We understand this concern—and it’s a completely valid one. At IME Capital, our fund ratings are built around long-term potential, not short-term performance. A fund that continues to hold a high rating despite recent underperformance reflects our view that the current phase is temporary, and that the fund still retains all the right characteristics to … Read more
It is important to note, that performance of a fund is only one out of many criteria that we look at, when rating a fund. Past performance of a fund, may or may not be replicated in the future, and our rating methodology focuses on a comprehensive set of factors that lay the foundation for … Read more
Flexicap funds are equity funds that are allowed to invest in any proportion of large, mid & small-cap companies. This gives the fund manager the flexibility to position his portfolio across market-capitalisations, based on evolving market conditions. Multicap funds on the other hand, need to at times maintain a minimum of 25% each in large, … Read more
Timing the market is something that is impossible to do, even the best fund managers are not able to do. When newflow is positive, equity markets are likely to be at highs and as long as economic momentum sustains markets can continue to do well. When newsflow is negative, this is likely to be the … Read more
While equity markets can be highly volatile in the short-term, over the longer-term performance tends to be in-line with the growth of the underlying economy. This context, helps explain the 12-15% IRR that is often considered a good benchmark for longer-term equity returns. To explain this further, real-GDP growth in India is expected to compund … Read more
Arbitrage fund returns closely track short-term risk-free market interest rates. This is because arbitrage opportunities exist when there is a spread between cash and futures markets which is similar to or better than short-term risk-free market interest rates. Any yields that are substantially higher than short-term market interest rates, get quickly arbitraged away – leading … Read more
India’s stock market offers active fund managers a real chance to outperform passive funds, even though their fees are higher. This is because the market is still developing, with less institutional participation compared to more mature markets. Active managers can take advantage of inefficiencies by carefully selecting stocks and timing their trades. In a market … Read more
With the change in taxation of debt funds (gains to be taxed at an investor’s income tax-slabs), we normally recommend investors invest in Arbitrage funds instead (due to their superior taxation leading to better post-tax returns). This is discussed in greater detail in our blog: Arbitrage Funds: Why Post-tax Yields are Superior to Debt Funds? … Read more
Pre-IPO funds are often considered to be the safest form of unlisted investing (please note, that all unlisted funds are typically higher risk-reward than even the most aggressive listed equity funds). Since Pre-IPO funds typically invest in more known & mature businesses, that are typically slated for an IPO in a 1-2 year period, the … Read more
Both Pre-IPO funds and Venture Capital Funds are funds that invest in unlisted equities, and have some similar risk – Exit Risk, Lack of transparency on valuations, Illiquidity risk etc. However, while both funds have a similar level of risk, there are some important differences: Maturity of the Business Illiquidity Risk As a category, Pre-IPO … Read more
IME Capital Pvt. Ltd. is a research-first investments firm. We aim to disrupt the wealth management industry, by shrinking the gap in investment insights between central research teams & RMs/Clients.