It is a known fact that past performance continues to be the single biggest criteria for investors to choose funds for their portfolio. Performance is difficult to ignore.
Well, let’s make an effort to go beyond performance and dive a little deeper with a few funds.
3 funds that probably appear in your portfolio are:
- DSP Blackrock Micro Cap Fund
- ICICI Pru Value Discovery Fund
- Franklin India High Growth Companies Fund
As I said, as an investor, you are not interested in the history or other facts about the fund. As long as it performs, it is great.
Over the last few years, the above 3 funds have been favourites of the investor. This is proved by the huge amount of investment money that they have managed to attract.
However, there is more to a fund than meets the eye (the performance). Let’s dig into the real stories.
#1 DSP Blackrock Micro Cap Fund
As the name suggests has been recently in the news for NOT accepting any more investments. The bull run has got a lot of small stocks to top their valuation and any further money invested in such stocks will not result in adequate risk adjusted returns. There is quite a chance that money invested now can lose capital too, partially or fully.
It is quite a unique fund with a focused investment objective. But that’s not all.
#2 ICICI Prudential Value Discovery Fund
This is a fund I have mentioned several times in my earlier posts. Very few investors are aware about its history. Even the popular media conveniently ignores what it stood for and how it has changed over the years.
The biggest learning that you need to have is you need to tone down your expectations with this fund. It will happen only when you know the whole story.
#3 Franklin India High Growth Companies Fund
This is yet another common fund in an investor’s portfolio. Though it has found its place only the last few years. The
High Growth fund is a flexicap/multicap fund from the Franklin Templeton stable. How is it different from the other 2 multicap funds from FT – Franklin India Flexi cap and Franklin India Prima Plus.
Is it likely to sustain the enormous performance it had in 2014-15? Yes, no, maybe!
By the way, it is one of the few funds that while being open ended also has an exit load of 1% if you redeem before 2 years of purchase.
Between you and me: Do leave your comments. What new did you come to know?
Are there any other funds you would want me to cover?