Mutual Funds SAHI HAI — Really! — Part 2

  • PPFAS Mutual Fund launches it’s second Equity Fund in 6 years
  • SEBI notified new regulations for Liquid Funds
  • Investor need to Trust, the abilities of the Fund manager and should be sector agnostic. The Fund Manager should be given the freedom to move across sectors & market caps.
  • Stick to 4–5 funds. If a fund is not performing for a very long period switch, else stick to knitting & do nothing.
  • Some people think that since NFO is sold at Rs. 10/- it is cheap. But it completely wrong understanding. To give an example the return from 1–2 or 10–20 or 100–200 is the same mathematically (100% Return).

What is the reason for this Mess?

  • Advertisements / Sales Executives (Relationship Manager) Suggestions
  • Banking on AMC Brand Image
  • Scheme Name etc.,
  • The key for success is diversification. Investment in Mutual Funds has to be ideally in Diversified Equity Funds
  • The next step is to trust the fund manager’s 100%.
  • Market Returns are not linear. It has its ups and downs. Investors need to be patient and should not expect high returns in the short term
  • Donot invest in high risk debt instruments (This is the lesson from the UNFIXED FMPs from HDFC & KOTAK). Risk averse should stick to Bank / Post Office Deposits.
  • A few Funds are enough. No need to invest in every Theme and every NFO
  • NAV does not matter. Only Returns matter.

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