1. The fund management of MFs definitely does matter to long-term investors, and this is not a one-man job.
2. It is a team of professionals, including analysts, researchers, and the fund manager himself, and its inputs are necessary for investment ideas.
3. In addition, many fund houses have a process-driven approach and strict investment philosophies, within which the fund manager has to function.
4. Some fund houses allow a fund manager to play around the investment parameters, and his credentials are, therefore, critical to the performance of the fund.
5. While he is the lynchpin, any fund house with a process-driven approach, a well-defined philosophy and risk management practices can deliver sound performance without relying purely on the fund manager.
6. Such a fund house can even replace an outgoing star fund manager without affecting the returns.
7. So, you should give precedence to the fund house pedigree over the individual running the scheme, as he is rarely the sole driver of the fund’s performance, especially when investing for very long-term goals.
8. As a thumb rule, evaluating MFs through these 5 Ps is helpful - People, Process, Parent, Performance and Price(charged).
9. All other factors being equal, an inexpensive fund should be preferred over an expensive one.
10. Peer group comparison of funds with similar investment objective and style also enables a fair evaluation in the same category.
11. As it is a fact that none of our MFs are actually fully process driven in practice, hence the persisting importance of a fund manager and his changing positions too.
12. In a growing and emerging economy like ours, there is bound to be higher market volatility, and fund managers are able to utilize this situation for alpha returns.
13. Comparison of long-term performance of funds within the fund house and among peers, after changes in fund managers, through their ratings, expense ratio, etc. can throw a better light.
14. However, at the end of the day, it is the long-term earnings and ratings of peer funds which should matter for comparison by investors for selecting them in their portfolio.
15. The details submitted by MFs in public domain, as directed by Sebi are supposed to be ok as they can be subjected to scrutiny and penalty, leading to loss of customer confidence and clientele, and could therefore be depended upon.
2. It is a team of professionals, including analysts, researchers, and the fund manager himself, and its inputs are necessary for investment ideas.
3. In addition, many fund houses have a process-driven approach and strict investment philosophies, within which the fund manager has to function.
4. Some fund houses allow a fund manager to play around the investment parameters, and his credentials are, therefore, critical to the performance of the fund.
5. While he is the lynchpin, any fund house with a process-driven approach, a well-defined philosophy and risk management practices can deliver sound performance without relying purely on the fund manager.
6. Such a fund house can even replace an outgoing star fund manager without affecting the returns.
7. So, you should give precedence to the fund house pedigree over the individual running the scheme, as he is rarely the sole driver of the fund’s performance, especially when investing for very long-term goals.
8. As a thumb rule, evaluating MFs through these 5 Ps is helpful - People, Process, Parent, Performance and Price(charged).
9. All other factors being equal, an inexpensive fund should be preferred over an expensive one.
10. Peer group comparison of funds with similar investment objective and style also enables a fair evaluation in the same category.
11. As it is a fact that none of our MFs are actually fully process driven in practice, hence the persisting importance of a fund manager and his changing positions too.
12. In a growing and emerging economy like ours, there is bound to be higher market volatility, and fund managers are able to utilize this situation for alpha returns.
13. Comparison of long-term performance of funds within the fund house and among peers, after changes in fund managers, through their ratings, expense ratio, etc. can throw a better light.
14. However, at the end of the day, it is the long-term earnings and ratings of peer funds which should matter for comparison by investors for selecting them in their portfolio.
15. The details submitted by MFs in public domain, as directed by Sebi are supposed to be ok as they can be subjected to scrutiny and penalty, leading to loss of customer confidence and clientele, and could therefore be depended upon.