FATCA - Online Self Certification Facility offered by Registrars - links with my comments

 With effect from November 1, 2015 all investors will have to mandatorily provide  information and declarations pertaining to FATCA for all new accounts opened. For pre - existing accounts AMCs are reaching out to investors to seek the requisite information/declaration which has to be submitted by the investors before specified timelines.

For investor convenience, Registrars have allowed investors to submit the same through online mode for updates across Funds, serviced by them.

A look at the physical forms sent by Mutual Funds, shows that the data needs to be updated for ALL holders of the folio and links to sample forms are here MotilalOswal MF and Quantum MutualFund

I tried the online links and please make use of these and see my comments

Franklin Templeton Mutual Fund

The online updation link is here . Franklin handles its own RTA activity.

For FT, you need to know your folio number, input the same and go along till you submit. For Franklin Templeton, I was able to update the information for all holders. The PAN of the second holder was recognized and I could update the same.

CAMS

CAMS has provided the facility to update the information once and the same will be done across all Funds for which it is the RTA. The link can be accessed from here .

If an investor is only second holder in folios of CAMS Funds (and not the first holder in any scheme), the PAN is not recognized in the option - "I am an existing investor in CAMS"  I have mailed the Registrar a couple of weeks back and I hope this is fixed quickly. Else, second holders would have to use the physical form.

Karvy – the easiest and the best among all

The link for Karvy's Funds is here . Karvy has given us the additional facility to view and edit earlier submissions which is not there for the above two Registrars. I used this to view the earlier submission. 

This is the simplest link and the easiest one to fill in and kudos to the team for keeping it simple. If you are only a second holder in any of Karvy’s Funds, your PAN is recognized and you can very easily complete the process.

Sundaram BNP Paribas Fund Services

There is no online link at this website to update FATCA details for investors of the 2 funds for which they are the RTA – BNP Paribas MF and Sundaram MF

MF Utility CAN

If you have a CAN from MF Utility, you can update the FATCA declaration online here at one place for the 25 Funds which are participating in MFU. I have not tried this facility since I do not  have a CAN. Please try this and comment - I will add the comments

Patanjali takes on MNCs: Yashwant Deshmukh on how giants have conspired against locals

Patanjali takes on MNCs: Yashwant Deshmukh on how giant pharma companies have conspired against locals - cites the case of Vaidya Gauda

Behavioral Finance: What Good Is It, Anyway?

Primers: Nifty Fifty and other videos on the markets from the BL

Bears and Bulls



Exchange Traded Funds




Know your customer



Market Cap




Nifty Fifty




Algo Trading



Hedge Funds

@jace48 and @Prashanth_Krish explain the performance of Quantum LT Equity Fund

Interesting graphs and market tidbits from @Prashanth_Krish

Prashanth has been sharing some really super graphs and interesting market tidbits.

Have a look...

Mutual Funds' net inflow and Sensex Returns

Mutual Funds turned net buyers for 16 straight months and reproduced below is a table - Mutual Funds' net inflow and Sensex Returns from the Business Standard
                 

Mutual funds net inflow		Sensex return
Month	Rs Crore	%
May-14	106	8.03
Jun-14	3,251	4.94
Jul-14	5,081	1.89
Aug-14	6,958	2.87
Sep-14	4,342	-0.03
Oct-14	5,940	4.64
Nov-14	1,677	2.97
Dec-14	6,229	-4.16
Jan-15	879	6.12
Feb-15	4,309	0.61
Mar-15	3,940	-4.78
Apr-15	9,244	-3.38
May-15	4,177	3.03
Jun-15	10,320	-0.17
Jul-15	4,800	1.2
Aug-15	10,017	-6.51
Business Standard

Irritating, customer unfriendly procedures at Mutual Funds

Irritating and unreasonable procedures at Mutual Funds.

It is a known fact that minors may not have bank accounts and when investments are made on behalf of minors, it is common to give the bank account details of the guardian and issue the cheque from the guardian's account.

However, when the minor turns a major, the folio is locked for transacting till some formalities are completed in the folio which include registration of the PAN, KYC and bank account of the minor.

Now, a few years ago, if an investor (not minor) had to change bank account in the folio, mutual funds wanted proof of the old bank account ( account to be deleted from the folio - old bank account cheque leaf) as well proof of the new bank account. This was to protect investors from fraudulent changes.

However, this is really unreasonable in the case of minors who have turned major since this is not technically a new bank account.  It is the introduction of the minor's account in the folio.

Do see the tweets below - irritation faced by an investor and the delay in getting redemption proceeds.

Are you aware of the risks of investing in Credit Opportunities Funds?

 Yesterday the NAV of two of the debt schemes of JP Morgan Mutual Fund fell:

JP Morgan Short Term Income Fund  -3.38% - This is a short debt fund with Avg Maturity of 3.59 yrs and a Modified Duration of 2.01

JP Morgan India Treasury Fund  -1.73% - This is an ultra short term fund with Avg Maturity of  0.51 yrs and Modified Duration of 0.37

These schemes, at the end of July 2015 held 15% and 5% of their AUM in one security - Amtek Auto. It seems that Amtek Auto paper was downgraded from AA- to C yesterday.

@BrettLeeholic Amtek Auto downgraded today...AA to C!!!!

— INFixed Income (@FixedIncomeIN) August 27, 2015

That is, yesterday, the scrip was downgraded from one which  has high degree of safety regarding timely servicing of financial obligations with very low credit risk to one which is considered to have very high risk of default regarding timely servicing of financial obligations.

Brokers were being approached to get rid of Amtek papers

Refer my previous tweets, I said a fund was aggressively approaching brokers to get rid of Amtek paper!

— INFixed Income (@FixedIncomeIN) August 27, 2015

@atwistintale Amtek money market bonds maturing 20/09/2015!!! Imagine return, if face value not repaid!! ;)

— INFixed Income (@FixedIncomeIN) August 27, 2015

Spate of NFOs - Credit Opportunities Funds - Read this: Investors searching for high yields floods debt mutual funds

In the last year, there has been a spate of NFOs of Credit Opportunity Funds / Short Term Income Funds. These Funds invest in Corporate Bonds which are rated by credit rating agencies whose analysis I simply do not trust. 

This simply underscores the fact that in choosing to invest in such funds one must understand the risks involved. 

Corporate Bonds are not liquid securities

In addition to the risk of default, investors must note that the Corporate Bond market is not an open liquid market. Trades are through brokers and till the establishment of an online platform for dealing, trading in such securities, deals are not transparent. Any major selling will drop prices. I have had several investors with no idea of the risks involved asking me if these credit opportunities funds were a good place to park money as they expected higher returns that fixed deposits. 

Not really good advice - Commission matters to bankers and sellers

@invest_mutual @LazyTRaider @FixedIncomeIN my advisor put me into this fund. would i have grounds to say it was bad advise or just bad luck?

— Tejus Sawjiani (@tejus_sawjiani) August 27, 2015

Many of us on twitter have been warning of the risks in such funds and please read the tweets and links below. As LazyTraider has been saying - many of these corporate bond funds have been taking unnecessary risks for earning a few basis points more

With lower rated, risky bonds not very liquid, be careful when getting into ST debt funds

— Mahesh (@invest_mutual) August 24, 2015

Boom ! One example of kind of risks bond funds have been taking. Something I have been ranting for a while ... https://t.co/7Bj1CCZp4Q

— Lazy Trader (@LazyTRaider) August 27, 2015

.@tejus_sawjiani Bad advice ! Lots of these corporate bond funds have been taking credit risks for a few basis points more @invest_mutual

— Lazy Trader (@LazyTRaider) August 27, 2015

Risk taken by Equity FMs is transparent. Debt funds very tough. Too many skeletons hidden under holdings like xyzseries 12 etc @NagpalManoj

— sandip sabharwal (@sandipsabharwal) August 28, 2015

Investors searching for high yields flood debt mutual funds - short-term and corporate bond funds http://t.co/EorSWvhVmz

— Mahesh (@invest_mutual) August 24, 2015

Qs top distributors ask before selling a MF StanC: Global tie-up? CitiBank: Upfront? ICICI: High Upfront? HDFC: Manpower? No customer :(

— Manoj Nagpal (@NagpalManoj) August 28, 2015

What happens now to investors in these schemes?

There will most likely be a spate of redemptions. The AMC took concentrated risk. 15% of the AUM of a small scheme of 400 crore AUM was in one security. 

It's adieu time JP Morgan MF - The risks they took are now falling apart Remember all debt is not the same. All debt is not safe

— Manoj Nagpal (@NagpalManoj) August 28, 2015

This was because of a MM bond maturing on 20/09/15...Imagine, if the AMC had failed to exit 2020 (5yr) amtek paper which it held till May15

— INFixed Income (@FixedIncomeIN) August 27, 2015

On the markets today - The focus is on who you are

On the markets today - The focus is on who you are. A great series of tweets by Deepak Shenoy

How stock markets work :)

This is how stock markets function 😀 .@Mldigital .@mobis_philipose .@invest_mutual .@menakadoshi .@investor_first pic.twitter.com/y7plEOEfDD

— pd (@iGalactus) July 15, 2015

Services available at the eFiling website of the IT Department

The following online services are available at the e-filing website of the Income Tax Department for returns filed electronically (Logon to www.incometaxindiaefiling.gov.in with your user id and password)

NEW: The IT Departhment has introduced OTP verfication for returns that have been e-filed and there is no need for  tax payers/filers to send their ITR V to Bangalore for validating and verifying the returns.  Read the process here. 

If one is reporting a taxable income of less than Rs. 5 lakhs, one can easily generate the Electronic Verfication Code at the mobile number registered in your account at the E Filing website

If your income is > Rs. 5 Lakhs or there is a refund, the best way would be to link your Aadhaar to your PAN through the EFiling website and request for the Electronic Verfication Code which will be sent to the mobile number registered with Aadhaar authorities.

 Read the details here 

The other services offered at the efiling website are given below. These were received as a mailer and it is very simple to use this site to do your own filing.

History of e-filed returns You can view all your e-filed returns by Acknowledgement number, along with all status details like receipt of ITRV, processing status, etc. To view E-Filing history, log on to e-filing –> My Account –> My Returns ⁄ Form.

View Status of Demand ⁄ Refund The status ⁄ outcome of the processing of your return as refund ⁄ demand along with reasons of refund failure, if any can be viewed at My Account–> Refund ⁄ Demand Status. The refund issued can also be tracked athttps://tin.tin.nsdl.com/oltas/refundstatuslogin.html

Details of Outstanding Tax Demand Details of outstanding tax demand is available at 'E-file' tab –> Response to outstanding demand. A response can be submitted for Agreeing ⁄ Disagreeing to each of the demands along with details at 'E-file' tab –> Response to outstanding demand.

View Form 26 AS Statement The annual consolidated credit statement, which is provided to the assessee having details of Tax Deducted at Source (TDS), Tax Collected at Source (TCS), Advance Tax ⁄ Self-Assessment Tax ⁄ Refund paid during that year. You can also view your tax payment details in Form 26AS at My Account –> View Form 26AS ( Tax Credit)

Request for Re-issue of Order u/s 143(1) and 154 If the Income Tax Return has been processed at CPC, then an online Request for resend of the Orders u/s 143(1) and 154, can be raised on the e-filing website at My Account –> Request for intimation u/s 143(1) and 154.

Refund Re-issue request If the Income Tax Return has been processed and refund determined has failed to reach the taxpayer, then an online Request for refund re-issue along with the required information can be raised at My Account –> Refund Reissue request.

File Rectification You can file a rectification application u/s 154 for e-filed Income Tax Return processed at CPC. To file a rectification go to My account –> Rectification request.

Submit Grievances and Know Status of Grievance You can register your grievances related to CPC at Helpdesk –> Submit Grievance with respect to ITRV, Processing, Rectification, Refund or Communication, and check the status and view the resolution online.

FAQ The FAQ document related to services is available for easy reference . Go to Help tab –> FAQs.

Contact Us For queries and further information on e-filing and CPC, please contact:  E-filing Call Centre : 1800-4250-0025 (Toll Free) CPC Call Centre: 1800-425-2229 / 1800-103-4455 (Toll free) or 080-22546500

ULIPs versus Mutual Funds

@b50 No data for different periods. Here is 5 year data of best ULIPs Vs MFs for you :) @DharmeshASampat pic.twitter.com/KAiz2ErVWI

— Debashis Basu (@Moneylifers) July 7, 2015

How many stocks should one have in his portfolio - a great twitter conversation

Do see this great twitter conversation on how many stocks should be there in a portfolio

A discussion on whether a Direct MF investor should check scheme portfolios

 I received a link to an online conversation  discussing whether investors should check scheme portfolios - and am sharing some excerpts the same. Provides good insights into investor thinking. 

A question was asked - Many DIY investors just see performance of the last 1,2,7,10 years and the star ratings and invest. They do not see portfolios.  I want to know – Do you need to see portfolios especially of large and multi cap schemes or just follow the ratings and performance. For mid caps – what is your opinion? Many just see performance and ratings. That may not be good? Some say that one must check holdings in your portfolio for overlap.

Gist of the answers - against checking portfolios

1. If I knew how to analyse, I would invest directly in stocks - I don't think it is necessary.

2. Overlap is important. BUT you don’t need to check for that if you only use funds with a narrow mandate. Like one blue chip fund and one mid/small cap fund. (In other words, limit the number of funds and keep the mandate narrow so that one need not check for overlap)

3.  Stop worrying too much about fund portfolios - because of the below mentioned reasons:

There are some practical difficulties in studying the portfolio of mutual fund scheme. They are

We always get information about their holding at the end of month, which IMO is very late. We do not know either the rationale behind buying those stocks. Nor do we know either their purchase price, time of purchase or holding period or exit price. Again we do not know whether the exit is partial or full and at what price and for what reasons.

The very purpose of approaching the stock market through MF is to

a. Compensate our ignorance or lack of time or both with regard to stock investing

b. To get reasonable returns (I mean superior returns) for the fees and commissions we pay to MF and also for taking the risk of investing in stocks.

c. If we know how to do the aforesaid things, we can do it by ourselves and save the fees and commission paid to MFs

Portfolio overlap? You can hardly avoid that. All large cap funds have almost the same stocks albeit in slightly different proportion. It is mid and small cap funds whose portfolios vary by vast extent. But they move up and down too much and too fast. By the time you get the information about them, it is too late.

So stop worrying too much about fund portfolios and stick with the funds that you are comfortable with.

Answers for checking fund portfolios

1. I strongly believe that you should check the portfolio of the MFs you are investing in! A few reasons being, you are entrusting your money to the fund manager, don’t you want to know what’s being done with it? (Imagine you gave someone the money as a loan, would you not check?)

Secondly, you want to ensure that the fund walks the talk. If it’s chasing glamour by taking high risk, then you will know from the portfolio.

Finally, by knowing the portfolio you will start learning what decisions are going wrong and whether the fund manager is learning from them, acting quickly, etc. this helps you in increasing your confidence and remain invested when the market tanks (trust me, if you are a long term investor, you’ll see a few crashes.) if you don’t have complete faith in the fund manager, you’ll exit at the worst possible time.

2. You can see the ability of the fund manager if stocks overlap: If you see all large cap funds have invested in more are less same companies but the return is not always same, I think it’s mainly due to fund manager ability to manage the fund well and get best return so probably just one fund in each category may be bit restricting yourself.

3. Is the fund manager backing duds and putting your investment at risk? I check I think this is a good way to shortlist a fund, along with metrics like churn rate, returns % etc. While this helps in finding out actual portfolio overlaps, this also gives a hint whether the fund manager is backing duds ( say for example – is the fund invested in a Sahara Group or equivalent); and could help investors take a more informed call.

4. Checking portfolios helps you learn what fund managers do: I am currently invested only in one fund, and am predominantly into direct stocks. When I wanted to finalize this fund, I did check portfolios of the funds i had shortlisted (VR/Moneycontrol/Morningstar provide these snapshots). Surprisingly, what i found was that a lot of mid cap/value funds also had large caps; probably to act as a cushion. There were many which had exposure to dominant stocks in the index itself – again probably as a way to protect downside in case of a drop in mid cap stocks.

Here is the  link to the complete conversation  .