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With interest rates at all-time lows, these are tricky times for fixed income (debt) investors. The consensus view seems to be that we are done with the rate cut cycle and the RBI may gradually start increasing rates. Most debt fund categories have delivered handsome returns in the past 2-3 years given the series of rate cuts. But if the rates start increasing, investors will have to moderate their return expectations. Given this backdrop, a lot of people have started talking about floating rate funds and how investors can use them in a rising rate environment. But the reality is that it is not quite that simple. Coincidentally, IDFC Mutual Fund has just launched its floating rate fund. So, we caught up with Arvind Subramanian, fund manager & head of credit research at IDFC Asset Management to learn how these floating rate funds work and if how investors should think of them in a rising rate environment. In this conversation Arvind talks about: How his journey in the markets began The current Indian interest environment What are floating rate funds? How do they work What are interest rate swaps and how are they used to create synthetic floating rate bonds Investment universe of floating rate funds  Role of a fund manager How floating rates perform in rising and falling rate environments Whether floating rate funds are a perfect hedge for rising rates Where does a floating rate fund fit in a debt asset allocation framework? Risks in these funds Return expectations His personal investing philosophy and how he invests  We also highly recommend you listen to this conversation with Suyash Choudhary of IDFC Mutual Fund on how to get your asset allocation right when investing in debt funds. This conversation perfectly compliments the conversation with Arvind on floating rate funds.  If you have any questions about floating rate funds or debt funds, do post them here.  We'd love to hear your thoughts on this conversation. Hit us up on Twitter. 

All the issues in the debt mutual fund space in the past 3 years have highlighted just how important it is to get your debt allocation right. But unfortunately, a lot of investors spend a lot of time thinking about equity in when deciding their asset allocation but take the debt part of the allocation for granted. And this has come back to haunt a lot of investors ever since the IL&FS crisis.  In the previous episodes, we have spoken at length about why you need debt in your portfolio and the right way to think about debt. But we figured investors need a framework on how to go about getting their debt asset allocation right.  So, we caught up with Suyash Choudhary, the Head of Fixed Income at IDFC Asset Management. In this absolutely brilliant conversation, Suyash talks about: How his career in the markets started How the Indian debt markets and debt mutual funds have evolved throughout his career The core reason for having debt in a portfolio Core and satellite approach to debt asset allocation Pitfalls of diversification in debt Is it wise to rely on common rules of thumb when investing in debt Should investors invest in credit risk or high yield funds? Biggest lessons for investors in the last 3 years How should savers and retirees think about the current challenging low-interest rate environment? His personal investing philosophy, investing mistakes, lessons and favourite books You can check out these previous conversations on investing debt:   Understanding what's happening in the debt markets with R Sivakumar, CIO of debt at Axis Mutual Fund Should you invest in debt mutual funds with Arvind Chari of Quantum Mutual Fund If you have any questions on the topics discussed in the episode, do post them here. You can also check out the Varsity module on personal finance to learn more about the basics of debt mutual funds

Motilal Oswal AMC is launching a new 5-year constant maturity G-sec ETF, the first one in India. It’s an interesting product for a lot of reasons. And also given that ETFs have been around for a while and investors have a lot of misconceptions. Today, we caught up with Prateek to talk him about how ETFs works and the new Motilal Oswal 5 Year G-Sec ETF. In this conversation Pratik talks about:  What ETFs are and how they work Difference between ETFs and mutual funds ETF liquidity Do's and don'ts when buying and selling ETFs The Motilal Oswal 5 Year G-Sec ETF and what makes it unique Role of debt in a portfolio Common mistakes investors make when investing in debt funds Historic performance of the 5 Year G-Sec index across cycles Risks in the ETF Taxation of the new ETF and a whole lot more If you wish to invest in the ETF: https://coin.zerodha.com/etf-sgb Earlier episodes with Pratik: Should you invest in index funds? - https://link.chtbl.com/owrqKj2y The need for global diversification - https://link.chtbl.com/-NE9Jqzf

One of the things that investors struggle with the most is with having the right expectations when investing and we've talked about this in the previous episodes as well. Mid-cap funds and small-cap funds tend to have higher returns than large-cap funds. But what most investors don't realize is that those higher returns come with a cost - that is higher risk or volatility. Most often than not, they just look at line charts comparing large-cap funds with mid and small-cap funds without looking at the deep and sharp drawdown and invest. If you look at the inflows and outflows of mid-cap and small-cap funds, you can clearly see that most retail investors tend to invest in these funds when they have already gone up and sell when they crash. So, in this conversation, I caught up with Rahul Singh, the Chief Investment Officer (CIO) of Equities at Tata Asset Management. In this conversation Rahul talks about: Whether the Indian markets are too small enough for good opportunities the nature of mid and small caps and how should investors think about them and allocate to them.  His own investing philosophy and that of Tata Mutual Fund His thoughts on the current market phase Current market valuations International diversification Large-caps vs mid-caps.  Is it the right time to invest in mid-caps and the case for investing in mid-caps and small-caps How to invest in mid-caps and small-caps His own investing philosophy Investing mistakes and lessons Prateek Singh is the founder of LearnApp, an online learning platform with courses on investing, personal finance, trading and more, do check it out.

To say this year has been a roller-coaster ride for the markets would be an understatement. A lot of new investors saw their first serious market crash since 2008, although it didn't last as long, it was brutal nonetheless. But what was surprising was the dramatic recovery even as all the economic data was dismal. We wanted to make sense of the disconnect between the real economy and the stock market and also how investors should look at investing going forward. So Prateek caught up with Anand Radhakrishnan, the Chief Investment Officer of Equity at Franklin Templeton India. In this absolutely brilliant and wide-ranging conversation, Anand talks about:  The opposite journeys of the economy and the markets The major economic concerns, both Indian and global Thought on the return of inflation globally How should investors think about this current market phase Why are the markets going up when the economic data is grim Thoughts on the current market phase and the factors that would determine the market direction ahead Current market valuations and concerns on potential overvaluation concerns Sector leadership going forward Thoughts on gold How Anand invests personally Some investing lessons he's picked up over his career Hope you folks enjoy this conversation with Anand. Prateek Singh is the founder of LearnApp, an online learning platform with courses on investing, personal finance, trading and more, do check it out.  The information contained in this communication is not a complete representation of every material fact and is for informational purposes only. Statements/ opinions/recommendations in this communication which contain words or phrases such as “will”, “expect”, “could”, “believe” and similar expressions or variations of such expressions are “forward – looking statements”. Actual results may differ materially from those suggested by the forward-looking statements due to risk or uncertainties associated with our expectations with respect to, but not limited to, exposure to market risk, general economic and political conditions in India and other countries globally, which have an impact on the service and / or investments. There may have been changes in matters which affect the security subsequent to the date of this communication. Stocks / Sectors / Securities mentioned may or may not form part of fund’s portfolio and do not constitute investment advice or recommendation to trade in stock/ sector/ security in any manner whatsoever. The AMC, Trustee, their associates, officers or employees or holding companies do not assure or guarantee any return of principle or assurance of income on investments in these schemes. Please read the Scheme Information Document carefully in its entirety prior to making an investment decision and visit our website http://www.franklintempletonindia.com for further details. Mutual Fund investments are subject to market risks, read all scheme related documents carefully.

Index funds and ETFs are steading becoming popular among Indian investors as they realize the importance of costs and the fact that fund managers generating alpha is hard.  In the past year or so, we've discussed index funds and the merits of passive investing in multiple conversations but we haven't spoken much about Exchange Traded Funds (ETFs). The folks at Mirae are betting big on ETFs and they are launching a fund of fund (FOF) that invests in Nifty 50, Nifty Next 50, and Nifty midcap 150 ETF. This has the 2 benefits of equity taxation for the FOF and also the rebalancing inside the FOF is tax-free. So we caught up with Siddharth Srivastava, the head of ETF products at Mirae Asset India to talk about all things ETFs, index funds, and Mirae's new fund offering.  In this conversation we talk about: What an ETF is, how does it work and how is it different from an index mutual fund The global and Indian ETF landscape His thought on why ETFs aren't popular among retail investors Liquidity issues in ETFs and what should investors do when buying and selling ETFs Why Mirae is launching index ETFs when it is known for its active funds What makes the new Mirae Asset Equity Allocator Fund of Fund unique and it's advantages His thought son how investors can use Mirae Asset Equity Allocator Fund of Fund in a portfolio Investing in this ETF vs buying the ETFs individually His personal investing philosophy and his investing lessons His favourite books Please enjoy this conversation with Siddharth of Mirae.  We would love to hear your thoughts, feedback and suggestions on the podcast. Please do tweet your thoughts @CoinbyZerodha. You can also post your question on ETFs and mutual funds here on TradingQnA. 

In part 1, Vidya spoke about why mutual funds, having the right expectations, setting goals, importance of asset allocation, and how to pick an equity fund. We figured given all the issues, the topic of debt mutual funds deserves a separate episode unto itself. Debt is supposed to be the boring part of your portfolio that provides stability while equity provides growth. But we've seen that investors driven by past returns, star ratings, and poor understanding of the various categories of funds have seen losses in the debt part of their portfolios. In this episode Vidya talks about: The need for a debt fund in a portfolio How to analyse and pick debt funds - the do's and dont's  Understanding credit risk and duration risk How to use gilt funds What is rebalancing, the need for rebalancing and how tor rebalancing? Growth vs dividend plans and why it makes NO sense to invest in dividend plans Vidya's investing philosophy Her favourite books Do check out PrimeInvestor for some insightful perspectives on investing, fund selection, portfolio construction by Vidya and her colleagues. You can also check out this LearnApp course on the basics of investing in mutual funds.

Since Feb 2020, we've seen historic and unprecedented volatility in the Indian markets. We saw the fastest fall in the markets and also one of the fastest recoveries in the history of the Indian markets. All this was within a space of a few months. Surprisingly, we are seeing a sharp uptick in the number of new investors enter the markets, but the mistakes some of them are making are the same old ones. Over the past few months, we've had conversations with some of the most experienced participants in the markets to put this insanely volatile market phase in perspective. But we also realized that investors were lacking context on how to think about investing even before they put their first rupee to work. So we figured, there's no better time than this to do this. Given that Vidya has been interacting with investors for the better part of a decade in various capacities, we reached out to her and she graciously agreed to talk to us. In this conversation, Vidya talks to Prateek about: How to think about risk and reward when investing How to set goals and why a goal-based investing framework helps you invest better How to have returns expectations How do you figure out your risk tolerance What the hell is asset allocation, why it matters and how to figure out the right asset allocation for you Active vs passive funds How to pick an equity fund How to sort through the various styles of funds and how to include them in your portfolio Do's and don't when picking an active funds Growth vs dividend plans Once you have heard the conversation, you will have a framework on how to think about investing, why you need to invest, set goals and pick your first fund.  Do check out PrimeInvestor for some insightful perspectives on investing, fund selection, portfolio construction by Vidya and her colleagues.  You can also check out this LearnApp course on mutual funds.  In part 2 of the conversation, we'll talk about the right way to pick debt funds, rebalancing and portfolio maintenance.

In this episode, Prateek (Founder of LearnApp) caught up with Radhika Gupta, the CEO of Edelweiss Mutual Fund. Radhika started her career with McKinsey and later joined AQR - the pioneering quantitative asset manager. She then started her own hedge fund which was acquired by Edelweiss Financial Services in 2014. She also led the acquisitions of JP Morgan Mutual Fund and Ambit's AIF business and became the CEO of Edelweiss MF. In this wide-ranging conversation Radhika talks about:  Her experience at AQR Common behavioural mistakes that investors commit What is asset allocation why is it important Static vs dynamic asset allocation Decodes balanced advantage funds, how they work, the various models etc What are equity savings funds and how do they work What makes Bharat Bond ETF special and the advantages How she invests personally  and a whole lot more... Please enjoy this conversation with Radhika. Do let us know your feedback by tweeting to us @zerodhaonline. 

As we publish this episode the markets continue to remain volatile and the Nifty 50 and Nifty Midcap 100 are down about 25% while the Nifty Smallcap 100 index is down by 33% year to date. We understand that these can be nerve-wracking times for you. With that in mind, over the last couple of weeks, we've published conversations with some of the smartest and most experienced people in the Indian markets, people who've seen the previous bear phases. And in this episode, Prateek Singh (Founder of LearnApp) caught up with I. V. Subramaniam (Subbu), the MD, CEO & CIO of Quantum Advisors. Subbu has over 25 years of experience in the India markets and has pretty much seen every market phase in India, including the Harshad Mehta scam, dot com crash, the 2008 crisis among others. In this conversation, Subbu talks about: How got started in the markets What exactly was the Harshad Mehta scam and what he personally learnt from it What you shouldn't do in a bear market Common behavioural mistakes investors make How to build portfolios during such bear market phases How to avoid value traps if you are a direct equity investor His thoughts the underperformance of value style of investing Importance of asset allocation How he personally invests and a whole lot more.  Please enjoy this conversation with Subbu.