IIPM BEST B-SCHOOL
A bird eye view on the buying pattern of MFs vis-à-vis the Sensex reveals the losing characteristic of MFs (see chart). Defying the golden rule of ‘buying low and selling high’, MFs bought heavily in May and September this year (when Sensex was at 12,000 level) and remained net sellers in June and July (when Sensex was down at around 9,000). K. K. Mittal, Vice President and Head, Escorts Assets Management, attributes such buying pattern to, “The cautious approach of the MFs due to the uncertainties prevailing in the market place at that period of time and the changes in various portfolio mixes.”
One may expect the MFs to crawl back to their highest levels. But, with markets tending to be volatile and the MFs reacting very cautiously, MF investors perhaps may not be able to see their NAVs at May heights in the near future.
Definitely, the MF managers have to be proactive in analysing the market trends so that they could act in line with the market swings and deliver what they are supposed to – maximum return on investors’ money. Their addiction to react late that seems to be taking away the cheese from investors needs to be changed.
For Complete IIPM Article, Click on IIPM Article
Source : IIPM Editorial, 2006, Arindam Chaudhuri's Initiative
A bird eye view on the buying pattern of MFs vis-à-vis the Sensex reveals the losing characteristic of MFs (see chart). Defying the golden rule of ‘buying low and selling high’, MFs bought heavily in May and September this year (when Sensex was at 12,000 level) and remained net sellers in June and July (when Sensex was down at around 9,000). K. K. Mittal, Vice President and Head, Escorts Assets Management, attributes such buying pattern to, “The cautious approach of the MFs due to the uncertainties prevailing in the market place at that period of time and the changes in various portfolio mixes.”
One may expect the MFs to crawl back to their highest levels. But, with markets tending to be volatile and the MFs reacting very cautiously, MF investors perhaps may not be able to see their NAVs at May heights in the near future.
Definitely, the MF managers have to be proactive in analysing the market trends so that they could act in line with the market swings and deliver what they are supposed to – maximum return on investors’ money. Their addiction to react late that seems to be taking away the cheese from investors needs to be changed.
For Complete IIPM Article, Click on IIPM Article
Source : IIPM Editorial, 2006, Arindam Chaudhuri's Initiative
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