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Doubleplus Newsletter -November 2021
1. This Issue :
Investment Mantra -
Don't run away from
Equity, just rebalance it
01
Is the Omicron new
threat ?
The month of November saw massive sales from FIIs (around 39k
cr.), which was almost neutralized by continuous support from
domestic institutions (around 30K cr.), both NIFTY and SENSEX saw
a decline of around 5%, However retail buying was prevalent during
the month.
Market also seem to be nervous due to new variant of Virus -
Omicron. Experts believe that market will be volatile in coming
days and they are advising investors to play cautious.
We always believe that investors should have a long-term horizon
while investing in equity. Since India is growing with the fastest
speed across world and our consumption story is playing out well,
investors should not be bothered about the long-term growth. So
one should remain invested or look for dynamic asset allocation
funds for the better peace of mind. Read more...
INVESTMENTS KNOWLEDGE CENTER
A monthly Newsletter to manage your personal finance
N O V E M B E R 2 0 2 1
02 Market Indicators -
Check the important
numbers and indicators
of the month
Inspiring Case Story of
R Murali - Savings for
Rainy Days
03
Trending MF Category
04
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2. www.doubleplus.in Page 02
Multicap is Back
As the name suggests, such scheme will buy shares of
companies across market capitalisation. SEBI revised its
rules for the multi-cap funds last year. According to SEBI
norms, multi-cap funds must allocate 25 percent of their
assets each in mid-cap, small-cap and large-cap stocks.
The remaining 25 percent may be invested at the fund
manager’s discretion.
There are a few good Multicap NFOs (New fund offers) in
the market. Like HDFC Multicap fund, AXIS Multicap
Fund etc. Ask us for participation in such schemes.
NOTE : Multicap funds are higher on the risk-return
profile compared to flexicap and large & midcap schemes
Investment is a game of risk reward proposition...
Higher the Risk, higher the reward. I always
believe that every investor need a guide to
identify his / her risk appetite, and motivation to
invest according to the suitable risk matching
products. Generally, investors increase their risk
appetite during the Bull market and they decrease
their risk appetite during the Bear Market.
However, it should be just reverse. In case you
cannot control your emotional behaviour of
greed and fear then you should blindly choose
the dynamic or fixed asset allocation funds, like
Balanced Advantage Funds, Equity Saving Funds, and Debt-Equity Hybrid Funds etc. In this
Newsletter, I am sharing details of such funds, which can provide you better peace of mind
and better control over your emotions. I Thank you for appreciating our monthly Newsletter
content and request you to pour in your feedback to improve it further.
(Mr. Bhavesh Madhukant Shah)
Managing Director
Doubleplus Finserve Pvt Ltd.
Disclaimer : Mutual Fund investments are subject to market risk. Please read all scheme related documents carefully before investing.
3. Asset allocation is a very important part of creating and balancing your
investment portfolio. Every investor of this world aims at 'Buying at Low and
Selling at Low'. However this dream is generally not achieved by retail investors
due to lack of information, research, cost of rebalancing and emotional control.
After all, it is one of the main factors that leads to your overall returns—even
more than choosing individual stocks. Establishing an appropriate asset mix of
stocks, bonds, cash, and real estate in your portfolio is a dynamic process. As
such, the asset mix should reflect your goals at any point in time. So which is the
best way to achieve it ? The answer is : through Asset Allocation
another big question here is : What type of Asset Allocation should be done ?
And How to achieve the desired Asset Allocation ?
CHAPTER 1
INVESTMENT MANTRA
Asset allocation is very important to create and
balance a portfolio.
All strategies should use an asset mix that
reflects your goals and should account for your
risk tolerance and length of investment time.
Dynamic asset allocation Fund of a good fund
house can be the best for retail investors
We have answer for you, in this
knowledge article. Please read below :
There are typically 5-6 type of Asset
Allocation - Tactical Asset Allocation,
Integrated Asset Allocation, Insured
Asset Allocation, Dynamic Asset
Allocation, Fixed Asset Allocation.
When you are doing the asset
allocation by your own then Fixed
Asset allocation can be easy way.
If you are investing through a Mutual
Fund or Fund Manager then Dynamic
Asset allocation can be the best choice
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4. Dynamic asset allocation relies on a portfolio manager's judgment instead of a
target mix of assets.
With this strategy, fund managers constantly adjust the mix of assets as markets
rise and fall, and as the economy strengthens and weakens. With this strategy,
your fund manager aims to achieve the very basic of investments - sell assets
that decline and purchase assets that increase. In India we have variety of
Dynamic Asset Allocations. Almost all have generated descent alpha (excess
returns over the FDs & Bonds) in past. Most commonly such funds are named as
'Balanced Advantage Fund'. See the list of some selected Balanced Advantage
Fund for your reference :
DYNAMIC ASSET ALLOCATION
Long term capital gains tax applies to returns on such funds. A capital gain
registered during a period of less than 1 year is defined as Short-term Capital
Gain (STCG). A capital gain registered over a period of more than 1 year is
defined as Long-term Capital Gains (LTCG). STCG are taxed at the rate of 15%.
Long term capital gains in excess of Rs 1 lakh are taxed at the rate of 10% without
the benefit of indexation.
Tax benefits of investing in the fund:
Disclaimer : Mutual Fund investments are subject to market risks, read all scheme related
documents carefully. The NAVs of the schemes may go up or down depending upon the factors
and forces affecting the securities market including the fluctuations in the interest rates. The past
performance of the mutual funds is not necessarily indicative of future performance of the
schemes. The Mutual Fund is not guaranteeing or assuring any dividend under any of the schemes
and the same is subject to the availability and adequacy of distributable surplus.
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Life Cover of Rs 1 Crore ( Term Insurance)
Medical Insurance Cover of Rs 10 Lakhs
Accidental Disability Cover of Rs 50 Lakhs
In this issue, we have covered an emotional but inspiring story of R Murali, aged 32
Years. His case story will be a good guidance for all such working individuals whose
Income is directly dependent on their daily duty- I mean, their every leave is without
pay ! For e.g : Medical Representatives
R Murali is also a Medical Representative. When he met me in 2019, he was earning
approximately Rs 40,000 per month. He very well realised the fact that his Income is
directly dependent on his health, hence he sought our advice to get rid of this worry.
After mutual discussion , he instantly agreed to buy following protections :
Besides this, he spared Rs 10000/- per month towards his wealth creation. He started
two SIP of Rs 5000 per month in equity funds. The current Value of his SIPs are given
below :
CHAPTER 3
Inspiring Case Story of
Mr. R Murali
Unfortunately Murali met an accident in 2021 and was forced to rest for 3 months.
That was the time when his Medical Insurance and SIP helped him. Due to his Medical
Insurance, all his treatment cost was covered and saved him from this unexpected
expenses. Due to his SIP investments, he managed his expenses during 3-4 months of
bed rest. God bless Murali and keep him healthy. This case story is a good example for
every young executive whose Income is linked to 'Month On Month' basis.
Disclaimer : The name of the Schemes shown in above table are specific to this case story of Mr. R Murali; and it is
should not be a taken as recommendation or advice from our side. You are advised to select your SIP according to
your risk profile and investment tenure. The minimum investment to start an SIP is Rs. 500 per month
9. CHAPTER 4
Trending Mutual Fund Category
Out of around 1100 open ended schemes, we saw the maximum inflow and action in
the Hybrid category ( Mixture of Debt & Equity) . Among Equity schemes, the inflow
was seen in ELSS, Multicap and Flexi cap Funds. The trend is clearly indicating that
investors are liking the dynamic approach of asset management in both Equity &
Hybrid. One should spend time with their MF distributor, to know more about these
dynamic and active schemes under various category.
See the table below for the list of Funds which are trending currently and have seen
maximum subscriptions in the month of November :
Disclaimer : Mutual Fund investments are subject to market risks, read all scheme related
documents carefully. The NAVs of the schemes may go up or down depending upon the factors
and forces affecting the securities market including the fluctuations in the interest rates. The past
performance of the mutual funds is not necessarily indicative of future performance of the
schemes. The Mutual Fund is not guaranteeing or assuring any dividend under any of the schemes
and the same is subject to the availability and adequacy of distributable surplus.
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10. 1. All 3 are important - Large Cap , Mid Cap and Small Cap
Investing in Small cap some times become very Risky and investing in Large cap sometime
fetch below average returns. If you are looking for active participation in Equity market and
aiming to beat benchmark, then should have a dynamic allocation among Large cap, Midcap
and Small cap funds . This will be a nice way to diversify your risk and achieve descent returns
2. Best way to diversify your portfolio
It is always said - Don't put all your eggs in the same basket. Hence investors look for
diversification in their investments. Multicap fund provides the best diversification of portfolio
in terms of capitalisation, which consequently turns into a well balanced equity portfolio. Such
funds are good for long term wealth creation
CHAPTER 5
Fund of the Month - Multicap Funds
According to Sebi regulations, multi-cap funds need to have a minimum 25 per cent
exposure under each market cap, ensuring that the portfolio is not overtly
concentrated towards a particular market cap. Due to its large and varied investment
universe, multi-cap funds offer the dual benefit of growth and risk-adjusted returns,
making them a better solution for long-term investment objectives and wealth
creation.
Such Funds offer a consistent mix across segments and is suitable for investors looking
for a stable, conscious allocation across market capitalisations. Multicap funds help
investors package large, mid and small-cap stocks in one single portfolio and steer
through volatile market cycles.
What is a Multicap Fund ?
Why choose a Multicap Fund ?
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