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Zerodha Educate

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Masterclass on factor investing (smart beta) with Sankaranarayanan Krishnan- Part 2

Zerodha EducateFeb 12, 2024

00:00
01:29:12
Masterclass on factor investing (smart beta) with Sankaranarayanan Krishnan- Part 2

Masterclass on factor investing (smart beta) with Sankaranarayanan Krishnan- Part 2

In the first part of our conversation we spoke about absolute basics of factors investing and dove deep into the two major factors — low volatility (low vol) and momentum. We spoke about why these factors exist and the explanations, return expectations, and how to use them in an asset allocation framework.

For this episode, we focused on the other two factors—value and quality. We talk about how value as a factor is different from the popular "value investing", how to really measure the value and how to implement them. We also covered what is meant by quality, why it works and if it's a real factor.


Sankaranarayanan Krishnan is a quant fund manager at Motilal who has rich experience designing factor models and managing factor funds.


We hope you enjoy listening to this conversation

Feb 12, 202401:29:12
Asset Allocation: Building your own asset allocation model

Asset Allocation: Building your own asset allocation model

Asset allocation is one of those fancy-sounding terms. We all keep hearing about it non-stop everywhere, but very few investors think about it, and even fewer have a sensible asset allocation that works for them. At its simplest, asset allocation is not putting all your eggs in the same basket. In other words, it’s about spreading your money across different asset classes like equity, debt, gold, and real estate. This naturally leads to the question: how do I figure out a good asset allocation. Asset allocation is as much a science as it is an art.

The objective of asset allocation is to help you reach your financial goals. Coming back to the question of how you figure out a good asset allocation, there’s no perfect asset allocation that’s objectively good for everyone. There are multiple approaches, and each has its own pros and cons. For example, a naive asset allocation that has equal allocation to different asset classes is a perfectly sensible strategy in the right context and for the right type of investor.

In this episode, we caught up with Ashutosh Bhargava, fund manager and head of research at Nippon India Mutual Fund. Ashutosh manages the Nippon India Balanced Advantage Fund, among other funds. Given the nature of the fund, he’s thought deeply about the concept of asset allocation and its various dimensions. In this conversation, we talk about:

  1. His background and how he stumbled on asset allocation
  2. Various approaches to asset allocation
  3. Static asset allocation vs. dynamic asset allocation
  4. Selecting the right parameters to guide asset allocation decisions and their trade-offs

 

Jan 17, 202401:05:01
How sneaky UI designs manipulate your choices online | Regulating Dark Patterns
Oct 21, 202301:01:11
Prioritizing Mental Health for Traders: Insights from Lissun
Oct 10, 202351:30
Decoding the SEBI consultation paper on regulating financial influencers
Sep 07, 202345:03
Macroeconomics for dummies

Macroeconomics for dummies

Thomas Carlyle, the Scottish writer and philosopher, called economics the dismal science. I don’t know if you’ll agree but having read economics textbooks, I certainly think they’re dismal. They’re filled with unnecessary complexity, pointless jargon and theories that have been dead and buried for decades. While economics as a discipline has progressed, the textbooks used today are stuck in the dark ages.    

Then I came across Macroeconomics: An Introduction by Alex M Thomas and I regretted not having this as my textbook when I was studying. Though it’s meant to be a textbook, it doesn't read like one. It’s a brilliant book that weaves classical economic theories with excerpts from wide-ranging Indian literature to highlight the structural, social and cultural complexities of the Indian economy. It’s one of the very few books to do so. 

Apart from just making macroeconomics more relatable Alex introduces an alternative approach to understanding macroeconomics, which questions the dominant (marginalist) approach. This alternate approach is inspired by the works of the old masters like Adam Smith, David Ricardo, Karl Marx, John Maynard Keynes, and Piero Sraffa.   I learnt a lot while recording the podcast. I hope you enjoy listening to the conversation as much as I enjoyed recording it.   

Link to the book: https://www.amazon.in/Macroeconomics-Introduction-Alex-M-Thomas/dp/1108731996 

1:27 - About Alex M Thomas 

4:51 - What is political economy? 

6:35 - Theory of interest rates 

10:11- Why should you read this book? 

11:29 - The problem with economic teaching 

14:41 - How is this book different? 

15:41 - The dominant (marginalist) approach 

18:57 - How to approach economics 

22:32 - The economy as an embedded system 

26:10 - Theory of wages 

29:52 - Marginalist theory in policymaking  

34:15 - Theory of money

44:15 - Modern monetary theory

You can read the full episode transcript here.

If you have any questions or thoughts about the topics in the conversation, post them on TradingQnA.

If you enjoyed listening to this episode, do let us know @zerodhaonline on Twitter.


Feb 03, 202352:35
Indian asset management with Swarup Mohanty

Indian asset management with Swarup Mohanty

In the last 15 years, Indian asset management has grown leaps and bounds. One of the amazing success stories of this period has been Mirae Asset management, which is best known for its well managed equity funds. 

In this episode, I caught up with Swarup Mohanty, the CEO of  Mirae Asset Investment Managers (India). Swarup has been at Mirae since day 1 during a period when both Mirae and the Indian markets have grown immensely. I hope you enjoy listening to the conversation as much as I enjoyed recording it. 

In this episode, he speaks about: 

0:00 - Introduction 

2:55 - Influx of young investors into the markets 

5:55 - The evolution of Indian asset management 

10:15 - Thoughts on the current market cycle 

15:05 - The biggest mistakes investors make 

20:55 - What’s it like to be the CEO of Mirae? 

26:15 - Performance chasing 

31:17 - Are there too many AMCs in India? 

34:14 - Active vs passive  

If you have any questions or thoughts about the topics in the conversation, post them on TradingQnA.

If you enjoyed listening to this episode, do let us know @zerodhaonline on Twitter.

Jan 16, 202341:53
Money, war and a changing world order with Debashish Bose

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.

Jan 11, 202301:12:14
Masterclass on factor investing (smart beta) with Sankaranarayanan Krishnan

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: 

  1. How did he become a quantitative fund manager
  2. What are factors
  3. What drives the returns of factors
  4. Will factors continue working forward?
  5. Factor performance in India
  6. Are factors free lunch?
  7. Introduction to low volatility and momentum
  8. Why do low volatility and momentum anomalies exist
  9. Does the macroeconomic environment matter for factors?
  10. What would make low volatility and momentum stop working?
  11. Various approaches to implement low volatility and momentum strategies and what investors should know
  12. Are factors replacement for active funds?
  13. Factors funds, diversification and asset allocation
  14. Will factors always outperform marketcap-weighted indices?
  15. His personal investing philosophy
  16. Career advice for someone who wants to pursue opportunities in quantitative finance
  17. Book 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

Oct 15, 202201:59:45
Timeless principles of investing with Sankaran Naren
Aug 17, 202201:12:17
Why are debt fund NAVs falling?

Why are debt fund NAVs falling?

One topic we keep talking about on the podcast is debt funds. As we've alluded to numerous times in the show, most investors focus too much on the equity part of their portfolio and ignore the debt part. They often take debt for granted and invest based on recommendations or based on whatever partial understanding they have. This often ends up backfiring whenever there are bad phases in the debt markets like the IL&FS, DHFL, and Franklin episodes. 

The other risk that investors don't pay much attention to is the interest rate risk. Rising interest rates are bad for debt funds, and falling rates are good for debt funds. Given the strong inflationary pressures, RBI has hiked interest twice over the last month, and that has led to the debt fund NAVs falling. Predictably, over the last 3 odd months, the most common query from mutual fund investors was, “why are my debt fund NAVs falling?.”

So we caught up with Mahendra Jajoo, the CIO of Fixed income Mirae Asset India. In this conversation, Mahendra talks about:

  1. What's happening in the debt markets
  2. Why are debt fund NAVs falling
  3. Why are interest rates rising
  4. What's causing inflation?
  5. Why have debt in your portfolio?
  6. How should investors invest in a rising rate environment
  7. Tips on building a debt portfolio and much more

Hoep you find this useful. 

Jun 09, 202201:00:26
What's your retirement plan?

What's your retirement plan?

Dec 15, 202101:29:27
Navigating the madness in the markets with Kalpen and Sahil

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:

  1. Some key takeaways over the last 1-1.5 years
  2. How to make sense of inflation
  3. The disconnect between the real economy and the markets
  4. A bird's-eye view of the Indian and the global economy
  5. Are the markets in a bubble?
  6. Investing in the age of markets where central bank actions have a massive impact
  7. Why do investors stop investing in equities early? 
  8. What can be done to get people to stick with their investments
  9. How not to get carried away by all the madness around
  10. Asset allocation
  11. How to think about fixed income in a low-interest rate environment
  12. Keeping your behaviour in control and avoiding mistakes
  13. Can you pick the best fund or best fund manager in advance? Discussing Sahil's article on this. 
  14. International investing and the role of global funds in a portfolio
  15. The role of gold in a portfolio
  16. How the Indian mutual fund industry looks in the next 5-10 years
  17. Sahil and Kalpen's investment philosophies
  18. Book 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


Nov 01, 202101:00:33
An investor’s guide to shareholder meetings in India

An investor’s guide to shareholder meetings in India

The CFA Society India recently published the second edition of The Investor’s Guide to Shareholder Meetings in India. As investors, even though we hold stocks of various companies, we rarely think about our rights. Investors also rarely realize that by virtue of the shares they hold, they are entitled to voting rights in a company. It's a chance for them to question the management and engage with them so that they aren't taken for granted as minority shareholders. 

So we caught up with Sivananth Ramachandran, CFA, Director of Capital Markets Policy (India) and Amit Tandon, Founder and Managing Director, IiAS, who worked on the report to talk about: 

  1. The objective behind publishing the report
  2. Shareholder meetings post-COVID
  3. Basics of shareholder meetings
  4. Why don't retail investors attend these meetings
  5. Evolution of corporate governance in India
  6. Do the votes of retail investors count?
  7. Things to look for when analysing shareholder proposals put forth by companies
  8. ESG investing and the role of shareholders
  9. Shareholder activism and ESG
  10. Shareholder meetings in India vs other countries

and a whole lot more. 

Please enjoy this conversation with Sivananth and Amit. 

Here's the link to the An Investor's Guide to Shareholder Meetings in India.

If you have any questions about shareholder meetings and shareholder rights, do post them here on TradingQnA


Sep 19, 202152:31
Taking the long view with Prashant Jain

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: 

  1. His journey into the markets
  2. The evolution of our economy and the Indian markets
  3. What does a good business look like to him
  4. His research process
  5. His thoughts on portfolio construction
  6. What does being wrong look like
  7. His thought on using macro inputs in an investing framework
  8. Whether the opportunity set of stocks in Indian markets is limited
  9. The road ahead for India
  10. His thoughts on quality at any price
  11. Active investing vs passive investing
  12. Indian valuations, global valuations, rates and inflation
  13. Advice for aspiring analysts and portfolio managers
  14. How 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.

Aug 30, 202155:53
Does gold have a place in your portfolio?

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: 

  1. His journey into the markets
  2. His perspective of what happened in the markets last year
  3. What moves gold prices
  4. Why do Indians love gold so much?
  5. Historical performance of gold in India vs equities and bonds
  6. Pros and cons of various gold options like physical gold, gold ETFs, Sovereign Gold Bonds, Gold Mutual Funds etc
  7. What roles gold plays in a portfolio
  8. How much to invest in gold
  9. His thoughts on some popular arguments against investing gold
  10. Central banks actions and their impact on gold going forward
  11. How do Indian gold ETFs and Mutual Funds manage their gold, where do they store it, safety measures etc
  12. Things to keep in mind when picking gold funds
  13. His personal investment philosophy
  14. Some unique stories from his career
  15. Some 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. 

Aug 03, 202143:36
Part 2: Personal finance in challenging times with Rishad

Part 2: Personal finance in challenging times with Rishad

In part 1, Rishad gave a quick intro to personal finance if you are new to investing. The pandemic has put a lot of stress on people's finances. So in part 2, we decided to focus on how to manage your personal finances in these challenging times. 

In this part, Rishad talks about

  1. His experiences with investors during the pandemic
  2. How to prepare your finances in these difficult times
  3. Basics of health insurance
  4. Importance of having nominees for your investments and other accounts
  5. How to prepare for eventual market downturns
  6. How to think about philanthropy if you have the financial ability to help people in these trying times


Jul 14, 202136:13
Introduction to personal finance with Rishad Manekia

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:

  1. The right mindset for investors
  2. The first step in personal finance
  3. How to budget
  4. How to set goals
  5. How to invest for short term and long term goals
  6. Figuring out the right asset allocation for various goals
  7. Basics of insurance
  8. How to manage your behaviour during bad market phases
  9. How to review and maintain your personal finance plan
  10. The 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.

Jun 25, 202143:07
The right way to invest in ELSS mutual funds with Amit Grover
Mar 26, 202133:23
Introduction to momentum investing with Aman Singhania

Introduction to momentum investing with Aman Singhania

Though the momentum effect is widely known in developed markets like the US, it's still relatively unknown in India. Over the past few years, there's been growing interest in the momentum style of investing. UTI Mutual Fund recently launched India's first momentum index fund which tracks the Nifty 200 Momentum 30 Index. But investors often extrapolate the past returns of momentum as a style and tend to think that momentum will always deliver superlative returns.  So we caught up with Aman Singhania, the Vice President & Head of Index Development & Research at NSE India.

  1. In this conversation, we talk to Aman about:
  2. His journey into the markets
  3. What is the momentum style of investing
  4. Why does the momentum effect persist
  5. How is momentum measured
  6. How have momentum investing fared historically in the Indian markets
  7. Are market capitalization-weighted indices momentum oriented in disguise?
  8. Multi-factor investing
  9. How should investors think about momentum
  10. His investing philosophy

You can also check out the Varsity chapter on personal finance to dive deeper. If you have any questions, please do post them here

Mar 20, 202148:05
Introduction to floating rate funds with Arvind Subramanian

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:

  1. How his journey in the markets began
  2. The current Indian interest environment
  3. What are floating rate funds?
  4. How do they work
  5. What are interest rate swaps and how are they used to create synthetic floating rate bonds
  6. Investment universe of floating rate funds
  7.  Role of a fund manager
  8. How floating rates perform in rising and falling rate environments
  9. Whether floating rate funds are a perfect hedge for rising rates
  10. Where does a floating rate fund fit in a debt asset allocation framework?
  11. Risks in these funds
  12. Return expectations
  13. His 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

Feb 13, 202147:06
An asset allocation framework for debt mutual funds with Suyash Choudhary

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:

  1. How his career in the markets started
  2. How the Indian debt markets and debt mutual funds have evolved throughout his career
  3. The core reason for having debt in a portfolio
  4. Core and satellite approach to debt asset allocation
  5. Pitfalls of diversification in debt
  6. Is it wise to rely on common rules of thumb when investing in debt
  7. Should investors invest in credit risk or high yield funds?
  8. Biggest lessons for investors in the last 3 years
  9. How should savers and retirees think about the current challenging low-interest rate environment?
  10. 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

Jan 14, 202101:09:34
Understanding how debt & equity ETFs work with Pratik Oswal

Understanding how debt & equity ETFs work with Pratik Oswal

Motilal Oswal AMC is launching a new 5-year constant maturity G-sec ETF, the first one in India. It’s an interesting product for a lot of reasons. And also given that ETFs have been around for a while and investors have a lot of misconceptions. Today, we caught up with Prateek to talk him about how ETFs works and the new Motilal Oswal 5 Year G-Sec ETF.

In this conversation Pratik talks about: 

  1. What ETFs are and how they work
  2. Difference between ETFs and mutual funds
  3. ETF liquidity
  4. Do's and don'ts when buying and selling ETFs
  5. The Motilal Oswal 5 Year G-Sec ETF and what makes it unique
  6. Role of debt in a portfolio
  7. Common mistakes investors make when investing in debt funds
  8. Historic performance of the 5 Year G-Sec index across cycles
  9. Risks in the ETF
  10. Taxation of the new ETF and a whole lot more

If you wish to invest in the ETF: https://coin.zerodha.com/etf-sgb

Earlier episodes with Pratik:

Should you invest in index funds? - https://link.chtbl.com/owrqKj2y
The need for global diversification - https://link.chtbl.com/-NE9Jqzf

Dec 02, 202057:36
The right way to invest in mid-cap funds and small-cap funds with Rahul Singh

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:

  1. 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. 
  2. His own investing philosophy and that of Tata Mutual Fund
  3. His thoughts on the current market phase
  4. Current market valuations
  5. International diversification
  6. Large-caps vs mid-caps. 
  7. Is it the right time to invest in mid-caps and the case for investing in mid-caps and small-caps
  8. How to invest in mid-caps and small-caps
  9. His own investing philosophy
  10. Investing 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.

Oct 24, 202044:05
Making sense of the markets that don't make sense with Anand Radhakrishnan

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: 

  1. The opposite journeys of the economy and the markets
  2. The major economic concerns, both Indian and global
  3. Thought on the return of inflation globally
  4. How should investors think about this current market phase
  5. Why are the markets going up when the economic data is grim
  6. Thoughts on the current market phase and the factors that would determine the market direction ahead
  7. Current market valuations and concerns on potential overvaluation concerns
  8. Sector leadership going forward
  9. Thoughts on gold
  10. How Anand invests personally
  11. Some 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.

Oct 07, 202057:19
Basics of ETFs and asset allocation with ETFs with Siddharth Srivastava

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:

  1. What an ETF is, how does it work and how is it different from an index mutual fund
  2. The global and Indian ETF landscape
  3. His thought on why ETFs aren't popular among retail investors
  4. Liquidity issues in ETFs and what should investors do when buying and selling ETFs
  5. Why Mirae is launching index ETFs when it is known for its active funds
  6. What makes the new Mirae Asset Equity Allocator Fund of Fund unique and it's advantages
  7. His thought son how investors can use Mirae Asset Equity Allocator Fund of Fund in a portfolio
  8. Investing in this ETF vs buying the ETFs individually
  9. His personal investing philosophy and his investing lessons
  10. His 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

Sep 09, 202052:05
A step-by-step guide to investing in mutual funds - part 2

A step-by-step guide to investing in mutual funds - part 2

In part 1, Vidya spoke about why mutual funds, having the right expectations, setting goals, importance of asset allocation, and how to pick an equity fund. We figured given all the issues, the topic of debt mutual funds deserves a separate episode unto itself. Debt is supposed to be the boring part of your portfolio that provides stability while equity provides growth. But we've seen that investors driven by past returns, star ratings, and poor understanding of the various categories of funds have seen losses in the debt part of their portfolios. In this episode Vidya talks about:

  1. The need for a debt fund in a portfolio
  2. How to analyse and pick debt funds - the do's and dont's 
  3. Understanding credit risk and duration risk
  4. How to use gilt funds
  5. What is rebalancing, the need for rebalancing and how tor rebalancing?
  6. Growth vs dividend plans and why it makes NO sense to invest in dividend plans
  7. Vidya's investing philosophy
  8. Her favourite books

Do check out PrimeInvestor for some insightful perspectives on investing, fund selection, portfolio construction by Vidya and her colleagues.

You can also check out this LearnApp course on the basics of investing in mutual funds.

Jul 10, 202030:17
A step-by-step guide to investing in mutual funds - part 1

A step-by-step guide to investing in mutual funds - part 1

Since Feb 2020, we've seen historic and unprecedented volatility in the Indian markets. We saw the fastest fall in the markets and also one of the fastest recoveries in the history of the Indian markets. All this was within a space of a few months. Surprisingly, we are seeing a sharp uptick in the number of new investors enter the markets, but the mistakes some of them are making are the same old ones. Over the past few months, we've had conversations with some of the most experienced participants in the markets to put this insanely volatile market phase in perspective.

But we also realized that investors were lacking context on how to think about investing even before they put their first rupee to work. So we figured, there's no better time than this to do this. Given that Vidya has been interacting with investors for the better part of a decade in various capacities, we reached out to her and she graciously agreed to talk to us.

In this conversation, Vidya talks to Prateek about:

  1. How to think about risk and reward when investing
  2. How to set goals and why a goal-based investing framework helps you invest better
  3. How to have returns expectations
  4. How do you figure out your risk tolerance
  5. What the hell is asset allocation, why it matters and how to figure out the right asset allocation for you
  6. Active vs passive funds
  7. How to pick an equity fund
  8. How to sort through the various styles of funds and how to include them in your portfolio
  9. Do's and don't when picking an active funds
  10. Growth vs dividend plans

Once you have heard the conversation, you will have a framework on how to think about investing, why you need to invest, set goals and pick your first fund. 

Do check out PrimeInvestor for some insightful perspectives on investing, fund selection, portfolio construction by Vidya and her colleagues. 

You can also check out this LearnApp course on mutual funds. 

In part 2 of the conversation, we'll talk about the right way to pick debt funds, rebalancing and portfolio maintenance.


Jul 04, 202055:28
Introduction to asset allocation with Radhika Gupta

Introduction to asset allocation with Radhika Gupta

In this episode, Prateek (Founder of LearnApp) caught up with Radhika Gupta, the CEO of Edelweiss Mutual Fund. Radhika started her career with McKinsey and later joined AQR - the pioneering quantitative asset manager. She then started her own hedge fund which was acquired by Edelweiss Financial Services in 2014. She also led the acquisitions of JP Morgan Mutual Fund and Ambit's AIF business and became the CEO of Edelweiss MF.

In this wide-ranging conversation Radhika talks about: 

  1. Her experience at AQR
  2. Common behavioural mistakes that investors commit
  3. What is asset allocation why is it important
  4. Static vs dynamic asset allocation
  5. Decodes balanced advantage funds, how they work, the various models etc
  6. What are equity savings funds and how do they work
  7. What makes Bharat Bond ETF special and the advantages
  8. How she invests personally 

and a whole lot more...

Please enjoy this conversation with Radhika. Do let us know your feedback by tweeting to us @zerodhaonline


May 27, 202043:07
How to build a robust long term portfolio for all markets

How to build a robust long term portfolio for all markets

As we publish this episode the markets continue to remain volatile and the Nifty 50 and Nifty Midcap 100 are down about 25% while the Nifty Smallcap 100 index is down by 33% year to date. We understand that these can be nerve-wracking times for you. With that in mind, over the last couple of weeks, we've published conversations with some of the smartest and most experienced people in the Indian markets, people who've seen the previous bear phases. And in this episode, Prateek Singh (Founder of LearnApp) caught up with I. V. Subramaniam (Subbu), the MD, CEO & CIO of Quantum Advisors. Subbu has over 25 years of experience in the India markets and has pretty much seen every market phase in India, including the Harshad Mehta scam, dot com crash, the 2008 crisis among others. In this conversation, Subbu talks about:

  1. How got started in the markets
  2. What exactly was the Harshad Mehta scam and what he personally learnt from it
  3. What you shouldn't do in a bear market
  4. Common behavioural mistakes investors make
  5. How to build portfolios during such bear market phases
  6. How to avoid value traps if you are a direct equity investor
  7. His thoughts the underperformance of value style of investing
  8. Importance of asset allocation
  9. How he personally invests

and a whole lot more. 

Please enjoy this conversation with Subbu. 

May 08, 202042:37
Understanding what's happening in the debt markets with R Sivakumar

Understanding what's happening in the debt markets with R Sivakumar

Whenever there is volatility, equity markets get all the attention. Bonds typically don't move around as much as equities and hence they seem boring to most people. Moreover, the Indian bond markets are extremely shallow and are dominated by institutions. But the bond markets send far more useful and actionable signals about companies and the economy at large are far more insightful than movements of stock prices and indices. 

And debt mutual funds, the most accessible products to retail investors are dominated by institutions and HNIs. And there are also a lot of misconceptions about the role of debt in portfolios. So, Prateek Singh (Founder of LearnApp) caught up with R Sivakumar, Head of Fixed Income at Axis Mutual Fund - THE best person to talk about all things debt and bond markets. 

In this conversation we talk about:

  1. When happens in a bond market when the equity markets crash
  2. A birdseye view of the Indian and global economy as COVID-19 spread through the globe
  3. Factors that move bond prices
  4. RBIs recent actions to provide liquidity 
  5. Why do you need debt in your portfolio
  6. How not to choose debt funds
  7. Gilt funds and their use

and a whole lot more...

Please enjoy this conversation with Sivakumar of Axis MF. Please let us know your feedback on @zerodhaonline on Twitter or on iTunes ratings.  

Apr 27, 202050:21
The need for global diversification with Pratik Oswal

The need for global diversification with Pratik Oswal

One of the most prevalent yet ignored biases among investors is called the home country bias - the tendency of investors to invest all or most of their money in the country they live in. To give you some context, India is just 2% of the world marketcap - meaning a vast majority of the investment opportunities lie outside India. And old economy stocks dominate the Indian indices. We don't have the Indian listed equivalent of Apple, Google, Netflix, Amazon, Facebook etc, the biggest and most innovative tech companies in the world. 

We've all been taught that we should diversify our portfolios across asset classes such as stocks, bonds, gold, real estate, etc. But In this wide-ranging conversation, Pratik Oswal, Head of Passive Funds at Motilal Oswal AMC talks to Prateek Singh (Founder of LearnApp) about:

  1. What is global diversification and why it is needed
  2. The opportunities and risks of global diversification
  3. What does depreciation of rupee means and how it adds to returns
  4. How to allocate to global funds in a portfolio
  5. Comparing the S&P 500 and the Nasdaq 100 index funds

And a whole lot more...

Note: We had recorded this podcast with Pratik before Motilal Had received the approval for launching the Motilal Oswal S&P500 Index fund. We recorded an extended conversation specifically about the new fund from the 41: 50 mark.  

Please enjoy this conversation with Pratik Oswal of Motilal AMC. 


We've also launched a Zerodha Paathshala, a Hindi Podcast. You can check out the latest conversations here

Apr 18, 202059:16
Investing through good and bad times with Kalpen Parekh

Investing through good and bad times with Kalpen Parekh

Since mid-February, there has been a sharp sell-off in the markets as the Corona Virus pandemic spreads through the globe. As we record this, Nifty 50 is down 25% while Nifty Mid-cap 100 and Nifty small-cap 100 indices are down by over 30% and 40% respectively. This is the sharpest fall in the markets since the 2008 financial crisis. And you might be worried about your investments. So, we decided to talk some really smart people who've seen various cycles in the Indian markets to bring you some perspective on what to do and what not to do.

In this conversation, Prateek (Founder, LearnApp) talks to Kalpen Parekh, the President of DSP Mutual fund. Kalpen has over 2 decades of experience in the Indian markets. He was previously the Managing Director at IDFC Mutual Fund. He has also served in Birla Sun Life AMC and ICICI Prudential AMAC after beginning his career with L&T Finance.

We had coincidentally spoken to Kalpen when there was some volatility in the markets last time, you can listen to the old episode here

Apologies for the poor audio quality. Given the work from home situation, there was a drop in the quality. 

Apr 07, 202046:33
Should you invest in index funds? Getting passive with Pratik Oswal

Should you invest in index funds? Getting passive with Pratik Oswal

Index investing (passive investing) has become increasingly popular in the last decade across the world. Trillions of dollars have flown out of active mutual funds into low-cost index funds. But in India, these are still early days for indexing, we just have about Rs 7700 crores in index funds. Although Rs 1.6 lakh crores is invested in index exchange traded funds (ETFs), most of it from the Employees' Provident Fund Organisation (EPFO) and retail investors predominantly invest in index mutual funds.  In the past few years, there has been small by steadily increasing chatter about the merits of low-cost index funds in India. Given the growing underperformance of actively managed large-cap funds, there also seems to be a growing realization that low-cost index funds may be the best way to get large-cap exposure. In the last few months, Motilal Mutual Fund has launched a suite of index funds tracking the Nifty 50, Nifty Next 50, Nifty Midcap 150, and Nifty Smallcap 250, and Nifty 500 indices. 

In this sweeping conversation with Pratik Oswal, Head - Passive Funds at Motilal Oswal Asset Management Company talks to Prateek Singh (Founder of LearnApp) about: 

  1. How he got started in finance
  2.  What are index funds and how do they work? 
  3. The basics terminology of index funds
  4. Impact and importance of costs when investing in mutual funds
  5. His take on the active vs passive debate
  6. Are index funds the best way to get large-cap exposure?
  7. Liquidity concerns in midcap and smallcap stocks
  8. Growth of index funds in India
  9. Scope of smart beta funds in India
  10. Portfolio construction with index funds
  11. Motilal's previous experiment with index funds

Note: The latest AUM in index funds is Rs 7717.16 crores. When the podcast was recorded it was just a little over Rs 6500 crores. 

Dec 31, 201954:26
Dhawal Dalal talks about the new Bharat Bond ETF and the Indian debt markets

Dhawal Dalal talks about the new Bharat Bond ETF and the Indian debt markets

The Bharat Bond ETF by Edelweiss Mutual Fund opens for subscription today. This exchange traded fund (ETF) holds AAA-rated bonds issued by public sector enterprises. The Bharat Bond ETF is unique in a lot of respects. In this wide-ranging conversation, Dhawal Dalal, Chief Investment Officer - Fixed Income of Edelweiss Mutual Fund talks to Prateek Singh (Founder of LearnApp) about:

  1. Why the Indian corporate bond market is shallow
  2. Reasons for the lack of retail participation in the debt markets
  3. The role of debt in a portfolio and how to use debt instruments in a portfolio
  4. And finally, explains in detail what the Bharat Bond ETF is, the structure and the risk & rewards of the ETF

You can also check out this companion LearnApp video and this TradingQnA post for more details about the ETF.

Click here, if you wish to invest in the Bharat Bond ETF. 


Please enjoy this conversation with Dhawal.

Dec 13, 201943:04
Should you invest in debt mutual funds?
Aug 02, 201954:19
How to Invest for the long term across market cycles with Kalpen Parekh

How to Invest for the long term across market cycles with Kalpen Parekh

These are unnerving times for investors with the markets being volatile. Long term investors should ideally embrace volatility, but we are seeing investors stop their investments. Volatile markets tend to induce investors to most often than not, make all the wrong choices. When markets undergo a period of under-performance, investors tend to stop their SIPs or worse yet redeem their investments.

This during a time when they should do the exact opposite. As an Investor, you should embrace volatility because you get to average your investment at various price points.

In this illuminating webinar, Kalpen Parekh (President, DSP Investment Managers) talks about:

1. The do's and don'ts of investing.  

2. The recent under-performance of mid and small cap indices vs the Nifty 50 large-cap index.

3. How should you approach investments in mid and small-cap funds?

4. How Indian markets have performed over various market cycles and the parallels with the performance of the past 1-year.

5. How to think about debt allocation in your portfolio and some historical context on the performance. 

The presentation used in the webinar: http://bit.ly/2J6F4r6

Here's the previous webinar on introduction to debt mutual funds by Kalpen: https://youtu.be/5AxNrSQrMg4

Jul 19, 201939:20
Introduction to contra funds

Introduction to contra funds

Contra funds is a new and unique category that was carved out in the recent scheme reclassification by SEBI. By the very definition, these funds follow a contrarian investment approach and swim against the tide. These funds invest in stocks that are out of favor, special situations, and stocks that can turnaround. Taher Badshah is the Chief Investment Officer (Equities) at Invesco Mutual Fund. He also manages the Invesco India Contra Fund. In this webinar, he explains how a contra fund works, the investment process, and how to use these funds to build your portfolio. 

Apr 12, 201944:56
Accrual management (Part 4)
Mar 30, 201950:26
Introduction to bond Duration (Part 3)
Mar 23, 201944:26
Making money in bonds (Part 2)
Mar 15, 201941:56
Introduction to bonds (fixed income) - Part 1

Introduction to bonds (fixed income) - Part 1

The awareness about debt schemes in limited due to a variety of reasons. But having a  fixed income or debt component in your portfolio is essential to building a diversified portfolio. In part 1  of the Series, Winston Noronha, Head of content and learning and development at IDFC mutual fund explains the basics of bonds, the various types of instruments, and sets the stage before diving deep into the complexities of fixed income. 

Just to set the context the bond market in India is still in its nascency. The corporate bond market today just accounts for 16% of the Indian GDP vs 73% in South Korea and 120% in the US. The bond market in India is  dominated by government bonds. Even in mutual funds, institutions are the dominant investors with 54% of the AUM. Comparatively, 87% of assets in equity-oriented schemes are held by retail investors. 

Winston has a career spanning 25 years in financial services with a  background in financial advisory, sales, and research. He has held in strategic and leadership roles in these areas. In recent years Winston is living his passion. He is an ardent believer of appropriate financial advice and financial awareness. He works at the intersection of sales, finance, and behavior. He is a proponent of experiential learning by using high engagement and innovative instructional delivery.

Link to the original webinar: http://bit.ly/2RxKla1

Mar 08, 201934:40
Best practices of value investing with Raamdeo Agrawal

Best practices of value investing with Raamdeo Agrawal

Raamdeo Agrawal, co-founder of Motilal Oswal financial services is one of India's most prominent value investors. His annual wealth creation studies are a treasure trove of insights. In this conversations he talks about how he got started as an investor, his framework for value investing, his learnings from Warren buffet and more. 

He also talks about one of the most important aspects in value investing - recognizing the difference between price and value. 

This is a masterclass on all things investing. Enjoy the conversation. 

Mar 01, 201943:01
Mahesh Patil on Indian macros and the recent market trends

Mahesh Patil on Indian macros and the recent market trends

Mahesh Patil is the Co-Chief Investment Officer of Aditya Birla Sun Life  AMC and one of the biggest names in the fund management space. He leads  a team of twenty, comprising fund managers and analysts, managing  around INR 88,590 crores in equity assets.  


In this conversation with Karthik Rangappa, Mahesh talks about:  

1. Overall macros of India and the factors that will influence growth
2. Earnings growth and corporate profits
3. The divergence between Nifty and Nifty small and mid-cap indices
4. The issue of pledged promoter holdings in mutual funds
5. Navigating quality and junk stocks
6. Passive investing and ETFs 

Feb 22, 201925:02
Everything you need to know about Liquid Exchange Traded Funds (ETFs)

Everything you need to know about Liquid Exchange Traded Funds (ETFs)

Having idle cash in your trading account is a bit of a conundrum. In this episode, Anil Ghelani Senior Vice President - DSP Mutual Fund explains how liquid ETFs work, the underlying securities, and how you can use a Liquid ETF for cash management and to plan your trades.

Feb 16, 201936:46
How to build a goal-oriented mutual fund portfolio

How to build a goal-oriented mutual fund portfolio

Most of us today invest without clear goals in mind. But the thing about setting goals for your investing is that it helps you quantify them. It also allows you to easily set expectations and choose the right instruments to achieve those goals.

In this conversation Aashish P Somaiyaa, CEO of Motilal Oswal AMC explains how one should go about setting goals and invest to achieve them. 

Happy investing! 

Feb 08, 201939:19
How to reduce the possibility of losses & volatility in equity portfolios
Feb 01, 201934:06
Introduction to multi-cap mutual funds
Jan 25, 201928:35
International diversification with mutual funds
Jan 18, 201937:44
Investment opportunities in debt mutual funds
Jan 13, 201938:60