Mu­tual Fund Story

Dalal Street Investment Journal - - SPECIAL REPORT -

in­dices than there are funds that are out­per­form­ing the bench­mark in­dices. In­vestors look­ing at mu­tual funds for in­vest­ments need to avoid the un­der­per­form­ing funds, as get­ting stuck up in an un­der­per­form­ing fund in­volves a huge op­por­tu­nity cost in a bull mar­ket sce­nario that we are in right now.

An eq­uity fund may un­der­per­form its bench­mark due to var­i­ous rea­sons such as poor stock se­lec­tion, higher man­age­ment fees, as­set bloat­ing, over-di­ver­si­fi­ca­tion and higher cash-on-hand. In­vestor have to look at all th­ese as­pects care­fully while se­lect­ing a mu­tual fund that is right to in­vest in. While look­ing for in­vest­ing op­por­tu­ni­ties in mu­tual funds, it will be ex­tremely handy for in­vestors to know well in ad­vance which funds are to be avoided. Avoid­ing in­vest­ing in wrong eq­uity mu­tual fund schemes is as ad­van­ta­geous as choos­ing the right eq­uity mu­tual fund to in­vest in.

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