Lessons For Mutual Fund Investors From 2018

Some of the lessons are obvious and some aren’t 

A job seeker takes notes during employer presentations. (Photographer: Daniel Acker/Bloomberg)
A job seeker takes notes during employer presentations. (Photographer: Daniel Acker/Bloomberg)

As the year ends, BloombergQuint compiles the best of its weekly series The Mutual Fund Show in 2018, highlighting key lessons for investors.

Key Takeaways Of 2018:

1) Don’t Forget To Top Up

How does one boost the retirement corpus by a few lakhs, or even crores? Easy. Put to work your annual salary increment, said Swarup Mohanty, chief executive officer of Mirae Asset Global Investments (India).

Watch to understand the power of compounding.

2) Diversification, Long Terms Can Phase Out Volatility

The probability of one losing money in the equity markets over one year can be as high as 30 percent, says Sunil Subramaniam, chief executive officer of Sundaram Mutual Fund. While this may not come as music to investors, he offers a solution: staying invested over a longer period.

But for how long? Watch to know more…

3) When 15 Percent Doesn’t Equal 15 Percent

If two mutual funds have returned 15 percent gains over the same period, are they equally good? No, says Rohan Chinchwadkar, assistant professor of finance at Indian Institute of Management, Tiruchirappalli, suggesting that risk evaluation can separate the wheat from the chaff.

Click to find more about evaluating funds...

4) The Three Buckets Every Investor Needs To Mind:

The market regulator may have ordered reclassification of fund schemes, but that shouldn’t worry the average investor if one is mindful of the “three key buckets”, according to Dhirendra Kumar, chief executive officer of Value Research. An emergency fund is one of them.

What are the other two? Watch to find out.

5) Mutual Funds, Demystified:

Indexation, CAGR, alpha… confused about these mutual fund terms? You’re not alone. Newbie investors often get confused by the jargon financial professionals use. And Vijai Mantri, chief investment strategist and founder-promoter of JRL Capital, acts as your ready reckoner on the topic.

Watch how Mantri demystifies terms like entry and exit load

6) Gauge A Fund’s Performance Rightly

Investors scrutinise a mutual fund’s track record so that they don’t invest in an underperformer. The performance of such schemes should be determined based on long-term track record, said Tarun Birani, founder of

Read on to know how else mutual funds are judged.

7) A Rs 1-Crore Corpus Has Many Routes

An investor can create a corpus of about Rs 1 crore by investing a small sum monthly in mutual funds for nearly 25 years. The target can be scaled faster if the monthly sum is increased. Regardless, there’s one secret sauce: and that’s to stay invested, according to Kunal Bajaj, founder and chief executive officer at Clearfunds.

Bajaj sets different paths for becoming a crorepati. Click to watch

8) Know What Not To Do:

Investors need to emphasise on not just selecting the right fund but selecting the right type of fund, said Harsh Roongta, investment adviser.

Watch to identify the other red flags while investing:

9) The Six Steps To Financial Liberation

There are two kinds of investors that don’t need the help of a financial advisor, according to Nimesh Shah, the managing director and chief executive officer of ICICI Prudential AMC. “They are those that know and those that don’t.”

It’s those who think that they know the markets need the help of an advisor, he said, while prescribing six precautions that investors need to follow.

Watch to find out the six precautions: