M. Pattabiraman's Blog, page 98

Index fund tracking error screener May 2023

This index fund screener is based on tracking error and returns difference wrt benchmarks (aka tracking difference). The screener will help users evaluate how efficiently an index fund has tracked its underlying benchmark. It will also help a understand how tracking a midcap index or the Nifty 100, 500 differs from tracking the Sensex or...

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Working with a fee-only advisor? Please participate in this short survey

As you may know, freefincal has maintained a curated list of fee-only SEBI-registered advisors since 2014. In Sep 2017, many of those advisors formed an informal association – fee-only India (FOI), which has now grown bigger. A fee-only advisor does not get any commission or remuneration from any product manufacturer (insurers, mutual funds etc.). They work...

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Fixed income options for non-salaried individuals

Dr Rajesh Mevada writes, “What are debt fund / fixed income options for non-salaried, self-employed professionals and businessmen? For salaried investors, it is compulsory to contribute to EPF/ VPF, or NPS, which automatically takes care of its debt component. But for non-salaried investors, choosing debt fund investment is a bit difficult. So another relevant question...

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NPS to allow multiple annuity purchase for retirement income optimization

In a circular dated 10th May 2023, NPS regulator PFRDA announced that retirees can now buy multiple annuities for “Retirement Income Optimization”. However, there are still considerable limitations and much more flexibility is required. The circular says (1) In the interest of optimising subscribers’ retirement income and providing them with a wider range of annuity...

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ETF tracking error screener May 2023

This is an ETF screener based on tracking errors and tracking differences (ETF return minus index return). The screener will help users evaluate how efficiently an ETF has tracked its underlying benchmark. The tracking error is the ETF’s standard deviation minus index monthly return differences. The lower the tracking error, the more efficient the ETF...

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What to do if an Adani-like situation affects your mutual fund investments?

A reader says, “I get the rebalancing and how the backtests prove how it works for most market conditions. But what about the quality of the assets we have chosen for investment?” “For example, if an Adani like situation arises for a fund house? How do we handle that? Well, one may say we must...

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Can we use the information ratio to analyze index funds?

A member of the freefincal investor circle asks, Can we use the information ratio to analyze index funds? What is the information ratio? It is a measure of outperformance per unit risk associated with the outperformance. In other words, the information ratio is a risk-adjusted measure of the fund manager’s effectiveness in beating the benchmark. How...

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How important is turnover ratio in choosing a mutual fund?

A reader asks, “How important is turnover ratio in choosing a mutual fund? While selecting an index fund, should Turnover ratio be considered?” The portfolio turnover ratio is the lower of the total of new stocks purchased or sold over 12 months, divided by the fund’s average assets under management (AUM). For example if a...

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How should I plan for retirement if I have a pension?

One quesion many readers ask is, if I already have a pension, how should I plan for retirement? A user of our robo advisory tool writes, “I am studying and trying to understand the robo advisory tool. In the income flooring sheet, annuity laddering and DIY Bucket, I found that annuity is needed to be purchased”....

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Are there any debt index funds in India?

A subscriber to our YouTube channel writes, “Do we have any debt fund like benchmark Nifty 50 Index fund for 7-10 years period. I just want to follow only one fund. Of course, the major chunk is EPF, PPF, and ESOP. This is to build slowly in debt space for a future 25% allocation”. “I...

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