Wait Before You Act
If you are a mutual fund investor, chances are high that you have received e-mails from asset management companies intimating you regarding the change in the name of the schemes, merging of two schemes or even change in the investment attributes. The background for such intimation is SEBI's directive to mutual fund houses to align their schemes based on a circular issued by them to rationalise and categorise their mutual fund schemes. The process is in full swing currently and most of the fund houses have already initiated the process to comply with the directive. It will take few more weeks to fully complete the process.
This intimation has left many investors high and dry, who are grappling with what to do with such communication. There is no need to panic. Our study shows that there are only a handful of funds in equity category whose investment attributes are changing drastically. You might or might not be holding these funds. So as an investor you should wait for the entire process to complete. After that, you review your portfolio and see if the current portfolio still goes with your risk-return profile and if it will help you to achieve your financial goals.
Once you are done with the assessment of your portfolio, our cover story of this time will help you in deciding whether to take exposure in large-cap funds or not. I believe investment in large-cap dedicated funds may be one of the options for you. The caveat is; however, they may not give you superior returns. Our cover story this time is on ‘Large-cap dedicated equity mutual funds'. It analyses how the returns generated by these funds have changed over the years and what to expect going ahead. It will help you take appropriate decision on the exposure to large-cap funds.
A long-term debate ensuing in the equity market is that over-diversification might be adversely impacting the returns. There are equity funds dedicated to such theme. Our special report on ‘Concentrated vs Diversified Funds' analyses how the returns of these funds are over the years and how should you go about opting for any one of them.
This issue, I believe, will help you in taking right investment decisions and help you to reach your financial goals. Please share your feedback and suggestions to our stories..