50 shades of value investing in India
15 July, 2022
While everyone agrees that value investing is buying a stock for less than its intrinsic value, this is easier said than done. There is no one way to calculate intrinsic value. Over time Warren Buffet’s definition of value has changed from the ‘cigar butt’ approach that his mentor Ben Graham espoused to a more broader
- Published in Portfolio Construction, Equities, Featured
How active and skilled are Indian equity funds?
22 June, 2022
While retail investors and advisers track various performance-based quantitative parameters such as excess returns and Sharpe ratio on mutual fund fact sheets, the professional investment consulting industry uses more advanced measures such as tracking error and information ratio to evaluate active funds. We calculated and analysed these measures for the Indian equity fund universe with
- Published in Portfolio Construction, Equities, Featured
Are PMS better than mutual funds?
20 January, 2022
With increasing flows into portfolio management services (PMS), we hear PMS providers claiming that they outperform mutual funds as a category. We decided to take a high level look at the performance. While the median PMS performance is not too different from that of mutual funds, the dispersion of returns is higher. We suggest investors
Indian financial reporting standards
19 October, 2021
In India, the state of financial reporting has changed dramatically in the previous five years. As trade expands beyond national borders, compliance and reporting standards must adapt as well. The reporting standards ensure that the transactions are reported by the firms similarly. However, standards must remain flexible and allow discretion to management to properly describe
- Published in Equities
Differential voting rights in India – a summary
05 August, 2020
What are DVRs? Dual Class Shares (DCS) or shares with Differential Voting Right (DVR) as popularly known in India, simply mean that a company has issued more than one class of stocks with different voting rights. In other words, DVRs are shares that give the holder different voting rights compared to someone who owns ordinary
- Published in Equities
Unlisted stock investing
21 July, 2020
In addition to investing in the 5,000-odd listed stocks, investors can invest in unlisted stocks, either pre-IPO or delisted stocks. The CFA Society India organised a webinar on this topic – https://www.cfainstitute.org/en/research/multimedia/2018/investing-in-indias-growing-unlisted-space The webinar discusses what unlisted stocks are, their types, valuation, how to invest. Unlisted securities are not listed on stock exchange and those
- Published in Equities
Does ETF liquidity matter for investors?
03 June, 2020
The Indian asset and wealth management industry laments the lack of liquidity in ETFs, encouraging investors to buy passive funds instead. But what is liquidity and does it matter? In the recent past, two papers have been issued to address this topic – The CFA Society India issued a report on ETFs generally with some recommendations
- Published in Portfolio Construction, Equities
Forget track records for responsible investing
09 December, 2009
The United Nations Principles for Responsible Investment now claims over 550 signatories with more than USD 18 trillion in assets. UNPRI provides a framework for institutional investors to integrate environmental, social and governance (ESG) factors into investment processes. Also, the International Finance Corporation has sponsored a study on the prevalence of RI in emerging markets.
- Published in Equities