2021 is >~2 months away, and a 2019 disease is yet ever-so relevant. Continuing to be a front-page feature, it’s the biggest socio-economic crisis humanity has faced this century. Yes, we write about Covid 19, and its gain-&pain relation with markets. 

Harboring a sweet-&-salty relationship, the viral virus forced the world into lockdowns. After months of stillness, the world’s united attempt in stopping the spread of the virus as borne fruit as India looks at Unlocking 5.0 via Relief Package 2.0

Markets reacted accordingly by wiping out trillions in wealth only to bounce back by 50%+ on the upside since its march lows. With Volatility as its theme (all-time high levels), markets have delivered and not delivered. 

As investors raise eyebrows questioning the uncertainty, they justifiably complaint about the difference between returns realized and returns lost.

Before we break-down the reasons for the aforementioned, let us paint the rainbow market’s in its true colors.

Right off the bat, we observe that markets have solely neared their pre-covid levels, and not equalled and surpassed them thus subduing investor growth.

Choosy Sectors Are Influencing The Market’s Vectors

In our prior “The Signal” pieces, we educated investors on how the markets bore inflated levels because of rally seen 5% of index stocks. In fact, the index sans-reliance would today be 10%+ of its levels!  

This time we applied a similar study to sectors (on a global level), and unsurprisingly yielded the same results. Table below highlights how much of the market’s shift from fever to fervor has been attributed by Consumer Spending, AI, and API.

The data speaks volumes of today’s levels being representative of sector-focused gains, than a true representation! This presents good news, for now we know the unrealized upside potential markets still have to offer! So, what are you waiting for? Get in touch with us and curate your portfolio to profit off of opportunities and not let it remain a cost.

If Nifty Is A Lake, Then MF Stock Universe Is An Ocean

The Indians in population and trading make for one of the biggest indices in the world. Boasting an investment universe of 5,000+ companies, only 50 of them account for our country’s representative index in Nifty 50. That’s a mere 1%! 

India’s evergreen investment product in Mutual Funds smoothens the width to a certain extent by looking at the top ~1,500 companies, thus accounting for ~30% of total investable universe.

Hence, the share of Nifty’s representation jumps to 10%. But this brings a bigger problem in contribution as the remaining 90% of the stock universe is composed of Mid & Small-caps.

The table below highlights division and distribution of market-caps across MF universe, and their YTD returns: 

As can be seen from above, the shallow returns garnered by the indices, courtesy of the viral virus has kept returns at bay. As economic indicators start faring well and expediting adoption to “New Normal”, we can expect the market to close current gaps and hint towards to being onwards and upwards.

So far we have pointed out 2 key stress points that have kept investment potential lack-lustre. This can be worrying for many as they may be afar from realising set objectives. Worry not, we at Fisdom foresaw this and are prepared with 1 solution for all your issues. 

Asset Allocation – An All-Weather Investment Strategy

The answer lies in the magic of Asset Allocation. Through shrewd portfolio structuring, you can tweak 2 vital elements of goal-based investing. They are:

Investment Time Horizon

Risk Capacities

Every asset class has its “season”, and thus dynamic portfolios are poised to win most. Every element has their designated role ranging from generating alpha to acting as hedge, thus helping portfolio be a hunter and not the hunted.

The lower co-relation amongst portfolio constituents is a bonus as it curb-stomps cannibalizing of contributions. 

You can’t control market volatility, but you can limit its effects on your portfolio. To choose to complaint or to Gain is a mindest which is reflected in your portfolio health and wealth. Be It books or speeches, sound asset allocation merits a special mention when talking of investing. And in transitioning times of Co-vid to Go-Vid even more so!

Your portfolio in red? Well put a “stop” to it by getting in touch with us. In 1 download and 3 clicks, lets colour the portfolio Green, in “Signal” and monies.

Usually This Is Where Stop, But Today We Gift You A Learning Extra!

The year’s volatility and uncertainty is going to get a kicker in the coming 2 weeks as the US election nears. The winner between the Republicans and Democrats bears influence on market movements, as the winner gets to set the trajectory of the economy for the next 4 years.

Is the ‘expected’ upcoming rattle left you off the battle? If so, then the graph below will soothe your nerves:

Investing is a hiccup-full journey. In a periodical 4 year manner, the markets view the event as another speed-breaker to tide over.

And hey, no matter the political colour of the president (Red/Blue), they wish towards the same goal of accelerating country’s economy and the world. For if the world grows, they grow.

So, don’t let the elections “decide” your portfolio positioning, but instead you “vote” to stay invested!

If you have any anecdote to share with us, then write away! 

Happy Weekend

1. Spending, Not Being Spent Is The Solution

The sharpest economic contraction on record and across the world has investors worried about India’s promise as an investment-favorite destination. October’s Stimulus 2.0 of Rs.46,700 Cr (0.2% of GDP), inclusive of direct cash payments and interest-free loans are to provide limited comfort to India’s contracted economy. In total, 2 rounds of stimulus bring direct spending on fiscal support to 1.2% of GDP vs avg of 2.5% of GDP for Baa-rated peers! 

Covid 19, now in 2020, and in 2021 in 3 months, continues to be bearer of bad news. Causing shockwaves across the world, India’s GDP correction reflects economic infections. Like before, reforms are being merited as economical vaccine, with individuals and institutions awaiting govt.’s possible Relief package 2.0 announcement between October-November 2020. 

2. A Robust Recovery But A Coup In Re-Coup-e

Economy to fall -13.5% in Q2FY21, and -9.5% in FY21 unless govt. takes immediate recovery initiatives. Improving PMI, GST collection, PV sales Railway freight activity, and rebound in exports is in contraction to declining capex, credit disbursals, high inflation and reduced imports to lead the country to adopt the new normal at expedited pace. Govt. policy is going to be instrumental in deciding next wave of short-term positives.

India’s economy has adorned the qualities of a phoenix, as it gears up to rise from the ashes. India’s potential and promises are just as alive as they were before the virus hit, albeit with few hiccups. Think of it as a race, in which India tripped cause of untied shoelaces. As the laces get tied and we less tired, the finishing line is about to come in sight. Its all Go from here..

3. An Investment In DisInvestment

Centre to divest Rs.1 Lakh Cr. via divestments vs all-time high Budget target of Rs.2.1 lakh Cr. from strategic sales in BPCL, ConCor IDBI Bank, LIC, Air India, and Hind Copper. Staying on decided Borrowing for H2, and 2.0 Stimulus requirements, govt. has accounted for Rs. 1 lakh Cr. slippage in divestments.

As those who finance, find themselves in similar waters as those they lend to, puts Govt. in a “Big Need – Small Feed”. As situations calls for stimulus, govt. policy endorses the adage, “Can’t have cake and eat it too”, looking to be hunted rather than be the hunter through its stake-sale attempt. 

4. The Perks Of Potential – FDI’s Favor The Fevered India

Total Indian FDI inflow of $35.73 Bn is the highest in 1st 5 months, growing 13% more than year-ago period. FDI equity inflow followed suit recording highest ever 1st 5 months inflow of $27.10 Bn, registering 16% more growth on YoY basis. Measures such as FDI policy reforms, investment facilitation, and ease of doing business resulted in increased FDI inflows into country 

Amidst a corona-filled year, distraught with lockdowns and recessionary fears, India got clout when world was in doubt. The increased investor-friendliness, coupled with Investment potential of India has helped it record 55%+ growth between 2008-2014 and 2014-2020 

5. RBI’s Long-Term Action By Short-Term Lending

RBI to conduct an on-tap Targeted Long-Term Repo Operations (TLTRO) of up to 3 years for ₹1 Lakh Cr at floating rate linked to repo rate. Liquidity availed by banks under this will be deployed in Loans, Corp. Bonds, CPs and NCDs in Agri, Agri-Infra, and Secured Retail MSMEs. Remaining operational from October 22 till March 31, 2021, the scheme will address crunch seen in current credit climate. 

RBI has been at the forefront in tackling the virus and teasing and testing the economy. As Covid breaks the long-standing economic shackles, so does RBI, by adopting a foot-loose approach. In bidding adieu to the old, RBI has donned a 2020 Meme, “Modern times require modern solutions!

Making money. Making a difference.
You shouldn’t have to pick between the two.

ESG investing is about assessing a company’s sustainability practices, measuring not only how much money the firm makes, but also how they make it. In fact, the 3 key factors measured is how the category derives its name. The breakdown is as follows:

As individuals and institutions endorse broader and cross-border patriotism in becoming global citizens, the purview and scope of investment world widens too.

Viewing the world from a bigger lens has put light on universal issues such as Global Warming, International regulatory challenges, and unorganized labor platforms. Tackling these issues has proved to be financially fruitful for companies and investors alike per the observations made below:

❖ For Companies:

❖ For Investors – The Intelligence In Indexing:

Ironically, the modern world progresses today by adopting old ways of Pangea era, where unity prevailed over divisions. As we morph into one, we onboard bigger challenges. In tackling these issues, global currency has new-found favoritism for ESG investing, wearing the adage, “An Issue is an Opportunity in disguise”, on its sleeves.

The graph below highlights the how monies have found nest in ESG fund category:

Already excited to go hunting for your favorite socio-economic friendly fund? Mirae MF introduces their ESG fund so your portfolio can boast financial and societal gains!

Mirae Asset ESG Sector Leader Fund Of Fund
Strike While The Iron Is Hot

Mirae Asset ESG Sector Leader Fund Of Fund will encourage Sustainable Investing by investing in Companies which:
❖ E – Show Environmental Empathy
❖ S – Take Charge Of Social Responsibilities
❖ G – Demonstrate Good Corporate Governance

Fund Breakdown is as follows:

Investor Takeaway

From hedging to serving as awareness metric, this fund offers it all. Meriting accolades for combining finance and social securities, the fund is well poised to capitalize on the modern issues via modern solutions. It is more suitable for those wearing higher risk appetites but can feature in limited fashion in moderate risk-return profiled portfolios.

Those investing in this fund, and category should look at an average indicative horizon of up to 5 years & more.

Key Details About The Fund:

3 months to 2021, Covid 19 is still ringing bells of doors (health) and markets (wealth) across the globe. Questioning systems and stressing operations, global economies are resorting to their piggy banks to curtail impositions to be in-position to localize the new-normals.

As Covid 19 continues to be a weekly event of learning, the weekends continue to be dictated by Fisdom’s attempt to make-&-break your earnings. The simplest way to do that is by addressing the simplest mode of investment – Systematic Investment Plans

“An Ocean Started Out As A Drop Of Water, For A Drop Over Another Culminated Into The Voluminous Water Body”

The above adage breaks down the financial complexity involved in the making of a SIP. Like Oceans, SIPs are designed to be an all-weather investment vehicle making the best of the markets in bullish or bearish times. 

Markets being cyclical & event-driven, have inherent volatility which many try to bank on by adopting unique strategies but come out with more pain than gains. The common learnings we come across from those attempts are:

1. Timing The Market Instead Of Time In The Market 
2. Undisciplined Approach
3. Emotion-Driven Exits

The structure of SIP puts a earmuff to noise, inculcating regular and disciplined investment approach. Limiting human bias limits your window of errors. And if there’s 1 theme the markets have carried since the dawn of the new century, “Terror By Error” is to be its top feature.

Over the last 20 years, the markets have been subject to various crises’, resulting in plenty investment principles losing ground. However, the principle of SIP found favoritism, courtesy of its ability to tailor market’s fever to fervor in time-agnostic fashion.

The Graph below shows landmark market crashes over last 2 decades and how SIPs navigated them in a financially savvy manner:

As Can be seen, SIPs are the perfect scenario-sans investing tool, which have held their groove across market turmoils. 

In fact, SIPs can be utilized to boost upside return potential in times of crisis, as investors can accrue higher units at depressed market levels by keeping the SIPs active and emotions inactive. The graph shows how investors who kept SIP ongoing would have realized ~Rs.50 Lakh on Rs.5 Thousand monthly investments!

In times pre-Covid, in-Covid and Post-Covid, markets have shown how every trough is followed by a pointed peak. It is in times of rough, that markets yield the best opportunities, as all hunting becomes bargain hunting.

It is then when the flexibility of SIPs bear fruit for investors as they can modulate their monthly monies on the click of a button (Yes, Your Fisdom App Makes the Process That Easy – Download Now On App Store / Play Store). 

The Bottom-right graph shows how investors who increased their SIP amounts by mere Rs.500 on monthly basis realized their portfolio grow by ~3x Times!

More so, an additional 10% increase in monthly SIP resulted in Portfolio/Profit growth of 2.4x and 2.1x respectively over those who kept stable their SIP figures through investment horizon of 20 years!

However, today may be different as Covid-19 has changed as much as challenged the financial position of many. The temporary halting of SIPs is perceived as cautionary action as market mood shifts to wealth conservation over proliferation and people lead-&-plead for moratoriums.

But, SIP’s being SIPs have got you covered, for the extension in SIP can do away the worries of the in-extensions of muted loan periods.

The graph below shows how investors who stopped SIPs in 2008 but stayed invested for the long-run would have realized portfolio growth of 7.2x times!

So remember, SIP is the chicken which lays the Golden Eggs. But for eggs to be laid, the chicken has got to be fed.

We at Fisdom plan to keep writing on SIP for as long as SIP stays exciting, and oh yea, SIPs will always be exciting and more.

Having shared our views, do you have any fun insights that you want to share with us? Then please write away, for we excitedly await your response. We may feature it in the next piece too, so keep an eye out for that!

Till then, Happy Weekend.

1. Spending, Not Being Spent Is The Solution

The sharpest economic contraction on record and across the world has investors worried about India’s promise as an investment-favorite destination. October’s Stimulus 2.0 of Rs.46,700 Cr (0.2% of GDP), inclusive of direct cash payments and interest-free loans are to provide limited comfort to India’s contracted economy. In total, 2 rounds of stimulus bring direct spending on fiscal support to 1.2% of GDP vs avg of 2.5% of GDP for Baa-rated peers! 

Covid 19, now in 2020, and in 2021 in 3 months, continues to be bearer of bad news. Causing shockwaves across the world, India’s GDP correction reflects economic infections. Like before, reforms are being merited as economical vaccine, with individuals and institutions awaiting govt.’s possible Relief package 2.0 announcement between October-November 2020. 

2. Inflated Inflation Indicates Illusions & Illness
Retail inflation jumped to an 8-month high of 7.34% in September, primarily driven by higher food inflation. Core inflation, which excludes food and fuel inflation, softened to 5.67% from 5.77% in August. At over 6%, inflation remains just above the MPC’s tolerance band of 4 (+/-2)%, creating a stagflation-like scenario where inflation is high despite a collapse in growth. Supply sinkages pried higher inflation figures on account of amplified fodder prices.

Amidst a corona- filled year, disruption in supply-chain activity was a given, and was reflected in latest figures. Ample system support via liquidity measures and restructuring facilities are deemed necessary for better times ahead. As for rate-cuts, we see a pause in the upcoming December meet, as outputs of effective policies and transmissions are brought outwards.

3. In Covid 19 Parlance, IIP Stands For “Indian Industrial Problems”

India’s IIP contracted for 6th consecutive month in August at -8.6% compared to -10.4% in July 2020 and -1.4% in August 2019. Industrial activity bore the brunt of localized lockdowns and work restrictions in August, chipping away nearly a tenth of the factory output.

Sharp recovery seen in May and June seems to be losing steam, even though there is consistent decline in pace of contraction. The adversity is here to stay for short-term, as the viral virus continues to spread an air of uncertainty across the country’s socio-economic factions. In this process, like a tortoise (slow and steady), India is sowing the seeds of the much-awaited and talked about V-shaped recovery. 

4. Banks To Tank As There Is Fire-In-The-(W)Hole
The financiers of growth currently can neither finance nor grow they grapple with after-effect of Covid 19, finding themselves in similar waters with those they lend to. Even post policy support from the top, money flow is working like a malfunctioned pipe as stressed loans and write-offs increase. As NPA and credit costs increase, the profitability wound is sure to rupture, adding stress to current conservative credit climate 

All, but one voice, cheered when the moratorium was announced, and that was the banks. Knowing of the impending doom, in economic contractions, and bending will to satiate central govt. policies, those who lend money are themselves in dire need of it. 3 years later, and banks find themselves 4 years behind! But as is always, Banks will navigate through this crisis too, maybe limping more than ever before! 

5. “Locally Made – Globally Sold” –> The Make In India Mantra
After announcing Production-Linked Incentives for Pharmaceutical sector, Mobile & Electronics manufacturers, to adopt similar practice for more sectors to boost domestic manufacturing. Giving the ‘91 reforms a 2020 twist and reduced corporate tax rates will continue to attract attention of the world’s biggest makers. 

Finding new home in India, companies with market-cap bigger than country have situated its producers where its consumers are. The cash-rich entities continue to be cash-hungry, being interest-invoked by India’s make-&-take plans. The Make Local – Sell Global policy is here and alive!

Pictures are merited for its ability to portray 1000 words with a stroke of 1 brush. Tell us what you take away from the graph below:

Do you see what we see? Yes, we are talking about how FII’s not only stayed invested during the peak pandemic months but also bought more dough when the bakeries were on the verge of closing shop.

In paying homage to 2012, worries rekindled about the (economic) world coming to an end as the countries received their report cards after having waded through the 1st quarter of Covid crisis. 

This is what we had in store:

When everyone was rushing for exits, FIIs endorsed the worlds most successful investor, Mr. Buffet’s evergreen words, “Be Greedy When Others Are Fearful”. They did this for 2 simple reasons. 

• 1. 1st Reason – Markets Habit Of Self-Sustenance

We have talked plenty about the need of staying invested in times of trouble to make your gain double. And this graph explains why.

It shows why the markets give ‘paise’ to all-wise FIIs, and ‘pain’ to all-noise DIIs.

However, it is the 2nd point where which highlights the fallacy of premature exits without having a mature (defined) entry point, or rather, re-entry point.

• 2. When 1 Door Closes, Another Opens….Or Does It?

From the 1st graph, we saw how FIIs kept buying when DIIs kept crying, but we didn’t focus on the why…till now.

Another key element in the graph was the right-side axis, which highlighted the Avg. Market Returns vs return potential sourced via investing in more traditional instruments. 

As can be clearly seen, even with Coronavirus at its strongest, the markets managed an Alpha of 1.5% more than safer instruments. Yet as we learn from the virus, it is very few who earn, with others carrying the “Big L”. Read on to know why!

Investors, in their best attempts, often enter markets when the euphoria is already high and exit when upside fervor turn to downside fever. However, it is in their attempt to exit haphazardly where they lose most of their money.

Focusing only on entry points is like looking at a half-pained picture. The other side of the coin is re-entry, for If there is no re-entry, then there is no coin. Even a participation prize requires you to participate.

As you get more fluent with “Re-Investment Risk”, you will develop a more nuanced market behavior. 

Investors often cite market volatility as the prima-facie reason for their exits and in turn seek safter instruments, assuming markets will not give but dive during their investment horizon. However, Our math tells us otherwise:

As can be seen, investors who re-invested smartly garnered higher returns for their investments than those who panicked. The investor who didn’t plant their exit strategy found themselves short-changed on returns, whereas those who invested and re-invested in-line with their plan of action yielded smarter results.

There’s a reason rocket engineers say, the rocket has to exit the planet 1st, before they focus on entering space. It’s the same with your investments. If you wish to see your returns rocket, then you have to fuel up well ahead in time, navigating volatility with a focused and objective blueprint.

As we say within the walls at Fisdom, “To Have A Window Of Opportunity, You Must Make The Window First”.

The dilemma for Entry-Exit-Re-Entry will always be relevant for as long as Markets continue to exist. Hence, it is imperative that investors realize re-entry strategies to realize returns. 

We at Fisdom, will continue to educate you on markets and its various anticipation and actions. From emotion to ego-tion, we are there to address it all by being only a download away! Available on App Store and Play Store – Download Today!

If you wish to share your inputs or like us to write a piece on a topic of your choice, do write to us! We eagerly await to hear from you.

1. India’s Domestic Discourse Attract Cautious Global Gauge

The sharpest economic contraction on record and across the world has investors worried about India’s promise as an investment-favorite destination. Economic agencies across borders slash GDP estimates to reflect current economic climate more correctly, and bank on more govt.-induced policies/reforms to clot bleeding economy!

Covid 19, now in 2020, and in 2021 in 3 months, continues to be bearer of bad news. Causing shockwaves across the world, India’s GDP correction reflects economic infections. Like before, reforms are being merited as economical vaccine, with individuals and institutions awaiting govt.’s possible Relief package 2.0 announcement between October-November 2020. 

2. India’s PMI Number Resorts To Manufacturing Its Own Health

India’s manufacturing activity expanded for the 2nd time in row after 5 months of contraction between March and July, showing green shoots of economic revival. The manufacturing PMI came in at 56.8, compared with 52 in August, recording 2nd straight growth in last 5 months, and highest level since January 2012. This was also the 3rd quickest surge in the survey’s history.

As Covid 19 continues to press pain, Indian industries look to manufacturing a pain suppressant. PMI average for Q2FY21 is in stark contrast to what was seen in Q1FY21: a rise from 35.1 to 51.6. While uncertainty about the COVID-19 pandemic remains, producers can at least for now enjoy the recovery.

3. RBI Evolves From A Watch-Dog To A Guide-Dog

RBI has been creating new stones, for its left no stones unturned in generously applying oil onto India’s growth gears. Announcing moratoriums, declaring dividends, conducting OMO’s, standing accommodative, allowing loan restructuring and most recently identifying workarounds for 11 key matrices, the nation’s bank has been putting bite into its barks.

RBI has been at the forefront in tackling the virus and teasing and testing the economy. As Covid breaks the long-standing economic shackles, so does RBI, by adopting a foot-loose approach. In bidding adieu to the old, RBI has donned a 2020 Meme, “Modern times require modern solutions. 

4. Here’s a 2017 Recap in 2020! Banks Recap Program Revives

The financiers of growth currently can neither finance nor grow they grapple with after-effect of Covid 19, finding themselves in similar waters with those they lend to. Even post policy support from the top, money flow is working like a malfunctioned pipe as stressed loans and write-offs increase. As NPA and credit costs increase, the profitability wound is sure to rupture, adding stress to current conservative credit climate 

All, but one voice, cheered when the moratorium was announced, and that was the banks. Knowing of the impending doom, in economic contractions, and bending will to satiate central govt. policies, those who lend money are themselves in dire need of it. 3 years later, and banks find themselves 4 years behind! But as is always, Banks will navigate through this crisis too, maybe limping more than ever before! 

5. Make In India Goes Global

After announcing Production-Linked Incentives for Pharmaceutical sector, Mobile & Electronics manufacturers, to adopt similar practice for more sectors to boost domestic manufacturing. Giving the ‘91 reforms a 2020 twist and reduced corporate tax rates will continue to attract attention of the world’s biggest makers. 

Finding new home in India, companies with market-cap bigger than country have situated its producers where its consumers are. The cash-rich entities continue to be cash-hungry, being interest-invoked by India’s make-&-take plans. The Make Local – Sell Global policy is here and alive!

Albert Einstein once said “In The Middle Of Difficulty Lies Opportunity”. Today is difficult. Today is Opportunity.

The phrase above describes 2020 in 1 sentence. The year which started with Covid-19 will probably end with it too. The year has been fraught with mass hysteria showering markets with volatility and conservatism. 

The wide-spread panic because of Covid-19, saw Fear acclimatize itself with investors, global and domestic alike. The mass-dumping equities overnight, saw trillions in wealth wipeout in a matter of 2 months. 

Indian indices too fell victim, witnessing their biggest drop (-~40%) in 10 years to in a matter of 4 months (shown in table below):

Covid continued to dominate headlines, landlocking the world socio-economically inducing recessionary fears, bleak budgets and comforted GDPs (India saw record -23.9% contraction)

This is where the fork in the road was visible for the 1st team in this foggy year. While most favored the road taken of vouching for safe-haven assets, there were who braved the less treaded upon roads, i.e. opportunities, and bagged themselves a big reward. 

The graph below shows how Nifty and its sub-indices have fared since March lockdown:

In fact, for every time there has been a crisis, opportunities have followed right after as the graph below shows:

Unlocking 4.0 unlocked 40+ different opportunities with relief packages, fervent factory activity and magnetic macros. As Unlocking 5.0 comes gains momentum, newer and different special opportunities stand at bay waiting for those who choose to surf the rough seas.

To help you capitalize on the next wave of opportunities, let us understand what Special Opportunities mean in market parlance and where they are most visible as of date:

Special Situations can arise from any of the following windows:

Why Indian Markets are the best Diwali Gift you can buy yourself this year:

Already Excited to find the diamond amongst the stones? Aditya Birla MF brings your portfolio a ticket to fight the flight!

Aditya Birla Sun Life Special Opportunities Fund

Aditya Birla Sun Life Special Opportunities Fund is poised seek opportunities in most uncertain period since WWII, capitalizing on current crunched climate & emerging new trends. Wearing a Margin Of Safety, the fund is a value play consuming companies available at lower valuations than their fair value.

Investment Approach involves:

1. Focused Portfolio of 35-40 stocks portfolio with high active share
2. Sector and Market cap Agnostic
3. Follow the “Price-Target approach” to derive value from tactical opportunities arising due to any special situation

Investment Philosophy follows:

1. Bottom-up approach to stock-picking, based on:
   • Opportunity Size & Scalability
   • Margin Of Safety
   • ROE Growth Potential

Investor Takeaway

From Catch to Snatch, this fund offers it all. It merit accolades for its ability to be a frontrunner in bearish times. 

It is more suitable for those wearing higher risk appetites but can feature in limited fashion in moderately high risk-return profiled portfolios.

Those investing in this fund should look at an average indicative horizon of up to 5 years & more.

Key Details About The Fund

2021 is >3 months away, and a 2019 disease is yet ever-so relevant. In fact, getting more so with every passing day. Yes, we are talking about the biggest socio-economic crisis humanity has faced in recent times – Covid 19. 

Covid-19 has become as universal as water featuring in every headline across periodical in every nook-&-corner of the world. And just like the water crisis, this disease too has taken a severe toll on Health-&-Wealth infrastructures of continents and countries.

Bringing the world to a halt, Covid-19 highlighted many shortcomings across all nations, the effects of which spilled on border-agnostic markets wiping off trillions in a matter of 2 months. Nifty 50 recorded highest volatility levels at 80+ (more than during GFC’08), witnessing its biggest drop (-~40%) in 10 years!

But as the Rocky Movies have taught us, “It is how you get back up, that counts”. Cue “Eye Of The Tiger”

From Covid ‘Cry’sis To ‘Pharm’ing Opportunities

If Covid-19 pandemic has been a Bane so far, then countries have been quick to wear the Bat-suit, looking to curb illness and welcome wellness. 

The world’s collaborative efforts on vaccines and relief packages is yielding results as is seen in unlocking of factories and markets. Graph below shows how Indian indices have rallied from 1st lockdown to 4th unlock: 

As can be seen above, the near-to-medium future is going to defined by APIs and AI. Health has always been and will always be one of the most primary elements of societies everywhere. And the viral virus has just cemented this belief.

Banking on the renewed focus on upscaling the current healthcare sector, Edelweiss via their NFO – Edelweiss MSCI India Domestic & World Healthcare 45 Index Fund links investor wealth with world health.

Why Have 1 When You Can Have It All 

The Edelweiss Fund will be Passively managed, Open-ended Equity Scheme replicating MSCI India Domestic & World Healthcare 45 Index.

The healthy exposure between Local and Global across the Healthcare market spectrum can help vaccinate your portfolio to market malaise. This is how:

1. Bet Big – Win Bigger: Going Global Welcomes Growth Opportunities

a. Global healthcare industry net-worth to cross $10 Tn by 2022 from being valued at $8.45 Tn in 2018 because of inflated capex and consumer expenditures in coming times

b. The Growth Gears Shifts From Linear To Exponential as can be seen in table below:

2. Where There Is Medicine – There Is India

a. The Indian pharmaceutical industry is 3rd largest in world on volume terms accounting for 10% of global industry and >60,000 generic brands!

b. India drug exports account for 20% of total global exports by exporting to >200 countries. It was 3rd largest principal commodity exporter In FY19.

c. Graphs below highlight how India can continue to inject wealth in your portfolio by capitalizing on Corona Crunch

3. The Intelligence In Indexing

Covid-19 in market parlance means volatility. Indexing presents a smart way to regain upside fervor and bid adieu to downside fever. The data below highlights how indexing favors apt risk-return metrics in all capital climates.

Already excited to go hunting for your favorite healthcare fund? Edelweiss MF brings fight-&-flight to your portfolio!

Edelweiss MSCI India Domestic & World Healthcare 45 Index Fund

The Fund is a passive Index Fund investing in stocks comprising the underlying MSCI India Domestic and World Healthcare 45 Index which constitutes 45 healthcare sector stocks listed across India and US market

Fund Composition is as follows:

1. 95-100% of portfolio allocated in MSCI India Domestic & World Healthcare 45 Index with 0-5% in Liquid/Money Market MFs
2. 70% Weight to be given to India Healthcare:
   1. Top 25 Stocks based on Market-Cap
   2. Sub-sectors covered: Pharma, Hospitals, Diagnostics, Life Science Tools-&-Services, Biotech and other services
3. 30% Weight to be given to World Healthcare:
   1. Global Healthcare companies listed in US
   2. 20 stocks – Top 5 stocks based on market cap size from 4 subsectors each – Pharma, Healthcare Equipment, Biotechnology and Life Sciences Tools and service
4. Weights assigned based on FF market cap and capped at 20% and rebalanced on each calendar quarter end

About MSCI: Largest index provider in world with $13.1 Tn in AUM benchmarked to it & having 99.7% accuracy in index production. 

Investor Takeaway

From hedging to a healthiness factor, this fund offers it all. Banking on the Healthcare segment to push India & world out of Covid era, the fund wears strong potential to grow in the coming decade. As health risks rise, so do its returns as govt.’s align their budgets to curb-stomp the spread of viral viruses. 

Being highly thematic in nature, it comes with strong undertone of cyclicality. The indexing involved does reduce human bias offering some resilience. However, diverging from the broader market, the fund is apt for those willing to take tactical calls.

Those investing in this fund and category should wear High Risk appetites with investment horizon of up to 7 years & more

Key Details About The Fund

Yesterday, India celebrated the 151st birthday of The Father of the Nation – Mr. Mahatma Gandhi. Ironically, As India celebrates the person who marched for its freedom, it simultaneously spins the Charkha to seek liberation (read as: unlocking economy) from the viral virus.

The teachings of the spectacled icon have found its voice in various shapes & styles across different occupations, from engineering your finances to financing your engineering. In fact, on closer observation, the evergreen investment approach in SIP can see its roots grow from the shoots of Gandhi’s Principles.

All of Mr. Gandhi’s renowned movements credited their success to 1 concrete belief – His stance on non-violence. Mr. Gandhi preached being silent when others talked, for silence often wore the loudest voice. It even found mention in the world’s biggest film industry through “Munna Bhai MBBS” wherein Mr. Dutt stood tall, being inactive to surround sounds.

SIPs in a similar fashion calls for investors to stay invested and let market murmurs fall on deaf ears. SIP is a long-term strategy and so should be played out in the same manner. Also, being non-violent will let violence take care of itself, as is witnessed in SIP through the mathematical magic of “Dollar-Cost Averaging”.  A strategy to help you realize market’s upside potential even in times of downfall!

(Dollar-Cost Averaging is practice of accumulating units at regular intervals with disciplined approach, irrespective of markets health and wealth)

The graph below highlights the potential of SIPs in the long-run and shows why “Time in the Market” beats “Timing The Markets”

Make sure you spell your investments as “SIP”, and not “SLIP”, for it can between your wealth tripling from X to 3X in a span of 10 years! (as seen between 20-30-year investment time period) 

The 2 Key movements helmed by Mr. Gandhi to give the citizen’s its country back were the “Non-Cooperation Movement”
and the “Quit India Movement”. Both these movements garnered favoritism across ponds with United Nations recognizing October 2nd as ‘World Non-Violence’ Day and Mr. Martin Luther King Jr. adopting his teachings to fight the apartheid battle.

The underlying pattern for both movements revolved around staying ‘True-to-Label’ by staying vested. 

It was Mr. Gandhi’s Small Regular And Disciplined Steps That Made The Biggest Difference

Mr. Gandhi’s efforts “compounded” over time to yield independence. Like how he stayed vested, SIP calls for investors to stay invested. Reflecting patience and resilience in your SIPs can help you realize long-term gains irrespective of how tough the short-term situation dresses itself.

Learning from Mr. Gandhi in ’47, Finance derived the ‘Rule of 72’, where staying put equals staying winning. 

Today, India owes a great deal of gratitude to Mr. Gandhi for his unparalleled beliefs and actions. In display on many occasions like the “Dandi March”, it was Mr. Gandhi’s continuity that helped India become a free country. 

SIPs can be recognized as a direct derivative of this school of thought, turning Mr. Gandhi’s Learnings into Earnings. Stressing on continuity, it calls for investors to ride the pain to welcome the gain. Don’t take a pause for any cause, for if you stay invested can you be’ financially independent’ 

As can be seen, Investors can draw so much from Mr. Gandhi’s practices. What better way to honor his efforts than to endorse them today, for they are universally applicable.

And remember, there’s a reason Mr. Gandhi’s is the face of Indian currency! 

If you have any such interesting insights between Mr. Gandhi and Investing principles, do write to us at Fisdom! We are eagerly awaiting to hear from you. 

Happy Weekend.