How to evaluate a fund’s returns
Experts say that you should not penalise a fund for short-term underperformance. So, look up the trailing returns of the fund over a five- or seven year horizon. Over such a period of time, the fund would have undergone both a bull and a bear market. Compare the fund’s performance with its benchmark and category average return. If it is underperforming, put it on your watchlist.
In addition to trailing returns, also look up calendar year wise return over the past five or seven years. This will tell you whether the underperformance is a recent phenomenon or a sustained one. If it is a relatively short term phenomenon, you should be patient with the fund. The calendar year wise breakup of performance will also tell you how the fund performed in both rising and falling markets.
Before you decide to sell a fund, you also need to find out the reason for its underperformance. A lot of times, a fund underperforms because the market does not support the investment style that its fund manager pursues. In India, for instance, value-oriented funds underperformed for many years. But over the years past six months or so, this style of investment made a comeback. If an investor had moved out of a value fund while it was underperforming, he would not be there to benefit from its rebound.
When the fund manager changes
Inactive fund management, the fund manager plays a key role. Fund houses like to say that they are process-driven and that the exit of a star fund manager will not affect performance. Such statements should be taken with a pinch of salt. Fund management is a difficult and rare skill. However good the fund management team might be, and however process-driven an approach it may take, the fund manager is still the person who pulls the trigger. He’s the one who takes the final call on whether to buy a stock or sell a stock. Therefore, when a fund manager with a good track record exits, you do need to put the fund on your watchlist. It is quite possible that the fund house may replace him with an equally able person. And that person may do well, thanks to the strong research support that he gets from the team of analysts at his disposal.
Continue reading your story on the app
Continue reading your story in the magazine
Tips to create wealth over long term by investing in mutual fund SIPs
Mutual fund has emerged as a popular investment option for meeting the longterm goals. The popularity of mutual funds is increasing day by day because of simplicity, transparency, and as a cost-effective tool to generate a high return compared to other investment options.
Investing in debt mutual funds: Things to consider before you invest in them
The interest rate has been falling creating a precarious situation for the senior citizens and retirees. Fixed-income investments are providing low yields and thus retirees are finding it difficult to manage their regular income needs.
01. Insurance sector has grown at a healthy 9.7% in 2020-21
Ask the Expert
Q Dear Sir, I am going to retire from my private company service after one year. I will not get any pension and my monthly expenses are expected to be around Rs. 50,000/-. How much retirement corpus I must accumulate to ensure that I am able to meet my expenses? -Ajay Sahni, Kanpur
MUTUAL FUND NEWS
01.Key officials in AMCs to get 20% salary in the form of MF units: SEBI
Health Insurance amid Covid-19: Know about plans, coverage, home care treatment and claim process
The Covid-19 pandemic in the country is having a big toll on the health and lives of the population. While it may too early to estimate the extent of damage to the economy, some of the impacts on personal finances may already be seen.
Should you bet on dividend yield funds?
One value-oriented mutual fund category that has made a comeback over the past year or so is dividend yield funds. The category has given investors an average return of 68.9 per cent over the past year.
Natural Ways To Prevent And Cure Diabetes
Diabetes is becoming an epidemic in India and everywhere. Diabetes is commonly known as the ‘high sugar’ problem. Currently, a fasting blood glucose (sugar) level of 126mg% or more is defined as diabetes. The blood glucose level is normally kept in range by a hormone called insulin, which is produced from the pancreas. Insulin controls blood glucose levels by allowing glucose to enter the cells so that it can be used as fuel by the body.
5 Mutual Fund Features To Help You Build A Robust Investment Portfolio
It has been a blockbuster performance of equity mutual funds in 2020-21. The return generated by most equity mutual fund schemes in the last 12-months has been nothing short of a spectacular performance.
How To Start Investing In Mutual Funds?
When you begin investing in mutual funds for the first time, you must take each step with a lot of care. Your initial experience must be pleasant so that you feel encouraged to keep on investing for your entire lifetime.
Sometimes, an idea needs time to incubate until it’s ready to grow. That was the case with Sujata Massey’s series about Perveen Mistry, a woman attorney practicing in India during the 1920s.
THIRTEEN FASCINATING 4X4S from the2020 Fall 4-Wheel Jamboree Nationals
Recap of the 39th Annual O’Reilly Auto Parts Fall 4-Wheel Jamboree Nationals
Klara Landrat & Her Journey with Endometriosis
Klara Landrat is an American-Israeli actress of Polish origin, producer, a writer known for her talent worldwide. She is starring in the Irish TV series – “Gods & Fighting Men” due for release in 2021.
HER MAJESTY PEDDLING HOMEMADE HOOCH!
QUEEN ELIZABETH looks like a dowdy, straitlaced granny, but she’s turned into a heck of a bartender — serving up her own brands of homemade hooch!
The Winter of Discontent
Even though america is preparing for a summer reopening, the Coronavirus will still be around to dog us when the temperatures fall.
India thought it had the virus beat. The virus had other ideas
Governments around the world keep repeating the same mistakes. In a country of 1.4 billion, the consequences are on a whole new scale
Reincarnation And Realpolitik
China, India, and the U.S. are vying to influence the selection of the next Dalai Lama
An Exclusive Interview With Nandakumar Narasimhan
The Little Red Train
A Room for Dad
Before Mom passed, I made a promise to her