InvestWealth

Happy to share that I have recently cleared the NISM-Series-XIII: Common Derivatives Certification Examination . 

 

 

SIF are specialised products which uses derivatives and advanced portfolio strategies not for speculation but for:

Risk management and hedging

Portfolio efficiency

Controlled use of leverage

Managing downside during volatile market phases

SIF requires a deeper understanding of how derivatives can be used responsibly within regulated investment structures, keeping investor suitability and risk controls at the core.

Many new products of SIF are already out woth initial investment of 10 lac. The learning journey continues with a sharper focus on evaluating and guiding SIF strategies in a disciplined, investor-first manner.

Which is good for SWP. Aggressive hybrid fund or small cap fund.

I did 10 year data study of 2 funds and below are my 5 finding.

Fund name:
Aggressive hybrid: DSP Aggressive hybrid
Small cap: DSP small cap
(These funds are NOT recommendations — used only for learning.)

Details
Investment: 1cr
Monthly SWP: 50000
Duration: 10 Years completed starting from Nov 2015 with 120 withdrawals received. Total 60 lac received by investor.

 Insight 1
1. DSP aggressive hybrid returns are 12.79% and current value is 2.17 cr
2. DSP small cap returns are 16.56% and current value is 3.2 cr

Small cap being a winner here.

 Insight 2.

Lets Understand the journey.

Nov 2015 to Dec 2017. Initial journey. A fairly stable markets and bull market in 2017 especially in Small cap.

1. DSP Aggressive hybrid value increased from 1 cr to 1.24 cr.
2. DSP Small cap created huge wealth from 1 cr to 1.54 cr.

Small cap did well in bull markets.

 Insight 3. Jan 2018 to Feb 2020. ( Pre- covid). Fairly weak market period.
1. Aggressive hybrid fund value stayed at 1.24 cr only. No gain and No loss.
2. Here comes the surprise. Small cap value declined from 1.54 cr to 1.09 cr. A massive fall of around 45 lacs.

Now here comes the volatility part of journey. Aggressive hybrid score big here.

Markets are uneven. You think and decide?
A smoother journey or exciting but uneven journey?

 Insight 4. Covid fall. March and April 2020.

Aggressive hybrid fund did well. It fell from 1.24 cr to 96.3 cr. A fall of around 28 lac
Small cap fund fell from 1.09 cr to 75 lac. A further fall of 34 lac.
Winner is aggressive hybrid fund in falling market. It fell but less. During major drawdowns, capital protection matters — especially in SWP.

 Insight 5. Post covid rally.
You know the answer right.

Aggressive hybrid increased from to 2.17 cr and Small cap rallied big to 3.2 cr.

 Key Takeaway
Don’t evaluate only end-value returns — always analyze the journey.
Small caps delivered higher final value, but with much deeper volatility dips.
Aggressive Hybrid offered a far smoother SWP experience, especially during weak and falling markets. In SWP, Stability often matters more th

*WHERE ARE WE. Market Insights: Valuations*

Currently, Indian equity markets are trading above their long-term historical averages across all segments:

1. Large Cap (NIFTY 50):
• Present P/E: 20.6
• Historical Average: 18.9
• Trading at a 9% premium.

2. Mid Cap (NIFTY Midcap 150):
• Present P/E: 27.3
• Historical Average: 24.9
• Trading at a 10% premium.

3. Small Cap (NIFTY Smallcap 250):
• Present P/E: 25.0
• Historical Average: 17.8
• Trading at a 40% premium.

What This Means
• Large & Midcaps: Valuations are somewhat stretched but not excessive. Earnings growth will need to support these valuations going forward.
• Smallcaps: Trading at a significant premium (40%). This means expectations are already very high, and risks of volatility or corrections are higher if earnings disappoint.
• Earnings should make comeback and that’s important. Q3 and Q4 is key. GST and income tax reduction impact needs to be seen.

Our Approach
• Continue with a disciplined SIP/ STP strategy and deploy
• Lumpsum: Diversify across Debt, Hybrid and Large cap to large extent. . Keep STP in Flexicap, multicap, value, mid and small cap
• Avoid overexposure to smallcaps at current levels. SIP preferred.
• Keep Cash position to deploy during volatility. Overall I think its buy on dips market with strong growth potential.

On this auspicious day of Shri Krishna Janmashtami, may Lord Krishna bless you with happiness, good health, and prosperity. Wishing you and your family peace, love, and endless joy. 🙏✨

Wealth is not built overnight. Start planting your financial tree today 🌳🌳🌳

Some Big Quarter 4 results and Dividend in next few days.

*Star Ratings and Mutual Funds?*
We often rely on mutual fund star ratings to make investment decisions.
• ⭐ = Poor fund.
• ⭐⭐⭐⭐⭐ = Top fund. Lets buy.

Ratings like 1-star or 5-star reflect past performance, but should not be the only basis for choosing a fund.

Great Past performance does not mean great future performance

Key Points to Understand:
1. Ratings are backward-looking – they only reflect the past, not future market conditions.
2. Markets change – a fund that performed well before may not do well in a different cycle.
3. Ratings are not permanent – funds can move up or down in ratings based on changing performance.
4. Now lets say 1 star rated fund management is changed and new fund manager is experienced. Now, this fund may perform.
5. Lets say a 5 star rated fund gave great returns in bull market but its volatile. It may underperform.

A More Reliable Approach:
Rating may be a starting point to evaluate the fund but should not be key weight in your decision making.

You may look for

• The fund’s consistency across various market cycles

• Investment strategy and how it aligns with your financial goals

• Fund manager, AMC and their past track record. Check for consistency for fund manager.

• Rolling returns to check consistency of returns

• Portfolio composition. You will get many insights. For example, high portfolio turnover ratio may mean Fund is taking lots of short term call. Can be highly volatile.

• Risk management. Check standard deviation, sharpe ratio etc.

Noise vs Numbers: Are FDs really over?

The narrative says: "No one is doing bank deposits anymore."

Reality says otherwise.
HDFC Bank FY25:
• Deposit Growth: 15.8%
• Loan Growth: 7.3%
ICICI Bank FY25:
• Deposit Growth: 14.0%
• Loan Growth: 13.9%

📌 Even quarterly numbers show deposits growing faster compared to loans.

This can mean many things.

- Market volatility may have pushed many investors to increase their weight in stable asset class like Debt ( FDs)
- Banks are getting conservative in loan growth after years of high loan growth.

✅ Despite market noise about the decline of traditional saving instruments, FDs and bank deposits are still very much alive. Bank deposits are far from over.

When Momentum Misleads – What Gensol Engineering Taught Us About Investing 💡

Let’s look at the numbers first:

🔹 March 2023: 2,299 investors held Gensol stock
🔹 December 2024: 94,031 investors!
(Source: screener)

That’s a 40x jump in investor count… only to face a sharp blow when the company got flagged for poor corporate governance.

Imagine putting 10% or more of your hard-earned money into one trending stock… and watching it erode overnight.

Now let’s look at mutual funds 👇
✅ Over 1,700 schemes in India
✅ Only 1 fund held Gensol — with just 0.32% allocation

Why? Because skilled fund managers don’t just chase hype.
They filter companies through strict lenses:
🔍 Management quality
🔍 Governance
🔍 Sustainability
🔍 Valuation discipline

They also follow something retail investors often ignore: diversification.
One mistake won’t sink the ship.

Large caps presents opportunity. Caution in small caps