CAGRfunds – Blog

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

Index	13-Jan-23	06-Jan-23	Change (%)
Nifty 50	17,956	17,859	0.54
Nifty 500	15,346	15,272	0.48
Nifty Midcap 50	8,747	8,752	-0.06
Nifty Smallcap 100	9,675	9,656	0.20

Gyaan of the week

Multi-Asset Allocation Funds are hybrid funds that invest a minimum of 10% in at least 3 asset classes. These funds typically have a combination of equity, debt, and one more asset class like gold, real estate, etc.

The multi-asset allocation Mutual Funds are suitable for investors who have a low-risk appetite but want to enjoy steady returns on their investments. It helps to even out the risk that comes along with investing in just one type of asset class. It ensures a steady flow of income for the investors even at a time when some asset classes are underperforming than usual.

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

Personal Finance

• What Fund Managers Do With Their Money – Fortune India asked India’s top money managers how they handle their finances. Here are some investment lessons from the best of the best. Read here.

• Nitin Kamath on bonds for retail investors. – We’ve always believed that bonds and maybe not stocks are the right stepping stone for most Indians—better than FD returns but lower risk than stocks. Read twitter thread here.

Investing

• Stocks Ki Baat – Maithan Alloys – In the 3rd edition of our “Stocks Ki Baat” series, we write about a Ferro Alloy company. The company is the largest manufacturer of manganese alloys in India.  Read here

• Interest rate rise does not impact equity returns – Most of the impact that declining interest rates had on asset prices (particularly U.S. stocks) occurred during the 1980s (and somewhat into the mid-1990s). After that, the impact of declining interest rates may not be as significant. Read here.

• 1979 Profile of Warren Buffet: The investor’s investor – He thinks of stocks only as a fractional interest in a business and always begins by asking himself “ How much would I pay for all of this company? And on that basis, what will I pay for 1% of it?”  Read twitter post here.

• Indian Exchanges – Rise of Option Turnover – The trading volumes in India’s capital markets have seen significant growth in recent years. NSE’s Cash Equity volumes have tripled and Futures volumes have more than doubled over the last seven years. Read here.

• Tata Neu is not working– Tata Group’s ambitious super app is expected to meet just half of the sales target in its debut year. Read here.

Economy

• CareEdge releases first edition of state’s ranking – Maharashtra tops the overall ranking of all states, with a favourable score in social, financial inclusion and fiscal categories. Gujarat ranks second and fares well in economic and fiscal categories, while Tamil Nadu ranks third with an edge in social and governance categories. Read here.

• States may borrow only around 65% of Jan-Mar calendar, sources say– States are flush with ample cash and spending remains sluggish, so they would not need to borrow the entire amount, the official said. In a note on Tuesday, IDFC FIRST Bank estimated state governments have a cash surplus of around 3 trln rupees in December. Read here.

CAGR Speak

• Fixed Deposit rates have increased. Should I now invest in fixed deposits? Well, for me, I am still not investing in Bank Fixed Deposits says Shruti. Then what? Read the linkedin post here.

• Zerodha’s annual profit are amazing. Read the linkedin post here.

****

Check out CAGRwealth smallcase portfolios here.

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

If you have any feedback that you’d 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	06-Jan-23	30-Dec-22	Change (%)
Nifty 50	17,859	18,105	-1.36
Nifty 500	15,272	15,448	-1.14
Nifty Midcap 50	8,752	8,751	0.01
Nifty Smallcap 100	9,656	9,731	-0.77

Bazaar Ki Baat

In the December edition of “Bazaar Ki Baat”, our founders briefly discussed what moved the market in December, the Small Savings scheme interest rate formula, the return of debt funds, and many more interesting topics. Watch here.

Gyaan of the week

RBI Floating rate saving bond (RBI Bonds) is one of the safest investment options available for individual investors in India. The floating interest rate on these bonds is paid semi-annually and is linked to NSC. They have a fixed tenor of 7 years. The interest income is fully taxable at an individual slab rate. The current interest rate is 7.35%.

It can be an attractive investment option for Investors looking for safety and a higher interest rate than fixed deposits. Senior citizens, who have surplus funds beyond their liquidity needs, can also find these bonds attractive.

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

Personal Finance

• Only 16% Indian households plan to invest in 2023. As the consumer spending sentiment increases for the majority of Indian households, the investing sentiment remains low, with 78 percent of people saying that they won’t invest in 2023, according to the India Consumer Sentiment Index, a monthly analysis of consumer perception compiled by Axis My India. Read here.

• The Save-Invest Continuum.- The idea is that early on in life (or when you have fewer assets to your name) your savings have a bigger impact on your wealth and later on in life your investments have a bigger impact. Read here.

• Latest IRDA claim settlement ratios- Based on this, we can easily assume how customer-friendly they are in dealing with death claims. However, I warn you that this claim settlement ratio is raw data. It will not give you a clear picture of what types of products they settled. They may be Endowment plans, ULIPs, or Term Insurance Plans. Hence, this is not the sole criterion in judging the performance of a life insurance company. Read here.

• SEBI punishes DSP AMC, trustees for undercutting scheme expenses to woo investors. – The capital market regulator imposed a penalty of Rs 1 lakh each on the fund house and its trustee company for absorbing a chunk of its recently launched scheme’s- DSP Nifty 50 ETF- expenses on the AMC’s books, in violation of SEBI rules that state that all scheme-related expenses must be borne by the scheme. Read here.

Investing

• Why you should Invest in the stock market – Owning shares in the stock market gives you access to the profits, dividends, sales, growth, innovation and ingenuity of the biggest and best companies in the world. Read here.

• Indexing Evolution in Indian Market – 294 index-based products with aggregate assets of INR 6.46 lakh crore account for 16% of the total industry as of November 2022. Read here.

• Three Scenarios for Fed Policy, Inflation and Growth– We consider three scenarios and their impact on a diversified portfolio: sticky inflation, a soft landing and global recession. In the worst-case scenario of global recession, a composite portfolio could lose as much as 11%.Read here.

Economy

• Growth challenges in 2023 – what seems to be happening now is that the corporate sector is raising leverage without increasing investments appreciably. Read here.

• EPFO data show fall in employment– The good old EPFO Annual Report tabled in Parliament with a lag of about 9 months is still the best provider of this data. And, it suggests that employment fell during 2020-21 and stagnated in 2021-22.Read here.

CAGR Speak

• You probably won’t pick the best-performing stock in 2023. Read the linkedin post here.

• Small Savings scheme hiked. The hike in NSC (6.8% to 7%) will also lead to an increase in the yield of RBI Bonds, which is linked to the NSC interest rate. Read the linkedin post here.

****

Check out CAGRwealth smallcase portfolios here.

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

If you have any feedback that you’d 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.

Wish you and your family a very happy and successful new year!

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

Index	30-Dec-22	23-Dec-22	Change (%)
Nifty 50	18105	17,806	1.68
Nifty 500	15448	15,046	2.67
Nifty Midcap 50	8751	8,400	4.18
Nifty Small cap 100	9731	9,182	5.98

Gyaan of the week

Hybrid mutual Funds are funds that invest in a combination of different asset class mainly debt and Equity. The objective of the fund is to diversify the portfolio with an aim to reduce the risk and also generate income.

Hybrid Funds are suitable for first-time investors and for investors looking for lower volatility than pure equity funds. Some of the popular Hybrid Funds are Aggressive Hybrid Funds, Conservative Hybrid Funds, Arbitrage Funds, etc.

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

Personal Finance

• The new Mutual Fund Challengers – India’s tightly regulated and highly competitive mutual funds market is dominated by large established players. But a bunch of new fund houses is looking to disrupt the space that is already riding high on technology, innovation and digitisation. Read here.

• To Parents with love – Must read. A compilation of essays on how parents can be prepared to support their children’s future aspirations! Read here.

• Massive decline in new MF investor registration due to change in KYC norms- AMFI data shows that the MF industry added 78,045 investors in November 2022, the lowest since April 2022. Between April and October, the industry added over 3.75 lakh new investors on a monthly basis. Read here.

• An underappreciation for how small things compound into extraordinary things – Howard Marks once talked about an investor whose annual results were never ranked in the top quartile, but over a 14-year period he was in the top 4% of all investors. If he keeps those mediocre returns up for another 10 years he may be in the top 1% of his peers – one of the greatest of his generation despite being unmentionable in any given year. Read here.

Investing

• Stocks ki Baat – Globus spirits– The 2nd edition of new “Stocks Ki Baat” series, talks about an Alcoholic beverage company. The company is the largest grain-based ENA manufacturer in India with a capacity of 250 Mio lts. Read here.

• MF CIOs see weak case for equity mkt next 1-2 years, recommend debt– “Our fund house applied three main criteria of corporate earnings, valuations and sentiments and while macro drivers were positive for corporate earnings, the other two factors did not portend well for the equity markets in the next couple of years,” said SBI MF’s Srinivasan. Read here.

• How to learn from others – A time comes when the teacher has to disappear and we need to be comfortable in the driving seat without any guidance. At this stage we need to be self-aware about our limitations and our style of processing ideas. Read here.

• Warren Buffet says “When I want to do something, I want to do it big” – In this video, Warren Buffett, the chairman and CEO of Berkshire Hathaway shares a wide-ranging interview with Charlie Rose about the Berkshire Hathaway he created, his friends, his values, and life at a young age of 91, compared to Charlie Munger. Watch here.

Economy

• Indians spent 11 bn minutes travelling in Uber cabs in 2022 –The year 2022 saw Indians start travelling big again, and cities swinging back open for business after the pandemic. Uber trips during the year covered as many as 4.5 billion kilometres, which is the distance from Earth all the way to Neptune. Read here.

• Central Bank watching is like an art form – Central bank actions and communications are as much as what is said as what is left unsaid. It is both reading the lines as well as reading between the lines. Read here.

CAGR Speak

• How does Inflation impact equities and various factor strategies? This can be a useful read to help us navigate the period of high inflation. Read the linkedin post here.

• Small advice firms vs large ones. Large is not necessarily credible. The reason we tend to prefer larger brands as consumers is because we feel they are more credible. In the space of personal finance, parameters which vouch for credibility can exist with smaller firms as well. Read the linkedin post here.

****

Check out CAGRwealth smallcase portfolios here.

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

If you have any feedback that you’d 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 the web.

Index	23-Dec-22	09-Dec-22	Change (%)
Nifty 50	17,806	18,269	-2.53
Nifty 500	15,046	15,636	-3.77
Nifty Midcap 50	8,400	8,831	-4.88
Nifty Smallcap 100	9,182	10,017	-8.33

Gyaan of the week

Term Plans are Life Insurance Policies where the payout is made on the death of the insured. However, unlike hybrid Insurance – Investment products (Read: LICs, Endowment Plans, and so on), one does not get any payout if the insured survives the term of the plan.

Life Insurance like any other insurance should be taken only to protect against the risk of absence of income. If you have anything which is dependent on your earning capacity and your income, you need to protect the risk of going missing in case you pass away due to an untimely event. And hence, we find it very silly to buy 100-year term policies.

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

Personal Finance

• Needs, Wants and why We Always Feel Unfulfilled – 100+ years ago you would have been happy just to have abundant food, shelter and clothing. But our wants slowly turned into needs. Good healthcare and education were relatively rare for older generations, but today they’re necessities. And so the hamster wheel keeps spinning and we keep putting more and more needs on the wheel. Read here.

• It’s difficult to outperform the market– Just 17% of listed companies in India had market capitalization greater than 2500 Crores. Small companies, while attractive to investors for the chance to get onto the train before the long journey starts have a very high failure rate. The attraction towards these smallcaps though is massive like in a lottery, there will always be a few winners and stories of how someone made it rich keep others in the fray. Read here.

• Where Zerodha invests its cash – With our own funds, we invest in bank FDs, Government bonds, and have a long-term stock portfolio. We neither leverage (borrow to trade more) nor trade any leveraged products like F&O, which can lose more money than the capital at stake. This is to ensure there is no risk due to our treasury operations to the business. Our portfolio currently has exposure of 33 percent to bank FDs, 32% to stocks, 13% to Government Securities, 9% to tax-free bonds, and 13% to Gold bonds. Read here.

Investing

• Stocks ki Baat – Caplin Point Laboratories– In the 1st edition of Stocks Ki Baat, we talk about a Pharma company engaged in manufacturing and sourcing of APIs, finished formulations, R&D, and clinical research. The company has a unique business model, with above 80% of the sales being generated from LATAM countries. Read here.

• Analysis of Godfrey Phillips– Makes for an engaging read on the complexities of the Cigarette industry in India. Read here.

• How often is the market down in consecutive years– The last time the US stock market posted a string of bad years was in the 2000-2002 bear market when each year it fell more than the previous year. From an investor psychology standpoint, a prolonged bear market is probably more difficult to stomach than a severe crash that ends in short order. Read here.

Economy

• Grim situation of COVID in China- Dozens of hearses queued outside a Beijing crematorium on Wednesday, even as China reported no new COVID-19 deaths in its growing outbreak, sparking criticism of its virus accounting as the capital braces for a surge of cases. Read here.

• Bank of Japan shocks global markets with bond yield shift – The Bank of Japan caught markets off guard by tweaking its yield curve control policy to allow the yield on the 10-year Japanese government bond to move 50 basis points either side of its 0% target. Read here.

• Additional spending unlikely to strain fiscal math – In spite of the supplementary demands for grants, the government seems to be in a sound position on the fiscal deficit front in the current fiscal because of tax buoyancy. Read here.

• India cenbank cannot prematurely pause rate tightening cycle – MPC minutes – “A premature pause in monetary policy action would be a costly policy error at this juncture,” Governor Shaktikanta Das wrote in the minutes of the policy meeting released by the Reserve Bank of India on Wednesday. Read here

CAGR Speak

• Shruti shares her experience of being invited to judge a competition at her alma mater. Difference was, I was on the other side of the table this time. Judging 20 teams for an interesting simulation that they had been a part of. Read the linkedin post here.

• We talk about the benefits of Gold Bonds. We believe that SGB is a great way to take gold exposure. And gold can be an effective diversification tool in your portfolio. Read the linkedin post here.

****

Check out CAGRwealth smallcase portfolios here.

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

If you have any feedback that you’d 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.