Zerodha Educate

Whenever there is volatility, equity markets get all the attention. Bonds typically don't move around as much as equities and hence they seem boring to most people. Moreover, the Indian bond markets are extremely shallow and are dominated by institutions. But the bond markets send far more useful and actionable signals about companies and the economy at large are far more insightful than movements of stock prices and indices.  And debt mutual funds, the most accessible products to retail investors are dominated by institutions and HNIs. And there are also a lot of misconceptions about the role of debt in portfolios. So, Prateek Singh (Founder of LearnApp) caught up with R Sivakumar, Head of Fixed Income at Axis Mutual Fund - THE best person to talk about all things debt and bond markets.  In this conversation we talk about: When happens in a bond market when the equity markets crash A birdseye view of the Indian and global economy as COVID-19 spread through the globe Factors that move bond prices RBIs recent actions to provide liquidity  Why do you need debt in your portfolio How not to choose debt funds Gilt funds and their use and a whole lot more... Please enjoy this conversation with Sivakumar of Axis MF. Please let us know your feedback on @zerodhaonline on Twitter or on iTunes ratings.  

One of the most prevalent yet ignored biases among investors is called the home country bias - the tendency of investors to invest all or most of their money in the country they live in. To give you some context, India is just 2% of the world marketcap - meaning a vast majority of the investment opportunities lie outside India. And old economy stocks dominate the Indian indices. We don't have the Indian listed equivalent of Apple, Google, Netflix, Amazon, Facebook etc, the biggest and most innovative tech companies in the world.  We've all been taught that we should diversify our portfolios across asset classes such as stocks, bonds, gold, real estate, etc. But In this wide-ranging conversation, Pratik Oswal, Head of Passive Funds at Motilal Oswal AMC talks to Prateek Singh (Founder of LearnApp) about: What is global diversification and why it is needed The opportunities and risks of global diversification What does depreciation of rupee means and how it adds to returns How to allocate to global funds in a portfolio Comparing the S&P 500 and the Nasdaq 100 index funds And a whole lot more... Note: We had recorded this podcast with Pratik before Motilal Had received the approval for launching the Motilal Oswal S&P500 Index fund. We recorded an extended conversation specifically about the new fund from the 41: 50 mark.   Please enjoy this conversation with Pratik Oswal of Motilal AMC.  We've also launched a Zerodha Paathshala, a Hindi Podcast. You can check out the latest conversations here. 

Since mid-February, there has been a sharp sell-off in the markets as the Corona Virus pandemic spreads through the globe. As we record this, Nifty 50 is down 25% while Nifty Mid-cap 100 and Nifty small-cap 100 indices are down by over 30% and 40% respectively. This is the sharpest fall in the markets since the 2008 financial crisis. And you might be worried about your investments. So, we decided to talk some really smart people who've seen various cycles in the Indian markets to bring you some perspective on what to do and what not to do. In this conversation, Prateek (Founder, LearnApp) talks to Kalpen Parekh, the President of DSP Mutual fund. Kalpen has over 2 decades of experience in the Indian markets. He was previously the Managing Director at IDFC Mutual Fund. He has also served in Birla Sun Life AMC and ICICI Prudential AMAC after beginning his career with L&T Finance. We had coincidentally spoken to Kalpen when there was some volatility in the markets last time, you can listen to the old episode here.  Apologies for the poor audio quality. Given the work from home situation, there was a drop in the quality. 

Index investing (passive investing) has become increasingly popular in the last decade across the world. Trillions of dollars have flown out of active mutual funds into low-cost index funds. But in India, these are still early days for indexing, we just have about Rs 7700 crores in index funds. Although Rs 1.6 lakh crores is invested in index exchange traded funds (ETFs), most of it from the Employees' Provident Fund Organisation (EPFO) and retail investors predominantly invest in index mutual funds.  In the past few years, there has been small by steadily increasing chatter about the merits of low-cost index funds in India. Given the growing underperformance of actively managed large-cap funds, there also seems to be a growing realization that low-cost index funds may be the best way to get large-cap exposure. In the last few months, Motilal Mutual Fund has launched a suite of index funds tracking the Nifty 50, Nifty Next 50, Nifty Midcap 150, and Nifty Smallcap 250, and Nifty 500 indices.  In this sweeping conversation with Pratik Oswal, Head - Passive Funds at Motilal Oswal Asset Management Company talks to Prateek Singh (Founder of LearnApp) about:  How he got started in finance  What are index funds and how do they work?  The basics terminology of index funds Impact and importance of costs when investing in mutual funds His take on the active vs passive debate Are index funds the best way to get large-cap exposure? Liquidity concerns in midcap and smallcap stocks Growth of index funds in India Scope of smart beta funds in India Portfolio construction with index funds Motilal's previous experiment with index funds Note: The latest AUM in index funds is Rs 7717.16 crores. When the podcast was recorded it was just a little over Rs 6500 crores. 

The Bharat Bond ETF by Edelweiss Mutual Fund opens for subscription today. This exchange traded fund (ETF) holds AAA-rated bonds issued by public sector enterprises. The Bharat Bond ETF is unique in a lot of respects. In this wide-ranging conversation, Dhawal Dalal, Chief Investment Officer - Fixed Income of Edelweiss Mutual Fund talks to Prateek Singh (Founder of LearnApp) about: Why the Indian corporate bond market is shallow Reasons for the lack of retail participation in the debt markets The role of debt in a portfolio and how to use debt instruments in a portfolio And finally, explains in detail what the Bharat Bond ETF is, the structure and the risk & rewards of the ETF You can also check out this companion LearnApp video and this TradingQnA post for more details about the ETF. Click here, if you wish to invest in the Bharat Bond ETF.  Please enjoy this conversation with Dhawal.

Debt markets have suddenly become more action-packed than the equity markets. Ever since the IL&FS default, investors have slowly grown to realize that even debt carries its own risks. make no mistake, debt plays an important role in a portfolio. But it is imperative that you as an investor understand the various debt instruments and use them the right way.    Arvind Chari is the Head of Fixed Income and Alternatives at Quantum Advisors. In this webinar, Arvind lays out the case to invest in debt and the core tents to follow when investing in debt funds. Arvind has over 14 years’ experience in Indian fixed income markets across dealing, research and portfolio management. Arvind joined Quantum in 2004 as Research Analyst – Fixed Income to build the fixed income and macro economy research function and also to help develop fixed income and other asset class products for Quantum Mutual Fund. He also helped set-up an offshore India Bond Fund amongst the first of its kind then. Arvind holds a Masters in Commerce (M.com) and Masters in Management Studies (MMS) from the Mumbai University.   Arvind is also a really good writer. Here are a couple of articles that inspired us to ask Arvind to talk about the topic at hand today.  http://bit.ly/2IGnO8k http://bit.ly/2XhgERA 

These are unnerving times for investors with the markets being volatile. Long term investors should ideally embrace volatility, but we are seeing investors stop their investments. Volatile markets tend to induce investors to most often than not, make all the wrong choices. When markets undergo a period of under-performance, investors tend to stop their SIPs or worse yet redeem their investments. This during a time when they should do the exact opposite. As an Investor, you should embrace volatility because you get to average your investment at various price points. In this illuminating webinar, Kalpen Parekh (President, DSP Investment Managers) talks about: 1. The do's and don'ts of investing.   2. The recent under-performance of mid and small cap indices vs the Nifty 50 large-cap index. 3. How should you approach investments in mid and small-cap funds? 4. How Indian markets have performed over various market cycles and the parallels with the performance of the past 1-year. 5. How to think about debt allocation in your portfolio and some historical context on the performance.  The presentation used in the webinar: http://bit.ly/2J6F4r6 Here's the previous webinar on introduction to debt mutual funds by Kalpen: https://youtu.be/5AxNrSQrMg4

Contra funds is a new and unique category that was carved out in the recent scheme reclassification by SEBI. By the very definition, these funds follow a contrarian investment approach and swim against the tide. These funds invest in stocks that are out of favor, special situations, and stocks that can turnaround. Taher Badshah is the Chief Investment Officer (Equities) at Invesco Mutual Fund. He also manages the Invesco India Contra Fund. In this webinar, he explains how a contra fund works, the investment process, and how to use these funds to build your portfolio. 

In the 4th and final part of the video, Winston talks about accrual management i.e., how to generate returns by managing the yield to maturity (YTM) in your portfolio. When you buy a bond, you earn an assured interest (coupon), which will accrue in your portfolio. In this part, you will learn how you can maximize this. Winston covers concepts such as: What drives the return of a bond How to increase the returns in your portfolio Different types of risks What is an yield curve, how to interpret it, and the types of yield curves.   Part 1: Google Podcasts, Apple Podcasts Part 2: Google Podcasts, Apple Podcasts Part 3: Google Podcasts, Apple Podcasts

In part 3 of the webinar, Winston talks about Duration. It is one of the most important factors when you are choosing a bond or a bond fund.   Duration is a measure of a bond's sensitivity to changes in interest rates. In order to understand duration, you will also need to have a working knowledge of discounting future cash flows or time value of money. To learn about the time value of money, you can check out this Varsity module on this: http://bit.ly/2ECfBS1   In case you missed Here's: Part 1 - Google Podcasts, Apple Podcasts Part 2 - Google Podcasts, Apple Podcasts