15 09, 2015

JP Morgan AMC Isolates Amtek Bonds Into A Side Pocket, Will Allow Redemptions of the Rest

By |September 15th, 2015|Categories: AmtekAuto, MutualFunds|Comments Off on JP Morgan AMC Isolates Amtek Bonds Into A Side Pocket, Will Allow Redemptions of the Rest

JP Morgan, which has been in the news because if refuses to let people exit short term funds (currently has a gate of 1% per day), has now offered a redemption proposal to “segregate” its funds.  The Proposal is complex but basically it’s like this:

11 09, 2015

Premium: Action Plan: What To Do With the Jitters In Corporate Debt Owning Mutual Funds

By |September 11th, 2015|Categories: Debt, MutualFunds, Premium|Comments Off on Premium: Action Plan: What To Do With the Jitters In Corporate Debt Owning Mutual Funds

CapM Premium Header

Today we’re going to look at debt mutual funds, and how they will be impacted when there are concerns that the debt they own has a potential of not being repaid.

Unless you’ve been living under a rock, you’ve heard of the crisis at Amtek Auto, and then that caused a crisis at JP Morgan AMC. Amtek Auto’s shares are near multiyear lows and when they were downgraded (12 notches! to essentially junk) everyone realized there’s a good chance the company may not be able to pay back the debt.

The Mark-To-Market Problem


28 08, 2015

JP Morgan AMC Takes A Big Hit on Two Short Term Debt Funds – The Sword of Potential Default in Amtek Auto?

By |August 28th, 2015|Categories: Debt, MutualFunds|13 Comments

Remember Amtek Auto? That company that fell big time on the exchanges and the official excuse was that it was taken out of the F&O category?

Well, that’s not that only thing that seems to have been hit. JP Morgan AMC’s short term debt funds have seen a large dip in their NAV yesterday. From Invest Mutual:

JP Morgan Short Term Income Fund  -3.38% – This is a short debt […]

10 03, 2015

Long Term Returns for Going “Direct” Can Give You Many Lakhs More

By |March 10th, 2015|Categories: Direct Plan, HDFC Mutual Fund, MutualFunds, Regular Plan|39 Comments

Last week, we wrote about how investing in Direct Plans vs Regular Plans could give an investor up to 0.7% extra returns annually. The differential is because of commissions that the distribtors get versus none in the Direct route. 

Take the HDFC Equity Mutual Fund, for instance. The Fund was started on January 01, 1995 with a starting NAV was Rs. 10. The Direct Plan was introduced in January 2013.

This is […]

5 03, 2015

Mutual Funds: Direct Plans Beat “Regular” Plans By 0.7% Per Year!

By |March 5th, 2015|Categories: Direct Plan, MutualFunds, Regular Plan|26 Comments

Mutual Funds have been in vogue as an investment class ever since their introduction in the 1960s with UTI introducing the first Mutual Fund in India. It has undergone a sea of changes and upgrades since those days, with public sector banks and other NBFCs throwing their hat in the ring as the years went by. The first private sector funds were set up in 1993, and this coincided with […]

9 02, 2015

Bonus Stripping and the Impact of Arb Fund Unwinding on the Market

By |February 9th, 2015|Categories: Arb Funds, Budget2015, Budgets, Charts, JM Fund, MutualFunds|25 Comments

You gotta hand it to Manoj Nagpal (@nagpalmanoj). (He’s a great guy with excellent insights on mutual funds!) In a conversation on the impact of converting arbitrage funds to debt funds, potentially in the budget, he spoke of the strange happenings at JM Mutual Fund’s Arbitrage scheme.

The Massive JM Fund Inflow

JM Arb Fund was one of the big recipients of investor money, which according to Manoj came in even before the budget (which was on July 10 or so). This money amounted to Rs. 5,500 cr. (approx). The entire idea was to do bonus stripping. That is: […]

6 02, 2015

Tax Arbitrage Using Arb-Funds To Be Removed?

By |February 6th, 2015|Categories: Arb Funds, Budget2015, Capital Gains Tax, MutualFunds|9 Comments

Value research says it’s likely that in the budget, Arbitrage funds will be considered debt funds for the sake of tax.

After the last budget (July 2014) you had to hold “debt” mutual funds for three years before they were considered long term. Equity funds, however, were tax-free after a year. A special species of such funds, called “Arbitrage funds” came into demand.

India loves the concept of fixed income, but […]

26 12, 2014

Closed Ended Mutual Funds: Why You Shouldn’t Bother

By |December 26th, 2014|Categories: ClosedEnded, MutualFunds|6 Comments

Many fund houses have come up with “closed ended funds” which have been the rage with distributors lately, largely (almost entirely) because of the much higher commission structure. Should you buy into the madness?

If it’s the rage with distributors because of commissions, the answer should be a BIG NO.

Let’s see why. Firstly, what the heck are closed ended funds?

Here’s a video we did a long time back:

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