CAGRfunds – Blog

CAGR Insights is a weekly newsletter full of insights from around the world of web.

Index	14-Jul-23	7-Jul-23	Change
Nifty 50	19,590	19,332	1.34%
Nifty 500	16,781	16,565	1.30%
Nifty Midcap 50	10,352	10,170	1.79%
Nifty Smallcap 100	11,325	11,119	1.86%

Chart Ki Baat

Gyaan Ki Baat

Risk Profiling is assessing risk tolerance for investment success. It helps investors to take informed decisions by evaluating the willingness and ability to take risk and then matching it with investments that suit their risk profile.

It involves evaluating various factors such as financial goals, investment time horizon, investment knowledge, and risk tolerance. Risk tolerance is an investor’s emotional and psychological ability to handle fluctuations in the market. Understanding an investor’s financial goals is crucial as short-term/long-term objectives require different levels of risk exposure.

The time horizon is another key factor, a longer investment horizon allows for a greater tolerance for risk as there is more time to recover while shorter time horizons require a conservative approach to protect capital.

Here’s the list of curated readings for you this week:

Personal Finance

• “I have a high surplus every month which I want to invest. I can’t think of any specific financial goals but I do want to grow my money” – For some individuals, the only objective of investing is to beat inflation and create wealth.  Read here

• Why investors should ask what is not going to change in the next 10 years – Predicting the future can be a fun thought experiment, but it’s often not knowable. In the world of investing, you are often better off inverting the problem. Thinking about what’s going to stay the same in the next 10 years may seem boring, but can lead to better investment opportunities. Read here.

• The biggest hedge fund in the world says ChatGPT was able to pass its investment associate test – and it’s like ‘having millions of them at once’Read here.

• NRI Knowledge Series – What are the different types of NRI accounts? – One of the frequently asked queries by NRI clients and friends. Watch here.

• PVR cuts snack prices after viral tweet triggers backlash, offers ‘bottomless popcorn’ – A viral tweet on the high price of snacks at PVR Noida resonated with a large section of movie-goers who slammed multiplexes for the pricing. Read here.

Investing

• Brand IPL , Dhoni and the paradigm shift in viewership – As per the recently published Houlihan Lokey report the league’s brand value reaching US$3 billion and its business enterprise value topping US$15 billion. Read here

• Size of capital managed does matter – If there is a high probability of underperforming against index funds, the fundamental purpose of an active fund, i.e creating alpha, is undermined. The size at which an actively managed fund is forced to invest in index stocks is probably a size that is TOO big. Read here

• Sustainable and Productive changes in India – Unifi Capital –  – Over the last many years, and especially post-Covid, India’s growth drivers have notably changed. While several factors have driven this transformation, we examine two vital areas of change: (A) India’s systemic need for low leverage [low debt/GDP] and (B) Gradual improvements in productivity. Read here.

• Prefer the investment side of the economy as compared to the consumption side – Breakout Capital – Kelkar is currently more exposed to the investment side of the economy rather than the consumption side. Frontline sectors such as cement, engineering, construction, financials and real estate are some of his key preferences. Watch here.

Economy

• Did the government just kill online gaming? – This time, the tax won’t be just on the Gross Gaming Revenue (GGR) or the commissions that Dream11 earns. The GST will be charged on the Contest Entry Amount (CEA). Or simply put, on the entire sum of money the customers deposit to play on the platform!!! Read here.

• India’s June inflation came in at the higher end of expectations – Strong inflation prints are aligned with the RBI policy committee’s cautious stance on inflation. Read here.

• As Foxconn-Vedanta deal snaps, a look at semiconductors & ‘design giant’ India’s 40-yr chip struggle – Taiwanese tech giant Foxconn has withdrawn from its $19.5 billion semiconductor joint venture with India’s Vedanta. While the Modi govt has said this won’t hurt India’s goals with respect to the cutting-edge chips, Foxconn has also reiterated its commitment to working with the country in the field. Watch here.

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Check out CAGRwealth smallcase portfolios here.

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That’s it from our side. Have a great weekend ahead!

If you have any feedback that you would like to share, simply reply to this email.

The content of this newsletter is not an offer to sell or the solicitation of an offer to buy any security in any jurisdiction. The content is distributed for informational purposes only and should not be construed as investment advice or a recommendation to sell or buy any security or other investment or undertake any investment strategy. There are no warranties, expressed or implied, as to the accuracy, completeness, or results obtained from any information outlined in this newsletter unless mentioned explicitly. The writer may have positions in and may, from time to time, make purchases or sales of the securities or other investments discussed or evaluated in this newsletter.

CAGR Insights is a weekly newsletter full of insights from around the world of web.

Index	7-Jul-23	30-Jun-23	Change
Nifty 50	19,332	19,189	0.74%
Nifty 500	16,565	16,430	0.82%
Nifty Midcap 50	10,170	10,127	0.43%
Nifty Smallcap 100	11,119	10,837	2.60%

Chart Ki Baat

Bazaar Ki Baat

In the 9th edition of “Bazaar ki Baat”, we discuss the following topics.

• Monthly performance of market – FPI deluge
• Sector performance – Opportunities to generate alpha
• How to invest when Markets are at all-time highs?
• Term Insurance – How to calculate your ideal cover?

In case you have any comments or suggestions, please let us know. Watch here .

Here’s the list of curated readings for you this week:

Personal Finance

• Women and their relationship with Money – Episode 3 – Shruti spoke to Shrutkirti Vashist about how she thinks about her money. There were indeed some very good lessons to draw out of this conversation. Watch here

• Menace of Fininfluencers- How self-proclaimed stock market gurus exploit regulator Sebi’s limitations — and loopholes — to attract gullible investors. Read here.

• RBI seeks to give customers choice of card network- The Reserve Bank Wednesday asked banks and non-bank financial company (NBFCs) to issue credit, debit and prepaid cards on multiple networks to give customers the freedom to choose. Read here.

• NRI Knowledge Series – How to file your taxes in India as an NRI? – One of the frequently asked queries by NRI clients and friends. Watch here.

Investing

• Globally, Smaller Firms Have Underperformed The Larger Ones, Will The Tide Turn? –Small-cap and emergingmarket equities are now trading at better valuations than large-caps.Read here

• Recoveries from written-off loans will keep contributing significantly to public sector banks’ profitability – The contribution of recoveries from written – off loan accounts could remain significant for PSBs, given their sizeable written-off pool of loans of Rs.  7.5 trillion as of March 2023.Read here

• FMCG sector to witness 7-9% rise in revenue this fiscal – “Revenue growth would vary across product segments and firms, but will largely be volume-driven. While the food and beverages (~50% of the FMCG sector revenue) is expected to grow 9-10% this fiscal, home care (~25% of sector revenue) should slow to 6-7% after price cuts. Personal care (~25% of sector revenue) will see continued traction growing at 7-8%, owing to revival in rural demand and steady urban demand. Read here.

• India Drugmakers’ Margins Under Threat – The government’s Janaushadhi scheme—which provides generic medicines at steep discounts to branded generics to make them affordable—has gained strong traction with a 4.2% volume share in the Indian pharma market. Read here

Economy

• India’s Digital Transformation – Nandan Nilekani – Must watch– India is innovating a technology-led model for growth that is collaborative, equitable, and democratises opportunity at population scale. This talk will explain the genesis and history of this transformation and the interoperable building blocks that made it possible. Watch here.

• India an attractive destination for investment – Over 70% of the Japanese companies surveyed have the intention to expand business in India over the next 1-2 years. Read here.

• Kharif sowing has been uneven in 2023 so far; adequate rainfall in July crucial for pick up in sowing across the country– With nearly ~50% of kharif sowing taking place in the month of July, adequate rainfall in the ongoing month across all region s will be critical to accelerate the pace of sowing over majority of the country. Read here.

• A Merger That Will Leave India’s Banks Gasping – The newly bulked-up HDFC Bank will go after as much as 20% of the banking system’s incremental deposits over the next three to four years. This could be highly destabilizing, at a time when the overall industry is gasping for liquidity. Read here.

• Modi adviser says India will push back on West monpoly over ESG aims – In a hard hitting interview, PM economic advisor hits out at ESG norms and credit rating agencies. Watch here.

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Check out CAGRwealth smallcase portfolios here.

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That’s it from our side. Have a great weekend ahead!

If you have any feedback that you would like to share, simply reply to this email.

The content of this newsletter is not an offer to sell or the solicitation of an offer to buy any security in any jurisdiction. The content is distributed for informational purposes only and should not be construed as investment advice or a recommendation to sell or buy any security or other investment or undertake any investment strategy. There are no warranties, expressed or implied, as to the accuracy, completeness, or results obtained from any information outlined in this newsletter unless mentioned explicitly. The writer may have positions in and may, from time to time, make purchases or sales of the securities or other investments discussed or evaluated in this newsletter.

CAGR Insights is a weekly newsletter full of insights from around the world of web.

Index	30-Jun-23	23-Jun-23	Change
Nifty 50	19,189	18,666	2.80%
Nifty 500	16,430	16,012	2.61%
Nifty Midcap 50	10,127	9,807	3.26%
Nifty Smallcap 100	10,837	10,624	2.00%

Chart Ki Baat

Indian Consumer Market: The Dominance of HUL. Courtesy: Euromonitor, Kotak Institutional securities.

Gyaan Ki Baat

Quant funds use mathematical and statistical model-based computer algorithms to plot their investment strategy. Quant-styled mutual funds follow a partly active partly passive investing approach.

What it means is that while the fund manager is in charge of the eventual investment decision, their actions are guided by a set of rules that decide the course of action. There are essentially three steps in constructing a quantitative – fund the input system, the forecasting engine, and the portfolio construction.

The first step is where all the necessary input is provided. This includes data points like interest rate, inflation, consumer sentiments, a company’s revenue growth earnings, cost of capital, and dozens of other variables. Then, initial screening is done to remove all the undesirable factors like high volatility, unmanageable debt, inefficient capital allocation, etc., which then leaves us with a curated list of acceptable companies. 

The second step in the process is the forecasting stage and this is where the model rules are defined along with an estimation for the expected return price risk parameters and other related metrics.

The final step is portfolio construction where a model portfolio uses optimizers and heuristic-based systems to explain which stock to buy and at what percentage should it be bought. This gives us a curated objective and templated portfolio which is also referred to as the quant fund model portfolio.

Here’s the list of curated readings for you this week:

Personal Finance

• Women and their relationship with Money – Episode 2 – Shruti speaks with Saumya Sinha about how her approach to savings and investments has transitioned over time. Watch here and Part 2 here.

• The Bollywood star who launched a family office – Vivek Anand Oberoi, Bollywood actor and chair of Oberoi Family Office, reveals the principles guiding his Indian private equity investment business. Read here.

• Sebi defers decision on overhaul in total expense ratio for mutual funds– Armed with more granular data that SEBI got from the MF industry as part its feedback to the May 18 consultation paper, SEBI chairperson said that its proposals needs a rethink. Read here.

• India pushes back plan to collect 20% tax on overseas spending beyond a certain cap- India has pushed back plans to collect a 20% tax on annual overseas spending of more than 700,000 Indian rupees ($8,500) by three months to provide banks with more time to prepare their system. Read here.

• Sebi halves IPO listing time to 3 days – This will ensure that issuers have faster access to the capital raised, thereby enhancing the ease of doing business, the market regulator said. Read here.

• NRI Series – Investment options in India – The most common query which we have received from our NRI clients and friends is where can we invest in India. Watch here.

Investing

• Analyst Estimates are useful- As a budding equity investor, I started my investing journey reading/learning from the great value investors Graham, Buffet, Lynch, and others. And, it got drilled into me that analyst estimates, predictions, etc. are useless and should be ignored as noise. Well, it turns out they have utility after all.Read here

• Tata’s runway success – The pilots’ unions at Air India that once struck fear in the heart of the government and the airline’s potential suitors have been grounded. How did Tatas pull this off? Read here

• On investment firms, brand & reputation- Nalanda Capital – Investment firms may not have a brand, but certainly have a reputation. It may well be the most valuable thing we have. Read here

• Promoters missing at the markets – When startups launch IPOs, their founders abruptly change their classification from promoters to public shareholders. SEBI worries about its impact on public confidence, but the trend is all pervasive Read here.

• Corporate Arm twisting at MCX – MCX renewed the contract with 63 Moons for a sum of Rs 125 crore per quarter for two quarters, totalling Rs 250 crore. MCX and 63 Moons, formerly Financial Technologies India Ltd., were both founded by Jignesh Shah, who had quit from the board of India’s largest commodity exchange after a payments crisis at the National Spot Exchange Ltd., a subsidiary of FTIL. Read here

Economy

• India’s improving Asset quality moves closer in line with global levels – In FY23, the SCBs GNPA ratio fell to 3.9%, a decadal-year low. The asset quality has improved due to recoveries, higher write-offs by banks, rising advances, etc. The slippages have declined across bank groups in FY23 indicating lower accretion of fresh NPAs. The PSB GNPA ratio (4.97% in FY23) continues to remain significantly higher than the private banks’ GNPA ratio (2.35% in FY23).Read here.

• Gujarat’s MSMEs reel under loss of demand – MSMEs contribute 33 percent of India’s GDP, 50 percent of its exports, and 19 percent of its employment. Read here.

• Pakistan Gets IMF Initial Approval for $3 Billion Loan Program – Pakistan is one of the biggest customers of the IMF with almost two dozen bailouts since the 1950s. Read here.

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Check out CAGRwealth smallcase portfolios here.

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That’s it from our side. Have a great weekend ahead!

If you have any feedback that you would like to share, simply reply to this email.

The content of this newsletter is not an offer to sell or the solicitation of an offer to buy any security in any jurisdiction. The content is distributed for informational purposes only and should not be construed as investment advice or a recommendation to sell or buy any security or other investment or undertake any investment strategy. There are no warranties, expressed or implied, as to the accuracy, completeness, or results obtained from any information outlined in this newsletter unless mentioned explicitly. The writer may have positions in and may, from time to time, make purchases or sales of the securities or other investments discussed or evaluated in this newsletter.