With a significant surge in mutual fund investments and the emergence of many new asset management companies (AMCs), a key challenge for investors is how to evaluate the pedigree of fund managers when considering new AMCs.
Kushal Bhagi, the proprietor of PCC Investing, suggests examining the track record of the fund management team, assessing past experiences with them, and determining if they offer a unique proposition not present in the existing portfolio.
Noteworthy entrants in this competitive landscape include BlackRock, which is re-entering the Indian market in collaboration with Jio, and the relatively newer and youthful Zerodha.
While the growing presence of these companies reflects the strength and potential of the Indian mutual fund sector, it poses a challenge for investors in choosing the right fund house and fund.
According to Bhagi, the track record of currently active schemes should carry weight unless the newer AMCs present a distinct strategy that addresses gaps in investors' portfolios.
He suggests a more cautious approach for these schemes compared to established AMCs. However, for first-time or passive investors, the advantage of existing AMCs might be somewhat diminished against newer players, he added.
In November 2023, equity mutual fund inflows registered a decline of 22.16%, as reported by the Association of Mutual Funds in India (AMFI). The segment witnessed inflows of Rs 15,514.5 crore compared to Rs 19,932 crore in October.
On a positive note, systematic investment plans (SIPs) crossed the Rs 17,000 crore mark for the first time in November. The SIP book reached Rs 17,073 crore, surpassing the Rs 16,928 crore recorded in October.
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(Edited by : Ajay Vaishnav)
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