Size Matrix

The never-ending debate on the optimum asset size of a fund and how to tackle them in your portfolio.

- Narayan Krishnamurthy

We are so used to bigger the better and more the merrier approach to life that when it comes to investing in mutual funds, several investors believe that they should be investing in a fund which manages more money. Until a few years ago, the rush to tom-tom the assets managed by an AMC was the norm, till the regulator put a stop to this practice. Even now, among the distribution community, it is common to hear sales pitch that revolves around the AUM of a fund. The debate has both sides in equal number and there is plenty of data available to prove both the hypothesis, depending on what time frame you use for the analyses.