BQ Big Decisions: How To Assess Mutual Fund Scheme Performance...The Expert Way
BloombergQuint’s Big Decisions podcast gets you the insights you need to make big money decisions with confidence.
There are a couple of warnings that are often issued to those looking to buy mutual fund schemes. First, mutual fund investments are subject to market risks. Second, past performance doesn’t guarantee future returns.
Yet, many websites rank mutual funds based on their performance over the past three or five years vis-a-vis their peers and the relevant benchmark index.
Gautam Kalia, head (investment solutions) at Sharekhan, said this method of ranking mutual fund schemes was fraught with danger. A fund manager’s reading of a trend may be accurate one year and completely off the mark in the next. Also, fund managers sometimes leave an organisation and their replacements have an entirely different approach.
On this BQ Big Decisions podcast, Kalia spoke about the process involved in coming up with top recommendations for mutual fund schemes as well as discussed his organisation’s top picks in the most popular categories.