STAY AWAY FROM Mutual Fund Scheme Rankings
MYTH ABOUT SCHEME RANKINGS....
MYTH ABOUT SCHEME RANKINGS....
Hi just felt like giving an opinion on the Performance Ranking of Mutual Funds By Moneycontrol or other related sites.
you should understand these sites show ranking of schemes based on returns achieved in the last three months 6months or a year. my suggestion never go by this methodology in picking a fund. never consider returns as criteria in picking funds. coz the fund manager would have got lucky and picked a right sector and hence outperformed its peers or benchmark in the last three months. you should look at consistency in out performance.
The other point is when Small caps rallied last week small cap Funds became the top performers(DSP Micro Cap fund), when mid caps rallied 9 months backs then DSP Small & mid Cap fund was the market leader. last year when markets were coming out of recession dividend yield funds were in vogue. all that these sites and magazines gives out is past performance. please don't invest your money based on past performance. consult a financial advisor in analyzing the risk factors before investing. micro caps and small caps can erode your capital by half if there is a market correction.
a financial advisor is responsible for your portfolio performance at least you can catch him by the collar in case anything goes wrong, news papers very clearly avoids to take responsibility for the report published.
be careful at least before investing in a particular fund understand what category is the fund investing in. has this fund performed well in the bear market 2 years back.
Happy Investing!!
No comments:
Post a Comment