Zerodha Varsity

?? Big update on DigiLocker You can soon view all your financial holdings in a single DigiLocker a/c. Key feature: DigiLocker will automatically notify nominees upon the user's demise. Nominees can access all holdings in one place & approach AMCs/brokers to claim assets.?? 1??DigiLocker, a digital wallet by the Govt of India, lets you store & access e-docs like Aadhaar, PAN, DL, birth/death certificates, insurance, bank & NPS statements - anytime, anywhere. Now, you can also view MF folios & demat statements. These e-docs are valid as originals. 2??The idea of SEBI & the Govt is to reduce unclaimed assets. DigiLocker lets you add nominees who can access your financial asset details after your demise. You must provide their mobile number & email when adding them. On the user's demise, DigiLocker notifies the nominee. 3??Steps to Action - DigiLocker retrieves info from the death register or KYC registration agencies. - It automatically notifies nominees via SMS & email. - Nominees can verify their identity and access the deceased’s financial information through their DigiLocker account. 4??If the DigiLocker nominee is also the nominee in the investor’s account/folio, they can directly initiate the transmission process. Otherwise, they can share the information with the joint holder, nominee, or legal heir to let them start the transmission process. 5??The DigiLocker nominee cannot replace the nominee you have set for your mutual fund folios or demat account. See the example as stated by SEBI in the image ?? 6??What happens in the case of a joint account? The surviving joint holder will have the right over the deceased user’s assets. The DigiLocker nominee is expected to share the information with the joint holder or legal heir. ..... This SEBI circular will come into effect from April 01, 2025. Finally, we hope it’s clear that a nominee is not the owner of the assets but only a facilitator for their transfer. Nomination simply ensures a smooth transmission. The final ownership is determined by the will or, in its absence, by succession laws.

It's that time of the year again! Yes, that time of the year when you run to your CA friend or auditor. But this year, we have someone special to help you all! The choice between the old and new tax regimes may be easy, but the changing slab rates, updates on capital gains taxes, and no tax up to 12 Lakh also confused us. So, we are hosting a free Varsity Live session on taxation on March 23rd. Link in comments.

?? China is in the spotlight. Global investors are rushing in, & so are some Indian investors. Chinese ETFs in India are trading at a premium over their NAV; at one point at a 20-26% premium. Why? Here's a breakdown. Eg: Nippon India Hang Seng ETF traded price vs NAV as of Mar 18, 2025. (see the image) 1??China's market was in the doghouse post-2021, while global markets rebounded. Now, it's showing signs of rally. 1-???????? ????????????: Hang Seng Tech Index: 70% Hang Seng: 48% Nifty 50: 3.5% MSCI All-Country World Equity: 9% This rally is happening despite the new trade war. 2??China ETFs in India: ?? Nippon India Hang Seng Bees tracks the Hang Seng Index, offering broad exposure to China’s largest companies across sectors. ?? Mirae Asset Hang Seng Tech ETF tracks the Hang Seng Tech Total Return Index, focusing on tech-driven firms listed in Hong Kong. 3??RBI limits Indian MFs from buying foreign stocks/ETFs. So, there’s a higher demand for existing China-based ETF units on the exchange. Hence, prices soared, much higher than the underlying index. 4?? Paying a premium on ETFs hurts your returns. Why? Eventually, ETF prices adjust to NAV when demand cools. Eg: if you pay a 20% premium for an ETF now and the market rises by 20%, your net return will be zero—assuming the ETF price eventually aligns with its underlying price. 5?? Want China exposure without ETF premiums? Consider fund of funds: ?? Edelweiss MF's FoF investing in JP Morgan Funds—Greater China Fund ?? Axis MF's FoF investing in Schroder International Selection Fund Greater China. Their NAVs reflect the true price of underlying assets. ???????????? ????????: Always compare ETF prices with iNAV (indicative NAV)before buying or selling. You can find iNAV on AMC websites, the NSE, or broker platforms. iNAVs of equity ETFs are usually updated in real-time. However, for international ETFs, there is no set frequency, and they are updated as new data arrives.

Should you buy a stock that has fallen 30% in one day?

After becoming SEBI Chairperson, Tuhin Kanta Pandey's first public speech was on ‘India’s Growth Story: Opportunities & Prospects’. When a new leader takes charge, we look for their intent, vision & style. Here's what he said at the Moneycontrol-CNBC Global Wealth Summit. ?? 1?????????????????????? Tuhin Kanta Pandey is a 1987 batch IAS officer. In his 30+ yrs of experience, he served as Union Finance & Revenue Secretary and was with DIPAM & NITI Aayog. He holds a Master’s in Economics from Punjab University & an MBA from the University of Birmingham (UK). 2????????????? ???? ?????????????? Quoting Charles Dicken, he said, “It was the best of times, it was the worst of times.” Markets will have ups & downs, but India's growth remains strong. With policy, reforms & high investor participation, he believes India to be a global investment hub in the 21st century. 3???????? & ?????? Pandey believes both domestic and foreign capital are key to market momentum. He thinks long-term foreign investments can support infrastructure, innovation, and entrepreneurship. He said SEBI is conscious of addressing the difficulties of FPIs and AIFs. 4?????????????????? ?????????????????? "To ensure that investors are not lost in the labyrinth, investor awareness and education are crucial," he said. Pandey believes mutual funds & pension funds have strengthened domestic ownership, making Indian markets more resilient. 5???????????????? We have seen capital markets undergo significant regulatory changes in the last few years. About that, he said: "All reforms need not be Big Bang. Many times, small reforms cumulatively are more effective. SEBI will use the right mix of both to achieve its objectives." ..... Overall, Pandey praises India’s growth on multiple fronts, especially the surge in investor participation. He highlighted that SEBI's investor base grew from 49M in 2020 to 136M today, with mutual fund investors more than doubling to 53M in five years. For sustainable growth, he stresses the need for access to funding through capital markets - both equity and debt - while highlighting REITs, INVITs, and municipal bonds as key drivers of infrastructure development.

IndusInd Bank shares dropped 27% today. It noted some discrepancies that could hit its net worth by 2.35%. How? Banks typically hedge their overnight derivative positions. If a bank has to make USD payments tomorrow, it would hedge the position today to avoid INR losses at the time of the payment. Sometimes, they don’t find a counterparty to hedge such positions. For example, if a bank receives a 5-yr Yen deposit, it might not find a counterparty to hedge this exposure. The forex desk could ask its own trading desk to enter the trade as a counterparty. However, a September 23 circular from the RBI asked banks to stop trading with their own trading desks from April 1, 2024. IndusInd followed the guidelines and began unwinding all the trades it had entered with its own trading desk over the past 5-7 years. In doing so, the bank discovered a discrepancy - the forex desk and the trading desk were using different accounting methods to report their P&L on the same transaction. The bank revalued those transactions, resulting in a Rs.2100 crore impact on its net worth. From a market cap of 72K crores, IndusInd fell to 52K crores today. DIIs are the worst hit. By the way, about half of all promoter holdings are pledged. The promoters might have to pledge more or make repayments. Either way, this could add more pressure on the promoters. The bank is also grappling with leadership challenges. Last week, the RBI approved IndusInd Bank’s CEO, Sumanth Kathpalia’s tenure by just one year instead of the regular three years. Kathpalia said that the RBI might not be very happy with his way of running the bank. Only recently, in January 2025, did Gobind Jain depart as its CFO. Perhaps they had sensed some accounting inconsistencies by then. Bank officials are inclined to take the full hit on its P&L in March 2025. Very quickly, many brokerages have downgraded Indusind’s shares. Overall, the banking sector is down 0.75% today, which is not a lot compared to the freefall IndusInd witnessed today. Now that the stock is down so much, should you consider adding it to your portfolio? The full impact of the discrepancies is yet to be known. The bank has appointed external auditors to assess the complete loss. So, it might be too soon to make a call.

Besides gold, the U.S. Treasury FoF delivered more than 10% returns in the past year amidst equity markets trending south. Btw, we're not fans of tracking 1-year returns, but this is interesting. As it is a less discussed fund, we thought of doing a deep dive. ?? 1??First, what are US Treasury ETFs? A US Treasury ETF is a fund that holds US Treasury bonds, which are govt-backed debt securities. These bonds come in different maturities of up to 30 years. They are usually considered safe investments due to the backing of the US government. 2??FoFs in India invest in US Treasury ETFs. Passive ones like Bandhan & Aditya Birla MFs invest in ETFs with set maturities (1-3 yrs/3-10 yrs). DSP & Axis actively pick ETFs of diff maturities based on market conditions. These funds closed inflows now due to RBI restrictions. 3??How these debt-based funds gave 10% returns last year 2 key factors: - Higher US Treasury yields - Rupee depreciation. Post-2020, inflation drove US yields and it was at 4.2%-5%. Meanwhile, the rupee fell 5.4% over the year. Together, these factors fueled strong returns. 4??Let’s look at historical trends ?? Yield: US Treasury yields historically ranged between 1-1.6% ?? Exchange rate: Rupee depreciation has averaged ~3% pa over 30 years. So, long-term returns from these funds can be around: yield (~2%) + Rupee depreciation (~3%) = ~5% 5??Risks? Just like a bond fund, the risks are: ?? Credit risk – Low, as US Treasuries are considered safe. ?? Interest rate risk – Higher for longer-maturity bonds, as bond prices fluctuate with rate changes. ?? Liquidity risk – Low, since you’re investing via the FoF. Who should invest? ? For diversification – Many investors have exposure to foreign equities. If you want further diversification into safe global fixed-income assets, US Treasuries can an option. ? Tactical investors – You may make short-term tactical bets if you can track yields and exchange rate movements. ? Goal-based investors – If you’re investing abroad to meet financial goals, shifting from equity to debt (like these funds) as you near your goal can help reduce risk.

In the run-up to International Women’s Day, fine jewellery brand Mia by Tanishq is celebrating women by offering them the opportunity to take control of their financial future. Mia, in partnership with Zerodha Varsity, the educational wing of leading fintech platform Zerodha, is hosting an exclusive, free online financial literacy masterclass designed to empower women. Tap the link to read more: https://lnkd.in/dVVZaxX3 Keep up with the week’s latest jewellery market news with retail dive If you don’t receive Retail Dive, tap the link: https://lnkd.in/dduwN7uK to sign up for free subscription #TheRetailJewellerIndia #Internationalwomensday #MiabyTanishq #zerodhavarsity #collaboration #financialempowerment #womenempowerment #jewelleryindustry

We could not have asked for a better person to lead. This makes all of us so proud! Nithin Kamath Zerodha

SEBI introduced Specialized Investment Funds (SIFs), positioned b/w MFs & Portfolio Management Services. They are more flexible than MFs and are more transparent & tax-efficient than PMSes. But, they carry higher risks than MFs. We break it down here ???? 1???????? ???? ?????? ?????????????????? ???????? ??????? ?? More flexibility in portfolio construction by allowing F&O ?? Allows exposure through derivatives beyond hedging ?? Interval-based redemptions allowed instead of daily liquidity ?? Higher minimum investment threshold 2?? ???????????????????? ???? ???????? Derivative exposure in these strategies is limited to 25% of net assets ? Equity Long-Short: Like a Flexi Cap Fund with derivatives ? Equity Ex-Top 100 Long-Short: Like a Mid Cap Fund with derivatives ? Sector Rotation Long-Short: Like a Sectoral Fund (max 4 sectors) with derivatives Similarly, two investment strategies are allowed each under debt and hybrid categories. 3?? ?????? ???? ???????? - SIFs may allow SIP, SWP, and STP, but you must always maintain a ?10 lakh investment. - Value falling due to market conditions won’t count as a violation. 4?????????????? ???????????? ???? ???????? SIFs may have a notice period for redemptions, meaning your withdrawal is processed at NAV at the end of the waiting period. The max wait time is 15 working days. In contrast, MFs allow redemption requests on any day, with settlements in 2-3 working days. 5?? ???????????????? ???????????????? SIFs will include a scenario analysis in offer documents, showing potential losses to investors in different market conditions. Similarly, MFs conduct stress testing, which helps identify how a fund might react during a market fall or low liquidity periods. .... These SIF rules take effect from April 1, 2025. Only registered mutual funds would launch SIFs, but they will have separate branding for MFs and SIFs, including different websites. ??As with any new financial product, investors should approach it gradually and carefully.