Following your channel ( and blogs/podcast) for last few years and benifitted a lot. Just wanted to say Thank You. Hope you keep on creating such quality content. All the best!
I have been watching your videos for so many years now but still i cant resist giving 1 small cap fund a go.. Though i have very tiny exposure.. May be once we get a very bad hit we will all realise your point.. it will be too late for some then..
Maybe a portfolio of large and mid cap index funds can provide better returns than all of the caps separately assuming one index performs better than the other during certain times so the overall average returns of the portfolio is relatively higher (I’m assuming they perform differently at different times from quickly viewing your charts, I don’t have the actual data to prove). Then again what amount do you overweight the mid cap compared to the large becomes the next big question (and a hassle).
Sir The returns we get are proportional to the time at which we look at the fund from the entry and exit pov. I would like to ask that , as per the data produced by the fund houses , small cap funds from a standard and a stable fund house might actually give a better return than a linear return from Nifty 50. Your comments sir
As mentioned in the other comments, that is bias. You cannot pick and choose a "good fund" based on past performance and claim that will be reflective of future experience in the same fund or the category.
I agree with your suggestion sir, that instead of searching for a needle in a haystack, it's better we buy the index but the Nifty 50 may not give inflation beating returns, even if it gives its not sufficient for a retirement corpus and post retirement medical needs sir. But as you always say, do we have anyother option?
And I hedge my MF folio with Nifty Options (As insurance) to protect my folio for sudden black swan events.. also every time I want market to crash 30 to 40% so that my hedging will get benefit and pump more money into MFs and make awesome returns
The market cap of today's small caps have been increased I guess....also please check Nippon ND sbi small cap active funds ND check their rolling returns it's average 20% cagr... 1,3,5,7 years rolling is it less than nifty 50?
How many data points are there in those rolling return graphs or over window? And choosing X or Y fund that has outpeformed has all sorts of biases loaded. No would have known 1,3,5,7 or any number of years ago which fund would be a winner in future.
But just sharing small cap index with other Index and concluding that small cap funds doesn't outperform nifty is incomplete conclusion... Just gave examples you can take any active small cap funds other than mentioned above or just take category average returns of smallcap active funds over 15 years.... Active small cap mandates 65% in small cap stocks only that 35% allocation can be made in mid or large or cash too....which gives fund manager a flexibility to beat the indexes
Exposure to small cap via flexi cap or aggressive hybrid may be a viable option. Of course we have to keep faith on fund managers also we are here providing him/her full freedom to explore. Othet active funds like small cap, multi cap etc. has extra constraints. If someone choose those funds unknowingly an investor becomes, to some degree, a fund manager, himself by restricting the space of a fund manager.
Yup, the volatility is very high in small caps compared to nifty 50. A profit booking stretegy is must have if you are investing in a seperate small cap fund. If you wanna do SIP, then do it in a flexicap instead.
Small caps invest 35% in large and mid caps and only 65% in small caps. Anyway if you invest in small cap funds you are still investing a good part in mid and large caps.
Pattu, even with (past) data -- we cannot sufficiently prove any hypothesis right, because events of the future determine the performance of the stocks and hence the funds that they are a part of. Since investing isn't an exact science, taking in both views - data and thesis - might help you take a leap. Of course, reaching your goals by using a Nifty50 fund and allocating sizeable capital is the most preferred route for you. There might be someone who has the appetite to dabble with Smallcaps. Maybe Smallcap funds don't offer any discretion so learning to pick your own stocks could be considered.
I have made this clear enough. There is little historuy in support of small caps. The little history available is not in great support either. So if someone says "I believein small caps" then I have no issue with faith. But if they start to generalise their belief as universal truths then for what it is worth, I will criticise it. Context! Riak appetite is mostly fluff. Most people are clueless about it and assume they can handle it without the experience.
You are right, sir. Investing in small-cap funds is like investing in direct equity. It requires a lot of knowledge, effort, and research. It is only worth it if you invest a lump sum.
Usually a strategy to invest at cheaper valuations and sell at expensive valuations has shown to be helpful. Regular investing yields similar results as large cap investing with higher risk.
@@pattufreefincal Yes.. Momentum does better but one should be ready to get little more drawdowns when the market goes down. I have seen people going out of momentum strategies during the fall only (wtihout understanding the inherent nature of momentum)
I sold all my small caps and shifted to Nifty next 50 after watching your video. I heard a similar opinion from a mutual fund manager who retired early in one of the videos and it really hit hard.
Sir no doubt pure smallcap funds are not worth investing but having smallcap exposure in overall portfolio makes big difference, for example multicap funds performed better than flexicap ,large&midcap ,value categories due to smallcap exposure, The great Indian growth story will have good amount of contribution from mid&small cap space so it's better to go with diversified fund with smallcap exposure like Multicap funds where the fund manager will book the profit according to valuations
Sir, I was in Franklin small cap for about 5 years. Came to Bodhi tree (freefincal), attained Nirvana and liquidated in 2021. Okay that was also because of the loss of trust issue triggered by debt scheme freeze. Even then, this is like " brain is clear , but heart longs" - Thankappadahakkam film dialogue 😁 😁 😁
For those who want proof with ACTIVE small cap funds see
freefincal.com/why-investing-in-small-cap-mutual-funds-does-not-make-sense/
How about using a tiny portion of small cap for tax gain/loss harvesting along with periodic rebalancing so the puppy dont get too heavy?
Following your channel ( and blogs/podcast) for last few years and benifitted a lot. Just wanted to say Thank You. Hope you keep on creating such quality content. All the best!
Can we conclude same for midcap funds? Invested in nippon india midcap 150 fund
Hello sir, can you share your view on Old Bridge Focused Equity Fund?
Is lic mutual fund is good
Could you please review Edelweiss Nifty Midcap150 Momentum 50 Index Fund 🙏🙏🙏
I have been watching your videos for so many years now but still i cant resist giving 1 small cap fund a go.. Though i have very tiny exposure.. May be once we get a very bad hit we will all realise your point.. it will be too late for some then..
Correct. But regular profit booking will help in this scenario.
Thank you Sir!
Hi pattu, your view on canara elss and kotak elss funds ?
new tax regime. No need for elss
what do you think about multicap funds where the allocation is supposed to be managed by the fund house? Can that be a better option?
They are too young
Maybe a portfolio of large and mid cap index funds can provide better returns than all of the caps separately assuming one index performs better than the other during certain times so the overall average returns of the portfolio is relatively higher (I’m assuming they perform differently at different times from quickly viewing your charts, I don’t have the actual data to prove). Then again what amount do you overweight the mid cap compared to the large becomes the next big question (and a hassle).
Sir
The returns we get are proportional to the time at which we look at the fund from the entry and exit pov.
I would like to ask that , as per the data produced by the fund houses , small cap funds from a standard and a stable fund house might actually give a better return than a linear return from Nifty 50.
Your comments sir
As mentioned in the other comments, that is bias. You cannot pick and choose a "good fund" based on past performance and claim that will be reflective of future experience in the same fund or the category.
I agree with your suggestion sir, that instead of searching for a needle in a haystack, it's better we buy the index but the Nifty 50 may not give inflation beating returns, even if it gives its not sufficient for a retirement corpus and post retirement medical needs sir. But as you always say, do we have anyother option?
You are trying to compensate for higher investment amt with higher returns. Down to luck it will be.
Hi Pattu sir,
what is the source for TRI index historical data?
asking since NSE indices website provides price index data not TRI.
Thanks
You can get TRI from
www.niftyindices.com/reports/historical-data
What is your take on small AUM funds vs large AUM funds ?
Will matter for small cap funds which is why they close often not so much for others
Nippon Small cap fund with huge AUM.gave stellar returns for long term
gave does mean will give!
Can you pls do a review of Quant MF house
And I hedge my MF folio with Nifty Options (As insurance) to protect my folio for sudden black swan events.. also every time I want market to crash 30 to 40% so that my hedging will get benefit and pump more money into MFs and make awesome returns
I wonder if such open and clear thinking in life is possible everytime I watch your videos pattu. And I am happy your are living it. I am on it.
The market cap of today's small caps have been increased I guess....also please check Nippon ND sbi small cap active funds ND check their rolling returns it's average 20% cagr... 1,3,5,7 years rolling is it less than nifty 50?
How many data points are there in those rolling return graphs or over window? And choosing X or Y fund that has outpeformed has all sorts of biases loaded. No would have known 1,3,5,7 or any number of years ago which fund would be a winner in future.
But just sharing small cap index with other Index and concluding that small cap funds doesn't outperform nifty is incomplete conclusion...
Just gave examples you can take any active small cap funds other than mentioned above or just take category average returns of smallcap active funds over 15 years....
Active small cap mandates 65% in small cap stocks only that 35% allocation can be made in mid or large or cash too....which gives fund manager a flexibility to beat the indexes
Example = bias. And I have taken ALL funds in the previous analysis. See pinned post.
@@pattufreefincal OK can you please make video on nifty mid small 400 index I just saw this new index list ....
Exposure to small cap via flexi cap or aggressive hybrid may be a viable option. Of course we have to keep faith on fund managers also we are here providing him/her full freedom to explore. Othet active funds like small cap, multi cap etc. has extra constraints. If someone choose those funds unknowingly an investor becomes, to some degree, a fund manager, himself by restricting the space of a fund manager.
Is there any proof large cap will outperform mid and small cap in long run?
😊pattu u have rightly said that small cap f should use for tactical alocation
Most people cant do that right. So I would recommend staying away altogether
Yup, the volatility is very high in small caps compared to nifty 50. A profit booking stretegy is must have if you are investing in a seperate small cap fund. If you wanna do SIP, then do it in a flexicap instead.
Flexicap funds are another sudo large cap funds
nope Multicap. flexicap funds are mosty largecap itself
Small caps invest 35% in large and mid caps and only 65% in small caps. Anyway if you invest in small cap funds you are still investing a good part in mid and large caps.
YOLOing in small caps. 40% returns. Lets see after 5 years. Its fun.
investing in small cap fund is risky but can change the fortune. need a high amount of temperment to handal the fall.
I have seen a lot of theoretical temperament from people who stared their journey a couple of years ago. Well good luck to them
you are right pattu sir its not easy to have right temperament in investing.
you are right pattu sir its not easy to have right temperament in investing.
@@pattufreefincal Theoretical Temperament 😂 Good one sir
Pattu, even with (past) data -- we cannot sufficiently prove any hypothesis right, because events of the future determine the performance of the stocks and hence the funds that they are a part of. Since investing isn't an exact science, taking in both views - data and thesis - might help you take a leap. Of course, reaching your goals by using a Nifty50 fund and allocating sizeable capital is the most preferred route for you. There might be someone who has the appetite to dabble with Smallcaps. Maybe Smallcap funds don't offer any discretion so learning to pick your own stocks could be considered.
I have made this clear enough. There is little historuy in support of small caps. The little history available is not in great support either. So if someone says "I believein small caps" then I have no issue with faith. But if they start to generalise their belief as universal truths then for what it is worth, I will criticise it.
Context! Riak appetite is mostly fluff. Most people are clueless about it and assume they can handle it without the experience.
But msny bluechip funds of the past had large small and midcap exposure before sebi put in a classification@@pattufreefincal
Once again you're on fire Thala! I'd like to think that I'm part of the 'rational' list 😂
You are right, sir. Investing in small-cap funds is like investing in direct equity. It requires a lot of knowledge, effort, and research. It is only worth it if you invest a lump sum.
lump sum investing in small cap is down to luck.
Usually a strategy to invest at cheaper valuations and sell at expensive valuations has shown to be helpful. Regular investing yields similar results as large cap investing with higher risk.
I have backtests that show momentum investing does better but nothing will work all the time
@@pattufreefincal Yes.. Momentum does better but one should be ready to get little more drawdowns when the market goes down. I have seen people going out of momentum strategies during the fall only (wtihout understanding the inherent nature of momentum)
The community of reasonably rational people, anyway , is a minority indeed in all walks of life.
Nver knew that. Thank you
@@pattufreefincal❤
I sold all my small caps and shifted to Nifty next 50 after watching your video. I heard a similar opinion from a mutual fund manager who retired early in one of the videos and it really hit hard.
Sir no doubt pure smallcap funds are not worth investing but having smallcap exposure in overall portfolio makes big difference, for example multicap funds performed better than flexicap ,large&midcap ,value categories due to smallcap exposure, The great Indian growth story will have good amount of contribution from mid&small cap space so it's better to go with diversified fund with smallcap exposure like Multicap funds where the fund manager will book the profit according to valuations
What you have expressed is an opinion, not a fact!
I can't express how much I love this.
Sir, I was in Franklin small cap for about 5 years. Came to Bodhi tree (freefincal), attained Nirvana and liquidated in 2021. Okay that was also because of the loss of trust issue triggered by debt scheme freeze. Even then, this is like " brain is clear , but heart longs" - Thankappadahakkam film dialogue 😁 😁 😁
Thala always Thala ❤