Are you Mutual Fund Investor? Are you following Fund
Managers cautiously along with the funds they manage? Are you switch the funds
whenever there is a change in Fund Manager? Read these facts about Fund
Managers before you act on your investments.
Let us understand few untold or unshared stories about Fund
Managers.
# They need new theme
and stories to accumulate AUM
Yes, to be in the market they have to float new stories and
new themes. This way they attract new investors. With boring only 5-10 funds, how can they accumulate the AUM? How can they sustain in such a competitive business?
Therefore, once in a while they come up with the theme or
stories to attract and float the new fund offer (NFO). Advisers or middlemen
brainwashed with lucrative NFO commission. Finally, scapegoats will be investors.
# Equities will work
in the long run
Yes, definitely and none have the second view on that.
However, to sustain in the long run as an investor, it needs a tremendous behavior
training and mind control.
Sadly your fund manager will not teach you such lessons.
Also, they do not define what is the meaning of the long term. Hence, for few
investors, it maybe 3-4 months, 3-4 years or 10-15 years.
# Have you heard Fund
Managers confession?
Have you heard somewhere that Fund Manager came up and
confessed his wrong theme selection, wrong stock selection, wrong entry or
understanding the market wrongly?
In my view, they never do that. They have every
reason ready to defend of what they did (even if it is wrong). They are
also human beings. Doing errors is human nature. What if we assume that
during a role as our fund managers they never did any mistake? Is it believable?
# Do they suggest you
to exit from equity?
Have you ever heard from Fund Managers suggesting you that
you must exit from equity NOW? Exit may be due to your nearing of financial
goal or high market valuation.
They never say you exit. However, they defend at each level
the growth story of India whether the market PE is at 10 or 100 level. Because
at the end they need AUM to run their show. How can they themselves suggest you exit and reduce the AUM?
# They predict always
a POSITIVE story
No matter whether your goal is 2-3-5-10 years, for them it
is always a positive equity story and forces you to invest. They never confess
that their macro or microeconomic views MAY be wrong. Instead, they talk with
confidence as if everything is happening as per their term.
Sadly it does not happen in this way. Including the Fund
Managers, we all humans. While expecting future scenarios, they may or may not
happen. However, they act like GODs who knows everything in advance.
# They defend the
expense ratio
Today morning I was reading an article.
In that article, they compared the Liquid Funds returns with other Debt Fund
types. It was shown that Liquid Funds with less than around 0.2% expenses,
generated around the same or more return than the other types of debt funds during the
last period of 1 Yr, 5 Yrs and 10 yrs.
These are the few bitter truths which you must digest before
investing in Mutual Funds or start following Fund Managers like their fans.
Stick to your basics of investments. Mutual Fund Companies, Fund Managers and
Advisers need money from you to run their show. Hence, they floated these many
1000+ funds. If they are so caring towards your need, then they might have
satisfied with 5-10 funds in each Mutual Fund Companies.
Capitalstars is a SEBI registered investment advisor. Schedule a call with Capitalstars investment consultant or drop a mail at backoffice@capiltalstars.in and we will get in touch with you. You may also call us on 9977499927
Investment trading in securities market is always subjected to market risks, past performance is not a guarantee of future performance. CapitalStars Investment Adviser: SEBI Registration Number: INA000001647
For more details call on 9977499927 or visit our website www.capitalstars.com
