But you said debt funds are safe. Financial advisers and mutual fund distributors must have heard this statement many times over the past week. The trigger was the fall in value of four debt schemes of Taurus Mutual Fund. The net asset values, or price, fell between 7% and 11% over just a day.
Mutual fund investors do not often see these kind of price crashes overnight even in their equity schemes—which are seen to be riskier than debt funds. Worse, the funds were ranked highly by most third-party rating agencies such as Value Research, Morningstar and Funds India (Mint50 does not have recommendations for liquid and ultra short-term debt funds and has done away with looking at star ratings while evaluating longer-tenure debt funds). Investors, distributors and advisers (correctly) find using a star rating an easy way to shortlist funds before they sift further.
The 40-plus have a new parlour game. (The first line is also a gentle warning to the 20-somethings to ignore this piece—you’ve been there, done that.) I walk into a room with some 40-plus people one evening and see them looking intently at their phones. Every now and then, someone exclaims: “It works!”, “I got a 100!”, “Hey, mine is not working. What did I do wrong?” “Bhaisaab, give my 100 bucks back!” This is the 40-plus playing with digital apps that push and pull money using smartphones.
Choice is good, but too much choice freezes us. If you have ever been in the market for a financial product, you know that this is true. To help readers cut through the clutter, we run two league tables at Mint. We ran the 8th edition of Mint 50, the 50 investment-worthy mutual funds that Mint curates, on 13 February 2017. Sometime mid-year 2017, we will do the 5th edition of our health insurance ratings—the Mint SecureNow Mediclaim Ratings. It’s a lot of work. We open ourselves to criticism on our final listing. So why do we work on such ratings? The Mint mandate has been clarity. We have prided ourselves on not reproducing press releases. An average Mint story will explain the background and give the context.
If my Twitter feed is indicative of events in the world, then Donald Trump is outraging people across the world with his first few actions as US President. Among the many things that have caused the upset is a memorandum he signed on 3 February. The memorandum seeks to roll back a US Department of Labor rule that makes financial advisers responsible for their advice. It is reasonable to ask the question: but weren’t they already responsible? No. They were not and it took the Barack Obama government a full 6 years to put together the ‘fiduciary rule’ to protect investors who put their money in retirement products sold by commission-earning brokers and insurance agents.