Sundaram Iyer

SSL Research - Macro Update India's Trade Deficit narrowed to USD 15.9 bn in Mar'24 vs USD 18.7 bn in Feb’24. For FY24, Trade Deficit improved from USD 264.9 bn in FY23 to USD 240.2 bn. Key Takeaways ⏩ Merchandise Exports & Imports in Mar'24 stood at USD 41.7 bn (-0.7% YoY) and USD 57.3 bn (-6.0% YoY) respectively. Merchandise Trade Deficit for Mar'24 stood at USD 15.9 bn vs USD 18.7 bn in Feb’24. ⏩ Service Exports & Imports stood at USD 28.5 bn (-6.2% YoY) and USD 15.8 bn (-6.6% YoY) respectively in Mar'24. Total Trade Deficit (merchandise + services) for Mar'24 stood at USD 2.9 bn vs USD 2.0 bn in Feb'24. ⏩ Mar'24 recorded the highest monthly merchandise exports in FY24 led by export of organic & inorganic chemicals (+39.7% YoY), followed by electronic goods (23.1% YoY) and engineering goods (+10.7% YoY). SBI Securities SUMEET SHAH Arnav Sane

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Excited to share a new blog post discussing the key consideration of "What MFs should I choose if I can invest Rs 1 Lakh a month?" for long-term financial goals. This post features model mutual fund portfolios and relevant fixed-income options, offering valuable insights for investment planning. Check out the full post here: https://lnkd.in/gbR4Tksu

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Very interesting reading of the "Gen Z’s Alternative Investing Bug Will Cost Them Dearly" piece by Nir Kaissar published on Bloomberg. The analysis is very comprehensive providing multiple insights and data. The opinion piece can be found at https://lnkd.in/g5KDf9hG 👉 About 94% of wealthy millennial and Gen Z investors are looking to invest in collectibles (Bank of America). 👉 It’s a mistake to think all assets are interchangeable. 👉 Millennial and Gen Z investors told Bank of America that social media is their primary source for financial information and advice. A couple of own thoughts: ◾ The visual depicts an investment behavior driven by a significant divergence in portfolio allocation strategies between young and older investors. This divergence is driven by risk tolerances, market dynamics, recent economic volatilities and technological advancements within financial markets. ◾ Younger investors showcase a strategic pivot towards liquidity and diversification beyond traditional asset classes embracing investments also into questionable stores of value, whose performance may be hard to track and even harder to anticipate, along with, a price that can collapse without ever recovering.  ◾ Young conservative investors allocate substantial portions to cash highly likely as a hedge against market unpredictability and also as a means of maintaining flexibility for opportunistic investments. On the other hand young aggressive investors (who also hold cash reserves) prioritize liquidity even within high-risk strategies. These counterintuitive behaviors reflect evolutionary transformations within traditional correlations between asset allocation and risk tolerance. ◾ Moderate young investors try to strike a delicate balance between conservative and aggressive investment strategies exhibiting a more diversified portfolio approach in an endeavor to balance growth and income. The adoption of crypto across all young investor profiles highlights a broader acceptance and confidence, along with, the seeking of potential high returns and portfolio diversification. ◾ Older investors display more conventional investment portfolios indicating preference towards stability and generation of income (retirement planning is critical). There is also openness to non-traditional assets in search of yield in a low-interest-rate environment. In my opinion, a generational gap in the adoption of emerging asset classes can be observed. Investment strategies are becoming more dynamic (portfolio diversification, liquidity and enhanced returns) and possibly less dependent on age-old principles. Investment strategies are undergoing a transformation driven by a blend of traditional, alternative/digital assets and cautious optimism. #investing #alternativeinvestments

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The ABCD of Quant AMC and its Tryst with the Latest Front-Running Case Quant AMC has witnessed an astronomical rise in its Assets Under Management (AUM) over the last 3-4 years: April 2021: ₹1221 crore April 2022: ₹8819 crore April 2023: ₹22281 crore June 2024: ₹91000 crore Looking at this, the term "astronomical growth" seems apt. Who Runs the Show at Quant? Quant operates with an unusual organizational structure compared to traditional AMCs. While others might have teams of 10-12 analysts and 4-5 fund managers, Quant's investment team consists of only 5 individuals (whether considered fund managers or analysts). The primary decision-maker is Sandeep Tandon, a maverick known for his stock-picking abilities, reminiscent of Jim Simons rather than Warren Buffett, a style divergent from most Indian AMCs. What Sets Them Apart? The substantial AUM growth has correlated with top-quartile performance in their schemes consistently since the pandemic. Some distinctive traits in their portfolios include: Disregard for Benchmarks: Unlike other large-cap funds in India, Quant allocates only 13% to banking, whereas the benchmark mandates around 35%. Derivatives Usage: They swiftly employ derivatives for cash optimization rather than strictly for hedging. Dynamic Portfolio Adjustments: Positions can change rapidly, such as a notable shift from no holding in HDFC Bank in May to a 10% allocation by June, a strategy uncommon in other AMCs. Current Issues The AMC faces scrutiny in a front-running case involving ₹20 crore. Allegedly, someone had prior knowledge of Quant's stock purchases, allowing them to buy shares personally before the AMC's actions, akin to insider trading. Immediate Impact Following the news, there were initial redemptions as a knee-jerk reaction. However, subsequent weeks saw moderated outflows and even inflows. Week 1( 24th - 28th) : outflow of3000 cr Week 2: (01st Jul-05th): inflow of 444 cr Week 3 (08th - 12th): inflow of 148 cr Week 4 (15th-17th): inflow of 31 cr Although the AMC's schemes underperformed during this period due to market dynamics favoring banking stocks, where the AMC was underweight. AMC's Liquidity Position Despite outflows, the AMC holds ₹5000 crore in cash, with approximately 50% of its assets invested in blue-chip stocks, ensuring ample liquidity to meet redemption demands. Trivia: The top three holdings in their small-cap fund are Reliance, HDFC Bank, and Jio! Worst-Case Scenario The AMC's stability heavily depends on Sandeep Tandon. Any adverse outcome involving him could impact the AMC in some way. However, given the scale of operations (₹90000 crore AUM) and majority ownership is with Sandeep, his direct involvement seems unlikely. We have to wait n watch for SEBI's investigation to complete. For Quant Investors, it is advisable to have patience, situation is not as dire as it's portrayed in the media. MFs remain a well regulated space. #Quant #Mutualfunds #markets

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Small Cap Funds. How cool it sounds! But very stormy to handle. Actually, I picked some very high ranked Small Cap funds to analyze them. I ranked them based on various parameters as you can see in the attached file. I was expecting Quant to be on top but surprisingly Nippon tops the list. If you have more than 5 years of time horizon and if you can handle the high volatility, just go with Small Cap Mutual Funds. For analysis part, don't consider it as an investment advise. It is just for awareness purpose. #amfi #mutualfundssahihai #mutualfunds #nippon #icici #quant #tatacapital #axis #investment #finance

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#SEBI proposes new asset class to fill gap between Mutual Funds (#MFs)and Portfolio Management Services (#PMS) The Securities and Exchange Board of India (Sebi) has proposed to introduce a new asset class for investors, who want to put between Rs10 lakh and Rs50 lakh in differentiated investment strategies such as Long-short equity and Inverse Exchange Traded Funds, among others. Here's a detailed breakdown: 1. Minimum Ticket Size: Rs 10 lakh per AMC strategy. 2. Labeling: To be branded as 'strategies', not funds. 3. Eligibility: Only MFs with at least 3 years of operations and Rs 10,000 crore of AUM can launch these products. 4. Derivatives: Allowed for purposes other than hedging, but no leverage. 5. Examples: Long-short funds or Inverse ETFs. 6. Exposure Limits: Looser stock and sector exposure limits. 7. Advanced Flexibility: Greater freedom than PMS, including tax-efficient derivative use. 8. Retail Access: Derivatives-linked products, previously unavailable to retail investors via PMS, will now be accessible with a minimum investment of Rs 10 lakh (across multiple strategy funds). Read more at: https://lnkd.in/gWF9C_nt #SEBI #MutualFunds #MutualFund #PMS #Investment #FinTech #WealthTech #ProductManagement #NEWS #ProductManager

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Master Risk Management with Financial Derivatives This informative Video, led by industry expert Shri Subhash Chander Kalia (former ED Union Bank of India), dives deep into the world of financial derivatives and their crucial role in risk management. Valuable Downloads:  1. PPT on Financial Derivatives and Risk Hedging Strategies 2. Summary of the Webinar 3. Dos and Don’ts for Bankers 4. Glossary of Terms 👩‍🎓🧑‍🎓 Enroll today and let’s grow together

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CAT2024 - 100 Most Important Quant Questions The CAT 2024 100 most important questions video gives you a complete revision has been released. Check it out on our YouTube channel -" Cracku - MBA CAT Preparation" Follow @crackuexam for more CAT-related content #cat2024 #catstudyplan #studyplan #catexam #cracku #catexam #mbalife #mba #mbapreparation #iima #iitprep #catpreparation #catprep #cat #study #mba #mbalife #cattopper #mbalife #tipsbytopper #toppertips #catquant #geometry #qa #catqa #quantitativeaptitude

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Article on stock analysis by Yagnesh Patel (5 min read) : #TNPETRO https://shorturl.at/KQ11Q #stockanalysis #stocktrading #hotstock #stockmarket #yagneshpatel #technicalanalysis

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Should you invest in Multicap or Flexicap Funds? Flexicap fund like the name suggests are allowed to invest across Large, Mid and Small in any ratio as per the fund managers best judgement. So if the manager feels small and mid cap is fairly valued, she might have more allocation to Large cap. But for all practical purposes, in general, these funds have 60-70% large cap allocation. Multicap on the other hand is a fund where you compulsorily need to park 25% in each Large, Mid and Small and the remaining 25% can be in any of the 3. Practically this is a fund with 40-50% in large cap. So if you want more large cap kind of exposure your choice is Flexicap & if you want a more Midcap kind of exposure on risk & return your choice is Multicap P.S - I write to make you a better investor, follow me at Kirtan A Shah

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How to estimate addressable market size? 2 ways to estimate: 1. Top-Down -- this is quick 2. Bottom-Up Let's estimate the mutual fund market size in India as an example 𝟭. 𝗧𝗼𝗽 𝗗𝗼𝘄𝗻 Top-down estimate is derived by connecting key industry metric (MF AUM) to macro data (GDP) and taking guidance from peers (other countries) MF AUM in India is ₹54 Tn -- 16% of India GDP as of FY24 In developing like Brazil, SA, this metric is over 50%. China is ~25% India GDP is expected to grow from $4T (₹330T) to $6 T (₹530T) 5 years out *Assuming* that MF AUM as a % of GDP will reach 25% over 5 years, the MF AUM is projected to grow to 25%*530 = ₹𝟭𝟯𝟬𝗧 by the end of this period 𝟮. 𝗕𝗼𝘁𝘁𝗼𝗺 𝗨𝗽 1st we need to identify the industry value drivers -- ask yourself! what drives AUM growth? a. It is existing + new MF investors that bring in money i.e. AUM b. how much net money these investors pour in? c. natural growth in asset classes like equity Current value of above drivers: a: MF investors: As of FY24, there are 4.5 Cr unique MF investors (which is 55% of tax payors, which is 11% of PAN holders). Given the bull run, there was an addition of 70 L unique investors in FY24, 50 L investors in FY23 b: Avg net inflows/unique MF investor: In FY24, all MF investors put in net ₹2.6 T, which is ₹58,000/investor c: Asset class compounding ie natural growth in AUM e.g. NIFTY CAGR, which is the natural growth in equity asset class Equity AUM FY24 = ₹30T Total MF AUM FY24 = ₹54T Now, with value drivers and their current values noted, lets estimate how each of these drivers evolve over 5 yrs -- to estimate future market size Projection: a. India adds 2Cr unique MF investors over the next 5 yrs ie 40L investors every year (derived it *assuming* a rise in pan holders & tax payors) b. Based on history *assuming* each investor adds net ₹55,000 pa in equity MF in the out years c. Conservatively *assuming* 10% growth in equity MF every year (Index grows at 12-13% on avg) Equity AUM in an year = Previous year Equity AUM * (1+Equity Growth%) + (# of unique investors * avg net equity flow/investor) Equity AUM FY25 = ₹30.0T * (1+10%) + (4.9Cr * ₹55000) = ₹35.7T Equity AUM FY26 = ₹35.7T * (1+10%) + (5.3Cr * ₹55000) = ₹42.2T . . Equity AUM FY29 = ₹57.8T * (1+10%) + (6.5Cr * ₹55000) = ₹67.2T Equity is 50-55% of Total AUM *Assuming* same %, total AUM in FY29 will be ₹𝟭𝟯𝟰𝗧 - this is the bottom-up estimation ----- Bottom-up converges with top-down MF AUM estimation of ₹130T by FY29. Both estimation methods are used to triangulate each other Assumptions are fine so long as they are based on past/peers/some guidance To see another example from a different industry, watch the 1st 16 min of this video: https://lnkd.in/dM397Pk2 P.S: This pic has NYC downtown Manhattan in the background. Like other developed countries, US has an MF AUM % of GDP of 100%+ #investandrise #equityresearch #valuation #businessvaluation #dcf #financialmodelling #marketsize

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Interesting Pic for the Day : What a roller coaster week with initial panic selling and then full panic buying in multiple segments of market and particularly we saw shift change in interest in FMCG sector which we were generally bullish in last few quarters due to sustained subdued performance and valuations was getting close to long term average for very high quality business model like FMCG where lots of Free cash flow is generated . To appreciate the significance of last week rally, I have tabled both 1 week return which is absolute and 3 year return which is CAGR . The last 1 week return in few cases is more than 3 year CAGR return reflecting the time in the market is more important and market sentiment for any sector can change very quickly . We need to allocate our time and capital to sector which is currently ignored for short term reason but has long term potential which is what happened to FMCG sector. #opportunity #FMCG #Investing

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#rbipolicy #interestrates 🚨Bond yields fall 10 bps since GDP data 🔸Indian 10-year bond yields have declined 10 basis points following weaker-than-expected GDP growth data last week. 🔸It is expected that the Reserve Bank of India may adopt a more accommodative stance to counter slowing economic momentum in its upcoming monetary policy decision on Friday. 🔸The country reported a sharp economic slowdown last Friday, with GDP growth hitting a seven-quarter low of 5.4% for the July-September period.

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Nifty this Week: It's Gonna get Bumpy - 16 August'24   Entire sectoral analysis here - https://lnkd.in/gU2yhjy6 Benchmark Nifty index managed a bounce back last week with a gain of 0.71%, most of which came from Friday's almost 400 points gainer. Recently, we've had a sharp move down, after which the index has managed to hold its ground. Long-term charts are still bullish, so investors should not be too worried. It's the short-term charts which are confused in terms of trend and momentum. That's why I sense that going forward into next week's trade, we will face intra-day volatility. On the downside, if last week's low of 24,099 gets broken, that will inject fresh selling momentum. In such a case, avoid building long positions in the fall. On the upside, the index is trying to close the falling gap on the daily charts, so resistance to keep in mind is at 24,700.  This video is a part of MasterClass Mentoring Sessions - https://bit.ly/40j7pNm Reach me on Whatsapp - https://wa.me/919836947400 Join my community, join "Right Tribe" - Android: https://bit.ly/4akdaQ8 iOS - https://apple.co/3K8pEPv

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