Attendees continued to participate in large numbers on Day 2 of CCIM 21. More than 4388 participants benefited in the second day of the event.
In line with the conference theme, the speakers addressed existing opportunities and challenges while decoding emerging trends. Every session shared some great ideas and actionable tips.
Here are the key highlights of Day 2.
Monika Halan, Author, Personal Finance Guru
Topic: What if you die? Planning beyond this life
- Different regulators have formulated different nomination rules. The rules of nomination also differ from product to product
- Nominee and legal heir should be the same to avoid court cases
- Register nominees for every financial product. Remember to fill nomination details for FDs. Bank account nominee does not automatically become nominee in FD
- Maintain a file with details of each financial product. Create a separate sheet for each type of assets — mutual funds, insurance policies, etc.
- Insurance policy sheet should contain information like name of company, name of policy, policy number, date of premium, date of maturity, name of nominee and name and contact number of agent
- Real estate sheet should contain details like address, if ownership is joint or single, papers’ location, rent details, if any land is agricultural land and if any loan has been taken on the property
- You must write a will as it makes things easier. You can even write it on a plain paper
- You will need two witnesses. Make separate wills for yourself and your spouse
- Witness and executor should be younger than you. Witness should not be a beneficiary
- Will should be sealed and kept with a dependable person like family lawyer or planner
Rahul Singh, Senior Fund Manager- Fixed income, LIC MF
Topic: Current debt market scenario and the way forward
- 4 things to look when investing in the debt market (1) level of liquidity in the market (2) rate of inflation (3) government borrowings (4) global scenario
- When the level of liquidity reduces in the market, the yield at which securities are available starts inching upwards. As things get better with the rising momentum of the vaccination drive, RBI is expected to announce measures to bring down the liquidity level
- RBI is expected to implement new measures slowly and gradually, as any drastic change will hurt economic growth. This gradual implementation will work as a silver lining for investors as they would enjoy sufficient time for reviewing their portfolio
- At the current juncture, it is advisable to opt for low duration debt products for at least one year
Vidya Bala, Co-founder, PrimeInvestor
Topic: Creating the ideal mutual fund portfolio
- Creating a mutual fund portfolio has three aspects — asset allocation, choice of funds and plan of action to maintain the portfolio
- Choosing a mutual fund category depends on following: Time frame, risk appetite and whether the category fits your goal
- Role of different categories:
- Largecap / flexicap - core of your portfolio to provide stability within equity
- Large & midcap / multicap - provides aggression to the portfolio with flexible style
- Mid and smallcap - provides kicker returns to your portfolio. Should not be a part of low-risk investor's portfolio
- International - Provide diversification if investor has a 5-year plus time frame
- You can stay invested in a debt fund as long as you want but you need to adhere to the minimum time frame
- For small investments, you don't need more than 2-4 funds. As your portfolio grows, you can invest in 6-12 funds
- Add more funds only if you think the new fund will compliment your present portfolio
- For short-term debt, diversify across AMCs, even if that means duplication
- Active funds call for active management. Rebalance the portfolio annually and review it half yearly. Don't over review your portfolio
Manoj Shenoy, Chief Executive Officer, IIFL Asset Management Company
Topic: How to preserve wealth
- Estate planning helps to preserve wealth generated during lifetime towards post lifetime activities like seamlessly transferring legacy to future generations, charity, caring for a differently-abled child, etc
- Estate planning can be achieved through more than one way - nominating, gifting, writing a will, setting up a HUF, creating a Trust or joint holding
- In absence of an estate plan, legal heirs of the deceased estate have to apply for a succession certificate from the relevant court
Vinay Paharia, CIO, Union MF
Topic: Factor Investing – What has worked for equities in India?
- Business growth is a strong indicator of future stock returns. Growth premium exists in Indian market, shows a study done by Union MF
- Portfolios focused on future quality potential of companies are likely to produce superior returns
- Momentum premium exists in India. Momentum has delivered the best performance based on retrospective data amongst all factors analysed in the study
- Forward-looking valuations have a stronger influence on future returns than trailing valuations
Dhirendra Kumar, Founder & CEO, Value Research
Topic: Mutual funds guru answers your queries
- Allocating across 4/5 funds will be able to meet the needs of most investors if chosen properly. Investors must typically have a time horizon of at least five years while investing in equity funds
- Active investors can opt to invest in international funds through ETF, while FoFs are recommended for other investor types. For someone trying to test foreign grounds, 10% to 15% of the portfolio can be invested in international funds
- The date of SIP has nothing to do with a fund’s performance. Investors can opt for any convenient date
- For investors complaining about underperforming schemes, it is important to determine the period for which the scheme is not performing well. Additionally, underperformance must be defined as well i.e. is it unable to beat the index or is it not performing well viz a viz its peers.
It is recommended to allow 2 years before deciding to exit
- For those who have accumulated their retirement corpus rather than opting for an annuity plan, it is advisable to seek expert opinion on deciding asset allocation and devising a withdrawal plan
Ashutosh Bhargava, Head- Equity Research & Fund Manager, Nippon India MF
Topic: Markets - good/bad & ugly
- There is no permanency in capital markets. Stock categories (largecap, midcap and small cap) keep outperforming each other from time to time
- Future is far less predictable than you and I might think. But one thing is proven that markets as an entity keeps going higher in the long run
- Long-term returns of each asset class are same, it’s just that their journey is different
- If one asset class underperforms, the other one takes the lead. Therefore, investors should focus on portfolio diversification
- Emotional bias is the biggest obstacle in wealth creation. Discipline can help you counter this issue
- New investors should focus on asset allocation. This will reduce the bumps in their investment journey. Destination is important but one should also focus on the journey
Daniel Crosby, Behavioral scientist, Author- The Behavioral Investor
Topic: Psychology and the secret of investing success
- There are over 200 biases that can negatively impact the way you manage money. However, distilling these results into four major biases - ego/over-confidence (the feeling of knowing more about the future than what is actually known), conservatism (being overly conservative), attention (scared by things allowed but not likely, for example, a frequent market correction) and emotion (listening to your heart and not head)
- Adopting a pre-mortem strategy can help in overcoming biases. This includes answering the question - What would be the cause of me not reaching my financial goal? Answers will differ and could include - there is too much risk involved, the portfolio is not well-diversified, etc. Having the answer helps in taking protective measures
- Research shows people speaking multiple languages make better financial decisions while thinking in their second language. Thinking in the second language requires slowing down and being more deliberative
- Studies suggest, people make better financial decisions while making it for somebody else, for example keeping their children in mind while taking an investment call can result in prudent decisions
To view the session recordings of both days, click here to login and go to the 'Video on Demand' section in the Navigation Bar on the left.
7 more industry experts will be joining us on Day 3. International investing, multi-asset allocation, and many more interesting topics are a part of the final day of CCIM 21. To attend click here.
Get your clients to attend India’s largest investment marathon.