Come Ferbruary, every fund house worth its NAV comes up with a hoard of ELSS / Tax planning mutual fund offerings and promotions. These days you open any (business) magazine and you see atleast a dozen ads on how MFs can save you Rs. 33,360* or something on taxes. First up the claim that they can save so much tax itself is based on some unrealistic assumptions. But we are going to talk about something more today.
“Why do mutual funds position themselves like a herd of sheep?”
To quote Vysper Lynd from Casino Royale, “Even accountants have imagination”, but Indian fund managers (houses) seem to have lacked the imagination to get a slice of unit holders mind (pocket). How else can you explain the same “save tax, get returns” tripe literally everyone is shelling out?
As you can see if we plot various products and services on a space with Product / Service type on one axis and value on the other, MFs/Insurance products comeout as high valued commodities. They are comparable with Saloon or Public transport options on product differentiability. (mind you, i am considering only funds by top performing, well established houses like SBI, HDFC, UTI etc.)
I think MFs can do much more to differ themselves from each other. I know investing in equities is still not a hot favorite for most of the semi-urban, rural India for lack of comprehension of the investment concepts and distance from technological advances like internet and demat. Also tax planning is often not done by these people either because they earn very little or their incomes are not tracked (no TDS or paid in black)
So we can safely assume that MFs are targeting salaried / self-employed people mostly located in metro/cities with sufficient understanding of the offerings and various investment avenues.
Now, sometime back even before I could get my online trading account and PAN I wanted to start an SIP and went to several websites. Finally I called up SBIMF phone numbers in chennai and asked them how I can start an SIP for some of their funds. They sent a person to my office, but to my surprise he is not from SBI-MF, but from some broking house. He gave me application forms and finally took ECS clearance from me. That was the last I have seen or heard from them. I keep getting monthly statements, but I would certainly prefer a better way to track the investment progress and an easier way to buy the funds. Not that SBIMF doesnt have an online part for that, but its pathetic to say the least.
So there goes No. 1, the fund houses can be much more tech/mobile savvy by creating a snappy web site with easy way to do better financial planning and hassle-free investments. Hardly any mf seem to focus on this space.
No. 2 could be “no advertising policy”. For one advertising budgets have to come from fund management expenses (which are generally 1-2%) and the more number of ads you see, the more of investors money is gone useless.
I think recently Reliance MF did fiddle with the positioning and launched a mid cap fund with a Debit card attached to it so that you can redeem units once every month from any of the HDFC atms. I think the concept is innovative even though I am not sure about the modalities.
Hopefully some fund house marketers read this and launch their funds with investor friendly positioning.
Also Read: Excel Based Mutual Fund NAV Tracker | The Art of creating new MFs
41 Responses
Ok, a remarkably simple but just awesome idea! Thanks.
This is a wonderful post!!! There have been so many times where I had to do separate graphs to show changes for the same product over time because I was measure two vastly different pieces (e.g. # of transactions and $ sales). I’ve needed this and didn’t even know it! Thank you!
I love your charting techniques posts!Â
How would you cope with values that are extremely variable before indexing? If the price of the commodity is sometimes very high and sometimes very low, the index won’t very accurately reflect later changes. Can you somehow homogenize the values to artificially deflate the variability?
Hi Bctyner…
Thanks for your love.
In such high volatility, you can use moving averages to plot the line. Assuming a value has cycle time of 7 days (for example: sport event ticket prices go up on weekends and go down on weekdays), you can calculate moving average of 7 days and then plot that to understand the true trend of your data.
For more on moving averages see – http://chandoo.org/wp/2009/04/28/calculate-moving-average/
Also, you can calculate standard deviation and show that as a data point on chart
Its not just an excel technique but a great analysis technique too. Thanks a lot for sharing ! Love your post ( as always 😉 )
Hi Chandoo,
  thanks for nice article. But I’m wondering, how to visualize or analyze data as follows: Let’s imagine we have forecast of 3 materials for week10 till week 20, actualised during 7 weeks (w1 ~ w7). Could you point me to some guideline, how to visualize biggest drops or increases and such a things? Like a forecast history?
I’m attaching example.
https://dl.dropbox.com/u/96356710/forecast.xlsx
Thanks for help.Â
Hi Exoskelet.. You are welcome.
If you have such data, a quick and easy method would be to calculate weekly fluctuation (change% with respect to previous week) and then apply conditional formatting to highlight very high or very low percentage changes. Like below:
Download example file
Great post – thanks for the great advice.
Awesome
Hi Chandoo
Downloaded the workbook ,  can you please explain how to relate the box to the data , Tried doing it was not successful
Regards
Srini
Ditto on Srini’s comment. The whole dang thing is cool, but I couldn’t figure out the link in the data box. Please comment on that technique.
Thanks
Hi Srini & Dean,
The linked data is called as picture link. Please see here to know how to use them:
http://chandoo.org/wp/2010/10/19/how-to-use-picture-links/
Another great post (but who’s surprised by that!).
I run eBusiness activities for a major, global manufacturing company. I need to record and display progress but to do so without revealing any company secrets. I use indices to show %age of total revenue processsed through eBusiness as well as absolute revenue numbers.
The starting point (=100) is the month I joined the company, so there’s no doubt about the value my team and I have added 🙂 Â
Hi,
Great article. I was wondering how you created the “View” page chart to show only columns A-J?Â
You can hide all unnecessary columns & rows by just selecting and hiding them. Please see here for instructions: http://chandoo.org/wp/2012/07/24/show-only-few-rows-columns-in-excel/
Thanks a lot appreciate your good work
Hi Chandoo,
i have a query please. Could you please tell me how i can create a secondary x axis. When i referred articles on the net, it mentioned that secondary x axis option is available in the ribbon under Axis. But i couldnt find it. Could you please help,
Regards
Deepa
right click on the series, you want to have on secondary plot, select format data series, right side of the window you will see secondary axis option..select that and you are done…!!
Hi Chandoo,
Another great post..thank you sharing.
I am not able to get the upward and downward arrows with the percentage in same cell, how do you do that??
Do reply.
Nishant
Hi, How would you handle a situation where the index date for one of the item which you index against has a value of 0 at time=0?
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Thanks. great!how you put the summary below the chart pls?
I want to monitor data changes in open interest of stocks on daily basis.Will this indexed chart work in such situations too.Please reply ASAP.Regards.
Great post thanks.
Hi Chandoo, really like your website…
What if there is a decrease in the following year. How can I calculate the result if the value in the new year (2012 above) is zero?.
i.e.
2011: 2
2012: 0
-200%
Hi Chandoo,
thanks for this.
I need to have a sliding 0 index date so that I can amend the 0 index date on the fly.
How would I be best to approach this?
Best regards,
Mark
Dear Chandoo,
What if my categories are not in full value but in percentages, like Industrial Production, GDP growth rate, Inflation Rate? How to to the indexed chart of such categories?
I want to highlight the row cell with to dates in same row
This indexing and rebasing to 100 has been most useful; I have been able to take the aggregate performance of a small portfolio of investments and compare, or benchmark, this to a recognised global index. However, this portfolio is not static, additional sums are invested periodically (not necessarily regularly) so the original investment of say £100 is now £100 + additional amounts: my question is, how can I now compare my dynamic portfolio to the global index?
Best Excel tutorials I have ever come across. Your content is informative and easy to understand at the same time
im trying to create a chart where the buy price (x) is straight horizontal line across numerous dates on the bottom.
Than the current close of business price per day (Y) is in the same graph
So i can than see if the cost of item is higher than buy price per day.
I just cant seem to get the correct setup to work to show (x) in the graph as a separate continuous line.
Hi Richard…
See this:
Superb post – thanks so much Chandoo!
Mr. Chandoo, you are just great and a great teacher as far as excel is concerned.
I have been studying your post for a long and have derived immense benefits.
Thanks.
Thanks Uche… 🙂
Great post as usual! Could not find anything to create the same in Power BI. I’m trying to replicate it via Dax measure but I’m not getting the output I want. I’m using this formula below
Rebased Stock Indices =
VAR
Original_Value =
CALCULATE ( AVERAGE ( F_stockindices[Close]), FIRSTDATE ( ALLSELECTED (F_stockindices[Date] ) ) )
VAR
Current_Value = AVERAGE( F_stockindices[Close] )
RETURN
DIVIDE ( Current_Value, Original_Value )*100
It would be great if you could help with a video or a post! Many thanks anyway for your amazing work!