Episode 17 - Know your mutual funds with Dhirendra Kumar

Money Konnect

In the last two and half decades the mutual fund industry has evolved considerably to offer investors a host of products that can optimally meet their investment requirements. However, investors can benefit from the industry’s offerings only if they have sufficient information on the products and are able to understand the unique characteristics of each product. In this Edelweiss Money Konnect podcast episode, Radhika Gupta, MD & CEO of Edelweiss AMC has an in-depth conversation with Dhirendra Kumar, CEO of Value Research on different mutual funds products and how investors can cut through the jargon to make better investment decisions.

Key takeaways:

· When analysing an equity fund you must look for performance, process, and fund manager longevity. From a performance perspective, instead of simply focusing on returns generated, you must see how the fund has performed in a full market cycle.

· If there is a robust process in place then there is a possibility that past performance can be replicated. This means that you should understand the stated objective of the fund and determine whether the fund manager is following a robust and sustainable policy.

· The only way you can impress a customer is if you guide him and hold his hand through the ups and downs of the market and help him keep his emotions in check. Earning his trust is the most important thing. Interestingly, this cannot be done through jargonised content.

· The needs of every type of investor can be met by four to five funds. For example, all your requirements from long-term investments can easily be met by balanced funds, balanced advantage funds, and tax saving funds. If you are a first-time investor then you can invest in Balanced advantage funds – it is a steadier take on growth

· Considering that asset allocation is very personal by nature, there are no thumb rules or formula for the ideal asset allocation. An important thing to consider is that as your investment corpus grows and becomes meaningful, the need to safeguard it through optimal asset allocation becomes essential

· While investing, our primary aim is to invest in good companies. Thus, geography should not become a limiting factor. Investors should actively consider international funds to diversify their portfolios and gain exposure to good companies

You can learn about more such interesting investment principles on the Money Konnect Podcasts available on the Edelweiss Mutual Fund website, Spotify, Google Podcasts, and Apple Podcast. We hope you enjoyed this podcast and will tune in to listen to more such podcasts on money management.