Unovest recently did an interview with Atul Kumar, Fund Manager of Quantum Long Term Equity Fund.
Atul has more than a decade’s experience in equity research and fund management. His strong dedication and simple investment style has won accolades for Quantum Long Term Equity Fund. Atul is also the Fund Manager of Quantum Tax Saving Fund.
In this interview, Atul tells us all that is important about the fund.
Let’s begin.
HDFC Mutual Fund is one of the largest and the most respected fund houses of the country.
What would you expect from such a fund house?
That it would put its customer, the investor, at the centre of all that it does. I thought so too.
Unfortunately, the facts don’t support that notion.
While they might have started with it, I believe they are losing track.
They have indulged in greedy, big business like behaviour playing a upper hand and putting the investor at the receiving end. I am afraid the arrogance of being big is slowly creeping in.
Let me first put across 2 broad observations.
A question that I was recently asked with regards to investing in equity mutual funds was whether a fund should be fully invested in equity at all times or should it be holding cash if need be?
There were two arguments against a stay in cash strategy.
One, holding cash can lead to underperformance as the markets may rally faster than the funds can search for opportunities and deploy the cash.
Two, how can a fund hold cash and charge a Fund Management fees of 1% to 2% or more? The investor pays fund management fee to make investment in equities, not for holding cash.
Let’s see if these arguments hold any water.
You have just received a big amount as your annual bonus. While the first temptation was to splurge it all, good sense prevails and you decide to invest 80% of it in equity mutual funds.
But you are not sure how to do it? Should it be one shot lump sum or in parts?
These days what you hear is “Market index touches all time high.” The popular media has this headline all over.
You are now forced to think if this is the right time to invest a lump sum amount in equity mutual funds.
So, you reach out to various forums, blogs, websites and friends who give this advice:
“Do an STP or a Systematic Transfer Plan.”
“Put your money in a liquid fund and then start an STP into the equity fund for 6 to 12 months.”
You feel almost convinced that is the way to go.
Hold on! Why STP at all? Does it really work?
Take a look at the following mutual fund schemes: (you can click on the names to see detailed reports)
Now, take a look at the following:
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