Latest news with #CapitalmindFinancialServices
Mint
25-05-2025
- Business
- Mint
How Capitalmind's Deepak Shenoy covered shortfall in his son's education goal
Planning for your kids' education goals can be a complex process if you are not prepared for it. Deepak Shenoy, founder and chief executive officer of Capitalmind Financial Services, had to make some adjustments to his financial plan when his son showed more interest in overseas education. 'Earlier, I was building up the corpus for domestic education, but once it was clear that overseas education was more suitable for him, I made the necessary adjustments," Shenoy shared with Mint in an interaction for 'Guru Portfolio', a series where leaders from the financial services industry share how they manage their money. Adjusting education portfolio Shenoy had started making investments for his son's education goal in 2017. As mentioned, the expected goal was domestic education at the beginning. He started investing for the goal from his PMS in 2019. He assumed weighted average returns of 12.2% from a 60:40 equity:debt portfolio, which was part of his PMS firm's goal-planning tool. His son was aged 12 in 2019. The equity allocation was a mix of Capitalmind's active and passive PMS strategies. The debt portion was a mix of short-duration and long-duration funds. In mid-2021, it was decided that overseas education would be more suitable, which meant adjusting the education portfolio. His son still had four years left before starting college. 'I had to get aggressive, increase my investments and increase the equity allocation to 75%," Shenoy explained. For the overseas education plan, he made the following assumptions: US education inflation of 2.5% and currency depreciation of 3.5% (rupee versus dollar). While the education inflation ended up being higher at 3.5%, Shenoy made up for it with additional investments. Over the next four years, a combination of higher investments, higher equity exposure, and reasonable returns from the education-linked portfolio helped Shenoy come close to his targeted education corpus. In today's terms, US education costs around ₹2.4 read: Inside Edelweiss MF CEO Radhika Gupta's plan to build over ₹10-crore—and how she's investing to get there His own investments Excluding the education-linked investments, Shenoy's own asset allocation is 75% equities and 25% arbitrage funds. His PMS also had a separate arbitrage strategy that was more tax-efficient after debt investments lost their indexation benefit, and hence, he made all his new fixed-income investments in arbitrage from FY23. He says he exited his international exposure earlier this year (in January)—held through Nasdaq ETFs (exchange-traded funds)—and is 100% invested in domestic equities. 'That exit worked out well as US stock markets appeared expensive and since January, they have underperformed," he pointed out. His portfolio, though, was marginally positive over the past year. He says the returns were 3.5%. His own investments were largely in his firm's PMS products. Over the last 5 years, his portfolio has delivered 19% annualized returns. He says he is on track for his retirement goals. 'I have already reached 50-60% of my retirement corpus. So, it is on track. But if Capitalmind does well, then that would itself be a very big kicker to my goals as I have a meaningful stake in the business," he read: What makes Mirae Asset's Swarup Mohanty paranoid about his retirement corpus Mutual funds As Shenoy's Capitalmind Financial Services has received the mutual fund licence, as part of the regulations, Shenoy will move his own investments to his new fund house's mutual fund schemes. Regulations don't allow mutual fund executives to own stocks directly, like in a PMS account. For now, he has shifted the funds from his PMS to index funds. These are in Nifty 50 Index fund (37% of equity exposure), Nifty Next 50 Index fund (33%) and Nifty 150 Index Fund (30%). The latter represents the mid-cap segment; 101st to 150th stock in terms of market cap. Pocket money lessons Shenoy says he used to invest his kids' pocket money in liquid funds, but his sons made him switch their pocket money investments to equities. 'I used to regularly share with my sons the progress of their investments. They compared their education-linked investment—which was largely in equity—with their pocket money investment and told me to switch to equity as they wanted similar returns on their pocket money. So, I started investing their pocket money in equity index funds," he says. In spouse's name Shenoy has put all the investments in his wife's name. 'If something were to happen to me, it would be easier for my wife to access the investments if they were in her own name. If something were to happen to her, I am savvy enough to move things around and access the funds," he explains. Life, health cover Shenoy has basic health covers of ₹10 lakh ( ₹5 lakh from family floater and ₹5 lakh from employer cover), and a super top-up of up to ₹50 lakh. The super top-up will kick in after the first ₹10 lakh is paid for. 'My thinking was that ₹10 lakh in medical costs, even I should be able to afford if needed, but I should have an additional buffer if higher costs are required in a medical emergency," he says. Shenoy has a term cover of ₹1.5 crore, which will lapse when he turns 60. 'I don't expect to depend on my income after crossing 60. Hence, I don't wish to cover my income. The term cover plus my savings should be adequate for my family in case something were to happen to me. Additionally, I also have a stake in the business," he additionally holds 10 months of living expenses for contingencies, which is held in arbitrage funds. Staying healthy Shenoy says for the last several years, he has not prioritized his sleep. 'I think I have only been sleeping for four to five hours. And, I would try to somewhat make up for it over the weekend or a holiday, but this was not a healthy practice. Now, I have moved my sleep to six hours. I plan to bump it up every month. That is a major health goal for me," Shenoy says. He has also tweaked his diet by reducing his carb intake. He used to play squash, but after hurting his knee, Shenoy is doing body-weight exercises at home. He adds that he is trying to prioritize family time as well. 'Just like the tagline of our new fund house—win at life—I think it is important not to just focus on making money all the time, but also to improve the quality of life. Hence, we try to now spend more time as a family—try to go for movies, travel, outings, etc. Now that my older son will be going to the US for studies, we will be travelling to the US and Europe," Shenoy says.
Time of India
02-05-2025
- Business
- Time of India
Backed by decades of positive INR returns, is gold set to shine brighter in 2025?
Gold is once again commanding investor attention as global macro uncertainties, currency fluctuations, and central bank purchases continue to strengthen its position as a reliable safe-haven asset. According to recent market analysis and expert commentary, the yellow metal has not only delivered consistent outperformance over the long term but is now poised for another strong year in 2025. Interestingly, gold (in INR terms), has not had a negative decade in INR versus two decades of negative returns for the USD, according to a report by Capitalmind Financial Services. Further, gold's history reveals its dual nature: an enduring store of value and a volatile investment prone to long drawdowns. 'Gold has been a relatively safer asset for Indian investors on account of the Rupee's depreciation versus the USD,' said Anoop Vijaykumar, Head of Research at Capitalmind, highlighting that gold's role in modern portfolios should be part of a strategic, systematic allocation rather than reactive FOMO-driven decisions. The divergence between gold's performance in INR versus USD terms has been stark. Capitalmind's research shows that even in periods where USD returns were negative (e.g., 1980s, 1990s), INR returns remained positive, thanks largely to the rupee's depreciation. Live Events For example, during the 1990s, gold posted a -28% return in USD, but a +85% return in INR. From 1990 to 2002, the USD return on gold was frequently negative, whereas INR returns remained largely in the green. As of 2025, it takes more than 80 INR to buy 1 USD, up from just 8 INR in 1973, highlighting the importance of currency hedging for Indian investors. (Source: Capitalmind Financial Services) Also read: Gold retreats on firm dollar, US payrolls data on tap Gold's increasing demand Nippon India Mutual Fund also shared certain data points that show the yellow metal's growing demand among investors. The data highlights that the industry turnover has tripled since 2018, comparing the prices of the metal on the occasion of Akshaya Tritiya each year. The turnover has increased to Rs 32,541 lakhs in 2025, up from Rs 3,007 lakhs in 2018. Meanwhile, the Nippon Gold ETF accounted for 40–63% of total industry turnover in most years. Further, in 2025, Nippon's volume was also 21 times the industry average (excluding its own). Volumes spike annually around Akshaya Tritiya, also reflecting a shift in consumer behavior — from buying physical gold to investing in digital and paper gold formats like ETFs. Gold outlook for 2025 As per Capitalmind's study, gold is expected to approach USD 3,300 per ounce in 2025, supported by slowing U.S. growth, rising fiscal deficits, and ongoing geopolitical instability. This would mark a sharp rise from the $800/oz levels seen during uncertain periods in 2024. Key drivers supporting this outlook include: Trade War Escalation: U.S. tariffs on Chinese goods (145%) and retaliatory tariffs from China (125%) have increased safe-haven demand. Currency Hedging: Depreciation of the yuan and other emerging market currencies has accelerated gold buying. According to Manoj Kumar Arora, Managing Director at Almondz Global , 'Gold as a commodity is expected to perform well in 2025 despite gold posting a 30% return since last year.' He added that, 'Gold has posted a 15% CAGR return since 2001 and has outperformed inflation by more than 2% to 4% since 1995.' Arora also highlighted continued strong central bank buying as a structural pillar for gold's bullish trend. 'As of March 2025, China holds 2,292 tons while RBI holdings reached a record 879 tons,' he stated, noting that global central banks have been adding 1,000 tons of gold annually over the past three years. 'We believe tariff-driven recession and stagflation risks are forecasted to continue for gold's structural bull run,' Arora added. He recommends investors consider Gold ETFs as a low-cost investment avenue in this environment. Also read: The golden illusion: Know the risks behind gold's safe haven image With elevated central bank demand, tariff-related uncertainties, a depreciating rupee, and geopolitical risks on the horizon, experts maintain a constructive outlook on gold for 2025 and beyond. As history shows, even a modest gold allocation can enhance portfolio stability, especially when markets are in flux. As Capitalmind's report summarises: Portfolios with just a 5–10% allocation to gold often achieve better risk-adjusted returns than equity-only portfolios.
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Business Standard
30-04-2025
- Business
- Business Standard
Bought gold in India? Data shows why you have been winning all along
Gold hasn't had a single negative-return decade in Indian Rupee (INR) terms — a claim the U.S. dollar can't match, said a new report by Capitalmind Financial Services Pvt. Ltd While the world watches gold push towards $3,300 an ounce in 2025, driven by fears of US economic slowdown, trade wars, and ballooning deficits, Indian investors may already be holding a golden ticket. Gold has delivered reliable returns when measured in Indian Rupees (INR) — even over long timeframes, which means it has consistently appreciated in value for Indian investors. These INR returns have actually been better than gold's returns in U.S. Dollars (USD) — meaning, if you bought gold in India and held it over the long term, your gains would likely be higher than someone who bought the same gold in the U.S. Why the difference? It's largely due to the depreciation of the rupee against the dollar. As the rupee weakens (which it has steadily over decades), the local price of gold in INR goes up, even if the international (USD) price stays flat or falls. Implication for Indian investors: Gold not only acts as a hedge against inflation and economic shocks, but it also benefits from currency depreciation, making it a more rewarding asset for Indians over time. Also Read 'Gold's history reveals its dual nature: an enduring store of value and a volatile investment prone to long drawdowns. in spite of its volatility in USD, Gold has been a relatively safer asset for Indian investors on account of the Rupee's depreciation versus the USD. While it won't generate cash flows or compound like equities over decades, its low correlation with other assets makes it invaluable for diversification. The best way to include gold in your portfolio is through systematic rebalancing—not as a reactionary move driven by FOMO but as part of a long-term strategy designed to weather market cycles," said Anoop Vijaykumar, Head of Research, Capitalmind Financial Services. As per the study, gold is expected to approach $3,300 per ounce in 2025, driven by fears of slowing U.S. growth, geopolitical tensions, and rising fiscal deficits. This surge has coincided with a correction in equity markets, sparking renewed interest in gold as a portfolio diversifier. Why 2025 Could Be Gold's Next Big Year This year's rally toward $3,300/oz is fueled by a perfect storm: Trade War Escalation: U.S. tariffs on Chinese imports hit 145%, with China retaliating at 125%. This reignited demand for gold as a safe-haven asset. Yuan Weakness: A 19-month low against trade-weighted currencies triggered defensive gold buying by central banks and investors. Equity Market Correction: Tumbling equity valuations have made gold a go-to diversifier. Portfolios with just a 5–10% allocation to gold often achieve better risk-adjusted returns than equity-only portfolios. Capitalmind tested a 50:50 portfolio split between gold and the Nifty 50, rebalanced annually. The result? It outperformed investments in either asset alone over more than 20 years — a surprising revelation given gold's reputation for underperformance versus equities. This is a textbook example of the Lindy Effect, where strategies that survive over time are more likely to continue succeeding. Historical Lessons: Gold's Whiplash Decades Gold investors have experienced wild swings. In the 1970s, gold soared +1359%, only to languish with two decades of negative returns in USD. But INR investors were shielded. After the 1991 reforms liberalized India's economy and decontrolled the rupee, the stage was set for divergence. From 1990–2002, gold in USD terms struggled, often posting negative five-year rolling returns. Yet INR returns stayed mostly positive, thanks to a steadily weakening rupee. "As shown in above table, in early 1980, Investors inspired by the stellar returns of the 1970s (+1359%) would have faced two decades of negative returns. Whereas, in Early 2000, after dismissing gold during the poor-performing 1980s and 1990s, investors would have missed its massive rally in the 2000s (+293%)," noted the report. Missed the 2000s? Y ou missed a +293% rally. That unpredictability is exactly why Capitalmind advocates systematic rebalancing, not emotion-driven decisions. How about the Indian Investor in Gold? The report highlights that it took only 8 INR to buy 1 USD in 1973, whereas by 2025 it will take more than 10 times that amount. The returns on gold in INR and USD were fairly similar up until 1990, largely due to India's capital controls and protectionist policies. However, the post-1991 reforms, including trade liberalization and currency decontrol, entrenched a more market-driven exchange rate. This institutionalized the rupee's sensitivity to external shocks, sustaining the post-1990 divergence in gold returns. As mentioned below, the USD return on gold experienced negative movement between 1990 and 2002, while the INR return remained positive for the most part. On a five-year rolling return basis, the USD return on gold frequently slipped into negative territory, especially between 1990 and 2002. Whereas the five-year INR return mostly stayed positive and has remained ahead of the USD return for the majority of the period. What should investors do? A 5–10% allocation can dramatically improve your risk-adjusted returns. And for Indian investors, the rupee's long-term trajectory continues to enhance those gains. So next time you consider where to park your long-term savings, remember: gold might not shine every year—but in INR, it never dims for long.
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Business Standard
30-04-2025
- Business
- Business Standard
How much should you allocate to gold in your portfolio this Akshaya Tritiya?
With gold prices scaling past the ₹100,000 per 10 grams recently and making the yellow metal out of reach for some, is it still advisable to buy the yellow metal at the current prices this Akshaya Tritiya, and how much money should allocate to gold in your portfolio? According to a note by Capitalmind Financial Services, gold portfolios with just a 5–10 per cent allocation to gold often achieve better risk-adjusted returns than equity-only portfolios. '50:50 portfolio of gold and the Nifty 50, rebalanced annually, outperformed standalone investments in either asset over more than two decades. This counterintuitive result underscores the Lindy Effect in action — where longevity and resilience in systems or strategies increase their likelihood of enduring success," the note said. In early 1980, investors, the note said, were inspired by the stellar returns of the 1970s. If they invested in gold back then, they would have faced two decades of negative returns. 'In early 2000, after dismissing gold during the poor-performing 1980s and 1990s, investors would have missed its massive rally in the 2000s. This unpredictability underscores why systematically rebalancing portfolios is critical,' the note said. Why are gold prices rising? The recent rally in gold that took the prices of the yellow metal past the Rs 100,000 per 10 gram mark in India has been triggered by US tariff fears as it fueled safe-haven demand. The $800an ounce price surge in gold in 2024/25, analysts said, is related to trade-related uncertainties. Yuan depreciation (19-month low versus trade partners' currencies) also accelerated gold buying as a safe-haven asset. Gold returns USD vs INR 'The returns on gold in INR and USD were fairly similar up until 1990, largely due to India's capital controls and protectionist policies. However, the post-1991 reforms, including trade liberalisation and currency decontrol, entrenched a more market-driven exchange rate,' Capitalmind said. Gold price outlook Analysts feel there is more steam left in gold price rally and investors should use the dips to buy the yellow metal. Analysts at Motilal Oswal Financial Services (MOFSL), for instance, expect gold prices to hit the ₹106,000 mark in the long run. 'Investors can start accumulating gold near ₹90,000-91,000 for the long-term targets of ₹106,000. The metal has resistance near ₹99,000 levels,' wrote Manav Modi, senior analyst for commodity research at MOFSL in a recent report. READ ABOUT IT HERE Gold demand outlook One casualty of the surge in prices, according to analysts, could be retail demand for gold. A Crisil Ratings analysis of 60 gold jewellery retailers, which account for a third of the revenue of the organised jewellery sector, indicates as much. In fiscal 2025, retailers, according to Crisil Ratings, took a 4 – 5 per cent hit to volume as gold prices soared around 25 per cent on-year amid geopolitical and economic concerns. As of mid-April 2025, gold prices are already nearly 20 per cent higher than the average price in fiscal 2025. 'The recent jump in prices came just before the start of the festive and marriage seasons in the first half of April 2025, limiting the impact on demand thus far. However, as ticket sizes for buyers are likely to remain constant, caratage and grammage may reduce, as seen in the last four fiscals, impacting volumes. The demand, though lower, remains supported by duty cuts on gold imports announced last year,' said Himank Sharma, director at Crisil Ratings.
