Exchange-Traded Funds (ETFs) Investment strategies | Dr Shashank M Hiremath | Saturday, May 18, `24

Dear Readers & Investors, 

Warm greetings to all! 

In the world of investing, Exchange-Traded Funds (ETFs) offer a diverse range of opportunities for investors seeking exposure to various asset classes, sectors, and investment themes. As you board on your investment journey or seek to diversify your portfolio, I am excited to share some insights into some of the best quality ETFs worthy of consideration. 

Investment strategy: Suppose you select all the mentioned ETFs representing different sectors or asset classes, during a major market correction, you may allocate additional funds to purchase more units of each ETF, aiming to take advantage of lower prices. 

Data extracted, as on Saturday, 18 May, `24 

NSE Symbol	ETF details (from NSE website)	Price
SILVERBEES	Nippon India Silver ETF	88.37
AUTOBEES	Nippon India Nifty Auto ETF	238.40
GOLDBEES	Nippon India ETF Gold BeES	62.82
CPSEETF	Cpse Etf	89.35
JUNIORBEES	Nippon India ETF Nifty Next 50 Junior BeES	720.49
MID150BEES	Nippon India ETF Nifty Midcap 150	197.70
LTGILTBEES	Nippon IN ETF Nifty 8-13 yr G-Sec Long Term Gilt	25.71
ICICIB22	Bharat 22 ETF	107.87
MONQ50	Motilal Oswal Nasdaq Q50 ETF	62.94
GILT5YBEES	Nippon India ETF Nifty 5 yr Benchmark G-Sec	55.80
NIFTYBEES	Nippon India ETF Nifty 50 BeES	249.00
DIVOPPBEES	Nippon India ETF Nifty Dividend Opportunities 50	76.25
BANKBEES	Nippon India Etf Nifty Bank Bees	492.50
NV20BEES	Nippon India ETF Nifty 50 Value 20	141.70
MON100	Motilal Oswal NASDAQ 100 ETF	149.41
PSUBNKBEES	Nippon India ETF Nifty PSU Bank BeES	79.40
PHARMABEES	Nippon India Nifty Pharma ETF	19.26
CONSUMBEES	Nippon India ETF Nifty India Consumption	117.00
SHARIABEES	Nippon India ETF Nifty 50 Shariah BeES	484.38
HNGSNGBEES	Nippon India ETF Hang Seng BeES	302.63
MONIFTY500	Motilal Oswal Nifty 500 ETF	21.20
NIF100BEES	Nippon India ETF Nifty 100	248.00
ITBEES	Nippon India ETF Nifty IT	35.71
INFRABEES	Nippon India ETF Nifty Infrastructure BeES	890.00

Disclaimer: This investment strategy is provided for educational purposes only. I am not a SEBI registered analyst, and this is not a financial/ investment advice. Investing in the stock market involves risks, including the risk of loss. You should carefully consider your own financial situation and risk tolerance before making any investment decisions. 

Best wishes,
Dr Shashank M Hiremath,

       DISM, MBA, M.Com (Banking), NET, PhD.
Associate Professor, JAIN (Deemed-to-be University),
Faculty of Management Studies, CMS Business School,
No.17, Sheshadri Road, Gandhi Nagar, Opp Race Course,
Bengaluru 560009, Karnataka, India.
P: +91 9845239036 | P: +91 80 46840400
E: dr.shashank_hiremath@cms.ac.in  E: shashankmh2000@gmail.com
W: bschool.cms.ac.in
'An MBA is a financial investment in yourself'

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Berkshire Hathaway Inc

 Berkshire Hathaway Inc

Company Information

Berkshire Hathaway Inc. is an American conglomerate founded by Oliver Chace in the year 1839. Being currently headquartered in Omaha, Nebraska in the United States, it originally started as a textile manufacturing company. 

The Berkshire Hathaway Inc Class A Shares are the costliest shares, trading at more than $4,30,000. This was largely because there has never been a stock split, and the company paid dividends only once after billionaire investor Warren Buffet took over the company. 

Being a conglomerate, Berkshire Hathaway is engaged in diversified investments in various other corporations, insurance, utilities, food processing, consumer, real estate, operating North American railroad operations, etc. 

What originally started as a textile company expanded its operations into the insurance sector largely due to the waning textile industry after World War-I. In 1965, Warren Buffet took over Berkshire Hathaway, who later expanded its operations in the insurance industry and other avenues. Its insurance business includes property, life, casualty, health, and accident insurance. It is also engaged in providing reinsurance services. 

Berkshire Hathaway is traded under the ticker symbol BRK.A for Class A shares and BRK.B for Class B shares. The financials of Berkshire Hathaway are as under: Berkshire Hathaway clocked a revenue of $245.5 billion with profits of $42.5 billion in 2020. It has been maintaining its massive stakes in some of the most established companies, including Apple, Coca-Cola, Bank of America, American Express, etc. 

Currently, its Class A and Class B shares are traded at NYSE. Apart from it, its Class B shares also form the part of indices that includes S&P 100 and S&P 500. 

Currently Berkshire Hathaway Inc. (class A) has a market cap of $785.77 Billion. It has a P.E ratio of 10.23. The shares of Berkshire Hathaway Inc. (class A) are trading at $546868.99.

Organization: Berkshire Hathaway Inc. (class A)

Employees: 383000

CEO: Warren Buffett

Industry: Finance

Eli Lilly And Company

Eli Lilly And Company Information

Lilly (Eli) & Co. is an American-based multinational pharma company with offices in 18 countries. Its headquarters are situated in Indianapolis, Indiana, and it sells drugs in over 125 countries. Colonel Eli Lilly was a pharmaceutical chemist and American Civil War veteran who founded this company in 1876. It is traded as LLY in the New York Stock Exchange (NYSE). 

Lilly employs over 33,000 people and generated a revenue of over 22 billion USD as of 2019. The company is committed to researching and developing high-quality drugs for humankind's welfare by remaining true to its work. In 1876, this company produced the medicinal drug called quinine used in the treatment of Malaria. 

Among its many commendable innovations were gelatin-coating for the capsules & pills and sugar-coated pills that make them easier to swallow. It also developed various drugs for treating syphilis, rheumatism, eczema, and psoriasis in the early 1880s. A scientific journal asserted that the Lilly operation was the largest capsule factory in the world in 1917. 

In 1923, Lilly mass-produced the Insulin under the name “Iletin” used to treat diabetes in the US. Moreover, it also became the company to mass-produce Penicillin in the 1940s and started producing the Polio vaccine in the early 1950s. It acquired CoLucid in 20017 for 960mn USD and Armo Biosciences for 1.6bn USD in 2018. 

Also, it purchased the Aurora Kinase A, an inhibitor developer, for 575mn USD. It acquired multiple companies for developing and researching breakthroughs. The company aims to bring life-changing research to the community while performing voluntary & philanthropist operations worldwide. Currently Eli Lilly And Company has a market cap of $561.54 Billion. It has a P.E ratio of 112.57. The shares of Eli Lilly And Company are trading at $591.6.

Organization: Eli Lilly And Company

Employees: 39000

CEO: Mr. David A. Ricks

Industry: Health Technology

Stock market investment perspectives of college students, working professionals, homemakers, entrepreneurs, and the self-employed!!

 Dear Readers,

Greetings!!

The stock market's allure has grown immensely in recent years, drawing in a diverse array of participants across various demographics in India. Let's delve into the investment behaviours of different groups, shedding light on the approaches and perspectives of college students, working professionals, homemakers, entrepreneurs, and the self-employed within the Indian context.

College Students:
For college students, entering the stock market often represents an opportunity to learn and gain firsthand experience in financial markets. Their investment behaviour tends to be more exploratory and experimental. With limited funds, they might take smaller positions, often driven by curiosity and the desire to grasp market dynamics. Many turn to online resources, educational platforms, and apps to understand the basics of investing. However, risk-taking tendencies may be higher due to a lack of experience and a smaller financial cushion.

Working Professionals:
Working professionals in India often view the stock market as a means to grow their wealth and secure their financial future. They may adopt a more cautious approach, conducting thorough research and seeking advice from financial advisors or experienced investors. Their investment behaviour is often goal-oriented, focusing on long-term wealth accumulation, retirement planning, or specific financial targets. Regular income enables them to invest consistently and diversify their portfolios across different asset classes.

Homemakers:
Homemakers, though not directly earning an income, play a significant role in household financial decisions. Many homemakers, especially those managing family finances, take an interest in the stock market to ensure the family's financial stability and growth. Their investment behaviour may lean towards more conservative options, prioritizing safety and stability over higher-risk investments. They often seek secure investment avenues that offer steady returns to contribute to the family's financial well-being.

Entrepreneurs:
Entrepreneurs, accustomed to taking calculated risks in their business endeavors, often exhibit a similar approach in the stock market. They might engage in active trading, leveraging their risk-taking propensity and business acumen to identify market opportunities. Their investment behaviour may involve a mix of short-term trading strategies and long-term investments, aiming to diversify their wealth and potentially expand their business interests.

Self-Employed Individuals:
Self-employed individuals, like entrepreneurs, have a diverse range of investment behaviours. Their approach to the stock market often depends on the nature of their business and financial stability. They might prioritize investing in line with their business interests or opt for more conservative investment vehicles to balance the unpredictability of self-employment income. Some may leverage market opportunities to enhance their personal financial portfolio while managing the risks associated with variable income streams.

Indian Context and Common Trends:
Across these diverse groups, some common trends emerge in the Indian context. Technology plays a pivotal role, with the proliferation of investment apps and online trading platforms simplifying access to the stock market for all these demographics. Additionally, the rise of financial literacy initiatives, educational resources, and workshops has empowered individuals from various backgrounds to engage more actively in stock market investments.

Moreover, the impact of social media and peer influence cannot be overlooked. Discussions, tips, and success stories shared online often influence investment decisions among these groups, sometimes leading to herd behaviour or speculative trading.

The stock market in India continues to evolve, attracting participants from diverse backgrounds, each with unique motivations and approaches to investment. While risk tolerance, financial goals, and knowledge levels vary among college students, working professionals, homemakers, entrepreneurs, and the self-employed, the increasing accessibility and resources available are shaping a more informed and engaged investor base across the country. Understanding these varied behaviours helps in comprehending the market dynamics and the broader financial landscape in India.

Best wishes,
Dr Shashank M Hiremath,
Associate Professor & Placement Advisor (Finance),
JAIN (Deemed-to-be University), Faculty of Management Studies, 
CMS Business School, No.17, Sheshadri Road, Gandhi Nagar, 
Bengaluru 560009, Karnataka, India. 
P: +91 9845239036 | P: +91 80 46840400 (Ext: 469)
E: dr.shashank_hiremath@cms.ac.in  E: shashankmh2000@gmail.com
W: bschool.cms.ac.in 
'An MBA is a financial investment in yourself'

United States shutdown and its impact on the global stock markets!! What should Indian investors do?

United States shutdown and its impact on the global stock markets!! What should Indian investors do? 

Dear Readers,

Greetings!!

A US government shutdown is a situation in which the United States (US) federal government cannot operate because Congress has not passed a budget or a continuing resolution (CR) to keep the government funded. This can happen when Congress is unable to agree on a budget, or when the President vetoes a budget bill. Short-term bill is proposed to avoid the shutdown, as it extends funding for appropriations bills till October 31, while instituting a 7.8% cut to discretionary funding. There have been 14 government shutdowns since 1981. 

(Source: https://coopwb.in/info/will-there-be-a-government-shutdown-in-october-2023/) 

When the government shuts down, non-essential government services are suspended and employees are sacked (temporarily laid off without pay). Essential services, such as the military, the police, and fire departments, remain in operation. 

Government shutdowns can have a negative impact on the stock market. Investors may sell stocks out of uncertainty about the economy and the government's ability to function. Shutdowns can also delay or disrupt government economic data releases, which can make it difficult for investors to make informed decisions. 

However, the impact of government shutdowns on the stock market is typically short-term. In most cases, the stock market has recovered from shutdowns within a few weeks or months. For example, during the 35-day government shutdown in 2018-2019, the S&P 500 index fell by about 5%, but it had fully recovered by the end of the year. 

Kevin McCarthy, the Republican Speaker of the House, plays a vital role in this situation. He is a key player, navigating internal pressures and aiming to prevent a shutdown. 

The following are some of the potential effects of a US government shutdown on the stock market:

Increased volatility: Investors may sell stocks out of uncertainty about the economy and the government's ability to function, which can lead to increased volatility in the stock market.

Lower stock prices: Some investors may sell stocks at a discount in order to raise cash, which could lead to lower stock prices.

Reduced liquidity: Trading volume may decline during a government shutdown, as investors become more cautious.

Reduced consumer confidence: Shutdowns can create uncertainty and anxiety among consumers, which can lead to a decrease in spending. This can have a negative impact on corporate profits and stock prices.

Delayed economic data: Many government agencies are responsible for collecting and publishing important economic data, such as GDP growth, unemployment rates, and consumer prices. If these agencies are closed, investors will have less information to make informed investment decisions. This can lead to increased volatility in the stock market.

Reduced government spending: Shutdowns can lead to a decrease in government spending, which can have a negative impact on the economy. This can also lead to a decrease in demand for goods and services, which can hurt corporate profits and stock prices. 

Historically, government shutdowns have had a relatively modest impact on the stock market. However, the severity of the impact can vary depending on the length of the shutdown and the specific agencies that are closed. For example, a shutdown that affects the Securities and Exchange Commission (SEC) could have a more significant impact on the stock market than a shutdown that affects the National Park Service.

 

Investors should be aware of the potential risks posed by government shutdowns and monitor the situation closely. If a shutdown does occur, investors may want to consider reducing their risk exposure by selling some stocks or investing in more defensive assets, such as bonds. 

Overall, the effects of a US government shutdown on the stock market are typically short-term. However, investors should be aware of the potential risks and take steps to protect their portfolios. 

What might happen to the Indian stock market due to US Shutdown?

The impact of a US government shutdown on Indian stocks is typically short-term and modest. This is because the Indian economy is less integrated with the US economy than many other economies. However, a US shutdown can still have a negative impact on Indian stocks through the following channels: 

Reduced risk appetite: Global investors may become more risk-averse during a US shutdown, which can lead to a sell-off of Indian stocks.

Weaker rupee: A US shutdown can lead to a decline in the value of the rupee against the US dollar. This can make Indian exports more competitive and imports expensive, which can hurt corporate profits.

Weaker global growth: A US shutdown can have a negative impact on global economic growth, which can also hurt Indian stocks. 

In addition, a US shutdown can also have a negative impact on Indian stocks if it disrupts the flow of foreign investment into India. 

However, it is important to note that the Indian stock market has shown resilience to US shutdowns in the past. For example, the Indian stock market fell by only 1.5% on the day of the 2018 US shutdown, and it recovered its losses within a few days. 

Overall, the impact of a US government shutdown on Indian stocks is typically short-term and modest. However, investors should monitor the situation closely and be prepared to take action if necessary. 

Here are some tips for Indian stock market investors during a US shutdown: 

Stay calm and avoid panic selling.

Monitor the situation closely and be prepared to adjust your portfolio as needed.

Consider investing in more defensive stocks, such as consumer staples and healthcare stocks.

Review your risk tolerance and make sure your portfolio is aligned with it. 

Hope you liked reading this article!! Thank you for your time.

Best wishes,

Dr Shashank M Hiremath,
Associate Professor & Placement Advisor (Finance),

JAIN (Deemed-to-be University), Faculty of Management Studies, 

CMS Business School, No.17, Sheshadri Road, Opp Race Course Rd,

Gandhi Nagar, Bengaluru - 560 009, Karnataka, India. 

W: bschool.cms.ac.in 

'An MBA is a financial investment in yourself'