[kavensri]

Originally Posted by ZMG

Hi All
I am seeing Dividend in my transactions on Coin (Zerodha) for some funds (Tata Digital, UTI momentum 30) - does anyone know what this is ?
My investments are all in Growth mode and not IDCW.

I was about to post the same query!
Even I have received significant amount of Dividend for my Axis Midcap Fund!

[kavensri]

Originally Posted by kavensri

I was about to post the same query!
Even I have received significant amount of Dividend for my Axis Midcap Fund!

And magically the Dividend amount has disappeared today

[DigitalOne]

Quant AMC's funds' performance dips significantly over the last 6 months?? Most of their funds are in the bottom 10% in the last 3- and 6-months period. Time for concern?

Source

[saket77]

Originally Posted by DigitalOne

Quant AMC's funds' performance dips significantly over the last 6 months?? Most of their funds are in the bottom 10% in the last 3- and 6-months period. Time for concern?

Source

Reality bites?
BTW, I exited Quant funds fully except for locked units of taxsaver fund after the CFO resigned. I was invested till SEBI front running news came but sold all investments when their CFO resigned sometime in July if my memory serves me right.

[vaibhav_a_a]

There are a few funds on the ''quantitative'' theme - (link below). Ideally they are all based on a quantitative model thus reducing human bias. In reality, the fund manager plays a role - e.g. Quant loaded ITC onto all their funds this month - including in their Quantamental fund.

Some seem more successful than others basis AUM list. Does anyone have personal experience investing into these funds? Would be great to hear some.


https://www.indmoney.com/articles/mu...funds-in-india

[SideView]

Originally Posted by SmartCat

-
- Invest remaning Rs. 15 Lakhs in Equity funds. This link displays only 4 or 5 star rated (large + midcap) funds.
-

Thanks for the link SmartCat.
I have been curious, why isnt then everyone investing in 5* rated funds with the best XIRR for past couple of years and least expense ratio (my thought process).

Any critial point I am missing? ( for sure different funds have different exposure to different stock and past performance don’t guarantee future returns etc)

[SmartCat]

Originally Posted by SideView

Any critial point I am missing? ( for sure different funds have different exposure to different stock and past performance don’t guarantee future returns etc)

No, beyond the 'past performance future returns' caveat, there is nothing else.

But:

- past performance (cagr returns)
- brand name (HDFC/ICICI vs Quant/Bandhan)
- 4 or 5 star rating (best risk adjusted returns. that is, highest possible returns taking the lowest possible risk)
- long history (5 or 10 years or more)
- large AUM (Rs. 10,000 cr+ vs Rs. 1,000 cr)

implies that the fund house has basics/foundation/investment processes in place that increases the probability of getting above average returns in the future.

As an analogy, when you buy a Japanese car brand, the probability of getting a troublefree car is higher. That's because the Japanese have the basics in place - engineering, manufacturing process, parts sourcing etc.

Notice that I'm using the word 'probability' instead of 'guarantee', in both the cases.

[vijaykr]

Originally Posted by SideView

Thanks for the link SmartCat.
I have been curious, why isnt then everyone investing in 5* rated funds with the best XIRR for past couple of years and least expense ratio (my thought process).

Any critial point I am missing? ( for sure different funds have different exposure to different stock and past performance don’t guarantee future returns etc)

If you want to base investment decisions on ratings, then it would be a good idea to understand the methodology behind these ratings There are multiple rating scores available online and the same fund might show 4 as one site and 5 in another. The very large AMCs with AUM in 000's of crores are unlikely to vary significantly, but there could still be variations.

Like @SmartCat has mentioned, you can go with the typical parameters that make sense. Anyway, there is no guarantee that this year's 5-star funds will continue to remain the same (best-case) or not go down a short time after we invest

[eagles_ts]

Read the last few comments (from SideView & SmartCat). If only it was that simple, but it isn’t.

To quote an example from reading the previous pages in this thread, everyone who’s expressed concerns about Axis funds not performing to their expectations did something similar. After all, around 3 years ago, Axis funds were at the top in each category, large cap, mid cap, small cap. They were rated 5 star by our dear Value Research too, so that box was checked too. What happened later is a story better told by some of you who invested in those funds, and how you saw the returns slide and the 5 star rating change (axis bluechip is currently one star, axis mid cap fund is currently two star).

Axis met all those criteria, good past performance, brand name, star rating, long history, large AUM. Yet the investment experience went awry. Their funds failed to deliver in a bull market. As a DIY investor please ask yourself why did it happen.

A few pointers:

1) There are various methods/ approaches/ styles of investing like value, momentum, quality etc. Each fund house is broadly associated with one style, for example ICICI follows value investing in most of thie funds, atleast the flagship funds.

2) In each market cycle one investment style comes out on top, other styles do reasonably ok, and some styles don’t do well. In the last 3 odd years Value has done really well & Axis as a fund house is not a big follower of Value approach of investing.

3) There is no reason to believe that today’s bad perfomers won’t do well in the future, just like there’s no guarantee that today’s good performers will stay that and won’t turn average or bad.

4) Recognize (or consult someone who can do so for you) where we are in the broad market cycle and what style of investing is in vogue. That will help you understand the relative performance of the funds in your portfolio.

5) Try to combine funds following various investment styles in your portfolio so that on an aggregate level your portfolio is doing ok. In the quest for best performance, year on year, we may end up making mistakes.

6) Know what’s your required run rate, and realise that till the time your portfolio is doing better than your required run rate you are doing fine. Don’t worry about what markets are doing. FOMO is a thankless pursuit, and grown ups are caught up in it too, not just the millennials.

[SmartCat]

Originally Posted by eagles_ts

Axis met all those criteria, good past performance, brand name, star rating, long history, large AUM. Yet the investment experience went awry. Their funds failed to deliver in a bull market. As a DIY investor please ask yourself why did it happen.

1) This is analogous to pointing out specific cases where Maruti/Toyota/Honda customers too had reliability issues with the car, and then saying "hence there is no link between Japanese cars and reliability". That's why I stressed the word 'probability'.

2) Are you suggesting that a MF advisor managed portfolio will never have an Axis Bluechip fund, but only a DIY investor? If an advisor exits a fund because of underperformance, so can you, based on star ratings.

3) A fund will not get lower or higher rating because of market cycles. Because it is benchmarked against different indices and also the average of funds in the same category. Star ratings are not about absolute returns. It is about risk adjusted returns, benchmarked against its respective index.

4) If you have trouble finding the right mutual fund, it is very likely you will have trouble finding the right mutual fund advisor too. If there are 100 mutual funds too choose from, there are 1,000 mutual fund advisors to choose from. How will you find the right person? Is it 100% fool-proof? Is there any evidence that average DIY investor gets poorer returns than average MF advisor returns?

5) Investing in different mutual fund categories to ride out market cycles is fine-tuning of the portfolio to get the best possible returns with lowest volatility. But that unnecessarily complicates investing strategy, and make it look more difficult than what investing should be. Over the long run, most equity MF categories will offer similar returns. And if volatility needs to be reduced, choosing flexi/muticap or (largecap + midcap) fund is far better option.

6) Whenever we invest in equity mutual funds, essentially we are outsourcing stock picking to a professional team. Hiring a MF advisor to pick MFs is adding one more layer. Then how about hiring a "super MF advisor" who will then select top 10 MF advisors?

[volkman10]

Originally Posted by SmartCat

--- Over the long run, most equity MF categories will offer similar returns. And if volatility needs to be reduced, a mix of (debt MF + largecap equity MF) is far better option.

In a nutshell, the quoted text sums up all about investing in Mutual funds today.

[eagles_ts]

Please read what I wrote carefully before responding:

1) Various investment styles are not the same as different mutual fund categories. For instance, in the mid cap space, you will have funds that follow the value approach or growth approach or momentum approach. All of them are essentially mid cap funds, but the way they go about constructing their portfolio is very different. Hence the results are very different. I am urging people to combine investment styles, you’re confusing it with mutual fund categories.

2) Nothing in life is 100% fool proof. If that’s your expectation then I wish you luck. But if you are happy with your investment approach & results then that’s great . Nothing else matters if one is at peace with their method. However you will agree that this thread is full of DIY investors who are not sure of their choices and are seeking validation/ confirmation.

3) Please read more about mutual fund rating system if that is one of your key criteria for fund selection. Also I never said rating is dependent on market cycles. Ratings take returns as a key input, and returns depend on investment style followed by the fund and whether that investment style is working in that phase of market cycle.

4) I am not sure how to respond to your car / mutual fund analogy. Again, if you’re fine with relative underperformance then that’s great. Till the time you’re clear about your perspective it’s fine.

[eagles_ts]

Various equity MF categories over the long run have significantly different returns.

A) The best performing large cap fund over a 10 year period has delivered around 17%. The worst performing large cap fund over the same tenure has delivered around 12%. The average investor will fall somewhere in the middle of the above range.

B) Similar numbers for mid cap funds: Best performing fund - around 23%, worst performing fund - around 18%

C) Similar numbers for small cap funds: Best performing fund - around 25%, worst performing fund - around 18%

Long term returns vary from category to category. Your portfolio return will be determined largely by your asset allocation and then by your relative allocation to the various fund categories. Security selection (which fund to invest in) will be third factor.

[SmartCat]

Recommending the MF advisor route is fine, especially to investors who are confused or can't be bothered with picking MFs. But insisting that is the ONLY way to invest in mutual funds, else we stand the risk of underperformance is not based on reality.

The biggest advantage of hiring a mutual fund advisor is actually something else - and it is not returns or choosing the "best funds". Since MF advisors chat with customers regularly, they instill investing discipline in their customers. MF advisors are usually successful in ensuring that customers stay in the market for a long time, and not be fickle with their investments.

So if somebody has a patchy investing history (investing at market tops/completely exiting all MFs when there is a crash), then a mutual fund advisor will be of great help to them.

[eagles_ts]

I am not sure where you got the impression (from my posts atleast) that MF advisor route is the only way, unless of course you are making a general/ broad comment. That’s not my stand. To each their own. Cheers.