Recently there has been a lot of hullabaloo of how one particular fund has delivered around 40 times returns in 14 years. The best thing about statistics is that they show us what the statistician wants to display so if a fund has done best in the last five years it will advertise that period. The idea is to cut the time charts according to convenience and display it as an advertising tool.
The biggest question is whether these pieces of data are as Taleb would call rare random chance events or do they bear any resemblance of a recurring nature?
While I like history the worst place to put history is in the asset management industry.
At the cost of sounding critical I have stopped looking at how the past data works because investors cannot make future returns by looking at the past. More-over the past data means almost nothing when you have had several fund manager changes and in some cases even the whole research team has been revamped.
My first question would be to find out if there is any data of how many of the original investors are still with the fund? If there are a few people invested then the fund should use their faces to advertise. That will create more mileage for the fund in terms of impressing new investors then anything else. Here we should exclude the investors who are betting with less then 2% of
their net worth.
There are over several hundred Mutual Fund schemes (and each of the fund houses having around twenty to fifty of them) then obviously a few would do the double of the underlying index but the trick is to find that out in foresight then in hindsight and the only way to know if that was in anyone's foresight is to count the number of original investors in the fund.
Though I have no privy to such data I am sure that the actual numbers
would not impress me or for that matter anyone who is convinced and
aware of the danger of getting sucked into chance events thinking them
to be actual predictable outcomes in foresight.
I'd also like to know the Fund manager's bet on this particular fund as a percentage of his net worth soon as he took over and how long has he continued with that bet. Of course there should be no one believing more in the Fund then the Fund Manager himself. Now if the Fund Manager's bets aren't too big then he also did not think of the performance in foresight thus making it a chance event.
I would strongly urge SEBI to make mandatory disclosure of the Fund Manager�s investment in the fund so that Investors know if they believe in the fund more then the Manager. Even if absolute bets are not mandated SEBI should include classifications as a relative percentage of the Fund Manager�s net worth.
There is a need for some urgent legislation in this context so Fund Managers just can't come up to the Idiot Box and say "OK Guys we got it wrong". They should also be made to pay for their mistakes. Once this is done some funds will advertise their Manager's bets in the underlying fund. Clearly Funds with little bets of their managers will have little confidence amongst the investing public and vice-versa.
www.morningstar.in
There is no specific section. I gathered above information going thru specific Mutual Fund analysis details. There is a section called Stewardship in the analysis details of funds.
1. Mr. Smith is being investigated by the SEC for insider trading. Calculate the probability of Mr. Smith�s relocation to Dubai.
2. If an American hedge-fund manager makes $900 million and is taxed at a rate of 15 percent, how many American factory workers making $32,500 and being taxed at a rate of 25 percent does that make a sucker of? (Show your work.)
3. Your mother gives you x dollars to put gas in the family car. Your father gives you y dollars to get a haircut. You lose x + y dollars betting against your high school�s undefeated football team. Explain to your familial investors how �that�s life.�
4. Days before the housing bubble bursts, you short the ABX subprime index and, when the ensuing mortgage crisis causes millions of families to lose their homes to foreclosure, you realize a $550 million profit.
nice info.Members please help me here.does an online platform gives a huge price advantage for unlimited trading up to 25-50 per cent?
and all your positions are updated automatically and instantly with real time profit/loss updates.Reliance Money Super trade platform has these benefits . is that true?
Investor expects return from the scheme to continue to grow while the growth depnds on performance of underlying assets and investor mood at the time of sampling data.
There is a large body of academic finance literature concerning mutual
fund persistence, i.e., just what does past performance tell you about
future performance? The short answer is "not much." Burton Malkiel,
who has extensively researched the problem, concludes in A Random
Walk
Down Wall Street that yes, the funds with the best past returns will
outperform their peers by a slight amount, but will not beat an index
fund.
Unfortunately, the analytic techniques used are abstruse, highly
complex,
and unverifiable by the average investor.
;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;
SMARTLIPO
kratom
Posted on:10/10/2009 11:48:05 PMbasant
[QUOTE=nav_1996]Morningstar gives some detail of Fund Managers investments. Sukumar Rajah makes all equity invetments through his Franklin Prima Plus. Kenneth does not invest in IDFC Premier Equity. Shankar Naren invests in ICICI Pru Discovery and not in ICICI Pru Dynamic.[/QUOTE]
Please provide the link or details to find out what the other fund managers are doing?