit dates. Its one of the important parameters to check while evaluating Sahi Funds.
Fund Returns are calculated for the calendar year, however, Investors Returns are different as they entered or exited a Fund at different time. For a Sahi Fund, the IIR should be equal or higher than the Fund Returns.
If IIR is lower than the Fund Return it could mean:
- The Fund Manager has not communicated the Funds strategy (i.e. when its likely to perform better or to underperform), and therefore, retained investors OR
- Investors have sold the Fund during the Funds underperformance, did panic-selling and/or bought back post its outperformance, for the fear of missing the opportunity OR
- Investors received poor advice from Mutual Fund Distributor or there was a lack of good zero-conflict advice
- Is the Traditional Way of looking at the Expense Ratio alone Sahi?
- It is the annual fee that a Fund charges for managing the assets. It includes management fees, administrative fees, operating costs, and all other asset-based costs of the Fund. Expense ratio is one of the important parameters to check while evaluating Sahi Funds.
Often, Investors are misguided to see how low the Expense Ratio is. This would be right, only when all other things of the Funds being compared are the same. To know if a Fund is Sahi, the Expense Ratio should be seen in comparison to the excess returns (Alpha before expenses) a Fund has generated. Higher Expense Ratio is acceptable, if the Fund performance is superior. Typically small-sized Funds have higher expense Ratios due to high fixed costs, but due to smaller size they can generate better Alpha too.
- Why is it important to look at the Underlying Asset Valuation?
- Using our equity valuation model, we assess a Funds underlying stocks as under-valued, fairly valued or over-valued. Higher the Funds allocation to over-valued stocks, lower its future returns; and higher the allocation to under-valued stocks, higher the future Returns/Upside. You must also look at portfolio composition across market capitalisation i.e. Large, Mid and Small-cap stocks. If the fund holds more mid and small stocks with respect to the Benchmark Index, then the Fund may be taking higher risk than its stated objective.
- Why it is important to look at the Underlying Asset Quality and a Fund Managers Investing Style?
- Weve a method of fundamental analysis to ascertain quality of stocks based on their 10-Year performance on key parameters (Green-Orange-Red) and market-capitalisation risk (Large-Mid-Small). If the Fund is holding a lot of Red stocks, it means its taking high risks. If the fund holds more mid and small stocks with respect to the Benchmark Index, then the Fund may be taking higher risk than its stated objective. In such cases, the Funds performance should compensate such high risks accordingly (i.e. high risks-high returns.)
So, the Underlying Asset Quality highlights the amount of risks taken by the Fund Manager to generate returns. When looked at over years, it gives a fair idea of the Fund Managers investing style. To know if the Fund is Aapke liye Sahi, its good to check, if the Fund Managers style complements your investing style.
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