Active Strategy:-
Active investing, as its name implies, takes a hands-on approach and requires that someone act in the role of a portfolio manager.
The goal of active money management is to beat the stock market’s average return
(2/18)
Index Funds have been a red hot equity passive Mutual Fund strategy in the last 10 years!
A thread🧵explaining why index funds should be a part of ur equity MF portfolio!
Hit "Retweet" to educate maximum investors
Let's go👇
(1/18)
Active Strategy:-
Active investing, as its name implies, takes a hands-on approach and requires that someone act in the role of a portfolio manager.
The goal of active money management is to beat the stock market’s average return
(2/18)
Passive investing entails a non-active role on part of the investor.
When you invest in a diversified portfolio with low costs and a long-term horizon, it tends to deliver returns comparable to the market average.
(3/18)
Index Fund invests in stocks that imitate a stock market index like the Nifty, Sensex.
These are passively managed funds which means that the fund manager invests in the same securities as present in the underlying index in the same proportion.
(4/18)
The assets under management (AUM) of passive products will grow eight times from the current levels of ₹3 trillion to ₹25 trillion by 2025
Passive assets will grow to constitute 37% of the overall assets in the MF industry by 2025
(5/18)
Both ETFs & index funds are passive products that track an underlying index.
ETFs track a particular index, such as the Sensex or the Nifty, and trade on a stock exchange, just like stocks
Liquidity can be a problem in ETFs
(6/18)
Costs are higher in index funds than in ETFs
However small retail investors should stick to index funds!
(7/18)
Significant underperformance of actively managed over the last 10 years as can be clearly seen below!
Nearly 67% of Large-cap funds underperformed the index over a 10-year horizon
This gives additional impetus to index funds
(8/18)
Therefore following an Active+Passive Mutual fund strategy is a must
(9/18)
1. Nifty 50 Index Fund
2. Nifty Next 50 Index Fund
3. Nifty 100 Index Fund
4. Sensex Index Fund
A list👇
(10/18)
1.Cost
Most active funds charge anywhere b/w 0.8% to 1.2% of AUM on the Direct Plans
Index funds are available for as low as 0.06% to 0.30% of AUM
(11/18)
There is no guarantee if the Active fund will outperform even after paying higher fees
Index funds make sure u get market returns and lower the probability of underperformance wrt index
(12/18)
Index funds follow an automated,regulation-based investment method.
This eliminates human discretion/bias while taking investment decisions.
(13/18)
These funds invest in a proportion similar to that of an index ensures that the portfolio is diversified across all sectors.
Thus, an investor can seize the probable returns on the larger segment of the market through a single index fund.
(14/18)
Tracking error(TE):-
TE is the difference between the scheme’s return and the benchmark index’s return.
(15/18)
(16/18)
More from Aditya Shah
What to do when u first save money?❓
Do u straight away invest in equities/shares?🤔
A simple thread🧵explaning how u can systematically create a structured portfolio on ur own.
Hit "Retweet" to educate maximum retail/small investors
Lets go👇
(1/14)
Step No 1.-
Golden Rule of Finance-
Expenses=Income-Saving
🧪In the starting years as an investor save as much as u can.
🧪Cut down as much as u can on discretionary spending.
🧪Initial years are tough as capital comes in slowly and seeds for compounding are being laid
(2/14)
Step No 2:-
Buy a health insurance:-
Health insurance will protect your portfolio against undue shocks of unforeseen hospitalization
A detailed review of how to buy health insurance is
Step No 3:-
Buy a Life Insurance(If required):-
Evaluate the need for life insurance.
If need be buy a term plan.
A detailed review of how to buy life insurance is
Step 4:-
Evaluate ur life goals
Goals can be:-
🧪Retirement
🧪Buying a house
🧪Child's Marriage
🧪Child's Education
Evaluate the year in which the goal will be achieved with the amount of estimated amount
(5/14)
Do u straight away invest in equities/shares?🤔
A simple thread🧵explaning how u can systematically create a structured portfolio on ur own.
Hit "Retweet" to educate maximum retail/small investors
Lets go👇
(1/14)
Step No 1.-
Golden Rule of Finance-
Expenses=Income-Saving
🧪In the starting years as an investor save as much as u can.
🧪Cut down as much as u can on discretionary spending.
🧪Initial years are tough as capital comes in slowly and seeds for compounding are being laid
(2/14)
Step No 2:-
Buy a health insurance:-
Health insurance will protect your portfolio against undue shocks of unforeseen hospitalization
A detailed review of how to buy health insurance is
As part of financial planning
— JST Investments (@JstInvestments) December 24, 2020
A thread on health insurance
What is health insurance?
Health insurance is a insurance that covers medical expenses that arise due to an illness. These expenses could be related to hospitalisation costs, cost of medicines etc.
1/
Step No 3:-
Buy a Life Insurance(If required):-
Evaluate the need for life insurance.
If need be buy a term plan.
A detailed review of how to buy life insurance is
Term Plan or a ULIP or a endowment plan?\U0001f914
— JST Investments (@JstInvestments) April 5, 2021
Life Insurance simplified:
Do 're-tweet' & help us educate more investors
A Thread \U0001f9f5\U0001f447
(1/15)
Step 4:-
Evaluate ur life goals
Goals can be:-
🧪Retirement
🧪Buying a house
🧪Child's Marriage
🧪Child's Education
Evaluate the year in which the goal will be achieved with the amount of estimated amount
(5/14)
SEBI cuts REIT lot size to 1 unit....this will boost the liquidity and encourage more participation!
REIT is like a mutual fund that invests in physical real estate assets!
Read more
REIT is like a mutual fund that invests in physical real estate assets!
Read more
Real Estate Investment Trusts (REITs) Simplified.
— JST Investments (@JstInvestments) June 9, 2021
A product that provides a fixed income that is better than FD +an upside like equity.
A Thread \U0001f9f5\U0001f447
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A thread 🧵
1) Learn Anything - Search tools for knowledge discovery that helps you understand any topic through the most efficient
2) Grad Speeches - Discover the best commencement speeches.
This website is made by me
3) What does the Internet Think - Find out what the internet thinks about anything
4) https://t.co/vuhT6jVItx - Send notes that will self-destruct after being read.
