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Money, war and a changing world order with Debashish Bose
11-01-2023
Money, war and a changing world order with Debashish Bose
We are at an important crossroads in history. The pandemic might seem like it’s behind us but we have a raging war in Europe, unprecedented sanctions, currency crises, inflationary pressures, and volatile markets. There are early signs of a shift away from the dollar and uncertainty about the US led global order. So what does all this mean for India and the world? We caught up with Debashish Bose, Managing Director—Public Equities at Oaks Asset Management, to make sense of it all. In this conversation, Debashish talks about:   1. How money is created in the modern world  2. The geopolitical divide  3. Fall of Yen and Japan’s currency conflict  4. Limited power of central banks   5. Cracks in the current dollar-dominated system  6. Advice for investors and much more Debashish had come on the show previously and we had talked about making sense of the macroeconomic developments in the world. You can check out that conversation here: You can follow Debashish on Twitter for more. We hope you enjoy this insightful conversation as much as we did, recording it 😀   Timestamps  0 - Introduction   1:34 - Creation of money   10:14 - Financial repression   11:50 - The geopolitical divide   16:33 - Japan’s currency conflict   27:43 - Do central banks have enough power?   32:34 - Is the dollar system breaking?   40:10 - China, Russia and deglobalisation   47:46 - Bretton woods III?  55:00 - What to do as an Indian investor   1:08:30 - What about gold? If you have any questions or thoughts about the topics discussed, post them on TradingQnA. If you enjoyed listening to this episode, do let us know at @zerodhaonline on Twitter.
Masterclass on factor investing (smart beta) with Sankaranarayanan Krishnan
15-10-2022
Masterclass on factor investing (smart beta) with Sankaranarayanan Krishnan
Up until the 1990s, the Capital asset pricing model (CAPM) was the dominant model used to explain market returns. But in 1992 Nobel Laureate Eugene Fama and his partner, Ken French said that market returns can be explained by three factors namely: 1. Value: the tendency of cheap stocks to outperform costly stocks 2. Size: the tendency of small cap stocks to outperform large cap stocks 3. Market factor: the risk premium of the market over the risk-free rate, like a government bond. Over a period of time, other factors like quality, momentum, and low volatility were added. Institutions were the first to adopt factor investing but with the popularity of ETFs, around 2010, factor ETFs also known as smart beta ETFs started becoming popular in the United States. Given that Indian markets are still very young compared to the US, we just had our first wave of factor or smart beta funds around 2017. But in the last 3 years, there has been an explosion in factor ETFs and mutual funds. But investors often think of factor investing as a guaranteed way to generate higher returns than the market. They often look at the historical returns of factors like value, momentum, quality, and low volatility and think that these factor funds will always outperform Nifty, which isn’t true. Having said that, factor investing can play a very important role in your portfolio, and it’s important to know how to use these funds in your asset allocation. This week on the show, we caught up with Sankaranarayanan Krishnan, a quant fund manager at Motilal who has rich experience designing factor models and managing factor funds. In this conversation, we start with the absolute basics of factors investing and talk about two major factors — low volatility (low vol) and momentum. We talk about why these factors exist and the explanations, return expectations, and how to use them in an asset allocation framework. In this conversation, Sankar talks about:  How did he become a quantitative fund managerWhat are factorsWhat drives the returns of factorsWill factors continue working forward?Factor performance in IndiaAre factors free lunch?Introduction to low volatility and momentumWhy do low volatility and momentum anomalies existDoes the macroeconomic environment matter for factors?What would make low volatility and momentum stop working?Various approaches to implement low volatility and momentum strategies and what investors should knowAre factors replacement for active funds?Factors funds, diversification and asset allocationWill factors always outperform marketcap-weighted indices?His personal investing philosophyCareer advice for someone who wants to pursue opportunities in quantitative financeBook recommendations.  This was an absolute masterclass on factor investing, and we hope you enjoy listening to this conversation as much as we did recording it. We have an upcoming episode on the other two factors—value and quality. We also have an introductory note on smart beta funds on Varsity, do check it out.  If you have any questions about anything discussed in the episode or thoughts in general, do post them here on TradingQnA. If you enjoyed listening to this episode, do let us know by tweeting, we are @zerodhaonline
What's your retirement plan?
15-12-2021
What's your retirement plan?
Retirement is the ultimate goal for everyone. We work, save, and invest so that we can kick back and retire comfortably, but a vast majority of Indians aren't ready for their retirement. This is due to structural economic issues, lack of awareness about the need for retirement planning, the lack of quality advice, among other reasons. PGIM India Mutual releases an annual survey of retirement readiness among Indians, and the last one was in 2020. Given that we're living through this mega COVID shock that has disrupted the personal finances of pretty much everybody, we thought it would be the perfect time to talk about the importance of retirement. So Sahil caught up with Ajit Menon, the CEO of PGIM India Mutual.  In this conversation, Ajit talks about: What does retirement meanThe good, bad, and the ugly from the PGIM India Mutual Fund Retirement Readiness Survey 2020Why are Indians saving less?How has COVID changed retirement planningWhy should you think about retirement?Thinking about how to structure various aspects of your retirementHow to build that mindset to think about retirement readinessRetirement readiness around the worldAdvice for someone starting to think about retirement today And a whole lot more. This conversation was absolutely brilliant and full of insights. We hope you enjoy it as much as we did recording it.  If you have any questions about anything discussed in the episode or thoughts in general, do post them here on TradingQnA.
Navigating the madness in the markets with Kalpen and Sahil
01-11-2021
Navigating the madness in the markets with Kalpen and Sahil
The way the markets have run up post the March 2020 crash have equally surprised and perplexed investors. Given the pace of the recent bull run, that's understandable. A lot of smart people are wondering what's happening in the markets. But that's how the markets work—they don't have to make sense and they rarely do. So, we caught up with Kalpen Parekh (MD & CEO, DSP Mutual Fund) and Sahil Kapoor (Head of Products & Market Strategist, DSP Mutual Fund) to get a sense of the madness in the markets and what you should do as investors:  In this conversation, Kalpen and Sahil talk about: Some key takeaways over the last 1-1.5 yearsHow to make sense of inflationThe disconnect between the real economy and the marketsA bird's-eye view of the Indian and the global economyAre the markets in a bubble?Investing in the age of markets where central bank actions have a massive impactWhy do investors stop investing in equities early? What can be done to get people to stick with their investmentsHow not to get carried away by all the madness aroundAsset allocationHow to think about fixed income in a low-interest rate environmentKeeping your behaviour in control and avoiding mistakesCan you pick the best fund or best fund manager in advance? Discussing Sahil's article on this. International investing and the role of global funds in a portfolioThe role of gold in a portfolioHow the Indian mutual fund industry looks in the next 5-10 yearsSahil and Kalpen's investment philosophiesBook recommendations You can follow Sahil and Kalpen on Twitter for more of their perspectives.  If you have any questions about anything discussed in the episode or thoughts in general, do post them here on TradingQnA.
Taking the long view with Prashant Jain
30-08-2021
Taking the long view with Prashant Jain
In this episode, we have a really really special guest. We caught up with Prashant Jain, the chief investment officer (CIO) of HDFC Mutual Fund. Prashanth is a market veteran and the first India fund manager to manage a single mutual fund scheme for over 25 years. He manages some of the largest active mutual fund schemes in India. Over his nearly 25+ year career in the investment management industry, Prashant has pretty much seen all the cycles of the Indian markets. The experience and insights he shared in the conversation are all the more relevant to us given the euphoric mood in the Indian markets currently.  In this wide-ranging conversation, Prashant spoke about:  His journey into the marketsThe evolution of our economy and the Indian marketsWhat does a good business look like to himHis research processHis thoughts on portfolio constructionWhat does being wrong look likeHis thought on using macro inputs in an investing frameworkWhether the opportunity set of stocks in Indian markets is limitedThe road ahead for IndiaHis thoughts on quality at any priceActive investing vs passive investingIndian valuations, global valuations, rates and inflationAdvice for aspiring analysts and portfolio managersHow he invests If you have any questions about this episode, you can post your queries here and we'll answer them. Disclaimer: Mutual fund investments are subject to market risks. Please read all scheme related documents carefully before investing. This show is for informational and educational purposes only and should not be construed as investment advice or a solicitation to invest. Please consult your financial advisor before making any investment decisions.
Does gold have a place in your portfolio?
03-08-2021
Does gold have a place in your portfolio?
Gold is probably one of the most controversial and perplexing asset classes. Some well-known investors like Warren Buffett call it useless while other investors take the middle path and recommend small allocations. As for investors, they often struggle to think about it in a portfolio construct. So we caught up with Chirag Mehta, senior fund manager at Quantum Asset Management who also manages the Quantum Gold Fund.  In this conversation, Chirag talks about:  His journey into the marketsHis perspective of what happened in the markets last yearWhat moves gold pricesWhy do Indians love gold so much?Historical performance of gold in India vs equities and bondsPros and cons of various gold options like physical gold, gold ETFs, Sovereign Gold Bonds, Gold Mutual Funds etcWhat roles gold plays in a portfolioHow much to invest in goldHis thoughts on some popular arguments against investing goldCentral banks actions and their impact on gold going forwardHow do Indian gold ETFs and Mutual Funds manage their gold, where do they store it, safety measures etcThings to keep in mind when picking gold fundsHis personal investment philosophySome unique stories from his careerSome reading recommendations You can explore gold mutual funds on Coin and gold ETFs on Kite.  If you have any questions about investing in gold, you can post your queries here and we'll answer them.  Disclaimer: Mutual fund investments are subject to market risks. Please read all scheme related documents carefully before investing. This show is for informational and educational purposes only and should not be construed as investment advice or a solicitation to invest. Please consult your financial advisor before making any investment decisions.
Introduction to personal finance with Rishad Manekia
25-06-2021
Introduction to personal finance with Rishad Manekia
Millions of new investors have started investing post-pandemic, and this is a good thing. But given that the returns in the past year have been spectacular, many new investors continue to make the same old mistakes and have wrong expectations. They tend to take the basics for granted. While pretty much anything investors do will work out in a bull market, these mistakes can come back to haunt them when the markets take a turn for the worse. We've spoken about how to think about investing, how to pick mutual funds and build a portfolio (part 1, part 2) in previous episodes but not much about personal finance. So we caught up with Rishad Manekia of Kairos Capital. Rishad is a Registered Investment Advisor and helps people simplify their personal finances. In this first of a 2 part series, Rishad gives you a blueprint of sorts on the basics of personal finance so that you can start your investing journey on the right foot.  In this conversation, Rishad talks about: The right mindset for investorsThe first step in personal financeHow to budgetHow to set goalsHow to invest for short term and long term goalsFiguring out the right asset allocation for various goalsBasics of insuranceHow to manage your behaviour during bad market phasesHow to review and maintain your personal finance planThe most common mistakes he sees investors make Do check out the personal finance chapter on Varsity, and If you have any questions about personal finance, please do post them here.
Introduction to floating rate funds with Arvind Subramanian
13-02-2021
Introduction to floating rate funds with Arvind Subramanian
With interest rates at all-time lows, these are tricky times for fixed income (debt) investors. The consensus view seems to be that we are done with the rate cut cycle and the RBI may gradually start increasing rates. Most debt fund categories have delivered handsome returns in the past 2-3 years given the series of rate cuts. But if the rates start increasing, investors will have to moderate their return expectations. Given this backdrop, a lot of people have started talking about floating rate funds and how investors can use them in a rising rate environment. But the reality is that it is not quite that simple. Coincidentally, IDFC Mutual Fund has just launched its floating rate fund. So, we caught up with Arvind Subramanian, fund manager & head of credit research at IDFC Asset Management to learn how these floating rate funds work and if how investors should think of them in a rising rate environment. In this conversation Arvind talks about: How his journey in the markets beganThe current Indian interest environmentWhat are floating rate funds?How do they workWhat are interest rate swaps and how are they used to create synthetic floating rate bondsInvestment universe of floating rate funds Role of a fund managerHow floating rates perform in rising and falling rate environmentsWhether floating rate funds are a perfect hedge for rising ratesWhere does a floating rate fund fit in a debt asset allocation framework?Risks in these fundsReturn expectationsHis personal investing philosophy and how he invests  We also highly recommend you listen to this conversation with Suyash Choudhary of IDFC Mutual Fund on how to get your asset allocation right when investing in debt funds. This conversation perfectly compliments the conversation with Arvind on floating rate funds.  If you have any questions about floating rate funds or debt funds, do post them here.  We'd love to hear your thoughts on this conversation. Hit us up on Twitter.
An asset allocation framework for debt mutual funds with Suyash Choudhary
14-01-2021
An asset allocation framework for debt mutual funds with Suyash Choudhary
All the issues in the debt mutual fund space in the past 3 years have highlighted just how important it is to get your debt allocation right. But unfortunately, a lot of investors spend a lot of time thinking about equity in when deciding their asset allocation but take the debt part of the allocation for granted. And this has come back to haunt a lot of investors ever since the IL&FS crisis.  In the previous episodes, we have spoken at length about why you need debt in your portfolio and the right way to think about debt. But we figured investors need a framework on how to go about getting their debt asset allocation right.  So, we caught up with Suyash Choudhary, the Head of Fixed Income at IDFC Asset Management. In this absolutely brilliant conversation, Suyash talks about: How his career in the markets startedHow the Indian debt markets and debt mutual funds have evolved throughout his careerThe core reason for having debt in a portfolioCore and satellite approach to debt asset allocationPitfalls of diversification in debtIs it wise to rely on common rules of thumb when investing in debtShould investors invest in credit risk or high yield funds?Biggest lessons for investors in the last 3 yearsHow should savers and retirees think about the current challenging low-interest rate environment?His personal investing philosophy, investing mistakes, lessons and favourite books You can check out these previous conversations on investing debt:   Understanding what's happening in the debt markets with R Sivakumar, CIO of debt at Axis Mutual Fund Should you invest in debt mutual funds with Arvind Chari of Quantum Mutual Fund If you have any questions on the topics discussed in the episode, do post them here. You can also check out the Varsity module on personal finance to learn more about the basics of debt mutual funds
The right way to invest in mid-cap funds and small-cap funds with Rahul Singh
24-10-2020
The right way to invest in mid-cap funds and small-cap funds with Rahul Singh
One of the things that investors struggle with the most is with having the right expectations when investing and we've talked about this in the previous episodes as well. Mid-cap funds and small-cap funds tend to have higher returns than large-cap funds. But what most investors don't realize is that those higher returns come with a cost - that is higher risk or volatility. Most often than not, they just look at line charts comparing large-cap funds with mid and small-cap funds without looking at the deep and sharp drawdown and invest. If you look at the inflows and outflows of mid-cap and small-cap funds, you can clearly see that most retail investors tend to invest in these funds when they have already gone up and sell when they crash. So, in this conversation, I caught up with Rahul Singh, the Chief Investment Officer (CIO) of Equities at Tata Asset Management. In this conversation Rahul talks about: Whether the Indian markets are too small enough for good opportunities the nature of mid and small caps and how should investors think about them and allocate to them. His own investing philosophy and that of Tata Mutual FundHis thoughts on the current market phaseCurrent market valuationsInternational diversificationLarge-caps vs mid-caps. Is it the right time to invest in mid-caps and the case for investing in mid-caps and small-capsHow to invest in mid-caps and small-capsHis own investing philosophyInvesting mistakes and lessons Prateek Singh is the founder of LearnApp, an online learning platform with courses on investing, personal finance, trading and more, do check it out.
Making sense of the markets that don't make sense with Anand Radhakrishnan
07-10-2020
Making sense of the markets that don't make sense with Anand Radhakrishnan
To say this year has been a roller-coaster ride for the markets would be an understatement. A lot of new investors saw their first serious market crash since 2008, although it didn't last as long, it was brutal nonetheless. But what was surprising was the dramatic recovery even as all the economic data was dismal. We wanted to make sense of the disconnect between the real economy and the stock market and also how investors should look at investing going forward. So Prateek caught up with Anand Radhakrishnan, the Chief Investment Officer of Equity at Franklin Templeton India. In this absolutely brilliant and wide-ranging conversation, Anand talks about:  The opposite journeys of the economy and the marketsThe major economic concerns, both Indian and globalThought on the return of inflation globallyHow should investors think about this current market phaseWhy are the markets going up when the economic data is grimThoughts on the current market phase and the factors that would determine the market direction aheadCurrent market valuations and concerns on potential overvaluation concernsSector leadership going forwardThoughts on goldHow Anand invests personallySome investing lessons he's picked up over his career Hope you folks enjoy this conversation with Anand. Prateek Singh is the founder of LearnApp, an online learning platform with courses on investing, personal finance, trading and more, do check it out.  The information contained in this communication is not a complete representation of every material fact and is for informational purposes only. Statements/ opinions/recommendations in this communication which contain words or phrases such as “will”, “expect”, “could”, “believe” and similar expressions or variations of such expressions are “forward – looking statements”. Actual results may differ materially from those suggested by the forward-looking statements due to risk or uncertainties associated with our expectations with respect to, but not limited to, exposure to market risk, general economic and political conditions in India and other countries globally, which have an impact on the service and / or investments. There may have been changes in matters which affect the security subsequent to the date of this communication. Stocks / Sectors / Securities mentioned may or may not form part of fund’s portfolio and do not constitute investment advice or recommendation to trade in stock/ sector/ security in any manner whatsoever. The AMC, Trustee, their associates, officers or employees or holding companies do not assure or guarantee any return of principle or assurance of income on investments in these schemes. Please read the Scheme Information Document carefully in its entirety prior to making an investment decision and visit our website http://www.franklintempletonindia.com for further details. Mutual Fund investments are subject to market risks, read all scheme related documents carefully.
Basics of ETFs and asset allocation with ETFs with Siddharth Srivastava
09-09-2020
Basics of ETFs and asset allocation with ETFs with Siddharth Srivastava
Index funds and ETFs are steading becoming popular among Indian investors as they realize the importance of costs and the fact that fund managers generating alpha is hard.  In the past year or so, we've discussed index funds and the merits of passive investing in multiple conversations but we haven't spoken much about Exchange Traded Funds (ETFs). The folks at Mirae are betting big on ETFs and they are launching a fund of fund (FOF) that invests in Nifty 50, Nifty Next 50, and Nifty midcap 150 ETF. This has the 2 benefits of equity taxation for the FOF and also the rebalancing inside the FOF is tax-free. So we caught up with Siddharth Srivastava, the head of ETF products at Mirae Asset India to talk about all things ETFs, index funds, and Mirae's new fund offering.  In this conversation we talk about: What an ETF is, how does it work and how is it different from an index mutual fundThe global and Indian ETF landscapeHis thought on why ETFs aren't popular among retail investorsLiquidity issues in ETFs and what should investors do when buying and selling ETFsWhy Mirae is launching index ETFs when it is known for its active fundsWhat makes the new Mirae Asset Equity Allocator Fund of Fund unique and it's advantagesHis thought son how investors can use Mirae Asset Equity Allocator Fund of Fund in a portfolioInvesting in this ETF vs buying the ETFs individuallyHis personal investing philosophy and his investing lessonsHis favourite books Please enjoy this conversation with Siddharth of Mirae.  We would love to hear your thoughts, feedback and suggestions on the podcast. Please do tweet your thoughts @CoinbyZerodha. You can also post your question on ETFs and mutual funds here on TradingQnA.