This blog is an attempt to conduct an analysis of the excess return of some of the Flexicap Mutual Funds in India. Thereon we have proceeded to conduct an attribution analysis of the Timing and Selection components of these excess...

Many non-term/non-ULIP life insurance policies are notorious for offering expensive plans with high embedded commissions. Most of these plans generate sub-inflationary returns even over very long time horizons, significantly destroying wealth and purchasing power of the investor. As in a...

Mr. Harsh Roongta, in his inciteful blog Evaluate funds on rolling returns over long term, makes the case for being extremely careful before being taken in by “magic bullet” ideas that solve all problems and generate the highest returns. Buttressing...

As markets continue their incessant rise, it is becoming increasingly difficult to prove our abilities as investment advisers. Everything an investor touches, rises and the stock markets are in effect feeling like Midas’s Gold. Over the past 2 years, though...

In a previous blog of 31-Aug-22 we had highlighted the significant advantages a prudent investor could have in taking a position in debt mutual funds over fixed deposits/bonds of a similar risk. The dual advantage of (i) claiming indexation benefits under long...

With Siddharth Kapoor – CBSE Class XI student, Delhi Public School, Gautam Buddh Nagar, Delhi. In a previous blog titled Sovereign Gold Bonds : 28-Feb-21, we have highlighted the key advantages of Sovereign Gold Bonds (SGB). We have argued that with the exception...

SEBI on 03-Feb-23 released a consultation paper on direct plans for schemes of Alternative Investment Funds (AIFs) and trail model for distribution commission in AIFs. The objective of the consultation paper was to seek feedback from all stake holders on...

We have recently introduced the Aroha App in both Playstore for Android devices and Appstore for Apple devices. With the Aroha App, clients can view their holdings on the go with a one day lag. While we have used(and continue...

In support of the cyber security awareness campaign notice of 19-May-22 from the regulator, a fellow Registered Investment Adviser was kind enough to share below a list of useful links to make you more aware of cyber security issues in...

Debt investors in India predominantly invest in sovereign bonds, bank and corporate fixed deposits. Citing safety, investors flock towards these fixed income instruments. No doubt, sovereign, high rated bank, NBFC and corporate fixed deposits or bonds are preferable for investors...

In the previous month we had blogged on the fallacy of using a simple arithmetic sum as a method to calculate the total cost of a term life policy. We discussed the importance of discounting future cash flows in estimating...

with Sahil Chhabria – A level graduate, Vidyashilp Academy, Bangalore Term life insurance policy:Term life insurance provides life insurance coverage for a specified term. Term life insurance lasts for a specific time period – this is called the term of the policy....

Our composite portfolio is the sum total of all individual client portfolio values and our composite highwater mark is the sum total of all individual client high water marks. We have explained the concept of a highwater mark in a...

It is said that a retiring individual would require a corpus of about 30X one’s annual expense. This useful rule of thumb, however presents an innocuous picture of a complex problem that has multiple assumptions and constraints. Solving the problem...

Morgan Housel’s book The Psychology of Money caught our attention on two fronts. The first in that it echoed in so many ways how we at Aroha think about investing and wealth and the second in some startling insights into...

In a circular dated 13-Dec-21, SEBI has published an Investor Charter that Investment Advisers have to put up on their websites and/or share with their clients. In light of this regulatory requirement, Aroha Capital has placed on its website this Investor...

We have always wondered upon the effect time horizon has on decision making. There is a qualitative difference between the split second decision made on where to return a shot on a badminton court versus for example choosing where you...

Nobel Laureate Daniel Kahneman is a co-author in a recent book – “Noise – A Flaw in Human Judgement” . In chapter after chapter of the book, deeply disturbing facts are presented about significant noise in professional human judgement. Bail applications, asylum...

Indian markets are at an all time high. Short term interest rates are at a low. Current and prospective inflation is arguably high. While the expected return for equity is muted, investing in debt offers even poorer prospects. Short term...

We are fans of products which have low intermediary charges and low taxes. The drag of intermediary charges and taxes on investments are real and have a significant deleterious impact on the long term returns of investments. One way to...

We have repeatedly written about the need to play defensively when investing. Playing defensively means to first avoid costly mistakes rather than trying to hit winners. Amongst the first steps to avoiding costly mistakes is minimizing intermediary expenses and reducing...

Our composite portfolio is the sum total of all individual client portfolio values and our composite high water mark is the sum total of all individual client high water marks. The performance being reported in this annual report is a...

The Government of India introduced the Sovereign Gold Bond (SGB) scheme In the Union Budget of 2015-16. To date about 45 SGBs have been issued. Let us for example consider the latest issue ending 5-Feb-21 which has been issued at a price...

This blog is a continuation of last month’s blog. In last month’s blog we discussed at length the obfuscation around the word “Total” in Total Expense Ratio (TER) in fund fact sheets. We showed with some real examples that the...

As SEBI Registered Investment Advisers, a corner-stone of our investment philosophy has been to choose low cost index funds. Our rationale has been that low cost index funds are sufficient in meeting the equity exposure requirements of most of our...

I recently attended a webinar on the Financialisation of India’s Savings with Monika Halan moderated by Marcellus Investment Managers. Drawing from the evolution of Bollywood, at the webinar Ms Halan spoke eloquently on how our (specifically the Indian Investor’s) relationship...

This is an unusual blog – in that it comes in-between month ends. We write this blog since SEBI has issued a circular dated 23-Sep-2020 with wide ramifications for Investment Advisers. The purpose of the circular seems to further reduce the obfuscation...

Savers in the USA have the option of saving in tax deferred accounts. Tax deferred accounts provide the benefit of deferring all income and gain in the account from tax as long as there is no redemption from the account....

On 03-Jul-20, SEBI amended the Investment Adviser Regulations. A few progressive amendments included were (i) disallowing individual Registered Investment Advisers (RIAs) from distribution (ii) reserving the name Investment Adviser only to those registered with SEBI as RIA (iii) instituting client...

The book – Winning The Losers Game by Charles D Ellis is a fascinating read. It is clearly THE BOOK we would recommend for individual investors – we are almost tempted to buy one copy for each of our clients!!....

In our blog of Report Card : 31-Mar-20 we presented our performance on a consolidated basis. Performance was reported on a Time Weighted Return (TWRR) basis as against an Internal Rate of Return (IRR) basis. It is critical that investors understand the...

Amidst the COVID-19 crisis the world finds itself in, and the commensurate rout that the markets have witnessed, we report on our annual performance for one more year. Whilst each client has her own individual portfolio holding report and the...

In our blog Emerging Value : 28-Feb-19, we had made out the case for deep value emerging in the wider markets. We had also implied in the same blog that outperformance of our basket of risky ideas against the BSE SENSEX...

It is pretty standard for “investment experts” to say that the long term “average” expected return from equity investments in India would be around 12%. Investors, I would dare say are not just blind but blinded (by the financial community...

Investing is part art and part science and above all is about decision making under uncertainty. In a recent video, I came across some nuggets of wisdom from an unlikely source – Mr. Ajit Doval, India’s National Security Adviser. The video...

A client recently purchased a house and had taken a home loan. As usual the client had to also undertake insurance for his home loan. While chosing the appropriate insurance for the home loan, the client was faced with an...

The financial year 2018-19 has just ended. The year gone by has witnessed stellar growth in the headline BSE SENSEX. The wider market however has lagged these indices. We present Aroha’s performance over the past one year as follows :...

In our blog of 31-Oct-17, we referred to the fact that our equity portfolios (we call them risky portfolios) benchmarked against either the BSE SENSEX or the BSE Small Cap index had been significantly underperforming. In the same blog we had...

In the 31-Oct-18 portfolio report to clients, we had mentioned that Aroha will be introducing a fixed fee (from the next financial year ie 2019-20) in addition to the usual performance based fee all clients are subject to presently. We...

The time value of money is an Investment 1.0 topic. It is a fundamental attribute that capital today is more valuable than the same notional amount of capital anytime into the future. In other words capital of the future will...

Aroha’s Investment Adviser License is coming up for renewal and in this regard, we recently submitted our application for renewal. Anguished with the unfair situation Corporate Fee Only Registered Investment Advisers (RIAs) find ourselves in, we wrote a separate letter...

A few days ago a good friend of mine forwarded me the product brochure of a Structured Product. The product was marketed with the following justification : Back testing of the product performance has shown that:    (i) There is a 81.02%...

The Union Government in its wisdom, introduced a Long Term Capital Gain (LTCG) tax on equity shares in its budget for the financial year 2018-19. My attempt in this blog is to elaborate on how should investors respond to the...

Simple interest is one in which the interest is paid out at regular intervals. In compound interest, the interest is not paid out at regular intervals, but instead added to the principal and the subsequent period interest is then charged...

It is the time of the year to take stock of how things have panned out in the financial year gone by. Clients have a choice of three benchmarks to choose. The first benchmark being a low risk benchmark such...

SEBI has invited comments to its recently published “Consultation Paper on Amendments to SEBI (Investment Adviser) Regulations 2013”. It is not clear whether the contents of this consultation paper released on the 2nd January 2018 is over and above the...

A number of clients have written in asking for our comments on the “Bail In” clause mentioned in clause 52 of the Financial Resolution and Deposit Insurance Bill (2017) tabled before the Joint Parliamentary Committee in August this year. The “Bail In”...

In the current financial year, risky portfolios managed by us and benchmarked to market indices such as the BSE SENSEX price index or the BSE Small Cap Price Index have been severely under-performing. While I have been witnessing this underperformance...

The CFA Society of India had recently conducted a Value Investing Summit in Delhi. Eager to listen to the best minds in the industry, I enrolled for the conference in which Mr. Raamdeo Agrawal of Motilal Oswal was one of...

In mid July, I had the good fortune of being a part of a panel discussion on robo-advisory in India. I was the only representative of a bricks and mortar fee only Investment Adviser on the panel. I was invited...

The subject of this month’s blog is a shameless copy of a chapter from the book Complications by Dr. Atul Gawande. The book provides a fascinating insight into the error prone world of doctors. In the chapter “When doctors make mistakes”, Dr....

The month of April is busy for Aroha Capital. It is the month of the year when client invoices are raised and clients cut their cheques to us. With growth in our client base and the quantum of our outperformance...

While every client is aware of the return generated in her portfolio for the financial year just ended, I would like to take some time to present on how Aroha Capital has performed on a composite portfolio basis. As explained...

When I receive enquiries on the viability of Portfolio Managed Services (PMS), amongst the many pointers that I put out to prospective investors is to draw attention to the concept of High Watermarking and to ensure their PMS fund manager...

In the many reviews I have received of our new web-site, one question that kept repeating itself was – what does the term dumb-bell strategy mean?. As real estate on the main page of the web site was scarce, I...

Dear clients, my apologies for not presenting my monthly blog for 30-Nov-16. We have been swamped with work including the revamping of our website, change in office location and the move to the MFUTILITY platform for mutual fund transactions in...

Festive greetings to all my dear clients. Wishing those of you who celebrate Diwali, a joyous and prosperous year ahead and for the others I hope you are thoroughly enjoying the long weekend that the festival has provided us. As...

SEBI in a circular dated March 18, 2016 among other things had directed that the Consolidated Account Statement being sent by Mutual Funds to investors every six months, must in a separate column disclose the total commission paid to the distributor and...

In his book the Aspirational Investor, Ashvin B. Chhabra provides insightful analysis on investing. The book is a great read and provides some thought-provoking ideas about making smarter investment choices that are aligned with our life’s financial goals. More specifically,...

Since time immemorial the medical sciences have been hounded by the concept of iatrogenesis. ‘Iatros’ meaning ‘healer’ and ‘genesis’ meaning ‘from’ in Greek – literally translating into ‘from the healer‘ or ‘caused by the healer‘. A quick reference check into Wikipedia...