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In this episode, recorded in early October 2024, we’re diving into a topic that’s on everyone’s mind: Is holding cash a smart move in these unpredictable markets?
We’re in what some are calling one of the most “unloved” bull markets—stocks keep rising, but investors (ourselves included) are uneasy, waiting for the other shoe to drop. To help us unpack whether cash can actually give your portfolio an edge during uncertain times, we brought in none other than Deepak Shenoy.
Together, we explore whether holding cash can protect you from potential downturns or even help you outperform the benchmarks. We also dig into the challenges fund managers face with cash calls, why getting back into the market can be harder than it seems, and how strategies like STPs (Systematic Transfer Plans) play out in real life.
Deepak shares some great insights, comparing today’s market to historical events like the 2020 Crash, Russia-Ukraine war, Brexit, and the 2008 financial crisis. Plus, we look at what Warren Buffett has done with cash during past downturns—and why even he hasn’t always gotten it right.
This episode is packed with practical takeaways including:
1) When holding cash makes sense—and when it doesn’t
2) Why fund managers sometimes get cash calls wrong
3) The emotional side of staying invested vs. going to cash
4) How IPOs and market liquidity can impact your cash strategy
If you’ve ever felt that itch to “do something” with your portfolio when markets are shaky, this conversation is for you. We break down the mental tug-of-war between holding cash and riding out the market, with Deepak sharing actionable advice that will help you stay prepared, no matter what happens next.
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In this episode, Deepak and Shray dive into the intricacies of mutual funds, Portfolio Management Services (PMS), and Alternative Investment Funds (AIF). We analyze the tax benefits of mutual funds, highlight the liquidity advantages, and compare them with PMS and AIF in terms of fees, transparency, and investment flexibility. We also discusses why different products cater to different investors based on their income levels, asset sizes, and risk appetites. The conversation covers the psychological and practical reasons investors might choose one investment vehicle over another, the role of fund managers, and the impact of regulations on investment returns. 00:00 Introduction and Overview 00:13 Comparing Mutual Funds, PMS, and AIFs 00:55 Tax Efficiency of Mutual Funds 01:28 Challenges with Mutual Funds 01:41 The All Weather Equity Portfolio 02:23 Why Mutual Funds Aren't the Default Choice 02:46 Understanding Different Investment Products 04:13 Tax Implications for Different Investors 18:33 The Complexity of Mutual Fund Selection 24:06 Liquidity and Size Issues in Mutual Funds 27:18 PMS vs Mutual Funds: Key Differences 27:29 Large Investors' Preferences 28:46 Challenges for US Investors 31:09 Systematic Transfer Plans in PMS 33:22 The Importance of Fund Managers 35:31 Process vs Personality in Investing 46:42 Choosing Between PMS and AIF 52:21 Conclusion: Tailoring Investments to Individual Needs
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In this episode of the Capitalmind Podcast, we take a deep dive into the world of unlisted and private securities. We’ll cover key topics such as:
What exactly are unlisted and private securities? How do you value them, and what complexities should you watch for, like liquidation preferences and ratchets? Who can you sell these securities to, and what about corporate governance risks?
Are these investments or just consumption in disguise? We also explore opportunities in the SME segment and how much of your net worth you should allocate to private investments. Whether you're considering investing in a friend's business or a pre-IPO startup like Swiggy, this episode will help you navigate the complex world of private markets.Don’t miss out! Send your ideas for future episodes to [email protected], and if you're ready to invest with us, visit capitalmind.in to learn more about our PMS service.
00:00 Welcome to the Capital Mind Podcast 00:37 Introduction to Unlisted and Private Securities 04:27 Private vs Public Limited Companies 07:32 Valuing Unlisted Companies 09:26 Complexities of Cap Tables 21:31 Exit Strategies for Unlisted Securities 41:19 The Impact of Swiggy and Zomato on Restaurants 42:57 Investment Opportunities in Unlisted Companies 44:01 Shenanigans in Private and Public Markets 44:49 Case Studies: Byju's and FarmEasy 49:22 The Role of Venture Capitalists 01:05:00 Strategic Investments and Their Impact 01:07:30 Challenges of Investing in Unlisted Companies 01:24:03 The Future of Private Investments 01:24:49 Conclusion and Final Thoughts -
In this episode of the Capitalmind Podcast, Deepak and Shray dissect the surge in New Fund Offerings (NFOs) by mutual funds, dissecting why fund houses are launching new schemes and who truly benefits from them—whether it’s the AMC, the customer, or intermediaries like distributors. We also discuss the economics of fund distribution, the role of intermediaries, and how to identify the best options for your investments.
The episode also ventures into the often not talked about side of financial advisory, the unrealistic expectations of managing wealth independently, and the vital role of professional advisors. Additionally, they explore the cyclic nature of NFOs, investor hype in bull markets, and the risks of market oversaturation, concluding with advice on navigating financial products during booming market conditions.
Whether you’re a seasoned investor or just getting started, this episode is packed with insights that can help you make informed decisions.
Timestamps
00:00 Introduction to the Capitalmind Podcast and disclaimer
00:43 Overview of New Fund Offerings (NFOs)
02:29 Historical Context and SEBI Regulations
03:24 Fund Categories and Flexibility
05:00 The Role of Fund Managers and Themes
08:50 Marketing and Distribution Economics
12:04 Impact on Customers and Fund Houses
29:47 Advertising and Expense Management
33:33 The Role of SEBI in Fund Innovation
34:29 The Impact of Fund Variety on Investors
35:30 The Importance of Innovation in the Mutual Fund Industry
36:59 Challenges of Fund Categorization
42:43 The Role of Financial Advisors and RIAs
49:55 Mutual Fund Distributors vs. Bank RMs
55:27 When to Go Direct with Your Investments
01:05:50 The Cycle of NFOs in Bull Markets
01:09:01 Conclusion and Final Thoughts
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Picture this: You’re at your favourite bakery, and you overhear that a celebrity is about to place a massive order for your favourite pastries. You rush to buy them all up before the celeb can, hoping to sell them back at a premium. That, in essence, is front running in the financial world.
We discuss how people pull off this trick and, more importantly, how they get caught.
(Spoiler alert: it’s not as glamorous as a Hollywood heist)
Axis Mutual Fund had their share of front running drama not too long ago. Traders making big bucks, splurging on luxury pads and flashy cars—sounds like a plot from "The Wolf of Wall Street”. We’ll break down the fallout and the lessons learned.
Currently, Quant Mutual Fund is going through allegations about front running.
How do you, as an investor, make sense of these allegations and decide on your next move?
Should you hold onto your Quant Mutual Fund investments or start thinking about an exit strategy?
We talk about all this and more in our latest episode of Capitalmind Podcast.
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Recently, the mere hint of an inheritance tax proposal sparked a mini-political crisis? Thanks to a quick government rebuttal, it’s off the table—at least for now. But that’s not where the story ends.
As always, Deepak and Shray go head-to-head, weighing the merits and pitfalls of this hot-button issue.
We’re not just looking at the problem from 30,000 feet; we’re getting into the weeds, examining real-life scenarios and potential solutions that could impact you and your future.
Government Finances: Can an inheritance tax significantly boost government coffers? Or is it just another drop in the ocean of fiscal needs?
Societal Impact: Will taxing inheritances create a more industrious society, or will it just penalise those who’ve worked hard to create wealth for their children?
Implementation: What if we set the bar high, say at 100 crores or even 1000 crores? Would this make the tax more palatable and targeted?
Practical Hurdles: Imagine inheriting a house or a business. Sounds dreamy until you hit the wall of unrealised gains and logistical nightmares. We’re peeling back the layers on these challenges.
Future Planning: If you’re expecting a windfall 5 or 10 years down the road, how should you plan your finances today? Spoiler alert: It’s not as straightforward as you might think.
So, grab your headphones and tune in. Whether you’re a financial novice or a seasoned investor, this episode promises to challenge your thinking and maybe even make you laugh along the way.
Timestamps:
00:00 Introduction and Disclaimer
01:25 Should we have an inheritance tax?
07:36 What if inheritance tax is imposed solely on the wealthy?
15:42 Creating a Trust to offset tax
25:04 Are there significant practical difficulties associated with inheritance tax?
35:08 Doesn't implementing an inheritance or wealth tax help reduce asset prices or control inflation?
42:58 How should one prepare for potential inheritance taxes in the future?
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In this comprehensive discussion, Fund Manager and Head of Research Anoop Vijaykumar and Shray Chandra distil the key lessons from over five years of managing the Capitalmind Adaptive Momentum portfolio.
Get a concise overview of the principles of momentum investing driving the portfolio’s success.
Learn from our real-world lessons on why momentum investing works for long-term wealth creation
00:36 Introduction
01:54 Momentum strategy in the last 5 years
03:30 Difference between the fundamental and quantitive styles
08:00 Random correlations when backtesting a quantitive strategy
10:30 Capitalmind Adaptive Momentum strategy
15:05 Why does momentum investing work?
18:54 Lessons learned from 5 years of managing momentum strategy
26:00 Will momentum stop working
29:30 How can we get more out of the momentum strategy?
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Have you ever wondered why finance seems to have a forgiving nature?
From the sins of the past being easily forgotten to the belief in second chances, we'll explore the nuances of forgiveness in the financial realm.
We'll dissect the tactics some "for education purposes only" players use to enrich themselves at the expense of their students. It's a sobering reminder to always question the motives behind the message.
We uncover the darker side of startup culture, where founders blur the lines between innovation and exploitation. It’s a cautionary tale for aspiring entrepreneurs and investors alike.
Deepak & Shray, in their quintessential style, discuss nuances of investing and finance in this latest episode of Capitalmind Podcast.
Show Notes & References
00:00 Introduction and Disclaimer
01:35 Why is finance a uniquely forgiving industry?
19:37 Deepak’s views on AT 1 Instrument
28:23 How do customers react to their fund managers' pros and cons?
57:57 Critical look at how some financial educators profit heavily from courses that may not benefit students as promised.
01:05:40 A look into the darker side of startup culture where founders misappropriate funds and then start new enterprises.
01:12:00 Delving into the challenges faced by companies when customers misuse their power. -
The idea that finance companies want to do everything from payments to lending to broking to investments is strange - why not just be good at one thing?
It’s a simple explanation, it turns out. Find out more about the business of money in a language you can easily understand, through the words of Deepak Shenoy and Shray Chandra.
Capitalmind manages Rs. 1700+ cr. as a SEBI-registered PMS, and has quantitative investing strategies that use extensively tested factor data to invest into stocks. Our flagship Adaptive Momentum strategy has outperformed the market indices over 5+ years.
References:
00:00 Introduction
00:17 Why does every company do everything in financial services?
12:41 Why aren’t banks more aggressive in growing and pricing things lower?
26:40 Discussion on the success of Bajaj Finance and arbitrage between Banks and NBFCs
36:46 Why aren't banks aggressive on lending ? What's the issue with lending?
56:49 Deepak explains the Indian Bankruptcy code
01:07:13 What can we do to fix this?
More about us: https://cm.social/pms
Schedule a call with us: https://cm.social/pms-connect
Deepak’s Twitter: @deepakshenoy
Shray’s Twitter: @shraychandra
Capitalmind Twitter: @capitalmind_in
Deepak's first book: http://amzn.to/3CgkGea
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Ever wondered why circuits are in place?
It all started on Black Monday in 1987, where a 25% market correction prompted the introduction of market-wide circuit breakers in the US. These limits aimed to ensure market maker solvency and prevent panic-induced trading.
Fast forward to 2001, and India also introduced circuits to handle intraday market volatility. From the Nifty's inception to the imposition of index-level circuit filters, the Indian market landscape has witnessed a steady evolution in its approach to market regulation.
In this episode, we delve deeper into the concept of circuits, with real life stories and understand how they help the market.
We also discuss, should circuits continue to exist in their current form? or is it time to explore alternatives that foster greater transparency and resilience?
Show Notes & References
00:00 Introduction and Disclaimer
01:24 Background on limits or circuit breakers.
06:38 When did India implement the circuit breaker?
09:20 What are the current rules for circuits in India?
15:58 Why are circuits interesting in the first place?
19:07 What would happen if circuits weren’t there?
24:38 Some interesting stories on circuits in the stock market
36:34 What is a better way to manage circuits?
40:47 Will circuits continue to exit?
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In today's episode, we delve deep into the recent actions taken by the Reserve Bank of India (RBI) towards the end of 2023 and the ensuing ripple effects they've set off.
The RBI, often the silent architect of our financial landscape, has made strategic manoeuvres that reshape the terrain for banks, non-banking financial companies (NBFCs), and borrowers.
Discover how these regulatory shifts could impact financial decisions and the broader economic landscape. From the nuances of risk weights to the implications for personal loan growth, this episode promises to demystify the complex world of financial regulations in a digestible and engaging format.
Here is a quick overview of what we talk about:
We unpack the RBI's directives regarding risk weights and the restrictions placed on simultaneous lending and investing activities by financial institutions. Dive into how startups offering digital lending products, like CRED and Paytm, are affected and the challenges they face under the new regulations. Explore why your credit card limits might be scrutinised and how conflict of interest rules reshape lending dynamics. Understand why the RBI's focus on Alternative Investment Funds (AIFs) matters and how it impacts investors' portfolios. Debate whether these measures reflect a proportionate response from the RBI and what they suggest about the current state of our economy. Timestamps00:00 Introduction and Disclaimer
01:34 Deepak demystifies the two new regulations by RBI on Banks and NBFC
05:37 What’s the impact of these new regulations? Why should we care?
16:05 Why is RBI more concerned about personal loans?
24:54 Why aren’t you positive about the RBI action here? What’s wrong with the slowing loan growth?
32:20 If Startups are ready to take the risk, why is RBI stopping them?
45:14 Even after this bull run, why isn’t there lending against securities?
52:11 RBI has a new rule prohibiting Banks and NBFCs from evergreening loans through AIFs.
01:03:51 Is this a warning, a sign that the economy is over-heating? -
Join us on Capitalmind Podcast, where we demystify the world of finance without the jargon. In today’s episode, talk about the asset management industry in India and what’s in store for the future.
Now get this - Mutual Funds own only 8% of Indian companies, while retail investors own 9%.
Let’s rewind. In 2005, despite impressive returns, MFs didn’t gain much attention due to high fees and the lack of tax advantages. Fast forward to 2018, capital gains and dividend tax changes sparked a surge in MF investments, increasing their ownership to 8%.
Explore the shift in India’s financial landscape – changing disposable incomes and tax adjustments have made MFs more attractive. The “MF Sahi Hai” mantra and the success of Systematic Investment Plans (SIPs) further contribute to their rise.
Regulatory improvements play a role, but we also discuss other investment vehicles – MFs, Portfolio Management Services (PMS), Alternative Investment Funds (AIFs), and more. Understand the evolving dynamics and where your money might fit best.
We dive into comparing investment vehicles and their equivalents in the US. Spoiler alert: India’s investment culture is rising, embracing the expertise needed to manage money with relatively low costs and instant liquidity.
Is passive investing becoming the norm? Not quite yet. We need more institutional capital for that shift.
We end the episode trying to connect the dots and see what the future of this industry may look like.
References
00:00 Introduction and Disclaimer
01:15 How is the money divided among different vehicles in the asset management industry?
06:36 Why do Mutual Funds have a lower ownership in Indian companies (8%) compared to retail investors who own 9%?
20:21 What are the downsides of investing in Gold and Real Estate?
27:40 Are we just one crash away from everyone turning away from equity?
34:38 Given that we have a savings culture, will investing grow faster in the future?
40:42 Which type of investment is good for whom?
44:53 Mutual Fund Vs Direct Stock Investing: How are things different in India and the US?
01:02:46 The future of the Asset Management industry in India. -
Ever wondered about the whole money thing – how it's made, where it comes from? Well, in this podcast episode, we're breaking it all down, and without using any jargons.
We also promise that this podcast will not remind you about an economics class. Because, it's not a lecture on economic theories. Nope. It's more like your friend explaining things in a way that just clicks. You'll walk away with a bunch of useful insights to help understand the concept of money a little better.
Make sense of those tricky concepts you read about in newspapers or on business channels. You know, the stuff that usually leaves you feeling a bit puzzled.
Write to us at [email protected] if you have feedback or ideas. We read and reply to all emails.
References
00:00 Introduction
01:36 How is money created? How does it grow?
12:41 Money printed is not the same as money spent.
32:16 How do banks create money by lending?
40:59 How does money flow between banks and RBI?
43:53 How do banks make money?
48:40 More ways to create money
53:59 Wealth effect: People often assess their wealth without accounting for the impact of taxes.
59:41 The central bank isn't the one creating inflation. It's the people.
1:02:53 Economies create wealth by moving up the value chain -
If you are even a little active on social media, especially Twitter, you would have witnessed the exponential increase in tweets related to options trading. Today, we are are going to talk about that - Indian's going gaga over options trading.
Deepak & Shray, take a detailed look at this fascinating phenomenon and tell you all that you need to know - except telling you about an options strategy that always makes money no matter where the market goes.
In this episode, we delve into the history of options, the factors driving their growth, and the potential risks and rewards.
From the earlier days of Badla to the scaling of options trading post-2006, we witness a significant shift in the landscape. What was once a predominantly institutional activity has evolved into a market dominated by retail and proprietary investors.
Several factors contribute to the surge in options trading, including simplified Securities Transaction Tax (STT) structures, technological advancements, flat-rate brokerages, and increased retail participation. The introduction of weekly options has especially transformed the game, turning it into a more accessible yet speculative arena.
But, all this is not without risks of ruin. Deepak raises valid concerns about the potential downsides of increased options trading. He shares real stories and lessons, through real-life examples, about the impact of options trading on individuals.
We realise that this is the time when the fine line between responsible investing and excessive risk-taking becomes apparent, emphasising the need for education and awareness.
While options trading has its drawbacks, Deepak acknowledges its positive aspects, such as providing liquidity and offering potential returns for those well-versed in risk management. He emphasises the importance of using options wisely and understanding the odds.
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Timestamps
00:00 Introduction and Disclaimer
01:26 History and growth of Options trading in India
07:55 What has contributed to this massive growth in Options trading?
27:17 Is there a problem with increasing Options volume? Will the government come in and do what it did to all those gaming firms?
35:16 How do people lose money in options?
48:33 Isn’t SEBI systematically reducing leverage?
50:30 How to not get suckered while trading Options in India?
1:02:11 What are the good uses of Options?
1:14:15 Where do you think Options trading will go from here?
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Welcome back to the Capitalmind Podcast – a place where we dissect the nuances of finance and investing, in a world that never stops changing. Your hosts, Deepak & Shray, are here to de-clutter yet another topic in their lucid and candid style.
In today's episode, we're zooming in on Portfolio Management Services (PMSes), a vehicle for your long-term wealth management. Here's a glimpse of what's on our financial canvas today:
PMS Demystified: We're going to peel back the layers on Portfolio Management Services – both the legalese and the real-world implications – to answer the quintessential question: "Does it make sense for you to invest?" The Art of Timing: We'll delve into the art and science of choosing the right time horizon for your investments and why it's the secret sauce behind successful wealth building. The 50 Lakh Question: At point of your investment journey should you consider investing in a PMS? What's the PMS magic?: What can it do that traditional investment avenues can't? Specifically, does it offer any edge against Mutual Funds? (Spoiler alert: It does) The Ideal PMS Investor: We'll introduce you to different archetypes of investors who stand to gain the most from embracing PMS offerings from our experience of managing 1200+ crores.Time Stamps:
00:00 Introduction and Disclaimer
01:30 What is a Portfolio Management Service and what’s it good for or what’s the point?
05:05 Who should invest in a PMS? And what should be the tenure of your investment?
08:53 Where to invest for short term needs?
13:27 The issues with investing in a mutual fund.
27:53 What does a PMS offer? What are the benefits of a PMS?
36:23 Once you cross a 50 Lakh mark, should you move from MFs to PMS?
42:36 What can a PMS do differently?
46:51 What about the returns of PMS and is it worth it vs Nifty?
52:15 Who shouldn’t invest in a PMS?
58:27 Who should invest in a PMS?
If what you hear today intrigues you, head over to Capitalmind Wealth to explore how our PMS services might align seamlessly with your financial aspirations. Our fee structure, ranging from 0.25% to 1%, keeps it straightforward, with no hidden performance fees.
Schedule a call
Alternatively, shoot us an email at [email protected], and we'll be more than happy to provide you with additional insights about our PMS offerings.
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You've tuned in to another episode of The Capitalmind Podcast, where we tackle a question that's been on your mind: "There's a lumpsum in hand, what's your next move?"
In a world where SIPs are all the rage, we're steering the ship towards understanding how to strategically deploy a substantial lumpsum amount.
Deepak & Shray walk you through these aspects of managing, deploying and even spending that lumpsum gain. They discuss:
Deciphering tax implications: The financial realm is fraught with complexities, especially when it comes to taxes. We delve into the intricacies, figuring out how you can harness the power of tax efficiency to maximise returns. Debt management strategies: From housing loans to high-interest obligations, every debt carries a unique weight. We share insights that empower you to navigate this terrain with finesse and help you to make informed choices Securing education and retirement: As the custodian of your financial future, you'll need strategies to earmark funds for your children's education and seamlessly transition into a well-funded retirement. Planning is key, and Deepak has you covered. The art of consumption and experience: Beyond investments, the episode delves into the delicate balance between material consumption and meaningful experiences. The discussion prompts you to curate a life that blends financial prudence with personal fulfilment.Lastly, for those who've experienced an ESOP exit or find themselves grappling with a lump sum, our website capitalmindwealth.com offers tailored services designed to cater to portfolios exceeding 50 lakhs. For feedback and podcast ideas, write to us at [email protected].
References00:00 Introduction
01:30 ESOPs taxation and Whats the right way to allocate large lumpsum amount?
18:43 Which option is more preferable: Paying off housing loans sooner or investing in the market.
29:50 How to plan for your kids education?
34:57 Whats the simple rule of thumb for retirement planning?
40:21 If you have a large sum to invest should invest it via SIP or Lumpsum?
49:45 Don't fall for the products that assures you low risk and high returns.
59:36 Say no to angel investing
01:04:04 Consumption - all the things you wanted to do, make that list and do these
01:12:24 Types of windfalls: End year bonus vs exit from some ESOPs or synthetic ESOPs
01:20:43 Charity and Philanthropy
Liked the episode? Just tweet to us at @capitalmind_in and let us know. That's all we need to keep going!
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Our latest podcast episode is here, and it's all about exploring the different ways investors make money in the market.
From thrilling arbitrage strategies to the art of short-term trading, we'll cover it all in a language that even your neighbour's fish could understand (well, almost!).
But that's not all—our experts will take you on a journey through long-term fundamental investing and quantitative approaches too.
Expect some fascinating stories, like the infamous LTCM blow-up, and how best investors (& trades) made their fortunes. We'll also unravel the logic behind the elusive VC's hunt for 50x returns and how even "value stocks" need a dash of momentum.
So, whether you're an investing enthusiast or just curious about the market's mysterious ways, you won't want to miss this one.
References00:38 What do you think about the new all-time high? How do you view different types of investing strategies in the market and how to make money from these strategies?
24:27 The problem with peoples expectations: When I say stock markets do 12%, people expect this to be linear.
27:00 Concept of Expectancy
33:29 Problem in arbitrage is competition, so you need to lever yourself up
38:21 Option volatility trading - sell options expiring in 2 days and make the decay
46:32 When VC wins they need to win huge
49:50 Nifty monthly returns - how do quant strategies do?
56:52 We have just hit all time high. Based on the past data, how long can this good time potentially last? Which one is your favourite investing strategy?
Liked the episode?
Just tweet to us at @capitalmind_in and let us know. That's all we need to keep going!
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Welcome back to another episode of our podcast, where we dive deep into the world of finance and investment. In today's episode, we will be exploring the fascinating realm of mutual fund costs and SEBI's recent proposals to bring them down.
As the saying goes, "The devil is in the details," and when it comes to investing, understanding the various expenses involved is crucial for making informed decisions.
In this captivating episode, we will dissect SEBI's latest discussion paper on Mutual Fund TER (Total Expense Ratio), which shed light on the inner workings of mutual fund costs and the need for change. We'll embark on a journey led by our expert hosts, Deepak & Shray, who will unravel the complexities of the system and explore the potential implications of SEBI's proposals.
Get ready to gain valuable insights and answers to burning questions.
What is the Total Expense Ratio (TER) of a mutual fund, and what does it include and exclude? Why does SEBI propose changes in TER, and how will it affect mutual fund investors? How do large distributors exploit the system, and what measures can be taken to address this issue? Can tweaking TERs alone make the mutual fund industry 10x bigger, or are there other critical factors to consider? What innovative avenues could mutual funds explore to earn higher TER while providing value to investors?Tell us on twitter @capitalmind_in on how did you like this episode. Your feedback means the world to us!
Show Notes & References02:00 Thoughts on the recent discussion paper by SEBI on Mutual Fund TERs
10:30 SEBI is saying "You are making too much money", reduce fees
19:25 Largest India equity scheme is charging the maximum fees possible
31:30 Limited Purpose Trading membership for AMCs to trade directly on the exchange
43:00 Why should a big fund house have the ability to charge more on a new scheme?
48:00 Performance based AUM through sandbox
53:00 How do you make the mutual fund industry 10X bigger?
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"If it looks like a duck, swims like a duck, and quacks like a duck, then it probably is a duck", goes the saying. Arbitrage mutual funds are actually taxed as equity funds but they actually behave as debt funds.
And this tax arbitrage of arbitrage funds is what the regulators may be looking to fix.
In light of this, we have our latest episode of the Capitalmind Podcast, where we dive into the intriguing world of arbitrage mutual funds, also known as arb funds.
In this shorter episode, our hosts, Deepak and Shray, explores the role these funds play in your investment portfolio and delves into the impact of recent changes in debt mutual fund taxation on arbitrage funds.
Here's a sneak peek of what you can expect from this episode
The Role of Arbitrage Funds: Discover the peculiar position these funds hold, being described as equity funds but offering debt-like returns. Taxation Changes and Their Effects: Explore how the recent changes in the income tax code could potentially affect arbitrage funds. Deepak shares his insights on the first and second-order effects of these tax changes and highlights the potential short-term buying opportunities that may arise. Risk-Free and Low-Risk Investment Options: Understand the investment landscape going forward in the likely new tax environment. Discover what alternative options exist for risk-free or low-risk investments in light of these changes.Here are five key questions that will be answered in this episode
What role do arbitrage funds play in your investment portfolio? How will recent changes in debt mutual fund taxation impact arbitrage funds? What are the first and second-order effects of tax changes on arb funds? What risk-free or low-risk investment options are available in the likely new tax environment? How significant is the presence of arbitrage funds in the stock market, and what does it mean for overall market volumes?Join us as we unravel the complexities of arbitrage mutual funds and gain a deeper understanding of their implications for your investment strategy.
Show Notes & References01:00 What do arbitrage funds (arb funds) do and where they fit in your investment portfolio?
08:30 Why didn’t arb funds become the FD replacement?
12:30 How big are arbitrage funds and what does that mean as a percentage of total volumes/positions on the stock market?
18:45 Arbitrage Funds are a huge part of our market and it's a problem. Why?
21:30 First and Second order effects of taxing arb funds like debt
34:00 What are the advice or takeaways?
If you have any feedback, ideas for future topics, or questions, we'd love to hear from you. Send us an email at podcast[at]capitalmind[dot]in.
For those seeking professional wealth management services for portfolios exceeding 50 lakh, visit Capitalmind Wealth.
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"Taxation is the price we pay for civilisation," as the saying goes. But what happens when the price tag keeps going up?
You may have thought you understood the friendly taxation system, until a new rule comes up that leaves you feeling like you've been sucker-punched. That's what recently happened when the government took away the tax efficiency of debt mutual funds and increased taxation. Suddenly, investors were left wondering how this would impact their investments and whether they needed to change their strategies.
In this episode of our podcast, Deepak and Shray delve into the conversation around the new taxation rules for debt funds. They ask the tough questions that many investors are likely asking themselves such as:
whether taxation should be a factor when investing in equities, what to do with existing debt funds, whether foreign investing is still exciting after all the taxes.But it's not all doom and gloom. They also explore other investment options such as MLDs, Gold, Real Estate, Startups, AIFs, and ETFs.
Taxes are indeed taxing. But who knows, maybe someday Pink Floyd will come up with a new hit single titled "We don't need no TAXES." Until then, tune in to our podcast to stay informed and keep your investing game strong.
Don't miss out on the show notes and references for this episode, where you'll find timestamps for each topic covered. So grab a drink, relax, and join us as we explore the fascinating and ever-changing world of investing and taxation.
Show Notes & ReferencesClick here for the Google Sheet
8:50 Now all debt instruments are taxed similarly, isn't it now a fair system?
18:45 What should I do with my existing debt funds?
27:00 Should taxation be a factor while investing in equities?
33:00 In stocks, should you sell underperforming stocks and move to other stocks?
36:00 What about MLDs, Gold & Real Estate.
53:00 How investments in startups are taxed?
56:00 What about AIFs and ETFs?
1:05:30 Is foreign investing still exciting after all the taxes?
1:09:00 Final thoughts
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