Ark wins Emerging Advisor Award 🙂

One of the Biggest & Oldest Mutual Fund – Observations

One of the Biggest & Oldest Mutual Fund – Observations

I have removed the name of Mutual Fund because message is more important than example. Few observations & questions…

  • Fund History & Performance
    • This fund was launched in 1994 – 20+ years.
    • Investment of Rs 10000 become Rs 4.7 Lakh (47 times) – 21% CAGR
    • Do you think this fund outperformed its pears every year? No…
    • If you are the one who keep checking fund ratings… you will find this fund in bottom quartile. (Must Read6 dumb ways to select mutual funds)
  • Do you think journey was smooth?
    • When you invest in equity, you get volatility in gift.
    • You can clearly see in below chart – fund returns were almost  zero in first few years, 20%-30% correction (even 50% in 2008) from top is visible from naked eyes.
    • But do you think investors will be complaining?

Mutual Fund Performance

  • Do you think investors enjoyed these returns?
    • NO… current investors 6.7 Lakh but only 5000 stayed with the fund since inception.
    • I can bet – out of these 5000 investors at least 25% are those who have no clue about this investment. (either they are no more in this world or they lost documents, address change etc)
  • Do you think there were no risk in this journey?

Mutual Fund Risk

  • Do you think investor who keep guessing the markets can earn this return?
  • Do you think investors who keep hoping from one fund to another can earn this return?

Past performance may or may not be sustained in the future.

Please share your observations, views & questions in comment section.

Print Friendly, PDF & Email
{ 7 comments… add one }

Leave a Comment

  • Aniruddha May 28, 2015, 12:39 pm

    If you are the one who keep checking fund ratings… you will find this fund in bottom quartile.
    Rating is the most confusing thing today. They change every month and investors have no clue in which fund one should invest.
    Crisil rating for HDFC top 200 fund is only 1 star today.

  • monilkumar khushmanlal daru May 28, 2015, 2:00 pm

    whts the name of a fund?? is it reliance growth fund?

    please reply me soon/.

  • rajiv May 28, 2015, 7:02 pm

    result…..invest for long term for ur retirement n forget it n dont see it daily as ur bloop pressure n sugar levels will go for a toss otherwise…..!

  • Anil Kumar Kapila May 29, 2015, 3:54 pm

    Hi Hemant
    I started investing in mutual funds even before 1994.At that time UTI was the only popular fund house.Tax saving was the only reason for investing. So I regularly invested in ULIPs and other schemes of UTI which offered tax benefits. Subsequently I also invested in schemes of Morgan Stanley, Canara Bank and Birla Mutual Fund. I never tracked the performance of any fund and the thought of redemption never occurred to me and I remained invested in these funds till last year when I liquidated my investments just before general elections. I think I made reasonable gains by remaining invested for a long time.

    • Praveen July 2, 2015, 12:05 pm

      Could u provide us some data as to when were the investments made, the amount and returns so as to check the kind of returns.. Even if the specific schemes are not mentioned its fine. Maybe it would be interesting to see how things have worked out in the long term.
      Thanx n best Rgds,

      • Anil Kumar Kapila July 2, 2015, 4:34 pm

        As already mentioned the investments were made around 20 years back and I did not keep track of investments. The concept of SIP was not known so all investments were made lumpsum of amount of around Rs 10,000/- each.Most of the schemes were close ended for which unit certificates were given. Subsequently the schemes were made open ended. In many cases the names of the schemes as well as fund houses changed several times.My earliest investment was in US 64 of UTI.

  • Pardeep Goyal June 4, 2015, 9:59 pm

    That is interesting analysis, Hemant!!

    It wish there was little more to read. Can you share some referral links for further study and research.