Any MF that shorts the BSE?

[Kashif.Baig]

I'm new to investing. However, after seeing the rate at which the Sensex scaled up from around 8000 to 17000 over the last year, I feel that it's probably time that it will fall back.

Is there any way I can short the BSE i.e. bet that the Sensex will go down in the near to medium term?

regards,
Kashif

 

[maddy2384]

i dont thnik so.....

 

[columbus]

I'm new to investing. However, after seeing the rate at which the Sensex scaled up from around 8000 to 17000 over the last year, I feel that it's probably time that it will fall back.

Is there any way I can short the BSE i.e. bet that then Sensex will go down in the near to medium term?

regards,
Kashif

Nifty you can short via Futures. But MAX for 3 months.
Later you can square off and extend it by another 3 months.

 

[AW10]

I think, SEBI has not allowed such ETF / Funds in India that can take exposure on short side.
But in global market, there are inverse ETF / Short ETFs available that allows you to take exposure for the fall in price. Value /NAV of such funds go up when underlying falls.

I don't think SEBI will allow such funds in near future cause their presence will make market more volatile.

Happy Trading

 

[alpha1]

Mutual funds are tools to maximize investment returns and minimize the risks.

Short Selling is not an investment by any measures.

 

[findvikas]

MFs are different routes than equities and there are two ways of investing.

* Invest in SIP and withdraw as Bulk
* Invest in Bulk and withdraw as Salary what I call as (SWP - Systematic Withdrawal Plan)

First approach is like you know most commonly done by common people who does not need to worry about falling market.

In second approach, your entry needs to be right.. like I know someone who did it.. he picked up HDFC Top 200 fund back in January 2009 in bulk.. which is above 123% now even after market has fallen... and since after last year's Budget he has redeemed 100% of his investment every month in equal units and still hold only the profit part of it in his folio (as risk free investment)

The core idea behind MF is that fund managers manage bulk funds and instead of short selling they book their longs when they see trouble coming and stay on sidelines for sometime or if its a mixed basket fund then they go for defensive sector/selective stocks.

 

[findvikas]

Second route is preferable to those who are planning to retire and are expecting some good amount of fund either from their existing MFs , FD , Gratuity and whatsoever. They can find a good fund and BUY in bulk and then after couple of months start withdrawing as retirement salary every month.

 

[AW10]

Mutual funds are tools to maximize investment returns and minimize the risks.

Short Selling is not an investment by any measures.

Are u saying that we can't make money by shorting ?

In my view, people make money in market when it goes up / goes down or stays in a range.
Only MFund make money when markets goes up.. and remaining 2 cases, only MF's fund manager makes money by controlling higher asset under his belt at the cost of MF investors.

I pity MF, cause they can't make money in falling market whereas as retail trader, I can.

Happy Trading

 

[findvikas]

I pity MF, cause they can't make money in falling market whereas as retail trader, I can.

It's not 100% true... just like a day trader or swing trader who go short when markets are falling MF investors.. atleast couple of them that I know shift their funds from one class to another to protect their fund value and also gain due to the shift. Then shift back to the original fund..

So this is a gain if you believe that a penny saved is a penny earned

Agree that Buy , Hold & Close your eyes guys dont gain anything from falling markets in MF

 

[AW10]

It's not 100% true... just like a day trader or swing trader who go short when markets are falling MF investors.. atleast couple of them that I know shift their funds from one class to another to protect their fund value and also gain due to the shift. Then shift back to the original fund..

So this is a gain if you believe that a penny saved is a penny earned

Agree that Buy , Hold & Close your eyes guys dont gain anything from falling markets in MF

But by rule defined in prospectus which got approval from SEBI, MF can't go into 100% cash. So even in worst case, 80 to 90% of AUM is stuck in stocks. And when market goes down, all stocks go down with it irrespective of sector/company etc.
Yes, some sector under/out preform the fall.. but again, MF can't put more then x% of AUM in a sector.. That means, major part of their asset will still be open to market risk. So they are tied up again.

As you have mentioned, yes, then make those adjustments and try to control the loss..but they don't have much leeway there.
So, even if MF mgr know that mkt is going down, he can't do much but just sit and fall with it. By making such minor adjustment, they manage to beat the benchmark..and collect their full bonus..
As BUY Only investor, they can just manage company risk/ sector risk with some adjustments but they are always open to market risk and economy risk.

That's why I like my position as retail trader who is free from those constraints and be my own boss and enjoy 100% freedom.. (I can still make foolish mistakes of holding on to longs and not following my rules..but that is different issue altogather).

Historically crashes are always short but steep so if we can't benefit from the opportunity, then it is big loss. And due to sheer size, MF's can't shift there position in one day. That's is where our agility is big edge over those biggies.

I only pity their position. (maybe I am only one here on TJ who thinks like this).

Happy Trading